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Jeff Bailey : 2/25/2009 7:24:25 PM

Closing Internals at this Link

Jeff Bailey : 2/25/2009 7:24:21 PM

April Crude (cl09j) settled up $2.54 at $42.50.

May Crude (cl09k) settled up $1.90 at $44.66

June Crude (cl09m) settled up $1.47 at $45.89

Keene Little : 2/25/2009 4:03:33 PM

For tomorrow keep an eye on the uptrend line from Monday afternoon, near SPX 758 at the close. A break below that level would also take out the previous low at 2:20 PM this afternoon and suggest the bounce has finished.

Keene Little : 2/25/2009 3:56:39 PM

Assuming we'll see the market push higher and SPX tags the 786 level where it will have two equal legs up from Monday it will then be important to see how price behaves from there. The A-B-C bounce to 786 will be followed by another leg down if we're to get the 5th wave down for the decline from February 9th. Equality between the 1st and 5th waves for that pattern gives us a downside target of 722, shown in dark red on the newly updated 60-min chart: Link

A contiuation higher than 786 would target 806-808 and in my opinion would increase the probability that we'll get a larger bounce up to the 820-825 area next week, shown in pink, before heading back down into mid month. I think the pink wave count would also mean we'd only get a minor new low to finish the decline from October 2007 (rather than down below 700).

Bottom line is that today was a doji day (indecision) as can be seen on the daily chart. It's a choppy mess and unfortunately does not leave a clear message for tomorrow. Keep your trading under control as it could go either way in a hurry. For the moment I favor more downside but that doesn't mean we can't first get a higher bounce.

Jeff Bailey : 2/25/2009 3:34:45 PM

dj- US Officials: Govt. won't make stress tests public

Jeff Bailey : 2/25/2009 3:27:15 PM

EWZ $34.99 +2.97% ...

Jeff Bailey : 2/25/2009 3:26:00 PM

FCX $29.88 +6.75% ...

Jeff Bailey : 2/25/2009 3:25:41 PM

VIX.X 43.28 -4.85% ...

Jeff Bailey : 2/25/2009 3:25:27 PM

Swing trade call option alert! ... for one (1) of the Companhia Vale Do Rio Doce RIO March $12 Calls (RIO-CE) at the offer of $1.70.

RIO $13.09 +1.23% ...

Jeff Bailey : 2/25/2009 3:13:34 PM

Selling long of UYG at the bid of $2.54 in personal account.

Jeff Bailey : 2/25/2009 3:09:17 PM

XLF $8.25 +2.48% ...

Jeff Bailey : 2/25/2009 3:09:04 PM

UYG $2.54 x $2.55

Jeff Bailey : 2/25/2009 3:08:53 PM

RKH $45.62 +5.13% ...

Jeff Bailey : 2/25/2009 3:08:11 PM

BIX.X 72 alert! (see Wednesday's wrap)

Jeff Bailey : 2/25/2009 3:07:42 PM

NYSE a/d 1,244/1,790

Jeff Bailey : 2/25/2009 2:50:19 PM

Regular sessions.

Jeff Bailey : 2/25/2009 2:50:10 PM

Also see on YM.

Jeff Bailey : 2/25/2009 2:49:36 PM

BIX.X 69.46 +1.84% ... WKLY R1 alert!

Keene Little : 2/25/2009 2:49:32 PM

By the time you get this it will probably be violated, but could we be looking at an inverted head & shoulders, with a neckline of about 775 and a head at about the 742 low on the S&P?

Good eye Scott. The inverse H&S price objective would be about 808 and as shown on the SPX 30-min chart a 162% Fib projection for the 2nd leg up in the bounce off Monday's low is just under 807: Link . A rally above yesterday's high would suggest that's where we could be headed next. Otherwise a break of today's mid-day low near 754 would suggest a break of 700 is next. So far we've got a choppy mess today.

Jane Fox : 2/25/2009 2:38:17 PM

SAN FRANCISCO (MarketWatch) -- Shareholders of Apple Inc. voted Wednesday to re-elect the company's board of directors despite concerns related to the disclosure, or lack thereof, about the health of Chief Executive Steve Jobs.

Jane Fox : 2/25/2009 2:31:30 PM

ES (S&P futures) briefly rallied to new daily highs but they were not able to sustain the rally. An AD line at -1296 should have given you a clue that was a distinct possibility.

Keene Little : 2/25/2009 2:14:54 PM

The bounce off this morning's low is a 3-wave bounce correction and unless it takes out yesterday's high we should see stronger selling follow if we get new daily lows from here.

Jeff Bailey : 2/25/2009 2:06:36 PM

02:00 Market Watch at this Link

Keene Little : 2/25/2009 2:03:30 PM

You just had to know reinstatement of the up-tick rule was coming. That's certainly a bit liking closing the barn door after the horses have left. I predict the rule will be reinstated when the market makes its low for the year. Government (which makes decisions by committee) is always the last one to act.

Jeff Bailey : 2/25/2009 2:01:16 PM

10-year Yield ($TNX.X) ... up 11 bp at 2.098% ... tries to leverage WKLY S1.

Jeff Bailey : 2/25/2009 2:00:23 PM

SPY $77.48 (unch) ...

Keene Little : 2/25/2009 1:58:09 PM

To provide a sense of some upside potential if the current rally continues, two equal legs up from Monday afternoon is at SPX 788.

Keene Little : 2/25/2009 1:41:02 PM

SPX just broke above its downtrend line from yesterday and that's potentially bullish. If we're going to get a bigger A-B-C bounce off this morning's low with equality in the two rally legs watch SPX 767.38 for a high. The top of the down-channel from February 9th is currently near 764.

Jane Fox : 2/25/2009 1:34:37 PM

Crude is doing just what the charts said it would do, rally. Now how much will it rally? There is a way to figure that out from the ascending triangle but since I find drawing these triangles so subjective to begin with I don?t think a projection would be worthwhile.

$50 should be an easy target though. Link

Jeff Bailey : 2/25/2009 1:33:26 PM

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

FCX is profiled as short 1/2 position

Jane Fox : 2/25/2009 1:29:51 PM

WASHINGTON (MarketWatch) -- Federal Reserve board chairman Ben Bernanke seemed to give tacit support on Wednesday to restoration of federal rules that don't allow short-selling while a stock is declining. In a question-and-answer session with the House Financial Services committee, Bernanke said that the rule "may have had some benefit" during the current crisis. Mary Schapiro, the new chief of the Securities and Exchange Commission, told the New York Times this week that she's thinking about reinstating the rule. The SEC eliminated the rule in 2007. It had been in place since the market crash in 1929. It stated that short sale had to take place at a price higher than the price of the previous trade. Robert Brusca, chief economist at FAO Economics, said too many people on Wall Street were able to make profits from the pessimism in markets and restoration of the up-tick rule was needed.

Jane Fox : 2/25/2009 1:16:31 PM

Oh my gosh daytraders really don't like this kind of market movement, not at all. Link

Jeff Bailey : 2/25/2009 1:08:15 PM

SMH $16.75 +2.07% ... best levels of the week.

Keene Little : 2/25/2009 1:04:24 PM

This is not racing to the downside yet and that raises the possibility for another leg up in the bounce off this morning's low (as part of a larger consolidation pattern or choppy rally). For now keep an eye on the downtrend line from yesterday afternoon, currently near SPX 762, as that should not break if we've got lower lows coming.

Jeff Bailey : 2/25/2009 12:54:30 PM

Companhia Vale Do Rio Doce (RIO) $12.73 -1.54% ...

Jeff Bailey : 2/25/2009 12:53:09 PM

Freeport McMoran (FCX) short ... stop goes $32.00. Target is $25.00.

Jeff Bailey : 2/25/2009 12:51:17 PM

Swing trade short alert! for 1/2 position in shares of Freeport McMoran (FCX) at the bid of $28.92

Keene Little : 2/25/2009 12:47:39 PM

Playing with some Fibs and trend lines I've had a projection down to 711 for SPX which is where the 1st and 5th waves in the move down from February 9th would be equal and it would be back down to the bottom of its parallel down-channel by early Friday. Assuming the decline keeps going from here I also see the potential for SPX to find support near 725. So for now, until I see how the decline develops and can get a better sense of the downside target, the potential support zone is 711-725, shown in dark red on the updated 60-min chart: Link

Moving out to the daily chart, the bounce following the next low (711-725) should last a couple of weeks and could make it as high as 800 before turning back down again for a final low into the end of the month, with a downside target for now in the 625-650 area (dark red wave count): Link . The pink wave count shows the possibility for a bounce all the way back up to the downtrend line from November, near 860, by the end of March but I consider that to be a lower probability.

Jeff Bailey : 2/25/2009 12:38:33 PM

SPX NH/NL tally yesterday was 0:65.

02/20/09 tally was 1:96.

11/20/08 tally was 0:263

Jane Fox : 2/25/2009 12:30:46 PM

I expected a reactionary bounce from 740 support, a bounce that should have easily reached 800, a support which is now resistance, but that does not seem to be happening. This should worry the bulls a great deal. Link

Jane Fox : 2/25/2009 12:18:50 PM

The markets have made a little comeback but the internals are telling me this is just a place to get short and ride the wave back down.

Jeff Bailey : 2/25/2009 12:08:26 PM

12:00 Market Watch at this Link

Jeff Bailey : 2/25/2009 12:03:35 PM

dj- DOLLAR TREE 4Q NET UP 11% ON INCREASED SALES

Discount chain net rises to $105.2 million, or $1.15 a share on increased sales as the discount chain continued to buck the downturn faced by other retailers.

Jeff Bailey : 2/25/2009 11:58:41 AM

$VXO.X 46.94 +3.82% ...

Jeff Bailey : 2/25/2009 11:58:27 AM

Dow Diamonds (DIA) $72.46 -1.25% ... DIJ-CT $3.00 x $3.05

Jeff Bailey : 2/25/2009 11:55:44 AM

XOM $72.09 (unch) ...

CVX $64.04 -1.89%

Jeff Bailey : 2/25/2009 11:54:41 AM

USO $25.38 +3.84% ...

PBR $27.32 +1.86%

Jeff Bailey : 2/25/2009 11:54:12 AM

dj- ISRAELI WARPLANES REPORTEDLY STRIKE GAZA

Israeli launches two air strikes along the Gaza-Egypt border as delegates from three Palestinian factions were crossing at a nearby terminal, witnesses say. Palestinian militants earlier fired two rockets into southern Israel.

Jeff Bailey : 2/25/2009 11:53:24 AM

dj- FREDDIE SEES JANUARY DELINQUENCY RATE RISE

Freddie Mac saw a rise in delinquency of single-family home loans to 1.98% in January from 1.72% in December as the mortgage finance company felt the dual impact of its foreclosure program being suspended and the broader economic slowdown.

Jeff Bailey : 2/25/2009 11:52:28 AM

dj- CHIP SALES SEEN SLUMPING IN 2009 AS WOES MOUNT

Two research firms again cut their estimates of global semiconductor sales this year as the economic downturn accelerates, with a recovery not expected until 2010 at the earliest. Gartner predicts a decline of 24%, while IDC anticipates a 22% drop.

Keene Little : 2/25/2009 11:47:35 AM

Resistance for this morning's bounce is likely to be in the 38%-50% retracement zone which is 761.50-764.20 and we're there now. Above the 62% at 766.86 would be a bullish heads up.

Jeff Bailey : 2/25/2009 11:47:16 AM

Semiconductor HOLDRs (SMH) $16.62 +1.34% ... comes to WKLY Pivot.

Jeff Bailey : 2/25/2009 11:46:18 AM

dj- AMBAC LOSS NARROWS ON FEWER WRITE-DOWNS

Ambac's 4Q loss narrows to $2.34 billion, on smaller write-downs and improved revenue figures. Latest results included $594.4 million in realized and unrealized derivatives losses, compared with $5.18 billion a year earlier.

Jeff Bailey : 2/25/2009 11:42:09 AM

A contrarian to Mr. Odum might then think ... could restrict growth if taxes are raised.

Jeff Bailey : 2/25/2009 11:40:20 AM

dj- Shell's Odum: Canada govt. could stimulate oil sand growth if taxes are cut

Jane Fox : 2/25/2009 11:06:19 AM

Bernanke: We're not making it up as we go along

Jane Fox : 2/25/2009 11:00:53 AM

TARP passage was key to avoiding deeper crisis: Bernanke

Jane Fox : 2/25/2009 11:00:33 AM

World came close to global financial meltdown: Bernanke

Keene Little : 2/25/2009 10:59:30 AM

There's a slight difference between the patterns of ES using all-hours and SPX. ES looks like it needs to stair-step lower while SPX looks like it has completed a 5-wave move down from yesterday and is set up for a larger bounce to correct this morning's decline. The line in the sand for bears is SPX 770 which would be a 78.6% retracement of the decline. I'll be watching the form of each bounce for clues as to whether we should continue to expect lower prices today.

Keene Little : 2/25/2009 10:31:04 AM

SPX is trying to hold onto its uptrend line from Monday afternoon, near 757. So far it looks like it's consolidating before breaking lower. It now takes a rally back above 770 to negate the bearish price pattern.

Jane Fox : 2/25/2009 10:08:27 AM

WASHINGTON (MarketWatch) - Sales of pre-owned homes dropped 5.3% to a seasonally adjusted annual rate of 4.49 million in January, the lowest sales pace in 12 years, the National Association of Realtors reported Wednesday. Sales are down 8.6% in the past year, the industry trade group reported. Sales were lower than the 4.80 million pace expected by economists surveyed by MarketWatch. The median sales price fell to $170,300, the lowest in nearly six years and down 14.8% compared with a year ago. The inventory of unsold homes fell 2.7% in January to 3.6 million, representing a 9.6-month supply at the January sales pace.

Keene Little : 2/25/2009 10:08:14 AM

With the confirmation now that yesterday's bounce is finished I'm now watching to see what kind of decline we get (impulsive vs. correction). That will provide some clues as to whether we'll head for a new low (the 711 downside target) or consolidate in a larger corrective pattern instead. Until proven otherwise I think we'll get the new low as I've been showing on the SPX charts.

Jane Fox : 2/25/2009 10:07:22 AM

The VIX is spiking all over the place today, you'd think it was an OPEX week or something (that was last week though). But whatever the VIX Is doing the AD line and volume are heading straight down so no time to try any long positions.

Keene Little : 2/25/2009 9:54:32 AM

SPX back below 758 would confirm yesterday's rally leg is finished. Until then we could see another push higher which would give us a 5-wave move off Monday's low and indicate a trend change to the upside. So far the bounce off Mondays low is a correction only and would be confirmed as that with a drop below yesterday morning's high near 758.

Jane Fox : 2/25/2009 9:52:10 AM

AD line is now -1475. I have noticed this week if the VIX is giving me bullish undertones like it did this morning but the AD line is moving opposite I need to be careful of the the VIX.

Jane Fox : 2/25/2009 9:50:42 AM

Getting back to the SPX chart I posted at 9:46. The weekly MACD is not giving me any bullish hints at all so and is actually quite bearish. Things are not looking good for the bulls I'm afraid.

Jane Fox : 2/25/2009 9:49:11 AM

WEll the VIX just spiked almost 1.5 points and ES is continuing its fall. THis is exactly what happened Monday morning.

Jane Fox : 2/25/2009 9:47:53 AM

ES is making new daily lows but the VIX is NOT making new daily highs telling me this selling does not have the powder to continue.

Jane Fox : 2/25/2009 9:46:21 AM

Here is a weekly chart of the SPX. Back in July and October 2002 it made a double bottom at 760-775 area and never looked back. Well never looked back until recently that is. In November 2008 the SPX broke that support to make a low at 741 and this week it retested that new lower support. We may be witnessing a bottoming process and this could be the area from which we take off and never look back. On the other hand if this zone breaks that would not be so good and a new support zone may have to form. Link

Jane Fox : 2/25/2009 9:35:05 AM

AD line opens a bearish -791

Jane Fox : 2/25/2009 9:34:49 AM

I was looking for Gold to retrace from its $1000 resistance and this may be all we get and the next push could break through. Link

Keene Little : 2/25/2009 9:27:34 AM

It was a relatively quiet overnight session (ES high to low was only 10 points) with price coiling as we head for the open. If the market heads immediately higher out of the gate watch for the possibility of a bull trap with reversal back down.

Jane Fox : 2/25/2009 9:27:17 AM

Crude is once again pushing up against the upper trend line of the ascending triangle. Ascending triangles are bullish so I suspect it will break through but I will not be trading this break because those trend lines are too subjective for me. I like the more objective kind of resistance/support you get from a swing high/low. Link

Jane Fox : 2/25/2009 9:24:13 AM

Day traders have the 10:00 Existing Home sales report to navigate.

Fed Chairman Bernanke continues his testimony

For you Crude traders remember the weekly Crude Oil Inventories at 10:30.

Jane Fox : 2/25/2009 9:11:21 AM

The bulls were able to get their act together yesterday and stage a rally, unfortunately though the rally didn't even make it to Monday's highs. Investors were hoping the momentum would carry through the overnight session and see it extend a little further but alas it did not and succumbed to this frustrating sideways consolidation. Link

Keene Little : 2/24/2009 11:51:01 PM

Wednesday's pivot table: Link

SPX, DOW and NDX all stopped at the tops of their parallel down-channels for their February declines. The wave pattern calls for another leg down into Thursday/Friday before setting up a larger bounce. But if we get a small pullback and then the market presses higher again we'll get a short-term bullish pattern for at least a few days.
SPX 60-min chart: Link
DOW 60-min chart: Link
NDX 60-min chart: Link

But there's one thing that has me wondering whether the stock market may be ready to rally from here. The daily chart of TLT, the 20+ Year Treasury ETF, looks like it's ready for another leg down. If bonds are selling off we could see money rotate into stocks. Perhaps bonds are going to rally instead. At any rate I'll be watching the pattern in stocks and bonds to see whether they run together or counter to one another. TLT daily chart: Link

Jeff Bailey : 2/24/2009 10:52:38 PM

President Obama's Speech ... Source: White House Link

Jeff Bailey : 2/24/2009 10:37:05 PM

YM 15-minute interval (all sessions turned on) Link

Jeff Bailey : 2/24/2009 10:27:25 PM

YM lower by 37 at 7,267

Jeff Bailey : 2/24/2009 10:24:39 PM

Stock futures were little changed during the President's address, perhaps modestly lower.

ES currently slips to extended session low, -3.00 at 765.75

Jeff Bailey : 2/24/2009 10:22:03 PM

I thought tonight's Presidential address was "good."

Moments of inspiration as well as a reality of the difficult times ahead.

Certainly I do not agree with all of President Obama's views.

He is certainly a "bottom up" approach to economic prosperity.

My most angered moment was certain Democrats cheering the "inherited deficit" point.

How quickly they forget they've had the majority in Congress and Senate House for 4-years.

Anyway, good speech.

Jeff Bailey : 2/24/2009 10:13:07 PM

$NIKK up 115 points, or +1.59% at 7,384.

OI Technical Staff : 2/24/2009 9:59:59 PM

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