Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
  Jim Brown   5/20/02,  4:21:13 PM
Pivot Trade Wrap (What is this?) Link

Well that was a fun day! The follow through from Friday was zero and the profit taking began. Support held at 10230/1700/1090 but offered only a weak attempt at a rebound. The excuses offered were possible terrorist attacks and a much weaker than expected Leading Indicators report. After the initial drop when the indicators were released at 10:am the markets traded sideways for the rest of the session. There was an attempt to take them lower just before the close but the support levels held if only just barely.

The bullish sentiment from last week has not disappeared but did move to the sidelines. There were minor attempts at buying but the volume was VERY light. The sellers were in control only for the first two hours before that volume also dried up. I don't think the pull back today is an indication of things to come. I think it was just simple profit taking from last weeks gains.

The open LONG position that was triggered at the close on Friday was stopped out two minutes after the Leading Indicator numbers were announced. After watching the markets trade in a narrow range for sometime I issued a signal to go long once the post announcement high was passed on any rally. That happened at 1:30 when the only obvious buy program for the day executed. The SPX traded only +.13 cents above the trigger price before falling back to support and stopping us out again.

When you suffer two trading losses in one day it is best to sit out the rest of the session. I call this my "two strikes and I am out" rule. This prevents a trader from trying to recapture earlier losses by over reacting to the next "opportunity" by letting emotion get in the way. Tomorrow is another day and I will a little pickier about the next entry point. See you at 9:15 !

 
 
  Jeff Bailey   5/20/02,  4:15:51 PM
CVC is up today on an upgrade but has not hit the $23 were if hit sell the put and take the loss. Do you think it is a good time to by the June 20 puts now?

I have a "fitted" retracement on Cablevision (CVC) $20.65 +6.7% from $49.35 (08/21/01 high) to $13.47. This gives me a nice "fit" at 50% retracement of $31.41 (02/20/02 relative low) and then 38.2% at $27.17 (resistance for 04/24 and 05/02 rallies). Downward regression channel from the 12/31/01 high has found stock bouncing from lower end of this channel, 2 previous times, and now a third.

This would have me looking for a rally to mid-point of channel at/near $23 as entry point for put, then good correlation for further resistance at/near $27 from criss-crossing regression and retracement.

Point/figure chart Link shows bearish count of $15, and if achieved, would tie in with lower end of regression channel on/about 06/10/02 based on extension of this regression channel lower.

 
 
  Jeff Bailey   5/20/02,  3:51:41 PM
Everest Group (RE) $62.70 -0.46% ... Hi Jeff: With today's big down day, RE is holding up pretty well, Are the Jun 60 and 65 puts still in play?

Friday was an "inside day" for RE and today's trading had the stock breaking to the upside. Therefore, trader perhaps using the inside day for an action point is currently "on hold" and wouldn't be trading.Link I will also note a regression channel anchored from the relative high of 02/14/02 shows the stock trading right in the middle of lower regression channel. Would prefer to get an action point for short/put at/near $64 (mid-point of regression) or better yet at upper end of channel at/near $67.

Without using the "inside day" technique to initiate a trade, the stock does look bearish. Dorsey/Wright has the stock classified as "insurance." Currently, that group is "bull confirmed" at 82%. However, RE has given multiple "sell signals" and currently trades below trend with a bearish vertical count of $57. Link

While I sure wouldn't be a buyer of the stock, would only be looking partial position put at this level.

 
 
  Leigh Stevens   5/20/02,  3:46:37 PM
Subscriber follow-up question: "Hi Leigh: Sorry -- are the percentages to which you refer (for envelopes) the same as the standard deviation??

RESPONSE: NO - Bollinger bands combine the envelope technique with a measurement of current or recent price volatility to determine the optimal placement of the upper and lower lines. Just as with envelopes, two bands – the convention is to call these lines “bands” to distinguish from the fixed percentage envelope technique – are placed above and below a centered moving average, which is often set (defaults) to 20-days. However, unlike lines that are a fixed percent above or below the moving average, Bollinger bands are plotted two standard deviations above and below the average.

Standard deviation describes how prices are arrayed around an average value. One standard deviation is a set of values that contains close to 70% of the price fluctuations that occur above and below the moving average used in the Bollinger band calculation. 95% of the fluctuations will occur within two standard deviations of the moving average in question. Since each Bollinger bands is placed at a fluctuating line that is equal to two standard deviations, 95% of all price action will theoretically occur within the upper and lower lines. Each band represents therefore, implied support or resistance. Price swings are unlikely to be sustained above or below these lines for long

 
 
  Leigh Stevens   5/20/02,  3:32:28 PM
Subscriber QUESTION: "Hi Leigh:I am new at using Bollinger Bands but find them, and what you say about them, fascinating. Perhaps you would like to discuss the other percentage values you use for the other indices? Also, do you cover this in your new book?

RESPONSE: am not using Bollinger, Bands, which automatically expand with current volatility as they employ a measure of the stock or indexes' standard deviation in the formula. I use simple moving average "envelopes" - in this Study you vary a "centered" simple moving average and also vary the percentage that a bottom and top line "float" above/below the moving average.

The envelope set up would ideally allow a different figure for the lower envelope line versus the upper and vice versa. However, this is not a huge handicap if the study or indicator inputs are not set up this way. To set the values, I am looking at highs and lows and see what percent figure (relative to a 21-day average) was represented by the peak or low. Only in this way, am I measuring volatility.

Yes and no, as far as covering the specific values in my book best used for different indices. There is a lot about the technique and using it however.

 
 
  Jim Brown   5/20/02,  3:04:49 PM
Pivot Trade Exit Point Alert - DJX/OEX/SPX
The DJX/OEX/SPX long was stopped out at 3:01 when the SPX traded below 1092.75. This does not appear to be our day. This is the second trade today that was stopped out for a loss, which triggers my "two strikes and I am out" rule. When things are going against you move to the sidelines.
All current signals are cancelled !

 
 
  Leigh Stevens   5/20/02,  2:55:02 PM
Subscriber NOTE/QUESTION: " Leigh, have been wanting to ask about how you draw your trend lines. The weekend Index Trader provides several opportunities for me to scratch my head. Sometime, when convenient, can you go over how you decide where to attach the lines? The attachment points are not always clear to me. Thank you for your Market Monitor input. It's always helpful."

RESPONSE: Well, this was a major section in my book, Essential Technical Analysis. Let me see if I can give you the very short answer. I tend to use "internal" trendlines that connect the MOST number of highs or lows. Jack Schwager, as far as I know, coined this term. I have also called trendlines drawn this way, "best fit" trendlines. We are taught in Technical Analysis 101 to draw trendlines through the MOST extreme points and these points should not be cut through or bisected.

However, we need to understand that a trendline is a visual representation of the rate of change or rate of ascent or decent. For example in an upswing, a stock increasing in value by 2% a week has a much steeper trendline than one increasing at an average rate of 0.5 percent. I look at charts and think what is the line connecting highs or lows, that best represents the uptrend or downtrend that the stock or other instrument is in. Sometimes or often, that line will cut THRU a spike high or low, where that high or low is NOT really typical of the line connecting MOST lows or most highs. To do this type of interpretation takes some experimentation -- when you have a trendline that you think is the "best fit" -- how do future pullbacks or upswings behave when they hit that line. It the trend stops or slows down at this intersection, then you know you have the best trendline - one that will reflect the DOMINENT trend.

 
 
  Jeff Bailey   5/20/02,  2:42:08 PM
AT&T (T) $13.32 +3.49% ... biggest gainer in the Dow Industrials today. Bouncing off lower end of regression (taken from the 08/02/01 high) on light volume of 7.7 million shares. Would expect significant resistance at/near the $14.00-$14.50 level. Link

 
 
  Leigh Stevens   5/20/02,  2:33:40 PM
Subscriber question: "Leigh, I bought DGX June calls on the pullback. It is getting very close to my stop. Do you see their pullback getting more extended or a second leg down just like the HMO sector?"

RESPONSE: Well, Quest Diagnostics (DGX) is right at its Feb. - May up trendline at its low for the day at 88.61. A close below 88.60 would suggest that the stock could drop further, maybe testing support in around 83.5. A close in the Healthcare index ($HMO.X) below its up trendline at 589-590 - depends on how you draw trendline - would suggest that there could be another down leg. This, rather than correcting TO the trendline, like many of the HMO stocks have, then continuing in its up trend.

 
 
  Jeff Bailey   5/20/02,  2:28:46 PM
Cell Therapeutics (CTIC) $9.98 -19% ... one of those stocks out there with a bearish vertical count of $0.00 or N/A. Trade today at $9.97 was new 52-week low. Volume is heavy today at 2.3 million. Trader talk is that downside action today attributed to a poorly received presentation at the American Society of Clinical Oncology conference, the details of which are still unclear. Link

 
 
  Leigh Stevens   5/20/02,  2:13:26 PM
Index Update: ALL - and, all have similar patterns, having held at or above their prior hourly lows, which were all pretty well-defined (horizontal) lines at the area of hourly lows of last week, AFTER the big upside gaps of Tues. It's bullish for the indices to resist "filling" in their price gaps like this.

The technical tea leaves are mixed: on one hand, the hourly chart patterns -- looking a bit like minor bear flags - suggest to me like the indexes could still take out their lows of today. On the bullish side, the volume is low and if the Market is now in an uptrend, volume SHOULD contract on declines. Also, the hourly stochastics, both on a 5 and 21-hour basis, are now at (Nasdaq) or near (S&P) oversold levels. This fact, plus holding chart support, are about all that's needed to suggest another buying opportunity may be settting up. I'm still waiting before pulling any trigger however.

 
 
  Jeff Bailey   5/20/02,  2:12:59 PM
Expedia (EXPE) $79.87 -4.9% ... Link stock dropping to session low and rather sharp in past 30-minutes. Orbitz travel site files for IPO. Also in the group are ROOM, TSG, TVLY and PCLN.

 
 
  Jeff Bailey   5/20/02,  2:06:38 PM
Treasury Budget was $67.2 billion. No surprises here. Slightly below the $69 billion estimate.

 
 
  Jim Brown   5/20/02,  1:58:38 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
We were triggered on the DJX/OEX/SPX long when the SPX traded above 1096.50 at 1:52 PM. I am going to put a stop of 1092.75 on this signal. The last relative low at 12:45 was 1093.10 and I want to get just below that.

 
 
  Jeff Bailey   5/20/02,  1:58:37 PM
QQQ $32.27 -2% ... seeing a bit of a tick higher on 30-minute chart ahead of the scheduled 02:00 PM EST release of the Treasury budget numbers. Again, analysts looking for a number near $69 billion. Will most likely need to see a number +/- $10 billion to get much of a reaction.

QQQ traders will note that earlier session lows of $31.94 came right near/at the 05/01 and 05/08 relative highs. Very correlative perhaps with the 30-minute chart action noted in the GSO.X (see 01:00 intraday update) Link at it's mid-point of downward regression channel.

QQQ bear needs a break of GSO.X $129 and QQQ break of 31.94 from here to find success. If so, good shot for QQQ bear to the $31.00 level.

 
 
  Jeff Bailey   5/20/02,  12:48:23 PM
Gold/Silver Index (XAU.X) 83.40 +3.38% ... surging to a new 52-week high today. Still some room to the bullish vertical count of $106 from the conventional $2 box scale on the point/figure chart. Bears continue to get squeezed and have been very eager to cover on pullbacks. Link

Barrick Gold (ABX) $22.49 +2.3% continues to chug higher after that triple-top at $20. Link

 
 
  Leigh Stevens   5/20/02,  12:12:32 PM
Subscriber NOTE: "Hi Leigh. Just thought I'd take a second about your recent Market Monitor posts - since I couldn't follow during the day, came across this:

'I have done my envelope line percentage levels by trial and error almost exclusively once I saw how valuable they were in showing not only oversold & overbought areas, but at what PRICE -- this being makes them (envelopes) more valuable than simple oscillators. For they are, really, a type of oscillator on the indexes. My theory about this has to do with the nature of an index. The S&P 500 has traded 90-95% of the time within simple moving average bands or trading envelops that have not varied by more than 3% on the low end and 5% on the high side (most common however is 3-4%) for some 15 years that I have used them.

"This is near priceless info and something I'd concluded on my own after much research a few mths ago. Range data is something rarely talked about but seemingly one of the larger pieces of the trading puzzle. Seems like we should be able to work a better trading approach based on this knowledge. Maybe you do, I dunno."

thanks for your note. I have not found a "mechanical" way to take advantage of this information, in the sense of automatic buys/sells, etc. However, have found use of the 21-day average with simple envelope bands of 3-5% on SPX (differing percent numbers on other indexes), to be invaluable information. That is, once the indexes get fully into the area of the upper or lower envelopes, then start to reverse. This is usually a good "signal" for a move back to at least the 21-day moving average.

The 21-day avg. will then often be the deflection point that will place a cap on rallies or provide a floor for a rebound. If the indexes then move through the 21-day average, a move to the opposite band often turns out to be the outcome.

Of course, I show these bands and how I am using them, quite often on my evening Index Sector wrap; e.g., yesterday's (Sunday) at Link

 
 
  Jeff Bailey   5/20/02,  12:09:20 PM
HI, Jeff, BRCD seems very weak. I like to put it. Could you profile it ? Thanks.

Brocade (BRCD) $21.19 -3.7% .... Dorsey/Wright classifies the stock as "computers" which is a rather broad classification as they don't have a "networking" type classification (mostly due to the fact that there just aren't a lot of stocks to get a broader feel for bullish %) and computers are "bull correction" at 37.6%. A reading of 32% would have sector in "bear confirmed" status, while a reading of 46% would be "bull confirmed". For now, sector more bearish.

Brocade (BRCD) recently achieved, then exceeded its bearish vertical count of $22, so difficult to assess risk/reward from supply/demand. However, bears could use the recent spread-triple bottom at $21 and Professor Davis' study for that pattern to arrive at.... profitable for bear 86.5% of the time, average gain of 24.9% in 4.6 months. So.... 24.9% of $21 would be target of $15.77. Link

Relative stength for BRCD has recently weakend versus the Networking Index (NWX.X) as depicted by the "sell signal" on RS at 102. Link

 
 
  Jeff Bailey   5/20/02,  11:37:18 AM
Hi Jeff, Take a quick look at IGENs PnF chart. Is that a great support line or what? It looks like it might be getting ready to violate that support though, would you short this at 36 or 37?

I will buy puts on biotechs, but don't like to short them. Only reason is if the company I'm bearish on finds a cure for something and the stock gaps significantly higher.

As IGEN Intl. (IGEN) $38.30 -2.64% goes, yes, I'd be looking to "put" the stock, but only 1/2 position on a break at $36 Link . According to Dorsey/Wright and Assoc. the biotech sector is now "bull alert" at 29.09%. This status is very similar to what we saw in the QQQ/NASDAQ-100 back on Thursday, May 9th.

If a trade at $36 were to take place, then the bearish resistance would begin at the $45 level (above the column of X from $40-$44 and you can kind of see how the latest rally to $43 would have stopped short of that trend. This is one of the stocks currently on a sell signal in the group. Bearish vertical count is $29. Right now, p/f chart risk/reward is ... risking stop to $43 to reward of $29, or roughly $5/$9 from current levels of $38.

 
 
  Jim Brown   5/20/02,  11:20:20 AM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
Support held on the first test near 1090. The narrowing range over the last hour give us a set of pretty clear entry points. I am going to issue a signal for both a long and short. Whichever way the markets move from here will activate a signal. We will follow them up with tight stops to protect the trades.

Go LONG the DJX/OEX/SPX if the SPX trades over 1096.50 (548.50 on the OEX)
Go short the DJX/OEX/SPX if the SPX trades below 1088.75 (540.75 on the OEX)

 
 
  Leigh Stevens   5/20/02,  11:06:54 AM
Index Update: Nasdaq Composite and Q's also have now traded under near support so we can expect some further weakness unless there is a rebound that keeps COMP above 1700 and QQQ above 32.

 
 
  Leigh Stevens   5/20/02,  11:02:58 AM
Index Update: Nas 100 (NDX) has dipped under technical support at 1288-1290. The key chart support I'm looking at it continues to be the low end of upside gap area well under this. The hourly chart gap from last week is from 1244 to 1282. I've been anticipating that some to all of this gap will be filled in by NDX trading back down into this zone.

 
 
  Leigh Stevens   5/20/02,  10:42:15 AM
Index Update: Nasdaq Composite (COMP) & Nas 100 (NDX) are also knocking on door of technical support at 1700 in COMP and 1290 in NDX. Anyone's guess whether these levels are going to be penetrated. I've been thinking that near support will give way, as better support looks to be at lower levels.

 
 
  Jeff Bailey   5/20/02,  10:41:28 AM
Computer Associates (CA) $16.54 -5.8% .... breaking to relative lows here Link . This was a stock we mentioned a couple of weeks ago from WSJ article on NYSE listed stocks with very heavy short interest. Current bearish count from p/f chart is $11.00. Link

Wall Street Journal reporting today that the Justice Dept. and the SEC are trying to determine whether CA wrongly booked over $500 million in revenue in FY98-99 as part of a scheme to enrich the company's senior managers.

 
 
  Leigh Stevens   5/20/02,  10:37:05 AM
Index Update: Nasdaq - QQQ has gotten to prior technical support at 32-32.1. A break below 32.00 should bring in more selling.

 
 
  Jeff Bailey   5/20/02,  10:33:07 AM
Moody's sees possibility for bank upgrades In its yearly industry report on the biggest banks in the industry, Moody's says it expects ratings of major U.S. banks to remain stable because their earnings are robust and because the erosion of their asset quality is manageable. In fact, Moody's believes that "upgrades are a possibility among U.S. banks, and we still believe that a select number of major U.S. banks could eventually populate the Aaa rating category, at the bank level."

 
 
  Jim Brown   5/20/02,  10:29:09 AM
Pivot Trade Signals
The S&P is nearing support at 1090. This support level will be key to holding the majority of the gains from last week. An aggressive trader would be looking to short the broader markets on any break below 1089, which was the low range for Wed/Thr last week. Bulls will be looking for a bounce at that level. This is where we will make our next trading decision.

 
 
  Jeff Bailey   5/20/02,  10:24:20 AM
Joseph A. Bank Clothiers (JOSB) $24.32 +1.92% .... multiple sessions of new 52-week highs. Company reported Q1 earnings of $0.25 a share, $0.08 better than consensus. Company expects Q2 earnings to exceed year-ago earnings of $0.05 (consensus $0.10) and sees FY03 earnings of at least $1.25 (consensus $1.19).

P/f chart has beens strong and giving multiple "buy signals." Link . Stock exceeded bullish vertical count of $21 from October (red a) of last year and difficult to assess longer-term upside. First sign of trouble is at $19.00.

 
 
  Leigh Stevens   5/20/02,  10:22:04 AM
Sector Update: Lots of red ink in most leading sectors, such as financials, airlines, software, and healthcare - Prudential Securities downgraded Humana (HUM) & Wellpoint (WLP) in this group and the stocks got hit with heavy selling this morning. HUM and WLP both gapped lower, but HUM is at its intrday high (14.62) and may close the gap by climbing back to Friday's low at 14.75. Technical picture however, has gone from "normal" type correction to suggesting a second down leg. My price entry suggestions in the healthcare group ($HMO.X) in Sector trader (see Link )were reached recently in 3 stocks - WLP, HUM and Pacific Health Care (PHSY). Only PHSY is still holding its uptrend well. Will update sector strategy on these stocks in my sector wrap up after full day trading. Would rather it was 2 of 3 doing well.

 
 
  Jeff Bailey   5/20/02,  10:15:52 AM
Dow Breadth negative with 27 down and 3 up.

Gainers are HD +1.68%, BA +0.66% and WMT +0.3%.

Biggest % losers are GE -2.4%, MSFT -2.3%, INTC -2.3%, EK -1.9%

 
 
  Jeff Bailey   5/20/02,  10:11:50 AM
Merrill Lynch selling tech into strength Merrill Lynch saying that "mainstream" technology is not a growth sector anymore, and reiterates long-standing strategy of selling tech shares into strength given NASDAQ's recent rally; fragmentation, overcapacity, margin pressures, and pro forma reporting continue to plague the industry; however, the Pentagon may be the next "Killer Application." Recommends redeploying assets into attractive themes such as: dividend-paying utilities, consumer staples, aerospace/defense, drugs, energy, and corporate-oreiented financial stocks.

I'm wondering.... "Merrill reiterates long-standing strategy of selling tech..." when was that?

 
 
  Jim Brown   5/20/02,  10:09:11 AM
Pivot Trade Exit Point Alert - DJX/OEX/SPX
The DJX/OEX/SPX position was stopped out at 1096.75 at 10:02 after the leading indicators number came in twice as bad as the expected -0.2%. The -0.4% number could energize the bears and depress the bulls. We are flat on everything and will wait on the sidelines for another entry point once conditions stabilize. A bounce from these lows would be very encouraging.

 
 
  Leigh Stevens   5/20/02,  10:03:34 AM
Leading Economic Indicators (LEI) - Reported at -0.4%, weeker than anticipated as -0.2% was consensus estimate. Spending by consumers continues to keep the LEI from dipping overly much. Still, the number has brought in increased selling.

 
 
  Jeff Bailey   5/20/02,  10:02:41 AM
Emulex (EMLX) $32.77 +3.11% ... stock getting a boost today from Pacific Crest upgrade to "buy" from "neutral" based on improving Fibre Channel fundamentals, the potential for market-share gains in 2002, and a growing Fibre Channel ecosystem that should drive demand for HBAs into the foreseeable future; believes there is upside to forecasts.Link

We mentioned EMLX as bullish on Thursday 02:35:13 Link for Friday's action from "inside day." Link

Trader's long from Friday's open of $32.50 need a break above Friday's high of $32.84, but more importantly some help from broader NASDAQ here.

 
 
  Jim Brown   5/20/02,  10:00:58 AM
Pivot Trade Signals
The markets are worsening as we approach the 10:AM Leading economic indicators. Bulls apparently want to see the news before buying this dip.

 
 
  Leigh Stevens   5/20/02,  10:00:29 AM
Index Update: - Nasdaq - after being up a whopping 141 pts. last week, the Nasdaq Composite (COMP) is also seeing seeing selling pressure, with Nasdaq TRIN above 1.00, but at and above 1.50 is where the Arms Index shows extreme selling pressure; NDX - Nasdaq 100 would test key support in the 1290 area; QQQ, everyone's favorite way to play the tech darlins, will test support if it drops to 32-32.1.

The selling pressure has eased a bit from the early going. Watch the Arms Index ($TRIN - NYSE & $TRINQ - Nasdaq) to see if readings drop back under 1.00 which is where selling is no longer predominating.

 
 
  Leigh Stevens   5/20/02,  9:51:47 AM
Index Update: Hourly chart up trendlines have been penetrated in SPX - key support > 1088-1090; OEX support > 540-541; DJX will test support if the index gets to 102-102.2

 
 
  Jeff Bailey   5/20/02,  9:50:51 AM
Russell-2000 rebalancing CE Unterberg Tobine in a pre-market note said they expect the annual reconstitution of the Russell 2000 Index (RUT.X) to involve a substantial shift away from the biotechs due to underperformance; possilbe additions include ALTH Link , VVUS Link , and WFHC Link and possible deltions include PCYC Link , VION Link , and NVAX Link .

 
 
  Jeff Bailey   5/20/02,  9:37:48 AM
Overture Services (OVER) $19.70 +6% ... getting upside alert for bears short/put the stock. Stock is bucking the early morning trend here and would look to move to the sidelines if bearish. Looks like short-covering on weakness.

 
 
  Jeff Bailey   5/20/02,  9:30:02 AM
Protein Design Labs (PDLI) $12.27 ... stock getting hit lower at $11.11 after the biotech company reported that a Phase III trial of Zamyl was well tolerated, but did not achieve a statistically significant overall response in myeloid leukemia patients who had failed chemotherapy or had relapsed following chemotherapy. The company also said, "Based on this analysis, we do not plan to seek meetings with regulatory authorities or to consider filing a Biologic License Apllication for Zamyl at this time."

 
 
  Leigh Stevens   5/20/02,  9:28:33 AM
Wall Street Journal (WSJ) - stories on Fed probe of Computer Associates to determine if CA wrongly booked over $500 million in revenues in '98-'99 in a scheme to enrich the firm's senior management. Anyone who knows the company, knows that this group has been known to like to put something away for a rainy day or two or 10,000.

The Feds are also probing Aldelphia (ADLAC) and are focused on questionable 3rd. party transactions and possible accounting problems involving the founding Rigas family. Did they forget the other shareholders?.

Schering-Plough (SGP) agreed to pay $500 million to resolve manufacturing problems, in largest penalty every imposed by the FDA.

And, last by not least, the WSJ reports that consumers are MORE satisfied with airline service than at any time since 1997 -- they didn't talk to ME, that's for sure.

 
 
  Jeff Bailey   5/20/02,  9:23:06 AM
Economic data Later today at 10:00 AM EST, Leading Indicators will be released. Economists are looking for a -0.1% decline.

Then at 02:00 PM EST the Federal Budget is expected to report a $68 billion surplus, but well below last year's $190 billion surplus.

 
 
  Jim Brown   5/20/02,  9:19:16 AM
Pivot Trade Signals

Futures are down slightly as you would expect after the big gains last week. The key will be the retail investor this morning. If they feel bullish after last week then retail buying could put a floor under the market. We need a bounce at the open to convince shorts of the need to cover but it appears we could get a small dip instead. Today will be critical for this rally. No follow through could put doubt back into the bulls and real profit taking could settle in.

Our only position is the DJX/OEX/SPX long that was triggered at 1106 at the close on Friday. I want to put a very wide stop on this position of 1096.75 to keep from getting jerked out on the morning volatility. After the first 30-45 min we will tighten it up.

Cancel any open signals except for the LONG on the Biotech Holders at 101.25. The upgrades on the generic drug makers today could trigger that position.

 
 
  Leigh Stevens   5/20/02,  9:17:19 AM
Good Morning - it's Showtime! Index futures are off this morning. DJ futures are down 29 pts, Nas futures -9, S&P futures are off 2.30. Plenty to worry the market with lots of weekend talk about another terrorist talk. Lots of red ink in the upcoming federal budget deficits. Lots of money going out to the oil producers with oil hanging up in the $28 area. Look for some profit taking today and for renewed activity by the bears, of which there are plenty. I will be looking for a good-sized correction to do some buying. Meanwhile, nimble traders or not some nimble, will be looking to take some green with put plays.

 
 
  Jeff Bailey   5/17/02,  7:21:23 PM
Friday's Market Monitor has already been archived. Click this Link to see all that took place on Friday.

 
 

Market Monitor Archives