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  Jeff Bailey       4/9/02,    9:24:07 PM
Have some confidence in yourself and use what you're learning! I've said before that we've got some sharp subscribers. I can't get to every e-mail that I get. Look at some of these questions and you can't tell me that some subscribers are just clicking their mouse buttons and running trades. We've got some subscribers that are really starting to "cook with gas." If you see a trade that you like, but just are a little uncertain, maybe you can par down your position to 1/2 or 1/4 and still trade it. If nothing else, run a paper trade then follow it. Price the option at the offer, write down the target you'd be willing to sell at and follow it. After you hit a couple and get some confidence, then try a trade.

03:57 EST Hi Jeff, what's your opinion on RIMM ? To me it looks bearish i'm checking the May 25 Puts. What do think about it ? Thanks in advance !!

10:18 AM EST Jeff, Looks like some traders are expecting a downside earnings suprise after the bell. RIMM is breaking down, big time. There are alot of Canadians following this stock. I'll be closing my puts before the suprise. I'm not that much of a gambler.

Jeff Bailey       4/9/02,    7:11:31 PM
Research in Motion (RIMM) $23.26 ... stock trading down to $21.74 in after-hours trading after company reported Q4 loss of $-0.14 a share, which was penny better than estimates of loss of $-0.15. However... on conference call, company issues EPS guidance for Q1 (May) of loss of $-0.18 to $-0.21 versus consensus estimates for loss of $-0.12.

Link and should perhaps note stock came "close" to achieving its bullish vertical count of $30.50, until sell signal at $25 turned count bearish.

Technology stocks having a heck of a time trying to find a break aren't they?

Jeff Bailey       4/9/02,    5:09:50 PM
SAP Aktiengesell (SAP) $33.28 -3.39% ... This one should be on a software bear's list tomorrow morning. Link I believe I mentioned this name the other day after competitor PeopleSoft (PSFT) Link got crushed from above trend. What's starting to smell a little funny in the software sector is today's warning from Kronos (KRON) $36.03 -22% Link when the company said it would miss earnings by a penny (PSFT did the same thing) and looks to report EPS of $0.26-$0.27 a share (consensus $0.28) and revenues of $79-$80 million (consensus $85.75 million)

Those that may have played Check Point Software (CHKP) $21.12 -5.41% from the $30 level Link and benefited from a "earning's warning" there know you don't need to overleverage in a put play in the software sector right now to make some coin.

SAP is scheduled to report earnings before the bell on April 18th (day before April expiration). Multex has estimates at $0.15 a share. I would rather pay a little extra and look at the SAP May $35 puts (SAPQG) $3.10 or the SAP May $30 puts (SAPQF) $1.00. Target is the $27.64 level.

I've had retracement on SAP since I don't know when from $49.10 to $22.58. Son of a gun traded a recent high at 61.8% retracement of $38.96, just broke below 50% retracement of $35.84 and MACD is just dipping below the zero level as the stock approached 38.2% retracement of $32.71. This also correlates with a flat 200-day MA. Not certain that SAP has a superior product to PSFT and my guess is that they are having to discount on price just as PSFT is.

Again, place a small bet, don't risk more than you can afford, buy a little more time than you think you need and let things unfold.

Leigh Stevens      4/9/02,    4:27:23 PM
Market Comment: QQQ close near the low of yesterday is not showing much strength. It is also typical of possible bottoming action. If you look at the last tradable bottom, it took 6-7 days for it to set up. A QQQ double bottom may develop as a result of all this backing and filling. If a double low does not materialize, anyone probing the long side can stop out if the market has another down leg ahead. As I am guided by risk to reward, I find myself waiting for a next tradable Index low, as having a better risk to reward equation. Meanwhile there are a lot of other individual stock or sector plays you see here that will provide some trade possibilities.

Jeff Bailey       4/9/02,    4:15:10 PM
Genesco (GCO) $27.75 +2.17% ... my computer went on the blink before the close. Day trader never got my target of $28.25 as stock traded high of $28.08. I got stuck with stock and couldn't close out, but would have prefered to. For tomorrow, will raise stop to break-even and see what happens. Target will stay at $28.25.

Leigh Stevens      4/9/02,    3:56:17 PM
OF POSSIBLE INTEREST, is this Subscriber question: " I'm sort of an intermediate range trader. In the past I seemed to hold my loosing trades too long and sell my winners too soon, so now I'm trying to correct that. I'm listening to you guys at OI and have been messing around with Bollinger Bands. My question is I now have some profits in Apr 580 OEX, should I take them or hold? They are still riding the bottom Bollinger Band. I was thinking about stops but I don't want to be taken out if the Dow is going down another 100 points before 4/19. I am looking to sell when they cross the middle Bollinger Band. I'm trying to take me out of the picture and get some type "system" I go with, profit or loss, and be consistent. Any thoughts?"
A tough question -- how long to hold or when to fold are not always easy to see. Some sort of "system" is a decent idea to help establish discipline. When you trade on short side when prices are at upper Bollinger band and on long side (or, cover shorts) when an index is near lower band, this at least increases the probability that you will have a better entry and exit.

Suggest you keep going in the direction of a method that increases your winning potential. For sure, if you are going to trade on an intermediate-term basis, which I really encourage (trade LESS, not more), then you must cut losses quickly, but not be too quick to take profits when a trend develops in your favor.

Jeff Bailey       4/9/02,    3:53:56 PM
Sharper Image (SHRP) $20 +11.42% .. high-end retailer reporting an 18% increase in March same-store sales. Based on strong Feb/Mar sales, company now expects to post a Q1 loss of $0.04-$0.08. According to Multex, analysts were expecting a loff of -$0.19 for the quarter. Point/figure hints that analysts didn't have a clue,while MARKET was on the right side of things. Link

Trying to think if Brookstone is still around and if it is publicly traded?

Leigh Stevens      4/9/02,    3:49:12 PM
Last hour Index update: Not much new except Nasdaq is down near the lows of yesterday mostly influenced by weakness in Cisco Systems (CSCO), which is now trading under its up trendline as the stock could not hold $15. Next obvious objective is around 14.25 on this stock, which was the area of the late-Feb./early-March lows. Ability of QQQ to hold my anticipated support in the 33-34 area may hinge on whether CSCO can form a double bottom near 14. The bulls need something to spark some buying as buyers are scarer than polar bears in august. Meanwhile, bearish sentiment continues to build as bears are plentiful, maybe just not of the polar variety. The bearish sentiment, in an improving economy, leads me toward looking for signs of a bottom and places to buy the indexes, as bearish conviction is always pretty high at decent bottoms.

Jeff Bailey       4/9/02,    3:39:12 PM
Semiconductor Bullish % According to Dorsey/Wright and Assoc.,last night's bullish % for the semiconductor stocks (a large sampling of semiconductor-related stocks) was "bear confirmed" at 49%. Recent high found last week was 60%, so we continue to see some internal weakening and sell signals being generated in the group. Semiconductor stocks with poor relative strength versus the sector SOX.X will make the most attractive shorts and the weak relative strength hints the stock may not be "in favor" and lack bullish buyers.

Jeff Bailey       4/9/02,    2:41:27 PM
Applied Materials (AMAT) $51.62 -2.65% ... different story than earlier this morning. However, for short-term trader that shorted yesterday, should note that stock just encountered the 200-pd MA of $51.25 on 60-minute interval and may find some bidders near current levels. This was a technical level on this time frame that held early yesterday morning.

50-pd on 60-minute starting to roll, but still up at this morning's high of $53.31.

Check you're pulse and make sure you're comfortable with your trade size from yesterday. If not, take a small loss here and get things under control.

Jeff Bailey       4/9/02,    2:30:24 PM
Brocade (BRCD) $24.39 -7.3% ... Hi Jeff ! BRCD is forming bearish triangle on P&F charts. What will be confirmation ? Break below $23.00 BRCD is forming a "triangle" right now, not bullish nor bearish. Bullish would come at $29, while bearish would be at $22. Is subscriber showing a bias? Perhaps. But suffice it to say, I'm not a buyer right now.

Hmmmmm.... a while back we noted at $22 that BRCD had traded its bearish vertical count of $22. That triangle sure looks compelling. I wonder what might cause a bearish triangle to unfold at $22? Maybe a warning in the sector from a major "like stock?" Link

Heck, if you've got some gains and not opposed to a "lottery play" I would think the May $22.50 put (BQBQX) offered $1.80 isn't bad. Idea would be to establish a trade, using some sector weakness. If a warning comes "after hours" then the move may be over. The KEY is to not over leverage, and only risk what you can afford to lose.

One reason a trader will often times "book gains early" is to allow for some more aggressive trades. Trades a trader trying to build up an account should try and avoid.

Relative Strength of BRCD versus the S&P 500 is rather bearish and looks like the stock has tried to rally (on a RS basis) but that rally may be getting sold. Link

Jeff Bailey       4/9/02,    2:08:06 PM
I am so glad I subscribed again to OI. Noticed BRCM reference as a put candidate and bought APR 35 puts at the high today. Tidy profit. set a tight stop. Is it worth holding for more? Glad to have you back!

When I "cover too soon" and a stock like Cisco (CSCO) a once "institutional favorite" slices through an upward trend like it wasn't there, the I think a BRCM trader holding some puts is looking for a little more than a 3.2% move to the downside right now.

As is always my advice... manage your account as you see fit and take some gains when they're needed.

An option trader than pehaps bought 10 April 35 puts may take 1/2 off the table as we realize that current month options can blow up in your face.

Let's face it. John Chamber's knows that Cisco (CSCO) is getting hit for a 7% decline today and if the "rumors" are just that, then expect Cisco to either reaffirm or say something. That could be costly to a BRCM bear.

Always expect the unexpected. If you need a gain then take it.

BRCM is a "sloppy" stock on retracment and this bugger can be volatile. I have retracement from $50.13 to $21.37. This has 50% at $35.75 (just above current levels) and 61.8% at $32.35 (just below current levels). Yesterday's low of $30.97 has not been tested, while CSCO broke below its yesterday low.

With that, if I had 10 put options, I'd lock in 5 of them, then target $30 to $29 with the rest.

Leigh Stevens      4/9/02,    1:44:12 PM
QUESTION of possible interest: "A couple of questions: You seem to be a fan of TradeStation and as such use different screens and indicators; what I'm having trouble with are the readings on your indicators, i.e., what are the settings? I understand the 10(5)3 and 5(3) 3 stochastic settings used al lot by your associates, but I don't understand all of the numbers on your charts.
Also, can you explain why you use different envelope bands with some of your charts...are you selecting the band based on the price action / volatility of the stock or for another reason?"

RESPONSE: Forget about all but the first number, which is the length settings -- that is, number of periods; e.g., number of hours, days or weeks. A sort of standard setting is 14 for RSI and Slow Stochastics, but shorter for those attempting to trade very short-term price swings; e.g., 5. Now, in hourly charts, I will often use a 21 setting for stochastics.

I use TradeStation, but the way I use it is not that different from Q-charts application for charting and price & volume history analysis. I am a fan of the application but for reasons related to the occasional backtesting I do of trading strategies.

Yes, envelope bands are set by me, according to the "best fit" for recent and current volatility. It's pretty simple really. S&P will tend to trade + or minus 4-5 % above and below a simple 21-day moving average.

Leigh Stevens      4/9/02,    1:24:08 PM
Index update: NDX - I spoke too soon, as NDX has fallen under the near support that I suggested for 1375 (last at 1360); next potential support to key off now is yesterday's intraday low at 1343, then at the the even 1300 level. QQQ - Support I see is at 34.00, which has been taken out now -- key next lower support is in 33 area. Q's are struggling to find a bottom, but without CSCO especially, it will be a struggle. Best that can be said about drift of Nasdaq is that it is on low volume. But market is vulnerable to more dumping if, for example, Cisco were to warn on earnings.

Leigh Stevens      4/9/02,    1:14:39 PM
Market Update: Indices: - No change in support & resistance levels on the major indexes from earlier as none have pierced support, but the NAS 100 appears vulnerable to retreat back to toward the lows of yesterday. The problem or key to ability of NDS/QQQ to hold around this area is near-term performance of Cisco Systems (CSCO), which has been talked about aplenty today. CSCO, which is a heavyweight in the capitalization-weighted NDX and Nasdaq Composite indexes, has come down to the Oct. - early March up trendline. Going through this trendline which the stock is trading AT currently (15.10), would suggest at least a test of the late-Feb./early-Mch lows in the 14.25 area. This is a more key area than $15. Watch CSCO, for clues for QQQ's ability to hold its support in the 33.00 area.

Jeff Bailey       4/9/02,    12:57:08 PM
EntreMed (ENMD) $8.62 +9.39% ... stock up sharp after company releases preclinical findings discovered by co's in-house scientific team on its drug candidate Panzem, which found that panzem kills tumor cells and the supporting blood vessel cells by turning on increased levels of a death receptor located on the cell survace to trigger programmed cell death or "apoptosis." Currenlty, Panzem is in Phase I clinical trials for breast cancer and Phase II trials for prostate cancer and multiple myeloma, a blood cancer.
I remember the day ENMD jumped to $80 (May 1998) from $11 on "news" of promising cancer drug. And that observation has me not wanting to ever short a biotech. Instead, if bearish I will only use put options to manage my risk. While my buddy "knew" ENMD didn't have anything, the MARKET didn't know it that day and if short, a world of hurt was inflicted on a bear's account. Link

Peregrin Pharma (PPHM) $2.07 +4.02 ... also seeing bidders. Often times I've seen both stocks tend to bid in unison as PPHM has some technology that is also designed to try and "starve" cancer tumors by cutting off the blood supply to the tumors.

Jeff Bailey       4/9/02,    12:50:45 PM
Applied Materials (AMAT) $51.85 -2.2% ... stock now in the red and most likely following Cisco (CSCO) bearishness lower. Trader/bear that was a little nervous earlier this morning now perhaps understands why a trader doesn't necessarily like to try and short stocks in upward trends. Silly buggers have a habit of trading strong on any type of market strength. Why? Because less experience traders are often the ones that shorted the strong stock to begin with and overleveraged, then when the trade goes against them, they're all buying it back and pushing the stock higher.

I'm "guilty as charged" for even mentioning a bearish trade in AMAT yesterday, but IBM warning really had me thinking (as it did most) that technology was really going to get whacked. Still, we must figure there's been a bunch of bears shorting AMAT all the way up from the $40's and they've got to be even more nervous than those just short from yesterday.

Jeff Bailey       4/9/02,    12:43:43 PM
Cisco Systems (CSCO) $15.15 -6.37% ... stock giving up retracement support at $15.27 and volume picking up to downside. "Rumor" circulating among traders, citing Dow Jones as one source of the rumor.

Eric Utley 4/9/02,    12:42:48 PM
Compelling: The three worst performing Dow components right now are Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC), and SBC Communications (NYSE:SBC). Tech and telecom. Ugly!

Jeff Bailey       4/9/02,    12:41:16 PM
Cardinal Health (CAH) $68.56 +0.26% ... I still like this name for longer-term bullish option play. Last week we thought stock might "firm up" at/near the $68 level as bears that were short $67 or below would look to sit some bids. Link I see where Prudential added Cardinal Health (CAH) to their "selected list" this morning. While I don't really care or it doesn't influence my bullishness in CAH, I'm taking note.

CAH traded "inside day" yesterday after finding some buyers at a rising 50-day MA. Break back above the 200-day would be nice for longer-term scenario. Feeling is that I'm "very early" on this one. Link

Jeff Bailey       4/9/02,    12:35:29 PM
Hi Jeff: Any thoughts on OHP, looks like it's on the move again. Oxford Health (OHP) $42.50 +1.28% ... only "trouble" I see for bullish entry here is that HMO.X is nearing the upper end of regression channel mentioned earlier at $530. I'm trying to find the intra day update where I had the chart of the HMO.X with regression, but looking for some sector resistance near the $530 level.

I have two different retracements on OHP. The first was from $23.05 to $42.26, which was a "rolled up" retracement to help us from the $34 level. We're now at 100% of that and breaking higher.

The second was yet another "rolled up" for the longer-term which is from $23.05 to $54.08. This has OHP 50% at $38.56, 61.8% at $42.22 (current levels) and 80.9% at $48.15 (new bullish target if 03/22/02 high of $42.75 is taken out). Right now, would have to assess potential pullback to $38.50 for bullish trade.

Bull can trade long here, but if just getting started in OHP, the scale in with 1/2 or 1/4 position.

Bullish vertical count longer-term is $71. Link

Eric Utley 4/9/02,    12:34:09 PM
I've found an interesting pattern in KLA-Tencor (NASDAQ:KLAC) that can be applied to our working thesis for the Semiconductor Sector. KLAC is one of the strongest chip stocks. Check out this relative strength comparison versus the SOX.X: Link

The "good stuff" that Novellus (NASDAQ:NVLS) said a few months back has lent to the strength of the capial equipment stocks. Within the SOX, the cap-ex stocks have been the strongest by far, so they're an important micro-segment to monitor. (AMAT is included in this group).

I'm willing to bet that the tech bulls who've been gunning KLAC are defending the stock today. It's at a very important support level Link at the quad-bottom at $64, reinforced by the bullish support line. The big bottom and bullish support line combine to form a solid support level. If that level is broken, then our bearish chip thesis gains conviction. If KLAC reverses higher, then our bearish thesis loses conviction.

I'm not real excited about a trade here in KLAC. Bailey's AMAT profile serves that purpose. Instead, I'm using KLAC to test my other observations in the chip sector. This is how I tie in observations, trying to get smarter about positions, and confident with convictions.

Eric Utley 4/9/02,    12:21:22 PM
Just got an e-mail from a reader asking about shorting the MidCap SPDRS (AMEX:MDY). If you breakdown the chart to a smaller box size, in this case 0.50, you can see Link where this reader is coming from. With minimal effort, you can find a pretty easy spot to set a stop on a bearish play here in the MDY.
But, and it's a big one, the MDY (midcaps) is one of the stronger segments of the market. The midcap group as a whole has out performed Link the broader market for more than three years. If you're shorting here, you're betting that that trend is coming to an end, which is an aggressive bet.

The easier trades with higher rewards, in my opinion, come from using tools such as relative strength in your favor. I ask this question: Why short one of the strongest segments of the market when there are so many other weak segments worthy of shorting? If you're betting against the MDY, you're betting against the market; therefore, if the market's going lower in your estimation, why not short the weak sisters, in doing so, achieving better downside potential?

Jeff Bailey       4/9/02,    12:20:35 PM
Verizon (VZ) $43.15 -2.39% ... Legg Mason downgrades stock to "buy" from "strong buy" based on weaker-than-expected core voice operations; firm believes that the majority of the weakness contained in this morning's preannouncement relates to continuing declines in access lines in service and are primarily the result of the continuing slow economy. Firm lowers FY02 estimates to $3.12 from $3.21 and FY03 to $3.27 from $3.42; lowers price target to $51 from $57. Hey! That's not fair... $51 is the bearish resistance trend! Link

Jeff Bailey       4/9/02,    12:12:45 PM
Cisco Systems (CSCO) $15.34 -5.12% ... bearish trader that took trade short near $17 can lock in nice little gain (10%) here, or move stop down to just above morning's high at $16.15. Again... retracement from $21.80 to $11.24 has 50% at $16.52 and 61.8% right here at $15.27.

Jeff Bailey       4/9/02,    12:06:20 PM
Why Sony? In past, we also talked about the "quadruple-top" in the Japan Index ($JPN) Link and will now note the $JPN has come right back to try and test that top of $116. Traders will observe a similar "triple-top" up at $148, but the pullback severely broke back lower.

That observation has us looking at only PARTIAL POSITIONS in SNE at this time, with thought that SNE is "Japan stock" in a "Japan Market" ($JPN) that is still weak, but flashing some early "buy signals."

Jeff Bailey       4/9/02,    12:01:56 PM
Yen Alert ! When I was writing the 11:00 EST Update, I did get my short-term "upside alert" in the Yen that I had set (see 09:49:59) at 76.68. Yen trading 76.56 here. This has bull eyeballing and monitoring Sony (SNE) $51.80 -1.05%.

At first check, I'm checking "scenario" of higher Yen creating bullishness in SNE and not seeing it yet.

I like the trade still for a bull, but I'll turn to the 60-minute chart to identify a trigger. I like the 200-pd MA at $52.00 that also correlates with the starting to round 50-pd MA at $51.81 which has been resistance all morning.

If Yen stays green (was red earlier) then short-term bull in SNE looks for $52.05 as entry.

Swing trade bull can also take long there ($52.05 as entry) and then follow 09:00 Update profile from there.

Jeff Bailey       4/9/02,    11:54:02 AM
Verizon (VZ) $42.02 -2.66% ... Jeff: You haven't mentioned VZ for a while. You profiled as a short and is working nicely. I just keep moving stops down as she swan dives. Lookout below. Ah yes... mentioned this "telecom" back on Friday March 22nd (archive was lost) but did touch on stock again March 26th Link at 10:38:31 and again at 03:35:19.

Day by day, stock trades lower. I like subscriber's disciplined following of stock lower with a stop. At some point, the gain will become to great and time to lock in a nice gain. A break of the 02/06/02 low of $43.02 makes things interesting. Just realize that there were buyers there before, will they be there again? If not... "look out below."

As mentioned before, bearish vertical count is $39 and that's pretty close to the August 2000 lows. Would be willing to buy weakness at $40 if it should happen. Link

Eric Utley 4/9/02,    11:24:08 AM
In my absence yesterday (yes, I was fly fishing), I see that Mr. Bailey profiled a short in Applied Materials (NASDAQ:AMAT). I too have been working on a bearish thesis in the chip sector. The primary impediment, however, as Bailey and I have discussed at length, is the relative strength of the group.
The chips are the go-to stocks for fund managers who want tech exposure; that's where the group's relative strength Link is coming from.

My bearish tendencies are coming from several metrics: sector bullish percent data (According to Dorsey Wright & Associates), valuations, overcapacity (specifically of equipment), and slack end-market demand (Read: IBM).

The biggest problem a bear has in the chips is the go-go fund managers, which is why I think that if you're bearish on chips you have to look near resistance, fading the buying of the fund managers.

The SOX looks to me to have established a new short-term descending trend Link , recently breaking its bullish support line at 570. Working with a vertical count of 515, I think shorting the SOX (its weakest components) at or near resistance offers favorable downside with limited upside risk.

Eric Utley 4/9/02,    11:01:48 AM
Per Bailey's always intelligent observations on Cisco Systems (NASDAQ:CSCO, I'm parlaying his insights to Juniper Networks (NASDAQ:JNPR). I've been buying the May 10 Puts for a lottery play; in other words, I'm using smaller than normal positions. The company reports this week, and being that it's levered to telecom, I'm not expecting anything positive. Also, for me, the lottery puts will get me long some vega, which I want with the VIX back down to 21.

Jeff Bailey       4/9/02,    11:01:35 AM
Colin Powell to meet with Arafat The wire services are reporting that Secretary of State Colin Powell says he intends to meet with Arafat, and that the U.S. is prepared to send observers to the region after a ceasefire; both statments indicate greater U.S. resolve to achieve a ceasefire in the region.

Jeff Bailey       4/9/02,    10:53:19 AM
Jeff: How can I review old market monitor commentary? I don't remember seeing comments on potential CSCO short. You can access prior market monitor comments by clicking the "Missed a day?" link at the bottom of the market monitor window. That will take you to a daily archive sheet. Link

Cisco (CSCO) comments were made April 02 at 10:14/00 Link

Jeff Bailey       4/9/02,    10:47:47 AM
Cisco Systems (CSCO) $15.53 -3.89% ... stock is weak still as RBC Capital cuts estimates due to a lack of pickup in enterprise spending; lowers FY02 revenue estimates to $18.99 billion from $19.14 billion and lowers 2003 rev/EPS to $21.74 billion/$0.42 from $22.38 billion/$0.44. In separate comments, Soundview says that despite gradual improvements in the macro landscape and slight uptick in March activity levels, checks indicate budgetary caution in communications equipment spending; maintains estimates and "strong buy" rating.

Jeff Bailey       4/9/02,    10:30:57 AM
Oakley (OO) $18.09 +0.89% ... stock continues to just inch along upward. Nice boring 1,2 and 3-lettered stocks that a young day-trader can trade. More calm and not as volatile as some of the 4-lettered technology stocks that most like to trade. No stock is "predictable," but the listed stocks trade more calm, steady and consinstent.

Jeff Bailey       4/9/02,    10:27:59 AM
Genesco (GCO) $27.33 +0.62% ... will take long on break of $27.26 here. Look for $1, stop just under this morning's low of $27.

Jeff Bailey       4/9/02,    10:26:43 AM
Keneth Cole (KCP) $25.99 +6.95% ... Didn't see this one until late last night. These gaps from bases as pointed out last night in MM on BIG volume are becoming powerful. Genesco (GCO) $27.25 +0.33% still a short-term traders play if she can trade $27.26.

See last night's MM comments Link

Jeff Bailey       4/9/02,    10:21:38 AM
QQQ $34.47 -1% ... lost some steam didn't it? Will be looking at the $33.42 level (yesterday's low) as near-term bearish target. Undoubtedly, there will have been some overly aggressive bears that shorted too heavy yesterday morning with the thought that IBM news was going to crush technology that will be re-thinking things and perhaps setting some bids just above that level.

I expect yesterday's turn higher caught some by surprise. This is perhaps good as it keeps everyone honest and drives home the fact of just how important discipline is.

Treasuries still finding some sellers today, so some cash freeing up. That should keep any bear in stocks honest.

Leigh Stevens      4/9/02,    10:20:51 AM
Index update: Semiconductor Index (SOX) - Mentioned in the Sector wrap up last night (part of Index Trader) at Link the SOX strongly rebounded yesterday from an up trendline dating from the early-Oct. lows and drawn through the late-Feb./early-Mch. highs. This action suggested that the Semiconductor index may be finding a bottom. Close was above the 50-day moving average at 568.5, which I take now as near support; best support is 552-553; Overhead resistance > 586 area, high of the day which repersents deflection from the down trendline currently. Look for more basebuilding before there is a sustainable rally, which may be setting up, per Jeff's comments on AMAT, part of the SOX and which is on a tear to the upside.

Jeff Bailey       4/9/02,    10:11:55 AM
Cisco Systems (CSCO) $15.76 -2.59% ... is a tech name I mentioned short/put last week near $16.75. Stock seeing some selling again today. Retracement from $21.80 to $11.24 has 50% now broken to downside at $16.52 and 61.8% at $15.27 is short-term bearish target. That correlates well with upward trend on the bar chart, which could serve as support. Downward trend crosses the 50% retracement level at $16.52. In all... stock is in a "wedge" right now, but MACD on dialy is starting to roll over, right near the zero level.

Point figure has given sell signal since profiled here in market monitor and now carries a bearish vertical count of $13. Link

Leigh Stevens      4/9/02,    10:09:52 AM
Index support & resistance levels: Dow - Industrial Average or DJIA (INDU); support > 10,160 where the Dow has now made a minor double bottom low on an hourly basis. Next lower support is in the 10,000-10,025 area. I doubt that we will get into this even 10,000 area. Expecting the unexpected, any close below 10,000 would ratchet up the bearish view that is pretty prevalent right now and set up the best buying opportunity in my view; Near resistance > 10,260; then, 10,325 area. Dow Transportation Avg. (TRAN): >very key resistance is 2800. Fourgetaboutit (any rally potential) if the Transports can't get back above 2800, especially on a closing basis; support > low 2700 area; best support I think will be found in 2650 - 2660 area.

Jeff Bailey       4/9/02,    10:05:49 AM
QQQ $34.71 -0.25% not seeing much strength in early morning. Retracement from $27.20 to $42.80 has 50% at $35 and high trade this morning was $34.98. Get the observation that there may be some sellers lined up at the $35 level.
This may have an AMAT short a bit calm, but will monitor the QQQ and downward trend in AMAT closely. Any breaks in unison would have AMAT bear then looking to either hedge or close out short on near-term basis.

Jeff Bailey       4/9/02,    10:02:25 AM
Applied Materials (AMAT) $53.50 +0.88% ... stock trading right at its 50-pd MA on 60-minute chart. Very short-term downward trend ahead at $54. I profiled as short yesterday with intentions of covering short near upward trend of $48 and then establishing bullish position.

Current bullishness is one of the problems I have with trying to short strong stocks, despite internal weakening showing up in the semiconductor bullish percent at a very early point.

Trader that may have "accidently" taken a full short position yesterday morning on gap lower that has seen the stock reverse sharply should perhaps trim off some of the position here, and monitor the very short-term downward trend currently at $54.

This may also be correlated against similar downward trend in Semiconductor Index (SOX.X) 582 +1.14%, which also trades right at a trending lower 50-pd MA on 60-minute interval here.

Leigh Stevens      4/9/02,    9:55:38 AM
Index support & resistance levels: NAS 100 (NDX): - There is a "line" of support at 1375 that yesterday's rebound got back above. Below this level, we're looking at the intraday low at 1343, at the low end of the downtrend channel. Key near resistance > 1392-1393 at the top end of the aforementioned downtrend channel. Next resistance, 1399-1400; then, 1420 area; QQQ - Support > 34-34.25 area; next best support looks 33. We have an apprximate double bottom now on the Q's if future lows hold these areas. Resistance > 35.40-35.50. Close above 35.50 would suggest that the Q's could get back up to next higher expected resistance in the 36.25 area - close above 36.25 would be bullish for a turnaround or upside reversal.

Jeff Bailey       4/9/02,    9:49:59 AM
Japanese Yen futures (jy02m) down fractionally versus the US$. Seeing some weakness in Sony (SNE) $51.77 -1.10% at the open too. (see 09:00 intraday update).
As such, shorter-term trader on the sidelines in trade as trader would like scenario for strong Yen to bolster Sony (SNE).

I have an alert set at .007668 on my Yen June futures (jy02m) to give me a very short-term "heads up" for potential strengthening in the Yen. There's a gap that could be filled on its chart and a sharp move higher could create a nice bullish trade in Sony (SNE).

Jeff Bailey       4/9/02,    9:46:55 AM
QQQ $34.73 -0.2% ... doesn't interest me in the least to be looking long. Broken upward trend from the September low, then anchored to the 02/22/02 pullback of $33.09, shows extension of that trend potentially serving as resistance here. With retracement anchored at $27.20 and $42.80, 50% retracement at $35 also in play. Shorter-term bear can short/put here, stop above $36.80. More "ideal" short/put entry point would be at upper end of downward trend near the rolling lower 50-day MA of $36.30, but not sure QQQ will get there.

Leigh Stevens      4/9/02,    9:43:10 AM
Index support & resistance levels: SPX - Support > can only be assumed as at Mon's low in the 1112 area. 1112 is support implied by the 62% retracement. Yesterday's rebound has taken the S&P 500 right above my original SPX suggested buy zone at 1120-1125. Should I have kept that target? -- safer to wait and see if SPX dips into 1100-1105 area, which is main support. Resistance > scale up from 1130 to 1135. Close above 1135 is needed to suggest a bullish turnaround.
OEX - Support > at Mon. low around 557 - this was a reversal from the Sept, early-Feb. up trendline. Best support is assumed in the 544-546 area, if reached, where the S&P 100 bottomed in late-Feb/early-Mch. Resistance > 570 is key near resistance.

Jeff Bailey       4/9/02,    9:41:44 AM
S&P 100 Index (OEX.X) 564.65 +0.12% ... short term bear that took my profiled short/put from last week can ease in here and lock in gains as OEX.X breaks just above a level of retracement. At this time, not interested in going long. Short-term downward trend on 60-minute interval as discussed is just ahead at 570 level.

Jeff Bailey       4/9/02,    9:38:30 AM
Celestica (CLS) $30.62 ... Banc of America lowers price targets and cuts estimates on CLS to $44 from $55 and lowers 2002-03 rev/EPS due to the risk that IBM (largest customer) may have substantial excess inventory in the June quarter. Link

Leigh Stevens      4/9/02,    9:26:29 AM
Market Update: Market is due slightly higher;e.g, S&P futures up 1 or so. Yesterday's rebound from areas of support in some cases in some of the indices, was fueled very much by lack of selling. However, while this is not typical of a stong advance, it's fairly typical for a bottom as there sometimes will be these "spike" lows, such as seen with OEX. The question is not whether the market is bottoming, but how long it will take and whether we will see the lows again that were seen yesterday. OEX is now knocking at the door of key short-term resistance in the 564 area -- as Jeff points, this is the level of the 62% retracement. Technical type traders will want to see a close above this area. I suggested last night buying QQQ at 34.30 and under -- such as into the 33-34 zone, both to cover any shorts and to go lightly long, in case this is one of those kind of turnarounds such as seen in Sept. There was a low, then sharp rebound. Given that lemming fund managers are holding their breath thru the earnings ahead, likely that there will be a bottoming few days or upcoming 2 weeks, with lows at or a bit under what we have seen already.

Jeff Bailey       4/9/02,    8:54:06 AM
S&P 100 Index (OEX.X) traders may want to quickly review Friday's 03:00 EST Update Link for potential levels to monitor. Notes may be taken as to today's 04:00 PM EST close of $563.65, which is just below the 61.8% retracement level that was shown in that update.

If downward trend were followed lower, then that trend right now correlates identically with the still trending lower 50-pd MA on that 60-minute interval at/near $570.

A short-term trader that is short/put this index looking to "buy a stop" would have a stop placed just above Monday's high of 564.12. A "trend trader" trading the short-term trend on the 60-minute interval would have a stop at $571.

Short-term bearish targets would continue to be $554.88 (555 is pretty close) or 100% retracement of 545.74 (546).


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