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  Jeff Bailey   4/2/02,  10:27:44 PM
S&P 100 Index (OEX.X) 571.48 -0.9% interesting... it can be informative to go back and look at some past comments. On March 28th in market monitor, before the market opened at 09:35 Link Leigh talked about the OEX and support at 570-571. Tomorrow could be very interesting day indeed. I think bears have a shot at a near-term route, but bulls have answered the call in recent weeks.

The S&P 100 Bullish % remains in "bull confirmed" status at 76%. This is down just 2%, but condition remain well above the 70% "overbought" level. Link If 570 is a critical level of near-term support and it gets broken, then bulls may "cave in" and protect their gains.

Have a good evening, I'm out of here!

  Jeff Bailey   4/2/02,  10:07:22 PM
Gold Jeff: compared to GOLD which broke out, or GG what's up with gold??? over 310 shouldn't we get a heck of a short sqeeeeeeze?

Hey! C'mon! We were talking about a potential squeeze setup back on 03/22/02 if memory serves me correct. XAU.X up about 15% since that test of retracement at $62 in mid-March. I'd say gold has been getting squeezed for a week or so. Link

I can almost count 11 days run from 01/24/02 relative low near $57 to relative high of $70 (+22.8%) before XAU.X rested for a couple of weeks. Now I count about 11 days from 03/15/02 of $62 to today's spike (11 days later) to $73 (+17%). Not too bad considering what the broader market averages are doing.

May also note that on 03/28/02 in market monitor (see 09:37) Link we thought trader that played Anglogold (AU) bullish from/near the $23.50 level with the mindset of a "buy, run, write" (buy the stock, let it run, then write the covered call) may want to sell the April $25 covered calls (AUDE) on 03/28/02. So far, stock hasn't seen daylight above the $26.40 level ($25 strike + $1.40 call).

  Jeff Bailey   4/2/02,  9:45:29 PM
Cablevision Systems (CVC) $30.25 -7.77% ... looking a little bit like fellow cable television stock Adelphia (ADLAC).

P/F chart for CVC has a bearish vertical count of $15 and stock has traded heavy/lower since the beginning of the new quarter. This hints the stock may have been on the way out before the end of the recent quarter. Link

What struck me as "odd" was the BIG volume spike (18.5 million) back on October 18th from ($35.60 to $36.97). Link

I immediately thought "secondary or convertible!" Turns out there was a Form 424B1 filed with the SEC relateing to a secondary offering of 23.4 million shares, marked to the close of October 17th of $36.05.

Maybe its just me, but there was a rather large volume spike on 02/14/02 of 5.3 million shares on a down day ($39.50-$35.25) which came after Goldman Sachs downgraded CVC based on valuation to "mkt perform" from "mkt. outperform." This turns out to be "second" downgrade by Goldman after a previous downgrade on August 10, 2001 from "mkt. outperform" from "recommended list."

I will simply note, that what looks to be a secondary offering or new issue of stock at $36.05 is starting to get "underwater" at $30.25 and volume tends to be Large on the downward moves as if somebody wants out.

With recent success by bears in Adelphia (ADLAC) from the $24 level, got to consider a January out the money play in the CVC Jan03 $25 puts (VJKME) offered $2.65. Only consider "risk capital" and no stop to begin with. Will check back if trades $23.

Will note that this stock along with Adelphia (ADLAC) have been commonly mentioned as potential candidates of acquisition. "Rumor" has been for some time that AOL Time Warner (AOL) $23.62 +1.50% is potential buyer. However, one has to wonder if Time Warner is really looking to make purchases after acquiring AOL.

  Jeff Bailey   4/2/02,  7:11:17 PM
Portfolio/trade management You mentioned in the Market Monitor that long-term vertical count for THC is $88, what about for short-term? I'm holding Apr 65 call based on OI recommendation, with a small profit. What do you think should be my upside target prior to this months expiration?

Question from Jeff: How much is a "small profit?"

I bought 2 calls on 3/27 @$2.45. (I'm trying to trade small while learning.) So my current profit is 47% based on today's close. Thinking if uptrend continues, I should hold for more. But also wondering if I should cash out and try to buy in again on a pullback with a later month contract (if most of the upside is longer-term). I also have smaller profits on CAH, UNH, LH calls and GNSS puts (all April) and likewise thinking if I should grab some (or roll) if they get bigger. I've been trying to use 100% target gain and 50% stop loss as a general guideline for short-term options, but obviously I may need to vary that depending on current outlook. Thanks for any insight,

Wow... long calls in THC, CAH and UNH which are all healthcare and all expire current month. If I/you are just a slight bit wrong on our bullishness, or if some "world event" takes place then you're account could get wiped out.

Here's what I'd do. Since THC reported earnings today and beat estimates let's pretend that we were just as "smart" as the MARKET and "knew" they were going to beat estimates.

Since subscriber is "overweight" healthcare, lets "sell the good news" and book a gain in THC and raise some cash. Get a "good feeling as we learn."

Then lets look at the earnings calendar for UNH and CAH. With THC reporting better than expected earnings, perhaps the MARKET will play some earnings runs in UNH and CAH, so we will hold these into earnings and look for similar runs as THC had.

This is purely an account management call. I think the subscriber is too "overweight" on healthcare for this current month expiration and I would look to reduce my exposure some as all contracts expire in April.

Ask yourself this. What if THC had missed today's number (like PSFT did in software)? I'm thinking there would have been less bullishness in the group today (was tough enough fighting the broader market), and would have traded lower and April expiration might have gone "poof!"

I classify LH as a mix between "healthcare" and "biotech" and a bit different that THC, CAH and UNH.

Also... I don't consider a 47% gain in 3 trading session's a "small profit." If I could do that 80 times a year then I would be a very happy person. Not a bad trade in a "boring" stock.

  Jeff Bailey   4/2/02,  6:07:12 PM
PeopleSoft (PSFT) $25.16 Correction!! earlier today at 10:08 I mistakenly overlooked a prior sell signal that is the "current" bearish vertical count of $29!

Again... current vertical count that was in play was $29. Stock traded that today, so bears should take note and snug down stops if short/put.

I went back and made correction to the 10:08 comments just minutes ago.

Vertical count would have been the column of O's from $37-$34. $37-((4*2)*1)

  Jeff Bailey   4/2/02,  4:07:32 PM
GSTI Software Index (GSO.X) 155.38 -6.52% ... I think MSFT bear will also want to use the GSO.X. I'm thinking "What if I had simply shorted MSFT when the GSO.X traded right on bearish resistance at $180?" That would have been March 11th. That was also the day that MSFT traded a relative high after my short/put profile at $58 from 02/22/02.

With the GSO.X looking weak, then MSFT bear could use a trade at GSO.X of 168 as reason to be looking for cover. Link

Only problem is that MSFT tends to follow a sector decline and lead a recovery.

  Jeff Bailey   4/2/02,  3:58:42 PM

Ooooo... an "institutional" boy that can take some heat to a bearish trend. I like it.

It's "put up or shut up" time for bulls in MSFT. I was "wrong" and stock rallied from previous profile right at these levels. If she break $57, then I will have to go back to original target of $54. I think I/we got trapped at $58 and if the market makers will do it once, then don't rule out another trap at $57, be alert and open to the possibility. Link

If I were short with average cost basis of $60, then I'm looking for the break to come very soon and would not be willing to risk another rally attempt.

If she trades $55 before the week's end, then I would be tempted to pay myself for some of the heat I took from $58 to $65 by snugging down a stop. At the same time, there's temptation to try and inflict as much pain as possible.

However... in trading, there is no revenge, just good trade management. Take some profits when you get them and build some gains to the bottom line.

  Eric Utley   4/2/02,  3:46:05 PM
I'm liking this move in Hanover (NYSE:HC) into the close. Being that I'm long this stock, I'd like to see a close at the day high.

  Jeff Bailey   4/2/02,  3:32:24 PM
Oakley Inc. (OO) $17.24 -2.98% ... nothing new going on here that I see. Little pullback to the triple-top. Looking for good support at $16.29 from retracement (retracement from $26 to $10.29). If holding May or August calls, you'll drive yourself nuts if you watch this thing every day. First sign of trouble is trade at $15 and that should be less than what a call option cost when profiled at the triple-top break. Link

Plan remains to sell strength into seasonally strong earnings.

  Jeff Bailey   4/2/02,  2:51:27 PM
Don't forget about some of the "utility stocks." Treasury YIELDS did an about face today and look to be finishing near lower end of today's trading. This may have some money coming out of technology and all of a sudden, some "fat" YIELDS in the utility sector don't look so bad.

I've liked Ameren (AEE) $42.24 as bullish, but there have got to be some others too. Link

  Jeff Bailey   4/2/02,  2:45:14 PM
Rockwell Collins (COL) $25.21 -0.15% ... Do you think it may be time to bail out of the April 25 calls now?

Not yet... I have a regression channel from the lows of September and last two day's stock is finding support at mid-part of this regression trend. Today's is "inside day." I can't speak for every trader, but I'd wait at least until tomorrow to see if I couldn't catch a bullish break, get a move to the upside of yesterday's high and get a "pop". Right now, demand is in control. Should stock break below today's low, then I would sell. For me, worth another day if contemplating selling.

With some Middle-east tensions, not a bad sector to be in right now is my thinking. Worth another day at least.

  Leigh Stevens   4/2/02,  2:37:16 PM
Subscriber question of possible interest: Maybe it's just me, but I don't understand what you mean by "buy at 36.50 or better." Do you mean 36.50 or above? Right now (just before opening) it looks like the QQQ will go lower than 36.50. What am I missing?

"Or better" always means at that price or better -- on a buy order, a better price would be LOWER than your intended purchase price or limit order. I use this designation when I think that there could be a lower opening and you might get a lower price than the price suggested.

An exception, probably not to your advantage, would be limit order just under a recent close, but the next morning the stock gets clobbered; e.g., PeopleSoft (PSFT) this morning. You may now no longer want to own the stock at that point.

"Or better" is normally implied on a limit order as it is assumed that a price that improves on a limit price is to your advantage. Sometimes "OB" is specified on an order put in before the opening, when you want to leave no doubt that you recognize that an opening may put prices under the suggested specific (limit) price.

When I made the QQQ recommendation last night, I was accounting for the possibility of a lower opening and the "ob" designation just gives you some more information. E.g., QQQ closes at 36.75, then opens next day at 36.00, my suggested buy price is 36, but not MORE than 36.5.

  Jeff Bailey   4/2/02,  2:33:20 PM
Interesting Looking at a p/f chart at Dorsey/Wright for the September Nat Gas contract and see BIG reversal yesterday, which created a double-top buy signal at $3.60. That creates a bullish vertical count of $4.18 yesterday. Today's action to $3.76 builds the bullish count further to $4.66.

Also interesting is that this September contract traded a high of $4.80 back on 02/02/01.

Also interesting is that Hanover Compressor (HC) closed at $38.74 on 02/02/01.

Will history repeat? Time will tell but a longer-term marginal bet on HC looks like a decent little play. As long as a trader will buy some time and NOT overleverage, can simply initiate a position and set some sell target alerts in the upper $20's before September.

  Jeff Bailey   4/2/02,  2:22:15 PM
General Motors (GM) $59.51 -0.31% ... saying March U.S. total vehicle sales fell 2%, but boosting Q2 forecasts. GM boosting Q2 production estimates by 4%, citing stronger than expected consumer demand and a moderate recovery in daily deliveries for the revision.Link

  Jeff Bailey   4/2/02,  2:18:36 PM
Qwest Communications (Q) $7.70 -3.62% ... Bear Sterns noting that last night's disclosures from conference call: under new accounting rules, Q will write down $20-$30 billion of its existing $34.5 billion goodwill balance in Q2, which will negatively impact EPS by $12-$18 per share; also, the company revised it long distance re-entry schedule to Fall/Winter at the earliest, and as a result of the delay, Bear Sterns anticipates Q will not generate material long distance rev in 2002 (already reflected in firms estimates).

Sounds like Q may be pushing back any networking orders until this fall/winter for new telephone systems that may have been slated for this summer's long-distance re-entry plan.

  Eric Utley   4/2/02,  2:16:52 PM
I received a reader question asking about Novellus (NASDAQ:NVLS) that touched a nerve because of recent trades I've made. He suggested that NVLS had topped out.

I've been trying to short chip stocks at resistance for about two weeks and it hasn't been working. I've been stopped out of three trades for small losses over that time frame. The set-up in NVLS currently Link is similar to what I've been trying. I can see perfectly why the reader thinks NVLS has topped out. Moreover, I can see the ease with which a trader could manage upside risk here. But easy risk management has nothing to do with probabilities, which is the variable here. The chips, especially the capital equipment stocks (NVLS), have been the strongest in tech. It's WRONG to short strong stocks, which I was recently reminded of. If you pick the top in chips, which is what I was trying to do, you're a genius. But the odds don't favor such an end.

Yes to the ease of risk management here in NVLS, no to the probabilities. The better odds lie in the weaker sectors of the market, which brings up a seemingly contradictory stance as it relates to my prior post concerning gaming stocks. The difference is that the gaming stocks are overbought and in a bearish bullish percent condition.

  Jeff Bailey   4/2/02,  2:12:42 PM
Cisco Systems (CSCO) $16.64 -5% ... not a bad little trade for bears going since 10:14:00. Break of yesterday's low sets stage for test of $16.16, which is 38.2% retracement (retracement from $24.13 to $11.24). It's very early to be counting chickens before they hatch, but the "egg could break" should the $16 level be violated to the downside.

  Eric Utley   4/2/02,  1:48:08 PM
Since coming public, Anthem (NYSE:ATH) has completed a bullish triangle, and today broke from a triple-topLink at $58. Good timing!

Working off of the vertical count of $72, I like this stock very much for further upside. It has the group sponsporship of the HMOs (HMO.X), earnings momentum, price momentum, and relative strength.

  Jeff Bailey   4/2/02,  1:46:21 PM
Hmmmmm... just noticing too that there's lots of action today in the SAP June $30 and June $35 puts. Volume is over 3,000 in each, while open interest in those contracts was just 965 and 180 prior to today. Looks like others making similar bets for those strikes.

SAP is due to report earnings on April 18th. If they're going to "warn" like PSFT did, then May should be long enough. Today's action in the June's may be somewhat of an institutional hedge on a position. SAP is an American Depository Receipt and a little tougher to find liquidity perhaps on the stock side of things.

  Jeff Bailey   4/2/02,  1:44:00 PM
SAP Aktiengesell (SAP) $36.15 -5.6% ... very similar business to PSFT and we've talking about this before. I'd be very surprised if SAP business any better than PSFT.

P/F chart of SAP still looks strong though Link

Would consider a "lottery play" in the SAP May $35 puts (SAPQG) currently offered $1.60 and target the $29 level near-term (bullish support trend)

  Leigh Stevens   4/2/02,  1:30:30 PM
Update - Support & Resistance - Indexes: OEX: - approaching near support at 570; next support is 564-565; Nasdaq 100 (NDX): Near support at 1423 has been penetrated on an intraday basis; unless we come back on short-covering today, this violation of recent lows sets up a potential downside objective to the 1360 area, a next level of chart support. QQQ: Near support at 35.5 has been penetrated intraday; closing break of this level is an indication that downside momentum is resuming; if so, this sets up a possible test of likely next support at 34.75-35.00. Below this area, key support is at 33, at the late-Feb. downswing low.

  Eric Utley   4/2/02,  1:28:12 PM
Treasuries are higher today, yields lower. I don't rate the rally in Treasuries a major concern right now. The Treasury market has been hammered in recent weeks based upon the market's expectations for higher short-term rates (inflation). The rally today could be a short covering reaction or a slight defensive bid.

I'm using a .25 point box for the Ten-Year Yield (TNX.X) Link to get a smaller view of the happenings in that market. As you can see, using a small view, not much is going on in the TNX.X. In fact, it appears as if it wants to move higher. I won't get real excited about falling yields until at least 5.300%.

  Eric Utley   4/2/02,  1:18:52 PM
Bailey recently alluded to the potential for some bearish trades in the Gaming Sector. I'm warming up to the trade.

Jeff and I actually adopted a bearish stance some time ago, but as it turned out we were early in that call. I think we're getting closer to a move lower in the group. There are three stocks that I'm using for indicators, as well as potential targets.

Int'l Game Tech (NYSE:IGT) is the big one in the group. We're watching Link for a break below $60. Penn Gaming (NASDAQ:PENN) is very near an actionable point Link at $32. Finally, Alliance Gaming (NASDAQ:ALLY) has already taken out its meaningful short-term support Link , and is in the process of retracing that breadkown.

Our working thesis is coming from the position of the group's bullish percent data, based on Dorsey Wright & Associates' numbers. In addition, I found a lot of stocks (not mentioned) in the group that exceeded their vertical counts by 2 or 3 points and now trade toppy. We're early here, but I think the upside risk is minimal versus much bigger downside potential.

  Jeff Bailey   4/2/02,  12:54:34 PM
Emulex Corp. (EMLX) $31.83 -8% ... yesterday I thought this was "most bullish" stock I could come up with in tech area and stock getting smacked down today. Traders are going to be quick to sell anything with 4-letters in the telecom/networking area.

If short Cisco (CSCO) from earlier comments (see 10:14) then a bull might give EMLX a shot from the long side, but stop is understood at $29. Link

Maybe a trader that is short/put Cisco (CSCO) better understands how he/she is playing both sides of things if short CSCO and long EMLX. Here's CSCO chart. Link

  Eric Utley   4/2/02,  12:54:22 PM
The Nasdaq-100 Volatility Index (VXN.X) is close to reversing its trend of complanceny Link . A spike above 40 in the VXN would, in my opinion, increase conviction in any Nasdaq-100 bearish positions, such as short the QQQs, or any other NDX component.

  Eric Utley   4/2/02,  12:51:21 PM
The CBOE Market Volatility Index (VIX.X) has shown more signs of fear in the last few days. The fear gauge is higher today by about 4 percent.

I like viewing the VIX.X on point and figure charts, inferring levels of fear and complacency through buy and sell signals. On a .25 point box, the VIX.X reversed its bearish signal today Link with its trade past 21.00. I conclude that the short-term trend of complacency has reversed. From more of a macro perspective, however, the VIX is still far off from reversing the intermediate-term trend as this .50 point box reveals Link ; the VIX needs a print above 23.50 to reverse its intremediate-term trend.

The nice thing about the pop in the VIX is that it should boost premiums in open contracts independent of underlying movement. As a market indicator, the reversal in the shorter time frame may hint towards more weakness.

  Jeff Bailey   4/2/02,  12:50:08 PM
One of my best trades ever! came after I mentioned a potential bullish trade in MVK years ago. Client owned an independent oil/gas producing company. Turns out he had just gotten off the phone looking for some steel tubing to put in a well his company had just drilled and found prices had risen substantially in recent weeks. Was an easy "buy" for him at $6 back in May of 1999 (check out MAVK) and an easy sell at $10 a couple of days later. Just never know.

I know we have a subscriber that is also an independent oil/gas producer. I need to give him a ring and see if he can get me some info on steel tubing!

  Jeff Bailey   4/2/02,  12:46:22 PM
Maverick Tube (MVK) $16.55 +0.66% ... these guys sell steel tubing to oil/nat gas producers that eventually makes its way to the well-bore. Stock getting through bearish resitance at $16.50. Longer-term bull takes 1/2 position with thought that pullback to $14 level not out of the question.

Then starts to think about a stock like Lone Star Tech (NYSE:LSS) $24.26 +1.46% acting bullish. They too make steel tubes for oil/nat gas industry. Link

  Jeff Bailey   4/2/02,  12:41:27 PM
Seitel (SEI) $11.00 +20.7% ... I don't see any news on this "seismic data processing" company, but looks like a pretty big short covering, or new bull coming into stock. This would be a "later-stage" bullish play in the oil/nat gas exploration area. Need high energy prices for a stock like SEI to do well. Link

Stock to watch in unison with SEI would be seimic equipment maker Input/Output (NYSE:IO) $9.20 +2.22%. Link

  Eric Utley   4/2/02,  12:28:48 PM
The weakness in the Transports ($TRAN) is something to watch. The TRAN is an important gauge of economic activity. It has been a leading segment of the market, but is today threatening to breakdown Link below the 2800 level. I would NOT look to short any of these stocks, but instead would use the price action of the TRAN as it relates to a broader market view, and economic view.

  Jeff Bailey   4/2/02,  11:47:22 AM
Lone Star Steakhous (STAR) $20.72 +0.29% ... Company announcing that it has entered into a non-binding Letter of Intent "LOI" with a prominent national buy-out firm with respect to the proposed acquisition of all the outstanding shares of common stock of STAR for $20.50 per share.

Hmmm... guess who was buying all the way up from $10. I'm guessing the "prominent national buy-out firm."

  Jeff Bailey   4/2/02,  11:43:25 AM
Lone Star Steakhouse (STAR) $20.72 +0.29 ... Halted! .... news pending. Link

  Jeff Bailey   4/2/02,  11:38:34 AM
Kohl's (KSS) $69.00 -2% ... After setting a new 52week closing high on Wednesday, stock has seen some marginal selling. I think selling (as described in that evenings market wrap on PI) would only come if the Retail Index (RLX.X) couldn't get back above the 960 level of retracement. Since that time, the RLX.X has found resistance and I believe the GROUP is dragging weighing on KSS.

As such, a short-term trader needs to monitor the RLX.X closely here as next level of retracement support is down at 896 (retracement from 1022 to 693). Link

Note where the RLX.X trades just below a rising 50-day MA?

Not take a look at KSS bar chart and note it is trading right at its 50-day. Link

May well be classic example of what we've talked about with the "head of the snake" is Kohl's (KSS) and the "body" is the Retail Index (RLX.X).

This should have a short-term bull ready to pull the plug on a bullish trade in KSS if buyers don't step in soon and get the head pulling higher and get the body going in the same direction.

If the body (RLX.X) continues lower, then the head (KSS) most likely turns lower too as if to see what's pulling at it.

As such, short-term trader snugs a stop under the 50-day at $68.35 as risk then becomes 80.9% retracement (retracement from 71.82 to 43.30)

Again, will note that RLX.X is below its 50-day and 80.9% retracement, while KSS above both right now.

  Leigh Stevens   4/2/02,  11:25:58 AM
Support & Resistance - Indexes: Dow (INDU) - Near support > 10,260; then, 10,200, which is a 50% retracement of the last upswing; Near resistance > 10,400; then, 10,500. S&P 500 (SPX): Near support > 1131-1132; next lower support looks like all the way down down the low-1100 area (1100-1105); Near resistance > 1147-1150 area; 1150 is pretty key; a close above this area is needed to generate upside momentum and a test of the key 1170-1173 area, at the top of the recent trading range; OEX: - Near support > 570; then, 564-565; Near reisistance > 580 - 583 area; 593-595 is key overhanging resistance, at the top end of the recent trading range.

  Jeff Bailey   4/2/02,  10:47:14 AM
May Natural Gas (ng02k) $3.62 +2.5% ... will want this to happen for bullish play in Hanover Compressor (HC). Scenario here is for higher Nat. Gas price to further stimulate demand among gas producers to lease compressors from Hanover. Kind of a supply/demand thing I have.

  Leigh Stevens   4/2/02,  10:46:15 AM
Support & Resistance - Indexes: Nasdaq 100 (NDX) Near support > 1423, at recent hourly lows; if 1420 is broken, especially on a closing basis, this sets up a potential downside objective to the 1360 area, a next level of chart support. Near resistance > 1480, at the recent hourly high; above this area, resistance is anticipated at 1520. QQQ: Near support is 35.5, at the recent hourly lows. Break of this area, especially on a closing basis, would be an indication that downside momentum is resuming -- if so, this sets up a possible test of likely next support at 34.75-35.00. Below this area, key support is at 33, at the late-Feb. downswing low.

  Jeff Bailey   4/2/02,  10:44:03 AM
Black Box (BBOX) $50.61 -2.42% ... will hold a conference call to discuss their lowered Q4 guidance at 10:45 AM ET (call in 888-428-4474). Link

I will not listen to conference call, but will set an alert at $46. If triggered in the next hour or so, may be hint that something was said in conference call to trigger selling?

  Jeff Bailey   4/2/02,  10:37:41 AM
Hanover Compressor (HC) $18.50 +1.59% ... talked about this one late Thursday in market monitor and again yesterday. Trades the triple-top today at $18.50. I like 1/2 position bullish here. Link

  Jeff Bailey   4/2/02,  10:36:19 AM
GSTI Software Index (GSO.X) 157 -5.5% is leading sector decliner. Looks vulnearable near-term to 150. Today's trade at $158 puts index back on sell signal after test at bearish resistance (first test of bearish resistance can be painful for the bulls) and now has vertical count bearish to 148. Could grow with the column of O, but preliminary count. Link

  Jeff Bailey   4/2/02,  10:29:38 AM
Rational Software (RATL) $14.50 -9.25% ... stock trading lower in sympathy with PSFT. We mentioned this one as bullish at the $19 level and quickly changed our minds near $18.50-$18.00. Triple-bottom at $17.50 now looking powerful for the bears and vertical count of $8.00 may not be out of the question. Link

I have retracement from $29.21 to $8.10, which has 38.2% just above at $16.16 (stop for short) and 19.1% down at $12.13 (target for short).

  Jeff Bailey   4/2/02,  10:14:00 AM
Cisco Systems (CSCO) $17.07 -2.5% ... would be looking short this networker at the market here, stop just above $17.68 and target $15 near-term. Link

Bar chart and 200-day MA has also been resistance recently. Link

  Jeff Bailey   4/2/02,  10:12:48 AM
Factory Orders fell 0.1% wich is worse than consensus for a gain of 1%. Weakness was due to a much weaker than expected 2.4% decline in nondurable orders; durable orders were actually revised up to 1.8% from 1.5%. Factory inventories fell 0.4%, which is weak given the perception that the manufacturing rebound is being spurred by inventory building.

  Jeff Bailey   4/2/02,  10:08:58 AM
PeopleSoft (PSFT) $27.33 -26% ... Ouch! This may have some "tech bulls" thinking twice. This seems a little "drastic" for a miss by a penny. They must have said something else to analysts that I don't see in the newswires. Link

Vertical count now bearish to $29.

  Jeff Bailey   4/2/02,  10:03:38 AM
Q-chart if you're missing the 03/28/02 bar on your daily charts like I am, you can type in the number "720" in the Interval area of your q-charts and get that bar back.

  Jeff Bailey   4/2/02,  10:00:37 AM
Economic data ... Factor Orders are due out at 10:00 AM EST. Economists looking for a gain of 1% (was 0.6%), but the recently revealed durable goods orders of 1.5% increase has had a more bullish outlook "built in" to today's expectations.

  Leigh Stevens   4/2/02,  9:59:57 AM
ON THIS DAY in 1805 Denmark’s most famous author, Hans Christian Andersen was born. He was known as of the author of many famous fairy tales such as The Ugly Duckling and other fantasies such as The Red Shoes. He wrote his own story and called it The Fairy Tale of My Life. Where is Hans when we need him ? -- to write about the Street of Dreams and the fairy tales spun by some companies these days!

Also, TODAY, fills on my QQQ buy suggestion (36.50 OB) should have been filled at or just under 36. Based on a fill at 36, stops should be set at 34.5. Upside objective to 42, so risk to reward is in line, at 4 to 1. Of course the math can be fuzzy if the estimate of the profit potential is wuzzy.

  Jeff Bailey   4/2/02,  9:56:42 AM
Tenet Healthcare (THC) $68.45 +1.61% ... breaking to new 52-week high after reporting earnings that beat estimates.

P/F has been bullish for THC Link with spread-triple top recently at $67. Vertical count hints at $88 longer-term.

  Jeff Bailey   4/2/02,  9:41:53 AM
Microsoft (MSFT) $58.90 -2.48% ... this is "key stock" for a QQQ trader I think. Retracement from $73.59 to $41.50. This has $61.33 at 38.2% level and would be resistance to correlate against for QQQ. 50% is at $57.54 and for QQQ bear to have some success, this is a level than I feel needs to be broken. Subscribers will remember we/I lost in a trade when I profiled MSFT as short/put at the $58 level back on 02/22. I now "know" where some support is at from that trade and now a QQQ bear wants to see it broken.

Conversely, a QQQ bull is looking for sponsorship and bullishness from MSFT which carries the largest weighting in the NASDAQ-100 Trust (QQQ).

  Jeff Bailey   4/2/02,  9:33:56 AM
QQQ well... it looks like Leigh and I disagree a bit on the QQQ. Last week I thought short near $35.60 and yesterday's rally took us right up to the upper end of "my" regression channel. With some weakness is the software space and some estimate cuttin in Microsoft (MSFT) this morning, not thinking QQQ that good of a bet for the bulls.

Don't let this "confuse you" and cause frustration. What would the markets be if there wasn't some type of disagreement from time to time. We're not robots or cloned to think a like. Read and understand Leigh's thought, then go back and review mine. Is there one that you agree more with? Then play that train of thought. If still can't figure it out and neither makes sense, then perhaps a trade in the QQQ does not fit your trading criteria at the moment.

  Leigh Stevens   4/2/02,  9:28:33 AM
Oh, my musings on the indexes made last night at Link was written by yours truly, not Austin Passamonte, although it has his byline on the Index market wrap. No, this was a programming error and Austin is taking some time off this week.

  Leigh Stevens   4/2/02,  9:24:41 AM
It's showtime! With the market due lower this AM, we should have no trouble getting filled on my recommendation to buy the QQQ Nas 100 tracking stock at 36.50 or better. Short term downtrend on NDX was exceeded to the upside yesterday. It's not a GREAT looking rally, what with the low volume and all, but price is KING and so are we if make the objective of 42. Risk to 35 on a stop, or 1.5 under entry. Also like SUNW and CSCO for an April play. By the way, April has the 4th. largest propensity to advance over the past 50 years; it ranks after Dec., Nov., and Jan.


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