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  Leigh Stevens   6/3/02,  4:09:09 PM
Index Update - SPX & OEX: closing comment - just to note that per my yesterday (Sunday) comments in Index Trader (see Link ) my SPX and OEX "minimum" downside objectives were met by the close today, at 1042 and 520, respectively.

 
 
  Jim Brown   6/3/02,  4:06:46 PM
Our server time appears to be 2 min, 19 sec ahead of the actual NYSE trading time. We will fix for Tuesday's trading.

 
 
  Jim Brown   6/3/02,  4:05:19 PM
time check 16:03:00

 
 
  Jim Brown   6/3/02,  4:00:36 PM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
Close the OEX/SPX/DJX Short here at the close of trading. The TRIN at +3.50 is very oversold and could indicate a bounce at the open tomorrow. The VIX at 25.50 is bullish. Close the trade now at the current 514.15 level.

 
 
  Leigh Stevens   6/3/02,  4:00:02 PM
Re the QQQ - Had previouly indicated objective on short Q's at 27.50 - revise that slightly to 27.70. Consolidation (sideways move) we saw between 29.2-29.5, looks to be about half way in a move that started at 31. (31 minus 29.2 = 1.8 substracted from 29.5 = 27.70)

 
 
  Jonathan Levinson   6/3/02,  3:55:30 PM
Heavy selling pressure with the TRINQ showing 4.98.

 
 
  Jim Brown   6/3/02,  3:55:25 PM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
Lower the stop loss on the OEX/SPX/DJX short to 518 (SPX 1046), which is just below our entry point of 518.64.

 
 
  Leigh Stevens   6/3/02,  3:51:46 PM
Selling pressure even more extreme going out in last 15 minutes, with NYSE Arms Index ($TRIN) now up to a very extreme 3.15. Nasdaq Arms Index ($TRINQ) is at 4.46 - we've seen this one up over 5.00 for 1-2 days before last bottom.

 
 
  Jim Brown   6/3/02,  3:48:49 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
We were triggered on the OEX/SPX/DJX short when the Dow traded below 9775 at 15:39:40. (OEX =518.64, SPX=1047.20) The initial stop loss will be OEX 520 (SPX 1050.50 est) The market has broken down significantly and our next stop could be in the 9550-9580 range. Keep the stop tight however just in case this sell program triggers a buy program of the same magnitude.

 
 
  Leigh Stevens   6/3/02,  3:47:31 PM
Index Update: Final half hour - All indices continued on their merry way (LOWER) per patterns I was seeing on the hourly charts - that is, "bear flag" consolidations, which typically "consolidate" a prior decline, before the next round of selling. Suggest staying short QQQ per my earlier comments, based on my Friday suggestion to sell in 31 area. Same stop/exit point, at 30.50.

 
 
  Jonathan Levinson   6/3/02,  3:29:59 PM
COMPX low of the day coinciding with XAU high of the day.

 
 
  Jonathan Levinson   6/3/02,  3:13:22 PM
Precious Metals are a little more precious today, with the XAU up 2.34 near a high of the day. Rightly or wrongly, I take this as bearish news for the equity indices, as the purchase of metals and mining stock could be considered a flight to quality. A friend was telling me over the weekend that a horse has cost the same weight in gold from Plato's day through to Caesar's, all the way up to today. Either way, we might have to watch the upper end of the XAU's range for our bullish entry instead of buying on the dip, but time will tell.

 
 
  Jonathan Levinson   6/3/02,  3:02:23 PM
Hi Jonathan, as a general rule do you always use max. pain when selecting strike prices for options. If so, would you also always use max. pain for trading the QQQs, especially in this kind of uncertain market?

As a general rule, I try to take in as many inputs as possible in planning a trade. MaxPain is one that I consider more closely during expiration week. The MaxPain theory is that an underlying security will be likely to close on expiration day at the level that will cause the "max pain" for option holders, by making the maximum number of contracts expire worthless. Max Pain calculators sometimes work beautifully, though, like every other indicator, sometimes they don't. I choose my strikes based on my timeframe, the amount of cash I'm willing to risk, and how my account is already balanced. In general, I try to strike a balance and reduce the amount of premium I purchase by staying ITM as much as I can afford.

 
 
  Jonathan Levinson   6/3/02,  2:46:02 PM
A new cliche for the toolbox: When in doubt, zoom out. The 60 minute and daily charts show the COMPX firmly within its longer downtrending channel. In fact, the COMPX appears to be below its longer term channel, with the lower line at approximately 1600 and the upper line in the 1645 area.

 
 
  Jeff Bailey   6/3/02,  2:40:25 PM
Wireless Telecom Index (YLS.X) 54.52 -2.2% ... new 52-week low today and continues to look bearish. Vertical count is $41, so still some downside risk in this sector. Link

Component tickers.... AETH, AWE, CHL, CTL, DT, ERICY, LU, MOT, NOK, NT, NXTL, PALM, PCS, QCOM, RFMD, TLAB, USM, VOD, VZ, WWCA.

 
 
  Jeff Bailey   6/3/02,  2:36:32 PM
Pharmaceutical Index (DRG.X) 329.75 -1.34% ... continues to exhibit weakness as sector breaks to another 52-week low. Will make note that on Thursday, the DRG.X met its bearish vertical count ($5 box) Link

Trader's short/put this group should begin locking in some gains, or snugging down stops. Still looks defensive and out of favor. According to Dorsey/Wright and Assoc., sector is "bear confirmed" at 32%. September 2001 levels were 16%.

 
 
  Leigh Stevens   6/3/02,  2:32:01 PM
Index Update: SPX back up above a line of resistance at 1053-1054, so is hanging in too, resisting further decline. All the indices are now fully oversold on an hourly basis, with even the 21-bar setting (for length) now fully oversold. Attempt to rally here should not be surprising, but nature of any such rally (e.g., how far it might carry) is unknown at this point. No real measurable technical resistance until about 1070-1072.

 
 
  Jim Brown   6/3/02,  2:31:17 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
Confirmation - I am keying off the Dow above 9875 for the long signal, not the OEX/SPX numbers.

 
 
  Jim Brown   6/3/02,  2:27:37 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
Let's try this bounce one more time. If the Dow prints over 9875 (est = OEX 525/SPX 1059) go LONG the OEX/SPX/DJX. This will be above the intraday resistance points we have seen the last couple hours. They were unable to take it below 9800 the second time, which could be a significant key. However, 9850 has been strong intraday resistance as well. This narrow range could lead to a significant move when one side fails.

 
 
  Jonathan Levinson   6/3/02,  2:23:36 PM
The COMPX is challenging the upper end of its recent downtrending channel. This isn't surprising given the quick jump in the QQV and the sustained readings on the TRINQ between 2.5 and 3. The COMPX isn't exactly a paragon of strength, but respect your stops and don't get lulled to sleep in this tight range.

 
 
  Jeff Bailey   6/3/02,  2:23:25 PM
Verizon (VZ) $42.93 -0.16% .... Jeff: What telecom or index could I follow to correlate with Verizon?

Verizon VZ is a component of the AMEX North American Telecom Index (XTC.X) 522.32 -1.23%.

P/F chart of XTC.X is bearish, but will note this index has exceeded its bearish vertical count ($20 box scale) of $640 (column of O from $1,000 to $840) Link

 
 
  Jeff Bailey   6/3/02,  2:03:50 PM
NPS Pharma (NPSP) $17.50 -9% .... would look to be locking in some gains here at $17.50 from profile 05/15/02 11:00 Update and market monitor earlier that day. Stock has achieved near-term targets. Good trade! Link

 
 
  Leigh Stevens   6/3/02,  2:02:39 PM
Index Update: DJX - Not reflected in cap weighted S&P, but rally (again) from 98.0 is possible when you have equal weighting in an aritmetic average like the Industrials and where strength in AT&T (T) can lead the charge - General Motors firmness being an exception of course in terms of (capitalization) weight.

 
 
  Jeff Bailey   6/3/02,  1:58:19 PM
General Electric (GE) $30.13 -3.17% .... bear in GE should at least note and understand that stock is approaching its bearish vertical count of $28. From point/figure chart, new bear entry here is risking $12 to potentially make $2 based on point/figure chart. Link

 
 
  Jeff Bailey   6/3/02,  1:48:44 PM
Siebel Systems (SEBL) $17.75 -2.63% ... Hi Jeff Please tell me what you think of sebl ---I'm short and could take a nice profit now.

I have retracement from $37.01 to $12.98, which has stock sitting right at 19.1% retracement of $17.56. I also have downward regression from the 01/24/02 relative high down this scale, and SEBL sits right below the lower end of this regression channel. In past (no guarantee of the future) the stock has managed to bounce from this lower end of regression. Would like to at least lock in 1/2 of gain at what most likely would have been a bearish target from $25 (50% retracement).

Point/figure remains bearish with vertical count hinting at $13, which would be near the September lows. Link

I could see a short-cover rally back to $22 (38.2% retracement level) making for another entry point again.

 
 
  Leigh Stevens   6/3/02,  1:42:44 PM
NYSE TRIN is 2.49, so selling pressure is again at an extreme. Arm Index ($TRIN) looks at number of advancing issues relative to decliners and also relates the A/D at any moment to advancing volume relative to declining volume. Nasdaq TRIN ($TRINQ) is over 2.00 also, but readings above 200 is more unusual in the NYSE TRIN.

 
 
  Jim Brown   6/3/02,  1:42:25 PM
Looks like they tried to take the Dow below 9800 again and the attempt failed. The market makers/institutions could be trying to determine how strong the support really is before taking any positions. There is a battle being waged here and the outcome could be a decisive move. Adv/Dcl ratio is still very negative at .41 and new lows are beating new highs 189/139.

 
 
  Leigh Stevens   6/3/02,  1:38:08 PM
Index Update - DJX: DJX taking another run at the 98.0 level again. Weakness in bellwether GE, as Jim has been pointing out as important to the health & well being of the DOW, is not making defense of this level look, well, defensible.

 
 
  Jim Brown   6/3/02,  1:28:29 PM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
We were stopped out on the OEX/SPX/DJX long when the OEX traded below 521.75 (SPX 1053.50 est). We will wait for the Dow to trade over 9850 before going long at this level again. GE, INTC and MSFT have weakened over the last several minutes to lead this most recent dip.

 
 
  Jim Brown   6/3/02,  1:12:00 PM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
Let's raise the stop loss on the OEX/SPX/DJX LONG here to 521.75 (SPX 1054) and look to re-enter it again at a higher level if stopped out.

 
 
  Jonathan Levinson   6/3/02,  1:07:17 PM
The COMPX is still within its downtrend from Friday. Volatility is staying high with the QQV up over 3 points on the day.

 
 
  Leigh Stevens   6/3/02,  1:05:09 PM
Index Update - DJX: Consolidating above the line of prior support at 98. However, right now this consolidation has the appearance of a bear flag formation ahead of another move lower. If so, such a break would likely bring in further selling as 9800 has been a perceived support area.

 
 
  Jim Brown   6/3/02,  12:57:39 PM
With GE breaking down, should we jump the gun on the Dow puts and use this as leading indicator?

I have been watching GE on a 1 min chart and it is really struggling with $30.00. If it breaks it would definitely be not only a leading indicator but a leader to the downside as it would produce a lot of program selling. Could be a good choice! IBM has firmed somewhat so watch them both for confirmation.

 
 
  Jim Brown   6/3/02,  12:54:23 PM
Jim..Just bought June 99 DJX calls for 1.45... Would you use the Dow 9775 as a good contingent stop? Thanks, Tom

I think that would make sense. With a short signal outstanding at that level it would indicate that the market could go much lower if hit. Making a long play here is very speculative but should the Dow hold we could see buying from a successful retest. Of course that means both buyers came to work today and are not on vacation. (grin)

 
 
  Jim Brown   6/3/02,  12:46:24 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
We were triggered on the OEX/SPX/DJX long at 12:37:32 when the OEX traded above 522.25. (SPX 1054 est) This signal may have been premature in that the Dow bounce stopped at 9840. I should have waited until the Dow cleared resistance at 9857. The initial stop loss will be 520.25, (SPX 1050.50) just below the days low of 520.43. (SPX 1051.08) The SHORT signal is still valid as well with any Dow print below 9775.

 
 
  Jim Brown   6/3/02,  12:37:28 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
Change the entry point to go long the OEX/SPX/DJX to any trade over 522.25 (SPX 1055 est)

 
 
  Jim Brown   6/3/02,  12:28:56 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
Go SHORT the OEX/SPX/DJX with any Dow print under 9775. This would represent a major breakdown of support and could signal a retest of the 9550 level. This is a cautionary signal in case a bounce here at 9800 does not occur. We don't care which way the markets go, we now have a signal for each direction!

 
 
  Jim Brown   6/3/02,  12:24:18 PM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
We were stopped out of the OEX/SPX/DJX SHORT at 12:17:14 when our stop of 521.25 was hit. (SPX 1052.50 est)

This trade signal covered a 12 point swing in the OEX.

 
 
  Jim Brown   6/3/02,  12:19:33 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
Go long the OEX/SPX/DJX with any trade over 523.25 (SPX 1056 est)

 
 
  Jim Brown   6/3/02,  12:18:08 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
When we get stopped out on the OEX/SPX/DJX short, any minute now, be prepared to go long. I am watching for signs of a bounce. A second bounce at 9800 could be more bullish if it has legs. Stay tuned.

 
 
  Jonathan Levinson   6/3/02,  12:16:41 PM
Looking more closely at the QQQ's, I see bollinger band support at 28.54 and the May low at 28.42. However, I see this area as short term support.

 
 
  Jonathan Levinson   6/3/02,  12:12:26 PM
I'm looking for an entry point on the QQQ's (Puts). I noticed that all the charts (Daily, 60,30,15,) are in oversold territory. I know that a stock that is oversold can remain that way and get even more so. Additionally Leigh see's support at 29.50, (not super solid will probably fail) and then 27.50. -- 29.50 now seems to be resistance. Considering the apparent oversold condition, is the fact that 29.50 is now resistance a favorable put entry to 27.50, or would you wait untill the charts indicate the q's have become over bought.

That's the big question at a time like this. My answer would be... it depends (grin). Seriously, though, it does depend on your timeframe, risk tolerance and overall account allocation. That said, the QQQ's have been respecting the 29.50 level, and as you can see from the market internals, there's not much for a bull to celebrate. If you're uncertain but need to be in here, set a tight stop and limit your risk to a level you're comfortable with.

 
 
  Jim Brown   6/3/02,  12:11:14 PM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
Let's lower the stop loss to 521.25, 12 points below our entry point. (SPX 1055.50 est) Dow 9800 any minute now!

 
 
  Jeff Bailey   6/3/02,  12:11:00 PM
El Paso (EP) $19.90 -21.83% ... another energy trader we mentioned in recent weeks with bearish technicals. Tragic events today and Reuters has confirmed with company that the treasurer of EP is dead. Cause of death apparently suicide. Link

 
 
  Jim Brown   6/3/02,  12:05:03 PM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
Let's lower the stop loss again to 522.25, 11 points below our entry point. (SPX 1055.50 est) We are getting really close to that Dow 9800 level.

 
 
  Jeff Bailey   6/3/02,  12:00:54 PM
Jeff, Cien has just broken down. How much further can this go?

Ciena (CIEN) 5.39 -4.77% .... The logical answer is it can go to $0.00, as can EVERY STOCK. However, as profiled bearish in past, bearish vertical count is $0.50. From recent bearish profile of $7.00, risk/reward from here to $0.50 is $1.61/$4.89. A near-term target would be from retracement at 19.1% retracement of $3.86. ("Fitted" retracement bracket from $17.30 to $0.68) This has 38.2% at $7.03, 19.1% at $3.86 and 0% at $0.68.

Disclosure ... I currently hold bearish position in CIEN.

 
 
  Jim Brown   6/3/02,  12:00:52 PM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
Let's lower the stop loss to 523.25, 10 points below our entry point. (SPX 1056 est) I don't want to give up any extra on a bounce.

 
 
  Jonathan Levinson   6/3/02,  11:57:48 AM
New COMPX low of the day just printed at 1583.16. MSFT has broken 50.

 
 
  Leigh Stevens   6/3/02,  11:57:43 AM
Sector Update: Disk Drive ($DDX.X) Index has taken out its early-May lows, so at 80.6 is making a new low for current downswing; ditto: Fiber Optics ($FOP.X) also making a new low for its move.

One of, if not THE, key tech sector, the Semiconductors ($SOX.X), has traded today (at 454.5) to slightly under its early-May low at 455.3. SOX is up a bit (457.9) from today's low, but further weakness would pressure the Nasdaq even more than has been the case so far today.

 
 
  Jim Brown   6/3/02,  11:57:21 AM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
As the rate of descent slows I am thinking about taking profits in the 520 area. The intraday low range on May-7th was 519-520. There was a spike at the close that dropped the price down to 518. These levels are likely to provide a pause if not a bounce. Let's set a profit stop of 520.25 (SPX 1052 est) and exit this trade and wait for the next direction change.

 
 
  Jonathan Levinson   6/3/02,  11:55:28 AM
Nasdaq up-volume at 86,991,600, down-volume 600,937,920; unchanged 7,399,300.

 
 
  Jeff Bailey   6/3/02,  11:43:53 AM
Jeff: Do you still feel bearish on VZ, broke through the 43.42 on Friday, today's movement just trading somewhat sideways in a negative market, is it the news over the weekend, usually we don't listen to outside noise mostly what the charts tells us, what is your opinion, would say be patience to the downside?

Subscriber may be talking about this weekend's Barron's covery story regarding telecom sector. VZ among others was listed as bullish plays from fund managers.

I (Jeff Bailey) would remain paitient and trade as outlined on Friday. Will monitor MACD on daily chart and bear would like to see MACD cross BELOW signal, then back under zero level. Stop just above $45 as outlined. Link

Discolure .... I currently hold bearish position in VZ.

 
 
  Jim Brown   6/3/02,  11:41:25 AM
GE at $30.26 is only +.11 cents above its eight month low of 30.15. That $30 level is strong support but that support is slowly eroding. A break under $30 by GE would likely be a sell signal for the other Dow stocks. IBM is down -2.29 to 78.16 and only +2.00 above its May lows. A break under the $75-$76 level would also bring more Dow selling. Just a couple stocks we should be watching as leading indicators for the broader market.

 
 
  Leigh Stevens   6/3/02,  11:40:18 AM
Wall Street Journal (WSJ) key stories - Well, it is the bible of the Street, sort of. I, like many, puruse it over the day, as I have a moment when not writing, trading, scratching my head, etc. and there are a couple of noteworthy analysis/think pieces. Front page story, "No Safe Haven", is about the dollar's recent slide and speculates that this reflects a disillusment about the U.S., or at least our equities market - instead foreign investors have been opting for Russia or Indonesia, etc. Of course, worries relating to the dollar have most to do with its impact on inflation here in the U.S. - well, YOU try to find something that is NOT made in China. Maybe, we should not worry about the Euro or the Yen so much (except for cars), but about how the greenback is faring against the Chinese Yuan. Anyway, the article speculates that the U.S. equities market is more dependant on foreign capital than in prior decades. I happen to think that the Europeans, et al, will be back when the U.S. market begins a sustained move higher - at that point, U.S. stocks will be especially cheap in Euro or Yen terms.

In Money & Investing section - analysis of how nearly a fifth of all the S&P 500 stocks are BELOW their lows after the 9/11 reopening....this fact has been masked by the relatively better perfomance of some of the big cap stocks in the index (it is capitalization weighted of course). So, while SPX is only off about 7% for the year, you may have noticed that YOUR portfolio of S&P stocks may be faring much poorer than this.

 
 
  Jonathan Levinson   6/3/02,  11:36:56 AM
In fact the rise in gold and decline in the equity markets are concomitant trends. The US Dollar Index has also been lower today.

 
 
  Jeff Bailey   6/3/02,  11:34:37 AM
Hi Jeff, Still in this Adelphia Communications trade and have been enjoying the ride down. Now that it's been delisted from the NAZ and I don't see it trading this morning, does this mean I need to go elsewhere to find what it's trading at? Did it get, again, a new ticker?

At this point, it looks like one cannot sell the puts for the full value so I'm thinking of just exercising and remaining short the stock so I'd appreciate any help you can provide as to the whereabouts of the stock when it's delisted like this. Thanks.

Adelphia (ADLAE)... has been delisted by the NASDAQ. It is now trading on the pink sheets. Last trade on NASDAQ was $0.70. I'd close this trade out as it has run its course. Risk/Reward from here is unfavorable for bearish trader. From past bearish profiles of $23 and $18, trader is now perhaps risking $17 to make $0.70 and not good risk/reward. Close this one out!!!!

You will probably have to call your broker, get the quote from them from the pink sheets. They will have to call around to get the trade closed out, but should be able to execute it for you.

If holding the put options, you may also have to call the CBOE, exercise the puts to where you are holding the stock short, then do the "buy in" from your broker/dealer via pink sheet. If you do hold the puts, I'd set up the arrangement with the broker/dealer first, then exercise the put option and offset the trade then. I called the CBOE a couple of weeks ago regarding the "halt" on ADLAE and this was the instruction I got during the trading halt.

 
 
  Jim Brown   6/3/02,  11:26:41 AM
Reports that came out today were positive for the economy as well as the market, yet all the indexes are negative except a very small gain in the gold sector. What gives? To be quite honest I am close to the point of capitulation myself. It seems that everything is stacked against an investor these days. It's almost impossible to make a living in the current economic and politcal enviornment. At what point does everyone just take their toys and go home? MD

Based on the recent volume I think many of the retail investors have already cashed in their chips. As I mentioned in my weekend commentary volume is the weapon of the bulls. Without it the markets will simply sink from lack of interest, which also brings in more shorting by the bears. The economic conditions are improving on all fronts but the news is falling on deaf ears. Investors are more worried about vacations and mowing grass now than trying to pick a bottom. They have been burned so many times they feel like the weekend barbecue. Eventually it will dawn on the bulls but with the summer doldrums still ahead it may not be soon.

 
 
  Leigh Stevens   6/3/02,  11:22:26 AM
Index Update: Amex Composite ($XAX.X) - At 953 (-0.9%). Contrary to the talking analyst heads that have been telling you for weeks that you need only be in small caps to be a fat & happy bull - the bastion of small is beautiful, the Amex Composite is taking a hit today, falling upder its Feb.-May up trendline. Next key level will be at 948, the area of a number of recent lows.

 
 
  Jim Brown   6/3/02,  11:18:36 AM
If Dow slices through 9800 would you buy/add to puts? Russ
That could be a very good idea. If 9800 fails I think the next support could be in the 9550 range. Also, there still remains the possibility of a bounce at 9800. The 9800 level could be a great place to put on a DJX strangle. The June-97 put is ask $1.30 and the June-99 call is ask $1.50.

 
 
  Jim Brown   6/3/02,  11:11:33 AM
Pivot Trade Signals
Market internals are very bad with decliners beating advancers 4048 to 1709. However the TRIN has only risen to 2.10. The VIX is spiking at 24.03 which indicates that there is finally some fear coming back into the market as we approach 9800 again. Trader fearing that this level may not provide support on the second test are starting to hedge their long bets with index puts.

 
 
  Leigh Stevens   6/3/02,  11:06:36 AM
Index Update: SPX, OEX - SPX and OEX falling under their prior hourly lows from mid-May.

 
 
  Jonathan Levinson   6/3/02,  11:06:30 AM
Nasdaq-100 Volatility Index (QQV) is up 2.96 as I type, to 41.17 as premiums rise on renewed fear in the market. With clear air up to 44.34, which is the current location of the upper bollinger band on the daily chart, and with other oscillators in upswings, there's plenty of room for volatility to increase. This is, of course, bearish for the QQQ.

 
 
  Jim Brown   6/3/02,  11:06:01 AM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
The low for the OEX last Thursday was 523.31. This 523 level could provide a pause as the Dow nears 9800. Be aware that the trend could change soon. Let's change the stop loss to 525. (SPX 1059 est)

 
 
  Jim Brown   6/3/02,  10:55:36 AM
Pivot Trade Signals
The Russell-2000 is getting killed this morning. With a -8.13 drop to 479.34 it is now back to February ranges and looks like the next support could be in the 469 level. With the Russell shuffle set to garner news attention later this week we could see extreme volatility in this index. Stocks to be replaced will see heavy selling and stocks moving into the index will be bought by traders in advance of the Fund requirements to rebalance portfolios at the end of June to match the new index values.

 
 
  Jim Brown   6/3/02,  10:46:47 AM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
Change the stop loss to 528.25. (SPX 1065 est) I don't want to get too close and get taken out on any bounce but I don't want to give up the nearly 10 point move either. As we approach 9800 on the Dow I will lower the stop again in anticipation of a technical bounce at that level.

 
 
  Leigh Stevens   6/3/02,  10:44:10 AM
Index Update: COMP, NDX and QQQ have taken out or fallen under their prior hourly lows (from 5/13).

 
 
  Jim Brown   6/3/02,  10:28:02 AM
Pivot Trade Signals
No big economic explosion, as evidenced by the inline ISM numbers, was followed a couple strong sell programs that were obviously scheduled to profit from any bounce. The markets are now setting at the lows of the day and there is no economic or earnings news left today to provide a boost. They will have to trade on their own internals which is a scary thought. The news that India has ruled out nuclear weapons in any future border conflict had no impact. Decliners are beating advancers about 2:1 with new lows 105 to 88 new highs. The TRIN and the VIX are neutral with no oversold indications or fear in the markets. So much for the bullish first day of June theory. (9 of the last 11 times bullish)

 
 
  Leigh Stevens   6/3/02,  10:25:59 AM
Index TRADING Update - QQQ: I suggested intraday on the Market Monitor Friday, to short QQQ when the Q's reversed in the 31 area, at its hourly down trendline. I never suggested a stop, did suggest that downside obective was to 27.5 area in my Sunday commentary at Link . My suggested stop is 30.5 for those on short side. We just went to a new low for the move. Am anticipating a re-test of early-May low at 29.5, but per my Sunday commentary think this area will not necessarily hold - but, definitely an area to watch for a possible double bottom.

 
 
  Jonathan Levinson   6/3/02,  10:24:09 AM
Ah, the joys of trading... Better safe than sorry, though. This is where longer term conviction can save a lot of angst. I've been holding some back month QQQ puts because I believe that the index will be lower than higher this summer. However, daily action like we had on Friday is difficult to ignore, so I play those swings using front-month contracts. This move just cost me money, but I avoided getting tanked on a possible bullrun from 10AM. If you're bearish, you can reenter anytime, but it's best to wait for an obvious trade to come to you on a strong break south from here.

 
 
  Jonathan Levinson   6/3/02,  10:16:12 AM
This downmove should have triggered any stops set by aggressive longs in the QQQ.

 
 
  Leigh Stevens   6/3/02,  10:13:19 AM
The ISM May figure is put out by Institute for Supply Management - new manufacturing orders rose to 63.1%, up from 59% in April -- you may remember this report as the "old" NAPM (National Association of Purchasing Managers) report. This was the bullish number that indexes reacted to.

Production was reported 58.5%, up only slightly from the month before; Prices paid rose to 63%, from 60.3%, indicating some price inflation here.

 
 
  Jonathan Levinson   6/3/02,  10:09:42 AM
I'm closing my shorter term QQQ puts on this news. Aggressive traders can switch to calls here.

I'd be setting tight stops on a long play here- we saw this same setup on Friday. The COMPX needs to get through the 1625-1630 congestion area before seeing its strong resistance in the 1645-1650 area.

 
 
  Leigh Stevens   6/3/02,  10:08:14 AM
ISM Index reported at 55.7, higher than expected; 4 straight months now over 50, which indicates growth; Construction spendind: +0.2%

 
 
  Jeff Bailey   6/3/02,  10:00:23 AM
Knight Trading (NITE) $6.35 ... stock still halted for trading. P/F chart has been bearish. Vertical count is $0.00/NA. Link

 
 
  Jim Brown   6/3/02,  9:59:24 AM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
Set the stop loss on the current SHORT signal at 532.00. (SPX 1072) The ISM report should be released in about 5 minutes. Let's put the stop just below our entry point in case the report causes a bullish pop in the market.

 
 
  Jonathan Levinson   6/3/02,  9:56:55 AM
Precious Metals The Gold and Silver Index (XAU) is currently up .82 to 85.06, and gold is still hovering in its $325/oz range. I'm looking for an upside break of 89.25 on the XAU as a signal to initiate new longs, and a break of 82.50 to take short term profits. I remain long term bullish on gold and silver, and maintain a long position in a precious metals fund.

 
 
  Jim Brown   6/3/02,  9:56:30 AM
Pivot Trade Signals
It appears the Dow symbol $INDU is running several minutes behind on Qcharts. Other indexes $OEX, $SPX, $RUT, etc are pretty close.

 
 
  Jeff Bailey   6/3/02,  9:54:37 AM
Xilinx (XLNX) $33.25 -5.7% .... Stock down after company posted June update on their website. XLNX expects sequential rev. growth of about 8% for June quarter, which is at the high end of 6-8% guidance given on April 18th; also, June quarter shipments are expected to be non-linear, resulting in days sales outstanding of about 50 days (flat with last quarter) and 300mm trasition on track with initial production this quarter. Link

 
 
  Jeff Bailey   6/3/02,  9:49:47 AM
Genta Inc. (GNTA) $7.76 -16.21% ... stock breaking to relative lows. Trader talk is that weakness being caused by disclosure on this morning's conference call that company will delay DNA filing by roughly six months, but this news not completely unexpected. Link

Point/figure has been bearish. Bearish vertical count column currently under construction and hints at $6.00.

 
 
  Leigh Stevens   6/3/02,  9:49:34 AM
Index Futures Update: Not much price change yet, but selling pressure predominates in the early going as the NYSE Arms Index ($TRIN) has been up around 1.50, which is a reading at and above which suggests heavy selling pressure; readings over 1.00 indicates more selling than buying. Nasdaq TRIN ($TRINQ) has been under 1.00 (.88), which reflects somewhat more buying interest than in S&P.

 
 
  Jonathan Levinson   6/3/02,  9:44:45 AM
Institute of Supply Management's (ISM) May index is due at 10AM. QQQ is holding its ground around the 30 level, and has so far respected the 29.90 support. Cautious traders can close profitable short positions ahead of the ISM news. I am holding my positions, but it is, as always, your account and your call. As my father often says, you can't lose money taking a profit.

 
 
  Jeff Bailey   6/3/02,  9:43:55 AM
Williams Cos. (WMB) $13.11 -7.74% .... energy merchant gaps lower to open at new 52-week low. Looks defensive.Link

Disclosure .... I currently hold bearish position in WMB.

 
 
  Jim Brown   6/3/02,  9:36:02 AM
Pivot Trade Exit Point Alert - OEX/SPX/DJX
Set the stop loss on the current SHORT signal at 533.25. This is one point above our entry at 532.25 and hopefully will get us through any opening volatility.

 
 
  Jim Brown   6/3/02,  9:35:52 AM
Pivot Trade Signals
Tyco CEO resigns.Dennis Kozlowski, reportedly under investigation for tax evasion. This has nothing to do with TYCO but it has colored the pre-market sentiment. Napster filed bankruptcy and there are multiple rumors of corporate problems on NITE trading. UBS Warburg cut estimates on the Software sector. Specifically CHKP, ISSX, MERQ, NSCN, RATL, RSAS, SBYN, SCUR and WEBM. Lehman also joined the party with downgrades on ADVS, BEAS, IONA, MERQ, VRTS, MUSE. ORCL is down in premarket trading due to CIBC downgrading them with comments that they will probably miss estimates for this quarter.

Leigh said on Friday that Monday surprises have been in the bears favor recently and today appears to be following that trend. We are currently short the OEX/SPX/DJX from our entry point of 532.25. Resistance is 530 and initial support around 525. With the futures under pressure we could be seeing a lower opening. Like I said in the my commentary this weekend, if the bulls cannot mount a rally today on the positive economic news from Friday the markets could be in serious trouble. We will make our exit point 533.25, one point above our entry, and hope we don't get stopped out at the open.

 
 
  Jonathan Levinson   6/3/02,  9:31:11 AM
The QQQ has been drifting lower all morning, and is now right back where it finished on Friday. The NDX bullish percent indicator ($BPNDX) edged one point lower with Friday's action to 33, which is still not oversold and confirms Friday's downward price trend. Leigh's weekend discussion of the QQQ is a must-read if you haven't done so already - at Link

 
 
  Jeff Bailey   6/3/02,  9:26:45 AM
Adolph Coors (RKY) $66.74 ... Hi Jeff - I bought RKY at $68.50 with your analysis (Point & Figure chart), and it is $66.74 today. Do you think that I should hold on to this until it turns around? Please advice me. I will be grateful. I can hold stocks for some time as long as I know they will go up. Thanks.

The point/figure chart of RKY remains bullish as the stock is currently in an upward trend and bullish vertical count is $92. Link

FIRST SIGN OF TROUBLE for a bullish trader is a trade at $65. I (Jeff Bailey) would place a swing-trader's/investor's stop at $63, which would be a spread-triple-bottom sell signal. If this is "too much room" to give the stock based on your trading discipline, then I would snug a stop at $64.75.

 
 
  Leigh Stevens   6/3/02,  9:22:31 AM
Good Morning! - DJ futures are a bit higher, +13; S&P -.50; Nas futures +0.50

 
 

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