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  Jeff Bailey   2/13/02,  10:22:25 PM
Hewlett Packard (HWP) $20.98 +1.01% ... reports earning of $0.29 a share, 4 cents better than consensus looking for $0.25. Q1 revenues were $11.4 billion, which was inline with estimates of $11.4 billion. Guidance give for revenues to be "down modestly" on a sequential basis and gross margins and expenses to be flat with first quarter. Current consensus reveneu estimates were for $11.06 billion and that looks inline with guidance given tonight.

HWP trading fractionally higher at $21.10

 
 
  Jeff Bailey   2/13/02,  10:01:43 PM
PacifiCare Health Systems (PHSY) $18.09 -3.10% ... company reports Q4 earnings of $0.34 a share, 2 cents below consensus looking for $0.36. Reported Q4 revenues of $2.88 billion versus the consensus for $2.9 billion. Gives guidance for FY02 earnings of $3.55-$3.65 per share, which is slightly higher than consensus for $3.53 per share.

Stock trading higher at $18.20 per share.

 
 
  Eric Utley   2/13/02,  4:06:55 PM
Pretty amazing close in the SOX.X just below 570.00...

 
 
  Jeff Bailey   2/13/02,  3:50:22 PM
10-year YIELD ($TNX.X) finished the 03:00 EST session with a YIELD of 5.03% so saw some buying in this bond into the close. Will note that high YIELD of the session came right under the extension of upward trend if drawn from 11/01/01 low and attached to the 01/16/01 low. Extend that trend and it acted like resistance today. If we were to see this get back above this trend, then equity bears are going to be wondering what that cash is going to do.

Right now, action in the bond market is very correlative to the waivering we see in the Dow Transports around its old downward trend dating back to May 1999.

I'm no different than the next trader/investor that really wants a "clear" sign that all the stars are alligned in a particular direction. Unfortunately, we don't have that yet, or at least I don't, so willing to trade for profits, manage risk, and play the cards at hand.

 
 
  Jeff Bailey   2/13/02,  3:40:36 PM
Qualcomm (QCOM) $41.99 +3.7% .... 30-minute chart on q-charts shows the 200-pd MA right here at $42. Can't see it on the www.stockcharts one, but I'm thinking with the North American Telecom Index (XTC.X) down 1.3%, the Combined Telecom (IXTCX) up just 0.52%, short-term trader that is looking to cut a stock from overnight exposure may want to take the exit here. Those willing to carry some risk overnight can look for a gap higher open to sell into. I'm just not a "crazy bull" in QCOM at this point. Link

 
 
  Eric Utley   2/13/02,  3:40:23 PM
Watching the Semiconductors (SOX.X) tick just beneath the 570.00 level here in the final half-hour of trading. I would think that an advance past 570.00 in the SOX.X in conjunction with a close in the Dow above 10K would be a bullish development for stocks in general.

 
 
  Austin Passamonte   2/13/02,  3:25:35 PM
No downside move has carried thru so far. Still chopping at the same levels we've seen all afternoon. S&P 500 prints 1118.00 and I'm out at par & done for the day... but could be tempted to wager a tiny tad of ATM/slightly OTM put options IF all 10/5 min chart signals go overbought one more time before the bell.

 
 
  Jeff Bailey   2/13/02,  3:24:00 PM
Applied Materials (AMAT) $48.00 +7% ... getting upside alert here at 0% retracement of $48. Short-term trader could sell some strength with longer-term bulls looking good. Link

 
 
  Jeff Bailey   2/13/02,  3:17:22 PM
Copper Futures (hg02h) finished today's trading at $0.7515 a level not seen since June of last year in a downward trend. PD still looks to be lagging the move in copper and may still have some catching up to do. See yesterday's 03:00 Update and thoughts for PD Link

 
 
  Jeff Bailey   2/13/02,  3:10:34 PM
Copper "Hoppers" and Aluminum bulls ... these are considered "non-ferrous metals" and this sector according to Dorsey Wright and Associates is "bear confirmed" at 56%. We will note this group did reach 78% bullish back in May of last year, then turned down to 24% in September, then turned back up to 62% in December, and just reversed lower to 56% in early February. Still rather defensive here, but not "overbought" like the precious metals (gold/silver stocks.).

 
 
  Austin Passamonte   2/13/02,  3:05:22 PM
With exactly one hour to go before the bell and every single intraday chart signal now going bearish in unison, it could get very interesting to the downside from here! Stay tuned...

 
 
  Jeff Bailey   2/13/02,  3:02:55 PM
Gold Bugs According to Dorsey/Wright, the precious metals sector is "bull confirmed" buy way up at 86%. Be very careful if holding some big gains in this group.

 
 
  Jeff Bailey   2/13/02,  3:00:04 PM
According to Dorsey/Wright and Associates, Insurance group is "bull correction" at 55.9% and would take a reading of 58% to get back into "bull confirmed."

If you think about it then, today's "buy signal" and triple-top in AFC is a stock that will contribute positively to the insurance bullish percent as it was on a "sell signal" and now on a "buy signal." If the sector does get back to "bull confirmed" then what does Professor Davis' study say about that?

 
 
  Austin Passamonte   2/13/02,  2:58:33 PM
I just cannot type & hit "send" fast enough to catch some of these market turns. Indexes are now below what I consider intraday S/R and all intraday chart signals are bearish. Call plays from the open should have captured the SPX from 1110 to 1118, OEX from 564 to 567 and DJX from 98.56 to 99.50 areas.

Paltry moves as for what we hoped, but markets continue to pop & chop in volatile fashion these days. I'm short right now from S&P 1118.00 with stops held barely above that mark. Maybe the downside will "catch some air" like U.S. Olympic snowboarders instead?

 
 
  Jeff Bailey   2/13/02,  2:54:49 PM
Insurance stocks subscriber wondering why we don't mention insurance stocks and bullish moves there.

Thanks to the CBOE we lost our Insurance Index IUX.X and you have to concentrate on a few stocks. I see the bullishness in some and today's triple-top on Allmerica (NYSE:AFC) at $45 is compelling. Link

This may be a stock to consider for naked puts. Sell signal off the top in January (red 1) was to $46. Don't think near as much risk based on the base this one has built. The March $45 puts (AFCOI) are bid $1.85 and puts risk at $43.15.

First sign of trouble is $39 and current vertical count is bullish to $56.

Would rather get a pullback to $42.50, but not bad for 1/2 position naked put. Relative strength is "sell, but column of X" so some signs of strength. Link

 
 
  Austin Passamonte   2/13/02,  2:50:11 PM
Note that all 60/30 min index price charts are forming clear little wedges via today's consolidating session. With most stochastic values at or near overbought extreme in short-term charts, a break down from these wedges would be a solid downside play entry. Stops go just above the upper side of these wedges in case the breakout fails and traps bears in a rising market from there.

 
 
  Austin Passamonte   2/13/02,  2:47:44 PM
With the SPX at 1118 and OEX at 567, all intraday charts are looking very bearish right now. Open index call plays should have stop-loss orders right on current price levels and don't be surprised if they break down soon.

Aggressive put players can watch these levels of intra-session support/resistance to gauge bearish entries as well.

 
 
  Jeff Bailey   2/13/02,  2:43:59 PM
PEC Solutions (PEC) $26.02 -10% ... comment from subscriber is ... Hi, all,

the naked put column listed PECS as one candidate. Today, after an apparently excellent earning report, PECS got hammered to downside by as much as 12%.

I plan to sell some March 25 put, or even long the stock; comments please.

My comments .... I see the March 25 puts (PQDOE) bidding $1.75, so $25 - $1.75 has my risk at $23.25 on downside.

Quick look at point figure Link.

If I weigh the two counts, I get reward to $44 and risk to $9. Ugh!

Would rather stick with the underlyiing stock at this point to tell the truth, but not excited about a bullish play.

Relative strengh vs. the SPX is weak and currently reads "sell signal and column of O's" this is weakest of RS so not too bullish right now. Link

 
 
  Austin Passamonte   2/13/02,  2:26:02 PM
TYC is struggling after the conference call? There's a big surprise! This one should be a great short when trapped below massive overhead supply for months and possibly years to come.

 
 
  Jeff Bailey   2/13/02,  2:23:58 PM
Tyco (TYC) Down rather sharply after company sees March quarter earnings as lows as $0.65-$0.68. Consensus for quarter was/is $0.78.

 
 
  Jeff Bailey   2/13/02,  2:22:26 PM
Tyco (TYC) $28.29 -7.18% ... conference call turned nasty and stock moving quickly lower. Sun of a ... gun.

 
 
  Jeff Bailey   2/13/02,  2:18:32 PM
Energy Bulls want to see those Tranpsorts (TRAN) Link.

 
 
  Jeff Bailey   2/13/02,  2:13:06 PM
Apache Corp (APA) $49.87 +0.76% ... no I haven't forgotten about my "favorite" oil/nat gas producer. Trading right at downward trend from bar chart, but that silly reverse head/shoulder still in play. Stock is right back at the neckline of $50. Still looks bullish longer-term. That pullback on January 30th stopped dead in its tracks at bullish support. Current vertical count is bullish to $61. Link

Reverse head/shoulder easier to see on the bar chart Link

 
 
  Austin Passamonte   2/13/02,  2:09:08 PM
I don't want to call Suze Ormond a liar by any means, but she just told us how she personally watches a number of stocks (and CNBC) all day every day on her screens.

Oh really? Where does she find the time to do that type of daily monitoring when traveling the world preaching her gospel in several continents, writing new books several times a year, doing the Oprah show, etc?

I can't find time to finish one single book on trading and she pumps them out like pretzels at a beer party. Remarkable time management skills, I guess!

 
 
  Jeff Bailey   2/13/02,  2:02:15 PM
Excellent Observation from subscriber regarding Celestica (CLS) and large amount of open interest in the February $40 puts (CLSNH) at 6,265 and potential impact on trading near-term.

Could be bull that sold naked and willing to take stock at $40 less the premium, or institutional hedge on long position. Monday will most likely be the "decision" day near-term.

Good hard work from subscriber. I wish I had an extra set of arms, fingers and eyes to do more like this. However, will have to settle with the three eyes and 12 fingers that I have.

 
 
  Jeff Bailey   2/13/02,  1:54:19 PM
Jeff - Have followed the PD trade and bought the April 35 calls at 2.20 and have a nice gain now. What was your upside target and is there enough room to close the April 35 and move up to the April 40?...

If trader bought the Aprils, then I (not necessarily inline with your risk tolerance) would be willing to either give the trade some time to work as I think PD in the mid-40's by April. If the numbers make sense to roll to the $40's then that can be done.

Maybe strategy would be to take profit in the $35's, then only take half and go to the $40's here. Then if we see pullback to retracement support of $35.32 could round out to full and also be monitoring copper prices.

 
 
  Jeff Bailey   2/13/02,  1:49:13 PM
Tyco Intl. (TYC) $31.03 +1.77% ... stock did trade below yesterday's "inside day." Conference call underway to field investor questions.

This is a toughy right now with conference call underway. I also am looking at daily chart and a MACD that is just crossing above signal well below the zero level at -5.89. Link

With recent reversal in MSFT from this morning's lower inside day to MSFT now showing a gain of 2.4%, glad I kept loss small and not looking to try and duplicate in TYC.

 
 
  Eric Utley   2/13/02,  1:42:16 PM
About $2 later, I was obviously wrong about passing on the Micron (NYSE:MU) bullish triangle down at $37. More on the Micron triangle and other Semiconductor-related observations in the 3:00 p.m. EST Intraday Update.

 
 
  Jeff Bailey   2/13/02,  1:39:36 PM
Alltel (AT) $55.62 -1.04% ... Stock does look bearish and p/f chart currently has bearish vertical count of $40. Link

Relative Strength of AL vs. the SPX.X is weak and would read "sell signal and column of O." I do note that current RS reading near a level found in August (red 8). This has me thinking either 1/2 position short/put, or full position with tight stop. Link

I will say... this is not a stock I would necessarily want to have a large bullish position on.

 
 
  Austin Passamonte   2/13/02,  1:35:49 PM
Emails flooding me with new recent lows on the VIX alerts. That is a fine trade filter to watch, but far from a trade signal to take. It can easily go to 20 or lower, which I doubt will happen here but who knows?

I watch the VIX for market sentiment but will not short this market with impunity right now until daily chart signals turn bearish again. I will miss selling the tip top and leave that attempt to aggressive traders bent on catching the turn.

I've sold too many tops that didn't turn in my career to worry about finding it again. When the trend begins I'll take my chunks from the middle with little effort and leave catching the ends for traders better than me!

 
 
  Jeff Bailey   2/13/02,  1:25:47 PM
Phelps Dodge (PD) $38.28 +5.14% ... getting upside alert at 50% retracement of $38.28 here (retracement from $50.83-$25.74). Short-term traders can sell strength if you need some gains.

 
 
  Austin Passamonte   2/13/02,  1:17:24 PM
Markets behaving exactly as charts predicted: further thrusts higher but struggling in agony to do so. I would personally be a cautious long, waiting short or happily flat and looking for better index setups than we've seen this week so far.

Small gains at best are offered up until now, but things could get wild in the 2.5 sessions left to play.

 
 
  Eric Utley   2/13/02,  12:44:37 PM
Options Expiration is a few days away. Remember that stocks, especially big cap, widely followed stocks, tend to get pinned around strike prices where a lot of open interest exists. Take Cisco Systems (NASDAQ:CSCO), for example, at the 17.50 strike, where over 80,000 contracts exists. That makes the level a magnet of sorts. Every time the stock starts to release from the level, either the call holders sell or the put holders sell, forcing the stock back to the strike.

 
 
  Eric Utley   2/13/02,  12:32:24 PM
Biotechs (BTK.X) giving ground back today after the three day ramp. As weird as it seems, today's pullback in the BTK.X is logical. Weird because logic usually doesn't rule in the market. I suspect that the BTK.X will come back down into its base from late last week, giving bulls another chance at favorable entries. In the meantime, protect what you've made if you haven't already.

 
 
  Jeff Bailey   2/13/02,  12:29:25 PM
Phelps Dodge (PD) $37.74 +3.79% ... one subscriber e-mail says that PD makes some of the "big tech" like CSCO, MSFT, INTC look like they're standing still. I don't disagree with that.

 
 
  Austin Passamonte   2/13/02,  12:27:43 PM
Markets are churning a bit today, and call plays stalled out rather quickly. However, too many readers think a market is either bullish or bearish, one or the other. Too many readers think a trader must always be bullish or bearish, one or the other. I'm not sure where that grossly mistaken idea ever came from, but couldn't be further from the truth.

The biggest mistake short-term traders make is to exit calls and switch to puts or vice-versa with no break in between. Markets don't always go right up and then down... they often move sideways in between.

Right now we have no good entries either way. If downside players were dying to get in, waiting for 10/5 min chart signals to go overbought extreme and turn lower from there would be the next entry I'd try. Especially if price action fails at a lower relative high in these tick charts than the last trip to overbought and down.

 
 
  Jeff Bailey   2/13/02,  12:26:41 PM
Dow Industrials (INDU) $9,956 +0.93% ... session high as been $9,998.25 and very close to psychological resistance of $10,000. MACD crossed above signal on daily chart on Monday, and current reading of MACD is -22.46. My near-term bullish target would be the rounding 200-day MA up at $10,077.

Lots of economic data due out tomorrow.

Did you know that according to Stock Trader's Almanac, that the day before a mid-week Valentines day has been up 5 out of 7 times?

Option expiration is Friday (02/15/02) so may see Dow hover near the $10,000 level. I haven't looked at call/put open interest, but that is early thought.

 
 
  Jeff Bailey   2/13/02,  12:10:24 PM
Celestica (CLS) $38.61 -0.66% ... stock we've thought good short. Not participating today. Still work to be done for bears to get comfortable, but that bearish triangle still looks "nasty." Only thing I see holder her together is bullish support trend. Link

 
 
  Jeff Bailey   2/13/02,  11:59:01 AM
Somone wrote a while back that AT&T (T) $15.99 +0.75% looked weak relative to the market.

This was from subscriber e-mail. Lets put that to the test and check the RS chart of T vs. S&P 500. Link

I would read the RS chart as "buy signal, but in column of O's." Looks mixed to me and more of a "market perform"

 
 
  Jeff Bailey   2/13/02,  11:40:25 AM
Wireless Telecom (YLS.X) $74.27 -0.30% ... point/figure still bearish with vertical count dating back to January still bearish at $60. Recent rally to $76 is a "low pole" warning and may indicate some short-covering from bears in the $90-$100 are locking in some gains (very similar to past comments on QCOM). Link

 
 
  Austin Passamonte   2/13/02,  11:40:15 AM
Qcharts index and options feeds are having problems today, and I have no control or influence over that. Just a paid user like everyone else who takes technology as it's offered, for those who think I have influence to fix any glitches Qcharts may have.

 
 
  Austin Passamonte   2/13/02,  11:38:22 AM
After the early pop and quick fade back to current trading levels I see intraday charts looking toppy and weak. Personally I would exit current index call plays (of any symbol or other index) at breaks below OEX 567.00 and SPX 1118 from here.

My guess is the markets go a bit higher at least one more time this session, but if they fall it could drop like a rock. Trying to make decisions for everyone across the spectrum of account size and emotional level of risk is touch, so let's err on the safe side and get out if price action doesn't hold right here.

Aggressive traders ignore me and hang in there anyway, so you could say we do cover all bases indeed!

 
 
  Jeff Bailey   2/13/02,  11:36:54 AM
Wireless Telecom (YLS.X) $74.30 -0.25% ... yesterday was "inside day" with a range of $75.78-$74.18, so it has NOT broken to downside.

I think I know what subscriber may be doing here and very good observation. Thinking may be if we see near-term break to downside, then time to pull the plug on QCOM.

 
 
  Jeff Bailey   2/13/02,  11:31:54 AM
Alcan Inc. (AL) $39.04 +2.25% ... here's another "inside day" and comes in a stock that recently traded a quadruple-top buy signal at $39. This is bullish in my book. Link

If I were a trader that already owned some AL from previous commentary at $37 and then bought some Phelps Dodge (PD) from $35, I would not add to position in AL at this point. I've got some deep cyclical exposure at what I feel is very early stage.

However... trader looking to build a position in AL can average up in AL here.

 
 
  Austin Passamonte   2/13/02,  11:12:42 AM
Intraday charts are looking a bit weak right here at this point in time with the OEX at 568 and SPX 1119 areas. Daily chart signals are still bullish as are 60-min charts but price action could top out not much higher and stall or fall from there.

These are unclear chart signal times, and call option players who have decent gains on the table can close the plays and wait for next entry from here. Traders have no problem buying: it's the selling part where most mistakes are made. We never know if selling now or holding is the best decision to make, and individual choice makes all the difference.

If you see a sum of money in your account representing unrealized gains you don't want to slip away, click "sell" right then and wait for the next short-term play setup ahead... it's always right around the corner!

 
 
  Austin Passamonte   2/13/02,  11:03:12 AM
Reader Writes in " ", replies noted in bold

Dear Sir, "I want to trace a brief history of your messages since last Sunday. Your messages and graphs were bullish starting from weekend till yesterday. Yesterday your message said that bear market rally has begun. On Monday and Sunday your messages said that buy at dips. Today your messages and your graphs of SPX and QQQ are either neutral or bearish. I may be missing something but to me, it appears that there is no consistency in your messages/signal and charts."Have we seen much consistency in the markets this week? One thing is for sure: history recorded does not lie and all of the chart predictions I see in real-time are recorded via archived links at the bottom of this window. Research what the charts said this week and my calls, match it up to what happened soon after and let me know how they turned out.

"Your charts had bullish indications uptill yesterday and today you show different wedgeshaped graphs."Yes, which is why we played the break from these wedges to the upside at open with bullish plays and are nicely in the green right now. Also, Sector Share model entered a dozen or more long share plays at Monday's open from the weekend gameplan and are all up nicely today as well.

"Please educate me about this whole set up. One hopes that when you say a rally or biotech or tech rally is imminent as was your messages on Sunday that you will address that concerns. Perhaps saying something to the effect that our previous indications of bullishness (as indicated by Sunday messages) are now null and void and new signal are bearish in nature."My role here mandates I make market action comments from the next five minutes to several weeks out in advance. I'm afraid you might be blending my various short-term market calls in this window with Market Wrap predictions you referred to that are longer term in nature. There is a monumental difference in gaming weekly/daily charts versus 60/30 min charts as I wear a dozen different hats in this service.

"To me it feels like very confusing and considering what is at stake (hard earned money) and more clear directions are highly desirable."If you are confused about what time frames we speak of at any given point in here, I hope & pray you have no hard earned money at stake until your personal level of understanding is elevated. Our role is to help shelter readers from loss, and step one is knowing what time frame you wish to trade and how market action is behaving within that block.

"Also, you have more than one analyst, you may decide as a collective opinion and then write the messages otherwise it is impossible to decide who among you, is right or who is wrong." I don't trade by committee nor would I decide market direction in democratic fashion. I see other services who try that approach and get gutted like fish in the process. As for who is "right", I don't see where any of our opinions ever differ very much

"You may in addition have guidlines as how to act upon on your email messages, in that case, you may send me those directions or email me as it is convenient to you."Those details are easily accessed thru hundreds of how-to articles I've written in my two year's tenure here archived within the website. Enjoy the research!

" Please read the message and reply in as much detail as possible and you may not send an abbreviated message."That's precisely what I did here in hopes it is of value to many. Thanks for the note, decide what time frame for trading you are interested in and filter market prediction based upon those charts. If you prefer plays that last several days or weeks, ignore what intraday charts have to say. That is just noise to you.

"Thank you in helping me to understand your messages/signals/graphs and their consistency and follow through of emails messages. [MS]"

My pleasure, and I hope this helps a bunch!

 
 
  Jeff Bailey   2/13/02,  10:59:38 AM
Don't we run into Dow resistance at $10,000?, is question from subscriber.

"Psychological" would be my answer. If bears had real strong conviction, then shouldn't have traded the $9,950 level. Link

 
 
  Jeff Bailey   2/13/02,  10:43:01 AM
Know where strength most likely is at Here's a relative strength chart of the Dow Industrials vs. the NASDAQ-100. Notice that the Dow Industrials has started giving relative strength buy signals. It started giving "sell signal" back in October (red a) only after the NASDAQ-100 got going. Link

 
 
  Austin Passamonte   2/13/02,  10:38:56 AM
Nice little bull run this morning, would you agree? Even better for those who went long bullish plays near the open, which describes us. Our first order of business right now is to keep stops at/just above entry cost so no possible loss of capital can happen.

From here we just need to let time take over. So long as both 60/30 min chart signals are rising in bullish fashion, no problems for now. Those are the time frames we'll watch and looks like this session wants to trend methodically higher towards the afternoon.

 
 
  Jeff Bailey   2/13/02,  10:38:00 AM
Biotech Index (BTK.X) $521.19 +0.05% ... after a nice three-day rally from the lows, group isn't moving with broader market. This is not a surprise perhaps. Yesterday and today we see some resistance come in at our 50% retracement of $528 (retracement from $674-$382) and also our downward regression. If a trader has some nice profits in this group from past couple of days then TAKE SOME OFF THE TABLE!!!!

 
 
  Jeff Bailey   2/13/02,  10:33:42 AM
Thinking to myself... If I had taken all of the inside day trades, I would be a loser on MSFT and gainer on others. Now... of those others, which ones do I "rank" as weaker stocks? I've taken a 1% loss on MSFT, and I personally would be willing to offset that with a gain from one of the "weaker" stocks on relative strength.

Since I think "telecom" rather suspect still as that group really got hammered, I'm more likely willing to part ways with Qualcomm (QCOM) $41.44 +2.37% on strength. If long QCOM at upside of inside day ($41.25) then a 1% gain would be $41.66. Since I'm here to try and make money for my account, I would want to try and get something near the $42.00 level and I think stock has that in it if market remains bullish today.

Point/figure is still bearish on QCOM and current rally from $35 (remember vertical count was bearish to $37) is now at last sell signal, so going to meet some resistance I would think near $42. Link

Relative strength of QCOM vs. the NASDAQ-100 is bearish, so not a stock I'm looking at for anything but a short-term trade at this point. Thus willing to cut her loose early and not willing to cut the stock much slack. Link

 
 
  Jeff Bailey   2/13/02,  10:22:45 AM
Here we go! Getting upside alert on Dow Industrials at $9,950 so this is triple-top. Almost immediately I get upside alert and stopping out for MSFT inside day from bearish earlier. Keep the loss small and now playing a trend to the bull side perhaps with Austin's DJX.X trade. MSFT is Dow component.

 
 
  Jeff Bailey   2/13/02,  10:20:59 AM
Disney (DIS) $23.68 +1.23% .... much like MSFT in that it too had an "inside day", would have given the downside break near open of trading and then moved near yesterday's high of $23.70. Monday's high for DIS was $24.04 and declining 200-day MA up at $24.38.

 
 
  Austin Passamonte   2/13/02,  10:16:23 AM
Looking like a session where we hold short-term bullish plays and let time take over from there. No hyper-active trading in store for us today, and playing the upside from this open seems to be working for now. Chart signals are "squirrely" but bullish overall.

 
 
  Jeff Bailey   2/13/02,  10:14:28 AM
Phelps Dodge (PD) $37.49 +3.1% ... stock broke above its 200-day MA today and this can be important technical. I'd like to see volume reach the 2.5 million mark by sessions end to show some capitulation from the bears and aggressiveness from bulls. Link

 
 
  Jeff Bailey   2/13/02,  10:07:25 AM
AOL Time Warner $28.20 +1.87% ... also a break above "inside day." Well, as we see, several upside to their "inside days" and just one to downside so far. Hints of some short-term bullishness. Now a trade can follow some of these over the next couple of days and even if we didn't take all of them, we can "pretend" we did and imagine we trade that discipline. If they all start "stopping out" with a gain/profit, we may have better feel for things.

Imagine that they all run for several sessions, then start breaking below the previous day's low. That kind of action may help trader understand some near-term profit taking coming into the markets.

If the upside ones get blown back lower, then we understand just how darned range bound things really are.

If two of them trade below a previous session low and you are holding one long that has had a nice move and perhaps up 5% one day, may be an opportunity to sell the strength with the thinking that it will eventually trade below a previous sessions low.

Some different ways to increase some observations, but all based on one disciplined and very systematic trading strategy.

 
 
  Jeff Bailey   2/13/02,  10:01:31 AM
Intel (INTC) $33.55 +1.60% ... broke above its "inside day" of $33.48 and battling with a rolling 50-day MA. On this one a trader may wait to clear the $33.63 level (Monday's high) and give up a few pennies to make sure she has a chance of breaking that 50-day.

 
 
  Austin Passamonte   2/13/02,  9:59:42 AM
Looks like Qchart OEX and SPX live feeds are dead on some Qcharts service as readers write. Switch to INDEX:OEX and ES02H for live feeds in each index respectively.

Intraday chart signals are all over the map. So much for methodical, easy market action to trade these past several weeks! Inherent to human nature, a number of readers noted how they watched us rack up a string of winning trades in here only to get comfortable with the results and immediately begun getting chopped around.

I covered the varied stages of market action and trader's emotional reaction to them a day or two ago right in here, archived for posterity. When times get tougher to gauge market action we must trade a bit smaller than usual and get picky on entries, not more aggressive in frustration or desperation.

I expect markets to close higher on Friday than they opened today, but wouldn't stake large amounts of money on it. And any rally may be short-lived as we'll visually explore in tonight's Market Wrap.

 
 
  Jeff Bailey   2/13/02,  9:59:26 AM
Qualcomm (QCOM) $41.61 +2.6% ... broke above its "inside day" at $41.25 and bull could have taken long there. Will be tough for me to alert on every one.

 
 
  Jeff Bailey   2/13/02,  9:57:52 AM
Minnesota Mining $115.29 +1% ... getting upside alert at 19.1% retracement. Have retracement from $122 to $85.86. MMM has been pegging these retracement levels at 61.8% $99.69 and 38.2% $108.24 and looks strong here. MACD just edging above the zero level and could test the old highs of $122.

Point/figure bullish with vertical count of $123, pretty darned close to the December highs. Link

Hmmmmmm.... MMM is a Dow Component.

 
 
  Jeff Bailey   2/13/02,  9:53:45 AM
Microsoft (MSFT) $60.04 -0.19% ... I have retracement from $73.59 to $41.50, which has 38.2% at $61.33, 50% at $57.54 and 61.8% at $53.76. Trader may use "inside day" along with retracement to devise a trading plan for MSFT, using inside day as his/her action point.

 
 
  Jeff Bailey   2/13/02,  9:49:28 AM
Microsoft (MSFT) $60.01 -0.21% ... downside from "inside day" so bear can take short and start with a stop just above $60.85.

 
 
  Jeff Bailey   2/13/02,  9:48:29 AM
Phelps Dodge (PD) $36.83 +1.29% .... $36.90 has been the session high at the open. "Bad-ticks" at the $40 level. While that may be somebody's near-term target (grin), stock didn't trade there this morning.

 
 
  Jeff Bailey   2/13/02,  9:42:25 AM
Inside Days so far haven't seen MSFT, INTC, C, AOL, QCOM break yesterday's range, so narrow market is my thining right now.

 
 
  Jeff Bailey   2/13/02,  9:32:46 AM
Dow Industrials Traders will be watching the $9,950 level. Would be a triple-top buy signal and could also turn the vertical count back to bullish. Longer-term trend still bullish with the bullish support trend at $9,400. Link Bullish percent for Dow Industrials (just 30 stocks) is "bull correction" status at 53.33%. A reading of 56% would be needed to get back to "bull confirmed" status. Not that far so looks like a good bullish trade this morning. Link

 
 
  Jeff Bailey   2/13/02,  9:23:37 AM
Inside Day Explanation can be found in the "Bailey's Basics" section. Link

 
 
  Austin Passamonte   2/13/02,  9:00:51 AM
Readers Write: "Hi Austin, Just finished going over the enteries for plays tomorrow and noticed that 1 of the plays closed higher than your entry points DJX closed at 9863 entry 9850. Does this mean buy at the open? Thanks, [DM]"

Glad you guys question these things I post - makes me very happy to see! I meant to long in DJX 98.75 on that one... so many numbers, so little time to edit. In either case it looks like buying the open at some value near 98.75 on a gap-open move this morning.

 
 
  Jeff Bailey   2/13/02,  8:56:36 AM
Treasury Bonds Seeing some meaningful selling here in early action. 10-year YIELD ($TNX.X) rising to the 5.023% and this is above my "level of bullishness" for stocks, so willing to trade light from the bullish side where I can control my downside risk. I like to use the "inside day" technique for that.

 
 
  Austin Passamonte   2/13/02,  8:56:04 AM
Great Morning!

Readers Write: "...I did notice today(2/12) between 3:00 and 4:10 pm over $11 1/2 million spent on the purchase of the March 1100 calls purchased above the ask. In this same time frame over $4.6 Million used to purchase Feb 1100 calls also above the ask. Also about $1.75 million of Feb 1100 puts being sold below the bid and $8.15 million of the March 1100 puts going below the bid.

I remember reading once(actually I read the info over many times over) where a wise man advised about watching what the big money players are doing, and to not bet against them. Hmmmm. This could be interesting. Thanks, you do a great job, [R]"

I'm not so sure about the wise man thing, but looks like "R" noted some decent cash leaning to the upside right now. With intraday charts looking mixed to weak but longer term-charts bullish, I'd guess the best direction over the next several sessions to be higher.

Aggressive traders want to split their risk-loss capital in two or three pieces for today. I we enter one side and that reverses, use 1/2 capital on the first and second 1/2 playing the opposite direction. Chances are excellent that either side will profit big by Friday night!

 
 
  Jeff Bailey   2/13/02,  8:54:01 AM
Retail sales numbers better than expected has stock futures in the green. Lots of "inside days" for traders to be monitoring and perhaps trading based on risk tolerance. AOL, QCOM, C, MSFT, TYC, CHS, INTC

 
 

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