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  Jeff Bailey   6/18/02,  9:39:18 PM
Bull Alert! Our shorter-term indicator in the NASDAQ-100 Bullish % ($BPNDX) Link has reversed back into "bull alert" status as 23% (23 of the 100 stocks) now have "buy signals" associated with their charts.

This "suggests" to the trader/investor that near-term, most lows have been made and the probability for a rebound is nearing.

Aggressive bulls can begin establishing positions, but with caution. Trading profits of 10-15% should be taken from the bullish side when found, as stocks will have a tendancy to retest their lows before establishing a bullish trend.

Near-term, I'll be keeping a close eye on the QQQ itself. A level to look for support would be yesterday's low of $27.91.

 
 
  Jim Brown   6/18/02,  5:05:50 PM
Pivot Trade Wrap

This is expiration week?
The volatility today was zero in real terms after the opening hour. The Dow traded in a 50-point range and the OEX was stuck between 515-518. The Nasdaq was the only mover ahead of the Oracle earnings but it closed -24 points off its high.

The biggest news of the day was not the CPI or the housing starts but the fact that the markets held their gains from the Friday bounce. This was no small feat considering there was more than a +400 point bounce by the Dow. Whether you are bullish or bearish you have to be surprised by the resilience. It was helped by positive comments from the GE CEO who said he was cautiously optimistic about the current economic recovery.

After the bell the news was flying fast and not all of it was as optimistic as GE. ORCL released estimates that beat the street by two cents and revenue that hit estimates. The stock was up over $1 in after hours as shorts scrambled to cover. Immediately after the Oracle announcement two other tech companies stole Oracles thunder. AMD and APPL both warned that revenues and earnings would be significantly less than expected. Both blamed weakness in consumer sales both in the U.S. and Europe. Immediately the Oracle bloom was shredded. Oracle itself remained up while waiting for their conference call but the broader market in tech stocks sank. When two separate PC companies blame "very" weak PC sales on the same day it cannot bode well for tomorrow.

This sets up the dueling news events for Wednesday. Will investors trying to cover ORCL shorts provide enough excitement to blot out the bad news from AMD and APPL? Check back at the open and join the fun.

 
 
  Jeff Bailey   6/18/02,  4:59:52 PM
Yellow Corp. (YELL) $28.99 -0.03% ... Announces it expects Q2 EPS, excluding items, of $0.22-$0.25 a share, which is above consensus for $0.20 a share. Maintains Y02 guidance of $1.50-$1.75 versus consensus of $1.51 a share. Link

Note: YELL is a component of the Dow Transportation Average (TRAN).

 
 
  Jeff Bailey   6/18/02,  4:48:17 PM
Apple Computer (AAPL) $20.15 -1.89% ... stock halted for after-hours trading. Company warns on Q3 earnings saying it now sees net earnings of $0.08-$0.10 a share versus consensus of $0.13 per share. Sees Q3 revenue of $1.4-$1.45 billion versus the current consensus estimate for revenues of $1.61 billion. Cites weakness in the consumer markets for shortfall. Link

 
 
  Jeff Bailey   6/18/02,  4:28:40 PM
Advanced Micro Devices (AMD) Company sees Q2 sales in the range of $620-$700 million versus the current consensus estimate for revenues of $845 million. Company expects a "substantial loss" for Q2.

 
 
  Jeff Bailey   6/18/02,  4:23:46 PM
Oracle Corp. (ORCL) $8.93 -2.93% ... stock jumps to $10.18 (+13.9% from close) after reporting Q4 net of $0.14 a share, $0.02 better than consensus, versus year-ago EPS of $0.15. Revenues fell 15.7% to $2.77 billion, but came in above reduced consensus of $2.57 billion. Link

 
 
  Jeff Bailey   6/18/02,  4:20:11 PM
Advanced Micro Devices (AMD) $10.30 -4.62% ... stock has been halted for after-hours trading. Reducing outlook is preliminary news. Link

 
 
  Jim Brown   6/18/02,  3:57:29 PM
Correction Arch said SHORT at 1032 not target 1032

 
 
  Jim Brown   6/18/02,  3:56:14 PM
Pivot Trade Exit Point Alert - DJX/OEX/SPX
Since the Dow/OEX both failed at the 9720/518 level again we are going to carry the SHORT signal over to Wednesday. THIS IS VERY RISKY AND SHOULD ONLY BE DONE IF YOU ARE COMFORTABLE WITH IT Oracle could surprise us and the markets could explode at the open. I just feel any good news is already priced in and there is a better than 50/50 chance it will result in a drop tomorrow. However, remember the Intel guidance. It went contrary to expectations and long traders suffered. REPEAT: If we are not stopped out, we will be keeping the open SHORT signal over night.

 
 
  Jonathan Levinson   6/18/02,  3:54:27 PM
This is an astoundingly difficult market to trade. My indicators are fluttering like telltales on a sail in very low wind. With down volume slightly ahead of up volume, the TRIN at 1 but the QQV down .3, and market moving news scheduled for after the close, this is a very risky market to trade directionally. I am bearish, but very cautiously so, much moreso given the volatility we're seeing today and during this op-ex week. In some conditions the best place to be is the sidelines, and these conditions look that way to me.

 
 
  Jim Brown   6/18/02,  3:49:30 PM
Real Time Updates
We are testing a new Java front end to the Market Monitor today that will not need refreshing. It monitors the database and updates the window automatically when a new post is made. So far it has been working well. We will be giving out the URL to a few readers tomorrow for testing. Once this is in production we have a new graphics program for imbedding charts as well. With the lower bandwidth requirements and lack of the constant refresh we will be able to utilize more visuals. Just an FYI as we continue to improve the MM !

 
 
  Leigh Stevens   6/18/02,  3:46:49 PM
INDEX Comments: Nasdaq - Looks like we have completed Head & Shoulder's Tops in the Nastaq indices, including QQQ, based particularily on the 30min. charts. Break of QQQ "neckline" at 28.3 would "confirm the pattern and suggest downside to 27.5 at a minimum. I see better technical support down in the 27 area. This pattern, suggests that the overnight "news" won't be so favorable. Looks like the indices may go out with the pattern in doubt - to take advantage of a potential market break at least short-term, it looks like it will be necessary to go out short/long puts. .

 
 
  Jim Brown   6/18/02,  3:43:16 PM
Do you think somebody got the news early? At 3:25 the sellers appeared across all the indexes. Fear of the dark is finally prompting the bulls to take profits before the Oracle results. In reality I think it was a sell program prompted by Dow 9715 or OEX 518. Just as each of those indexes came within a couple ticks of their previous highs the program executed. The QQQ are approaching the lows of the day. A reader emailed me that Arch Crawford put out a short at 2:pm with S&P 1032 as the target today and then warned of another short at the open tomorrow with significant downside. Personally I don't believe in the alignment of planets theory but Arch is ranked #5 out of several hundred market timers. I have received several emails about Arch this afternoon so I know there are many people who do follow his alerts.

 
 
  Jim Brown   6/18/02,  3:06:49 PM
Pivot Trade Exit Point Alert - DJX/OEX/SPX
One of my axioms is when things are not going in your direction after 4 hours, get out. There is something you are not considering or the trend has changed. I think discretion is the better part of valor today. Let's close the OEX/SPX/DJX SHORT signal if the OEX trades at 518.50. This is just over the high of the day and takes us out on any positive end of day spurt. (SPX 1041) There could be a huge short squeeze at any time since most bears would have been counting on Oracle to help them out. Be prepared!

 
 
  Jim Brown   6/18/02,  2:41:37 PM
The advance/decline line cannot seem to get back to positive territory with the ratio stuck at .95. The major indexes are repeating the now familiar pattern of lower highs as the afternoon progresses. Still they are struggling to hold every point. The battle is far from over and the analysts calling for another retest of the September lows have got to be scratching their heads right now. I know I am! Two big days of gains and no major sell off. Something has definitely changed!

 
 
  Jeff Bailey   6/18/02,  2:27:03 PM
ImClone Systems (IMCL) $11.23 +16.3% ... stock jumped on rather strong volume of 622 million in past 1/2 hour on new intra-day high.

 
 
  Leigh Stevens   6/18/02,  2:21:14 PM
Subscriber QUESTION: "Are you going to hold your ORCL stock over earnings today? If you had June 10 calls at about break even, would you hold them over earnings? Anything from your charts that show hold/sell?"

RESPONSE: Oracle stock (ORCL) I'm holding is as a "position" type trade in a retirement account. Was not looking at the stock as a "trade" so much. At recent lows, I thought that ORCL had value for longer term. However, if we got move back up to DJ 10,000 and there was another downside reversal, am still concerned about one more down "leg" - only the Nasdaq has re-tested Sept. lows so far.

See nothing negative on ORCL chart right now in short term, in context of the stock still being in a long-term downtrend - that hasn't changed. Stock has to clear resistance in $10 area - reversal there would turn chart bearish again in short-term - as would a downside break of $8 just ahead.

Assuming recent rally continues & we clear $10, next technical resistance I estimate at 11.5, at top of daily chart trend channel. Think I would be a seller of the stock on a move up to 11-11.50.

 
 
  Jeff Bailey   6/18/02,  2:13:44 PM
Adobe Systems (ADBE) $30.46 +2.45% ... stock getting a boost in past 30-minutes after WR Hambrecht upgrades to "market perform" from "market underperform." Link

 
 
  Jim Brown   6/18/02,  1:51:25 PM
I continue to be amazed with the resilience of the markets. A +400 point bounce for the Dow off its lows on Friday and it is holding those gains. As Leigh pointed out the overbought internals can be worked off by simply trading sideways until the pressures ease and the oscillators revert back to neutral. Were it not for Oracle tonight we could be looking at a seriously different result. Upper resistance is still there but lower support is rising.

 
 
  Jonathan Levinson   6/18/02,  1:29:45 PM
Beadth has turned negative on the COMPX, with declining volume now leading 1.25:1, and new lows beating new highs. TRINQ is at 1.07 as the COMPX breaks down to 1544, having triggered our short entry when it broke below 1550.

 
 
  Leigh Stevens   6/18/02,  1:13:35 PM
Subscriber QUESTION: "on a daily chart I see a head and shoulders on the dj 30. how far can it go up to not break the right shoulder? If it is a true h & s, what would be the down side, around 8750? "

RESPONSE: Possible Head & Shoulder's (H&S) Top pattern in the Dow Jones Industrial Average (DJIA) -- Basis the Dow Index (DJX) calculation would be: Top of the middle top or "Head" = 106.60; To Neckline = 96.4 (trendline between bottom of two "shoulders"); Difference = 10.2

Subtracting 10.2 from point on DJX neckline break at 99.1 = 88.90 or DJIA 8,890, as a possible "minimum" downside objective implied by the H&S top pattern.

DJX could rebound "to" neckline, at 99.7 (Dow 9,970) currently and it would just be a "return" to the neckline resistance, which is not uncommon - if any such rally turned lower from there, downside target (at 88.9 or DJIA 8,890) implied by H&S top pattern would remain intact.

Encyclopedia of Chart Patterns study (Tom Bulkowski) found that average decline predicted by a H&S top is 15% from the point where the neckline was broken. Decline so far from "neckline" which has been to 92.6 (9,260), is 6.5% so far.

This analysis would suggest that there is substantial downside potential yet in the market. I will be curious as to what happens if there is this return to the Dow neckline - of course, the neckline rises over time - soon it will be at DJX 100, or Dow 10,000 - sound like a familiar level?

I did an explanation of the Head & Shoulder's pattern and how to compute "implied" objectives based on this pattern on my Trader's Corner article last week at Link

 
 
  Jim Brown   6/18/02,  1:05:59 PM
Pivot Trade Signals
Somebody pushed the Dow off the cliff! Suddenly the TICK is very negative and the ADV/DCL ratio is on the verge of going negative. Our reversal of fortune is due to another sell program and could be a signal of the next trend. The 518 entry point is looking better as the day progresses. The Nasdaq is definitely trading on ORCL and the closer we get to the close the more bulls are likely to take profits and run.

 
 
  Jonathan Levinson   6/18/02,  12:51:34 PM
COMPX remains roughly unchanged, with advancing volume 1.4 times declining volume, 50 new highs to 49 new lows. $TRINQ currently neutral at .81.

 
 
  Leigh Stevens   6/18/02,  12:40:11 PM
INDEX Comments: Dow Index (DJX) -unable to take out prior (up) swing high at 97.6 over the last 3 hours of trading - hourly chart pattern now has pattern that is "rolling over" slightly to the downside as the successive hourly highs are inching down. Meanwhile it also should be noted that the sideways move in DJX and the other indices is "throwing off" the near-term overbought condition seen on hourly stochastics.

A sideways move will cause the stochastic indicator to fall without a drop in prices. This because the stochastic looks at the current price relative to the highest high and lowest low of "X" number of periods or bars; e.g., 5. If the range between the lowest low and the highest high narrows, the reading comes down to a neutral or oversold reading, from overbought.

 
 
  Jim Brown   6/18/02,  12:33:01 PM
Oracle Straddle/strangle
Oracle has traded into the middle of its strike range at 8.91. It is $1.09 away from the $10 call/put and $1.41 away from the 7.50 call/put. The strangle options are very cheap at .10 for the $7.50 put and .15 for the $10 call. They are cheap because they are so far from the stock price and would require more than a $1.50 move in one direction to profit. It is entirely possible that Oracle could make this move but it is also more likely that it will finish right at $10 or right at $7.50. These are key strikes for the market makers and they will not want ORCL to exceed these levels.

Traders wanting a cheap lottery play could get it but it would require an earnings blowout or disaster to profit. Since Ellison said they would hit earnings the stock has risen from $7.25 to 9.00. This is "good news priced in". Any upside exposure would have to be due to amazingly good numbers which nobody expects them to post.

If I were going to play this I would rather use the QQQ. The $28 put is $.35 and the $30 call is $.15. For $50 cents you can capture any move in either direction as a $1+ Oracle move will impact the QQQ substantially due to its impact on other software stocks and chip/PC stocks. If you are directional then you can pick the $28 or $30 strike and buy both the call and the put for a straddle. The cost is more but you will profit more from a directional move IF you guess right. The $28 straddle is $.35 put, $1.10 call. Basically you are betting on a positive bounce with the put as insurance. The reverse would be true for the $30 straddle.

If you are going to put on an ORCL trade the time to do it is NOW. The later in the day the higher the volatility as we approach those earnings.

 
 
  Jonathan Levinson   6/18/02,  12:32:43 PM
Question: heavy interest in qqq around 32--wouldn't they want them to expire near there?

"They" most likely would, but those with the power to influence the price of the QQQ through large orders are no doubt hedged in their positions for the very strong likelihood that the QQQ won't make it to 32 this week. 32 is a very long way away from our current price of 28.65, and while anything's possible, it is unlikely that the market could rally that far through the many levels of strong overhead resistance in a few trading days.

 
 
  Jonathan Levinson   6/18/02,  12:22:01 PM
On the same note, MSFT is near the top of its recent range, and unlike the QQQ, its daily stochastics have already entered overbought territory. Its chart is a good candidate for a short play, and my only hesitation is that it's been very strong of late, and shorting strong stocks is near the top of my "To not do" list. Nonetheless, with bollinger band resistance just overhead at 56.59, and MSFT sitting near the top of its daily range, bears should be paying close attention.

 
 
  Jonathan Levinson   6/18/02,  12:18:24 PM
I sure wouldn't Jim, and presumably the market will be starting to think the same think as this session moves toward the close. I recall Larry's tight-lipped comments the last time he spoke, and doubt if there's much upside surprise to be had. Tech bears can open new shorts on a break below 1550. Like all my other suggestions this week, I'd characterize this as an aggressive trade, given the range we've been trading in since yesterday. Tight stops, etc.

 
 
  Jim Brown   6/18/02,  12:11:19 PM
IBM and ORCL have both been losing ground in the last few minutes. With Oracle earnings tonight it appears cautious traders are getting out before the news. I have numerous readers asking about an ORCL straddle/strangle today. I will update that in a few minutes. The Nasdaq is lagging the Dow/S&P as we move into the lunch period lull. Would you want to be long techs if Oracle bombs?

 
 
  Jim Brown   6/18/02,  12:04:52 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
The OEX/SPX/DJX SHORT signal was triggered at 11:56:28 when the OEX traded above 518 for the second time today. (SPX 1040.28, DJX 97.09) Ticks and advance/declines are both climbing as we touched the 518 level. This may be uncomfortable for those with a bullish outlook and require a leap of faith that this strong resistance will hold. We are going to set a wide initial stop of OEX 522.50 (SPX 1053)

 
 
  Jim Brown   6/18/02,  11:34:50 AM
Pivot Trade Entry Point Alert - OEX/SPX/DJX
Go SHORT the OEX/SPX/DJX with an OEX trade over 518. (SPX 1040) The markets are struggling to hold on to gains and 518 has already proved to be resistance once today. A reader pointed out that 518.22 is the May-7th closing low and is the bottom of the serious resistance range.

 
 
  Jim Brown   6/18/02,  11:25:51 AM
Pivot Trade Signals
The program wars continue. The buy program at 10:45 was followed by to sell programs that make Dow 9750 and OEX 520 entry points seem way out of reach right now. We will give it a few more minutes to see if the bulls buy the dip once again.

 
 
  Jonathan Levinson   6/18/02,  11:24:31 AM
Breadth on the COMPX has weakened alongside price, with advancing volume 1.5 times declining volume, and the TRINQ rising to .98, still within neutral territory. COMPX is currently resting at 1552, just above the area formerly known as resistance.

 
 
  Leigh Stevens   6/18/02,  11:17:06 AM
INDEX Comments: S&P 500 (SPX) - leading index in the bigger stocks, is retreating a bit after hitting resistance in the 1039-1040 area. Now on an hourly sell "signal" on both the shorter (5-hour) & longer (21-hour) hourly stochastic models.

 
 
  Leigh Stevens   6/18/02,  11:04:06 AM
INDEX Comments: Nasdaq 100 (NDX) has rallied to above its prior hourly high in the 1156 area - last at 1156, NDX needs to stay above 1155-1156 to suggest that the index is going to continue to move higher, even in face of minor overbought showing on the hourly stochastics.

 
 
  Leigh Stevens   6/18/02,  11:00:33 AM
INDEX Comments: QQQ has managed to follow COMP higher and is now at resistance implied by prior swing high at 28.8, so it an area to watch in the Q's

 
 
  Jim Brown   6/18/02,  10:59:39 AM
Pivot Trade Signals
The markets are looking very extended here. The Dow came within 30 points of resistance and the OEX less than 2. The urge to short here is strong but the adv/dec line is still rising. OEX 520 is the key level. We will continue to watch as the markets scorch those bearish coats this morning. My target for a new short play is a roll over in the OEX 520 range.

 
 
  Leigh Stevens   6/18/02,  10:56:12 AM
INDEX Comments: Nasdaq Composite (COMP) - on the other hand, the Composite has soared pretty easily above resistance implied by prior hourly (up) swing high at 1152. There is an hourly up trendline that COMP is following higher - over next 2-3 hours, resistance implied by this rising trendline intersects around 1580. Technical support looks to be well under current trading at 1564, down at 1526 to 1520 area.

 
 
  Jonathan Levinson   6/18/02,  10:50:22 AM
COMPX breadth looks like a repeat of yesterday, with advancing volume now beating declining volume just over 3:1, although new highs remain just 2 issues ahead of new lows. TRINQ at .46 showing buying pressure as the COMPX prints a new high of the day. $QQV down just .27 on the day shows that the bulls have their "wall of worry"- fear is subsiding slowly today.

 
 
  Jeff Bailey   6/18/02,  10:47:58 AM
Aquila Inc. (ILA) $11.10 +1.36% ... stock was halted temporarily this morning as company disclosed plans for an offering of 37.5 million shares and $500 million of senior notes. Yesterday, company announced it would issue $900 million of new equity and debt. Link

 
 
  Leigh Stevens   6/18/02,  10:46:39 AM
INDEX Comments: QQQ rally struggling some here - the stock has not been able to consistently this hour hold above top end of its recent narrow consolidation between 28.4-28.7. If the Q's slip below 28.7, this would be a warning, with dip below 28.4 offering "confirming" sign of a downside move, behaps back to support in the 27-27.5 area.

 
 
  Jim Brown   6/18/02,  10:33:44 AM
Pivot Trade Signals
Bulls in control! Despite the limited upside potential the rapidly improving internals are drawing traders into the market. All the major indexes are in the green and there appears to be no stopping them. HOWEVER, after two days of strong gains this bullish romp could come to a screeching halt with the first real resistance. That resistance is 520 on the OEX, 9750 on the Dow and 1039 for the SPX. The Nasdaq is coming into its resistance of 1567-1575 now. This is make or break territory and we will see how far the bulls can take it.

 
 
  Jeff Bailey   6/18/02,  10:29:50 AM
Dow Transport Avg. ($TRAN) 2,742 +0.44% .... been monitoring this key index as it is deemed "economically sensitive." Bulls getting their break above the 50-day moving average here. Link

 
 
  Jonathan Levinson   6/18/02,  10:28:33 AM
Overbought oscillators can always become more overbought. I personally will sit this trade out, but aggressive bulls can wait for a pullback to the bottom of the current uptrend channel on the COMPX and initiate a long position with a subsequent upturn in the shorter intraday oscillators. I would not chase this current surge, as such a trade will be likely to leave you buying at the top.

 
 
  Jim Brown   6/18/02,  10:20:45 AM
Hi Jim, How important is tonight's earning report form ORCL? Is it possible that it will effect the market significantly one way or another? I am wondering if the issues (positive or negative) will be viewed as company specific and not have a broad effect on the market. Thanks for the input. -YG

The Oracle earnings should carry a lot of weight in the current market. First, Ellison told investors they were going to hit their numbers when everyone thought they would miss. This "priced in" decent results. Any negative news could take this premium out of the stock and market. Many analysts feel that they may have made their numbers with cost cutting instead of sales. If ORCL guides lower due to reduced IT spending then it is confirmation of the same guidance from all the other tech stocks in the July cycle. Any bad news is not likely to be seen as company specific. However, the markets are in rally mode and they could easily ignore news they don't want to hear.
It is amazing how a little bullish sentiment can color judgment and things that were critical just a week ago are now overlooked. How important are Oracles earnings? Depends on where the market finishes today. Give us another triple digit gain and nobody will care. Let us close with a triple digit loss and it will be the only topic of conversation tomorrow.

 
 
  Jonathan Levinson   6/18/02,  10:17:42 AM
Breadth is similar on the COMPX, with advancing volume 1.13 times declining volume, 29 new highs to 27 new lows. It looks like the COMPX is trying its break now. With the TRINQ falling and now at .64, there's room to run, although all intraday stochastics are topped out in overbought. I think going long looks iffy here for that reason, but will keep you posted.

 
 
  Jeff Bailey   6/18/02,  10:13:53 AM
Multimedia Games (MGAM) $19.50 -31% ... mentioned this gaming stock yesterday at 09:47:32 at $27.39. If short/put, would lock in some gains on today's weakness. While bearish vertical count hints at $16, not willing to risk gains for extra $4. Link

 
 
  Leigh Stevens   6/18/02,  10:11:07 AM
ON THIS DAY in 1812, guess what - the War of 1812 began when the United States declares war on my favorite country, outside of America, Great Britian. Britian is not a "great" as they once were, but still a wonderful place to visit. Anyway, needless to say, we held our own against the Brits. Today they are our best buddy on the global political front. To make up for the 1812 fight, take one of our English cousins to a Pub today and treat them to a pint and lunch - well, maybe have the pint at a Pub and lunch down the street somewhere else.

 
 
  Jim Brown   6/18/02,  10:06:39 AM
As we near the end of the first 30 min of trading the internals are improving and the bullish bias from yesterday still appears to be present. The OEX has strong resistance at 520 and limited upside from the current 515 level. The intraday ranges are narrowing but there is no clear trend. We will wait patiently for a move out of this range. Advance/decline ratio is 1.18 and growing, new highs/lows ratio is 1.71 and growing. This would seem to indicate the breakout will be to the upside when it comes.

 
 
  Leigh Stevens   6/18/02,  10:00:40 AM
Wall Street Journal (WSJ) - This morning's WSJ has front page story on the new - and, profitable - upstart carriers like JetBlue (Nasdaq: JBLU) and more established SouthWest Airlines (LUV) - now even part of the Dow Transportation average. The group, dubbed the "Wal Mart" Airlines, now account for 20% of U.S. air travel - hey, if they arn't going to feed you anymore anyway, why not pay less!

The SEC plans to introduce this week a blue print for an accounting-oversight board. Concerns are that SEC Chairman Pitt's plan will create a body without the necessary authority to police the accounting profession. Stay tuned - investor confidence needed back!

The Marketplace section has story on Air Shippers being hurt by tendency by shippers to send more of their stuff by truck, which has gotten more efficient, and faster; air shipments are more profitable for the likes of FedEx (FDX), United Parcel Service (UPS) and Airborne (ABF). Trend is good for the customers and hurtful to the carriers bottom line.

Investor's bet yesterday on Oracle (ORCL), with the stock up 7%, is on expectations of a better earnings report today for Q4; Journal figures there is some reason for optimism as tech spending is expected to jump 7% or so next year, according to Goldman. Oracle is priced at about 20 times next years earnings, versus Microsoft's 30 times. Anyway, yesterday's buyers better keep their fingers crossed on ORCL earnings - the market hath no fury greater these days, then disappoints on earnings.

 
 
  Jeff Bailey   6/18/02,  9:55:48 AM
Dow Jones Home Construction Index (DJUSHB) 371.22 +2.73% .... after testing its bullish support trend, has gotten a nice little bounce in recent sessions. A trade at $375 would get this index back on a "buy signal" and negate the current bearish vertical count of $330. Link

 
 
  Jim Brown   6/18/02,  9:46:31 AM
IBM began the day down over $1 after the morning downgrade. It is recovering somewhat as the bullish sentiment from yesterday comes back to rescue the averages from the morning drop. It is still early and the morning volatility is still in play.

 
 
  Jonathan Levinson   6/18/02,  9:40:47 AM
Aggressive traders could use Jim's "conservative" trigger of COMPX 1537 from yesterday to initiate short positions. Given the uncertainty right now, I would *not* rely on the 1543 trigger. Whatever you do, set tight stops and if in doubt, stay out, which is what I'm inclined to do.

Note the divergence right now between the TRINQ and price on the COMPX. The TRINQ is at 1.5, while the COMPX is rising, indicating a price rise despite moderately high selling pressure. I would generally expect to see COMPX price falling alongside a higher TRINQ. This divergence will resolve itself either with a price reversal and a TRINQ spike, or a price spike and TRINQ reversal. Let's wait and see.

 
 
  Jonathan Levinson   6/18/02,  9:35:11 AM
COMPX opens with a gap down to the bottom of yesterday afternoon's range, at 1544, and is now looking to fill the gap. The TRINQ shot up to almost 1.7 and is now settling down a bit. We'll wait to see in which way the market wants to head before opening new positions.

 
 
  Jeff Bailey   6/18/02,  9:34:31 AM
Broadcom (BRCM) $22.52 +5.97% ... today's trade at $22 gets this NASDAQ-100 component back on a "buy signal." Morgan Stanley upgraded this morning. Link

Unlike GILD, BRCM trades below trend, thus any bullish positions most likely just 1/4 or 1/2 for now as stock has been very weak.

 
 
  Jeff Bailey   6/18/02,  9:31:12 AM
Gilead Sciences (GILD) $35.86 ... this was one of the stocks in the NASDAQ-100 that gave a "buy signal" on its point/figure chart (at $34) that contrubutes to the NASDAQ-100 Bullish % ($BPNDX). Link

GILD looks similar to this May (after red 5) and a bull may be looking for a 3-box reversal back lower at $32 for bullish entry, stop $29 and target the $38 level.

 
 
  Jeff Bailey   6/18/02,  9:20:58 AM
Market Internals showed little change from the bullish % charts after yesterday's trading action. The more volatile NASDAQ-100 Bullish % ($BPNDX) did find a net gain of 3 stocks to "buy signals" and currently shows 19% (19 of the 100) of the stocks in this market having a "buy signal" associated with its chart. Link

Status remains "bear confirmed" and it would take a reading of 22% to have this market (NASDAQ-100) changing to a "bull alert" status.

 
 
  Leigh Stevens   6/18/02,  9:20:08 AM
SECTOR Update: Small Caps - Lehman report says that market may have put in a low - they like the small cap sector. Me too, as I've been saying on SECTOR TRADER . There are iShares if you want to play either the S&P 600 small cap index - my favorite is the "Value" segment of the S&P 600, symbol IJS - or the Russell 2000 (symbol: IWM). Hope for a price dip ahead, as the stocks have rebounded strongly over the past two sessions.

 
 
  Jim Brown   6/18/02,  9:13:31 AM
Pivot Trade Signals
Resistance at 520, Support 510. According to Leigh's Index Wrap last night the OEX is right in the middle of its support and resistance range again. Seems like the story of my life. Do I sell 520 or buy 510? We will not know until after the opening market volatility dissipates.

The Book-to-Bill numbers last night were somewhat positive but the futures did not show any excitement. Probably as Buzz pointed out in his commentary, the billings have been flat for sometime. That translates into no profit growth. The Nasdaq is also at resistance so it will take some more positive news to push it higher. Worries are that Oracle will say something negative tonight despite hitting estimates and odds are good we will see a major move in ORCL on Wednesday. Straddle candidate?

After seeing buyers congregate all day yesterday and sellers switching to the boycott side we really want to see some negative internals before going short again. The long side has got to be running low on gas but could have one last spurt of energy before rolling over. Even if we are going higher the gains from the last two days need to cool at lower levels first. IBM was downgraded for the second day in a row and that has blunted yesterday's optimism. Stay tuned!

 
 
  Leigh Stevens   6/18/02,  9:09:17 AM
Pre-Opening, Stock INDEXES - Good Morning!

Index Futures trading: S & P > -3.60; D J > -35.00 ; Nas > -10.00

 
 
  Leigh Stevens   6/18/02,  9:07:31 AM
Pre-Opening INDEX Comments - Housing Starts +11.6%, biggest 1-month gain in 7 years; Morgan Stanley downgrades Big Blue (IBM), putting pressure on the rest of the blue chips this morning; CPI + 0.2%, in line with expectations.

 
 
  Jonathan Levinson   6/18/02,  8:06:31 AM
For Steve, who asked yesterday about the symbol for the TRINQ on Street Smart Pro, one of our readers, Suzanne, was kind enough to the send the following to me last night:

The trinq is $trit if that is the same as nasdaq listed stocks short term trading index. Tell him to go to help from street smart pro, then under contents all the index symbols are listed. There are short term trading symbols for every exchange.

Thanks, Suzanne!

 
 
  Leigh Stevens   6/17/02,  8:17:52 PM
The Market Monitor for Monday (6/17) has been archived and can be reviewed at Link

 
 

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