Conflicting Signals In The S&P

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Here’s a look at the S&P today. The daily chart of the cash S&P 500 is used to illustrate a new set of Fibonacci extension targets activated today. The .618 is approximately 113000 and the .750 is approximately 114000.

The weekly chart above shows the major downtrend line formed across the intraweek highs from the week of October 8, 20007 and May 19, 2008. It also shows the Fibonacci retracement levels where it is currently very near the .500 mark of approximately 112100. (A note to add here is that on the daily chart that downtrend line is shown to be broken slightly today).

So there could be a bit of a fight to be waged at these levels. To negate the extension targets the cash S&P 500 needs to get back below 108450 or so particularly on a closing basis.

Fed Chairman Bernanke’s speech this morning, which initially caused a reactive sell-off, ended up fueling the bullish fire of the day.

On CNBC this afternoon, though, Meredith Whitney voiced her opinion of which one of the highlights was that she “hasn’t been this bearish in a year.” We recall rather well how she nailed her forecast on the banks some time ago.

Until further notice, however, the major stock indices continue their upward push with traders and or investors seemingly chasing perceived value.

Good trading to all

Jeff
CB&S

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Price And Time In The Dow

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We don’t like to be too repetitive with our blogs but this is something we found intriguing enough to go along with what we covered in just our last blog Wednesday.

We talked then about the Dow Jones Industrials reaching just ticks through the 50 pct retracement of the entire down move from October 11 2007 to March 6 2009. What we discovered later is that there is also a Fibonacci 50 pct time sequence that was likely satisfied at the same time. If the down move from Oct. 11 2007 is 512 days and the recovery from the March 6 2009 low to this week’s November 11 high equals 250 days we find that ratio to be 48.8 pct. That seems close enough for government work to us to make mention of.

Down Move	10/11/07	03/06/09	512
Up Move	3/6/2009	11/11/09	250
Total Move	10/11/07	11/11/09	762
Retracement % Days of Total Move			32.81%
Retracement % Days of Up Move/Down Move			48.83%

This might be something to be aware of when considering market positions. The combination may help determine when market moves are due to come to an end. Nothing is perfect but this could be a powerful weapon to add to the arsenal.

Good trading to all.

Jeff
CB&S

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Key Fibonacci Resistance Reached In Dow Jones Industrials

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We thought this was definitely worth showing this morning.

The chart above is a weekly Dow Jones Industrials – CASH. The significance we find is that today’s high is virtually right at the 50 pct retracement from the October 2007 peak to the March 2009 low.

The high posted intraday was made October 11, 2007 at 14,198.10 according to our data. The low was made March 6, 2009 at 6,470. The difference between the two is 7,728.10. Half of that difference equals 3,864.06 which when added to the 6,470 low makes 10,334.05 the 50 pct retracement level following our method of division, subtraction and addition. Today’s high as of the time we are preparing this has been 10,342.

We thought you’d all want to know.

This could be an important milestone reached and may turn into a likely spot from which a correction begins. We strongly suggest to watch for additional signals such as a reversal. We also strongly suggest watching and keying off of the U.S. Dollar. It too is trying to reverse to the upside as we are typing. Perhaps today’s closes will tell us all much more.


Good trading to all

Jeff
CB&S

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

How to look at tomorrow's Dollar trade

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The U.S. Dollar which has been blamed for just about everything imaginable but for our purposes it has been for commodity prices and stock prices rising. We were going to say most notably Gold but we just couldn’t really justify this in our minds. Along the course of the way it has been crude oil and it’s by products, grains, soft commodities and of course the precious metals. It hasn’t hurt the stock indices either to have the lower trending Dollar.

The chart shows the continuing downward slope of the Dollar Index. Today’s low in this cash index at 74930 is but one tick below the previous low of 74940 made October 21. Coincidentally, that is the same day of the previous highs in the major stock indices prior to the Dow Jones Industrials breaking through with its sharp rise today.

Trending along with the price chart of the U.S. Dollar has been its 50 day moving average noting that for many months any rally has stopped at or near it. Likely this market will need a few closes above the 50 day ma to attract more serious buying interest.

One other note of potential significance is that the way we have constructed the Fibonacci extension on the chart we find that the target was virtually right at today’s low.

Looking at what tomorrow may bring and reasons why it may not be comfortable for short positions we find that 1.) A one tick rule with today's low one point below the previous low; 2.) The Fibonacci extension target being satisfied; 3.) Tomorrow is Tuesday.

Good trading all

Jeff
CB&S
Division of MF Global Inc.

312 261-7380

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Unemployment Report Trading Day

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The monthly unemployment figure were released this morning at 7:30 AM 9cst). The unemployment rate was the key surprise as it was reported to have risen to 10.2 pct. We don’t recall seeing any estimates above 10.0 pct. The non-farm payroll number was within the range of estimates at 190,000. There was a downward revision from the previous month.

The market went in to the report on the heels of a rally. It surprised us that with what appeared to be strong momentum that the S&P 500 was unable to trade through the .618 Fibonacci retracement level formed using the October 21 high and Nov. 2 low. (As illustrated in the chart). It has also stopped at the March / July uptrend which has posed resistance as a return to trend. However, the S&P has crossed back above its 50 day moving average closing above both Thursday and Friday.

The market did sell off after the release of the report but held and after trading quietly for a good part of the session was able to muster a rally not quite back to the highs of the day going in to the close. We believe this sets up another interesting and potentially volatile week beginning Monday. Possibly even Sunday night.

Good trading all

Jeff
CB&S

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Sizing Up The Bear S&P Argument

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The above chart is of the daily cash S&P 500. After spending virtually the entire day trading higher it ran out of steam after making a new high by a very small amount with an hour and a half left in the session. The last half hour particularly saw the steam come out. That being said, there were a few intriguing points that we wanted to point out.

There has been a 70 point decline off the October 21 high of 1101.36 to 1029.38. The .500 Fibonacci retracement comes to 1065.37. Today’s high was 106100. The .618 Fib retracement is 1073.86.

The 50 day moving average was at 105335 according to the display on our chart. Even though the S&P traded back above that level today it was unable to close above it. There are now 4 consecutive daily closes below the 50 day moving average and five out of the last six sessions have ended beneath it.

The trend line that marks the entire upward move from the March 2009 lows has now seen five of the last six sessions close below it. Today’s rally high came to within approximately five points of the trend line which likely poses some significant resistance as a return to trend line.

Finally, one of our clients versed in candlestickese pointed out to us that today’s daily bar is a falling star and that as one would imagine, a bearish not bullish event.

Good trading to all

Jeff
CB&S
Division of MF Global Inc.

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Gold: How High Is High

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This must be a hot topic today and to leave it uncovered would be foolish even though we suspect everyone has asked everyone what sparked the gold rally of Tuesday November 3.

It is especially fetching in that it did it all on its own, meaning without the aid of a drop in the U.S. Dollar. The prime reason we have found cited for the move is the Central Bank of India’s reported purchase of 200 tons of Gold from the IMF. Analysts consider this a clear sign of demand as central banks around the world replace some portion of U.S currency holdings with Gold.

Other incidentals included talk that the Gold companies such as Anglo American would be liquidating their hedge books, but likely over a period of time lasting well into 2010 according to what we have read.

Our chart included above shows the next Fibonacci extension targets. The .750 level is approximately 109150.

Final note on this is to be cautious with new or additional purchases at lofty levels such as these. We have seen it before where when things look most bullish the high price is made.

Good trading to all

Jeff
CB&S Division
MF Global Inc.

312 281-7380

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Stock Indices Plunge / How to guage Trend

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It’s hard not to make the stocks the focus of our blog again today. We are just a bit through the midway point of the day and the indices are down sharply. It is virtually a double reverse with today reversing the strong rally following the GDP figures which had reversed the sizable losses of Wednesday’s action.

The S&P 500 and the NASDAQ Composite and 100 are back below their respective 50 day moving averages and below the major up trend lines dating back to the March ’09 lows. The Dow Jones Industrials have now reached the 50 day moving average for the first time since testing it October 2.

The NASDAQ has become the weakest of the three majors. The Composite is now very near the October 2 correction low. Also of interest is the Dow Transportation Index which has made its downward turn before these others. It may have signaled a double top confirmation by falling below the low made between its two highs of September 17 and October 21. There are other lows in this price area from August 17 and September 2 that may provide an obstacle to further decline; at least for the near term. And as far as the double top, there may be a possibility this formation in the Transports could morph into a complex double headed Head and Shoulders top. But at this point in time that will be left to the crystal ball gazers.

The October 2 correction lows we believe are the next significant barometers.

We realize there is still time to go in this week ending session but we find this type of action negative and believe spells lower prices yet to come.

We are including here our S&P 500 market section from our Trade Focus written Thursday 10/22/09:

S&P 500 (Dec. EMini) – Last week we presented a short entry approach that would have been elected with the intraday penetration of 106625. The December contract proceeded to a low of 103725 today (Thurs.) before its sharp rally to close at 106150. We believe stop protection for this short entry can be lowered to intraday penetration of 109350 or a close at or above 109025. We believe we can keep the other new or additional short entry approach from last week also which is to initiate short entries with a close at or below 101150. Stop protection for this short entry approach should be intraday penetration of 105725. Retracement resistance levels are approx.: 106085 (hit); 106800; 107550.

Good luck and Great trading

Jeff and Diego

CB&S Division
MF Global Inc.

312 261-7380

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

How Confidence In Short Entries for Stock Indices Grows

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The charts included above are of the daily cash S&P 500, daily cash NASDAQ Composite and daily cash Dow Jones Industrials. It seems we can sum things up quickly and simply here today. These major indexes have now seen the major trend line connecting the March and July lows breached as well as their respective 50 day moving averages. These are not good closes today, unless of course a trader is short.

We believe these to be levels of significance that have now been broken and provide another signal that lower prices are on the way. There may be a bounce back upward in price but it doesn’t necessarily have to do so. We would view bounces, and we will be watching for them closely, to be opportunities to suggest additional short entry approaches.

We would also like to point out that the cash Dow Jones Industrials has not penetrated its respective trend line or 50 day moving average.

We are inserting the S&P 500 section from our last Trade Focus edition.

S&P 500 (Dec. Emini) -- Last week we ended this section saying that next level that may serve as an objective is the .500 retracement from the October 2007 high to the March ’09 low which is approx. 112625. We do not see a long entry suitable for this near of a possible objective. Certainly it could go beyond but we will watch for developments that are more indicative. We do, however, believe that if this “bull run” is nearing an end that short entries can be initiated with intraday penetration of 106625 or with a close at or below 106925. Suggested stop protection for this short entry approach should be intraday penetration of 110275. We believe another short entry approach for new or additional short entries would be with a close at or below 101150. If this short entry approach is elected we believe stop protection should be intraday penetration of 105725. We will update retracement levels following additional pattern development.

Good Fortune and Good Trading

Jeff and Diego

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

How to Take Advantage Of The Short Side Of Gold

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We haven’t talked about Gold for quite some time. It has achieved all time all time highs as probably everyone who reads this is aware. Over the past year, since October 24 of 2008, it has gone from the low of 69900 (basis the December Comex/Globex contract) to its October 14 2009 high of 107200.

We have been watching Gold as well as many other markets and market groups, for signs of exhaustion to their bull market rallies. Much of it has to do with the value of the US Dollar, which we have talked about at times in our Trade Focus. We noticed, in the case of Gold, a top heavy look developing on intermediate time frame charts. If there was to be a correction or perhaps the start of something larger, we wanted to be prepared particularly if the risk reward was warranted.

We have included a chart of the 120 minute December Gold for illustration and the Section on December Gold from our most recent Trade Focus prepared October 22.

Gold (Dec.) – As in the Silver we will stay with our suggested long entry approach from last week which is to initiate long entries with intraday penetration of 107550 or with a close at or above 107330. Stop protection for this long entry approach we believe should be intraday penetration of 104170 or a close at or below 104270.

We also believe now that we can suggest a short entry approach with intraday penetration of 104170 or a close at or below 104270. Stop protection for this short entry we believe should be intraday penetration of 107550 or with a close at or above 107330. Retracement levels of support are approx.: 103820; 102770; 101720. The next series below this is approx.: 101680; 99980; 98280.

Today's action (Monday 10/26/09) in the December Gold contract elected the suggested short entry approach in our weekly Trade Focus. Stay posted.

Good trading to all

Jeff and Diego

CB&S Division

MF Global Inc.

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

How To Approach Suspected Resistance in Mini S&P500

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There appears to be levels of resistance at or near the current price of the stock indices. We have included charts of the cash S&P 500 to help illustrate. The charts were prepared early on Thursday October 22. What they show are major trend line resistances and also the .500 Fibonacci retracement.

The action of this week has been interesting to say the least. New highs on Tuesday followed by heavy selling pressure on Wednesday but strong recovery on Thursday. Friday morning has seen selling pressure reemerge even with positive earnings news from Microsoft, Amazon and others. It looks like the willing sellers were satisfied selling to the “news” buyers.

Here is an approach we suggested in our weekly Trade Focus written yesterday (Thursday) afternoon:

S&P 500 (Dec. Emini) -- Last week we ended this section saying that the next level that may serve as an objective is the .500 retracement from the October 2007 high to the March ’09 low which is approx. 112625. We do not see a long entry suitable for this near of a possible objective. Certainly it could go beyond but we will watch for developments that are more indicative. We do, however, believe that if this “bull run” is nearing an end that short entries can be initiated with intraday penetration of 106625 or with a close at or below 106925. Suggested stop protection for this short entry approach should be intraday penetration of 110275. We believe another short entry approach for new or additional short entries would be with a close at or below 101150. If this short entry approach is elected we believe stop protection should be intraday penetration of 105725. We will update retracement levels following additional pattern development.

Remember you can sign up for a trial subscription to the Trade Focus email list. This will get the information to you a day sooner than waiting for it to appear on the web.

www.cbandsbrokerage.com

Good trading

Jeff and Diego
CB&S Division
MF Global Inc.
312 261-7380
800 321-5810

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

How To Manage A Winning Long Wheat Entry

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The wheat market has maintained its bullish price focus with another push into new highs since the October 5 low at 439.25. Today’s high reached 548.50. The last time we talked about December wheat in our blog on October 12 we mentioned that if long (particularly if from our Trade Focus recommendation) that participants might consider reducing the number of positions after it had reached 529.00 in order to not only book some profit but also for the purpose of capital preservation.

We had determined that level off of one of the possible Fibonacci retracement levels we illustrated. Other targets to consider near term are the Fibonacci extensions at 550.00 and 561.75. The first of the extension targets in this series just happened to coincide with a .382 Fib retracement at 548.25. That is determined from the down leg starting June 1 2009 at 725.25 and ending with the October 5 low.

Stop protection for original longs which occurred with the suggestion to initiate long entries with the intraday penetration of 48550 should at least raise it to intraday penetration of 49200.

The next Fibonacci resistance levels we feel are of importance are approximately 582.25 and 616. These would be levels to consider quantity and risk reduction also.

One last point of interest is that Wheat has been able to make this advance even after the latest USDA Crop Production report which was considered negative toward future price levels. We are hearing now, though, of smaller Wheat crops than originally expected out of some of the Eastern European producers.

Good trading to all

Jeff and Diego

CB&S Division
MF Global Inc.

312 261-7380
800 321-5810

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

How to rely on techincal indicators in Natural Gas

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We are talking about the natural gas today as it appears in the process of clearing another hurdle. After first catching our eye and introducing it to our Trade Focus in the September 10 edition we have seen an initial run up in price followed by a broad pattern of consolidation. The initial high since bottoming for the November contract was 5120 on October 6. This was slightly shy of a former peak at 5133 on August 3.

Today’s price action has it clearing this price level by reaching 5195 (as of 3:00pm central time). It would seem to us that a close above this 5133 level should set it up to test the next level of resistance which we show to be just above 5500.

Another aspect that got us stirred up over this market was that there was a reversal bar at the low on the daily chart and perhaps much more significantly, the month of September posted a large sweeping reversal off the low. All this in light of record supply. That’s impressive and deserved attention.

We would not be surprised at a move eventually into the 7000’s or near 8000 if and once the 5500 level is cleared.


God trading to all

Jeff and Diego

CB&S Division
MF Global Inc.

312 261-7380

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Bond Rally Stopper

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We have posted the weekly chart of CBT/Globex T-Bonds. We note how the high of the recovery from June 01 low stopped at the .500 retracement level and at the 50 week moving average.

We have talked about the Bonds in previous blogs and thought that since we had mentioned ways to enter the short side of this market we would present another for those looking to establish new or additional positions.

This is taken from our weekly Trade Focus prepared Thursday October 15:

T-Bonds (Dec.) – The T-Bonds have experienced a key reversal back on October 2 and have made a nice set of stair steps on their way down off their top. We will suggest at this time that short entries can be initiated at a price level of 119-30 or better. We believe stop protection for this if elected should be intraday penetration of 121-11 or a close at or above 121-06. Retracement levels of support are approx.: 118-21; 117-01; 115-14.

Good trading and Happy Week End to all

Jeff
and
Diego

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

How To Choose Target Levels For Short Dec. T-Bonds

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The December T-Bonds have begun a nice progression to the downside. We had presented the case for initiating short entries in our blogs of last Tuesday and Wednesday. (You can check the older posts for verification). The chart above shows a near term Fibonacci Extension sequence where what we refer to as the targets, are approx.: 118-30 and 118-15. Short term traders could consider using these as levels to reduce or cover short positions.

We also display on the chart a series of Fibonacci Retracements which are approx.: 118-19; 117-00; 115-13. We are thinking that there is potential down to the lower retracement levels and possibly even lower eventually. But how it gets there is always the $64,000 question. We will be updating the progress as best we can along the way.

How to utilize these various levels and other tools that are involved is something we are able to discuss in greater detail with our clients. We suggest you contact us if interested in finding out more.

Hit ‘em long and straight

Jeff and Diego

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Trading a Long Entry in Wheat

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Trade Focus added long December Wheat entries to its suggested trade positions with today’s action. Here’s what we said in our last edition:

WHEAT (DEC) - We will stick with last week's suggestion: “We believe long entries can be initiated with intraday penetration of 48550 or with a close at or above 48250. Stop protection if elected we believe should be intraday penetration of 44500 or a close at or below 44900.” Retracement levels of resistance are approx.: 49450; 51170; 52910.

This suggestion has been in the past two issues actually, and due to certain circumstances we were unable to publish this past Thursday as usual. But, the point is Wheat has been on our radar for a while now and may provide a very tradable retracement or correction. There are two sets of Fibonacci retracement levels that the December Wheat may seek. The first set is approx.: 494.50; 511.75; 529.00. The next set above is approx.: 547.50; 581.50; 615.25.

The latest USDA crop production report did not paint a very bullish picture for wheat prices but we certainly have seen markets behave opposite to such reports in the past.

As always, a trade is only a trade and needs to be approached and treated with a planned strategy and discipline. It’s wise to know not only where a position should be entered but where it goes wrong and therefore where stop protection needs to be placed. Along with these, a profit objective or plan of how to liquidate a position when right should be part of the plan.

In the case of this December Wheat example, there was an entry method that was satisfied triggering the trade suggestion. Notice that the September high was cleared and also that the 50 day moving average was cleared on a closing basis. There has also been a stage 1 breakout above the steep trend line which acted as a first alert. We have also identified what we believe to be valid stop protection. The last piece of the puzzle now is exiting a winner.

Exiting a winner is not as easy as most people and traders might expect. It is our belief that this is the time to take all the emotion out of the equation. When trading in multiple units, for example, we believe it very beneficial to choose a target level where a portion of the entire position is liquidated while simultaneously moving the stop protection in a favorable manner. The idea is to reduce risk exposure while still maintaining a piece of the position in case it continues in the desired direction and particularly if something special develops.

Using this example, or any example for that matter, it is up to the individual trader to determine exit strategies based on his/her own set of variables. We might suggest here, as a general strategy, to begin moving stops at the 511.75 Fib level and with partial profits coming off at the next 529.00 level. If the price of December Wheat continues to gain there may be points along the way where adding positions would become warranted. We will be watching for these opportunities.

These types of strategies are something that we discuss with our clients on an individual basis taking into consideration their personal viewpoints. We find that there is benefit in working together on a strategy. If that is something you are interested in or would like to know more about let us know.


Good trading to all

Jeff and Diego
CB&S Division of MF Global Inc.

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Finding a short entry point in the stock indices

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We definitely thought this would be of interest especially to stock index traders.

We are writing this at just before 2:00 pm Central Time.

What we have been following today is the come back rally in the stocks and the charts above show that these major indexes have retraced the Fibonacci .618 pct from their high made Wednesday Sept. 25 to their lows since the highs were made. For those who might believe the timing is correct for short entries, especially following the reversals of last week, we believe this may be useful.

There was holiday type volume today with the celebration of Yom Kippur. And it is possible that it provided just the setting for a rally opportunity following the key reversals of last Wednesday. What it does for the traders looking to be short is to provide a potentially lower risk entry level for their short positions. It would seem to us at least, that new highs above those of September 23 would suggest that the timing for short positions was inappropriate at this time but this rally today has brought the entry level to a more reasonable risk reward position.

In the Dow Jones Industrials we show the high of Wednesday the 23rd as 9918.00. The low of Friday the 25th was the lowest price since the high was made and we show that to be 9641.00. The .618 Fibonacci ratio value of the high to low we calculate as 9812.00 and today’s high as of the time we are writing this has been 9823.70.

In the S&P 500 we calculate the .618 ratio to be 1065.26 where today’s high has been 1065.13 and for the NASDAQ 100 we calculated the .618 as 1730.15 and today’s high we show as 1733.79.

Good trading to all

Jeff Majer
Diego Pilar

CB&S Division of MF Global Inc.

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Trade Focus update - Natural Gas

Click to enlarge chart

This is an excerpt from this week’s Trade Focus. It was written in the early afternoon on Thursday September 24.

Natural Gas (Nov.) – Two weeks ago we introduced this marked to our coverage and actually saw a suggested long entry be elected. That is from a price level of 4025. We noted last week that the rather quick run up had touched against two points of resistance and that some participants might choose to reduce the size of the long entry position. Remaining long entries from the initial suggestion we believe can raise stop protection to intraday penetration of 4369 or a close at or below 4425. We also suggested last week that new or additional long entries could be initiated with intraday penetration of 4830 which has been penetrated. Suggested long entries from this entry approach we believe should place stop protection at intraday penetration of 4540. We believe the next area to expect stiff resistance should be 5320 or so and some long entrants may choose to reduce position size in that price area. Retracement areas of resistance are approx.: 4874 (hit) 5308; 5743. Extension targets active are approx.: 5019; 5155 and approx.: 5205; 5381.

For those not on our Trade Focus email list you may sign up for a trial at jmajer@mfglobal.com

We send the email version of the weekly Trade Focus the day it is written. We post it on to the website at www.cbandsbrokerage.com after additional prep work and compliance procedures which usually takes an extra day.

Let us know if there are any questions comments or even better if there are any answers you may have.

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Emini S&P Trade Focus sneak peak

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S&P 500 (Dec. Emini) – Suggested long entries from the price level of 103600 we believe should raise the stop protection to a break even area with intraday penetration of 103700. A key outside reversal day was recorded in the major indices on Wednesday the 23rd following the FOMC announcement on rates and accompanying statement. For those looking to be short this market we believe we can suggest short entries can be initiated at a price level of 105000 or better. If elected stop protection we believe should be intraday penetration of 107900 or a close at or above 107650. Retracement levels of support are approx.: 104225; 103160; 102100. The next series below is approx.: 99450; 96920; 94375.

If you want to receive the entire Trade Focus the day it is written you can join our trial subscription email list. And if you would like to establish your brokerage account with us which automatically places you on the email lis along with gaining access to us please inquire here:

jmajer@mfglobal.com

dpilar@mfglobal.com

312 261-7380

800 321-5810

Jeff Majer

Diego Pilar

CB&S Division of MF Global Inc.

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Bearish Divergence?

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We have heard many times probably since July from some of the bearish stock market tabloids how the NASDAQ making a new high while the DOW JONES and S&P 500 did not was a bearish divergence and to look out below.

Today we see the NASDAQ 100 made a new high while the DOW and S&P 500 did not. Based on what has happened over the past months when this divergence has occurred more than once, we see no reason to expect that this is a signal of a stock market high. We often say that anything can happen and usually does, but this particular example of divergence has not stopped the rally, bear market rally or not, from continuing. We would expect it will be more than this type of divergence to make its mark and take its toll.

Jeff Majer
Diego Pilar

jmajer@mfglobal.com
dpilar@mfglobal.com

312 261-7380
800 321-5810

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.