Market Internals


Whether market participants were awaiting the FOMC meeting that begins tomorrow or Apple earnings tonight, trading was tame today on light volume.

Many market watchers presume that Chairman-to-be Janet Yellen will lead or at least co-lead this week's FOMC meeting. The early part of this week will be about positioning portfolios ahead of the first FOMC statement that will provide the first glimpse into a Yellen-led FOMC.

Indices ended with mixed performances. The SPX gained 0.13 percent, the Dow slipped 0.01 percent; and the NDX inched 0.03 percent lower. The RUT fell 0.04 percent, but the SOX gained 0.64 percent. The Dow Jones Transports climbed 0.39 percent. Consumer stables, technology, and healthcare tended to be the best-performing sectors, while financials, consumer discretionary, industrials, materials and utilities tended to be the underperformers.

Gold futures (/GC) for December delivery settled at 1352.2, down 0.3. At one point this morning after the Pending Home Sales disappointed, gold futures reached a five-week high at 1,361.8 before pulling back again. Silver futures (/SI) for December delivery settled at 22.538, down 0.101. Copper futures (/HG) for December delivery settled at 3.2690, unchanged.

Light sweet crude futures (/CL) for December delivery continued their bounce off last week's 95.95 low. They settled at 98.68, up 0.83. They were perhaps influenced by a drop in Libyan output caused by labor disputes, some experts speculated. Brent crude was more strongly impacted because of their sensitivity to upheavals in the area.

Monday's Developments

Yesterday, the Bank of Japan's Deputy Governor Kikuo Iwata vowed that the central bank would continue to buy bonds until inflation hits the bank's target. As a result, the yen weakened. Asian bourses gained, with the Nikkei 225 equities getting an extra price boost from that weakening yen. The Nikkei 225 gained 2.19 percent; the Hang Seng, 0.48 percent, and the Straits Times, 0.08 percent. China's Shanghai Composite gained 0.04 percent.

After starting out in positive territory, European bourses stumbled in early trading. Most managed a late-day climb off their lows, however. Amid increasing talk of signs of growth was mixed news. Spanish mortgage lending again fell heavily, and, in the U.K., October retail sales (High Street sales) were flat. The FTSE 100 gained 0.07 percent, the DAX lost 0.08 percent, and the CAC 40 fell 0.48 percent. Spain's IBEX 35 fell 0.81 percent, and Italy's FTSE MIB, 0.24 percent.

Today's allotment of U.S. economic releases included September's Industrial Production and Capacity Utilization. This release had been delayed 11 days due to the shutdown. Experts predicted a gain of 0.5-0.6 percent for industrial production after the prior gain of 0.4 percent. Industrial production gained 0.6 percent. Capacity utilization rose to 78.3 percent, up from the prior 77.9 percent and above the expected 78.1 percent. While the index's level for total industrial production equaled its 2007 average and significantly bested the year-ago level, capacity utilization remained 1.9 percent below its 1972-2012 average, the Board of Governors of the Federal Reserve System said.

The board summarized the third quarter's industrial production, too, saying that it rose at an annualized rate of 2.3 percent. Component industry groups included manufacturing output, rising 0.1 percent after August's 0.5-percent gain; production at mines, rising 0.2 percent; and output at utilities, gaining 4.4 percent. The rise in the manufacturing output was less than anticipated, disappointing those who had expected a 0.3 percent gain.

September production of consumer goods rose 0.8 percent, but third-quarter results showed a 1.1-percent decline in the annual rate for the third quarter. Durable goods output rose 0.7 percent in September, but that was due to a gain in automotive products and not a broad gain that included home electronics, appliances, furniture, and carpeting. Manufacturers of furniture and clothing might have scaled back production but clothing manufacturers didn't: clothing production rose 1.6 percent to a level 4.5 percent above the year-ago level. Indices for production of foods and tobacco decreased as did those for chemicals.

The board stated that all the major business equipment categories gained in September. That included the production of transit equipment, industrial and other equipment, and information processing equipment. To gain a look ahead, the output of materials that will be processed further rose 0.3 percent for the month and gained at an annual rate of 4.2 percent for the third quarter. September gains were prompted by gains in energy, however.

September's Pending Home Sales Index was the next release, and that one disappointed. The National Association of Realtors reported that pending home sales fell 5.6 percent. Experts had predicted a rise of 0.5 percent. Pending home sales excludes new construction.

This was the fourth consecutive decline in sales, the National Association of Realtors reported. Concerns over the then-looming possibility of a shutdown, higher mortgage rates and higher home prices cut into the number of contracts pending. Government and contract workers likely were sidelined, said Lawrence Yun, chief economist for the NAR. The NAR said that the index is hitting its lowest level since December 2012 and this month's results also mark the first time in 29 months that pending sales weren't above their year-ago levels. The region with the biggest drop was the Northeast, perhaps lending credence to the impact of federal employees stepping back from the home-buying process. However, even with this disappointment, it's likely that this year's existing-home sales will be about 10 percent higher than those in 2012.

Moody's weekly Business Confidence Index dropped again this week, the second week in a row. The index dropped to 27.5 from the prior week's 29.4, perhaps not surprising when opinions were sampled during the shutdown. At the time, a government default seemed a possibility, if a remote one. Still, Moody's thought that businesses "shrugged off" worries about the looming problems, in contrast to their behavior during the 2011 debt-limit controversies. Moody's notes that two-thirds of the respondents still believe conditions will improve early next year.

The Federal Reserve Bank of Dallas unveiled its results for the October Texas Manufacturing Survey. In Texas, factory activity rose again in October. The production index rose to 13.3 from its prior 11.5. The Federal Reserve Bank of Dallas described production as increasing at a "slightly faster pace" than in September. Other components of the survey also showed a strong expansion for October. These included new orders, capacity utilization, and shipments. The hours worked index produced the first positive result in three months. However, the general business activity index and company outlook index declined, although both remained positive, and the employment index was 9.6, not much changed from its prior number.

The raw materials index rose to its highest level in nine months while the finished goods index remained positive but fell seven points. Respondents believe they'll see strong increases in both components in the future. The wages and benefits index increased sharply.

Perhaps not surprisingly since the data were collected October 15-23, some components measuring future business conditions declined. However, the bank described them as remaining in "strongly positive territory."

Story stocks today included Twitter, moving one step closer to its IPO. This weekend, the NYSE conducted a mock initial public offering. We all remember the mess that attended Facebook's (FB) IPO on the Nasdaq, and the NYSE wanted to avoid anything similar. This was the first time the NYSE ran a simulated IPO. The Nasdaq had also run a test IPO before launching FB, too. However, the exchange had limited the number of orders from member firms in the test to less than 10 percent of the actual orders that were received on IPO day. Currently, it's estimated that the Twitter IPO could occur as soon as November 7.

Story stocks reporting earnings today must start with Apple (AAPL, 529.88, up 3.92 or 0.75 percent). The company climbed during the regular session but was dropping hard as this report was prepared. It was more than 20 points lower than its close as these words were typed, but after-hours trading can be volatile.

The company was widely expected to report earnings of $7.92/share, with analysts expecting to see iPhone sales in the neighborhood of 31-33.6 million units and iPad sales in the neighborhood of 12.9-14.5 million units, depending on the source. Earnings were $8.26 per share. Revenue beat, too, as it was $37.5 billion against expectations of $36.82 billion. iPhone sales were ahead of expectations, at 33.8 million units. iPad sales were at 14.1 million units. Gross margins hit or slightly exceeded expectations, depending on the source quoting the expectations.

The company said it expected revenue of $55-58 billion in the next quarterly report, with prior expectations at about $55.48-55.53 billion. Gross margins for the next quarterly report are expected to be 36.5-37.5 percent, against expectations of 37.75 percent. Guidance was important this quarter as some analysts believe that demand for the iterations of iPhone 5 might weaken ahead of the iPhone 6's introduction next year.

When reporting earnings, (SOHU, 68.11, down 13.31 or 16.35 percent) reported that more advertisements were sold on its platform and revenue increased 29 percent year-over-year. The company advised that the fourth-quarter earnings should be $378-390 million, against prior expectations of $375.9 million. That sounds like good news, except that the company's current earnings fell from the year-ago level of $51.5 million, due to acquisitions and a special dividend paid to some shareholders. Despite the higher revenue when compared year-over-year, those greater expenses meant that earnings for this quarter were $41 million, down from that year-ago level of $51.5 million. The stock price dropped on more than 4.5 times the average daily volume. In addition, the company said it expected a 0-4 percent decline in revenue for brand advertising.

Merck (MRK, 45.35, down 1.19 or 2.56 percent) reported adjusted earnings of $0.92 per share on revenue of $11 billion. Analysts had predicted earnings of $0.88 per share on revenue of $11.12 billion. Although both measures decreased from the year-ago amounts, the EPS report beat predictions for the current quarter. Revenue was less than expected, however, due to the effects of expiring patents and foreign exchange rates. The company also said full-year adjusted earnings would be $3.48-$3.52, a narrowing of the former $3.45-$3.55 guidance. Full-year GAAP EPS estimates were also narrowed, to $1.61-$1.79 from the prior $1.58-$1.82.

Loews (L, 48.70, down 0.11 or 0.23 percent) reported net profit of $0.73, against expectations of $0.76-0.77 per share. A decline in adjusted profit was blamed on Diamond Offshore. Two of Diamond Offshore's customers had cash flow issues, issues that the company had previously disclosed.

Seagate (STX, 49.85, up 0.05 or 0.10 percent), manufacturer of electronic data storage products, was expected to report earnings of $1.31/share on revenue of $3.56 billion. Excluding special items, the company reported $1.29 per share on revenue of $3.49 billion. The company's CEO mentioned a conservative business management as the company responds to transitions in technology and macroeconomic uncertainties. The company dropped in after-hours trading, last down 4.71 percent from the day's close.

Biogen Idec Inc. (BIIB, 254.43, up 2.17 or 0.86 percent) was forecast to report earnings of $2.10-2.11 per share, but instead the company reported adjusted earnings of $2.35 per share. Revenue was $1.8 billion, also higher than the expected $1.75 billion. The company raised expectations for 2013 earnings to $8.65-8.85 per share, higher than its prior $8.25-8.50 per share and besting the prior expectation of $8.62 per share. The company said the launch of its hemophilia drug might be delayed, a delay the company learned about in discussions with the FDA last week. The cause of the delay will not affect the likelihood of approval but rather relate to the manufacturing process.

Sales of the company's MS drug Tecfidera beat expectations, driving the company's gains. This is the third of the MS drugs on the market, but about three-quarters of patients are reportedly considering switching over to this medication.

Bristol-Myers Squib (BMY, 52.02, up 3.25 or 6.66 percent) was a strong performer, gaining on more than four times average daily volume. The company benefited from its announcement of encouraging results related to a study of its cancer drug nivolumab.

Herbalife (HLF, 67.92, up 1.55 or 2.34 percent) reported earnings, excluding some items, of $1.41 per share on revenue of $1.2 billion. Analysts had expected $1.14 per share on revenue of $1.19 billion.

Let's look at daily charts. We'll see that several indices have been reaching new or new recent highs. Regardless, most didn't much headway from their week-ago levels. We did see one notable exception to that statement, however.


Those new to my Monday Wraps might find the following paragraphs useful when interpreting my charts. Those who have read the Wraps can skip straight to the charts. I set up nested Keltner channels on my charts. It's a run-of-the-mill channeling system like the more familiar Bollinger Bands. As with those more familiar BB's, channel boundaries are often targets for upside or downside moves. They also mark levels where prices might find support or resistance on closes. When several channel lines converge, that potential resistance or support might appear stronger, just as it would if 20-, 50- and 100-sma's all converge in one spot.

For the benefit of subscribers, I mark potential upside and downside target/support/resistance levels with rectangles, usually green for upside and red for downside. Orange rectangles are sometimes used when the darker-colored ones would not allow for a clear examination of the next target. From now on, I will mention the nearest potential support or resistance level in the discussion on the chart, but not the further-out ones. They can be located on the charts if price breaks through the nearest levels on consistent daily closes. If an interpretation such as "support levels appear stronger than resistance, so up looks more likely than down" is possible, I'll tell you. Often we traders must be able to defend our trade against a move in either direction.

As with any type of potential support or resistance, those with profits should be protective of those profits as support or resistance is tested. If prices find support and climb, look to the next higher rectangle, even one just broken through, as potential resistance. Do the reverse when resistance is breached. Hopefully, this format provides you with the information you need without requiring all night to read as happens when I list each potential support or resistance level individually.

Annotated Daily Chart of the SPX:

The SPX dipped modestly last week but soon found support and climbed again. Daily candles have been small in comparison with the strong candles that produced the straight-up climb from the bottom of its ascending recession channel. It may be fair to say that there's been some hesitation at the top of that channel. While that hesitation can be understood as a need to consolidate strong gains, especially ahead of an FOMC decosion, they question bullish prospects.

On a Keltner basis, the SPX has set a new upside target at about 1775-1780. That potential upside target would remain in place until and unless the SPX produced consistent daily closes below about 1738. That's likely to about where the red 9-ema would be located if the SPX were to drop to test it. Since the 9-ema is, of course, a moving average, it would likely drop from its current higher level to about that level on any retest in the next couple of days, although that's an estimation.

Daily closes that chop between about today's high and 1738 technically preserve that upside target, but they would be in a building congestion zone that doesn't give us much confidence about upside potential or information about next direction.

Consistent daily closes beneath about 1738 would set up a potential test of the support that would converge near the midline of the rising regression channel, from about 1716-1728. If support holds there on a retest and SPX prices then bounce, watch for potentially strong resistance to reassert itself again near 1738-1751. If prices fall through 1716 on consistent daily closes, a next potential target is set near 1695-1707.

Consistent daily closes beneath about 1695 would set up an important test of the converging Keltner support near 1651-1667. A failure to hold that support on daily closes would likely do psychological damage as well as financial damage to some bullish holdings. A further potential downside target is marked, if needed.

Annotated Daily Chart of the Dow:

As long as the Dow maintains daily closes above about 15385, it technically maintains a potential upside target at about 15668-15710. However, the Dow has moved up to test potential resistance that begins kicking in about 15586. Sustained daily closes above about 15710 set up a new potential upside target near 16000-16120.

It's possible that a strong jump in one of the 30 Dow components or a post-FOMC market-wide jump could send the Dow up through that 15586-15710 resistance zone and toward the next 16000-16100 target. However, for now it looks as if it should be time for a retest of the red 9-ema, at least. Support found at the red 9-ema and another bounce from there could likely again challenge the resistance the Dow currently tests from 15586-15710. However, consistent daily closes beneath about 15385 set a new potential downside target near 15200-15310.

Potential support zones and target areas stair step down from there, including the next-lower one at about 15000-15123. However, it’s the potential support from about 14719-14900 that's most important to maintain. Sustained daily closes beneath 14719 would do psychological damage. A lower potential downside target is marked in case that failure should occur.

Annotated Daily Chart of the NDX:

I can't provide a new potential upside target for the NDX because it's outrun its upside target on both the daily and the weekly charts. As mentioned last week, the NDX has been on a momentum run, and it's difficult to pinpoint when or where a momentum run will end. However, the NDX appears to be struggling with potential resistance that spans from about 3367-3412, producing small-bodied candles indicative of indecision. Tomorrow's response to AAPL's report may change that indecision, but maybe not since 99 other stocks comprise this index, too.

As long as the NDX maintains daily closes above about 3320, it remains in breakout mode on this daily chart. However, consistent daily closes below that 3320 level set up a potential new downside target near 3256-3291, where grey-channel support would likely converge with mid-channel support on the rising regression channel. If the NDX should dip to test this support then rise again, watch for potential resistance to be strong on a retest near 3320-3350.

Sustained daily closes beneath 3256 set a potential target near 3200-3235. On a Keltner basis, a break through 3200 on consistent daily closes sets up a test of potential support near 3095-3133, although we should perhaps be cognizant of potential support near the bottom of that rising regression channel, now near 3150. It's the lower Keltner level near 3095-3133 that is more psychologically important to hold, however. A lower potential downside target is marked in case that one fails.

Annotated Daily Chart of the RUT:

Like the SPX, the RUT has also been hitting new all-time highs but doing so with small-bodied candles that don't particularly inspire further bullish hopes. However, if the RUT can break above about 1122 on consistent daily closes, it may be reaching for the top of its rising regression channel, currently crossing near 1140. Expect potentially strong resistance to begin kicking in as 1140 is approached, in that case.

If the RUT instead drops beneath the daily red 9-ema and maintains daily closes beneath about 1106, it sets up a next potential downside target near 1085-1098. If the RUT finds support in that area and bounces, expect the marked resistance zone now beginning at about 1106-1109 to have firmed up and perhaps represent strong resistance. Watch for rollover potential in that case.

If the RUT breaks through potential support near 1085 on sustained daily closes, it sets up a potential next target near 1069-1080, although this particular Keltner configuration hasn't had strong relevance for the RUT on the last few tests. Far more important is the potential support near the bottom of its rising regression channel, now crossing near 1044, and the Keltner configuration that's likely to span from about 1027-1040 by the time it's tested. A failure to hold that 1027 support on daily closes might be psychologically important and would set up a much lower potential downside target. That's marked on the chart.

Annotated Daily Chart of the Dow Jones Transports:

I've been counseling that we should watch for divergence on the part of the Dow Jones Transports and that such divergence might provide some insight into the strength of the economy and a possible next direction for indices such as the SPX, OEX, and Dow. We certainly saw that divergence last week, with the transports leading other indices higher, surging higher. Last week's broad market gains were trustworthy last week, if the transports' evidence was to be believed. The transports are, however, fast reaching that next potential upside Keltner target. Today, the index came close enough that potential resistance could be kicking in. I would not be surprised to see a stall or pullback begin any time. As with any index in a runaway mode, though, we can't time the moment when gains will stall. They can continue longer than seems possible.

Nevertheless, I would make just-in-case pullback plans for my short-term trades, particularly in Dow, SPX, and OEX-related trades. The transports' evidence suggests that the pullback, if it occurs immediately, could find support at least by about three or four percent below today's high, if not before that. I would examine my trades with this what-if scenario for other indices in mind, too. The transports can move fast. If this index drops fast and drops through about 6840 without finding support there, then a less bullish scenario may be in effect, not only for the transports but for other indices, also.

Tomorrow's Economic and Earnings Releases

This week's important economic events are carried forward from this weekend's Wrap by Thomas Hughes. Thanks to all those who write the weekend Wraps and prepare these charts.

The two-day FOMC policy meeting that concludes on Wednesday begins tomorrow, of course, and Fed watch will go into effect as portfolios are positioned ahead of the announcement. Almost no pundits expect a tapering announcement at this meeting, but many will scrutinize the statement for any hints of when tapering could begin. Developments since the last meeting have led many to push their expectations for a beginning of tapering back, especially with another funding and debt-ceiling argument looming in January. Equities have rallied again at least in part due to that expectation that tapering would be pushed back. Since many Fed watchers expect Chairman-elect Janet Yellen to at least help lead discussions if not take them over during this meeting, special scrutiny will be attending the statement. Any hint that an announcement could come as soon as December could puncture the euphoria we've seen lately.

Companies reporting earnings tomorrow include AET (AMC), BIDU (AMC), CZR (AMC), EIX (AMC), EA (AMC), ETR (BMO), GNW (AMC), GILD (AMC), HUN (BMO), JBLU (BMO), JCI (BMO), LNKD (AMC), OXY (BMO), PFE (BMO), PBI (BMO), RYL (AMC), TTWO (AMC), GT (BMO), X (BMO), VLO (BMO), and many more. So many companies are reporting that it's likely I've missed an important one or two while scanning down the list of reporting companies.

What about Tomorrow?

Annotated 60-Minute Chart of the SPX:

Since Wednesday morning, the SPX had been producing 60-minute closings mostly at or above a rising red 9-ema. Therefore, that moving average could be utilized as a short-term indicator. By today, the SPX was also hammering against its final upside target on the 60-minute chart. It looked to be time for the SPX to either break out to the upside into a momentum run or drop into a test of the lower boundary of its smallest grey channel.

If the SPX can maintain 60-minute closes above about 1766, it's attempting a momentum run. Bulls will want to see strong candles and continued support on 60-minute closes at or above a rising red 9-ema. Prices that churn between about 1759-1766 don't tell us much about next direction and may indicate indecision. Sustained 60-minute closes beneath 1759 suggest a pullback at least to about 1754-1757 and perhaps to 1745-1750.

If the SPX were to pull back as far as 1745-1750 and then couldn't maintain 60-minute close above 1745, the next potential support level is a wide one currently, ranging from about 1726-1737. If such a drop were to happen in the next day or two, however, support would likely compress toward the lower half of that potential support zone.

A bounce from any of these zones may find resistance again at the red 9-ema's then current level, so that should be watched for rollover potential on a bounce after a decline.

A failure to maintain 60-minute closes above 1726 sets up the lowest of the potential targets, marked on the chart.

Annotated 60-Minute Chart of the Dow:

Like the SPX, the Dow has been maintaining most 60-minute closes at or above a rising red 9-ema for several days. We can ascertain at least a short-term change in tenor, then, if the Dow starts forming 60-minute closes beneath that moving average, likely to sink down to about 15550 if tomorrow's open is to the downside. The Dow does look overdue for a test of the lower boundary of its grey Keltner channel, which would mean a test of potential support near 15497-15528. As long as such a test is followed by a sharp rise back through the red 9-ema, the bullish tenor is preserved. To maintain that green target marked on the chart, however, the Dow needs to maintain 60-minute closes above about 15595.

If the Dow drops to test the support of its grey Keltner channel and fails to find support on 60-minute closes at about 15497 on such a test, it sets a new downside target at about 15447-15483. The Keltner setup at that level has had some relevance to Dow trading, prompting bounces in recent tests, so that's what Dow bulls would like to see happen again on a retest of that support. A failure to hold support on 60-minute closes above about 15447 would mark another change in tenor and set up a new potential downside target, likely to be in the 15315-15367 range by the time it would be tested on a downdraft. That Keltner configuration can represent strong potential support, but if that support should fail, too, a lower potential target is marked.

Annotated 60-Minute Chart of the NDX:

The NDX's bounces from the 60-minute 9-ema haven't been quite as steady as those on the previous two indices. This average isn't as good a barometer for the NDX as it is for some other indices. However, we can see that the NDX spent most of Friday and today mired between the potential support of that 9-ema and potential resistance at the top of its converging Keltner channels. For much of the day, the NDX looked as likely to drop toward 3355-3371 as it did to climb toward 3400-3411. It did neither.

Sustained 60-minute closes above about 3395 would set up the potential higher target. Sustained 60-minute closes below about 3378 would set up the next potential downside target.

If the NDX heads down into that 3355-3371 target tomorrow and can't sustain 60-minute closes above 3355, the next potential downside target would likely range from about 3300-3321 tomorrow. A failure to sustain 60-minute closes above 3300 sets up the next potential downside target, marked on the chart. That target would likely be pushed lower by a decline that sharp, however.

Annotated 60-Minute Chart of the Russell 2000:

The RUT's pattern also looks different than the SPX's and Dow's. Although the RUT does sometimes climb along the spine of a rising red 9-ema, as it did on the left-hand side of this 10-day chart, it has begun chopping back and forth across that moving average, flattening it. This is a sign of waning momentum, but we don't know which way the RUT will break. Most of the day, it looked as likely to head up to test potential resistance at 1119-1124 as it did to drop to potential support at 1110-1113. It did neither today, although it did both on Friday. The RUT needs to sustain 60-minute closes above about 1124 or below about 1110 before it's done anything more than chop around in a newly forming consolidation zone.

Sustained 60-minute closes above 1124 means it's setting up a new momentum run, but bulls will then want to see strong candles climbing along a rising red 9-ema. Sustained 60-minute closes beneath about 1110 set up a new potential downside target from about 1197-1102, although a close approach to that support will likely compress it toward the bottom of that zone. Current Keltner evidence suggests that sustained 60-minute closes beneath 1197 (or perhaps about 1195 by tomorrow or Wednesday) would set up the lowest potential downside target marked on the chart.

What do I think? We often see choppy tight-range behavior leading into a FOMC decision, behavior that defies a prediction of next direction. We see that except when we don't . . . when prices plunge down to stronger support or reach up just beneath the next potential resistance to await the decision. In other words, be ready for anything.

I would watch the Dow Jones Transports. Last week the Dow Jones Transports led other indices higher, corroborating more tepid gains found on the SPX, Dow, and OEX in particular. However, that index now closely approaches its next upside target, where potential resistance also resides. Is it time for a pullback in that index and others?

It's always dangerous to try to time the end of a momentum run, and it's particularly dangerous when it's the Dow Jones Transports on that momentum run. However, evidence currently suggests that the transports could easily see a three to four percent decline just to retest and reaffirm potentially strong support, all within the context of a continued bullish run. I suggest that those traders in short-term SPX, Dow and OEX-related trades in particular ask some just-in-case, what-if questions about their positions and set up appropriate stops or trading plans. Keep an eye on the transports and other bellwether indices such as the RUT. In particular, a $DJT drop much below 6840 may indicate that prospects for the economy have changed.

Linda Piazza