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
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
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
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
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
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
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
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
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
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
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
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
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
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:
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
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
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
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
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
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).