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  Jim Brown   6/14/02,  6:11:18 PM
Pivot Trade Wrap

Another week bulls would like to forget! The week ended just like last week with a huge gap down at the open and a fight back to near positive at the close. The Dow still ended the week down -115 points total but after being down well over -200 at the open on Friday alone we will take the lesser number as a gift.

The recovery on Friday after several high profile earnings warnings and a disaster in consumer sentiment was nothing short of surprising. The resilience could show that the closer we get to the September lows the more willing investors are to ignore bad news. The S&P low for Friday was 981.63 and a 84% retracement of the post September gains. Friday's low was only 37 points away from those Sept lows.

Next week could be the turning point. The confidence numbers will probably come back to haunt us next week and there is likely to be several more high profile earnings warnings. These events will likely give us the impetus needed to retest those lows. Once that happens the bears will be left without a downside target and much less shorting conviction. Scared that any dip could then explode in their face the downside pressure should ease. At least that is my story tonight and I am sticking with it! The markets ability to surprise and confound analysts is well known and we will never be able to say "bottom" until it has already passed. Could that be next week? Tune in and find out! See you at 9:15 on Monday

  Leigh Stevens   6/14/02,  3:55:51 PM
Subscriber QUESTION: "It looks as though INTC has had a double bottom.....what direction should we be setting our targets on to play....bearish here or watch for a breakout to the upside? "

RESPONSE:You are talking about a very short-term double bottom, separated by a day. Tthe thing with double tops or bottoms, is that - to have a higher level of validity, tops or bottoms in the same area should be separated by days or (better) weeks - months are even more solid. So, with Intel (INTC), I would say that traders are more interested in a successful test of the stock's Sept. low in the 18.9 area - by the way, there was a minor double bottom then at this level, separated by 7 trading days - or 9, if we count the two days when the same intraday low was made.

If INTC retested the $19 area and rebounded, this would be a MAJOR double bottom - I would buy the stock on that kind of double bottom. I would also say that INTC intraday lows are declining along a line that is low end of a daily chart downtrend channel. So, on two levels - bottom of channel and possible retest of Sept. low in $19 area - INTC may be near a low. Of course, a bottom can then take the form of a sideways move or basing type action. It may not rebound right away and this is relevant to an options play.

  Leigh Stevens   6/14/02,  3:42:22 PM
INDEX Comments: Nasdaq indices , including QQQ, are right at their hourly down trendlines so this juncture is at a second level of short-term technical resistance - the first point being the top of the hourly chart gaps. The other point is the that the short hourly stochastic I use (length:5) is nearing an "overbought" extreme - recent hourly highs have had this same type of high reading on the scale; ie., around 80.

  Jeff Bailey   6/14/02,  3:28:40 PM
Cardinal Health (CAH) $62.04 -0.49% ... Jeff: any thoughts on cah.thanks.

Yes... I think the MARKET knew about today's acquisition and most likely figured out the "stock deal" acquisition would be near-term dilutive, thus stock fell and gave the triple-bottom-sell signal at $67, where bulls should have taken the exit. Link

Now all market participants have the same information and will vote according to their thoughts. For me, I will simply monitor the stock for awhile, but see no trade currently.

Those that are bottom feeders would play, but stop most likely below today's low.

  Leigh Stevens   6/14/02,  3:27:01 PM
Subscriber QUESTION: "Thanks again for your response. Just to clarify what I saw in the MO chart, I have attached a Q-chart. If my analysis of a Head & Shoulders Top is incorrect I would like to see the light now. Thanks again."

RESPONSE: You have "projected" or guessed that a Right Shoulder will form. You can't "project" this - a H&S pattern is valid only when 3 tops have formed of the right dimensions - I will have an article on the Head & Shoulders pattern in our Trader's Corner section, posted this weekend. This may help clarify what this pattern is, and isn't.

  Jim Brown   6/14/02,  3:25:23 PM
Pivot Trade Exit Point Alert - DJX/OEX/SPX
Expected afternoon sell off is failing. Close the open SHORT position here below 501 (currently 500.50) Go flat for the weekend.

  Jonathan Levinson   6/14/02,  3:19:57 PM
Market internals on the COMPX are virtually unchanged since the last update, weaker by just a touch as indicated in the price action on the COMPX, which has slipped below 1500. We'll see who blinks first. If the COMPX closes above the 1500 level, it will be an impressive accomlishment, though the downtrend remains firmly intact in any event. It's interesting that in a bear market there are so many upticks- wouldn't it be easier to just get it over with?

  Leigh Stevens   6/14/02,  3:10:54 PM
Subscriber QUESTION: " I have learned a lot from you. You have the gift of explanation (at least for me) that makes trading a thinking game. My question is related to the recent past. Last week there was a high range day like today. What would you think it means if the market comes back to even or better, not that I expect it, but would it be very bullish for the short term? "

RESPONSE: Not necessarily bullish to come back to unchanged after a wide-ranging day - I would then shift to the hourly chart pattern to get a closer view and right now that pattern is more or less neutral and doesn't tell me anything either way. So, we need to shift to how the indices close - this close is ALSO a Weekly close. Under 1000 in SPX, 500 in OEX, 1500 in the COMP, 1100 in NDX and 27.50 in QQQ keeps the chart pictures looking pretty bearish.

These rebounds from panic-selling look impressive, but the dynamic stems most likely more from short-covering and intraday trading rather than the type of buying that will be sustained over a few or more days. Until we see the pattern of lower (up) swing highs and (down) swing lows on a daily and hourly basis, the indices remain in a down trend - the trend is our friend and right now, it’s the friend of traders that sell rallies.

  Leigh Stevens   6/14/02,  2:58:54 PM
Subscriber QUESTION: "Please look at QLGC. Last time qqq was 27, QLGC was $17. Is this a sign of strength or may be a good short. The insider selling seems to high. Also if you could look at the P&F charts. Thanks...

RESPONSE: Well I can't find an easy correlation between Qlogic (QLGC) and the relative level of QQQ - have to look at it on its own. I would characterize QLGC 's trend as being in sideways trading range of 38 - 52, at least since its Dec.-Feb. double top (56 area). When the stock has dipped under its 200-day moving average (last at 43.8) it has tended to trade once down to low end of range -- from there it has tended to rebound back to toward the high end of the range.

Eventually, this sideways trend may prove to be "basing" action for a move higher - if there is a close above 52 - provided that this level then develops as a support area also ( upside may be back to 66-68). Conversely, a break of 38 would be bearish.

  Jim Brown   6/14/02,  2:56:44 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
We were triggered on the OEX/SPX/DJX SHORT at 14:53:16 when the OEX traded below 501. (SPX 1006.16, DJX 94.52) The initial stop loss on this signal will be OEX 505. (SPX 1015 est)

  Jim Brown   6/14/02,  2:52:02 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
Go SHORT the OEX/SPX/DJX on an OEX trade below 501.

  Jim Brown   6/14/02,  2:46:39 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
I am looking to re-enter the OEX/SPX/DJX short position around Dow 9500 which would signify a filled gap and a decision point. It could continue up from there because the gap fill would be bullish. It could also fail at that point. I will issue the signal if I feel it is valid. Stay tuned.

  Jonathan Levinson   6/14/02,  2:44:53 PM
The COMPX is printing its high of the day, though internals remain negative, but much less so: Declining volume beating advancing volume 1.4:1, new lows outnumbering new highs just over 10:1. The TRINQ is at 1.05 and the QQV is up only .57 on the day. I'm still awaiting a rollover, but must admit that it's becoming a long wait indeed.

  Jim Brown   6/14/02,  2:43:34 PM
A reader pointed out that this is exactly the same trading pattern we saw last Friday after the Intel guidance. A large gap down followed by a midday recovery, a 2:15 spike and then a roll over at the close. Grab a chart and check it out. It looks like a clone.

  Jim Brown   6/14/02,  2:36:41 PM
Pivot Trade Exit Point Alert - DJX/OEX/SPX
We were stopped out of the OEX/SPX/DJX short at 14:29:14 when the OEX traded above 501. (SPX 1007.44, DJX 95.68) This is very frustrating since serious resistance is between 502-505. The odds of a roll over are good but stop losses keep us from losing a bunch if we are wrong. We will look to re-enter the short when conditions change.

  Leigh Stevens   6/14/02,  2:33:57 PM
INDEX Comments: Nasdaq hourly trendline resistances just overhead at 1508 in COMP; at 1115 in NDX and 27.7 in QQQ; these levels would need to pierced to suggest that this recent rally was anything more than a rebound in a still-bearish trend.

  Leigh Stevens   6/14/02,  2:30:04 PM
INDEX Comments: COMP got back above first resistance around 1495-1500; a CLOSE over 1500 is needed to suggest that Nasdaq had regained a more bullish footing

  Leigh Stevens   6/14/02,  2:25:46 PM
INDEX Comments: SPX is back above 1000 - I peg resistance at this level on a daily closing basis; intraday, resistance looks to me to come in around 1008, at the top of the hourly chart gap; OEX has gotten back to 500 area this hour which needs be overcome on both an hourly and daily closing basis. With the NYSE Arms Index (TRIN) at 1.57, it appears that there is more selling pressure than buying.

  Jim Brown   6/14/02,  2:18:03 PM
Pivot Trade Signals
Interesting buy program that just came through. The advancing stocks were jumping by 100-200 every couple minutes. Jumping, not climbing. Most of the buying was in big caps since the Russell hardly budged while the S&P spiked over 5 points and the Dow over +60. The catch now is will it stick or is it just a temporary blip? We did not get back to the day's highs despite the strong program(s). Bears are probably thinking "new entry point" in front of the weekend. Time will tell.

  Jeff Bailey   6/14/02,  1:39:40 PM
PolyMedica Corp. (PLMD) $25.49 +0.15% ... Jeff: Please advise if PLMD is a good short candidate. Just heard of some accounting problems with the company, but not sure.

Kind of a "tough one" here. Stock got "clocked" lower after that triple-bottom at $34. Bearish vertical count of $8 is compelling. Link

Will note that stock sits right at bullish support and its rounding out 200-day MA at $23.60. Could play put with 1/2 position only and look for break lower of 200-day as some confirmation. If risk tollerance allows you to enter here on 1/2 that would be my suggestion. If there are accounting problems revealed and stock gaps lower, then you have some exposure. If not, and stock rebounds, then you've exposed more limited capital. Link

  Jonathan Levinson   6/14/02,  1:35:02 PM
I'm with Jim on this as regards the COMPX. The buying seems to have excited only the bears, but with fear instead of greed and no real buying has occurred. The internals have remained very weak throught this rise, the TRINQ never made it below .65, and this just doesn't feel like a return to the days of QQQ 120 (remember?). Notice the persistently high QQV today- the market is still very shaky.

  Jim Brown   6/14/02,  1:27:10 PM
Pivot Trade Signals
The lunch time lull has put traders to sleep after the morning excitement. The major indexes just completed a set of lower highs and could be setting up for a new leg down this afternoon. Traders who bought the dip did so with no conviction. Normally a -225 point Dow drop at the open would bring hordes of buyers off the sidelines. It was more like a trickle instead. It is too early to make any predictions about the afternoon trend but I would be surprised to see buyers ahead of the weekend.

  Jim Brown   6/14/02,  12:42:30 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
We were triggered on the OEX/SPX/DJX SHORT signal at 12:37:18 when the OEX traded below 497. (SPX 997.68, DJX 93.81) The initial stop loss with be OEX 501 (SPX 1005 est) This is slightly over the high of the day and represents the current resistance.

  Leigh Stevens   6/14/02,  12:38:35 PM
ON THIS DAY - so many things! - in 1642 Massachusetts passes the first compulsary education law in the colonies; in 1775 the U.S. Army was founded when the Continental Congress authorized the mustering of troops; and two years later, in 1777, the Continental Congress authorized the "stars and stripes" flag for the new United States. In honor of these events, teach your kids to respect the flag and men of honor who serve in our armed forces.

  Jim Brown   6/14/02,  12:30:58 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
Raise the entry point on the OEX/SPX/DJX short to a trade below 497. (SPX 998) The A/D line is finally showing some weakness.

  Jim Brown   6/14/02,  12:24:59 PM
Pivot Trade Signals
I really having trouble suppressing the urge to short the markets here at OEX 500. The problem is the A/D line, which is continuing to improve with a .72 ratio. Don't fight the tape! The bounce may be running out of steam but I would like to see a couple more points before placing a bet.

  Leigh Stevens   6/14/02,  12:21:45 PM
INDEX Comments: Nasdaq Composite (COMP) has now "filled in" the downside gap created from the sharply lower opening of this morning - 1495, on up to the psychologically important 1500 level, should offer increasing resistance. An hourly close over 1495 would start to regain a bit of a bullish footing. Right now its pattern still looks bearish.

Until we break the pattern of sucessively lower (up) swing highs and (down) swing lows, COMP's (like all the indices) trend is bearish. 1526.4 is the last swing high - a close over this area, would set up a potential test of major resistance at 1550.

  Leigh Stevens   6/14/02,  12:16:11 PM
INDEX Comments: QQQ is trending up toward its "breakdown" point at the top of its hourly chart gap in the 27.50 area, which should act as significant resistance - so far, the rebound looks like a bear flag consolidation that will lead to another downswing. Only a move above 27.50, AND the ability to hold this level on subsequent pullbacks, would suggest any kind of a bottom in QQQ

  Leigh Stevens   6/14/02,  12:12:09 PM
INDEX Comments: OEX came back up to today's "breakdown" point in the 500 area - this should now be fairly significant resistance - only an hourly close above 500, AND the ability to hold this level on subsequent pullbacks, would suggest that a bottom was in place for OEX. The 5-hour & longer 21-hour stochastics have seen upside crossovers, but not from oversold levels - better "signals" would occur from an oversold area and think OEX may sink to fully oversold at some point in the next 1-2 trading days.

  Jeff Bailey   6/14/02,  12:04:31 PM
Cardinal Health (CAH) $61.50 -1.36% .... Link announces that it will acquire Syncor Intl. (NASDAQ:SCOR) $31.22 +10.6% Link for about $1.1 billion in stock-for-stock deal in which SCOR will become wholly-owned subsidiary of CAH; terms of the deal call for SCOR shareholders to receive 0.52 CAH shares, and CAH will also assume SCOR's debt, which net cash totaled $202 million as of March 31,2002. The acquisition is expected to be completed by the end of 2002, and CAH expects the acquisition to be accretive within the first year.

  Jim Brown   6/14/02,  11:43:15 AM
Pivot Trade Signals
Finally a breakout! The next resistance is 502-505 on the OEX and 9500 on the Dow. A move over 9500 and back into positive territory would be very bullish and could bring shorts out to cover. This is a good sign as it gives us a higher odds entry point once this bounce fades.

  Jonathan Levinson   6/14/02,  11:41:49 AM
I'm bugged that I'm not in gold. Would you be thinking of getting in here, if you had no position? And, are you doing this with options, or actual stocks, -- and in either case, the major miners like NEM, smaller miners, or the indexes? If with options, how far out are you going (i.e. are you just holding them as insurance, or trading them?)

I'm invested in gold with a precious metals fund and a holding in CEF.A on the TSX. I thought of buying options at the open, and should have, but didn't. Because of the difficulty in timing the swings in gold, I chose months ago to invest longer term, given the long term bullishness of the charts.

However, note that the index has run up considerably in a very short time. In current markets, almost any play is very high risk. See my discussion of the XAU earlier today.

  Jeff Bailey   6/14/02,  11:41:18 AM
Dow Industrials (INDU) 9,406 -1.01% ... traders should note that this morning's trade at 9,300 had the Dow Indu. achieving its bearish vertical count of 9,300. Link

The column of O from 10,300 to 9,850, was the bearish count column. Equation is $10,300 - ((10*2)*50) = 9,300.

  Jim Brown   6/14/02,  11:33:37 AM
Preferred Trade CBOE feed.....

It wasn't just Preferred. The CBOE feed was down to Qcharts and Interquote as well. Looks like a CBOE problem and not broker specific.

  Jim Brown   6/14/02,  11:31:16 AM
Pivot Trade Signals
The adv/dcl ratio is continuing to improve at .43 (low today was .18) but the markets are struggling to maintain these levels. A good old fashioned tug of war is under way. With the a/d line improving I would give the edge to the bulls but just barely.

  Jonathan Levinson   6/14/02,  11:19:53 AM
preferred trade cboe feed was down! do you think we will get another downswing here after this bounce? gold not doing as well as I had hoped, but we will see... :-)

My own feeling is yes, or else I'd be buying calls. Note that the Gold & Silver Index (XAU) is up over 2 points on the day.

It's tough to be a trader, because we think or try to think fast, but the markets move at their own speed- like a horse race in slow motion. The action during the past several months is, in my opinion, hugely bullish for metals, and hugely bearish for equities. That's what the charts have been saying.

  Jim Brown   6/14/02,  11:13:17 AM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
Go SHORT the OEX/SPX/DJX on a breakdown with an OEX trade below 495.00. This would represent a trade under the recent relative lows. (SPX 994)

  Jonathan Levinson   6/14/02,  11:09:20 AM
COMPX stalled at 1480 for now, with the TRINQ at 1.13 and the QQV more persistant, still up nearly 3 points today. Market internals have firmed from terrible to merely very bad, with declining volume more than doubling advancing volume, and 192 new lows to 8 new highs. MSFT is in the green, though I note that its daily stochastics are in overbought territory.

  Jim Brown   6/14/02,  10:54:08 AM
Pivot Trade Signals
The Dow appears hung up at 9363 which is the 50% retracement of the 9/11 move. Now under that level it could provide resistance for the bounce.

  Jeff Bailey   6/14/02,  10:47:02 AM
Aquila (ILA) $10.66 -12.97% ... I added further notes to the 10:27:47 comments, regarding new retracement levels and today's news.

  Jim Brown   6/14/02,  10:45:18 AM
Pivot Trade Signals
Gunslingers would probably be looking to go long here with an OEX trade over 497. TICKS are positive and Adv/Dcl is improving. While the Dow has pared its losses by half I would find it hard to believe it will go positive. Dip buyer and short covering are providing this bounce but internal sentiment took a hit this morning. The trend will continue but it may not be this morning.

  Leigh Stevens   6/14/02,  10:35:46 AM
Subscriber QUESTION: "Hi Leigh, Can you please tell me the correct way to determine a gap. i've seen some say you take the whole candle into account and others say just use the previous days close versus next mornings open? Also for eminis, do i use 4:00pm or 4:15 close?"

RESPONSE: The correct way to measure a chart "gap" is - Downside gap: the difference between the low of one bar and the high of the next; Upside gap: difference or gap between the high of one bar and the low of the next. With candles you must take into account the "shadows", when a candlestick has them, not just the body.

Re e-mini's - for any market use the close as long as it is part of the most recent bar; e.g., hourly, daily, weekly or whatever time frame you are looking at.

  Leigh Stevens   6/14/02,  10:30:46 AM
Wall Street Journal (WSJ) - This morning's WSJ has a major front page story on "How Bush Decided that Iraq's Hussein Must be Ousted" - this, along with headlines on the car bomb explosion in Karachi and bad economic news certainly added to this morning's gloom & doom. Another WSJ story discusses a "Dramatic question" from the Anderson trial jury - this story is very much alive; along with more on ImClone, Tyco and poor sales forecasts from Lucent and Sprint. I couldn't find a "good news" story in the "What's News" summary column. Pretty remarkable really!! Sunny and clear here - the sun rose this morning too!

  Jeff Bailey   6/14/02,  10:27:47 AM
Aquila (ILA) $10.22 -16% .... stock got "clocked" this morning. From previous profile, I'm suggesting that traders take at least 1/2 position off the table here. Good Trade!.... From here, rest is gravy. Link

I've done some work with retracement on ILA, now have retracement from $25.06 to $5.94. What this does is simply "fit" trading from past couple of months, and helps "honor" this morning's low (asking why did the stock firm at $9.80?). This gives us 50% at $15.50 (acted like support, then resistance), 61.8% at $13.25 (served as resistance recently, and now becomes bear's risk), then 80.9% at $9.60, pretty close to this morning's low of $9.60. Should stock try and fill this morning's gap lower, bear that has locked in some gains could look short/put again on the rally, then target the $9.60 level again, or 100% at $5.94 longer-term.

Will note that Banc of America Securities downgraded stock to "mkt. perform" from "buy" as ILA's business and political environment continue to deteriorate. Reduced FY02 estimates to $1.70 from $2.00 and FY03 to $1.90 from $2.25. Separately, ILA announced it has received an informal data request from the SEC that it is considering a modification of its dividend policy.

  Jonathan Levinson   6/14/02,  10:24:06 AM
Actually, Jim, yes, but on precious metals (grin).

Disclosure: I am long precious metals.

  Jim Brown   6/14/02,  10:21:55 AM
Pivot Trade Signals
The reaction drop appears to be over. The initial urge is to go long here but I still think the longer term direction is down. There is likely to be some dip buying and short covering here but we do not know how long it will last. At the risk of being overly cautious I plan on staying on the sidelines until this bounce begins to roll over and then issue another short signal. Morning thought - with the Consumer Sentiment crashing and more terrorist attacks likely would you want to be long over the weekend?

  Jonathan Levinson   6/14/02,  10:19:31 AM
This rapid move makes measurement a little tricky, but COMPX 1475 looks a reasonable candidate for some overhead resistance. I'm more comfortable to watch from the sidelines and try to catch a rollover. If the entry isn't obvious, the better play is to protect profits. With volatility and premiums this high at the moment and the longer downward trend asserting itself, I would not be going long with calls at this time.

  Jeff Bailey   6/14/02,  10:12:57 AM
Treasury Watch 10-year YIELD ($TNX.X) 4.795% ... getting alert here at 50% retracement of 4.801%. Looking for some buying here, if not, then more defensive still. Next level of YIELD support would be the 4.635% level. Might tie in with any "capitulation" for stocks.

As mentioned before, I'm kind of using YIELD against the QQQ at $25, which was its bearish vertical count. Along with the NASDAQ-100 Bullish % ($BPNDX) currently at 20% bullish. "Capitulation" type even would be correlative to September's reading of 2%. Link

  Jim Brown   6/14/02,  10:10:21 AM
Pivot Trade Exit Point Alert - DJX/OEX/SPX
We were stopped out of the OEX/SPX/DJX short at 10:05:58 when the OEX traded above 491. (SPX 995.42) We will now wait on the sidelines to see where this bounce stops. The entry point for this signal was 506. (SPX 1016.88)

  Leigh Stevens   6/14/02,  10:10:12 AM
INDEX Comments: ALL - looks like the implied support areas at low end of hourly downtrend channels are starting to "catch" here - as long as we don't get an hourly close under 988 in SPX, this includes S&P 500

  Jonathan Levinson   6/14/02,  10:09:52 AM
COMPX Volume Breadth has improved a touch if you can call 16:1 to 15:1 an improvement. There are 173 new lows and 6 new highs, 2,211 declining issues to 467 advancers.

  Jim Brown   6/14/02,  10:05:05 AM
Pivot Trade Signals
Decliners 4382 vs advancers 803 (5:1) New lows 274 to 13 new highs.

  Leigh Stevens   6/14/02,  10:03:20 AM
INDEX Update: - S&P 500 (SPX) now fallen under any way of measuring downside targets using current hourly channel - necessary now to look at the Sept. lows at 965, then 945 as possible, or likely, targets.

  Jim Brown   6/14/02,  10:02:04 AM
Pivot Trade Exit Point Alert - DJX/OEX/SPX
Change the stop loss on the open OEX/SPX/DJX short signal to 491. If a bounce appears we do not want to give back our 15 point move. (SPX 987)

  Jim Brown   6/14/02,  10:00:19 AM
Pivot Trade Signals
The VIX has spiked up to 31.28 and is very bullish if we close in this area. However, it is only bullish on an closing basis! The TRIN is 3.38 and also bullish. However, these indicators show technical oversold conditions, not economic conditions or news events. This is a reaction to the events. When those events cool these indicators are predicting an immediate bounce.

  Jonathan Levinson   6/14/02,  9:58:50 AM
TRINQ at 4.21. QQV getting hoisted up the flagpole, currently up 3.37. Wow!

  Leigh Stevens   6/14/02,  9:56:06 AM
INDEX Update: - S&P 500 (SPX) potential support and possible stopping place in its free fall now looks like 988 area - if this doesn't kick in - no estimate beyond here

  Jim Brown   6/14/02,  9:55:10 AM
Pivot Trade Signals
Consumer Sentiment at 90.8 was significantly below estimates of 97. This could be a really bad day!

  Leigh Stevens   6/14/02,  9:53:03 AM
INDEX Update: Support estimates - Nasdaq Composite (COMP) Support > 1450 area, at low end of its downtrend channel; Nas 100 (NDX) implied support at projected low end of hourly channel > 1045; QQQ: 26-26.2 area is support implied by low end of projected hourly channel

  Jonathan Levinson   6/14/02,  9:51:45 AM
Bad Breadth on the COMPX, with the TRINQ snarling at 2.82, and 16.6 times more declining volume than advancing. QQV has jumped 2.68 as participants begin to wish they were out instead of in.

  Jeff Bailey   6/14/02,  9:50:00 AM
UTStarcom Inc. (UTSI) $19.00 -6.12% ... Hey Jeff, Bearish catapult w/trade at 19?

Yes, good pattern recongnition. Looks short/put here, stop $25 and target the bearish vertical count of $11. Link

  Jim Brown   6/14/02,  9:47:44 AM
Pivot Trade Exit Point Alert - DJX/OEX/SPX
Change the stop loss on the open OEX/SPX/DJX short signal to 496. If a bounce appears we do not want to give back our 10 point move. (SPX 998)

  Jim Brown   6/14/02,  9:45:19 AM
Pivot Trade Signals
The internals are extremely bad. Decliners are beating advancers 3711 to 879 and new lows 179 to new highs 9. The initial drop has stopped as traders attempt to catch their breath and decide if we are going lower or will the dip buyers step in.

  Leigh Stevens   6/14/02,  9:44:29 AM
INDEX Update: Support areas - S&P 500 (SPX) potential support > 996-995, at low end of its hourly downtrend channel ; S&P 100 (OEX) potential support > 493, at bottom of channel; DJX: Support estimated > 92.6-93 area

  Jim Brown   6/14/02,  9:39:38 AM
Jim, I went flat at the close last night, just too chicken (grin). What do you think about re-entering this am given the large drop in the futures foreboding a gap down open? Do you chase a falling knife?

I would wait at (9:40) for a bounce before entering. The initial drop is huge and has knocked the Dow under 9400. There was some underlying bullish sentiment yesterday morning and dip buyers may show up at anytime. Never enter after a big news event until market forces stabilize.

  Jim Brown   6/14/02,  9:34:04 AM
Pivot Trade Signals
Dow -84 with only 2 positive stocks and 3 stocks not yet open.

  Jeff Bailey   6/14/02,  9:32:58 AM
Movie Gallery (MOVI) $20.50 -0.34% ... short-term bulls may want to snug a stop at $20.48 here due to more negative market action. Looks like potential short-squeeze, but may have them pulling some bids under current market environment.

  Jeff Bailey   6/14/02,  9:29:26 AM
NVIDIA Corp. (NVDA) $27.66 ... stock trading $26.70 in pre-market. I'm sticking an offer out at $27.00, see if we can't get an up-tick, then looking for a break below yesterday's "inside day" and then drop lower. Point/figure remains bearish and vertical count is $19.

  Jonathan Levinson   6/14/02,  9:22:37 AM
Jonathan, Good morning. Is there a proxy for the Gold and Silver index like the Sox and BTK holders?

Good morning!

In fact, the XAU is the proxy, and it is optionable.

  Jim Brown   6/14/02,  9:18:38 AM
Pivot Trade Signals
The morning sentiment is very ugly. Sprint warned last night that wireless subscriber growth was weaker than prior estimates and it was slashing capital expenditures. Seems the 2Q is shaping up to be a struggle as the "soft spot" grows. The various warnings from last night and downgrades this morning provided plenty of bearish sentiment. Adding to this sentiment was a car bomb in Karachi which killed 7 and injured 45 at the U.S. Consulate.

The "event" risk for holding over the weekend just jumped up a couple notches. With the markets already on the cliff with yesterday's close it would not have taken much pressure to ease them off. A significant drop before the 9:45 am Consumer Sentiment report could set the stage for a major problem should that number be below 96.

  Jonathan Levinson   6/14/02,  9:15:29 AM
The Gold and Silver Index (XAU) is now fully oversold on the stochastics and crossing up, resting on lower bollinger band support, and looking like one of the flavors du jour for this bearish equities open. While the MACD is still in a freefall, a strong upday could arrest the fall, and gold bugs with itchy trigger fingers could do worse than make today the day to jump in. More cautious traders should await confirmation and go long on a break above 78.60. The 20 day EMA is at 80.11, and the bollinger band midpoint is at 82.50. Watch for possible reversals in these resistance areas.

  Leigh Stevens   6/14/02,  9:13:26 AM
SECTOR Update: NYSE Financial Index ($NF.X) - As Jim pointed out last night in the Market Wrap, the NF index of all NYSE Financial stocks is a key barometer of the overall market - with financials going into free fall yesterday, after gapping lower between Tuesday and Wednesday, this was a bad omen for what was ahead and we're seeing it with this morning's sell pressure. As noted in my Sector Trader wrap up last night at Link the next target on the Financial Index looks like a retest of its Feb. lows -- a double bottom in the 553 area; NF closed at 565.4.

  Leigh Stevens   6/14/02,  9:05:05 AM
Pre-Opening, Stock INDEXES - Good Morning!

Index Futures trading: S & P > -13.20; D J > -115.00 ; Nas > +31.00

  Leigh Stevens   6/13/02,  5:36:46 PM
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