Update: Overnight short scalp: China Life Insurance LFC (50.82) lower, Chinese stocks slighty lower in pre-morning

After rising at parabolic rates, China Life (LFC) is still reversing downward pre-morning. Technical indicators had been signaling extreme momentum on the upside.

Early Buy Scalp: Marathon Corp (MRO 84.68) 15 min Buy Divergence

Early Buy Scalp (MRO 84.68)

15 buy divergence is holding prices with rising momentum.

Target: 87.02 (30 EMA)

Stop: 84.25 below today's low

Mixed market internals continue into mid-morning session

Investors are getting spooked. At least the investing "public" at large. But you have to believe many institutions have been looking to "exit" ahead of the crowd. Money managers have been calling for a "correction" of some sort as market indicators have been diverging from market action recently.

Additional key factors concerning investing institutions include:

-Extreme bullish market sentiment
-Worry over economic soft landing vs. recession scenario
-Continued lower oil prices/commodities prices might ignite "recession" scenario
-Democratic policy-making economy killers.
-Falling large cap oil names ( XOM) will pull down S&P index

Key market driver: Friday's release of non-farm payroll report could heighten economic worry scenario.

Prior payroll numbers: 132k vs. projected 115k consensus

Potential Pre morning Shorts: Oil, Steel, Retail, Gaming names

COP, BHP, RTP, MAR, JOYG, CHA, IHG, HLT, FCX

Update: Overnight Short Scalp LFC (52.60) Pre-morning action lower. Target $52.20 reached

China Mobile (CHL) and China Telecom (CHA)
are also lower this pre-morning.

Short Scalp: China Life Insurance (LFC 55.88) chart appears overextended

Rationale: Unconscionable: not guided or controlled by conscience.
My colleagues probably think I'm crazy. A stock is outperforming with unconscionable new high momentum and unparalleled bullish sentiment regarding Chinese stocks. Remind you of Internet 2000.

A short seems probable here given the stock has reached parabolic heights. Technical indicators have been suggesting an extreme overbought scenario with lofty price expectations.

Target: 52.50 daily gap area
Stop: 57.90 above today's high

RIMM: Daily chart action consolidating as technicals indicators go neutral

The daily chart action of Research in Motion (RIMM ) has begun a consolidating pattern. The shorts are calling for a top while bulls maintain a base is building for future new highs.

I find consolidations a time for a stock to tip its hand in the form of price reaction to future news about the company; price action which suggest current "hidden" sentiment about future company developments.

While fundamental news continues to be strong regarding the release of Pearl, its newest Blackberry technology, an argument for eroding sentiment of RIMM may be reaching its nadir as greater earnings and product surprises have reached a cycle high. Daily technical momentum has waned while moving averages have flattened out. Technicians believe that price comes first discounting all available information. Stay tuned on RIMM !

Long-term Buy: General Electric (GE 38.09) after mild pullback, price action suggests higher prices

Rational: After breaking from it's 4th quarter price range, GE's price breakout suggest higher prices from these levels. New momentum highs and a shift to larger cap names has prompted a resurgence in other large cap names such as Citibank (C) and JP Morgan (JPM). After hitting new daily highs, GE displayed a mild pullback but today appears to be heading toward a re-test of the Dec. 20th '06 high (38.49)

Target: 41.25

Stop: 37.10 (below Dec. 29th low)

Short: Intercontinental Hotels ADS: (IHG 24.38) Momentum has peaked out and falling

Rational: With extreme daily momentum and spiking price action, IHG appears to be coming back to earth. ADX and RSI numbers have also reached extreme ranges and suggest a "mean reversion" at these levels.

Target: $23.33 (daily 20 day ema)

Stop: $25.50 (above Dec 29th highs)

Feb '07 Crude Oil: range-bound price action as warm weather continues to lower upside sentiment

Crude prices have taken a beating as unseasonably warm weather has pulled crude down to its lower range suppport areas dragging oil stocks lower. Previously, technical indicators had been flashing upward momentum with a breakout above Dec. '06 highs but price lows are currently being re-tested as we approach the Nov. '06 lows.

In reverse fashion, bonds are rallying strongly this morning as ongoing sentiment argues for Fed rate decreases and continued belief in inflation cooling.