AheadoftheNews.com

Es top of the ascending wedge is 1415, which is also tomorrow's R2. If bulls go for a home run target, that would line up nicely. Chart

The BIX (banking) is back in the channel and found support at the former trend line, now 391. Resistance is September highs at 395.20 (yes, you read right, still trading below September highs) which is also its 10 day moving average. Bulls need it back and soon. No rally is to be trusted without the financials. Bulls got the ball back with a nice interception this week, now they need to avoid a fumble. Chart.

Some traders keep pointing out the long side, but frankly, everyday sees great money on the short side for experienced day traders, usually at the open. It's quick and very profitable, just don't hang on because it's no the trend. But you can make in 30 mns what it takes bulls to make in four hours. Just look at the NQ chart from 9:30 to 10. An initial pop to 1798, 50% and wham, they ride it all the way down to 1783 before the first half-hour is over. The bulls don't make it back to the highs until 1:30 PM, over four hours later. That's like watching paint dry.

COMP/QQQQ/NDX/NQ all hit their respective 10 DMA's and pulled back. ES is still holding above, mostly thanks to energy, but the tech sector lag is not a bullish sign. Today was a technical day, as we sold off at the open close to daily S1's and rallied up to daily R1's (and 10 dma for NQ) then backed off, holding above pivots.

Tomorrow is another month, we will see what funds have in store now that their are done with this one.

The economic calendar is loaded, construction spending and ISM both at 10AM. Watch the dollar and bonds.

I suspect this rally will not end until investors realize Feds are not going to lower rates. The more the dollar falls, the more the Feds need to support it, especially since oil jumps with it (inflationary). The stagflation scenario is still the best bet going forward and that means bullish on gold and bearish on equities. It will take its sweet time or happen tomorrow, but a deep correction in the stock market is coming. Most likely the first week of January, but it could start rearing its ugly face in December with a few opening salvos.

They run NQ up to R1 and 10 DMA (1804) and promptly sell it. We will see what the close gives, but with ISM coming out tomorrow, there might be a reluctance to bid much higher.

SAN FRANCISCO (MarketWatch) -- Shipments for U.S.-made personal computers and related equipment plunged nearly 25% in October to the lowest level in at least 14 years, suggesting that the delay in Microsoft Corp.'s new PC operating system is crimping hardware sales for Dell Inc., Hewlett-Packard Co. and others.

You get the sens the market is on borrowed time. They won't ring a bell at the top, but you can definitely see the sellers everyday.

There we go. Oil drops a little and equities recover. It's still 62+ oil, but for now stocks will use any excuse.
As you can see, heavy distribution at the open happens every time SPX approaches 1400. That means money is getting out on rallies since most expect 1400 to be the year end target anyway. Single digit appreciation is the most likely scenario for 2006, 10% would put SPX at 1375, so I actually think 1400 is optimistic.
Traders should note the overnight highs, in case they make a run for it. NQ 1801.75 and ES 1406.25. That could happen if NQ manages a move above 1796. For now, the action is defensive and stalling at ES 1400/NQ 1794 and QQQQ 44.
QQQQ 43 and 44 strike are still put supportive, which is probably why bears are having a hard time gaining too much traction. Nevertheless, the opex contrarian trade does not take effect until the Thursday before option expiration week, so we could actually see some pretty heavy selling before.

Reality hit and NQ is now back below 50% recent high/low. Watch 1794 resistance. ES 1400 is also resistance. The fall of the dollar was pointing the way. Watch oil as equities hope for a drop. EIA natural gas report at 10:30 will be market moving for oil and stocks. This is still a trader's environment.

The dollar keeps falling and oil is now trading above 62.50. Obviously, currency traders are in disagreement with yesterday's GDP euphoria. At some point, something has to give. It's not very logical to have stocks other than energy on a bid, but that is what they are doing overnight. We await jobless claims and NAPM.

We have the VISTA corporate roll out tomorrow. I guess someone thinks it's news, but we've known about this for three months and it is priced in. Nevertheless, the overnight crowd is pushing the hype. I suggest keeping an eye on the semi-conductor group more than anything else going forward.

ES retraces 61.8% of the recent decline, but NQ (NDX futures) closes below its 50% mark at 1798. Once again techs are not leading on a relative basis. Semis were in the red most of the session. This was mostly an oil sector rally, although the comeback of the BIX (financials) bears some scrutiny. If bulls can keep that one up and get NQ above 1800, they can reach for new highs. But for now, we have some pretty heavy data coming out tomorrow including Chicago NAPM and jobless claims. Watch VIX 10.85 level and ES 1403 (SPX 1400).
ES prints a bearish divergence on its closing higher high Chart.

Good piece on the Vista roll-out. It seems no one cares.

WASHINGTON (Reuters) - Most areas of the United States reported moderate economic growth through the first weeks of November and labor markets were tight in many regions, the Federal Reserve said on Wednesday.

Tiffany sales of $20,000 rings is getting the market a little too excited if you ask me. You know we are treading water if the market rallies on ultra luxury items for the few and decides to ignore the masses that are only buying discounted goods with low profit margins. Furthermore, gasoline is about to move higher as oil tops 62.50. Just in time for Christmas. This rally is mainly due to end of month moves and short covering. I would keep on trading it, not holding it. Bulls can regain full control above SPX 1400, but we are not there yet. Watch ES 1403, last week's close.

The buyers come in at the close again as end of month portfolio adjustments take hold. SPX 1400 should act as resistance. Oil is at 62.50 but no one cares, for now. Semis are still weak.

NQ closes the gap and finds support at pivot and shorts cover as oil drops 62. This is definitely a trader's game today. Watch 62 oil.

Oil bids above 62 and the euphoria is gone. I had warned readers that this is a trading environment and today is no exception. NQ lost 1794 support and is now in the morning gap. Semis are in the red. If oil get back below 62, bulls will try and rally out of this, but for now, they are in trouble as NQ dropped 13 points from highs.

There's enough for everyone. Bears are pointing out higher oil and falling home sales, bulls are trying to look forward at a possible growth reversal. Let price dictate. If NQ gets above 1800, next level of resistance is 1804/1805. Key support is now NQ 1794 and ES 1400.
Right now, NQ is finding some resistance at confluence 50% and R2 (1798/1799). Watch oil and the 62 level. The higher high at 1800 was made with a bearish divergence. That can change with the pre-lunch push, but for now it's there.

Nov. 29 (Bloomberg) -- Sales of new homes in the U.S. fell in October, dashing expectations that the worst of the housing slump is over.

As expected, 50% at 1798 was a bit of a hurdle for NQ. We await oil inventories.

Watch the retracements from highs. NQ 50% is 1798 and ES 50% is 1395. QQQQ 50% is 44.10. ES is poking its head back in the channel. Be careful trading this as we approach end of month adjustments.
NQ 10 day exponential is at 1794.25, SMA is at 1804. There will be some distribution on the way up as fear of missing the boat will be coupled with relief of getting an opportunity to exit at a higher price.
New home sales figures are due at 10 AM and Oil inventories at 10:30. Right now, no one is paying attention to oil above 61, probably on the bet that oil will retreat after the report.

Nov. 29 (Bloomberg) -- The U.S. economy expanded at a faster- than-expected annual rate of 2.2 percent from July through September, reflecting an increase in inventories that may limit growth this quarter.
The revised figure for gross domestic product, the value of all goods and services produced, compares with a 1.6 percent estimate issued last month, the Commerce Department said today. A measure of inflation watched by Federal Reserve policy makers was revised down.

Futures are way up on the headlines and a Boeing upgrade. The dollar is getting a lift as well, although EUR/USD futures still at 1.3165.

Oil is at 61.20.

GDP pre-open tomorrow, Currently, overnight futures are enjoying a nice rally thanks to the Japanese production numbers. NQ resistance will be 1790 and 1793. Support is 1779.25. The oil rally is still in gear, but equities are not concerned about that right now. Everyone is worried they missed the dip.

The morning lows held and stocks managed a recovery into the close. NQ did not make it to the pivot, but ES showed more strength. SMH got out of some pretty nasty trouble and closed back above its 50 DMA. QQQQ found support right above the January high (43.31) and that looks to be the line in the sand going forward (NDX 1761.50). Nasdaq new year highs at 58 and new year lows at 50. That range is tightening.
The S&P did not quite manage a close above its 20 DMA and found resistance at the ex trend line support from the July rally. Until SPX closes back above that level (now at 1388), the bears will be attacking resistance. Futures traders watch ES 1388.50, 50% November and current overnight support.
Keep an eye on the BIX. It is showing a potential recovery in the making if it can start trading above 391.
I don't think we are done with this correction, there is still lots of froth, but if NQ can manage to hold on to its 20 DMA, now at 1776, and SPX gets back above 1388 and holds it, shorts could get jammed and we could see a rally. If that happens, NQ/NDX/QQQQ 10 DMA will be resistance. This is a trader's environment, so act accordingly and don't stay committed to any side for very long.

The COMP hit multi-month trend line support near 2388 and that is what bulls want to protect.
QQQQ January 2006 high is 43.31. Semis are weak, look for SMH 34 key support since we lost 34.35.

The range is pretty much set as we head into lunch. Remember, this is a trading environment. ES stronger than NQ as it hits a high near its pivot. NQ did not even come close. Support for the tech future's index is 20 DMA at 1773.25, overnight lows at 1771 and 1765.50. ES support is 1383.
The best work was done at the open and now it's feed your broker time so I would wait for the close.

WASHINGTON (Reuters) - The pace of existing home sales rose modestly in October hitting a 6.24 million-unit annual rate, according to a report form the National Association of Realtors on Tuesday that marked an unexpected rise from economists' expectations.

The rise in sales volume was the first since February but the median home price declined 3.5 percent, the third straight month in which prices fell and the largest year-on-year decline since records began in 1968.

The inventory of homes for sale was up 1.9 percent to 3.85 million units.

Analysts had expected home resales to slow to a 6.15 million-unit pace from the 6.18 million-unit rate in September.

Watch SMH (semis)34.35 level.

The dollar drops again but it's interesting to note that gold is not bidding. Maybe they know something? NQ lost 1780.50 support and looks headed for a possible test of 1765. Currently, we are at 20 DMA (1773) and bulls will try a run from there. If that support breaks, and they can't hold 1765, we could ultimately hit 1756, key breakout area and channel support (as well as 38.2 October/November).
ES lost 61.8% November at 1383. Next support is 1376.50.
In stocks, INTC is trading below its 50 DMA (20.95).

Nov. 28 (Bloomberg) -- Orders for U.S.-made durable goods declined last month by the most since July 2000, suggesting a slowing economy is prompting companies to curb spending.

The 8.3 percent decrease followed an 8.7 percent surge in September and reflected falling demand for commercial aircraft, computers and communications equipment, Commerce Department figures showed today. Excluding transportation equipment such as Boeing Co. jets, orders fell by the most since July 2005.

The dollar is making a small comeback against the Euro. QM (oil) has pivot support at 60.025.
Watch NQ 1780.50, weekly S2 in the overnight session.

For those who belittle the dollar sell-off, look no further than the crash of 1987, which occurred right after a parabolic rise in equities and a currency crisis. In fact, 1987 saw a heavy sell-off in April, followed by a summer rally ending in the precipitous October collapse. This year, we've had the freaky sell-off in May, followed by the extravagant non-stop binge buying of the past three months and now a steep dollar sell-off. It's not because October is behind us that you should stop worrying. Always worry. I don't want to sound paranoiac, but traders who have been around long enough know the rule: anything can happen. As of today, the long side should only be the realm of day traders and futures traders (24 hour stops) until we are certain this cloud is behind us. Take the overnight bounce if oil drops but exit the pivot, maybe fade it, then play the opening reversal, get out etc.. You know the drill. If they start buying the close, bulls (retail buyers) have a chance. If they keep selling it, something is wrong in the kingdom.

Tomorrow's economic calendar will dictate trade. That includes existing home sales and consumer sentiment, both at 10 AM. The modus operandi going forward might not be chasing performance, but rather protecting gains. Use that in your trading: don't get greedy, book profits.

Tough day for bulls when you realize ES lost almost half of its November gains in a single day. Support was clear at 1383, 61.8% for the month and bulls know what they need to hold. The VIX last week could not have screamed any louder and I guess someone finally heard, especially when coupled with those low equity pc ratio numbers. The selling actually started the day of Thanksgiving in Europe and Asia before any retail sales numbers came out. In other words, they were liquidating all US assets on the fall of the dollar. We had our silly little bounce on Friday, but today was the day of reckoning.
It's hard to say where we go from here, but my guess is many funds will use rallies to book more profits. Be prepared to do the same. We should bounce out of this, but resistance above could be pretty firm, namely SPX 1400 and NDX 1800. I am noting a lot of puts at QQQQ 43/44 and that could be supportive at some point, if not very soon. Just don't fall in love with anything.
We are entering a better trading zone with hopefully higher volatility and more technical plays as opposed to plain "buy any dips". I hope new traders do not think the past three months were the norm.

SMH (semi-conductor holders) did a clean bounce off 50% and 20 DMA (34.35). It also managed to get back above its 200 DMA at the close.

The markets are finding support at ES (SPX future) 61.8% November (1383). Still 30 mns to go, but that's what it looks like.
This is the kind of day when you look at stocks and realize how expensive they are.

QM (oil) has resistance at 60.425, weekly R1. Equity bulls need a pullback in oil soon SMH (semis) now at confluence 20 and 200 dma. An absolute must hold for the tech sector. Amazing how we went from one bullish extreme to a day like today. The very low VIX was the warning, don't ever let anyone tell you otherwise.

NQ hits weekly S2. YM needs to hold 12141, 61.8%.
We could be in the process of forming a short term bottom as a -40 day for NQ is pretty much an extreme. It will depend on oil, of course, now trying to catch another bid above 60. We cannot discount NQ hitting its 20 dma at 1771, which would make for a very, very bearish day. Remember that tomorrow we have some important economic numbers.

The problem for traders these days is all the hedge funds jamming it in a one-directional move without much play. It's not enough fluctuation to make for decent counter-trend trades, which forces everyone into wide stops and adds risk.
ES is now struggling with its trend line support and 30 DMA. NQ did a lower low with a bullish divergence, not quite hitting weekly S2.

The DOW finds support right above its 30 DMA. ES is trading below weekly S2 while NQ still hasn't hit it. RLX (retaialers) holding above 500 and that could be temporarily supportive. One would have expected more of a sell-off in that index. Broader market internals are very bearish, but if oil drops, they have a slim chance. VIX at 12, very bearish jump.
ES also found support at its 30 DMA (1387.50). However, NQ channel support and 20 DMA is lower at 1777. Weekly S2 for NQ is 1780.50.

Bulls are getting hit hard. Watch ES 1391/1392 support area, confluence weekly S2 and 20 DMA. SMH (semis) also has key support at 34.85.

YM (DOW futures) bears some scrutiny. Now trading below its 10 DMA, has multi-month trend line support around 12225/12230. Its 20 DMA is a little lower at 12215.

Watch the NQ (NDX futures) 30 mn channel with trend line support around 1811/1812.

December gold came within 70 cents of closing the September gap at 640.90. That has been a medium term target for many who bought below 600. Support going forward will be 634.70 and a little lower at confluence last week's gap at 629.10 and 10 day exponential moving average at 627.30. Weekly S1 is a little lower at 625. If the fix is on to go higher, that area should hold next week. The dollar will probably do some kind of dead cat bounce which will enable new gold buyers to step in at support. Immediate resistance above is 643.50 and 657.

As we move forward with some possible volatility for stocks, always keep in mind the year to date index growth figures. The COMP closed 2005 at 2205 and opened at 2216. That would mean +10% for 2006 would put us above 2425 (we are now almost +12%). The area between 2380 and 2400 better be supportive if we are to maintain double digit appreciation this year. The bear camp will point out that S&P earnings growth was 8.5%, which could endanger the double digit prospects. SPX is currently up 12% for the year. NDX closed Friday at +10% (that lag with the broader market is an ongoing bearish story which bulls need to correct quickly: blame the semis). Nevertheless, just looking at the overbought conditions of the current rally can make one forget the larger picture. Once the year closes, however, there will be little support for stocks and I expect January to be particularly bearish if we do not alleviate the present euphoric conditions in December. Investor bull/bear ratio is now at trend line resistance: Link.

CHICAGO (Reuters) - Wal-Mart Stores Inc. reported surprisingly weak November sales on Saturday, even as U.S. bargain-hunters jammed stores in search of gifts at the start of the crucial holiday shopping season.

Wal-Mart, the world's biggest retailer, sounded a cautious note for retailers as they began a second day of Thanksgiving weekend sales with deep discounts and early bird specials on items ranging from cashmere sweaters to plasma televisions.

After the initial excitement over Friday's bargain hunter numbers, reality could set in. This kind of yoyo news is why we have to rely on charts at this point and macro events such as foreign US asset liquidation. A currency crisis is never a light development.

Nov. 24 (Bloomberg) -- U.S. retailers greeted ``huge'' numbers of shoppers as they offered early-bird specials and staged stunts to kick off the holiday shopping season today.

It never ceases to amaze me that no matter what the news, NDX futures will nail their targets, whether a low in a downtrend or a high in an uptrend. Today's hit of NQ 1829.25 is no exception, a hair below monthly R2, 61.8% projection at 1830.50 and right under NDX 1825 call resistance. The close is bearish, although doji-like, dropping nine points after hitting a clear cut negative divergence at new highs.
The big story of the day will be Europe and Asia dumping dollars and US stocks while americans were digesting turkey.

NQ pulls back at 1829.25, right under NDX 1825. Seems like it was a sell signal. Not quite 1830, but we will take it as a high. One hour and twenty minutes to go before the early close. I can't imagine anyone wanting to be long over the weekend, but there has been lots of hedging with those cheap, cheap puts. If this market sells on Monday, those carefree put sellers could be in for a surprise.
Obviously if retailers have a gangbuster weekend, we could have the opposite reaction from last year, which saw a post Thanksgiving sell-off, but gap and crap is not out of the question either, no matter what the news. Just keep in mind that with end of month coming up, many funds will want to look like heroes and have techs in their portfolio, even if they just have started buying them last week. We could finally see some real volatility come back and good trading.
The prospect of lower rates is sending small caps higher, but again, I think the Feds will try and prop up the currency by not lowering rates for some time.
Overall, put a gun to my head and I still think the NDX chart is topped out short term and I would get very defensive now, at least until we get a decent pullback.
Gold is up almost 15% since October lows and that has beaten any major equity index out there, even NDX.

I might get that old NQ 1830 target after all. I had given up on that one at NDX 1821 with the VIX double bottom, but 1825 seems more in order now.
New highs at 1828.50, 30 mn RSI showing a clear bearish divergence, but we are used to that. Smells like short covering more than anything, but many hedgies were obviously waiting for NQ monthly R2 near 1831.50.
We are pulling back from that new high as I type. NQ support is 1826. Below that, 1824.25. Oil is still above 60. A falling dollar will be supportive of higher oil prices as OPEC does everything they can to make up for the currency loss since they get paid in dollars.

The buyers come in as if nothing happened and pretty much close the gap. We will se what happens now. Foreign money is getting out of Dodge and US investors are left to their own devices. So far, any bad news for them is a buying opportunity. It's a little silly, especially before any retail sales report, but that's the pattern.
Keep an eye on financials, with the BIX still stuck under its 50 day moving average at 396.30. Glancing over some investing web sites, I notice a complete lack of fear or concern. Almost no volatility whatsoever with the VIX barely jumping above its 10 day ema. 11.40 is the top of the envelope, traders were hoping for at least that, but no such luck. They are selling puts with absolutely no premium as if they will never get assigned.
You know this is post-turkey day when oil is above 60, the dollar is falling apart and they keep buying stocks the minute the ticker goes red. Shorts must be pulling their hairs out or just throwing in the towel at this point, which of course from a contrarian standpoint is trouble.
The real Fed action could now be in terms of supporting the greenback and not lowering rates, contrary to what many are thinking. They are in a very tight spot.

Watch QQQQ 44.50 resistance. Support was at trend line off Nov 20 lows. For NQ (NDX futures) that was even more precise at 1809.50, which is also 50% 11/15 low and 11/22 high.
We have had numerous incidents these past few years of Fed money coming in and supporting the markets at key times, so beware of that looming possibility. Nevertheless, with oil approaching 60 and massively overbought conditions, I think any bounce will be met with some profit taking. NQ hits 1818.50, 61.8% gap as I type. Gap close is 1824.25. With this low volume, anything can happen.

The dollar lost key trend line support at 84.85 overnight. Next fib support is at 83.27. Dec 2004 lows are at 80.39, but we are a long way from that.

NQ 50% of gap is 1817. Overnight lows at 1805 have not been tested yet.

NQ 10 day ema is at 1799. ES 10 day ema is at 1400 and was hit pre-open.
Looks like foreign assets have started dumping anything American due to the dollar decline while everyone here was digesting turkey. I had specifically commented on that possibility yesterday morning. It is not a coincidence that NDX hit critical mass at the same time and VIX did a double bottom on Wednesday off twelve year closing lows the day before.
Weekly pivot for ES is 1398.50. NQ is 1792, should things get really ugly. Resistance for NQ is last week's highs at 1813, but draw your fibs inside the opening gap and watch 50% level.

Nov. 24 (Bloomberg) -- U.S. stock-index futures tumbled on speculation the dollar's decline to a 19-month low against the euro will spur inflation.

Here is the NDX (Nasdaq 100) chart I was referring to. As you can see, perfect stall at 61.8% projection October. I had outlined the possibility of NQ (NDX futures) moving up to 1830, and it could happen in the thin Friday trading, but this chart could tell us the cash index is at pretty strong resistance. There is another interesting aspect to this, one that I alluded to several times and is now even more urgent. Note that during this entire rally, we have not spent more than 5 or 6 days away from the 10 day moving average (exponential on this chart, blue line). We have now been trading a whopping 10 days away from it. That is what I call overextended. Of course, all this time the average has been rising, but now there is the added risk of trading through it since the rise above was parabolic, which tends to correct harder as buyer fatigue sets in.
Longer term bulls would have preferred a more tradeable rise so as to keep a wall of worry present. It's all very artificial, of course, as the Feds inject liquidity to prop up the financial markets to make up for the housing loss. But the dollar is falling apart and that will scare away foreign assets. You can see the selling every day at the open, It's almost brutal. Then, all of a sudden, the phantom buyers appear (do you really think funds are still buying the same stocks here?) forcing shorts to cover and more retail money to jump in for fear of missing the boat. It just makes it very hard even for seasoned traders to commit without care on the long side and holding until the close after such a run. I preferred shorting the opening bounce, covering and getting out. It was quick money, simple (R2 at open is almost always a reversal) and very profitable (NQ dropped almost 20 points at the open in less than 30 mns and then took all day to get to new highs, far too tedious). You just can't hold on to it. That time will come.
The easier decision is to short the dollar on rallies (long EUR/USD) as it seems the trend is now set into year-end barring a monster bullish piece of economic data. For those who don't like currencies, buying gold on dips is the alternative.

I was thinking a little higher at NQ 1830, but NDX looks topped out right under 61.8% October projection (1821). We will see what the close gives. But watch that level (NQ 1825/QQQQ 44.75). We have 30 mn, 60 mn and daily RSI above 75 and the VIX did a double bottom at 9.84.

Stop run push on ultra low volume and NQ stalls right below weekly R1. Seems like they want to bring QQQQ as close as possible to 45.

Bulls keep techs up, hoping for a big retail weekend. So far, we have a slowing economy, consumer sentiment starting to wane and an old tech stock (DELL) that is only showing mediocre revenue growth year over year and has not even issued guidance. The upgrades came out, wich seem peculiar since no one has a clue what DELL sees going forward. What else is new in lala land.
Some Nigerian hostage business is keeping oil from plunging further, in fact it's back on a bid above 59 as I type.
These big opening drops, followed by choppy rises back to the highs at the close is telling us that the distribution is not over. Some pretty heavy money is getting outin a very orderly way when the morning retail buy orders come in. It doesn't mean we can't go higher, but it's getting pretty narrow up there.

NQ manages to move back up above last week's highs, but ES still faces 1408 resistance. It's a mixed market and half the street has gone home. Big bets were made on the dollar and the sell stops where pretty heavy. No one will want to be long the greenback over the holidays or oil for that matter.
YM is weaker due to GM and can't seem to keep a bid above its pivot at 12345.

Oil drops on the inventory numbers and that is lifting spirits a little, but the writing could be on the wall. That was a big drop from highs for NQ. Now XLE (energy) is down. Watch NQ 1813 resistance, last week's highs. Nothing would surprise me these days, even a bid to new highs, but I would consider that highly unlikely today.

Euro December futures just shy of 1.30 at 1.2962. The dollar has fallen out of bed, finally confirming what bonds have been saying for some time now.
It will be interesting to see how they will spin equities out of that mess. SPX could very well have hit its high for the year or close. Maybe a pop to 1413, but a reversal is not far. Shorting rallies has been a great opening trade for the past few days, which indicates distribution. Of course, buying dips has worked just as well, but I am less interested in that trade these days.

UMich Nov. sentiment revised down 92.1 vs 92.3
The jovial mood has disappeared. ES hit a major top and unless oil falls apart, there is no reason to bid equities other than the calendar, which I don't trust this year. Bull are now anxiously waiting for the oil inventory number (EIA) at 10:30. That could definitely help turn things around, but for now, NQ/QQQQ below last week's highs.
As for DELL, who cares? It is showing anemic growth year over year and that should actually be bearish for the rest of techs.

Double top YM and NQ tags R2. ES hits 1410.50 upside target and backs off. We await consumer sentiment at 10.
Oil is trading at 60.25. The dollar has lost trend line support. If YM gets back below 12369, that will be resistance.

Jobless claims rose to 321K and that hit the dollar. Gold is back on a bid.

Jobless claims at 8:30, consumer sentiment at 10 and EIA inventories at 10:30. A heavy morning ahead.

Just a little fun with some DELL headlines and commentary this past year.

This is UBS on July 12th cutting estimates and price target for DELL. They lowered revenue to 14.2B and price target to 26. Link

Here is Cramer, on May 12th of this year. Remember, he is the loudest bull out there now, pushing CSCO, INTC and GOOG. Well, he was the loudest bashing them not long ago:

The markets needs generals, he explained, adding that the leaders of the last market run-up are all played out. "The generals are dead," Cramer said, and listed Cisco, Dell, Microsoft, Intel, Broadcom, Marvell Technology and Google. Link

In today's Reuters press release, there is this little line: Third-quarter revenue was $14.38 billion, up 3.4 percent from a reported $13.9 billion a year ago. It was the slowest growth in more than four years, but it fell within the range of Wall Street estimates. Link

I can go on, but basically, you get the drift, and the scam. DELL is beating lowered estimates and rising from a low price only achieved by the knock down from the same group that will be out there pushing techs tomorrow. But the story hasn't changed: this company is not growing enough to justify moving the entire tech sector to multi year highs, after a four year run. But that is what they are doing, and doing it with no fear or any sense of responsibility going forward for the average investor. Bonds are telling us a recession is coming, the yield curve has been inverted for some time now. Who do you believe? Link

I want to see who points out the DELL shortcomings year over year tomorrow. I will respect that analyst. It was easy to raise margins thanks to the INTC price reduction last quarter, as the chipmaker worked hard to clear inventory and AMD came in as a competitor. But can anyone look at DELL and still call it a big cap growth story anymore? It might change, but for now, those are the numbers. Without guidance, we can only work with what we have and it isn't so hot.

I don't like doing these types of columns, they have nothing to do with trading. But once in a while, I like to debunk the machine and make you understand that what you think is true today, will be a lie tomorrow.

A real life example: when you want to buy a house from someone, do you tell him it's an incredible value? No. You tell him it is a worthless piece of junk, but you will do the poor guy a favor and take it off his hands at a discount. Six months later, when you sell it, do you tell the buyer that the house is a worthless piece of junk? No, you tell him it is the Hearst castle and by next year, it will be the Taj Mahal. Some sucker buys into your pitch and you made your money for the year. That is what big brokerages do. As a trader, you can make money riding the call, but as an investor, the real money is only made by buying low and selling high. Is today high enough? You be the judge. "Sell too soon" is not an idle cliche. It's what pros do. They take money off the table.

Since semi-conductors failed to participate (as did BIX, but we covered that yesterday), let's take a look at SMH weekly chart. We closed below the September highs and right at 50 weekly MA and ex 2006 trend line resistance, now support. Even though the group was red today, it was merely a blip next to the bullish white candle we had last week. The key will be to hold today's closing level. If bulls manage that, next resistance is 36.50. Failure to stay above 35.11 sets up a test of current channel support at 34 Chart.
Semis are still underperforming this year. The DELL news will be their chance. Bulls get the ball and they better not fumble especially next week. Trading the next two days will be relatively meaningless, other than providing more opportunities to sell on strength for those investors that respect the ebb and flow related to sentiment extremes.

The daytrade set up for tomorrow is pretty easy. NQ support will be 1812/1813. Long above, short below. If we do hit weekly R1 and montly R2 between 1828/1831, you might want to consider a swing short, or at least exit all longs and wait for the dust to clear. It's a pretty serious level of resistance.