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Jeff Bailey : 2/19/2009 9:41:55 PM

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

Jeff Bailey : 2/19/2009 9:35:41 PM

Closing Internals at this Link

Jane Fox : 2/19/2009 4:17:19 PM

On November 21st the DOW made an intraday low of 7449.38 but closed at 8046.42. Today it made a low 7447.55 and closed at 7465.95. This close was the lowest since October 2002.

Jeff Bailey : 2/19/2009 4:08:17 PM

DIA $74.89 to its close

Jeff Bailey : 2/19/2009 4:07:26 PM

SPY $78.00 to its close.

Jane Fox : 2/19/2009 3:55:20 PM

Crude surged $4.92 today but most of that was the switch from the March contract to the April. The April contract itself is up only $2.07. Link

Jeff Bailey : 2/19/2009 3:54:43 PM

BIX.X 60.77 -5.68% ... session low has been 60.15. (see last night's wrap)

Jane Fox : 2/19/2009 3:53:06 PM

ES is now testing the bottom of its 3 day trading range and so far it has held. Link

Keene Little : 2/19/2009 3:52:44 PM

This is one weird pattern for this afternoon's decline--there's so much overlap between the highs and lows and it's either and ending pattern showing accumulation (supported by the volume spikes on the spurts back to the upside) or else it's getting ready to really rip to the downside.

Jeff Bailey : 2/19/2009 3:44:04 PM

This could get ugly for bulls to the close.

Keene Little : 2/19/2009 3:38:21 PM

Keeping with the descending wedge idea shown on the NDX chart we could see something similar play out for SPX where another leg down to about 760 might lead to another rally attempt (perhaps back up to about 830 before rolling over again). SPX 60-min chart: Link

I'm playing with a couple of thoughts for a larger descending wedge on the daily chart that will call for only a test of the November low for a final low for the year. I'll have the chart ready for tonight's newsletter. As I mentioned yesterday, any break of the trend line along the lows since February 9th (down near 760) would be very bearish. A break of the downtrend line from February 9th, currently near 800, would be bullish.

Jeff Bailey : 2/19/2009 3:31:49 PM

YM short stop alert! 7,467

Jeff Bailey : 2/19/2009 3:31:17 PM

YM short lower stop alert! ... to 7,467

YM 7,456

Jeff Bailey : 2/19/2009 3:17:09 PM

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

YM 7,458

Jeff Bailey : 2/19/2009 3:12:50 PM

YM short ... stop goes 7,510. Target is 7,410

Jeff Bailey : 2/19/2009 3:11:14 PM

YM short alert! 7,477

Keene Little : 2/19/2009 3:05:44 PM

I made a slight change to the NDX 60-min chart for the descending wedge idea, calling for just one more leg down to finish it (perhaps around 1150), shown in pink: Link . The bottom line is that current price action is way too messy to get a good bead on what's next. It means trade lightly and don't let a move go big against you.

Jeff Bailey : 2/19/2009 2:19:48 PM

02:00 Internals found at this Link

Jeff Bailey : 2/19/2009 2:13:46 PM

BKX.X 22.76 -2.81% ...

Jeff Bailey : 2/19/2009 2:13:20 PM

BAC $4.35 -4.81% ... gets some action from the low.

Jeff Bailey : 2/19/2009 1:50:38 PM

dj- RUSSIA TO BOOST SPENDING, ALLOW BIG DEFICIT

Russia plans to increase budget spending to blunt the social impact of the deepening economic crisis, a move that will give the country its first deficit in a decade and is likely to fan inflation and undermine the ruble.

Jeff Bailey : 2/19/2009 1:26:13 PM

dj- FANNIE, FREDDIE REGULATOR OPPOSES NATIONALIZATION

James Lockhart, director of the Federal Housing Finance Agency, says he opposes the nationalizing of Fannie Mae and Freddie Mac, but adds that policymakers need to determine what to do with the mortgage finance giants now under government control.

Jeff Bailey : 2/19/2009 1:18:32 PM

dj- DOJ SUES UBS ON BANK RECORDS

The U.S. Department of Justice files a lawsuit in Miami asking a federal judge to force Swiss-banking giant UBS to disclose to the Internal Revenue Service the identities of the bank's U.S. customers with secret Swiss accounts.

Keene Little : 2/19/2009 1:17:36 PM

After a marginal break of yesterday's low NDX has held it and trying to bounce. I'm still seeing too much overlap between highs and lows which means we're not getting impulsive moves in either direction. This keeps the door open to the possibility for either a choppy decline (in an ending pattern that will set up a larger bounce) or a choppy sideways/up correction which would lead to a stronger decline. The operative word for now is choppy and therefore don't be bashful about sitting on your hands to keep from getting chopped up in this mess.

Jeff Bailey : 2/19/2009 12:18:40 PM

QAA-OQ ... Target is $85 in the underlying. No stop for now.

Jeff Bailey : 2/19/2009 12:15:40 PM

VIX.X 46.48 -4.08% ...

Jeff Bailey : 2/19/2009 12:15:22 PM

VXN.X 45.51 -2.50% ...

Jeff Bailey : 2/19/2009 12:15:02 PM

Swing trade put alert! ... for one (1) of the Apple Computer AAPL March $85 Puts (QAA-OQ) at the offer of $2.90.

AAPL $90.85 -3.75% ...

Jeff Bailey : 2/19/2009 12:07:46 PM

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

Jeff Bailey : 2/19/2009 11:59:54 AM

William ... Energy futures (focus oil) at this Link

March terminates at tomorrow's close (see drop in OI of late).

UCO is using the May contract for some 200-x leverage and SWAPS.

I don't know what DXO is using. This screen capture intraday should be pretty close to my MM 11:18:42, which is really about 11:15

Keene Little : 2/19/2009 11:56:20 AM

If we're in some kind of larger corrective pattern that has more upside work to do, SPX should hold at or above 784.77, which is where this morning's pullback will have two equal legs down.

Jeff Bailey : 2/19/2009 11:47:36 AM

Time: 11:44:15

Jeff Bailey : 2/19/2009 11:40:11 AM

BIX.X 62.76 -2.59% ...

Jeff Bailey : 2/19/2009 11:39:56 AM

VIX.X 45.71 -5.67% ...

Jeff Bailey : 2/19/2009 11:39:43 AM

SPX 790.45 +0.25% ...

Jeff Bailey : 2/19/2009 11:39:16 AM

DJUSHB 184.73 -3.06% ... probes its 61.8% ov 11/20/08 to 01/06/09 relative high.

Jeff Bailey : 2/19/2009 11:18:42 AM

William ... Per your question yesterday forwarded from Keene ...

USO $24.12 +5.55%
UCO $6.41 +9.57%
DXO $1.93 +10.31%

Jeff Bailey : 2/19/2009 11:07:17 AM

PBR $27.81 +3.69% ...

Jeff Bailey : 2/19/2009 11:06:57 AM

OIX.X 535.34 +1.39% ...

Jeff Bailey : 2/19/2009 11:06:35 AM

USO $23.46 +2.62% ...

Jeff Bailey : 2/19/2009 11:06:00 AM

EIA Headline:

Crude oil stockpiles down 200K
Gasoline +1.1 million
Distillate -800K
Refiners at 82.3%.

Jane Fox : 2/19/2009 11:04:23 AM

I agree with Keene, I see this price action as quite bearish and would be very careful going forward if long.

Keene Little : 2/19/2009 10:59:57 AM

This morning's rally to a new high for SPX above yesterday's negated the little descending wedge idea that I had on last night's charts. Now I'm wondering if we're getting a sideways triangle consolidation before heading lower again, shown in pink on the updated 60-min chart: Link

I can't say I like the pink wave count because the 3rd wave is too short, especially considering it had a big gap down, which is more easily seen on the RTH (regular trading hours) ES chart. We could be in a more complex (choppy) bounce pattern that will see SPX work its way higher over the next day and that warrants caution for day traders. The much more bearish scenario (dark red) continues to be a strong possibility.

So far I see nothing bullish going on but that doesn't preclude the market pushing higher again. I just don't see anything yet that tells me to even think about the long side.

Keene Little : 2/19/2009 10:36:46 AM

Because of the continuing sloppy price action and the inability to rally further this morning (so far), it's either extremely bearish that we can't even get a decent bounce or else we're going to see prices chop their way lower over the next couple of days. That would be the small descending wedge idea I showed on last night's SPX charts. For NDX we could see it chop its way lower to the January 20th low near 1137, shown in pink on the 60-min chart: Link

The lower trend line running along the lows since February 11th, currently down near 1158, needs to be broken to confirm the more bearish possibility (shown in dark red) as that would negate the bullish descending wedge. Notice that this morning's bounce failed right at the broken uptrend line from November--not bullish.

Jeff Bailey : 2/19/2009 10:36:03 AM

XNG 350.67 -0.49% ...

Jeff Bailey : 2/19/2009 10:35:36 AM

UNG $16.65 -4.42% ... new 52-weeker.

Jeff Bailey : 2/19/2009 10:35:09 AM

CHK $16.61 +1.34% ...

Jeff Bailey : 2/19/2009 10:34:55 AM

EIA: Nat. Gas Inventory Table Link ... Draw of 25 Bcf.

Jane Fox : 2/19/2009 10:33:41 AM

ES has retraced only 38.20%

Jane Fox : 2/19/2009 10:33:17 AM

NQ (NDX futures) has retraced almost 76.80% of its overnight range whereas YM has only retraced 50%.

Jane Fox : 2/19/2009 10:31:41 AM

Even though the AD line opened bullish, the bulls were not able to continue the rally and markets have fallen to new intraday lows.

Jane Fox : 2/19/2009 10:30:24 AM

VIX spiked 2 points on a 1 minute bar.

Keene Little : 2/19/2009 10:24:31 AM

NDX continues to lead but this morning that's back into the red.

Keene Little : 2/19/2009 10:23:35 AM

Um, bulls, it's the other way you need to go.

Keene Little : 2/19/2009 10:18:48 AM

So far this morning's consolidation looks good for at least another push higher. It will be interesting to see whether or not SPX 800 becomes strong resistance (or maybe even get pinned around it for the day).

Jeff Bailey : 2/19/2009 10:14:57 AM

10:00 Internals at this Link

Jane Fox : 2/19/2009 10:10:07 AM

WASHINGTON (MarketWatch) -- Factories in the Philadelphia region reported declining business in February for the 14th month in the past 15, the Federal Reserve Bank of Philadelphia reported Thuesday. The Philly Fed index dropped to negative 41.3 in February from negative 24.3 in January. It's the lowest since October 1990. Readings below zero show that more manufacturing firms reported worsening conditions than reported improvements. The new orders index fell to negative 30.3 in February from negative 22.3 in January. The shipments index fell to an all-time low of negative 32.4. Factory owners are optimistic about improvement over the next six months, however.

Jane Fox : 2/19/2009 10:07:12 AM

Feb. Philly Fed shipments index -32.4, record low

Feb. Philly Fed lowest since October 1990

Jane Fox : 2/19/2009 10:06:09 AM

Feb. Philly Fed index falls to -41.3

Jane Fox : 2/19/2009 10:05:35 AM

WASHINGTON (MarketWatch) -- Economic weakness will continue through this year, though the recession's intensity could ease over the next few months, the Conference Board said Thursday. For the second consecutive month, the index of leading economic indicators rose, gaining 0.4% in January, following a downwardly revised 0.2% in December. The recent gains are due, in part, to the Federal Reserve's huge injections of cash into the money supply. Despite the rise in January, widespread weakness remains as the troubled job and housing markets continue to take their toll. "The second half of 2009 may see a period of anemic growth," said Ken Goldstein, economist at the Conference Board. "In fact, a return to robust growth may not occur until well into 2010, even if the long climb starts a few months from now."

Jane Fox : 2/19/2009 10:06:33 AM

Here are your overnight charts. Looks like the bulls didn't have enough power to continue the rally into the intraday session. Link

Jeff Bailey : 2/19/2009 10:03:34 AM

SPX 796.70 +1.05% ...

Jeff Bailey : 2/19/2009 10:03:16 AM

VIX.X 46.42 -4.20% ... back at MONTHLY Pivot.

Keene Little : 2/19/2009 9:53:58 AM

The first level to watch for a possible top to this morning's bounce is at SPX 798.64 which is where the bounce off yesterday's low would have two equal legs up. If that's all we're going to get it will be a very bearish statement. NDX, the stronger index lately, hasn't even been able to reach yesterday's high. Bulls do Not want to see yesterday afternoon's lows violated.

Jane Fox : 2/19/2009 9:50:29 AM

VIX closed at 48.50 and opened at 45.22.

Jane Fox : 2/19/2009 9:49:35 AM

AD line is up +1398 - a good start for the bulls.

Keene Little : 2/19/2009 9:43:57 AM

The market should continue to stair-step higher this morning. Whether or not SPX will make it up to the 808 area remains to be seen.

Jane Fox : 2/19/2009 9:29:39 AM

I see Brent Crude is trading at 39.82 so West Texas Sweet is trading very close to Brent now.

Jane Fox : 2/19/2009 9:28:47 AM

Crude's front month is now April. This contract is up $0.94 from yesterday but $3.79 from the March contract's yesterday. Link

Jane Fox : 2/19/2009 9:24:02 AM

YM is up +123
ES is up +16.25
NQ is up 16.75.

Jane Fox : 2/19/2009 9:23:25 AM

Large caps have now broken their ON highs (the Russell probably has as well but it is on a delay). The DOW has even broken its previous day highs. ES is now testing its PDH.

Keene Little : 2/19/2009 9:21:01 AM

Equity futures moved steadily higher overnight and continue to press higher as we approach the opening bell. We've got a big gap up and clearly a bullish start to the day. If the bulls can keep it going we just might get the move up to the SPX 808 area after all.

Jane Fox : 2/19/2009 9:13:29 AM

The DOW (YM) and S&P (ES) futures have retraced almost their entire previous day ranges. The NDX (NQ) futures is on its way to reclaim its previous day high as well but may have to wait until the intraday session to do it.

Tuesday and Wednesday were two very narrow range days and I was hoping today would give day traders a little more to work with but seeing this move overnight makes me believe that may not be the case. Link

Jane Fox : 2/19/2009 9:07:45 AM

We still have the Philly Fed Manufacturing Index and CD Leading Index out at 10:00ET.

Jane Fox : 2/19/2009 9:06:51 AM

Here is a graph of the PPI from July 17, 2007 to today. Link

Jane Fox : 2/19/2009 9:05:03 AM

WASHINGTON (MarketWatch) -- U.S. producer prices in January rose for the first time since July, the Labor Department reported Thursday, as energy prices staged a comeback and propelled the overall producer price index higher.

Producer prices for finished goods climbed by 0.8% in the month, twice the number expected by Wall Street economists. The core PPI, which strips out food and energy prices, rose by 0.4%. Energy prices staged a huge turnaround in January, rising by 3.7% after falling 9.1% in December and 12.4% in November.

Economists surveyed by MarketWatch were expecting producer prices to climb by 0.4% in January. They predicted the core PPI would rise by 0.1%

Jane Fox : 2/19/2009 9:03:44 AM

NEW YORK (MarketWatch) -- Whirlpool Corp. (WHR) said Thursday that it received a grand jury subpoena from the U.S. Department of Justice requesting documents relating to an antitrust investigation of the global compressor industry. Whirlpool subsidiaries in Brazil and Italy were visited on the same day by competition authorities seeking similar information. The company said that it will cooperate with the investigation, but noted that an investigation does not mean that it is guilty.

Jane Fox : 2/19/2009 9:01:45 AM

WASHINGTON (MarketWatch) -- First-time claims for state jobless benefits were unchanged in the latest week, but remained at a high not seen since the early 1980s, the Labor Department reported Thursday.

Initial claims came in at 627,000 for the week ending Feb. 14, the government said. Two weeks earlier, initial claims were at 631,000. The latest week's number is almost twice as much as the year-ago level of initial claims.

The four-week average of initial claims, which measures the underlying trend, rose by 10,500 to 619,000.

This week's claims report covers the same week that the Bureau of Labor Statistics canvasses U.S. households and businesses for its monthly employment report for February. The February jobs report will be released on March 6.

Jeff Bailey : 2/19/2009 2:13:27 AM

Growing more defensive in posture. Not entirely bearish as the yen has softened up notable and once again trades right between its 11/20/08 high and 01/06/09 low.

IF the yen trades HIGHER for "defense equity," then what's it doing back down here? Link

Jeff Bailey : 2/19/2009 1:49:02 AM

Dorsey's BPSPX fell 3.80%, so a net loss of 19 to reversing lower PnF sell signals. 34.80% actual, 36.00% on chart.

Jeff Bailey : 2/19/2009 1:41:50 AM

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

Jeff Bailey : 2/19/2009 1:37:26 AM

SPX daily intervals (same chart as this evening's wrap, but larger) Link

Jeff Bailey : 2/19/2009 1:31:04 AM

VIX.X Daily Intervals Link

Jeff Bailey : 2/19/2009 1:26:46 AM

I think Jane noted something today that may be of note. Regarding the VIX.X and rather tight range so far this week.

Well, it is option expiration, but so far this week, the VIX.X has traded a slightly smaller range (see WKLY Pivot Matrix) than it has the last couple, yet the SPY, if taken REGULAR SESSION has been very tight since Tuesday's gap lower open ($80.62 to $78.28). Again, the VIX.X has traded a high this week of 51.18 and came juuuuuust shy of 51.32 on Tuesday. A couple of weeks ago Keene and I mentioned "fractions" with the VIX.X that may have been the BIG DIFFERENCE several months ago at the 150-day SMA.

This is COMPRESSION and is usually follow by a BIG MOVE.

Watch the BIX.X and the VIX.X

Pivot Matrix so far (SPY, BIX.X and VIX.X) Link

Watching FOX News this evening, they played a tap of President Obama's speech and did a "Crisis count". I think it came out to 25 times he used the word crisis.

The BIX.X didn't "cave in" (see this evening's wrap), but should it, then I'd have to think the VIX.X takes out the WKLY R2 and MONTHLY 61.8% overlap. So far this week, there's been more put buyers/call sellers than put sellers/call buyers to keep it above the MONTHLY Pivot.

Keene Little : 2/18/2009 11:45:59 PM

Thursday's pivot table: Link

The price pattern has begun to look a little strange and not quite what I expected to see if we're going to get either a larger bounce to correct the decline from Friday or a stronger decline that will take us below the November lows. It's hard to pinpoint at the moment but something just doesn't look right with the price pattern. So it's forcing me to consider two very different scenarios and if you're in a large position looking for a big move you'll want to be very careful right now until this clears up.

The pattern over the past two days has been very sloppy and it's what has me wondering if we're in an ending pattern to the downside, which shouldn't be if we've got much lower lows ahead of us in the next couple of weeks. So the pink count on the SPX 15-min chart shows one thought about a potential small descending wedge that could set up a big rally into next week: Link

If we get a relatively strong bounce up tomorrow, dark red, that fails around 808-810, it would be a great setup for a short play. But if it continues to chop its way lower (pink) then look for an upside breakout. These two scenarios are shown on the 60-min chart (with the key level to the upside at 810 and to the downside at 770): Link

And for a slightly wider perspective the daily chart shows how each of the two scenarios might look over the next month: Link

OI Technical Staff : 2/18/2009 9:59:59 PM

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

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