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  Jeff Bailey   3/19/02,  8:46:48 PM
TriQuint Semi (TQNT) $11.88 +0.33% ... stock trading down fractionally at $11.65 (-1.9%) as company holds mid-quarter conference call and lowers guidance for Q1. Guidance for Q1 sales and EPS now at $60-$62 million (Feb 7 guidance was $60-$65 million) and EPS is loss of ($0.02)-($0.01) vs. Feb 7 guidance of loss ($0.02)-break-even. As for Q2, company expects little change from Q1. Says the book-to-bill on its wireless phone business is above 1 for the first time since 2000. Optical network remains soft with "return of sales not on near horizon" and satellite business should recover in late 2002 or early 2003.

Company adds that wireless phone business is gaining market share and inventory levels in cell phone channel "has been pretty much sucked out, but optical market still has to work through inventory." Link

 
 
  Jeff Bailey   3/19/02,  8:37:23 PM
Semiconductor book-to-bill ratio at 0.87 The North-American-based manufactureres of semiconductor equipment posted $712 million in orders in February 2002 and a book-to-bill of $0.87. The bookings figure is 10% above the revised January 2002 level of $645 million and 56% below the $1.61 billion in orders posted in February 2001. The revised b-to-b for January was $0.81, which means February's $0.87 ratio marks the 5th consecutive month without a sequential decrease in the book-to-bill ratio.

 
 
  Jeff Bailey   3/19/02,  8:33:14 PM
United Auto Group (UAG) $22.15 +0.45% ... Company issues upside guidance for Q1 (March), expecting EPS of at least $0.35 versus consensus of $0.29; for FY02 (December), sees EPS of at least $1.73 (consensus $1.71). Company says Q1 earnings positively impacted by strong same store sales growth in all areas of business. Link

 
 
  Jeff Bailey   3/19/02,  8:29:34 PM
AutoZone (AZO) $70.35 +1.61% ... Company's Board of Directors approves repurchase of upt to an additional $300 million of company's common stock, bringing total repurchase authorization to $2.0 billion. Cumulative share repurchases to date are $1.66 billion, including forward commitments of $64.8 million. Link

 
 
  Jeff Bailey   3/19/02,  8:26:12 PM
Eastman Chemical (EMN) $47.38 +1.47% ... Company issues upside guidance for Q1 (March), expecting EPS excluding nonrecurring items, to be "greater than highest of current analysts' estimates as reported on First Call, which is $0.25 (First Call consensus is $0.11); cites internal actions taken to improve costs structure. Link

 
 
  Leigh Stevens   3/19/02,  3:42:43 PM
Market update: It's proven to be right on to highlight S&P 500 (Symbol: SPX or INX) resistance at 1172 as the key to whether this market would keep going up for awhile longer (and getting more overbought) before correcting or whether the market would correct and then try this resistance again later. Deflection is on low volume of course, during and after the Fed heads met and decided the future of the free world for now. 1160 is short-term SPX support to key off from. Short-term hourly MACD and longer-term (14-day) stochastics oscillators are just beginning to generate bearish downside crossovers. It appears market may be too overbought and traders a bit too bullish to suggest the S&P can get through recent hourly highs that have deflected prices lower now 4 times. That's the technical picture. Fundamentally, there is the end of Q1 "window dressing", which is probably why prices keep holding up. A bit boring in here while we wait for resolution. Better to tune into the HP/CpQ soap opera. Will they or won't they merge? I've liked both companies' products at different times although am ready to dump my Compaq laptop out a 10 story window. I love HP products & service so maybe they should shape up CPQ.

 
 
  Austin Passamonte   3/19/02,  3:17:55 PM
Had I been a bit more hyper-attentive today it would have been somewhat simple to close the first short play for solid gains and open a second one on the most recent lower-high failure again. Bulls just cannot get it in gear post-FOMC and if recent afternoon lows give way ahead, watch a rash of sell programs kick in to erase most/all of today's gains and then some!

 
 
  Eric Utley   3/19/02,  3:00:32 PM
Cerner (NASDAQ:CERN) just printed that $48 level I wrote about recently. The stock is now about $6 above the $42 area where we first observed the gap between its performance and McKesson (NYSE:MCK). In the meantime, MCK is higher by about $3 over the same period. We've seen about a 6 percent narrowing of the relative performance, a nice move for a pairs trade. Of course buying CERN outright would've netted better performance, but the risk was greater.

 
 
  Austin Passamonte   3/19/02,  2:59:34 PM
It's highly possible the upside was right direction to play from near post-FOMC lows, but with intraday chart signals bullish and prior resistance holding very stiff we cannot gauge the upside reward from here. Downside pressure is evident from overbought charts and serves as a ceiling over short plays.

Daily chart signals are still bullish and I'll happily play the upside, but only in a day or two when intraday chart signals cycle back down from overbought extreme towards oversold and offer an entry from there instead of up near resistance right now.

 
 
  Austin Passamonte   3/19/02,  2:49:20 PM
Sure enough, futures markets popped up to fail just beneath pre-FOMC session highs and promptly turned tail from there. We watch the futures charts because that's where hot money is flowing, and they drive the cash markets that lag the futures. Price action dove and bounced in volatile fashion... now we'll see what the outcome by 4:00pm will be.

All intraday chart signals are totally bearish but volatility between now and the close could be stiff. Whatever direction markets head past 3:00pm should carry forward into the bell.

Short from S&P 500 1176.00 and holding exit stops right there.

 
 
  Jeff Bailey   3/19/02,  2:39:25 PM
Fiber Optic Index (FOP.X) 90.41 -2.21% .... this is "tail of the snake" and she's at session low. Not seeing much positive reaction here and may be hint of lower stock prices in other areas.

 
 
  Jeff Bailey   3/19/02,  2:38:21 PM
S&P 500 Index (SPX.X) 1,167.83 +0.19 has traded off levels found right after FOMC announcement, but not much taking place. 1,175 still service as resistance.

 
 
  Jeff Bailey   3/19/02,  2:36:34 PM
Ariba (ARBA) $5.03 +5% ... stock seeing some buyers after announcement that Network Assoc. (NET) $26.93 -1.5% has selected Ariba Buyer for enterprise-wide supply and services procurement.

 
 
  Eric Utley   3/19/02,  2:35:21 PM
Fed Statement that was included with the official announcement on rates: Link

 
 
  Austin Passamonte   3/19/02,  2:32:02 PM
The assumed became known but markets didn't pop into overbought extreme as I wished. I'll wait and see if one more upsurge in the 10/5/1 minute charts can take out pre-FOMC highs or fails right there. If it does I'll try a modest short for the day; if price action rises into the close I'll watch that ship pass me by.

Simple as that!

 
 
  Jeff Bailey   3/19/02,  2:31:28 PM
Adelphia Communications (ADLAC) $22.40 +0.3% ... one thing I like to do when short/put a stock is look to see if a bull will sell strength on news that may be considered more bullish as the Fed's comments were that a "neutral" bias is taken toward the economy.

Not much change from earlier today as stock just hovers around the $22.50 level.

 
 
  Jeff Bailey   3/19/02,  2:29:03 PM
Treasuries stable here with YIELDS rather unchanged to slightly higher. 10-year YIELD ($TNX.X) holding steady at 5.317%.

 
 
  Jeff Bailey   3/19/02,  2:26:57 PM
FOMC decision on interest rates is to keep the Fed funds rate unchanged at 1.75% and changes bias to "neutral" from "weakness."

 
 
  Eric Utley   3/19/02,  2:26:33 PM
Hewlett-Packard (NYSE:HWP) saying that they believe the merger will be approved. Stocks reacting, spread between HWP and Compaq (NYSE:CPQ) narrowing.

 
 
  Austin Passamonte   3/19/02,  2:16:48 PM
Once the already known(assumed) becomes known, I'll be looking for the first big burst in either market direction from there. Hopefully it will be higher as all intraday chart signals are now overbought. Then I'll take high-risk capital (suggesting 50% stops on options) and take the opposite side of any earl pop if/when all 60/30/10/5 minute chart signals align.

Should that happen and a clear entry present itself, I'll take it looking for an intraday play most likely closed out by the 4:00pm bell. We often see the next session past FOMC reverse the afternoon action before, so beware of whipsaw markets ahead.

This one is impossible to wager either way, is pure reactionary trading and suitable for experience veterans who tolerate high risk very well! Trends should begin to emerge with better clarity from Wednesday forward.

 
 
  Jeff Bailey   3/19/02,  2:15:12 PM
FOMC decision on interest rates should be out in about 10-minutes Key technicals in my mind right now are S&P 500 (SPX.X) trading just under the 1,175 level that we have talked about for months. Not expecting any type of surprise here. I'd expect Fed to keep things where they are, have a "neutral" bias.

Will just try and measure market response to things into the close. Not overly anxious to put on any new positions long/shor or call/put in here. We've made some bets, so stick with them and honor stops.

 
 
  Jeff Bailey   3/19/02,  2:06:53 PM
McDermott Intl. (MDR) $15.83 +8.05% ... Jeff, Mcdermott has broken out to a new 52 week high today on heavy volume. Whats your take on this breakout? Will it be short lived or do you think it has some legs to it? I'm holding May 15 calls on it. Thanks for your time and advice.

I have MDR as "oil service" and according to Dorsey/Wright and Assoc., this sector is "bull confirmed" at 78%, which is well above historical readings of 74%. As such, would be willing to be looking to take some profits if a stock is close to a vertical bullish count.

Now that we have sector taken care of, the p/f chart of MDR is bullish and vertical count longer-term is $23.50.

Not sure when or how profitable subscriber is in calls he currently holds, but still has a couple of months until expiration and I'd continue to hold long.

I like the bar chart of MDR Link dating back to that gap higher on BIG volume of 3.7 million shares. Kind of reminds me of gap higher on Oxford Health (OHP) at $32.

 
 
  Leigh Stevens   3/19/02,  1:52:00 PM
A reader of the Trader's Corner article I wrote on 3/17 at Link mentioned that as of midday the Stevens equities call to put ratio was 2.1 -- that is, equities call volume on the CBOE was running 2.1 times put volume, which is getting pretty lopsided. (CBOE total put/call ratio was .58.) By the way, the QCharts symbol "QC:PUTCALL" symbol provides the put/call ratio by totaling the option volumes on all 5 options exchanges, not just the CBOE. I may not have made that clear in my Trader's Corner article. At any rate, there is a lot of call activity relative to puts. So, while the S&P looks like its going to break out to new highs, the level of trader bullishness is rising substantially. It pays to be cautious when traders get very bullish as this market is still likely to have many two-sided trading swings.

 
 
  Jeff Bailey   3/19/02,  12:44:41 PM
Per Eric's 12:16 comment on CVTX according to Dorsey/Wright and Assoc., the biotech bullish percent just added another X column at 42% bullish and still reads "bull confirmed." Still relatively lower risk sector for technology bulls.

 
 
  Jeff Bailey   3/19/02,  12:39:09 PM
Apache Corp. (APA) $57.30 +1.23% ... still trading bullish. Gets about 50% revenue from oil and 50% from natural gas. That reverse head/shoulder starting to pay some reward for bulls from break of neckline at $50. Link

 
 
  Jeff Bailey   3/19/02,  12:37:02 PM
Natural Gas Index (XNG.X) 195 +0.92 ... technicals here have this index breaking above a still trending lower 200-day MA. First move above the 200-day MA since break below back in June 2001. Link

Friday evening was looking at shares of Vintage Petroleum (VPI) Link , but stock moved too much in past couple of sessions.

 
 
  Leigh Stevens   3/19/02,  12:24:48 PM
What's moving: The S&P 600 (Q-charts symbol: $sml), which is the S&P small to mid-cap index, is continuing to move to new highs today. This index first made a new 52-week high at the beginning of this month (3/4).Then from 3/8 until the end of last week (3/15) it traded in a narrow range just above that new high. Yesterday (Mon.) SML broke out again to new highs.

 
 
  Eric Utley   3/19/02,  12:16:45 PM
A heavily shorted stock, CV Therapeutics (NASDAQ:CVTX) looks like it will go higher. I see a stock with just under four million shares short, while 30-day average volume runs about 730K, which gives the shorts about five days to cover. Oh yea, the stock broke out from a bullish triangle Link today with its advance past $43. I like its sector (biotech) and think we could see a pop here in CVTX as the shorts cover.

 
 
  Austin Passamonte   3/19/02,  12:14:28 PM
I scanned the S&P 500 components from high volume down to 700K shares section and whittled down a list of symbols poised to move higher or lower ranging from this session into the next month or two. For those with idle curiosity and pre-FOMC time on their hands to play, here it is:

Higher:
SUNW, CSCO, MSFT, QCOM, MIR, AES, NXTL, CA, GLW, T, PCS, CPWR, WMB, XRX

Lower:
S, SGP, KMB, KSS, AMGN, MRK, C, BMY, JNJ, CNC, EK, SBC, CCU, AT, AIG, CTL, SPLS, LUV, DAL, ADM, HRB, BAX, FDX

This list is comprised of symbols that are grossly overbought or oversold on weekly/daily charts, at tops or bottoms of trend channels, just broke above resistance or below support and/or exhibit market reversal candle patterns as the topper.

From here I would drill down to 60/30 min intraday charts looking for precision entries when all chart signals align from WD/60/30 in addition to chart patterns and lines of resistance & support. That would probably end up with three - five longs and five - eight shorts from this partial SPX component list.

I tend to forget how much fun it is gaming individual stocks, but the extra effort spent ferreting them out does pay substantial rewards as well!

 
 
  Leigh Stevens   3/19/02,  11:57:38 AM
Market technical update: SPX looks like it's going to break out of a minor bull flag and take out the 1172 peak that has turned back rallies 3 previous times since 3/8. If so, look for a significant further spurt on short covering. Beside a possible intraday breakout, another thing to look for will be the ability of SPX to hold the 1170-1172 level on any subsequent pullback and on the close.

 
 
  Austin Passamonte   3/19/02,  11:51:03 AM
I believe we can actively trade a number of symbols in technology right now that will soon cease to exist. Some of those companies will most assuredly spike higher before the ultimate demise. LU could easily rally to $5 or $6 in the months ahead as readily as plunging to $3. Traders who cannot fathom that happening must realize LU and NT still have huge market caps due to insanity of splits in late 1990s and can easily become penny stocks from here.

These are NOT investment-grade vehicles any more... they are lottery plays for wild speculation only. My choice to trade them will be waiting for Weekly/Daily chart signals to reach overbought extreme and then load up on puts for the inevitable ride back down. I'll play the trend downward on these telecom bubble has-beens and ride the strong trends up in retail, healthcare, cyclicals, energy and sectors of our future instead of dead fish from the past.

 
 
  Eric Utley   3/19/02,  11:44:43 AM
Forget about Lucent (NYSE:LU). How about slipping into Cintas (NASDAQ:CTAS), the corporate uniform maker. That's right, uniform maker.

I've been hoping, praying, wishing that this stock would come in a little more for a buy, but it doesn't appear that it will. It's above a quad-top Link today, relative strength Link is getting sexier, and I like the bar chart. This is a four-letter stock with a three-letter feel.

 
 
  Jeff Bailey   3/19/02,  11:44:37 AM
Cox Communications (COX) $39.27 -1.15% ... may also be a short candidate, or at least a stock to monitor for those holding Adelphia (ADLAC) short/put.

Should Cox (COX) find resistance and the trending lower bearish resistance, could act like a "sledge hammer" and drive ADLAC into the ground. Link

Relative strength chart of Cox vs. the S&P 500 Index is "sell signal, but column of X." If she reverses lower into O, would be further negative.

Good looking risk/reward short with a stop just above at $41.

 
 
  Jeff Bailey   3/19/02,  11:41:04 AM
e-mail problems Customer service informs me that we continue to have problems with our e-mail server and that some subscribers are not getting their e-mail updates. For those that can read this, and not getting your upddates via e-mail, you can get the updates from the web page. Intra-day updates are for 09:00, 11:00, 01:00 and 03:00. (all times EST).

 
 
  Jeff Bailey   3/19/02,  11:36:23 AM
Adelphia Comm. (ADLAC) $22.37 +0.17% ... stock traded sideways yesterday, and same today. Short-term trader can snug down a stop in their short/put to just above the $23 level.

60-minute chart Link shows the 200-pd ma right in here, with the 50-pd MA turning lower and just ahead at $23.50. We noted the 80.9% retracement level of $21.42 last week and that is the "hurdle" for bears right now. Most likely is/was a level of market maker support and bears want to see a close below that level to then have market makers playing some defense to the 100% retracement level of $18.76.

 
 
  Jeff Bailey   3/19/02,  11:30:15 AM
I'm hoping there aren't too many "telecom bulls" among our subscribership Austin. However, I do get some e-mails about "what about buying the LU $5.00 Calls for next month?"

 
 
  Austin Passamonte   3/19/02,  11:08:55 AM
Telecom equipment bulls? Jeff, that species is nearly extinct right now and the population will not grow strong for months or years to come!

Both Lucent, Nortel and a few others could easily cease to exist within the next two years. Sobering words for 1999 era investors who still believe such tech stocks are in a temporary lull, but time has a way of clearing the picture of reality for all.

My hometown of Rochester NY is rife with GBLX "investors" loaded with the stock when the Bermuda shell bought Rochester Telephone. Many of them are still in disbelief over how their five, six and seven-figure stock positions plunged to zero with GLBX insolvency. It is far, far from the last we will see of recent high-flyers doomed to cease operating in the near future ahead.

 
 
  Jeff Bailey   3/19/02,  10:43:42 AM
Lucent (LU) $4.45 -6.9% ... is most actively traded and another 52-week low. It and Nortel (NT) trading heavy today and not looking very good for telecom-equipment bulls.

 
 
  Austin Passamonte   3/19/02,  10:30:38 AM
Great Morning II!

Looks like the usual pre-FOMC session where an opening pop flattens out to move totally sideways into 2:15pm. For the life of me I don't know why today's event could possibly move traders either way... it is more well-scripted than WWF pay-per-view events.

Regardless, people are sheep and traders are people. We also know that the initial move off an FOMC announcement between 2:16 and roughly 2:45pm EST will be wrong and fading that move is likely to win directional action from there. However, lately we've seen muted action past the news as these events do not hold the market impact right now that they once did or soon will in the future.

One thing is for sure... I have zero interest in opening new plays before 2:00pm and will use the dead time in between for screening all indexes and sectors that list options or shares to trade. Then I'll scan all SPX components with higher daily volume than 200K shares and see what individual goodies lie hidden in the noise. Then when catalyst breaks, we have high-odds targets to play!

Simple screening process I use is archived in OI via this link: Link

 
 
  Jeff Bailey   3/19/02,  10:30:35 AM
Paychex (PAYX) $41.81 +2.07% ... reported earings before the bell for Q3 of $0.18, in line with consensus and even with year-ago EPS of $0.18. Revenues rose 6% to $242.8 million. Link

P/F chart looking more bullish. Trade at $42 would be a 3-box, reveral and offer near-term stop just under $38. Current vertical count is bullish to $63.

May well be longer-term bullish play for a scenario based upon strengthening economy and growing of payrolls should workers be hired back. Economic data shows stability of labor market recently, but very little growth at this point.

 
 
  Leigh Stevens   3/19/02,  10:20:16 AM
Index support & resistance levels: QQQ - Weaker Nasdaq sector has been such that the Q's have been unable to challenge recent highs in the 39.00 area, and this is the most important lid on prices currently. Near resistance is 38.00, the low end of downside gap on the hourly chart. Near support is at 36.50-36.75. Best "chart" support is seen down around 35-35.50.

 
 
  Jeff Bailey   3/19/02,  10:16:06 AM
Morgan Stanley cautious on truckers/ground transportation industry, saying that all of the benefits of an economic recovery and consistently low oil prices are fully reflected in current stock prices.

 
 
  Leigh Stevens   3/19/02,  10:12:22 AM
Index support & resistance levels: OEX Not changed from Mon. > Key resistance at 593-594; with a breakout above this area, anticipated next resistance at 600-601; major resistance likely beginning around 606, extending up to 610; 582-583 is support, at the low end of the recent hourly trading range. Next support below could be seen at 576, but best chart support is 570-571. DOW 30 or Industrials: - Resistance at 10,645-10,660, at top end of recent hourly range. If they push the Dow through this area, estimate of next resistance is 10,766, then 10,800. Support is in 10,475 area, at low end of recent range. If this area gives way, next support is 10,425-10,430 area; best chart support is 10,300 to 10,200 zone, where I would happily buy if the market is so accommodating to offer an "ideal" 50% correction.

 
 
  Jeff Bailey   3/19/02,  10:01:06 AM
Celestica (CLS) $36.15 -2% ... this morning's "rally" to $37.40 found the 200-pd MA on the 60-min chart and found some selling. Link

Shorter-term bear from last week makes the observation and would like to see a close below the $36 level today. Upward trend from recent low that is attached to the 03/22/02 low near $32 extends to the $34 level.

 
 
  Leigh Stevens   3/19/02,  10:01:05 AM
Index support & resistance levels: SPX NO CHANGE FROM MON > Key resistance is 1172; close above the 1170-1175 zone will be a bullish breakout above the current trading range. They can't take them down, so they'll probably take them up. If so, the odds of a further, deeper, pullback diminish quite a bit. Next SPX resistance - 1183, then 1195-1200. If there was a breakout here key to sustaining rally is ability of SPX to hold 1170 on a subsequent pullback. Resistance often "becomes" support, which is a well-known technical principle. Near support - 1160 area. Next support in 1150 area. This is more key. If this area gives way, some support may be found at 1145 area

 
 
  Leigh Stevens   3/19/02,  10:00:09 AM
It's Showtime! Minor league baseball players have it wrong when they call major league baseball "the Big Show" when actually the Market is the greatest show on earth. ON THIS DAY in 1931, Nevada legalized gambling. Any similarity between this and the big show is purely coincidental. But take a trader to lunch anyway.

 
 
  Jeff Bailey   3/19/02,  9:47:00 AM
Sector Weakness in early morning is found in Fiber Optice (FOP.X) -1.17%, Airline (XAL.X) -0.97%, Wireless Telecom (YLS.X) -0.76 and Networking (NWX.X) -0.75.

 
 
  Jeff Bailey   3/19/02,  9:41:43 AM
Eastman Kodak (EK) $31.95 ... not open for trading yet. Moody's cuts ratings on long and medium-term debt to Baa1 from A3 due to lower profitability and concerns over the compnay's trasition to digital photography.

 
 
  Jeff Bailey   3/19/02,  9:39:54 AM
Nortel Networks (NT) $4.63 -0.42% ... printing new 52-week low.

 
 
  Jeff Bailey   3/19/02,  9:38:47 AM
United Rentals (URI) $30.54 ... Announces the sale of 8 million common shares by management of the company. The stock is being sold at $27.50 (-9.9% from last night's close). CEO Bradley Jacobs sold 6.1 million shares, COO Wayland Hicks 700K shares and other execs selling smaller amounts. Of the shares sold, 1.37 million were acquired by the sellers upon the exercise of options.

They've made shareholders a lot of money in recent months and deserve to get paid. Link

 
 
  Jeff Bailey   3/19/02,  9:30:38 AM
Procter & Gamble (PG) $87.66 .... Company saying this morning that it expects earnings growth for the March quarter to exceed prior guidance and Wall Street estimates behind strong volume and cost performance. For 2002, company remains comfortable with the guidance range provided previously.

We first mentioned PG as bullish back in December when the stock traded $79 and spread-triple-top. Still looks strong today and bullish vertical count still $90. Link

On December 13th at 03:00 EST, Link I thought PG would trade $100 before year's end. Target isn't as generous and targeting $99.

 
 
  Jeff Bailey   3/19/02,  9:25:28 AM
Great Morning!

 
 

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