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  Jim Brown   5/14/02,  5:11:45 PM
Pivot Trade Wrap (What is this?) Link

What a day! The gap up this morning only paused for a few minutes around 10:am before easing up to close near its high. If trading it was only as simple as it sounds. After the big gains yesterday there were many analysts, including myself, expecting another failure ot resistance and a new dip. The cycle was so repeatable that many got caught flat footed. This was the first two day gain for the Nasdaq since April-1st. Does that tell you where we have been?

The fear was that AMAT would say something positive and another Cisco explosion would occur. After the AMAT earnings and guidance tonight it appears they were right. AMAT is up to $27.75 in after hours and could power another Nasdaq short covering rally tomorrow. The QQQs are up to $32.75 in after hours as well.

The Pivot Trade model is flat on the broader market but initiated a QQQ Strangle at 3:11 pm for an $.80 cent debit using the May-$32 put/May-$33 call. The QQQs have resistance at $32.80 and then stronger resistance at $35. The target on this trade would be something in the $1.50 range.

There is also an open signal on the Biotech Index using the BBH Holders as the trading vehicle. That signal is for a long position if the BBH trades over $101.50.

The SPX closed above resistance at 1094 and does not have resistance until the 1108 range. If we could take this out on the open tomorrow this would be extremely bullish. That would open the door to test strong resistance at 1125. Tomorrow will be the real test of the tech strength with the IBM analyst meeting and yet another chance for bad news. See you at 9:15 and we will watch the events unfold together!

 
 
  Jeff Bailey   5/14/02,  4:25:27 PM
Brocade Communications (BRCD) $24.08 ... released for trading in after-hours with action at $24.60.

As story unfolds, it turns out that guidance (see 02:50:13) was released via webcast and not at a conference.

 
 
  Jeff Bailey   5/14/02,  4:20:49 PM
Hewlett-Packard (HPQ) $20.49 +2.6% ... reports Q2 earnings of $0.25, 1-penny worse than expected as consensus was at $0.26 a share. Q2 revenues came in at $10.62 billion versus the consensus estimate for $11.14 billion. These numbers exclude the Compaq acquisition.

 
 
  Jim Brown   5/14/02,  4:14:28 PM
AMAT Comments from Press Release

"Applied Materials' order momentum increased in the second quarter as customers expanded capacity for their leading-edge technology applications," said James C. Morgan, chairman and chief executive officer. "We are seeing strong demand for our advanced products and service solutions as the semiconductor industry begins to recover and customers increase their capital spending." "While we believe that further improvement in worldwide economic conditions is necessary to drive the next phase of recovery for the semiconductor industry, we are encouraged by the current technology expansions. As applications for semiconductors continue to increase and electronics products become available to more people around the world, the long-term prospects for the semiconductor industry remain strong. With industry-leading products and services designed to help our customers bring new chips to market more quickly, Applied Materials is well-positioned to capitalize on the opportunities ahead," concluded Morgan.

 
 
  Jeff Bailey   5/14/02,  4:14:27 PM
Applied Materials (AMAT) $26.64 +4.14% .... reports earnings of $0.03 a share, beating estimates by a penny. Revenues fell 45.9% year-over-year to $1.16 billion, but better than consensus of $1.04 billion. New orders of $1.69 billion for the second fiscal quarter of 2002 increased 51.1% from $1.12 billion for the first quarter of 2002, and increased 25% from $1.35 billion for the second quarter of 2001. The new orders number of $1.69 billion figure for Q2 was higher than most estimates looking for $1.3-$1.4 billion; high estimate was Salomon Smith Barney at $1.5-$1.6 billion.

AMAT trading higher at $27.60. Link

 
 
  Jim Brown   5/14/02,  4:13:03 PM
AMAT News Corrected

AMAT beat the street with three cents and new orders for the second half of $1.69 billion. The revenue for the 1Q did beat at $1.16 billion. Analysts were expecting $1.35 billion for new orders not revenue. Numbers are preliminary and present a strong picute. Stay tuned.

 
 
  Jeff Bailey   5/14/02,  4:07:21 PM
QQQ $32.50 was the 04:00 PM EST tick. Interesting as this is the 200-pd MA on the 60-minute chart. Will take some notes here as this may well be a good moving average to use in coming sessions as we get earnings from AMAT along with IBM analyst meeting.

Short-term traders may want to benchmark some of their favorite trading stocks against this too.

For instance... BRCD was halted at $24.08, with 200-pd MA from 60-minute at $24.21, so very near.

MSFT closed $54.96, 200-pd at $54.03, so a little "stronger" than the Q's perhaps.

 
 
  Jeff Bailey   5/14/02,  3:53:21 PM
QQQ $32.50 +5.62% ... doesn't look like the Qs are going to trade my $32.99 level. Want to close out all underlying QQQ ahead of AMAT earnings, so taking the door here (SELL!). Have had enough "fun" in past couple of days.

 
 
  Jeff Bailey   5/14/02,  3:47:21 PM
Microsoft (MSFT) $55.02 ... getting upside alert here on break of recent relative highs. Could drive the QQQ's into the close.

 
 
  Jeff Bailey   5/14/02,  3:45:53 PM
Brocade Communications (BRCD) $24.08 +10.56% ... stock was halted at 03:37:40. Most likely due to "early release" of information (see 02:50:13).

 
 
  Jeff Bailey   5/14/02,  3:36:44 PM
Notable earnings tonight Applied Materials (AMAT), BEA Systems (BEAS), Hewlett-Packard (HPQ) and Network Appliance (NTAP).

 
 
  Jim Brown   5/14/02,  3:28:16 PM
Pivot Trade Exit Point Alert - SPX
We are out of the SPX long at 3:23 when it broke below our stop of 1095. We will stay flat the SPX into the close and take our chances on the open on Wednesday.

 
 
  Jim Brown   5/14/02,  3:11:16 PM
Pivot Trade Entry Point Alert - QQQ
QQQ Strangle- With the QQQ pegged at $32.50 lets go long a May QQQ Strangle into the close. The MAY-$33 call and the MAY-$32 put are both $.40 cents for a net debit of $.80 cents. With AMAT tonight, IBM/BRCD tomorrow, DELL on Thursday the odds are very good we will see a major move by Friday.

 
 
  Jim Brown   5/14/02,  3:04:00 PM
Pivot Trade Exit Point Alert
Numerous readers are asking if they should hold over the AMAT earnings since the "good news" already appears to be priced in. There is still a possibility of an end of day spurt but many traders have got to be thinking the same thing. Lets raise the stop on the SPX to 1095 and let the market take us out on any down tick from here.

 
 
  Jim Brown   5/14/02,  3:01:56 PM
Pivot Trade Entry Point Alert
Let's focus on something other than the broader market. The biotech index has made some impressive gains recently and hit 420 this afternoon. This is on the edge of a breakout from the recent slump. The next resistance is 440 and a move over 440 would be a strong signal to go long.

The way to play this move would be the biotech holders (BBH). The 440 BTK Level corresponds to 101 on the BBH. An aggressive trader could go long on any move over today's high of 98.68 in anticipation of the break. However as we all know resistance tends to hold on the first test. The recommendation I am making is to go long on a breakout, not a retest. Let's go long the BBH with any trade over 101.50.

 
 
  Jeff Bailey   5/14/02,  2:54:54 PM
Brocade Communications (BRCD) $24.19 +11% .... will take a couple of the BRCD May $25 calls (UBFEE) $0.90 here. Sell if stock trades its 200-day MA of $28.28 no stop. Link

 
 
  Jim Brown   5/14/02,  2:50:56 PM
Pivot Trade Entry Point Alert
At 11:04 this morning I suggested going long the QQQ if it broke $32.50. I overlooked the signal as the day progressed and after watching the markets this afternoon do not think the risk/reward profile still looks as good as it did this morning. We did not get the follow through on the Nasdaq all day until just a few minutes ago. I prefer being flat the QQQ into the AMAT earnings tonight. I am closing that signal here at $32.50 for no gain/loss. I repeat, I am FLAT the QQQ at this time with no open QQQ signals. Sorry for the confusion. Check the QQQ straddle comments above for a QQQ play.

 
 
  Jeff Bailey   5/14/02,  2:50:13 PM
Brocade Communications (BRCD) $23.95 +10% .. volume spike higher in last 5-minutes. Trading floor rumor circulating that BRCD showed a couple of slides at a conference today that may have revealed July quarterly revenues of $145-150 million (Multex consensus is $144.2 million, First Call $142 million) and another slide showed April quarter Silkworm 12000 products sales of $12 million, which is bettern than expected. BRCD is scheduled to report earnings tomorrow after the close of trading.

 
 
  Jim Brown   5/14/02,  2:43:51 PM
Pivot Trade Exit Point Alert
Nice gains from the S&P over the last few minutes. It appears everyone is pricing in good news from AMAT and no negatives from the IBM analyst meeting on Wednesday. This is exciting to see but dangerous from a risk standpoint since extreme bullishness often ends badly. I am changing the stop loss on the SPX long to 1092 to maintain profitability. This is just slightly over our entry point but should protect us from a late afternoon sell off. Cautious traders could always take profits at any time.

 
 
  Jeff Bailey   5/14/02,  2:40:35 PM
QQQ $32.49 +5.62% ..... raising stop to $32.25 into the close. Will stick out the entire QQQ underlying stock position at $32.99. If the bears want it to cover, they can have it all at $32.99.

However, will hold onto the Sep $30's for awhile.

 
 
  Jeff Bailey   5/14/02,  2:37:51 PM
Dow Industrials (INDU) 10,274 .... getting upside alert here at new intra day high.

 
 
  Jeff Bailey   5/14/02,  2:35:58 PM
QQQ $32.45 +5.49% .... upside alert here at new intra-day high. BTK.X seeming driving the QQQ's near-term.

 
 
  Jeff Bailey   5/14/02,  2:32:58 PM
Biotech Index (BTK.X) 418.09 +5.57% ... breaking to new intra-day highs. Should bode well for the QQQ bulls into the close.

 
 
  Jim Brown   5/14/02,  2:06:40 PM
Pivot Trade Signals
The after lunch dip has begun with all the indexes giving up some gains. This could probably be more appropriately call "the AMAT dip" as traders who fear what AMAT may say. Now we will get to see if the rally has legs.

Several readers have asked about putting on a QQQ straddle as we near the AMAT announcement. The May-$32 puts/calls are $.70 each right now and for $1.40 you could possibly catch a major move depending on the news. This is a valid strategy and considering the possibilities you may want to go out to June options. They are much more expensive at $3.40 for the straddle ($1.80/$1.60).

 
 
  Jeff Bailey   5/14/02,  1:51:12 PM
Oracle (ORCL) $8.60 +1.64% .... action has to be depressing for bulls holding this one long. Hints that institutions still looking for the door in some stocks, regardless of their perceived importance/status.

 
 
  Jeff Bailey   5/14/02,  1:44:20 PM
QQQ $32.21 +4.68% ... so far, I haven't gotten confirmation from MSFT above $55, or Dow Indu above 50-day MA of 10,259. With 140-minutes left until close of trading, risk I have is bullish gains. Will remove the risk from the account and take gains into the close. Leaving stop as profiled of $31.90 on full QQQ bullish position and let things play out.

 
 
  Jeff Bailey   5/14/02,  1:36:29 PM
Jeff, What about doing a straddle on AMAT going into tonights events?

Excellent idea. Goes along with yesterday's thoughts on a straddle for IBM ahead of their analyst meeting too! VIX.X dropping like a rock today, but price out premiums with targets (up/down) to make sure the premiums paid in the straddles you're looking at are worth the price.

 
 
  Jeff Bailey   5/14/02,  1:29:15 PM
QQQ $32.25 +4.84% ... watching 5-minute interval chart here. 50-pd MA on this time has 50-pd MA at $32.13 and sharply higher trend. QQQ bull with stop at $31.90 waits for encounter and monitors action. This is when it just starts to get interesting.

 
 
  Leigh Stevens   5/14/02,  1:01:40 PM
Index Trading Update: QQQ - would sell at 32.9-33.00 today, if reached. Risk to 33.5, with an objective to 31.25-31.00.

 
 
  Leigh Stevens   5/14/02,  12:57:58 PM
Index Trading Update: OEX - Suggest selling the OEX by buying puts today if 550 is reached. Risk to 555, with a downside objective to 535.

 
 
  Leigh Stevens   5/14/02,  12:54:06 PM
Index Trading Update: S&P 500 - I suggest selling the SPX by buying puts today if 1105 is reached. Risk to 1110, with a downside objective to 1080.

 
 
  Leigh Stevens   5/14/02,  12:43:48 PM
Subscriber QUESTION: "Leigh,How are you able to find such accurate levels and resistance points? Are there web sites or does OI publish or put out these areas? It is such a newbie question but one of great importance.

RESPONSE: The simple answer to your question -- well, there is no simple answer. It is mostly experience. Sometimes, most often, I pick these "implied" numbers off the hourly charts. But what - sometimes it’s a channel line, sometimes a prior high or low one end or both of an upside or downside price gap. For example, look at Cisco' s (CSCO) daily chart. Support was obviously at the top of the recent upside gap. Subsequent intraday lows fell right at that "line". Sure, enough, the stock then took of from there.

Sometimes, where I think support or resistance will be found is at a previously broken trendline, extended out and meeting up with current prices. Other times a particular moving average will act as resistance. This subject or topic is more of a lengthily study, which is in fact why I wrote my book (Essential Technical Analysis).

There are no web sites that do this - provide support & resistance areas, except perhaps "mechanically" by a formula. To do the analysis takes some time and effort. I put the numbers up during the day on the Market Monitor. However, you can just look at the Index Trader section nightly such as last night's at Link

 
 
  Leigh Stevens   5/14/02,  12:30:06 PM
Subscriber QUESTION: "The SPX expires thursday pm and QQQ friday when does OEX expire?"

RESPONSE: The S&P 100 (OEX) options trade through this Friday - trading ceases on Friday as the business day preceding Expiration date which, in the case of American Style exercise of OEX, is on Sat. (5/18 for May).

 
 
  Jeff Bailey   5/14/02,  12:04:41 PM
QQQ $32.31 .... taking more QQQ as bullish here (see 11:49:01). Looking for confirmation from Dow Indu and MSFT. Stop on all QQQ at $31.90.

 
 
  Jeff Bailey   5/14/02,  12:02:02 PM
Microsoft (MSFT) $54.80 +4% ... still hovering just below the $55 level. Correlating QQQ, MSFT and Dow Industrials near-term highs against each other. All three holding tough so far this morning.

QQQ trader can flip to 60-minute chart. Sees that MSFT has broken above 60-minute 200-pd MA, QQQ still below. Thus MSFT becomes "driver" for higher QQQ is my thinking.

 
 
  Jeff Bailey   5/14/02,  11:58:31 AM
Gold Silver Index (XAU.X) $77.41 -4.17% ... similar, but more extreme rotation today in this sector than in HMO or RXH. Will monitor XAU.X for support at $76.

 
 
  Jeff Bailey   5/14/02,  11:53:38 AM
Dow Industrials (INDU) 10,255 +1.43% .... 50-day MA at 10,259.66 to be exact Link . Looking to try and correlate further QQQ bullishness with break higher in Dow Industrials for new round of short-covering. Hasn't happened yet, but this is what I'm looking to try and trade in QQQ bullishness.

 
 
  Jeff Bailey   5/14/02,  11:49:01 AM
QQQ $32.23 +4.77% .... some nice little "inside hours" on the 60-minute chart. Will take the QQQ further bullish on a break above last hour's high of $32.29 at $32.31, then trail all QQQ bullish stock positions from earlier profile with stop at $31.90.

 
 
  Jeff Bailey   5/14/02,  11:40:55 AM
CNF Inc. (CNF) $35.30 +4.59% ... Our old buddy CNF is about to break $35. Who would have "thunk it"? Time for stops. Charts showing any good news? TRAN still under 50 dmv. Thanks

Stock adding to yesterday's 6% gain and "surprises" me a bit. New 52-weeker here Link . Have had retracement on CNF since first profiling the June $35's and have it from $20.75 to $39.87, which has 19.1% ahead at $36.21 an near-term target to be shooting for.

I like your observation of the 50-day in the TRAN 2,755 +1.91% up at 2,829 as target to correlate against. For move higher in the TRAN, may well need the Dow Industrials (INDU) to make the bold break above its 50-day MA to "fuel" the fire. Link

For trader that "averaged down" on the CNF pullback into $31.... if you feel you're a little too heavy in the calls then take some off the table on TRAN rally to its 50-day MA, especially if CNF then begins lagging such a move, which CNF looks to be leading.

 
 
  Jim Brown   5/14/02,  11:30:04 AM
Pivot Trade Entry Point Alert
We are now long based on the SPX trading over 1092.25 at 11:13. Hopefully this is not just a climax spike before the next down trend. (grin) The Nasdaq just got hit with a minor bout of selling after an hour of hard fought gains. A strong battle is being fought by both sides and there has been no clear winner for the last hour. The stop loss on the LONG signal will be 1085.75 which is .31 cents under the intraday low. I have been hit for losses several times now when signals were triggered by only a few cents. I am going to start making the entry/exit stops wider to avoid this. We will give up a few points of gains on winners and we should have fewer trades. Hopefully, only winners! (LOL)

 
 
  Jim Brown   5/14/02,  11:04:42 AM
Pivot Trade Exit Point Alert - corrected
The QQQ is struggling to get over $32.25 and the Nasdaq has flatened at 1703. Strong resistance on both the Nasdaq and S&P is keeping the ranges extremely tight on the 1 & 2 min charts. Pressure is building and a break is eminent. We just don't know which way. The QQQs are dead on resistance from April 30th. and a breakout from here could be strong. CLOSE THE QQQ SHORT HERE at $32.25 or below Go long if we break $32.50 to the upside.

 
 
  Jim Brown   5/14/02,  10:57:50 AM
Pivot Trade Exit Point Alert
It is official, we were stopped out of our aggressive short of the SPX at 10:45 after the SPX traded over 1091.50. Remember, we will trigger a long play on a breakout if the SPX trades over 1092.25.

 
 
  Jim Brown   5/14/02,  10:46:09 AM
Pivot Trade Entry Point Alert
It looks like the pressure may be building to the upside. If we get stopped out of the SPX short at 1091.50 let's go long with a trade over 1092.25. If we get a breakout to a new high the bears and bulls should start buying. These are aggressive and highly speculative trades and not for the faint of heart. Please act on these signals only if you are aware of the possible risks.

 
 
  Leigh Stevens   5/14/02,  10:44:31 AM
Sector Update: Semiconductors ($SOX.X) - Last at 537 - broke out strongly above key resistance at 509/510, at the prior lows - important now that SOX hold this area on any subsequent pullback; SOX is being led by Intel (INTC) which has gapped higher in what is probably the start of a good-sozed move. Its opening and current trading level (29.8) puts INTC above its 200-day moving average at 29.6, which is an important benchmark level. Next important area is its 50-day average at 30.1. There is one other technical hurdle to suggest the stock has reversed trend -- a close above the Jan.-May down trendline, would occur at 30.25. Ability to then stay above 30 would suggest a trend reversal.

 
 
  Jeff Bailey   5/14/02,  10:42:41 AM
Ciena (CIEN) $7.11 +1.97% ... bears that were playing this short from profile and break lower at $6.95 from "inside day" , I'm closing out here at $7.12. Stop using "inside day" would have had stop just above yesterday's high of $7.04, but gap this morning was at $7.42. $7.11 is close enough to keep loss small and settle down. Stock underperforming tech and taking notes. Link

 
 
  Jeff Bailey   5/14/02,  10:34:14 AM
QQQ $32.17 +4.58% ... not getting the pullback to $31.50. Will let the current holding work. Dip under $32 this morning probably market maker related and getting some short-term bullish stops cleared out, now move higher. Semiconductor Index (SOX.X) 536 +5.37% jumped sharp in last 5-minutes and hints that bears are edgy ahead of tonight's earnings from AMAT.

 
 
  Jim Brown   5/14/02,  10:33:18 AM
Pivot Trade Signals
Looks like a small buy program just hit and rallied the indexes back up to near earlier resistance levels. The real test of the market strength is approaching. If those morning highs can be broken then new buyers may appear.

 
 
  Jim Brown   5/14/02,  10:30:02 AM
Pivot Trade Signals
The VIX collapsed to 22.44 after the open this morning. This is approaching bearish levels as complacency returns to the market. The TRIN is 0.43 which is showing very overbought and is in risk territory.

 
 
  Jeff Bailey   5/14/02,  10:27:03 AM
Rotation Continue to see some rotation away from HMO.X (-2%) Link and RXH.X (-1%) Link , both "healthcare" sectors that saw large gains in first quarter. Most likely some near-term momementum players switching to technology near-term.

 
 
  Jim Brown   5/14/02,  10:23:09 AM
Pivot Trade Entry Point Alert
We are now short the SPX/OEX/DJX when the SPX traded below 1087 at 10:10. We need to watch this closely. The bullish sentiment has not gone away and this could just be an intra-morning profit taking dip. Our stop loss will be 1091.50 which would also be an entry point for a new long trade if it occurs. We are out on the bleeding edge with this short signal and we should be ready to act quickly if conditions change. The markets are very volatile and these gaps can go both ways very easy.

 
 
  Jeff Bailey   5/14/02,  10:23:00 AM
Expedia (EXPE) $78.39 +2.79% ... to trader from 05/09/02 11:46:07 that bought both June and July calls. Get rid of those June's, keep the July's and get the trade under control. You've got gains here, and I'd take the Junes off the table.

 
 
  Leigh Stevens   5/14/02,  10:21:49 AM
Index Update: COMP has been dipping under its open in this first hour of trading. COMP (and Nasdaq) looks like a sell if it reaches the 1720 area.

 
 
  Jeff Bailey   5/14/02,  10:20:51 AM
Macromedia (MACR) $22.70 +4.75% ... For bulls long from 05/09/02 10:42:33 or earlier profile stock trading strong. Look for surge of strength to $25 intraday for short-term traders. Link

 
 
  Leigh Stevens   5/14/02,  10:18:36 AM
Index Update: Resistance & Support - COMP - Resistance > 1720-1725; Support > 1675, then 1652, the low end of the hourly upside gap; NDX: - Resistance > at 1290, then, 1310; Near support > 1280, then 1265, then 1245 at low end of hourly upside gap; QQQ - Resistance > 32.1, then 32.6; support > 31.5; then, 31 at low end of upside gap

 
 
  Jim Brown   5/14/02,  10:15:42 AM
Pivot Trade Entry Point Alert
We are now short the QQQ at 10:10 when the QQQ traded below 31.90. This may be contrary to the prevailing sentiment but the gains of the morning are not holding. This is a strong short signal for the bears. They love to short strong bounces as entry points. AMAT could wreck the bullish sentiment and there is too much profit for the longs after yesterday's gains. Our stop loss will be $32.50 which is 18 cents above the high of the day. That would also be a long entry point should we trade that high but I will post it as a new entry if it happens.

 
 
  Jim Brown   5/14/02,  10:09:39 AM
Pivot Trade Entry Point Alert
Let's go SHORT the SPX (OEX/DJX) if the SPX trades below 1087. The initial opening pop was as strong as everyone expected and the sentiment is strongly bullish. Shorts are getting creamed. However there is weakness beginning to appear.The pull back established at benchmark on the S&P before the first bounce and if that level is broken we want to be short. I repeat SHORT the SPX/OEX/DJX if the S&P trades below 1087.

 
 
  Jim Brown   5/14/02,  10:09:17 AM
Pivot Trade Entry Point Alert
Let's go SHORT the QQQ if the QQQ trades below 31.90. The morning pullback stopped at $32. If that level is broken we want to be short as traders take profits from yesterday's gains and today's bounce. Traders will still be afraid of AMAT tonight and IBM tomorrow.

 
 
  Jeff Bailey   5/14/02,  10:07:41 AM
Treasury Watch Good round of selling today. 10-year YIELD ($TNX.X) break well above the 5.25% YIELD level. This was identified last week as a level bears in stocks didn't want to see and that bulls did want to see. Link

Lots of cash freed up over last 5 sessions and starting to have in impact on stocks.

 
 
  Jeff Bailey   5/14/02,  10:03:17 AM
Dow Industrials (INDU) 10,235 +1.24% ... early rally came right to a rolling 50-day MA. Secondary level of bullishness today may come from a break above this 50-day of 10,260. Link

 
 
  Jeff Bailey   5/14/02,  9:55:45 AM
QQQ $32.05 +4.16% .... QQQ bulls that already have a position from Friday or yesterday at lower levels. Look to leverage up at $31.50, then stop this trade (if filled) and earlier positions at $31.25. "Hurdle" for resistance is the 200-pd MA on 60-minute interval chart at $32.59, but targeting $33.33 into the close ahead of AMAT earnings tonight.

 
 
  Leigh Stevens   5/14/02,  9:55:31 AM
Index Update: Support & Resistance - SPX Near resistance > 1100, then 1108; Support > 1080; OEX - Resistance > 550; Support > 535; DJX - Resistance > 103, then 104; Support > 101

 
 
  Jim Brown   5/14/02,  9:53:23 AM
Pivot Trade Signals
A small pull back from resistance could be an indication of weakness or an entry point but we need to watch it develop. Remember the gains yesterday as shorts covered in front of the AMAT earnings tonight. That move could have removed some of the pressure. The averages stopped exactly at resistance indicating strong overhead supply despite the strong bounce. That is something we need to take into account the next time we near those levels.

 
 
  Leigh Stevens   5/14/02,  9:47:22 AM
Index Update: Gap higher on the indices puts them above their daily down trendlines, above the pivotal 21-day moving average, puts the 14-day stochastic momentum indicator strongly into an uptrend and sets up higher objectives. However, it would be surprising not to see the indices settle back into these upside gaps. COMP has gap now from 1653.1 to this mornings low at 1694.15. When both hourly osciallators that I use (5 & 21) line up at their top extremes and if in a resistance area, this will be next potential sell signal.

 
 
  Jeff Bailey   5/14/02,  9:44:31 AM
Microsoft (MSFT) $54.56 +3.53% .... $55 is the "key" level near-term here and watching stock closely. Market makers pulled a "trick" last week and got some bears to trigger stops right at $55, then stock fell to $50. Back in X's on the p/f chart and bullish count of $68 still in play. Link

Will continue to use MSFT for QQQ trading as it is largest weighted in QQQ.

 
 
  Jim Brown   5/14/02,  9:39:34 AM
Pivot Trade Signals
No sign of weakness yet. I know it feels like the market is running away but we need to get another five minutes or so to see if this is going to stick. Be patient. If it is going to stick there will be plenty of points ahead of us. The Nasdaq has slowed exactly on resistance at 1700 and the Dow is nearing 10250. The S&P is only 3 points away from resistance at 1090. If a pull back is going to occur it should be soon.

 
 
  Leigh Stevens   5/14/02,  9:39:15 AM
Index Update: QQQ open at 32, creates break out that puts the stock well above its hourly down trendline at 31. Above 32 also puts the Q's above its 21-day moving average at 31.9, which may not last into the close. If it does close at or above the average, then it sets up 34.50 as a possible upside objective.

 
 
  Jeff Bailey   5/14/02,  9:38:43 AM
QQQ $32.21 +4.64% .... I may get aggressive with another bullish trader here in about 15-minutes. QQQ strong at the open. May do same as yesterday and take another position, look to inflict some pain for complacent bears. This is what the pro's will do that have been on the right side of things past couple of days. Will leverage short-term positions with trailing stops.

 
 
  Jeff Bailey   5/14/02,  9:34:21 AM
Dow Industrials (INDU) 10,169 ... getting upside alert at 10,150. This is triple-top buy signal on point figure chart and break of bearish resistance. Good bullish trade here in the Dow Diamonds (DJX). Stop would be 9,900 on the Dow Indu. Link

 
 
  Jeff Bailey   5/14/02,  9:29:53 AM
QQQ option traders holding the QQQ September $30 call (QAVID) from 05/06/02 profile, we're not even close to target of $34-$35 at this point. Hang in there. NASDAQ-100 Bullish % ($BPNDX) only at 28% and still some bullishness left to play out until September. Link

 
 
  Leigh Stevens   5/14/02,  9:28:40 AM
Nas futures 40 pts. higher. Bulls are hoping for some positive earnings surprises this week. If this does not occur, what went up will come down.

 
 
  Jeff Bailey   5/14/02,  9:27:57 AM
QQQ $30.78 ... will get the gap higher we were looking for from yesterday. Bulls that took my trade from Friday ($29.68) or yesterday at $30.61, I will raise stop to $31.25 at the open. Will monitor QQQ action for first 15-minutes of trading, get an idea of bearish sentiment and/or complacency.

Will monitor the $32 level closely, especially into the close. A close above the $32 level sets the stage for further gap higher scenario tomorrow, as outlined in Friday's 03:00 intraday update. Link

 
 
  Leigh Stevens   5/14/02,  9:27:14 AM
ON THIS DAY in 1804, fammous early-American Explorer William Clark set off from Saint Louis, Missouri. He and Merriweather Lewis would have adventures that would be handed down from their wonderful descriptive dairies. In honor of this this day take a wilderness hike this month.

 
 
  Leigh Stevens   5/14/02,  9:22:15 AM
Index Futures: DJ Futures +135 ; SPX +15 ; Nas futures +50 - Retail Sales giving a real boost to the indexes this am.

 
 
  Jim Brown   5/14/02,  9:21:58 AM
Pivot Trade Signals (What is this?) Link

Futures are up strongly for several reasons. Intel was upgraded to a buy at Robertson Stephens. They said this could be the first quarter in over five years that Intel is not going to cut the price of its leading chip. Also, Wal-Mart beat the street with its earnings this morning and the Retail Sales came in stronger than expected. It was a bullish morning for everyone but WCOM Which was dropped from the S&P-500 due to its low share price.

The Intel and Wal-Mart news along with the strong Retail Sales have spiked the Dow futures +145, Nasdaq +48, S&P +15 and indicate another gap open morning. Do we chase it to the next resistance level? Hard question. With back to back chip upgrades, AMAT yesterday and INTC today, the shorts have got to be nervous and the futures are showing this. The Dow has resistance at 10250-10300 which is about where the futures are indicating we will open. S&P resistance is around 1090 and that is about where it will open. The Nasdaq could hit next resistance at 1700.

Should we chase the markets? Depends on where it opens. There is always the possibility of a gap and crap but I doubt it today. I suggest we prepare to go long at the first opportunity and hope for a monster short covering rally.

Opens like this are always a problem because you don't want to go long on the opening tick only to have it collapse back on top of you. The S&P Futures stopped exactly on resistance at 1092 and a move over that level will cause massive covering by hedge funds. The potential is here and we will try to read it quickly as it happens.

 
 
  Leigh Stevens   5/14/02,  9:18:41 AM
It's Showtime! S&P futures + 16. Per my Sunday recommendation objective on SPX calls is SPX at 1075 or higher, which should occur on the opening. These would be SPX calls bought on my Sunday evening recommendation to buy SPX at 1048 or on move above 1060, whichever came first. What came first yesterday was an advance from the 1054 area.

 
 
  Jeff Bailey   5/14/02,  9:10:21 AM
Good morning! get those nose-rings in this morning. Retail sales jumped to 1.2%, which was double the 0.6% economists were looking for. Stock futures firmly higher.

 
 

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