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  Jim Brown   5/24/02,  11:22:38 PM
Pivot Trade Wrap (What is this?) Link

Support held, barely! The markets recovered some around 3:30 on short covering but sold off again into the close. There were simply no buyers willing to hold over the holiday weekend in light of all the terrorist warnings.

Support held on the Dow at 10100, Nasdaq 1660 and 1080 on the S&P. It was not pretty but it held. This was the lightest trading day of the year.

Trading will be very light on Monday because the markets will be closed for Memorial Day. When trading resumes on Tuesday it is likely to be an entirely different market assuming the weekend unfolds peacefully. There is an underlying bid to the market and if support holds at the open we could see buyers appear. If we break these support levels we would likely retest the lows from early May. That could give us the capitulation event everyone wants to see and setup buying for the July earnings season. According to First Call positive pre-announcements are running way ahead of warnings at a much better than expected pace.

Have a great weekend and if you are driving somewhere you will have a lot of company. Rental agencies report that nearly all of the seven million cars available to rent have been reserved. Keep the rubber on the road and avoid the other 6.999 million cars if at all possible. See you Tuesday!

Check out Leigh's Index Trader section on Sunday for a full update on all the major markets. Link

 
 
  Jeff Bailey   5/24/02,  6:36:58 PM
Everest Real Estate Group (RE) $63.83 +1.39% .. Jeff: Any changes at this point? Still holding the June 65 puts from $3.30. I'm not sure where the strength is coming from, but volume still not heavy.

Still looks longer-term weak. Should be plenty of overhead resistance above $65. Bearish count still $57. Link

Only technical "negatives" I see for a bear is that according to Dorsey/Wright and Assoc., the "insurance" sector is bull confirmed at 79.3%. Would take a reading of 76% to get into "bear alert." In essence, sector bullishness probably keeping the stock from falling apart right now.

Second technical "negative" near-term may be that the daily chart shows a trying-to-round MACD. If this last couple of days is just a little short-covering, then stock should ease back lower.

I've also taken retracement from $75.65 to $48.50. This gives pretty good "fit" with past trading. Right now, 61.8% at $65.28, 50% at $62.08 and 38.2% at $58.87. Stock looks to have held the $62.08 level, except on 05/22, when stock dipped below and closed there, only to rebound just recently. That 05/22 action looks a little "fishy" as if specialist was clearing out some stops and looking for some liquidity.

 
 
  Jeff Bailey   5/24/02,  4:02:41 PM
QQQ $31.24 -2.46% ... from bullish profile yesterday, will continue to hold the 1/2 position from $31.07 profile over the weekend. If nothing happens over the 3-day weekend, then might look for a bounce higher and recovering of some of today's losses. Today's action was an "inside day." Link

 
 
  Jeff Bailey   5/24/02,  3:56:26 PM
KLA-Tencor (KLAC) $54.44 -4.65% .... The point and figure chart of KLAC is currently bearish and trades below trend. The bearish vertical count is currently bearish to $43, after giving a double-bottom sell signal at $54 today. The first sign of bullishness comes with a trade at $53, which would be a break of bearish trend and get the stock back on a buy signal. Link

The relative strength chart of KLAC versus the broader S&P 500 (SPX.X) is starting to show some relative near-term weakness. Current reading of the RS chart would be "sell signal and column of O." In general, this is not the most ideal RS to be looking to trade from the bullish side. Link

 
 
  Jeff Bailey   5/24/02,  3:52:20 PM
AMAT & KLAC Jeff, You said you liked amat under $24 for a short term call, how about klac? Can you tell me what your point and figure charts show for both? I asked you if you see a Head and shoulders on Klac, can you respond? Thanks

Yes I did, but last night and then today, I've discussed the "reasoning" for my change in thought on AMAT.

Current thinking is why try and trade bullish in the semi-equipment stocks. Today's "bearish" call out of Goldman (correct or not) puts a near-term cloud over the equipment sector.

Also... today's break lower in AMAT now NEGATES the potential reverse head/shoulder pattern.

For me, if I can't trade bullish in the "key" stock in semi-equipment, the dominant player, then I don't like to try and trade the second-tier or third-tier players in the group. Nothing against KLAC or NVLS.

 
 
  Jeff Bailey   5/24/02,  3:47:35 PM
Emotion I have emotion. Today in fact. I was going to raise my stop in yesterday's profiled QQQ play to break-even. Not for myself, but for you the subscriber.

But then I thought... "Wait a minute! Isn't it your own philosophy of trading that you lay out a plan, based on a scenario, and trade that plan? Then whey are you raising your stop if the market is just jittery about the Memorial Day Weekend? Wasn't part of the reason you were bullish the QQQ to try and take advantage of bullish market history the week after Memorial Day? Did the calendar suddenly change?"

I won't say I don't have emotions. I do. But we can learn to control these emotions. All we have to do is understand we as humans have emotions, deal with it, and learn to keep them under control.

 
 
  Jeff Bailey   5/24/02,  3:41:56 PM
Thoughts Per today's action and 03:00 update. Boy, I'm a bit depressed today. Not because my QQQ trade went from $32.03 right back to bullish entry, but because I think some Americans still "live in fear."

Aren't we all aware, every day, of the "new world" we live in sence the September 11th?

If nothing happens over the 3-day weekend, do investors/traders that sold today jump back into the market on Monday, whishing they hadn't sold today?

Hard to say, but if you and I don't come to grips with the way things are and try to only "manage risk" before holidays, then we're doomed. Doomed not only in our daily lives, but as traders/investors.

Understand that each day should really be no different that any other day when it comes to potential terrorism. Keep this in mind when trading your account.

For me, I always try and have at least one bullish or bearish position in my account. Not just to be on either side of a market.

No, the disciplined approach to to attempt to trade bullish in strong stocks and to short weak stocks. Then things should play out, but not necessarily to some type of unpredictable event taking place.

Let's face it. If we simply look back, didn't most stocks that were strong prior to the terrorist attacks recover losses, but those that were weakest extended losses? For the most part, I believe they did.

Emotion has no place in trading. Keep this in mind going forward.

 
 
  Jim Brown   5/24/02,  3:34:43 PM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
Cancel the signal to go LONG at 543.75. If the markets made a miraculous recovery here and triggered the signal we do not want to go into the long weekend long. Let's wait and see what Tuesday morning brings.

 
 
  Leigh Stevens   5/24/02,  3:29:13 PM
Index Update: SPX has been holding up the best on the decline, and it still holding its minor hourly up trendline. Next chart support begins at the 1080 area, extending to the 1075.6-1076 recent hourly lows. 1075 is the level where the chart gap from last week is completely filled in. We haven't got there yet, but maybe we will before we get more fully oversold. This would be the ideal - reach a support area, stabilize AND have oscillator readings suggesting we're oversold. Of course if the market was this ideal in its action it wouldn't be the difficult beast that we know and love (sometimes!). If we don't get blown up over the weekend, it should be an interesting week next week, maybe after a bit more of this backing and filling. In terms of getting positioned on the long side, favor the S&P segment - tech is still tough and the rallies fall apart the quickest. Buyers need to surface next week.

 
 
  Jeff Bailey   5/24/02,  3:24:23 PM
Jeff, Can you recomend some more reading on P&F charts in addition to your excellent Basics on the site.

Thanks for the nice note. Yes, I strongly recommend Tom Dorsey's book "Point and Figure Charting" for those that have an interest in understanding more about how the supply/demand relationship can impact stock prices and help traders and investors alike forecast price and trend of equities/commodities/futures.

I see that OI now offers the book in our "Bookstore." There are some other good books there too! Here's the Link to the bookstore.

 
 
  Leigh Stevens   5/24/02,  3:15:49 PM
Index Update: Selling pressure has been picking up gradually since the bonds shut down. TRIN now up to 1.65 and Nasdaq TRIN a little over 2. Total volume is not that heavy, but down volume is running double that of up volume on NYSE and 3:1 on Nasdaq.

DJX has been heading back toward recent hourly lows at 100.6. Next support is 100. We're getting down near oversold areas on the hourly stochastic again, but the daily oscillators still are only about a third of the way down from overbought levels.

 
 
  Leigh Stevens   5/24/02,  3:07:02 PM
Index Update: OEX is trading slightly under its minor up trendline on the hourly charts, so index could be heading back down toward retest of its recent 536 low. I have been favoring purchases on these kind of pullbacks, for a position type trade. The 532.5 level is where the OEX would finally fill in the upside chart gap of last week. 532.5-536 zone is my next area of focus for possible accumulation of some OEX calls. Would of course like to see some stabilzation in that area, looking at calls out to June/July.

 
 
  Jim Brown   5/24/02,  3:02:00 PM
Pivot Trade Signals
It was a valiant battle but the bulls appear to be losing the 10100/1665/540 line in the sand. Just too many negatives going into the weekend apparently. Once the Nasdaq broke the 1665 level the Dow & S&P weakened also. 538.75 is the next intraday support for the OEX before falling off to the 536 area from last Wednesday. 10065 is the next critical point for the Dow. A break below the 10065/536 levels would be very negative. The S&P could slow at 1080 and provide support for those indexes. I stress "could." 1075 is the last ditch support for the S&P before it falls into the abyss.

 
 
  Jeff Bailey   5/24/02,  2:51:16 PM
Stocks continue their declines as the final hour and 15 minutes of trading approaches. Certainly looks like investors cautious before the 3-day weekend. Some may be worrying about potential terrorist activity that might correlate with the Memorial Day Weekend, when American take a day to honor victims and heroes.

 
 
  Jeff Bailey   5/24/02,  2:20:13 PM
Biogen (BGEN) $49.29 +22.39 ... notice heavy put option activity today in the June 35 (BGQRG) and June $40's (BGQRH). Most likely bears closing out, and some bulls doing some naked selling. Thinking for naked selling is that recent good news gives low probability that BGEN trades below $40 prior to expiration.

 
 
  Jim Brown   5/24/02,  2:07:36 PM
Pivot Trade Signals
This is it. If the markets are going to hold this is the area to stage the battle. Dow 10100 and OEX 540 as I mentioned earlier. The Nasdaq has edged below 1665 support by a point but is holding. Everybody think "bullish" and lets see what happens. We will see if we have the "power of the force". (grin)

 
 
  Jeff Bailey   5/24/02,  2:06:23 PM
Southwest Airlines (LUV) $16.99 -0.17% .... pretty interesting cross-correlation with the XAL.X retracement.

I have retracement on LUV from $23.26 to $12.30. This has 38.2% retracement at $16.48, 50% at $17.78 and 61.8% at $19.07. I had this retracement on LUV for quite a while and before recent decline. Decline came right down and pegged the $16.48 level.

Bull might just get an "inside day" sometime near-term. Could then perhaps correlate a rally to the 200-day MA in LUV to $18 Link with an XAL.X rally to its 200-day MA of $93 Link

See perhaps on the bar chart the "constant" series of lower highs and lower lows as depicted in the bars? Kind of like the bearish signal reveresed supply/demand chart pattern. (perhaps ties in with market monitor comments of 12:09:16)

 
 
  Jim Brown   5/24/02,  2:05:02 PM
Fall Seminar Scheduled !! It is official. The Option Investor Fall seminar has been scheduled for October. The seminar will begin with a get acquainted casino party on Friday night with Craps, Roulette, Blackjack, etc. Prizes for everyone! The opening general session will be on Saturday Oct-12th and continue non-stop until Tuesday afternoon. We will break only to eat and sleep as any past attendee can confirm. There will be a Texas barbeque with steaks and fajitas on the grill around the pool on Saturday night. If you have been to one of our seminars you know we do it right.

ALL meals are provided as part of the package and we eat five times a day. We do not scrimp on the details. The signup page should be up sometime this weekend and there will be a bonus for early registrations. There will also be a boot camp on Friday for those who would like a little more foundation in the basic option strategies before the in-depth seminar begins. We cancelled the fall seminar last year because of the 9/11 tragedy. This one will sell out so don't be disappointed. Register early.

 
 
  Jeff Bailey   5/24/02,  1:55:31 PM
Airline Index (XAL.X) 82.66 +1.9% .... may be a sector to keep an eye on near-term. Bucking the broader-market today. The $2 box scale (used by Dorsey/Wright) shows this group came right back down to past "spread-triple-top) from November (red B) at $78 on 05/13. Trying to build a bit of a double-bottom on its daily bar chart. Bullishness back above $84-85 could be "fueled" by further declines in energy prices. Link

Retracement on bar chart from $180.19 (January 2001 highs) to 09/21/01 low $58.81, gives 19.1% retracement of $81.99 and 38.2% of $105.17. Both have some technical significance to past trading. I would think some bears from above the $105 level squaring some positions in here. MACD on daily interval trying to get turned higher. Link

 
 
  Jeff Bailey   5/24/02,  1:42:41 PM
Renal Care Group (RCI) $32.49 +1.27% ... stock responding from 05/22/02 bullish profile at $31.78. Will continue to keep stop at $28.00. Link

Discolsure ... I currently hold a bullish position in RCI.

 
 
  Jeff Bailey   5/24/02,  1:37:17 PM
DJ U.S. Home Constrction Index (DJUSHB) 384.32 +2.13% .... don't ignore this bullish action today. Continued bullishness puts a rather large "hole" in some bearish scenarios of the weak U.S.$ having the new home sales and that part of the economy unravelling. Could give broader market bulls some confidence that economy and consumer confidence remains on track.

 
 
  Jeff Bailey   5/24/02,  1:34:03 PM
Biogen (BGEN) $49.64 +23% .... must be a MASSIVE short position in BGEN. Today's action in biotech is perhaps even more evident of large short position unwinding in the stock.

This can be see today from the Biotech HOLDRS (BBH) $99.15 -2.79%. At the end of the session yesterday, the BBH surged higher on heavy volume. All stocks in the BBH finished with gains, only Biogen (BGEN) was unchanged due to trading halt entire session.

Today, we see all components of BBH showing losses, except for BGEN. What this action tells me is that there were a lot of worried shorts in BGEN yesterday and only way they could hedge was to use the BBH to get exposure to BGEN.

Now that BGEN has been released for trading, institutional shorts can begin unwinding the hedge, most likely selling the BBH and buying back their BGEN.

 
 
  Jim Brown   5/24/02,  1:34:02 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
I think there could be an end of day short covering bounce here and the internals just keep easing higher. The adv/dcl ratio has eased up to .80 despite the Dow drop. Let's go long the OEX/SPX/DJX if the OEX trades above 543.75. (SPX 1091 approx) The Nasdaq appears to have support at 1665, S&P 1087 which were both reached intraday. The OEX has intraday support at 540 but that is still 2 points away. The Dow could stop its decline at 10100-10125. The Russell is trending upward as well as the mid caps as evidenced by the MDY. This long call could be premature but I want to get it on the boards in advance of any confirming move

 
 
  Jeff Bailey   5/24/02,  1:26:00 PM
QQQ $31.32 -2.21% ... Jeff, I haven't seen any updates on the 1/2 position from yesterday in the QQQ, can you advise?

Yes. This trade was profiled as bullish at $31.07, stop $29.95, target $33.25. Will stand pat currently as market conditions are little changed from yesterday's action point, but slightly more bullish (as depicted by QQQ price from profile).

Disclosure ... I currently hold bullish positions in the QQQ

 
 
  Jim Brown   5/24/02,  1:16:36 PM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
The OEX/SPX/DJX short was stopped out with a +2 points gain at 13:12:18 with a trade above 542.55. Long signal to follow.

 
 
  Jim Brown   5/24/02,  1:12:18 PM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
I am going to move down the stop loss on the current short signal to 542.50 just below our entry point. Despite the lower low by the Dow the Nasdaq and the Russell are showing good relative strength. The advance/decline ratio is now .76, still negative but improving and the new highs at 139 are beating new lows at 48. It appears that we could be seeing the first signs of a bounce off support at 1665 for the Nasdaq and 1088 for the SPX. If this theory is true we could see Dow 10100 provide the bottom the other indexes are looking for. Still too early to tell but on a day when we should be seeing more weakness the broader markets are acting surprisingly well.

 
 
  Leigh Stevens   5/24/02,  12:50:29 PM
Sector Update: Higher today are Airlines ($XAL.X) +1.8%, the Health Provider's Index ($RXH.X), Healthcare (Payor's) Index ($HMO.X) and the Dow Transports ($TRAN). These are bucking the trend as all others are unchanged (Retail-$RLX.X) or DOWN on the day. Relevent to small caps, Amex Composite Index ($XAX.X) is up slightly - of interest as XAX went to new closing high yesterday. Amex's recent correction was short-lived, unlike Russell 2000 ($RUT.X), at 498 -0.5%, which has continued to retrace some of its big run up of recent weeks.

Am continuing my review of all major sectors in my Sector Trader daily commentary, undergoing a revamp to make it source of comprehensive reviews for all major stock groups; includes stock symbols making up sector. Next update will highlight Healthcare and Transportation indexes, renewing uptrend and poised to break out, respectively.

 
 
  Jeff Bailey   5/24/02,  12:41:16 PM
Hi Jeff, Great to have you back on MM. I thought you were on vacation today. In the last couple of days you made a comment that you would be intrested in AMAT in the $23 range. With the Semi downgrades this morning AMAT has been hovering in that range. Short term - are you still intrested? At what price? Please comment.

I've given this great thought, and even last night in the market monitor I addressed this very question.

I'm turning my "semiconductor" bullishness toward Intel (INTC) now. I'm a supply/demand guy, lets face it, pure and simple. Last night, I began the thought process that INTC should show "greater" bullishness going forward if, I emphasize if, the scenario for semiconductors is going to play out. My thought process here is very similar perhaps to past reasoning why the deeper cyclicals should lead a market advance.

AMAT is "dependent" on INTC for demand of semi-equipment. For that demand to continue (for AMAT) then INTC's business needs to grow further. That type of thinking is what had me re-visiting Intel, studying its bar chart and p/f chart, and perhaps uncovering the potentially bullish technicals should the stock trade above $31.50 or $32 as per this morning's commentary.

Now, if INTC does indeed play out to a bull's liking, then AMAT comes back into play again, with the thinking that INTC's business is strong (or the MARKET thinks it is) and then the MARKET will most likely turn bullish attention toward AMAT.

Does this make sense? Kind of like "trickle-down economics", "domino theory," "inchworm theory," "cause and effect."

 
 
  Jeff Bailey   5/24/02,  12:09:16 PM
Short-term traders Don't simply "ignore" the bearish signal or point/figure chart patterns. For yourself, try and think of you bar charts, even 5,10,15,30 or 60 minute interval bars the way you would a point/figure chart and perhaps bearish signal reversed or other p/f chart patterns.

Of course, you're not looking for 20% gains in X-number of months, but try and understand the very short-term supply/demand characteristics and how other short-term traders will respond to those characteristics. Study your x-period bar charts, look for certain "patterns" where some nice trading moves have come from. Then, when you see them developing, be ready to take action.

 
 
  Jeff Bailey   5/24/02,  12:04:55 PM
Amsouth (ASO) $22.40 -0.48% ... was a stock I profiled as bullish just about a year ago in the $16's. Interesting that this stock also broke a very short downward trend earlier this year at $19. No, it wasn't tech, it hasn't been exciting, but some subscribers that stashed a little away in a retirement account have done OK. Link

 
 
  Jim Brown   5/24/02,  12:03:17 PM
Pivot Trade Signals
The terrorist warning about possible attacks on public transportation did not have much impact on the markets. This is possibly due to the non-specific nature or maybe the public is finally becoming immune to the constant attempts by the media to make a news event out of it. Since the sell program just after 10:30 that sent the Dow down to 10134 we have been trading in a very narrow range. We are nearing the bottom of that range now on very light volume. With the holiday weekend ahead traders who are still at work may leave for lunch and not come back. This light volume can cause big swings in the indexes on minor buy/sell programs so be prepared. The advance/decline ratio has improved slightly to .70 but still negative.

 
 
  Jeff Bailey   5/24/02,  12:01:18 PM
Wells Fargo (WFC) $52.97 -0.45 ... is a name most are familliar with. It gave the Bearish Signal Reversal at $45. Note that $45 was not only a level where the pattern was created, but came at a widely monitored institutional break of downward trend. Two very powerful dynamics and perhaps "market realization" that a major shift in sentiment toward the stock was taking place. Link

Will note that the signal and break of trend came in early January (red 1). What were some other super-regionals doing or have they done since January?

 
 
  Jeff Bailey   5/24/02,  11:55:44 AM
Hi Jeff, Noticed last nite it looks like AOL gave a bearish signal reversal a few days ago (I am no P&F expert, so let me know if I missed something). Have also noticed that up volume days seem higher than down volume days for past couple of weeks. Rally of a few days ago got it to upper Bollinger Band, has now pulled back to 21 dma. I guess a "safe" play would be buying above 21, which would give double top BS and get above 50 dma. Any thoughts on this bow wow?

Rrrruff! Sorry, no bearish signal reversed here. While the pattern is potentially developing, it would take a trade at $23 to have the pattern develop. Link

Now, I would not try and "compare" a potential bearish signal reversed in AOL with a potential bearish signal reversed in Intel. Compare the two charts and try to understand where supply/demand is at, or at least overhead supply.

I would argue that there is considerably MORE overhead supply in AOL than in Intel.

Did you know that the various vertical counts and point/figure chart probabilities are partially based on the science of ballistics? Yep. Imaging that AOL is a gun, and that overhead supply (12-18 months back dating) is stacks of cardboard that you're firing a bullet into. How far do you think bullet will travel before its energy dissapates?

Look at some past "bearish signal reversed" patterns and try and figure out or understand what the supply/demand characteristics were of the better performers. Was the commonality simply supply/demand, or are there some sector associations that were in play?

Did you know that www.stockcharts.com offers a pattern screening for various point and figure chart patterns that have been triggered? Here's the Link for various chart scans.

 
 
  Jim Brown   5/24/02,  11:28:10 AM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
It appears the SPX closing numbers are questionable as well as a reader just pointed out. Qcharts says 1096.57, Interquote 1096.18, Prophet Finance 1097.10, BigCharts 1097.08, etc. Why these numbers are all different probably relates to their actual quote-feed timing of the cut off. Because I want to have the stop loss OVER the closing high I am changing the SPX estimate to 1097.50. Hopefully we will not need the extra 50 cents.

 
 
  Leigh Stevens   5/24/02,  10:51:34 AM
Index Update: SPX testing near support in 1088 area; next potential support is down in low-1080's. Hourly trendlien is at 1081.

 
 
  Jim Brown   5/24/02,  10:50:41 AM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
A reader emailed me that the closing high for the OEX was 547.57 and above the stop loss. I checked my Qcharts and it said 547.16 as the close but when I checked Interquote it did have the higher number. This may be a mute point given the recent drop in the markets but I am changing the stop loss to 548 to get above that closing high.

 
 
  Jim Brown   5/24/02,  10:30:56 AM
Web Site Problems ?
Several readers have reported problems with the website this morning. Some changes were made last night but we are unable to duplicate any problem today. If you are having problems TODAY please email immediately to it@sungrp.com with a description of the problem and a contact phone number and someone will get right back to you. Thanks

 
 
  Leigh Stevens   5/24/02,  10:17:47 AM
Index Update: COMP gapped lower on an hourly chart basis and remains under pressure, probably heading toward recent minor up trendline at 1660 - we'll see if this provides support; if not, we're looking at some prior lows about 10 pts lower. NDX is dropping toward possible trendline support around 1252; if this gives way, it could be heading to 1240 area again; QQQ near support at 31, then 30.70 area.

 
 
  Jim Brown   5/24/02,  10:15:15 AM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
The OEX/SPX/DJX short was triggered at 10:10:30 when the OEX traded below 544.50 at 544.49. (SPX 1091.48 approx) Our initial stop loss will be 547.50 which is above the closing high for Thursday. (SPX 1097 approx)

 
 
  Leigh Stevens   5/24/02,  10:02:31 AM
Index Update: SPX - We're seeing a diverging trend - no surprise - in the SPX/OEX relative to the tech heavey Nasdaq, as these indices are so far holding most gains from yesterday. SPX is trading above 1089-1090, at prior resistance which may well be tested again. If so, we'll see if this shapes up as support; if not, next lower target coudl be back to low-1080 area. OEX's near support, which also may be tested is 540-541 area; if pierced, it may drop back to 536, at recent hourly lows. DJX presents a different picture for the broader based S&P - yesterday the Dow failed to break out above 102.2 resistance at 102.2, the low end of a previous trading range. Near support looks like in the 101 area, then about 100.6-110.7.

Right now SPX/OEX/DJX could also be forming minor bull flag patterns on 30/60 min basis - IF consolidations are maintained, it suggests another rally attempt ahead.

 
 
  Jim Brown   5/24/02,  9:57:46 AM
Pivot Trade Signals
The market internals this morning are terrible with the adv/dcl ratio very negative at .61 and decliners beating advancers 2879 to 1794. However the markets are holding their ground amazingly well. There are 56 new highs to 19 new lows, which is bullish. Still the outlook for today should be profit taking from yesterday's closing spike in front of the long weekend. The Nasdaq is weaker than the broader markets due to selling in biotech and chip stocks but so far it has not penetrated the 1670 level which is minor support. It is still early and anything is possible. We could be seeing some short covering here from bears who want to enjoy the weekend without worrying about the Tuesday open. Stay tuned!

 
 
  Jim Brown   5/24/02,  9:44:28 AM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
The markets are holding their ground much better than expected but I can't imagine they will gain ground from here. Lets short the OEX/SPX/DJX when the OEX trades below 544.50. (SPX 1092 approx)

 
 
  Leigh Stevens   5/24/02,  9:39:16 AM
Index TRADING Update: Per my evening Index Trader commentary at Link , I suggest taking advantage of pullbacks over the next couple of sessions to accumulate some index calls, as more of a position type trade rather than on a short-term swing trade basis. You can see the levels suggested in my wrap up. Would like to see the daily stochastic indicator drop still lower, which it will do with some more backing and filling. Expect a lightly traded day. Buyers are not going to be rushing in ahead of the long weekend, what with many traders nervous about more terrorist warnings or, heaven forbid, an actual attack.

 
 
  Jim Brown   5/24/02,  9:17:03 AM
Pivot Trade Signals
The GDP was revised downward to 5.6% from the previously reported 5.8% and was far below the 6% rate that had been expected. The reason? A weaker business environment and slower consumer sending on big ticket items.

Goldman Sachs added to the gloomy outlook by downgrading the chip equipment makers AMAT, KLAC and NVLS. CLS was the topic of cautious comments at Soundview after the cautious comments by SUNW last night.

While BGEN is set to open at $48 after closing at 40.36 on Wednesday Merrill Lynch reiterated a reduce/sell rating this morning. Merrill believes the drug Amevive may eventually be an approvable drug they don't think it will happen by August. Either way Merrill believes BGEN is overvalued. This could weaken the gains on BGEN once the initial bounce is over.

For market direction the opening indications are down after the mystery rally at the close yesterday. Weaker economic conditions, chip and computer weakness and a long holiday weekend could drag on the indexes. They all closed at strong resistance which could make any more gains tough to come by. I would like to short the open but because of the uncertainty and mixed signals I will give it a few minutes for the volatility to ease.

 
 
  Leigh Stevens   5/24/02,  9:14:12 AM
Index Update: Nas futures are 18 lower; DJ futures are off 27 pts and the S&P contract is down about 2 pts.

 
 
  Leigh Stevens   5/24/02,  9:11:57 AM
Good Morning - it's Showtime! The market is due a bit lower this morning in the S&P, more so in the tech heavy Nasdaq. Goldman Sachs downgraded the Semiconductor sector ($SOX.X) - to "market weight" from "market overweight" - and Sun Micro (SUNW) fell after some broker comments relating to company statements said it wasn't seeing much pickup in business spending for its products. Meanwhile, Biogen (BGEN) took off last night, after having its trading halted during the day on pending news. That news related to an FDA panel voted to recommend the companies treatment for psoriasis. Meanwhile, during the day yesterday, on very heavy volume, the Amex Biotech Holdr's (BBH) rallied sharply - BGEN shorts running for cover? Biogen's stock rallied over $8 (20+%) in evening trade.

 
 
  Jeff Bailey   5/23/02,  10:01:32 PM
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