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  Jeff Bailey   5/4/02,  2:29:18 AM
Hanover Compressor (NYSE:HC) $18.30 +0.71% ... stock has edged back in right to the $18.04 retracement level (retr. from $10.63-$30.03). If institutions are accumulating, stock should get a pop this week if Nat Gas futues get going.

With Oil Service Index (OSX.X) +27.4% since Dec. 31, Oil (OIX.X) +8.3% then may be time for Nat. Gas Index (XNG.X) +1.6 to get going. XNG.X was up 1.1% this week, so still early for an energy play.

Hanover (HC) and (MARY) both very dependent on Nat. Gas prices.

Hanover bar chart Link Hanover p/f chart Link

  Jeff Bailey   5/4/02,  2:17:53 AM
St. Mary Land & Expl (MARY) $24.95 +1.83% Link ... "sleeper" stock for a play on natural gas production. Invested in this one for clients a couple of years ago and did pretty good. Can't believe I didn't remember this one as a follow on to Apache (APA) Link which is more of a 50/50 gas/oil producer.

St. Mary (MARY) p/f chart bullish with vertical count of $30.50. I've set an alert at $26 for spread-quad-top break-out, but would prefer a pullback to $22-$20 for good entry point.

June 2002 Nat Gas futures (ng02m) at $3.745/btu and challenging the 04/03/02 contract high of $3.85. With retracement set from $2.25 to $4.698, good levels to trade in correlation with MARY. P/f chart of June Nat Gas futures is bullish, with vertical count of $5.02. This doesn't necessarily mean $5.02 by June expiration, but gives hint of higher natural gas prices from futures market.

  Jeff Bailey   5/3/02,  7:12:23 PM
do you know teh index symbol for casinos and gaming ? specifically looking for secotor index for MBG

Sorry. One of the saddest days in my trading life came when the CBOE discontinued the Gaming Index (GAX.X). The second saddest was when they recently discontinued the Insurance Index ($IUX.X) and the Healthcare Index (HCX.X). Funny, healthcare is just getting good. Probably more money to be made from CBOE in the "exciting" tech area.

  Jeff Bailey   5/3/02,  7:04:18 PM
Hi Jeff:

Just sold my CSCO May15 Puts at 2. Could you clarify your last entry in Monitor whether you're buying some CSCO puts before the bell or "locking in" gains on a 1/2 position?

I'd like to leg into some 12.5s on Monday (CYQ QV), do you think we're looking at an incipient breakdown in the NWX?

No. I was talking about taking 1/2 of a short off the table and locking in gains from that level. By taking 1/2 off the table (buying it back) I have reduced account exposure, but still have left 1/2 of the position open, "just in case" something happens over the weekend. Maybe a nice juicy article in Barron's on CSCO?

Conversely, if something market bullish were to take place (capture BinLaden, upside announcement from CSCO) I've taken some gain off the table.

Not entirely sure where YOU may have bought your $15's, but if you did it anywhere close to $15, then you did OK is my guess.

If you took the full position in your puts off the table. Maybe you had 2, then you might simply tabulate your gains. Then if you wanted, you could risk just the profit to roll to the $12.5's.

Now, just remember. The NASDAQ-100 bullish % is now down at 20%. Also remember that it took a terrorist attack on America to get it (the NASDAQ-100 bullish %) down to 2%!

Tie that in with CSCO's p/f chart to perhaps understand "risk" in CSCO at this point. Bearish count has grown to $9, but a move back up to $18 would create a buy signal. Given this, a bear's risk/reward from $13.50 is now about $4.86/$4.13. Do you see how risk/reward is 50/50. To me, makes sense to remove 1/2 the risk for a bearish trader, especially with the NASDAQ-100 bullish % down at more oversold levels.

If you were a market maker and you went from bullish inventory (long the stock) to bearish inventory (short the stock) right at $18, what might you now be doing at $13.14?

  Jeff Bailey   5/3/02,  3:58:09 PM
Networking Index (NWX.X) 200.86 -2.32% ... breaking to a new 52-week low and now at multi-year lows. Link

Based on some other market action from the biotechs at their lows.... going to take the opportunity to lock in 1/2 positions on CSCO short/puts at the index target. CSCO trading $13.12 -3.7%. Link

  Leigh Stevens   5/3/02,  3:52:10 PM
QUESTION: "VXN index is approaching 50 which, if you look on a weekly chart, appears to be the closest thing to a lock for a NAZ rally. What do you think?"

RESPONSE: Well, we should look at the level of Nasdaq Volatility ($VXN.X) at the last two intermediate-term bottoms: Week ending 4/6/01, VXN spiked to as high as 80 area. Week ending 9/21/02, VXN climbed to as high as 90.

Looks to me that an area we could associate on VXN to being at/near a significant bottom & upside reversal, starts about 67-70 and up.

  Jeff Bailey   5/3/02,  3:44:52 PM

Phelps Dodge (PD) $36.18 ... you don't think that bullish support trend is being wathced do you? Link

Observation: lots of stocks like AMAT, INTC, SAP, PD, AA.... in different groups all trading at bullish support trends. Interesting.

  Jeff Bailey   5/3/02,  3:43:06 PM
Phelps Dodge (PD) $36.18 +1.20% ... looks like some bears a little jittery here too. Stock's been holding the rounding 200-day. May see a bit of strength back to the rounding 50-day MA. Link

Retracement from $49.79 to $25.74 has the 38.2% rock solid support so far at $34.92.

  Jeff Bailey   5/3/02,  3:40:33 PM
DJ US Home Construction (DJUSHB) 393.48 +0.25% ... not a lot of sellers here. Trades a new 52-week high under more bearish appearing market conditions. Still some sectors that are more economically sensitive at the "root" of the economy still doing well.

  Jeff Bailey   5/3/02,  3:32:54 PM
Seitel (SEI) $8.91 +4.57% ... what I consider a laggered in the Oil Service group. Looks like a short calling it quits after a relative low. Link and could get a "pop" to the 200-day on break back above the 50-day.

  Leigh Stevens   5/3/02,  3:31:46 PM
QUESTION: Awesome writing and calls. I've learned a ton from you and your book is on it's way to my house.

From your 1:37 pm post, I don't see the "5" setting being oversold (in fact, a long ways from it). I'm set at 5, 3, 3 and at the time of your post, it was up around 75. Not to mention, the 21 was even further. Where am I wrong here?"

RESPONSE: I think that reading was around the beginning of the hourly bar that ended at 1:30 eastern. At the beginning of the hour, the 5-hour stochastic was just turning prior to starting a steep run up. Reminds me that my posts need to be as much in real time as possible. For example, that post at 1:37 was a longish message and I might have worked on it for 5-10 minutes, or got interrupted. This happens rarely, but your note has made me more aware of possible glitches.

ALSO, remember that the stochastics model will change shape suddenly -- a crossover begins, then new data comes in and suddenly the crossover has "VANISHED" - the lines just uncross. One of the quirky things about working with these things.

  Jeff Bailey   5/3/02,  3:29:45 PM
Jeff, Any comments on your recent recommendations re JPM and MACR?

MACR $20.12 -6% ... (was/am bullish) sitting right on the 50-day MA. Stock acting like the NASDAQ near-term, but much stronger longer-term. The previously profiled MACR June $22.50 calls (MRQFU) $1.30 down just a little from $1.90. Plenty of time is my thought.

JPM $35.37 -1.87% ... (was/am bearish) ... has been finding support at the rounding higher 50-day. Found resistance yesterday at the 200-day MA of $36.52. Looks range-bound right now between 50-day and 200-day. Link

No change from previous comments. P/F still has bearish trend at $37 still in play. Link

"Nervous" bear in JPM can cut out on break back above today's high of $36.41 if need be.

  Jeff Bailey   5/3/02,  2:59:57 PM
I've messed up I accidently "saved" the 11:00 Update as the 01:00 update and sent to HTML dept. to post. This has now created the identical 11:00 and 01:00 Update. I unfortunately deleted the 01:00 update, or didn't "save" it and it is gone.

Key notes from it was that the NASDAQ-100 Index (NDX.X) had traded the lower end of downward regression channel and could be level of support.

  Leigh Stevens   5/3/02,  2:57:43 PM
QUESTION: "Do you know what the most liquid indexes are that have listed options?;and thus worth trading."

RESPONSE: The SPX (S&P 500) index options have the most volume; e.g., on Wed. there were 54,281 puts and 41,272 calls traded for a total daily volume of over 95,000 contracts. 2.) The S&P 100 index traded same day (Wed) over 35,000 contracts. 3.) The DJ Industrial Avg. (DJX) index options traded over 24,000 contracts. These are the most liquid. The QQQ and NDX options will trade in the 100s in the most active strikes on a busy day. They are not illiquid, but don't have the institutional participation that the S&P related indexes have

  Jeff Bailey   5/3/02,  2:56:10 PM
Semiconductor Index (SOX.X) 489.31 -2.92% ... has battle back above the 485 level. This is/was the 10/24/01 close, which then served as support on the 11/21/01 pullback of support. This may be a "waterline" or "pivot" point and near-term important level.

  Jeff Bailey   5/3/02,  2:46:07 PM
Applied Materials (AMAT) 60-minute shows a diving lower 50-pd at $24.00... this will be eventual test of short-term resistance, most likely at the $23.40 level or so as time passes.

  Jeff Bailey   5/3/02,  2:40:16 PM
Kronos (KRON) $42.90 +2.14% ... breaking above downward trend on bar chart. Will have to call it quits on this one for now. If holding puts, use the jacked up VIX.X as "excuse" to cut out of the puts.

  Jeff Bailey   5/3/02,  2:38:57 PM
Treasury Watch 10-year YIELD 5.062% and off lower levels of session of 5.029%. Again, just haven't seen the rush to the Treasuries today. Link

5-year YIELD ($FVX.X) at 4.345% is lowest, but it too hasn't violated Wednesday's low. Link

  Jeff Bailey   5/3/02,  2:35:52 PM
Biotech Index (BTK.X) 418 +0.56%... turning green. Watch out bears.

  Jeff Bailey   5/3/02,  2:34:50 PM
Applied Materials (AMAT) $22.78 -0.39% ... has battled back, threatens to go green.

  Leigh Stevens   5/3/02,  2:34:13 PM
QUESTION: "If we test and close above the 1600 level on the nasdaq do you think we could get a bounce on monday as we did this week? Also if we close below the 1600 what is next? "

Yes, is my thought on first part of your question . Maybe Tues. like before.

Close below 1600, especially on a weekly basis, presents low end of the weekly downtrend channel, intersecting in 1500 area currently, as possible next support. It's NOT surprising anyway to find the 100 levels to be natural areas of support/resistance.

  Jeff Bailey   5/3/02,  2:32:52 PM
Smurf! Does dynomite come in small packages? Surfit-Stone (SSCC) $16.60 +2.97% challenging 50-day MA here. Link

Observation: Smurf is a "paper stock" and deeper cyclical. Alcan and Alcao are "aluminum" and deeper cyclicals too.

Morgan Stanley Cyclical Index (CYC.X) 566.58 -0.61% trading with some "relative" strength today. Link

Observation #2: 50-day MA ahead on the CYC.X. If we start seeing some moves above or near the 50-days, could be sign of bullishness going forward.

  Jeff Bailey   5/3/02,  2:23:25 PM
Alcan (AL) $37.82 +0.88% ... another big aluminum stock "like" Alcoa (AA) finding some bidders. Link

  Jeff Bailey   5/3/02,  2:19:18 PM
Alcoa (AA) $34.62 +0.55% .... good risk/reward play for a bull in the May $35 calls (AAEG) $0.80. Dump them for a double if stock trades the 50-day MA of $37. Link

Observation: bullish support in play. Link

  Leigh Stevens   5/3/02,  2:13:20 PM
QUESTION: "In Editors picks a couple of Sundays ago Jim Brown suggested puts on BLS and SBC. I see they are heading down again today. I wonder what a reasonable target would be? I'm thinking $25.00."

RESPONSE: With SBC (BellSouth), first area I was drawn to was $25, at the apex of the bullish rising wedge on weekly chart formed over '96-'97. Stock looks like it would have support again in the 23-24 area, so in the "not to be greedy" dept., 25 looks like a great objective.

With SBC (SBC Communications) - $30 begins possible chart support basis the weekly chart; support, below this looks like 25 is even more solid. Take your pick. Since this stock has so much downward momentum, it may rest at 30 (stock is now oversold) for a bit, but get to 25.

  Jeff Bailey   5/3/02,  2:13:00 PM
Dow Breadth still negative... 6 gainers and 24 decliners.

Gainers are EK +2.01% Link , HWP +2.1% Link , MCD +1.8% Link , T +1.17% Link , AA +0.49% Link , MO +0.25% Link

Observation: Those that are "weakest" and trade below trend seeing the gains. Marginal gains in the storonger AA and MO. Hints that some bears may be active and taking profits in the more beaten down.

  Jeff Bailey   5/3/02,  2:08:26 PM
Cah...Cah...Cah. says the crow! Cardinal Health (CAH) $71.15 +0.42, bucking the broader market trend, breaking back above downard trend on bar chart. Bulls like the action and hints of accumulation under broader market selling.

  Jeff Bailey   5/3/02,  1:58:42 PM
Gemstar-TV Guide (GMST) $8.74 -1.79% ... will also discuss the strangle from outlined on Feb. 21st in the GSMT May $20 calls (QLFED) and May $15 puts (QLFQC). Once again, puts were the winner and show a 235% gain, with 51.2% net in trade. With expiration so close and stock firming at current levels past several session, would simply close this one out for those still holding. Link

  Jeff Bailey   5/3/02,  1:54:15 PM
SanDisk (SNDK) $14.93 -4% .... in tonight wrap, I'll discuss this profiled straddle from the $20 level. Puts have been the big winner and trade shows gains of net 30%. Trader can take the puts off the table (SWQRD) for 126% gain, then look for bounce near $19 to perhaps close out the calls (SWQFD) bid $0.15 currently. Again... will discuss more in detail in tonight's wrap on how to thing about this trade and manage going forward. Stock at $15.00 is right back at "apex" of the bullish triangle from March and may be a level of support. Retracement from $9.01 to $29.64 may still have bear targeting the 19.1% retracement level of $12.95, but this becomes a straddle-management call as it pertains to price perfomrance of the put side of things.

  Leigh Stevens   5/3/02,  1:53:39 PM
The Nasdaq Composite (COMP) at 1607, got to the low end of the hourly downtrend channel. Both the 5 & 21-hour stochastics are both oversold. The 14-day stochastic is back on a sell "signal" but in an oversold area.

Oscillators like stochastics, RSI and MACD, at extremes show the propensity for a trend reversal, relative to a norm. At extreme extremes, such as when a market is going straight up or straight down, oscillators don't do us much good -- which is why its best to have multiple tools in your toolkit that will help calculate market direction and momentum.

  Jeff Bailey   5/3/02,  1:47:10 PM
SERENA Software (SRNA) $13.03 +2.93% ... I haven't mentioned this stock here, but it was profiled as a short on PremierInvestor.com. Good gains were at risk for bears that took this trade from the play list at $14.94 and stock came right down to retracement (from $27.02 to $8.70) of $12.20. Advised bears to tighten stop down to $13.41. Stock finding some bids at lower end of 80.9% retracement. Link

Observation: some sign of willingness of a stock (software) I thought would see final leg down showing some firming.

  Jeff Bailey   5/3/02,  1:39:19 PM
Jeff: Jeff: do you have any comments on EXPE. what do show for bullish count, looking out to july calls. thanks

Expedia (EXPE) $82.14 -1.22% ... stock continues to trade strong and many bears short this one, which may have been a mistake? Stock exceeded its bullish vertical count of $67 back in March, so can't assess potential upside. Link

Stock hasn't given a sell signal this year, and hasn't given one since the $28 level, which came just after the test of bullish support at $22. Could look for a squeeze above $85, but I would think better risk/reward candidates near support exist.

  Leigh Stevens   5/3/02,  1:23:52 PM
In QQQ, we got to bottom of downtrend channel at 29.5, so likely to be some temp support in this area - over time, QQQ can keep drifting lower, but it will tend to hug the trendline. So, at a minimum the rate of decline (momentum) will likely slow down. I don't know why, it just does it when it gets to these trendlines. Index behavior is different than individual stock behaviour.

  Leigh Stevens   5/3/02,  1:17:40 PM
Looks like NDX at 1185 is at support near the bottom of its hourly downtrend channel -- it has dipped slightly under the line, but looks like this is where there is temporary support.

  Leigh Stevens   5/3/02,  1:07:49 PM
QUESTION: "Is it time to sell my QQQ May 33 puts?"

RESPONSE: right now, QQQ is at near support implied by the low end of the hourly downtrend channel, around 30

- however, on a longer term basis it appears that the stock is heading to a test of the low seen to date, at 27. We opened this week actually lower then the week when QQQ made that $27 low (Sept.'01). If you out with sufficient time to expiration, no reason not to see where they go.

  Leigh Stevens   5/3/02,  12:55:41 PM
NOTE from Thurs AM: "Lee, We are getting close to your #' as I type this: 'Key Index resistance: COMP > today's high at 1695; NDX > 1290; QQQ > 32.1-32.2'

" yep, good areas to short/buy puts ... go by the numbers.

  Leigh Stevens   5/3/02,  12:27:52 PM
Subscriber NOTE: "Leigh, The put/call ratio is looking rather interesting. It's getting pretty close to 1:1. Wish the VIX was higher."

RESPONSE: If the VIX was a stock, I'd be buying it due to its strong V-bottom. Sentiment in terms of option put/call ratios at 1:1 is getting close to where it does on tradable market bottoms -- however, other indicators, as you note, are not in synch.

  Leigh Stevens   5/3/02,  12:10:38 PM
QUESTION: "We've broken the channel. Any guesses at next S/R levels?"

RESPONSE: Yes COMP - Support at 1600 > Resist at 1640 NDX (Nas 100) - Support at 1185; Resistance at 1230 QQQ: Support - 29.50 Resist at 30.6

  Jeff Bailey   5/3/02,  11:51:54 AM
"Smurf" building gains with SSCC $16.48 +2.23%. Link

  Jeff Bailey   5/3/02,  11:48:37 AM
Forest & Paper Products (FPP.X) 364.91 +1.4% ... makes a bold move above the 50-day MA and looks to have some conviction. Link

MACD on daily hooking higher and getting some momentum. For FPP.X, next test is the 04/19/02 high of $371 and also mid-point of upper trending regression channel. Break above there sets stage for upper end of regression to/near $393.

  Jeff Bailey   5/3/02,  11:44:02 AM
SAP Aktiengesell (SAP) $30.09 -0.52% ... yesterday thought a bear might want to take some profits in the stock/trade from $34 at bullish support. Stock just sitting here. Link

May also be an important observation as per 11:00 Update. Yes, SAP is software, and I think much more vulnerable that INTC or AMAT as SAP's "like stocks" of ORCL and PSFT very weak. Yet stock firms a bit. It's only one day, but we make the observations each day and build from there.

  Leigh Stevens   5/3/02,  11:26:39 AM
Index Update: DJX -- Correction, make that 98.5 (not 99) as next downside swing objective if 99.7 current intraday low is pierced.

  Leigh Stevens   5/3/02,  11:21:37 AM
Sector Update: Semiconductor Index ($SOX.X) is off the most of the sectors, down over 3%. North American Telecoms ($XTC.X), Airlines ($XAL.X), Disk Drives ($DDX.X) all down more than 2%. SOX is the biggie and much technical damage was done with the break of 500, thereby taking out the Jan. and Feb. double bottom low. Taking out a low like this the third time often leads to a strong further move in the direction of the break. One downside objective is to around 458, a 62% retracement of its Sept to early-March advance. SOX is now also below 494, its 50% retracement level.

  Leigh Stevens   5/3/02,  10:58:34 AM
Index Update: SPX/DJIA - Apparent stabilization in the Indexes looks like a pause only. If we take out today's low at 1070, further downside swing objective is to 1060 area in SPX, and also around low end hourly chart downtrend channel. OEX - if low of today at 528.8 is pieced, downside swing objective is to 522, not far above low end of hourly downtrend channel at 520. DJX - if today's low at 99.7 is broken, downside swing objective currently is to 99 area. DJX continues to hold up the best.

  Jeff Bailey   5/3/02,  10:55:07 AM
Attractive risk/reward in FPP.X are

IP Link risking to $37 sell signal, to bullish count of $65.

SSCC Link risking to $14 sell signal, to bullish count of $25.50.

  Jeff Bailey   5/3/02,  10:49:42 AM
Forest/Paper Index (FPP.X) 360.85 +0.27% ... trading just below its 50-day MA as technical resistance. MACD hooking around, but has not yet crossed above signal. Move above the 50-day may have MACD above signal, then MACD trader wants to see follow through, get MACD above zero for nice continuation run like that in January. Link

Compenents are IP, GP, MWV, SSCC, TIN, WY, PCL, BCC, BOW, LPX, ABY, PCH, RYN.

Those trading above trend and having a buy signal associated with p/f chart are IP, MWV, SSCC, PCL, BCC, BOW, LPX, ABY, PCH, RYN.

  Jeff Bailey   5/3/02,  10:40:40 AM
C'mon Smurf! ... Smurfit-Stone Container (NASDAQ:SSCC) $16.30 +1.17% .... got my eye on this one as a forest/paper products component. I started eyeballing this one in the PI market wrap earlier this week. Last night I went through my paper stocks and SSCC had LARGEST volume of them all. More and Intl. Paper (IP) even, which is usually most heavy traded of the names.

Volume means NOTHING to me, other than BIG institutional interest. Supply (selling) and Demand (buying) are what matters most. Are they sellers or buyers? Old saying for traders is "volume proceeds price action."

I'm sticking with the p/f chart on this one. Link

  Jeff Bailey   5/3/02,  10:35:18 AM
Apache Corp. (APA) $59.90 +1.21% ... Jeff: you like it at these levels?

Hmmmm.... APA was stock I really liked back at the $46-$51 levels. I still like her, but imagine if you will. Suppose you WERE an institution that was accumulating when we were first bullish. What would you be doing here? I think they "top of the tanks" and round up to another 1/2 position. Link

Today's trade at $60, is buy signal and gives bullish count now to $73. Hey... that's $2 higher than the $71 bullish vertical count we were all buying back in January!

  Jeff Bailey   5/3/02,  10:27:02 AM
McDonald's (MCD) $29.01 +1.78% ... do this. Let's "pretend" that MCD trades $30 and gives the "double-top" buy signal. This would create the bullish vertical count column ($26-$30) and give longer-term bullish count of $41. Link

Hmmmm.... now take a retracement from $25 and stretch the upper end to $41. Check it out! 19.1% at $28 (served as rock support last week) and 38.2% at $31.11 (bullish trader target) and ties in nicely with the 05/22/01, 08/24/01 highs.

I do like MCD as bullish here. Also get good support from both the 50-day and 200-day MA's just below, also very near the $28 level. Link

  Jeff Bailey   5/3/02,  10:19:35 AM
Hi Jeff, MCD caught my eye the other day. My "tea leaves" suggest it may test 31 level. Notice it is up today (so far) in a down market.....is it the weaker dollar, Dow vs. tech stk scenerio, ??????? P&F, fib numbers provide any clues?

Had mentioned MCD awhile back for longer-term options on 1/2 position, then add on break higher at $31 (if it happens) which would be spread-triple-top. Link

I think subscriber has a point for weaker US$ as "old McDonald" has a lot of stores in overseas markets.

  Jeff Bailey   5/3/02,  10:13:18 AM
NASDAQ-100 Tracking Stock (QQQ) $29.81 -2.19% .... breaks the lower end of downward regression channel of $30 and sets up potential test of the September lows.

Lots of bulls from above $38 never thought they'd see the day again. I know, got lot of e-mails how we missed the bull market in the QQQ's at that level and we were too bearish in big tech.

QQQ traders short from a couple of days ago per Leigh's comments, can snug a stop above yesterday's highs of $32, or just above today's high for more short-term trader. Hey.... locking in some gains here not too bad either!

  Jeff Bailey   5/3/02,  10:07:38 AM
Semiconductor Index (SOX.X) $489.73 -2.84% ... sliced through the $500 level of support. Relative low of this base was the 11/21/01 low of 486.07, which was also relative high of 10/26/01 resistance. AMAT bulls want that 485 level to hold. Link

  Jeff Bailey   5/3/02,  10:03:14 AM
Dow Breadth is negative with 24 down and 6 up.

Weakness in INTC -3.58% (semi), SBC -3.45% (telecom), GE -2.31% (electronics).

  Leigh Stevens   5/3/02,  9:59:45 AM
Index Update: S&P/DJIA - SPX and OEX broke technical support at 1082 and 536, respectively. The Dow looks like it will be next -- its key near support is 100 in DJX. If so, DJX reversal will have come from right at the top of its downtrend channel. Next support areas look like 1066 area in the S&P 500 and 525-526 in the 100; DJX support, below 100, is around 98.3-98

  Jeff Bailey   5/3/02,  9:58:05 AM
Cisco Systems (CSCO) $13.45 -1.39% .... technicals have stock ready to test 80.9% retracement of $13.25 (retracement from $21.80 to $11.24), which is also mid-point of downward regression, taken from the 01/02/02 high. Trader short/put from past commentary can snug a stop down just above yesterday's high of $14.25. Link

Trader holding CSCO short from higher levels near $15, that may have added Applied Materials (AMAT) $22.37 -2.18% as bullish yesterday, will want to sit tight in CSCO short until firming in AMAT. Thingking here is short a weak CSCO (networking) and long a stronger AMAT (semi equipment). Same could be done for those holding CIEN short, AMAT long.

  Leigh Stevens   5/3/02,  9:49:08 AM
Index Update: Nasdaq - COMP, NDX and QQQ all breaking to new lows, getting near the low end of their hourly downtrend channels which, over past weeks, has been a place where these indices have been finding technical support at least temporarily. The low end of these channels, which become possible downside targets are: QQQ to 30; NDX to 1200; COMP to 1608.

  Jeff Bailey   5/3/02,  9:46:04 AM
Guidant (GDT) $39.55 +0.5% ... yesterday, GDT Link announced that the FDA approved the Contak CD/Easytrak system for the treatment of heart failure, which according to the company was the first system approved that combines an implantable defibrillator with cardiac resynchronization therapy.

Today, UBS Warburg believes that the FDA's approval of GDT's Contak CD is a positive for the company, as it is likely to increase the company's market share, but will not expand the market; also, it is neutral for Medtronic (MDT) $44.45 +0.7% Link (company will release their competing InSync product within the next 60-days), but is a negative for St. Jude Medical (STJ) $83.30 -0.93% Link , which is 12-18 months from launching their own product.

  Leigh Stevens   5/3/02,  9:41:07 AM
MUTUAL FUND INFLOWS - I noticed a couple of reports this morning relating to money flows into mutual funds. Trim Tabs estimated equity funds had inflows of $2.8 billion in the week ended May 1 compared with outflows of $6.1 billion during the prior week. Equity funds that invest mainly in U.S. stocks had inflows of $1.9 billion vs. outflows of $3.3 billion in the previous week.

The something that has been fueling the recent S&P rally is lots of greenbacks and this money inflow estimate indicates some decent cash coming in to equities fund managers. April has a tendency for a market rise due to the tendency for money coming into the market. People know what money they have after calculation of their tax obligations or what refund they're due.

  Jeff Bailey   5/3/02,  9:33:36 AM
Ciena (CIEN) $7.05 (unch) ... CSFB saying it believes that potential downside risk to CIEN shares in the near-term due to the weak spending environment for optical systems. Cutting FY02 rev/EPS estimates to $427 million/($0.65) from $452 million ($0.73) and FY03 to $540 million/($0.34) from $665 million/($0.43), both below consensus, and lowers price target to $12 from $14. Link

  Leigh Stevens   5/3/02,  9:28:36 AM
Look for the silver lining! - What is seen as a positive in the weaker than expected job loss and job creation figures, has to do with the perennial occupation of the market with interest rates. The Fed is meeting on Tuesday to consider whether it will make any changes to the 1.75% target rate for federal funds, lowest in 40 years. Thinking on the Street is that today's weak jobs report make it more certain that the Federal Open Market Committee will not raise rates until late summer.

  Leigh Stevens   5/3/02,  9:21:57 AM
It's Showtime! - Index futures lower this morning on the influence of the Labor Dept. Unemployment Report. The U.S. jobless rate rose to 6%, up from 5.7% and an 8-year high. The important non-farm payrolls figure indicated an increase of 43,000 jobs for April, versus expectation of a gain of 51,000. The jobless rate was expected to be 5.8%. March figures were revised to a drop of 21,000, well below the 58,000 increase first reported a month ago. Index futures initially fell on release of the report, but the futures are now off only marginally -- DJ futures down 15 pts.


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