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Traders look at lower open

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Traders are looking at a lower open after the recent three-day weekend in observance of Memorial Day with S&P futures (sp03m) currently trade lower by 4.7 points at 927.90. NASDAQ futures (nd03m) are off 7.5 points at 1,123,while Dow futures (dj03m) have fallen 52 points at 8,540.

Economic data to be released later this morning at 10:00 AM has economist's forecasting May Consumer Confidence to come in at 94.0, which would be an improvement from April's 81.0 reading. A pulse on the housing market will also be given as April's Existing Home Sales (consensus 5.7 million annual rate) and April New Home Sales (consensus 985,000 annual rate) will be released.

Shares of healthcare provider Tenet Healthcare (NYSE:THC) $15.55 are indicating a higher open at $15.75 after the company announced its CEO Jeffrey Barbakow is resigning immediately. Mr. Barbakow is said to receive separation benefits under a previously executed agreement that is available to all company senior vice presidents and higher under certain circumstances. Late last year, the company came under scrutiny by the SEC for accounting/billing practices.

Shares of Dow Component AT&T (NYSE:T) $19.25 are indicated lower at $18.58 after AG Edwards downgraded the stock to "sell" from "hold," saying business influences largely beyond management's control strongly suggest an unfavorable longer term outlook. AG Edwards believes the long distance industry is becoming even more competitive with the Regional Bell Operating Companies (RBOCs) rapidly entering the segment, and also thinks the tax package and takeover speculation are already partially factored in the price of AT&T's stock.

Here is a quick look at our pivot analysis matrix. DAILY levels for today are based off of Friday's trade, while WEEKLY levels are based off of last week's trading range (Monday-Friday).

DAILY/WEEKLY/MONTHLY Pivot Matrix

Early today, look for resistance at the SPX DAILY R1. This was a level we've watched come into play as resistance on Thursday afternoon and then all day on Friday. As such, I deem this a near-term level of resistance. If broken to the upside, 939.73 comes into play on daily basis.

Looking out past today, I've highlighted both the OEX WEEKLY R1 of 477.13 and MONTHLY R1 of 480.6. Since OEX 480.60 has not been traded this month, I sense (based on observation) some type of formidable selling just below that level. Using WEEKLY R1 (477.13) to MONTHLY R1 (480.60) to define a fairly strong zone of resistance.

S&P Bank Index (BIX.X) has a highlighted in "pink" WEEKLY S1 of 289.62. This is a level that since being traded through to the upside has not been traded or violated in several weeks. If violated to the downside this week, then would expect marked weakness in both the SPX/OEX if not major market indexes on such a violation to the downside.

With major market bullish % charts nearing, at or above the more overbought 70% level, current downside risk assessment should be given to MONTHLY Pivots.

For those wondering how the DAILY, WEEKLY and MONTHLY pivot levels were derived, the equations used and thoughts of this matrix were discussed in a January 19, 2003 Ask the Analyst column titled "Pivot Analysis to define levels and range."

Jeff Bailey

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