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Jeff Bailey : 2/26/2009 3:58:10 PM

February 19th Mar-April contango was 1.8% into the 02/20/09 termination.

Jeff Bailey : 2/26/2009 3:56:16 PM

CNBC guest trader mentioning narrowing Contango ... Really saw it intra-day today at 1.6% April-May. Be alert out there.

Keene Little : 2/26/2009 3:50:50 PM

The DOW pulled back and tested its broken downtrend line from February 9th, which was broken yesterday afternoon. So far the back test is holding and that's potential bullish for another leg up in this week's choppy bounce. On the other hand, SPX dropped back below its downtrend line and is bouncing back up to as we head into the close, near 758. There's a mixed message from these two, as relates to their downtrend lines, and that doesn't help us with a clearer answer for tomorrow. Caution for both sides is advised.

Jeff Bailey : 2/26/2009 3:49:39 PM

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

Jane Fox : 2/26/2009 3:26:37 PM

And once again the bears are able to overrule the bulls and turn the internals bearish. Link

Jeff Bailey : 2/26/2009 3:24:56 PM

Russell 2000 Index (RUT.X) alert! 392.77 -2.15% ... see last night's market wrap

Keene Little : 2/26/2009 3:21:59 PM

While the leg up from Monday has been confirmed as complete it doesn't necessarily mean we'll head directly lower. If today's pullback is part of a larger upward correction pattern we should see SPX find support around 750 (two equal legs down from yesterday). A strong rally leg back up from there is possible. I don't think that's what will happen but remains aware of the possibility if you piled in short today.

Keene Little : 2/26/2009 2:54:35 PM

Breaking to a new daily low would confirm the break of the uptrend line from Monday and the completion of the bounce.

Jeff Bailey : 2/26/2009 2:52:03 PM

I'm thinking we could get some "trader disgust" and bid pulling.

Jeff Bailey : 2/26/2009 2:49:59 PM

Swing trade long exit alert! ... for the 1/8 long position in shares of Petroleo Brasiliero (PBR) at the bid of $28.12.

Jeff Bailey : 2/26/2009 2:39:39 PM

HMO.X 841.42 -10.13% ...

Jeff Bailey : 2/26/2009 2:39:25 PM

VIX.X 43.65

Jeff Bailey : 2/26/2009 2:38:55 PM

Swing trade put triggered alert! for the CI-SC $2.65 with CI $16.30 -9.04%

Keene Little : 2/26/2009 2:33:36 PM

With about 90 minutes to go I'm guessing we're going to see lower prices into the close. If "they" do manage to rally it instead I would not trust it for holding.

Jeff Bailey : 2/26/2009 2:29:22 PM

USO $27.57 +6.00% ...

Keene Little : 2/26/2009 2:19:59 PM

I got out on my [long] trade on USO today. This a good spot to try a short with a stop above 28?

USO has bounced back up to the shelf of support near 28 that was broken this month. Will support turn into resistance here? That's always a good bet until proven otherwise. Bullishly USO has broken its short-term down trend line from January and its longer-term downtrend line from July-Sept 2008. RSI is up to previous highs and therefore overbought and MACD remains below zero. I'd say USO is a short here with a stop at either 29 or 30, depending on your risk tolerance. I see downside potential to about 20 for a bottom in USO. Daily chart: Link

Jane Fox : 2/26/2009 2:06:23 PM

Crude is up +2.10 so far today and approaching a mild resistance if resistance at all. We will know if the market makes a swing high here. Link

Jeff Bailey : 2/26/2009 1:40:23 PM

dj- IBM REAFFIRMS 2009 EPS VIEW OF AT LEAST $9.20

Information technology giant expects 1Q double-digit percentage growth in long-term signings in its service business and growth in total signings, and has "a good pipeline of software opportunities."

IBM $89.24 +3.88% Link ... #1 most heavily weight component in the YM/DIA

Jeff Bailey : 2/26/2009 1:39:36 PM

dj- JPMORGAN SEES PROFITABLE QUARTER, LAYOFFS

Executives at JPMorgan Chase say the New York bank expects to post a solid profit in this year's first quarter, and will eliminate a total of 12,000 jobs within its Washington Mutual retail banking unit.

JPM $23.50 +8.23% Link ... The +3.33% net gain for the BPDJIA bullish % yesterday.

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

dj- VOLCKER SAYS TOP TREASURY POSTS MUST BE FILLED

Former Fed Chairman Paul Volcker says vacancies in top Treasury positions are an "unfortunate situation." Tells Congressional Joint Economic Committee Timothy Geithner "shouldn't be sitting there alone," without Deputy Secretary.

Jane Fox : 2/26/2009 1:33:11 PM

This is all looking very bearish folks. I was counting on the bulls staging a decent rally this week. It didn't need to be a big one, any kind of rally would have done but so far they have not had the power. This is all looking very bearish folks.

Jane Fox : 2/26/2009 1:30:56 PM

The DOW is now down -1.61 points. Pretty close to even heh?

Keene Little : 2/26/2009 1:29:00 PM

If you look at volume on something like ES you can see that today's declines are on higher volume than the bounce attempts. As long as that continues we should see lower lows. Keep an eye on the today's downtrend line now for guidance as to whether you want to be short or long the market. It's currently near SPX 767.50. So far price is descending in a tight parallel down-channel from this morning's high.

Jeff Bailey : 2/26/2009 1:23:05 PM

The bullish side of me is NOT overly impressed with the market's reaction to President Obama's 10-year budget plan.

Jeff Bailey : 2/26/2009 1:17:07 PM

VXO.X 45.57 -0.10% ...

Keene Little : 2/26/2009 1:16:59 PM

SPX is now threatening to break its uptrend line from Monday, near 762.

Jeff Bailey : 2/26/2009 1:16:54 PM

Swing trade call exit alert! ... the Dow Diamonds DIA Mar $72 Call (DIJ-CT) at the bid of $3.00.

DIA $72.60 -0.09% ...

Jeff Bailey : 2/26/2009 1:00:27 PM

Disclosure: I currently hold bearish position in CI.

Jeff Bailey : 2/26/2009 12:59:34 PM

Swing trade put setup alert! ... for one (1) of the Cigna Corp. CI July $15 Puts (CI-SC) at the offer ...

Should shares of CI trade $17.30, or $16.30.

Keene Little : 2/26/2009 12:52:20 PM

Total volume is running a little behind yesterday's which was on the light side as well. This choppy price action has many traders on the sidelines waiting for some clarity.

Jane Fox : 2/26/2009 12:48:57 PM

Overnight lows have not been violated - yet. Link

Jane Fox : 2/26/2009 12:47:46 PM

Bulls are just not able to make a stand today and markets are now testing daily lows or making new daily lows.

Jane Fox : 2/26/2009 12:20:30 PM

Internals are mostly bullish but certainly not clearly bullish which is reflected in the choppy price action. I need to see the VIX make a move one way or the other before I will say anyone side has control. Link

Keene Little : 2/26/2009 11:54:44 AM

SPX has broken its uptrend line from yesterday's mid-day low (which sparked a little bit of selling 5 minutes ago) so that's the first heads up that the bounce may have finished. A retest of the line would be a bounce back up to about SPX 773.50. The uptrend line from Monday, which looks like the bottom of a bear flag consolidation pattern for the week, is currently near 761. A break below that level would confirm the bounce has finished.

Jeff Bailey : 2/26/2009 11:30:44 AM

EIA: Weekly Nat. Gas Storage Table Link ... Draw of 101 Bcf

Keene Little : 2/26/2009 11:04:06 AM

This morning's rally continues to look labored (overlapping highs and lows has it looking more like an ending pattern than the start of something bigger to the upside). SPX 786 is not that far away but it looks like it the way this is rallying.

Jeff Bailey : 2/26/2009 10:39:13 AM

Goldman Sachs (GS) $92.24 +2.58% ... probes its 01/06/09 intra-day high.

Keene Little : 2/26/2009 10:36:33 AM

Relating to the debate about inflation vs. deflation, whether gold is a good inflation hedge, etc., I've been watching TIP for some clues. TIP is the ETF for Treasury Inflation Protected bonds (appropriately named for TIPS). Investors will buy these bonds if they're worried about inflation and therefore a rallying TIP would be supportive of the argument for buying gold as an inflation hedge.

After breaking out of a sideways triangle pattern since December TIP is breaking down. The daily chart shows a head-fake break to the upside but has now reversed and broken down below its January 23rd low, confirming the failed break to the upside: Link

A failed pattern usually reverses hard in the opposite direction (down in this case). This adds to my contention that gold bugs have been premature in their flocking to gold as an inflation hedge. First we have to get through deflation and then I'll agree gold will be a great buy (down around $600-650).

Jeff Bailey : 2/26/2009 10:25:58 AM

Companhia Vale Do Rio Doce (RIO) $13.40 +4.28% ... well off its 01/06/09 relative high of $15.25.

Jeff Bailey : 2/26/2009 10:24:41 AM

Freeport McMoran (FCX) $31.46 +7.32% ... probes its 01/06/09 relative high.

Keene Little : 2/26/2009 10:18:10 AM

Silver is starting to make a big move to the downside, down nearly -5.5% this morning. It should lead gold back down. The GDX put play continues to look good, especially once it breaks its January 29th low at 32.00.

Jeff Bailey : 2/26/2009 10:15:48 AM

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

Keene Little : 2/26/2009 9:55:34 AM

There's been no follow through to the upside after the open (gap n crap so far). But the uptrend line for ES's overnight trading has not been broken yet (near 767) which keeps open the possibility that this morning's pullback will be reversed. Trade carefully here--lots of whipsaws.

Jane Fox : 2/26/2009 9:54:33 AM

The last time Crude's MACD was above 0 was July 17th, 2008. It would be worth noting if this little Crude rally is able to get the MACD above 0 again.

Jane Fox : 2/26/2009 9:46:03 AM

S&P futures are now making new daily lows but the VIX is not making new daily highs so I suspect the selling will stop soon.

Jane Fox : 2/26/2009 9:44:55 AM

AD line opens at +1103

Keene Little : 2/26/2009 9:28:20 AM

If the rally continues after the open there is still the upside target at SPX 786 that could be reached (for two equal legs up from Monday).

Jane Fox : 2/26/2009 9:24:54 AM

Gold hit resistance and has now fallen to a low of 943 overnight breaking its upward trend line. This dip has not even made it to the 38.20% retracement level and may have a ways to go before it rallies back to retest 1000. Link

Keene Little : 2/26/2009 9:20:26 AM

The price pattern for the overnight session in equity futures looks like a continuation of yesterday's--very choppy with overlapping highs and lows but pressing higher. It looks like something we would normally see as an ending pattern. Yesterday's highs have not been exceeded and the thing I would worry about this morning is a gap n crap.

Jane Fox : 2/26/2009 9:17:30 AM

Crude is in its 3rd day of rally mode but I will need more bullish proof before I would even think of taking a long position. MACD needs to get above 0. I need to see a higher high then a higher high to confirm it. Link

Jane Fox : 2/26/2009 9:11:31 AM

The overnight session was bullish, higher highs and lows, so I expect the AD line to open very close to +1000. This bullishness should carry throughout the day and if not then the support zones forged out earlier this week are in grave danger of breaking. If the SPX falls over a 100 points in a short time like it did from Feb 9 to the 23rd you are not out of line to expect the bulls to stage a reactionary bounce,. If they cannot gather the resources to rally then you know they are very very weak and the bears will be taking over again real soon. Link

Jane Fox : 2/26/2009 8:56:18 AM

I see where President Obama is scheduled to speak at 9:30ET.

10:00 New Home Sales released

Jane Fox : 2/26/2009 8:54:25 AM

WASHINGTON (MarketWatch) -- Demand for U.S.-made durable goods fell for a record sixth straight month in January amid widespread weakness from both domestic and foreign buyers.

Orders for durable goods -- such as airplanes, computers and washing machines --fell 5.2% in January, the Commerce Department reported Thursday. Orders had never fallen six months in a row since the data collection began in 1992.

Orders fell in every major sector, signaling that companies and consumers across the globe are battening down the hatches by delaying or canceling major purchases. Weakening business investment is expected to be a major drag on the economy in the first quarter as it was in the fourth quarter.

The January report was much weaker than the 3% drop expected by economists surveyed by MarketWatch

Jane Fox : 2/26/2009 8:49:53 AM

WASHINGTON (MarketWatch) -- Signaling persistent labor market weakness, first-time applications for state unemployment benefits for the week ending Feb. 21 rose 36,000 to a seasonally adjusted 667,000.

The level of initial claims is the highest since October 1982 and up 86% from the same period in the prior year. The four-week average of new claims, which measures the underlying trend, rose 19,000 to 639,000 -- also the highest level since October 1982, and up 84% from the prior year.

For the week ending Feb. 14, the number of people collecting benefits reached a record high, rising 114,000 to 5.11 million -- a level that is 86% higher than in the prior year. The four-week average of continuing claims was also a record, gaining 89,250 to 4.93 million -- a level that is 80% higher than in the prior year

Jeff Bailey : 2/26/2009 12:23:09 AM

Citigroup-Govt. aid deal may come this week ... AP Story Link

Citigroup (C) $2.52 -3.07% on Wednesday.

Keene Little : 2/26/2009 12:11:46 AM

Thursday's pivot table: Link

The bounce off Monday's low fell short of achieving two equal legs up, which would have been at SPX 786, and gave up quite a bit of the bounce into the close, making it look like the bounce finished. If so then we should see a move down to a Fibonacci projection near 722 by the end of the day Friday, shown in dark red on the 60-min chart below. Otherwise a continuation of the choppy rally could make its way on up to the 820 area by next week to tag the downtrend line from January (shown in pink). SPX 60-min chart: Link

The parallel down-channel shown on the above chart is also shown on the daily chart and I'm showing a couple of ways price could bounce around inside the channel before finishing the decline from October 2007: Link . The pink price pattern calls for a higher bounce and only a minor new low below 740 in March whereas the dark red price pattern calls for a final plunge lower into the end of March with a downside target in the 625-650 area. It should become clearer as we get closer and give us a very good buying opportunity for a multi-month rally (although a retest of the low a couple of months out is likely).

Jeff Bailey : 2/25/2009 11:39:19 PM

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

Jeff Bailey : 2/25/2009 11:31:35 PM

Swing trade long raise stop alert! for the 1/8 long position in the underlying shares of Petroleo Brasileiro (PBR) $27.23 +1.52% ... to $22.00 (from $20.00)

Jeff Bailey : 2/25/2009 10:47:18 PM

"Stress Test" US Treasury release of terms of Capital Assistance Program ... Source: US Dept. of the Treasury Link

Jeff Bailey : 2/25/2009 10:45:12 PM

Expanded Tax Credit for First-Time Homebuyers ... Source: US Dept. of the Treasury Link

OI Technical Staff : 2/25/2009 9:59:59 PM

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