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  Jim Brown   7/10/02,  9:36:42 PM
Pivot Trade Wrap
Bounce? What Bounce? - There was no bounce! As much as we tried to imagine one with every uptick, it never materialized. Earnings were negative, news was negative, sentiment was negative and the outlook is negative. How many negatives does it take to make a positive?

The S&P closed right below the October 1998 crash lows of 923 and 8 points above the 1998 low for the year of 912.83. It does not get much uglier than this. However, that is normally when the markets turn. The VIX closed at 39 and the TRIN at 2.13. The down volume swamped up volume and this is about as close to a capitulation as we are going to get. The news after the bell said that funds were still reporting massive outflows of both foreign and domestic cash and the overall sentiment was "I am finished." Good! That is called capitulation.

Obviously it could go on another few days or even a few weeks if the accounting crisis continues and the worry now seems to be that a whole new crop of surprises may appear in the next couple weeks. Earnings run? That term used to mean the gains by a stock as it approached earnings and was powered by speculators hoping for an upside surprise. Today the term earnings run means get out fast before they announce earnings and take the 5th.

Seriously, if the markets are going to bounce, even if it is just a hundred point relief rally, it had better be at the open on Thursday. If we fall further from here the flood of money from mutual funds over the last two months will look like a stream in Colorado. (there aren't any) It will look like a Texas river at flood stage if the S&P closes below the 920 level. Look at an intraday chart, 1 min, at the SPX on Wednesday at the close. The battle over 920 was fierce at the close and the bulls won by only 42 cents. A very slim margin in these days of 300 point Dow moves.

We are 42 cents away from being stopped out of the current LONG signal and if the futures tonight are any indication we are only one tick away from being flat again. Stop by at 9:15 and watch the blow by blow.

 
 
  Jeff Bailey   7/10/02,  6:56:45 PM
Research in Motion (RIMM) $12.80 -1.76% ... Jeff: Can you revisit RIMM and shed some light for those of us still bearish and holding Dec. Puts? Have always appreciated your insight. Many thanks from Canada!

Cheers! to good friend "north of the border!" and I think RIMM still goes south!

Don't think I'm not still following those (RULXC) profiled from 05/23/02 at $2.60.

The bearish vertical count is still $8.00, and while the stock came close at $10.50, still an opportunity for a retest of the lows. Link Current rally should have overhead supply serving as resistance near-term.

From bar chart, I've had retracement from $29.30 to $8.00. That has 38.2% above at $16.14, 19.1% at $12.07. What I'd want to see in the next week is a decline back below $12.07, then get that MACD to roll just below zero for the final flush to $8.00.

If looking to protect the trade and want a stop point a trader could put a tight stop at $14.05, which is just above the 07/05/02 high. Link

 
 
  Jeff Bailey   7/10/02,  6:15:23 PM
Jeff: Still any chance for a gap down on the dollar? Gold not breaking through 78 on XAU yet. Thanks!

Grin... at this point, anything is possible. Gold stocks as depicted by the XAU.X recovered from a -4% loss to post a marginal gain at 78.22 +0.33%, and this looks like "gold bugs" are really laying some bets on a weakening U.S. dollar. Link

Today, I just couldn't make the bullish bet in the sector though, with the Dollar Index (dx00y) showing gains.

Subscribers will note just how darned technically similar the August Gold futures (gc02q) and December Gold futures (gc02z) are now alligned with the XAU.X and how both have rallied back up under a rounding 50-day. August Gold futures (gc02q) actually closed lower today at $315.10, from Tuesday's close of $316.50. Here this evening, August Gold is ticking higher at $316.50.

While gold futures have been rather stable and trading in a tight range past three sessions, gold stocks have been whipped around a bit.

My thoughts are and have been, the to be a futures trader, you'd better know what you're doing, because you have very little "leading" or "lagging" type of indicator to trade off of.

Think about it. A gold producer is DEPENDENT on the commodities price level. While the gold futures are not the commodity itself, they are a way you and I can try and track perception of price. Today's closing spot price for Gold was $316.50, so August futures are on the mark.

The volatility we're seeing in gold stocks the last week or so is partially due to extreme levels of speculation.

Today was a difficult day to trade a gold stock, long or short in my opinion. You had two gold stocks ABX and PDG trading heavy volume due to last night's news they were coming out of the SPX. I think a trader is DEAD WRONG to have attempted a short on either of these on the thought that they would tank due to coming out of the S&P 500.

Now... the MARKET has the news, and everyone is on level ground as it relates to the S&P 500 changes. Look at the volume in ABX of 11 million shares and PDG at 8.4 million shares. Both stocks pegged their session highs at the close.

These two stock may now become near-term outperformers to the UPSIDE, if the U.S. Dollar tanks, and the commodity itself (gold) moves higher. The reason? These stocks may have been shorted today by the speculator looking for S&P re-balancing to be a negative. If gold prices rise from here, then both become candidates for a near-term short squeeze.

Note: Both Barrick Gold (ABX) $19.20 -1.74% and Placer Dome (PDG) $11.34 -0.96% are components of the Gold/Silver Index (XAU.X) 78.22 +0.33%.

 
 
  Jeff Bailey   7/10/02,  5:39:43 PM
U.S. Dollar Index (dx00y) What kind of index is the dxooy? I can't find it reported anywhere.(I don't use Q charts)

Think of this as an "index" which is computed using a trade-weighted geometric average of six foreign currencies against the dollar. The currencies are (euro, Japan yen, UK pound, Canadian dollar, Sweden krona, Switzerland franc). It's a way to keep track of the US% versus other major currencies, many of which are major US trading partners.

The symbol for this index is different at the various charting services. At www.stockcharts.com, the symbol is ($USD) Link

 
 
  Jeff Bailey   7/10/02,  5:03:48 PM
Yahoo! Inc. (YHOO) $12.19 -4.01% ... reports GAAP (Generally Accepted Accounting Principles) earnings of $21.4 million, or $0.03 per share, a penny better than consensus.

Net revenue for Q2 was $225.8 million, a 24% increase from the same period last year. Marketing services revenue totaled $135.7 million, a 4% decrease from the same period last year, which fell due to a decrease in renewals of previous advertising arrangements from Internet companies, partially offset by an increase in revenues from small-to-medium sized companies realized through YHOO's sponsored search and services and inside sales organization.

Fees and Listing revenues totaled $74.1 million, a 109% increase compared to same period a year ago. This was primarily driven by the HotJobs acquisition in the first quarter of 2002, the monetization of Yahoo! Personals, as well as an increase in the number of paying customers for YHOO's other fee-and listings-based services.

Stock active in after-hours at $12.44.

 
 
  Jeff Bailey   7/10/02,  4:43:09 PM
IDEC Pharmaceuticals (IDPH) $30.20 -7.95% Link ... company issues guidance saying that it estimates Q2 preliminary net income to be $0.20 a share, slightly above consensus of $0.19. IDPH says this level of net income was achieved through the combination of U.S. net sales of Rituxan totaling $257.4 million for the quarter, which IDPH copromotes in the U.S. with Genentech (DNA) $25.50 -6.07% Link , and net sales of Zevalin totaling $3.3 million, which IDPH markets alone in the U.S.

 
 
  Jeff Bailey   7/10/02,  4:24:44 PM
VeriSign (VRSN) $4.99 +3.31% ... stock trading lower at $4.85 after lowering Q2 guidance. Company expects Q2 revenue in the range of $315-$317 million and pro forma EPS of $0.14-$0.15, versus previous guidance of $320-$330 million and $0.18-$0.20. Company said "While continued weakness in IT spending led to lower demand than we had anticipated for our consulting and international affiliat lines of business, our telecom and core authentication lines of business showed improved performance from the first quarter."

 
 
  Jeff Bailey   7/10/02,  4:22:10 PM
Affymetrix (AFFX) $15.37 -9.58% ... Announces that it has entered into an EasyAccess Silver agreement with Immunex (IMNX) $18.43 -5.48%, under which IMNX will gain broad access to AFFX's standard and custome GeneChip arrays, instrumentation, and software. Terms of the deal were not disclosed.

 
 
  Jeff Bailey   7/10/02,  4:13:18 PM
Redback Networks (RBAK) $1.72 ... reports Q2 net loss of $0.16 per share, 2 cents better than consensus. Q2 revenues came in at $40.1 million versus consensus of $41.3 million.

Stock trades lower in light trading at $1.61.

 
 
  Jeff Bailey   7/10/02,  3:52:59 PM
FedEx (FDX) $52.37 -1.35% ... may be a short-term play here for bears. Profiling the July $50 puts (FDXSJ) $0.70 here. Target $47.50 near-term, but need lower YIELD and weak dollar. Link

 
 
  Jeff Bailey   7/10/02,  3:50:38 PM
Dow Transports (TRAN) 2,545 -1.19% ... looks like today will be the 3rd consecutive day close below this index's 200-day MA. This hasn't happend since early August (left of chart) and quite bearish. Link

 
 
  John Seckinger   7/10/02,  3:45:41 PM
The Utility Index continues to trade in a parabolic fashion lower, down 13.72 points to 239.27. Support should be found at 232, which may be coincidental with the 22 Monthly moving average crossing underneath the 50. The Biotech Index should maintain the daily low of 280.93, exactly at the low of our "support zone". Most likely traders are scaling into long positions at recent levels. Note: I totally agree with Jeff concerning price action in the U.S. dollar (posting just underneath).

 
 
  Jeff Bailey   7/10/02,  3:38:21 PM
Treasury Watch Per 03:00 Update, 10-year YIELD closed at 4.644%, so equity bears didn't quite get a signal from the bond market that all is "doom and gloom."

Still... very defensive type of action, but thinking there may be some stocks "overdone" on the sell side and emotions probably play a big part of equities today. As such, a bearish trader with a larger position in a stock that has done well to the downside on a near-term basis, may lock in some partial gains.

Only reason I see to be "bullish" so to speak is that US Dollar Index (dx00y) 106.06 +0.37%, looks to finish with some marginal strength. Maybe a double bottom on the bar chart. Hardly enough for a bull to hang his/her hat on, but reason enough for a bear to look for some profits in over extended downside stocks. Link

 
 
  Jim Brown   7/10/02,  3:26:42 PM
Pivot Trade Entry Point Alert - QQQ
If the Nasdaq Comp can hold this 1350 level on the second test I would be bullish on the QQQ. GO LONG the QQQ with a trade over $24.35, the recent intraday high.

 
 
  Leigh Stevens   7/10/02,  3:24:27 PM
Subscriber QUESTION: "On the subject of H&S patterns, the Q's appear to be forming a H&S bottom on the 60 minute chart. What do you think? Head on July 3, Shoulders at June 26 and Today. However, it almost appears to be a H&S top. Weird! "

RESPONSE: Great idea - but we can't go much or any lower then where we've been already, around 24 for "valid" Head & Shoulder's (H&S) bottom pattern.

If we test 23.6 and it holds then it’s a double bottom. Either is a potential bottom pattern.

These H&S patterns can 'flip" easily - suddenly what you thought was a bottom is now looking like a top - this is a bit weird when you see it.

 
 
  John Seckinger   7/10/02,  3:24:05 PM
Just a random thought: At current oversold levels in both the Nasdaq and Dow, it is my opinion that hedge fund managers may be selling the market with the true intention of taking a long position for the intermediate term. These funds can truly reach the "pain threshold" of retail investors, trying to spur panic selling, creating better liquidity, and getting better execution levels on the downside for their bullish investment.

 
 
  Jonathan Levinson   7/10/02,  3:17:49 PM
Someone get Jim a drink, fast! (big grin)!

 
 
  Leigh Stevens   7/10/02,  3:17:07 PM
Subscriber NOTE: " Re your note: 'If this prior low holds, this may be the short-term trading opportunity that I'm thinking is coming today/tomorrow.' Anecdotal data: on 9/21 we reached the low which was tested within 5 trading days (9/27)with the true rally starting on the 6th trading. The low this time was reached on 7/2, add 5 trading days and if it holds, the 6th trading day is tomorrow. For what it's worth... "

RESPONSE: I place some credence in these kind of calculations - thanks

 
 
  Jeff Bailey   7/10/02,  3:16:27 PM
The 3:15 PM intraday update has been posted. Link

 
 
  Jim Brown   7/10/02,  3:03:21 PM
Boss, boss, a bounce, a bounce!!! Yes Tatu, I see it but let's be quiet and try not to scare it away!

 
 
  Jonathan Levinson   7/10/02,  2:56:14 PM
I believe that this 10 point rise in the COMPX is in sympathy with the SPX- I see no support at 1350 to justify the bounce from there. The QQV is still up over 2 points on the day, indicating that traders haven't broken out their party hats just yet. Volume breadth is slightly more than 2:1 favoring declining volume, and for the COMPX, at least, there's no sign of capitulation. Just a deadcat bounce from the look of things.

 
 
  John Seckinger   7/10/02,  2:54:00 PM
Banking Index used the 22 and 50 DMA's as resistance on Wednesday, but a relative low looks to be forming as the index is currently down 22 at 2336. Both DMA's remain higher near 2370. Utility Index is continuing its long liquidation, falling off the chart and underneath lows set in early 1997. Moreover, The Transport Index might stay completely underneath its 22 and 50 DMA for the first week since last November. Not encouraging.

 
 
  Jim Brown   7/10/02,  2:50:25 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the broad market LONG signal at 14:37:00 when the SPX traded over 927. (OEX 462.97, DIA 89.35, SPY 93.14, DJX 89.04) The S&P came within a point of hitting the October 1998 crash low of 923. This is also the low end of the recent down trend channel. If we are going to see a double bottom bounce it has to be here. If this level fails the markets will set much lower lows. Keep in mind this may only be a trading bounce as other traders seeing the same inflection points try to catch this falling knife. We need to be alert to the possibility and bail on this trade in a heartbeat if the 923 level is broken significantly. I am changing the initial stop loss to SPX 920 which would represent a significant break of that 923 level. (OEX 458 est)

 
 
  Leigh Stevens   7/10/02,  2:39:37 PM
Subscriber QUESTION: " Has anyone written an article {that would be in the archives) on "ticks" and how they can be interpreted? "

RESPONSE: Not in our Trader's Corner or other type educational articles. I looked through my books & didn't find anything explaining how to use the Tick information. It's mainly just seeing when the advances go way over the decliners and vice versa.

If TICK ($Tick) goes to -590 it means that the last trades on all NYSE stocks that had either up or down "ticks" was greater than the number making upticks by 590 - for example, 1000 stocks had up or down ticks (not an "unchanged" price) on their last trade and of this 1000, if 205 are up and 795 down, this equals TICK of -590.

TICK Indicator - when a minus number, it shows number of stocks trading on down ticks minus number of stocks trading on up ticks; when a plus number, this is number of stocks trading on up ticks minus number of stocks trading on down ticks

 
 
  Jim Brown   7/10/02,  2:38:13 PM
Pivot Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go LONG the broader market with an SPX trade above below 927. The Nasdaq has stopped just above 1350 and could provide some SPX support. This is a HIGH RISK TRADE and the initial stop loss will be SPX 923, Just below the low of the day.

 
 
  Jonathan Levinson   7/10/02,  2:34:17 PM
The QQV has finally woken up, up 1.67 on the day to its upper resistance as discussed earlier. The TRINQ is now above 1 because, among others, Worldcom flipped to negative on the day. With the low of the day on the COMPX currently at 1350, and volality for the QQQ finally showing some increase, the 1340-45 congestion area becomes a more likely bounce candidate. Volume breadth is negative, more than 2:1 but less than 3:1 for declining volume- we've seen much worse, though, haven't we?

 
 
  Jeff Bailey   7/10/02,  2:26:08 PM
Stocks continue to erode as money rushes to Treasuries. 10-year YIELD ($TNX.X) falling to 4.656%.Link

 
 
  Jim Brown   7/10/02,  2:23:50 PM
Pivot Trade Signals
My next suspected point for a bounce would be SPX 923. That is the bottom of the recent downtrend channel and the October 1998 crash low. Aggressive traders might want to go LONG a bounce from that level with a very tight stop. With curbs in any further drops could be slowed.

 
 
  John Seckinger   7/10/02,  2:20:18 PM
Both Ford (F) and General Motors (GM) continue to weigh on blue-chip investors' minds following the Banc of America downgrade to "market performer" from a "buy" rating. BAC lowered its 2002 and 2003 estimates for both companies and is worried about future revenue due to fierce competition. Shares of F are lower by 88 cents at 14.23, while GM is down 2.64 at 48.50.

 
 
  Leigh Stevens   7/10/02,  2:17:27 PM
Subscriber QUESTION: "How do I put that "21 hour stochastic" into my daily chart.I have money net.com. You write some great stuff."

RESPONSE: I don't know how to use your application. You have in most charting/technical analysis applications the ability to set the number of "bars" or periods you want an indictor to work from - if set to 21, then the software will use the highest high and lowest low for 21 days, hours, or whatever the chart is, for calculating a stochastics formula.

If you have a daily chart up, and you "apply" the stochastics formula to that chart and "length" for stochastics is set to "21" then the formula is going to calculate based on the last 21-"bars", which in this case is 21-DAYS. If you apply the same to an hourly chart, then stochastics formula will be taking last 21-hours to calculate and display stochastics graph.

Most applications allow you to set up a chart window with an hourly chart and apply stochastic and set length on THAT stochastic to 21. At same time you can usually have a daily chart "window" set up with stochastics applied that is set at say, 14.

 
 
  Jim Brown   7/10/02,  2:13:50 PM
Pivot Trade Signals
Capitulation day? The down volume is running better than 5:1 to up volume on the NYSE and better than 2:1 on the Nasdaq. New lows are 310 compared to new highs of 60. Considering the markets have now broken the July 3rd lows and are down -400+ points for the week there is a good chance the capitulation event could be at hand. Only time will tell since the classic panic drop has not occurred and we are seeing a capitulation by breadth not depth. The VIX is soaring at 37.76 and the TRIN is on track to post a back to back day over 2. Dick Arms called this a double deuce and a strong buy signal. Time will tell.

 
 
  Jeff Bailey   7/10/02,  2:08:32 PM
Invitrogen (IVGN) $27.95 -4.7% .... subscribers that were nervous about IVGN's earnings reaffirming from 07/03/02 can cover here (see yesterday's 03:00 Update Link )

"Like stock" in Affymetrix (AFFX) $15.62 -8% showing relative weakness and have a feeling we're on the right track as it relates to commentary yesterday.

While IVGN reaffirmed current quarter guidance, current action makes you wonder about future guidance doesn't it?

 
 
  Jonathan Levinson   7/10/02,  2:07:56 PM
All stochastics, from the (Y)ear view all the way to the 1 minute view, are oversold on the COMPX. Intraday stochastics are at 0% oversold. Watching for support in the 1340 area. The TRINQ remainds entirely useless, and I'm struggling to stop watching it. Looking forward to WCOME being removed from the calculation. Interestingly, the QQV remainds entirely flat as well, now up only .43 as the COMPX breaks down.

 
 
  John Seckinger   7/10/02,  2:05:07 PM
Pharmaceutical Index did in fact roll lower from the five minute 22 period moving average, setting a new low of 268 - four points above our objective. Bitotechs also went into free fall mode, now at 284 and should test 280 - the bottom of our "support zone". The Financial Index has not quite fallen to 2100 and could see light buying just underneath current levels as the 200 DMA is tested.

 
 
  Leigh Stevens   7/10/02,  2:04:00 PM
Subscriber QUESTION: " What do you think of going long on qqq stock or calls? Nasdaq seems to be fighting the sell off here better then the Dow."

RESPONSE: Yes, Nas is holding up better than DJIA. The VIX (CBOE volatility index) has gone to a substantial new high today. VXN, measuring the Nas 100, has not.

INTC weakness and lack of any breakout moves in CSCO, MSFT, QCOM and ORCL suggests that QQQ is not in a position of being able to rebound. Also, looks like QQQ may be heading to a test of its prior low at 23.6 -it already took out the prior 24.4 low (from before the recent bottom).

 
 
  Jim Brown   7/10/02,  2:02:22 PM
Pivot Trade Signals
The next support level for the OEX is 463, the July-3rd low. However the S&P has already broken its 7/3 low of 934.87 and is still dropping. Attempting to catch this falling knife could be dangerous. The NDX is still +20 points above its low and the Comp +26 points. Where is this drop going to end? Some say SPX 925 but I am thinking with all the broken support levels the eventual low may be below 900. Scary but it does us no good to hide our heads in the sand to the possibilities.

 
 
  Jeff Bailey   7/10/02,  2:02:03 PM
Expedia (EXPE) $58.25 +0.33% ... Jeff Thanks you for all your insight on trading. Have been watching EXPE from OIN play of the day last week. Currently stock appears to be rolling over in mid $58 area.

On the daily chart July 1 price was approx. $61.50 when the stoch's rolled down. Now the price is $59.70 with the stoch's looking to roll from a much higher level. Does this Qualify as bearish divergence?

Here's a chart of EXPE with Stochastics set at (5,3,3). I understand the term "bearish divergence" as an indicator trending down, while a stock's price action is trending up. From what I see, everything is in "unison" here, so I'm not seeing any "bearish divergence."

Now... are you correlating your trading in EXPE with its potential buyer in USA Interactive (USAI) $22.84 -2.72%? If not, you'd better be!... Looks like USAI is redy to roll again, and EXPE has been following it around like a lost puppy dog. Link

See how your stochastics are also starting to roll in USAI?

Why might USAI be trading a little heavy today? Could it be that it is a "media" company, and another "media/Internet" company is reporting earnings tonight in Yahoo! (YHOO). Just making some associations here, but could be a more defensive near-term posture ahead of YHOO earnings. Results tonight from YHOO most likely drives tomorrow's trading in USAI, ROOM, EXPE and even TMCS. Remember, USAI is trying to buy the remaining shares it doesn't already own of ROOM, EXPE and TMCS in a stock for stock deal.

 
 
  Jim Brown   7/10/02,  1:55:39 PM
Time to go long on the qqq's?I am looking at the Aug 25 calls at $1.55.Nasdaq seems to be fighting the sell off here better then the Dow. Rob

While I agree with the urge to go long the QQQ because of the stronger than expected Nasdaq it appears the markets in general can't mount anything resembling a real rally. There is a bounce here somewhere but every support level touted by the various analysts has failed and the markets are continuing lower. Until further notice I would only want to be long the QQQ over $25. That could change if we got another big sell off and rebounded from those lows but for now patience is the key! Anybody got any Band-Aids?

 
 
  Jeff Bailey   7/10/02,  1:54:37 PM
The 1:00 PM intraday update has been posted. Link

 
 
  Leigh Stevens   7/10/02,  1:44:27 PM
Subscriber QUESTION: " Leigh - question re oscillator divergence: What timeframe do you recommend someone watch for price/oscillator divergence? Someone who normally gets in and out of a trade the same day; and someone who prefers 2-3 days swings as do you? And do you prefer stochastics (what setting) or RSI (what setting) or what? "

RESPONSE: Look for bullish or bearish "divergences" in the time frame that you have set up for your oscillator(s) - I assume you are talking about price/oscillator divergences. For example if you rely on the 5-bar Stochastic or RSI model to trade with, look at the intrday price action. If the latest new low for the day, was not "confirmed" by the 5-hour RSI - ie, the RSI did not ALSO fall to a new relative low - this bullish divergence is potentially "valid" or is a bullish/buy indication for a 1, at most 2-day period.

If trading the 2-3 swings and relying on say the 21-bar stochastic and there is a new high for this time frame (2-3 days) not "confirmed" by a similar move to a new high, this potential bearish divergence is potentially useful for spotting an upcoming reversal of a 2-3 day trend.

The RSI is the best single oscillator with which to spot divergences. I always keep the RSI on my daily charts, but I tend to look more for these longer-term divergences more than I do on interday charts. Again, length "setting" has to do with the time horizons I want to examine or trade; e.g., 5 on hourly charts for day trading, 21 on hourly for the 2-3 day swings; 14 on daily for the 2-3 week swings; 8 or 13 on weekly charts for the 2-3 month trends.

 
 
  John Seckinger   7/10/02,  1:37:14 PM
Afternoon Anecdotals: Gains in the Dollar grabbing the headlines, off the sessions high but still showing a nice advance in the futures market. Crude Oil remains strong, while Treasury bonds continue to post impressive momentum to the upside. What does this mean for equities? The dollar should give equities an underpinning bid while selling pressure on stocks will come from both treasuries and crude oil. Since the dollar is currently the best leading indicator, the Nasdaq should be kept from spiraling downward during the afternoon session. Note: Since all anecdotals are not mixed, it does make sense that the Nasdaq has been range bound so far.

 
 
  Leigh Stevens   7/10/02,  1:10:08 PM
INDEX Comments: QQQ & OEX - both traded right up to their down trendlines on their 30 min. charts, at 24.75 in QQQ and around 470.7 in OEX - both reversed at their resistance trendlines.

 
 
  John Seckinger   7/10/02,  1:03:58 PM
Pharmaceutical Index did find bids near 269, above our 264 objective; nevertheless, shares have not cleared the five minute 22 period average (271) in quite some time. Expect the same kind of rollover here. Biotechs still in "zone of support" at 280-290, so we will continue to monitor price action. Turning to the dollar, it is my impression that the short term rally will continue (futures at 106.59; objective is 107.50 before stalling).

 
 
  Jonathan Levinson   7/10/02,  12:58:07 PM
A buy program is hitting the COMPX, driving it off its lows at 1367. I've been hearing countless predictions for a bounce, and have been targetting different calls and puts this morning without jumping in. The TRINQ has been buried below 1 all morning, not giving any useful input whatsoever, and trading lately has felt like driving in the rearview mirror. However, looking a longer TRINQ chart, I see that the 13 day EMA at 1.78 has turned down, which indicates a buildup of bullish pressure, or rather, that there's been more buying pressure this week than the 13 day EMA. I tend to try to ignore the stochastics once they've become buried, but the weekly and intraday stochs are itching for a pop from oversold. Add to that the QQV which is edging along the bottom of its top bollinger band. I expect a bear market bounce here, and don't believe that this morning's pop and drop was it. Upside resistance is at the 1395-1400 level, followed by 1415. Support below is at the lows of the day, followed by 1440-1445. It's very difficult to stay out, and but preserving capital is job 1, followed a close second by booking profits. I will personally wait for a better setup to keep the guessing factor to a minimum.

 
 
  Leigh Stevens   7/10/02,  12:55:09 PM
Subscriber QUESTION: " In looking at various indicators. I notice that there appears to be a significant divergence with OBV and price in the DOW. Perhaps I'm reading it wrong....I don't think you use this indicator in your daily analysis, however, it might be worth a look. ( As a side note RSI seems to be holding up too.) FOLLOW UP NOTE - Just checked my charts on another service and guess what OBV is not divergent...forget my last post. "

RESPONSE: One thing is that On Balance Volume (OBV) is normally not used on an index only on individual stocks. At least that was the way (Joe) Granville, inventor of OBV, used to talk about with his indicator. It could be I suppose used on the Dow, but the formula would have to "pull in" the right total volume figure.

And, the only "right" figure for the Dow Industrials OBV would be one that took the total volume of the 30 stocks. I don't have such figures available myself. Your OBV formula might use "tick volume" as a "default" if "true" volume is not available. But tick volume is not valid for OBV.

 
 
  Jeff Bailey   7/10/02,  12:54:27 PM
Yahoo Inc. (YHOO) $12.58 -0.86% ... Jeff: I took a lottery play in your Yahoo July $12.50 puts at $1. With earnings tonight, do you think I should hold over, or take gains at $1.20?

It depends on your tollerance for risk, but since I profiled as a lottery play (risk capital), and stock hasn't hit my $11.50 target, I'd let it play out. YHOO expected to report earnings tonight after the bell. Consensus is for earnings of $0.02 a share.

 
 
  Jim Brown   7/10/02,  12:51:20 PM
Hi Jim, looking from the action of Ge,msft,and intc,looks like we are going down........if so how far?

I don't know about MSFT since it is holding its gains today. However GE is down -.50 and could drop another .75 before hitting last weeks lows. IBM is weighing on the Dow and could be ready for another drop back to $67. The biggest hits for the Dow today are GM which is down over -2.00 and JNJ down -2.61. These are followed by MRK at -2.08 and BA -1.92. How far can we go? Last weeks low was 8900 and with advance/declines falling through the floor it is possible we could see that level again. One of the biggest problems today is the seven deletions from the S&P as well as fear of the second dip in the economy. There is an increasing view that this dip is in our future based on the stop in new chip and PC orders and the drop in consumer sentiment. The morning bounce was killed by the criminal investigation of Qwest and fears that others are in the wings and may come out with earnings. With the new, stronger guidelines for earnings there is likely to be quite a few CEOs that will force further disclosures with earnings rather than sign a lie.

We are seriously oversold but I have already tried to pick a bounce twice today. I plan on remaining on the sidelines until something develops. Entering a new SHORT position here does not make any sense but neither does a long position without a sentiment change. We will be looking for last weeks lows on the Dow/OEX as the next likely bounce point.

 
 
  Jeff Bailey   7/10/02,  12:45:06 PM
Affymetrix (AFFX) $16.14 -5% ... stock just traded $16. May be clearing out some stops there, but looking good for bears from $21 and $19 bearish profiles. Looking to cover on break to $14 of bearish vertical count. Link

 
 
  Leigh Stevens   7/10/02,  12:43:32 PM
Subscriber NOTE: "the head and shoulder pattern (I was writing you about earlier) on spx shows from 1998 to 2002. Drawing a line from 1998's low (first shoulder) to 2002's (second shoulder) creates the 945 support . The head was in 2000, around 1600. I got this from a technical analyst friend. "

RESPONSE: There has been this speculation on both the S&P 500 long-term weekly chart and the Dow weekly - that suggests that this big sort of "rounding top" pattern is a Head & Shoulder's (H&S) top. I disagree, as the H&S pattern is not normally considered to:

1.) form over MORE than a few month period 2.) have a "Head" that is so far out of "proportion" to the "shoulders" of the same pattern. The analogy I use is that you have an "elephant" Head & human size "shoulders"

Because of the invalidity of applying a Head & Shoulders top interpretation to the SPX long-term weekly chart - making downside projections based on the distance from the top of the Head to the neckline (at 923 to 933) with a corresponding deduction from the level where there is break of the neckline at the bottom of the "right shoulder, is also not valid in my estimation.

(By the way, an SPX break of 933, if we use this as the "neckline", would then result in a downside projection to 313, if you use the "normal" H&S measurement for objectives after breaking the neckline.)

 
 
  Jonathan Levinson   7/10/02,  12:27:19 PM
Advancing and declining volume is now even on the COMPX. The bounce that everyone was waiting for has so far been restricted to the short lived opening gap. It looks like MSFT, CSCO and IBM have prevented today's COMPX action from turning into a bloodbath. If this is the bounce, I'd hate to see the correction.

 
 
  Leigh Stevens   7/10/02,  12:17:57 PM
SECTOR Update: The Biotechnology Index ($BTK.X) fell to a new low at 289.04, which is under the prior 290.67 intraday low - that day however, BTK closed at 309.32, which was a strong rebound from the low end of the daily downtrend channel that BTK is trading in. Now, the index is again at the bottom of this channel, but is not showing any signs of rebounding. This prior action (the 7/3 turnaround) suggested to me that the sector might have put in at least an interim low and would rebound further than it did.

I am stopped out of the Biotech HOLDR's (BBH) at 69.00 - was long at 72.00. BBH is last at 68.11 and is, like the Biotech Index, at the low end of its downtrend channel. The stock may be low-risk currently, but am not ready to jump right back in as it may just drift down for a while, following that channel line lower.

 
 
  Leigh Stevens   7/10/02,  12:04:30 PM
INDEX Comments: OEX - the index has not held its intraday low - just made a new intraday one. OEX is now so close to its prior 464 bottom that it appears increasingly likely that it will retest this level. If this prior low holds, this may be the short-term trading opportunity that I'm thinking is coming today/tomorrow.

 
 
  Jeff Bailey   7/10/02,  12:02:48 PM
The 11:00 AM intraday update has been posted. Link

 
 
  John Seckinger   7/10/02,  12:01:46 PM
The Biotech Sector has reached our 290 support area. There should be a "zone of support" between 280 and 290, while 310 most likely will cap a short-covering rally. Pharmaceuticals continue to get pummeled, heading towards our 264 objective. Currently down 13 at 271, we may get that objective sooner than later. The Financial Index may find support at current levels (2132); however, it is my opinion that 2100 will be reached in the near term and a bearish triangle will be formed.

 
 
  Leigh Stevens   7/10/02,  11:57:05 AM
Subscriber QUESTION: " The SPX neckline at 945 was breached - is this significant just because it happened? Or more significant with close below neckline? "

RESPONSE: I don't see the pattern you are talking about - we are seeing the possibility that a "right shoulder" (of a Head & Shoulder's bottom) is forming on the hourly charts, with the low so far today around 951, still in the area of the bottom of the potential "left shoulder" at 953. This is all a bit of a speculation at this point as SPX can certainly retreat back to its prior low at 935 and establish a double bottom, or not, if the index retreats still lower.

 
 
  John Seckinger   7/10/02,  11:46:42 AM
Crude Oil up over 0.80 following the API report on Tuesday. This rally is keeping the Commodity Research Bureau (CRB) positive and is one more reason to pressure equities. Other reasons include further relative strength in 5-year notes compared to 30-year, since this "flight-to-quality" is even less susceptible to interest rate risk than normally "safe" long bonds. On a positive note, Treasury bonds ran into resistance and traders took profits, allowing stock holders time to catch their breath (so far it has lasted 10 minutes).

 
 
  Leigh Stevens   7/10/02,  11:45:51 AM
INDEX Comments: OEX - the intraday low (468.4) is close to where I was anticipating possible support developing in OEX - last at 468.8. My longer hourly stochastic model is now at a fully oversold reading, so this may be an area to cover short/puts and aggressive traders step up to the long side. Stops can at least be kept "tight" in this area, as OEX will either hold around its recent lows or take a drop further in a retest of the recent 464 bottom.

 
 
  Jonathan Levinson   7/10/02,  11:45:21 AM
Down volume has just about caught up to up volume on the COMPX after this downdraft. Price is bumping along at the 1370 short term support level with all intraday 10(5) stochastics currently oversold. The QQV is up another .25 now to .78. Still a very weak market, but the only short entry points have been for gunslingers so far- interesting action that is frustrating both longs and shorts.

 
 
  John Seckinger   7/10/02,  11:38:28 AM
Treasury Bonds now testing the 104-04 level. Once above there should be significant stops being triggered. The objective remains at 105-16. As always, higher bond prices in theory means lower equity prices as well as lower yields.

 
 
  John Seckinger   7/10/02,  11:36:00 AM
On a far off tangent: The relative low in the Nasdaq is 1336. It was during the decade of the 1330's when the "Bubonic Plague" occurred in China. Other significant years included: 1347, 1352. I might be the only trader thinking of those numbers in that fashion; therefore, it is almost impossible to hold weight. Food for thought while traders in the NYSE eat or prepare for lunch.

 
 
  Jim Brown   7/10/02,  11:16:58 AM
Pivot Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Not going to be my day for longs it appears. We were stopped out of the current LONG signal at 11:13:02 when the OEX traded below 472 and at the low of the day. (SPX 945.35, DIA 90.51, SPY 94.73, DJX 90.42) We will stand aside and watch the markets until an extreme is reached. I do not anticipate any further trades for the balance of the morning.

 
 
  John Seckinger   7/10/02,  11:06:13 AM
The Euro almost pulled to parity with the Dollar for the fourth time in two weeks during early trading today. Moreover, the dollar has recovered from a 10-month low against the Yen. Therefore, intermediate projections are certainly for a weaker dollar (unless proven otherwise via price action); however, there certainly is room for a short term bounce - which is what we are experiencing currently.

 
 
  Jim Brown   7/10/02,  11:04:41 AM
Pivot Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the new LONG signal at 10:56:06 when the OEX traded above the 475 trigger point. (SPX 951.17, DIA 91.19, SPY 95.59, DJX 90.97) The initial stop loss on this trade will be 472. (SPX 946) This is a HIGH RISK signal and should only be taken with risk capital

 
 
  Jim Brown   7/10/02,  10:58:31 AM
Pivot Trade Signals
I changed the entry point on the LONG signal to 475 as it appears the markets have consolidated here and could move higher. I would rather be in at a lower level if possible.

 
 
  Jim Brown   7/10/02,  10:56:20 AM
Pivot Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go LONG the broader market with an OEX trade above 475.00.

 
 
  John Seckinger   7/10/02,  10:54:57 AM
Treasury Bonds: The September futures contract did in fact find solid resistance between our 104 to 104-04 level (intra-day high of 104-03). Currently up 2 ticks at 103-28, bond holders now have no choice but to watch equities for direction.

 
 
  Jonathan Levinson   7/10/02,  10:47:54 AM
The COMPX is showing very little strength here, and seems to be trying its best to coil into a wedge. The QQV is edging up a bit, now up .5 on the day. I'm itching to put on a position, but right now this intraday chop feels a little to close to a guess for comfort. Down volume is catching up to upvolume, now 241M advancing to 199M declining. It's anything but a bullish day, but I don't want to get blown out on a sudden spike if the wedge breaks north.

 
 
  Jeff Bailey   7/10/02,  10:44:38 AM
OSI Systems (OSIS) $17.50 -2.23% ... had a downside alert here, just below yesterday's low. Looking for some downside volume and would like to see a close below $16.80 (50% retracement from $27.10 to $6.50).

 
 
  Jeff Bailey   7/10/02,  10:36:30 AM
Ameren (AEE) $39.30 -3.4% .... stock down rather hard here and negative. Concern here as the company did a secondary offering back on February 27th at current levels and beginning to discount after a strong showing from secondary. May be some type of "energy" problem here. No news... Link

 
 
  Jeff Bailey   7/10/02,  10:32:03 AM
ESS Tech. (ESST) $16.85 -3.65% .... (see 10:21) ... taking retracement from $25.37 to $5.09, has 61.8% at $17.62 (market maker resistance), 50% at $15.23 (market maker neutral) and 38.2% at $12.84 (marker maker support). With MACD rather flat just below resistance of $17.62 stock may be vulnerable near-ter to 50% and 38.2% retracements. 200-day MA attempting to roll over. Link

 
 
  John Seckinger   7/10/02,  10:27:08 AM
The Pharmaceutical Index continues to come under pressure, while The Biotech Index came close to our 290 support level (intra-day low at 293). Currently at 297, the range in biotechs should be confined between 290 and 310 with a bias to the downside. It is interesting to note the Financial Index did in fact keep setting lower relative highs and does look to draw out a bearish triangle from its initial double bottom formation.

 
 
  Jim Brown   7/10/02,  10:23:51 AM
Pivot Trade Signals
It appears the drop this morning was not a sell program as first expected but the word from the futures pits credits the Qwest news as causing a momentary panic and the immediate selling. Whatever the cause it succeeded in blunting the opening bullishness and possibly setting the tone for the day.

 
 
  Jonathan Levinson   7/10/02,  10:22:06 AM
Advancing volume is just over twice declining volume on the COMPX, though price stopped dead just below the opening high of the day. The TRINQ has been no help at all, as has been the case all week, but FWIW, it's currently at .43. The QQV is up .26, one point below its upper bollinger band resistance.

 
 
  Jeff Bailey   7/10/02,  10:21:02 AM
Zoran Corp. (ZRAN) $17.39 -9.7% and ESS Tech. (ESST) $16.90 -3.37% .... down after Pacific Crest says they're concerned that ASP erosion at 15% or more makes it challenging for the company's to achieve firm's estimated 2002 DVD volume shipments. Believes ZRAN Link is less exposed to these ASP declines than ESST Link due to its strength in Japan.

Hmmm.... if Pacific Crest is correct and ESST has more exposure to weak ASP market, then trader can short/put ESST, stop $19, then look for a sell signal at $15.50, to turn vertical count bearish to initial $12.

 
 
  John Seckinger   7/10/02,  10:16:57 AM
Looking at a chart of the Septemeber 30-year bond (currently up 4 ticks at 103-30), resistance should be just above between 104 and 104-04. A settlement above could propel the futures contract to 105-16. In theory, as bond prices go up, equity prices go lower.

 
 
  Leigh Stevens   7/10/02,  10:16:05 AM
INDEX Update: Support & Resistance -

S&P 500 (SPX) Support > 953, at a prior (down) swing low; then, at 935 bottom - Resistance > looks like 970, at the prior "breakdown" point

S&P 100 (OEX) Support > 471 area, at a prior swing low; then, 464 at the recent bottom - Resistance > 483-484, the "breakdown" point of yesterday; then, 488-490

DJX: Support > 89.3-88.9, at the levels of the two prior swing lows - Resistance > 92.4-92.5, which is quite key as it was yesterday's "breakdown" point.

 
 
  Jeff Bailey   7/10/02,  10:11:38 AM
Choppy trading in here as US Dollar (dx00y) 106.07 +0.29% finds some bid, but Treasuries find marginal buying with benchmark 10-year YIELD fractionally lower now at 4.737%. This action gives "mixed picture" for equity traders and creates rather tight trading for stocks and little sense of buy/sell bias.

 
 
  Jim Brown   7/10/02,  10:09:00 AM
Pivot Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go LONG the broader market with an OEX trade above 477.50 which is the high of the day.

 
 
  Jim Brown   7/10/02,  10:07:42 AM
Pivot Trade Signals
It appears the S&P led us down this morning after losses in the stocks being removed from the index knocked the index back to almost the post 9/11 lows of 944.75. The low today was 946.45 but the trend is still weak and we could see that level again soon. There was a sell program at 9:42 and the index has not yet recovered. The Nasdaq remains the standout based on the CSCO upgrade and gains by MSFT. Internals are improving slightly and I would anticipate another attempt to go LONG if the indexes pass today's highs.

 
 
  Leigh Stevens   7/10/02,  10:06:33 AM
INDEX Update: Support & Resistance -

Nasdaq Composite (COMP) Support > 1380, at bottom of chart gap; then, 1375 at prior low; 1360 area is at my lower hourly chart envelope line - Resistance > 1400 area; then, 1415

Nas 100 (NDX) Support > 995, at bottom of its chart gap; then, 980, at a prior swing low - Resistance > 1018 area, at top of chart gap, on up to around 1023; above this, look for selling in the 1030-1033 area

QQQ: Support > 24.4, at a prior low; then, 23.6 at recent bottom - Resistance > 25.25, at top of chart gap; then, 25.4-25.5.

 
 
  Jeff Bailey   7/10/02,  10:05:39 AM
Microchip Tech. (MCHP) $23.92 -6.2% ... stock down after boutique firm Avalon initiated coverage with a "trading sell" rating and price target of $20, saying stock is "priced to perfection," and while firm does not believe company will miss Q1, they do think guidance will disappoint due to WCOME problems, weak auto sales, and weakness in 16-bit business.

Point/figure somewhat bearish and having trouble getting above trend at $28. Vertical count bearish to $20. Decent 1/2 position put here, or look for rally to $27 as entry. Link

 
 
  Jim Brown   7/10/02,  9:55:56 AM
Pivot Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
That was exciting! The LONG signal was stopped out at 9:49:36 when the OEX traded below 474. (SPX 950.99, DIA 90.65, SPY 95.06, DJX 90.58) It appears the selling from yesterday afternoon was not over and we headed down again. The failure to follow through on the opening bounce from severely oversold conditions does not bode well for the markets.

 
 
  Jonathan Levinson   7/10/02,  9:52:49 AM
Immediate support for the COMPX is at 1380, followed by 1340. To use a hackneyed, trite expression, the present level is "critical".

 
 
  Leigh Stevens   7/10/02,  9:50:01 AM
Wall Street Journal (WSJ) - This morning's WSJ has a front page story: "Bush crackdown on Business Fraud signals a new Era" - I would say its "new" when there is someone behind bars. Meanwhile, the Money & Investing section has story titled "Bush speech leaves investors wanting action" - is this the "where's the beef?" of our times. Anyway, investors are waiting for concrete action.

Merck postponed its Medco IPO, but hopes to spin it off later - up to a year down the road. With buyers holding tight to their wallets for established stocks, IPO's are not the rage currently.

Salomon Smith Barney was asked by two members of Congress if they favored top execs of WorldCom with some hard to get IPO's - one they zeroed in on was Rhythms NetConnections, a dot-comer whose stock went up 229% on its opening day (later peaked at a price that was 431% above the original offering price). Of course, the company subsequently went into bankruptcy -not before the Solamon favored few dumped it no doubt. Of course this is nothing new - it was a well known Wall Street practice to "reward" top institutional clients with hard to get IPO stock.

 
 
  Jonathan Levinson   7/10/02,  9:45:52 AM
37 new lows to 6 new highs on the COMPX, with 102M advancing shares to 26M declining shares, as the COMPX heads lower into its opening gap. Looks like very concentrated buying into a select few "winners". Without looking, I'm guessing CSCO and EBAY, for starters.

 
 
  Jim Brown   7/10/02,  9:45:32 AM
Pivot Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
The entry point and index levels for the current LONG signal were OEX 477, SPX 955.90, DIA 91.54, SPY 95.96, DJX 91.26.

The initial stop loss on this signal will be OEX 474, just under yesterday's closing lows. (SPX 951) Hopefully we will not need these numbers and the markets will see a follow through of the opening bounce.

 
 
  John Seckinger   7/10/02,  9:43:59 AM
Morning Anecdotals: A higher dollar and weaker gold should benefit equities, while a strong 5-year note and higher oil (CRB index is higher) is more defensive. Note: The dollar recently has been a leading indicator, while oil has been more of a laggard.

 
 
  Jonathan Levinson   7/10/02,  9:37:18 AM
Despite the dropping price from the open on the COMPX, we have bullish crossovers on all intraday 10(5) stochastics, reflecting the gap up. I wouldn't be surpised to see the COMPX head up from here, and the initial selling could have been stranded longs selling into the 15 point gap up open.

 
 
  Jonathan Levinson   7/10/02,  9:33:04 AM
That would be a 15 point gap up on the COMPX.

 
 
  Jeff Bailey   7/10/02,  9:32:54 AM
The 9:00 AM intraday update has been posted. Link

 
 
  Jim Brown   7/10/02,  9:31:02 AM
Pivot Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go LONG the broader market as soon after the open as possible. If the market is going to roll over we want to get in as early as possible to prevent buying at the top and giving back several points on the drop.

 
 
  John Seckinger   7/10/02,  9:30:00 AM
Rumors circulated overnight on a possible merger between Deutsche Telecom and AT&T. Also included in the rumor was Deutsche Telecom selling their stake in Voicestream for 10% of purchase price. Moreover, there was a rumor of CEO Sommer's resignation, whom is featured on the cover of WSJ.

 
 
  Jim Brown   7/10/02,  9:28:55 AM
Pivot Trade Signals
It appears that the indexes are poised to rally but how far and how fast is anybody's guess. The immediate urge is to go long at the open but normally we let the opening volatility fade somewhat before taking a position. There has been a tendency recently to gap open and then fade when bulls are unable to maintain momentum. However with the oversold conditions from yesterday we are going to risk any opening buy in the hopes of getting in close to the bottom.

 
 
  Leigh Stevens   7/10/02,  9:27:47 AM
More on the Merrill upgrade of Cisco (CSCO) - they went to an "intermediate-term strong buy" from a "buy". Their assessment that the company's fundamentals are improving and that CSCO will outperform the Nasdaq before the end of the year.

The Merrill Analyst told the firm's clients that "Our 'indicators' continue to point toward a recovery in communications equipment new orders during the second half of 2002, with revenues following shortly thereafter."

 
 
  John Seckinger   7/10/02,  9:23:41 AM
In overnight trading, the Nikkei lost 2 percent while the Dollar came under slight pressure (futures are now higher). U.S Treasuries continue to remain weak; however, foreign bonds (especially German) found solid demand - once again showing funds leaving the U.S. markets due to accounting concerns, weak dollar, earnings concerns, etc...Analyst Meeting scheduled today: ORCL. Moreover, there are reports of Morgan Stanley making positive comments on SUNW.

 
 
  Jonathan Levinson   7/10/02,  9:22:14 AM
I see slight bollinger band resistance on the Nasdaq-100 volatility index (QQV), and falling momentum, which tells me that fear is close to maxxed out in the short term. First "support" for the QQV is at 50 (the midpoint between the bands) with lower support just above 45. I will be watching these levels, along with the TRINQ and stochastics, to try to catch the top of what looks to be at least a bounce, reasoning that the QQV will be likely to stop falling or bounce back up from its support levels. A QQV reveral from a down move generally coincides with the reversal of an upmove in the QQQ's price. Something to keep an eye on.

 
 
  Leigh Stevens   7/10/02,  9:12:06 AM
Pre-Opening INDEX Comments - The big buzz of the talking heads this morning is the "strong-buy" rating that Merrill Lynch put on Cisco Systems (CSCO) with an upside target based on a 35 (P/E) multiple. Reach for the stars mother Merrill!

You may have noticed that the index futures are bouncing all over the place this morning, as the market evaluates various ratings changes, etc. May be a good idea to wait for the indices to settle out or down this morning before making new index plays.

 
 
  Leigh Stevens   7/10/02,  9:10:07 AM
Pre-Opening, Stock INDEXES - Good Morning!

Index Futures trading: S&P 500 > +3.80; Dow Industrials > +37.00; Nasdaq > +16.50

 
 
  Jim Brown   7/10/02,  9:06:18 AM
Tech stocks got a boost this morning when Merrill Lynch upgraded Cisco. Quite different from the semiconductor downgrade yesterday. Merrill said Cisco fundamentals were improving and the $13 price range represented a favorable entry point.

Also giving the markets a boost were the gains in the stocks being added to the S&P. Ebay was up over +2.00 in early trading and ERTS was up over $2.00 as well. This is due to short covering by those caught off guard and buying by speculators in front of the July-19th index change.

S&P is kicking out seven non-U.S. firms and replacing them with U.S. companies. The deletions are

RD, UN, NT, AL, ABX, PDG and N.

The additions are

UPS, GS, PRU, EBAY, PFG, ERTS, SDS.

The markets are at a good spot to rally. Currently just above the S&P post 9/11 lows of 944 and all indexes having retraced the gains from Friday.

 
 
  Jim Brown   7/9/02,  7:13:04 PM
The Tuesday Market Monitor has been archived and can be read here: Link
See you at 9:15 am!

 
 
  Jim Brown   7/9/02,  7:11:32 PM
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