Option Investor
Printer friendly version
  Jim Brown   9/12/02,  7:40:31 PM
The Swing Trade Game Plan has been posted: Link

  Jeff Bailey   9/12/02,  4:56:57 PM
Adobe Systems (ADBE) $18.45 -3.8% ... stock bid higher at $20.80 after reporting EPS of $0.22 (excluding charges) versus analysts estimates of $0.19, based on prior ADBE lowered guidance on 07/31/02. Stock bid higher on Q4 guidance for EPS in the range of $0.21-$0.25 versus consensus of $0.22.

Has other software names like Microsoft (MSFT) $47.19 -2.86% edging up at $47.43 and Oracle (ORCL) $9.48 -3.26% higher at $9.57.

NASDAQ-100 Trust (QQQ) $22.81 -2.72% ticking higher at $22.95.

  Jeff Bailey   9/12/02,  4:30:52 PM
Honeywell (HON) $28.34 -0.63% ... Dow component warns on Q3 earnings with EPS views of $0.50-$0.55 versus consensus estimate for earnings of $0.60.

  Jeff Bailey   9/12/02,  3:56:32 PM
Gold/Silver Index (XAU.X) 76.12 +4.3% .... stuck here at the $46 level. Look for tensions to mount between bulls and bears here. Looking at stocks all day and scalping some trades from the long side, but looks like some sellers at the offers into strength.

"Swing" vote most likely comes from the commodity itself as December futures (gc02z) trade right at downward trend and 80.9% retracement. May have to wait until tomorrow morning, but could be setup for near-term short squeeze if futures break firm above 320 then recent relative high of 326. MACD has some momentum. If stochastics turn higher, that could get a squeeze underway to the upside.

Here's the December Gold Futures chart and battle taking place. Link

Interesting.... per 03:00 update... Dow Industrials at upward trend and Gold at downward trend. Something's got to give. Feel the pressure?

  Jeff Bailey   9/12/02,  3:43:39 PM
The 3:15 PM intraday update has been posted. Link

  Jim Brown   9/12/02,  3:42:14 PM
Economic Reports Tomorrows economic reports include ECRI Weekly Leading Index, PPI, Retail Sales and University of Michigan Consumer Sentiment for September.

Looks like a good reason not to be long over the close!

  Jim Brown   9/12/02,  3:39:09 PM
New OIN Put plays for tomorrow

No new calls (grin)

  Jonathan Levinson   9/12/02,  3:03:34 PM
The COMPX is entering its congestion zone from 1277-1280. All intraday 5(3) stochastics are flatlined in oversold and the daily is pointed straight down. QQV is up 1.68, a slight increase given that the COMPX is down over 30 points today, and the TRINQ is back up at 3.55, showing heavy selling but not yet extreme. I'm guessing that this level will fail, but expect at least a pause or some sort of a bounce at 1277.

  Jeff Bailey   9/12/02,  3:00:29 PM
Alcan (AL) $26.15 -3.54% ... starting to follow the Dow lower, though not a Dow component. Day-trader from earlier this morning short, sticks a bid in at $26.01 here and looks for a fill into the close.

  Jonathan Levinson   9/12/02,  2:59:53 PM
Been keeping it warm for you, Jim.

  Jim Brown   9/12/02,  2:53:13 PM
Swing Trade Signals
A Dow break below 8400 would setup a test of that next support level at 8325, OEX 441. Don't think I will try to catch this falling knife this late in the day. Actually the day's down move has come very close to confirming the H&S pattern in all the indexes. With earnings warnings, war news and a possible nuclear weapon sitting off the coast of New York I think our best course of action is to watch patiently and short a breakdown of OEX 436 instead. Now where did I put that bear skin coat?

  Jeff Bailey   9/12/02,  2:45:44 PM
Aetna (AET) $40.05 -2.26% ... mentioned this one as bearish yesterday as "insurance stock" that recently gave triple-bottom sell signal at $40. Violating 200-day SMA on daily chart here. Looks weak to near-term target of $$35.

Disclosure ... I currently hold bearish position in the AET OCT. $40 puts

  Jeff Bailey   9/12/02,  2:43:38 PM
Dow Industrials (INDU) 8411 -1.9% ... breaking to intra-day low and now violating 50-pd SMA on 60-minute chart. Looking for weakness here.

  Jonathan Levinson   9/12/02,  2:39:00 PM
We have a fresh COMPX low of the day at 1286.

  Steven Price   9/12/02,  2:31:43 PM
Reader Comment: Mr. Price, just came on board with you all on the free trial. I'm very impressed w/ your site. I wanted to respond on your ibm comment just a while ago. You may be aware, but briefing.com said at 10.30 there was rumor ibm would lower guidance for the next qtr. At 1:00, another comment by Soundview refuted the rumor and basically defended ibm. I'd be willing to bet ( in fact I actually am) that big blue probably is in for trouble. The big money always seems to know what's happening before the fact. Just a hunch.

Response: Thanks for the comment, I have received this from several readers since my post. Jim Brown has actually been beating the drum for this possibility for a while. But you know us kids, we don't always listen.

  Jim Brown   9/12/02,  2:28:08 PM
Futures Brokers I've used Netfutures for about 6 months. Cost about 12.00 round trip per contract which may seem high, but you always can contact the trading desk to make trades or your individual broker. Their system has never been down since I've used them. Trailing stops and all the bells and whistles. $6 per contract seems to me to be a small price to pay of 24/7 connectivity. Very accomodating people. J. Mac

  Jim Brown   9/12/02,  2:26:51 PM
Swing Trade Signals
A lot of reader email is trying to get me to go long again here at 446. I agree it looks like 446 has been a bottom for the last two hours. I agree the A/D is improving slightly but we have a solid pattern of lower highs all afternoon. The volume is absolutely minimal. Both major exchanges are still well under one billion shares. I prefer to wait until the next support level is hit in the 440-441 level.

  Jonathan Levinson   9/12/02,  2:26:44 PM
The COMPX remains flatlined as breadth worsens gradually, with declining volume now outpacing advancing volume better than 5:1. HUI and XAU continue to march higher and I'm becoming increasingly dubious about the chances of a bounce from here.

  Jim Brown   9/12/02,  2:09:41 PM
Futures Brokers Wow, the overwhelming choice was InteractiveBrokers.com. Their commissions are $2.40 per contract each way. The ratio of recommendations was about 20:1.

Robbins Trading, PFG Best and FlashFutures.com were the only other brokers mentioned with each getting one mention.

I guess traders seem to gravitate to the winners and InteractiveBrokers.com was not only the winner but many readers wrote long recommendations of why.

Interactive Brokers is by far the best broker that I've used. Commissions are dirt cheap (2.40/futures contract, 1.00/options contract), executions are lightning fast, and the user interface is very flexible allowing the use of hot keys and automated trailing stops! Ben

Jim... I have been using Interactive Brokers since March...Love their trading platform but on occasion they do go down..Over 1/3 of the trading volume is done with IB so I am told..They have gone down 5 or 6 times since then and when they do it isn't pretty especially if you haven't put your stop in in a timely manner....Larry W....

I use Interactive Brokers at interactivebrokers.com . I don't think anybody beats their commissions at $2.40/contract. Their trading platform is somewhat complicated to learn, but it offers all the bells and whistles. Execution is instantaneous. The downside is that there is no live broker to call if you have questions or a problem. Better have another backup broker available in case of system outages, although their system seems relatively reliable (unless of course you have a trade your trying to get out of!). I have been using them for about six months, with no complaints. Craig

I use Interactive Brokers. I have been happy with the service: fast trades, minimal down time, relatively easy software to use. Only negative is phone support, which is minimal but does exist. Can call to exit a trade but not enter one. Best part is the price: $2.40 per contract per trade ($4.80 round trip per contract). Is there a cheaper one out there? Leonard

  Jeff Bailey   9/12/02,  1:51:55 PM
Alcan (AL) $26.24 -3.2% .... day-traders note how AL closed the % loss gap with Alcoa (AA) $23.06 -3.39% and good disparity for day-trader to have picked up on.

AL seemingly finds support where none exists, but trader that reviews 01:00 intraday Update Link (more specific to Dow, SPX, OEX) may understand how the major index averages and current support from 50-PD MA's on 60-minute charts comes into play. As such, AL day trader with target at $26.00, need a Dow break to the 8,400 level most likely to get his/her bearish day-trader's target of $26.00. As such, day-trader most likely now lower's stop to break-even after giving some "fudge" room with stop earlier above today's high.

See 10:17:55 comments.

  Jeff Bailey   9/12/02,  1:50:41 PM
The 1:00 PM intraday update has been posted. Link

  Steven Price   9/12/02,  1:40:09 PM
IBM $72.35 -1.85 Yesterday morning I profiled IBM as a long with a stop loss of $74. After getting stopped out on the play, IBM is back under support and I don't have a real sense of direction from here. The 50-dma of $72.75 is just above and has served as support recently. However, with the Dow and Nasdaq both heading the other way, and a possible head and shoulders forming in the Dow, I'm leaning short. IBM's recent low of $71.50 could signal a new short down to $67, but I'll assess that possibility a the time.

  Jonathan Levinson   9/12/02,  1:11:27 PM
HUI and XAU are having great days, up 3.11 and 2.02 respectively, and combined with the buying in bonds, I'm surprised not to be seeing more selling in equities. The COMPX is still within its range, but so far hasn't been able to do more than a deadcat bounce off the lows. The TRINQ is steady at 2.01 showing a sell bias, and there are just under 5 declining shares for each advancing.

  Jim Brown   9/12/02,  1:02:25 PM
Futures Symbols After today the active futures symbols will change from SP02U/ND02U to SP02Z/ND02Z. If you look at the volume on the "U" symbol today you will see it drying up.

I had a request from a couple readers lately for a recommendation for a good online futures broker. I know quite a few of you trade futures and would like to get your comments. If you are happy with your broker send me an email and I will tally the votes and publish the best recommendations. If you have a broker you think traders should avoid then tell us that also.

  Jim Brown   9/12/02,  12:52:03 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
The markets are now clear to rally. We were stopped out of the LONG signal at 12:43:50 when the OEX traded below 446. SPX 892.19, DIA 84.57, SPY 89.78, DJX 84.30, NDX 924.52, Compx 1289.04, QQQ 22.99, Emini 892.25. It was a mercy killing! I agonized with every dip and every tenth of a point. The markets struggled with each support level but eventually capitulated to our stop point. With a drop below 446 the next support level is in the 440-441 range with strong support in the 436 range which is the 50% retracement level. Overhead resistance is in the 460-465 level.

  John Seckinger   9/12/02,  12:44:23 PM
Clearly the recent weakness in the Dow is not encouraging; however, it is my opinion that 8418 (today's low) should be the telling point. It is common for prices to set a relative low, rebound, then achieve a more shallow low. If 8218 is taken out, most likely a lot of bullish traders are exiting to the sidelines. All Intermarket relationships have turned negative for blue chip holders, except the Dow. It might just be a matter of time.

  Jonathan Levinson   9/12/02,  12:29:06 PM
The 15 minute 5(3) stochastic seems to be dominant at the moment, and is running back south again alongside price The COMPX didn't exactly blast the roof off on that 6 or 7 point bounce, but it seems to be settling back again. The TRINQ has edged a little higher to 2.11, ditto the QQV up 1.15. If my own state of mind and the emails I've been receiving are any indication, we're best to recall that it's very difficult to accomplish anything except waste time when price is respecting a narrow range. You eyeball the charts and the quotes until you're sweating the nickle swings in your contracts. Until either 1305 or 1290 is taken out, all that will advance is the clock. Don't knock yourself out. Breath, practice patience, and be ready for the next significant move.

  Jeff Bailey   9/12/02,  12:28:46 PM
Tyco (TYC) $17.97 +0.95% ... Jeff, Was there any reason why TYC is not tading in the morning after trading 13,300 stocks there is no bid or ask price is available?

Yes ... was halted on news pending. Turns out news was that company had filed suit against former Chairman and CEO Dennis Kozlowski, charging that he misappropriated money and assets from the company and engaged in a concerted pattern of conduct to conceal larcenous acts from the Board of Directors.

  Jeff Bailey   9/12/02,  12:23:52 PM
NASDAQ-100 Index Per last night's Index Trader's Wrap regarding the QQQ and importance for traders to understand "key stocks" in the QQQ as it relates to weighting. Several subscribers have e-mailed on what web site they can get this info. You will note that the WEIGTHINGS of each stock change each day based on price action, but you can pick out the most heavily weighted ones. Here's the Link with weightings at the bottom. MSFT is the BIGGY at 13.1%, with INTC at 5.6%.

Aslo... kind of a neat thing NASDAQ does is provide a "heat map" which gives traders a quick snapshot of the NASDAQ-100 and what stocks are doing. I like to simply look once in awhile and try to pick out a "sector" or "grouping" of like stocks that are trading up/down. Some of you're best trades will come where you see DIVERGENCE. Check it out! Link

  John Seckinger   9/12/02,  12:19:10 PM
The US Dollar is unchanged at 107.61, but still above its 50 DMA of 107.47. There is a good chance that the Greenback could become the catalyst for the Dow; however, direction in the dollar is unclear. This morning's jobless number still remains in my mind, since the highest reading since April makes me wonder about the possibility of a "jobless recovery". Fed policy makers have been relatively quiet over possibility of another rate cut, and I hope that means this economy is in the "turning around" phase. Business investment clearly is dragging down growth.

  Jonathan Levinson   9/12/02,  11:57:07 AM
The COMPX is moving off its lows here, heading toward first gap resistance at 1305. The TRINQ is showing steady selling at 2.04 and the QQV is off its highs but still up 1.06. The TICK.NQ is flat to positive. Looking deeper under the hood, we've got 422M shares declining versus 93M shares advancing on the COMPX, with 68 new lows and 10 new highs.

  Steven Price   9/12/02,  11:55:43 AM
Light, Sweet, Crude Oil(CL02V) $28.78 (-0.99) The President's speech, which seemed to give some time for the U.N. to enforce previous Iraqi restrictions, has dropped oil futures off a cliff, looking at the 5 min chart, as well as the daily chart. Oil futures had been holding over $29/barrel since 9/6 and then took a dive this morning.

  Steven Price   9/12/02,  11:47:43 AM
Reader Question: Hi.What do you think of Amazon? It's overbought, stuck under 17 at resistence after a failed breakout, and after a major run in the last few days. Do you think it is a good short with the overall market heading down? thanks. Daniel

Response: Amazon (AMZN) $17.02 (-0.09) Amazon is actually showing pretty good relative strength with the Dow down 132 and the COMP down 22. That being said it does look over extended and I can see a rollover down to the 50 dma of $14.89 or the 200 dma of $14.56, where it found support on the last two drops. Keep in mind that these dmas are rising. While the stock is currently on a PnF buy signal, A trade of $16.00 would lead to a three box reversal and it looks about due. I can't really make a technical argument for shorting it, especially since the break below $17.00 found support, so if you are going to short it, I would use a tight stop at $18 above yesterday's high and keep in mind the risk/reward ratio from here.

  Jeff Bailey   9/12/02,  11:45:48 AM
The 11:00 AM intraday update has been posted. Link

  Jim Brown   9/12/02,  11:37:29 AM
Swing Trade Signals
Just another slow news day! (grin) With President Bush taking center stage all eyes were focused on his speech to see if he was going to strike Iraq on his own. Once the speech was over and it was deemed less hawkish than expected the markets rallied off their lows. The bounce was short lived with the alphabet soup group, SEC, AG, FTC, FBI, IRS, etc all ganging up on the former Tyco CEO/CFO for numerous charges of looting the company. The charges were much stiffer than anyone expected and unlike the perp walks of recent history the markets tanked again instead of rallied on the evil doers being charged.

The last major resistance to the markets acting on their own is the Greenspan testimony currently underway. The prepared text was as far away from discussing the market and the economy as he could get and focused on governments and deficit spending. His avoidance of the economy could be due to his lack of positive comments. If he can't say anything good he is he planning to say nothing?

The markets have basically flatlined since the initial drop slowed at 10:15 and they will probably remain flat until Greenspan goes home. It appears they are trying to consolidate at the bottom of the recent uptrend channel.

  Jonathan Levinson   9/12/02,  11:36:13 AM
What is the fed and repos all about that you often note?

I'd suggest that you take a look at the Federal Reserve's FAQ page starting with the comments about monetary policy:

What is monetary policy?

The term "monetary policy" refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit as a means of helping to promote national economic goals.


  Steven Price   9/12/02,  11:34:07 AM
Omnicom (OMC): $63.47 (-0.32) OI call play OMC, originally picked at $60, has rallied into an area of congestion. The top end of this area is $66, but conservative investors may want to take 1/2 profits off the table. Note we have raised our stop loss on this position to $61.00

  John Seckinger   9/12/02,  11:20:12 AM
It took a few hours; nevertheless, the yield curve is finally back to more neutral readings. Demand in the five-year note has definitely waned, most likely responsible for some of the rebound (albeit small) seen in the Dow. The blue-chips remain lower by 1.55 percent and continue to be outperformed by sectors including Utilities, Gold, Precious Metals, and Healthcare.

  Jonathan Levinson   9/12/02,  11:17:28 AM
Note that of the 7.25B in repos by the fed today, only 4.25B were overnight repos expiring tomorrow. The remaining 3B is a 28 day repo, which is at the lower end of their usual 28 repo amount, and will expire next month. Any injection of less than 4.25B by the fed tomorrow will constitute a net drain.

  Jeff Bailey   9/12/02,  11:14:49 AM
Morg. Stanley Healthcare Index (RXH.X) 319.87 (unch) ... broader healthcare sector edging back to unchanged. May be seeing a more "defensive" move by the bulls toward some healthcare groups. Not as economically sensitive or "war" impacted.

  Jeff Bailey   9/12/02,  11:11:42 AM
HMO Index (HMO.X) 560 +0.04% .... only sector other than Gold/Silver (XAU.X) 74.11% in the green. UNH and OHP look to be trying to make a move higher here.

  Jonathan Levinson   9/12/02,  11:10:51 AM
Price has flatlined midway to 1277-80 COMPX support, just above 1290. The TRINQ is at the lower end of its daily range at 1.88, showing 1.88, while the QQV up 1.60 on the day. The Fed had 10B expiring today, and added 7.25B for a net drain of $2.75B. The daily 5(3) stochastic is in a full bear roll, and all shorter timeframes are try to or are turning up, but without a significant corresponding move in price, which looks so far looks bearish to me.

  Steven Price   9/12/02,  11:10:29 AM
Reader Question: re sox short below 290 -what would be your short term--next few days target? thanks Denise in Phx

Response: What I'd like to see is 290 acting as resistance again on the short term chart (5 min), much like it did on Monday. If that occurs I'd expect to see us head toward the recent low of 275.

  Steven Price   9/12/02,  11:03:07 AM
Microsoft (MSFT): $47.41 (-1.18) MSFT is sitting on bullish PnF support that has held up on six straight occasions. $47 is the current support level, and a trade of $46 would be needed to break this support. I'm not ready to punt on the long position with such a consistent track record of support. A trade of $46 would change my mind.

  Steven Price   9/12/02,  10:57:09 AM
TXU: $44.23 -0.77 TXU now below recent lows and 50-dma of $44.55. next support levels: $41, $39, $35

  John Seckinger   9/12/02,  10:43:48 AM
The Volatility Index (VIX) is currently higher by six percent, and I am not surprised because some support levels in the Dow that should have held, did not. 8475 for one. Looking at a five-minute chart of the Dow, pattern recognition is difficult to say the least. A move under 8330 (another hundred points lower) seems to be the proverbial line in the sand for most Intermarket Relationships. Under 8330 should pressure the Dollar under its 50 DMA and wreak havoc on the yield curve. Note: One sector showing strength is Gold.

  Jim Brown   9/12/02,  10:26:03 AM
Here is the text of Greenspan's speech this morning: Link

  Jeff Bailey   9/12/02,  10:17:55 AM
Aluminum stocks Alocoa (AA) $23.03 -3.51% breaking two-day support and weak. Day Trader may come in with short in Alcan (AL) $26.53 -1.84%, stop $27, target $26 on day's end.

As discussed yesterday, Cyclical Index (CYC.X) never was able to break much above rolling 21-day SMA or hold a close above 477. Bears can leverage here.

  John Seckinger   9/12/02,  10:13:29 AM
Other Global news: ECB left rates unchanged at 3.25%, and there is talk that Prime Minister Blair is planning to recall parliament for a special session on Iraq next week. The rumor is that this special session means an attack is imminent.

  Jim Brown   9/12/02,  10:12:01 AM
Swing Trade Exit Point Alert - QQQ
We were stopped out of the QQQ LONG at 10:10:16 when the QQQ traded at 23.00. This signal was initiated at QQQ 22.50.

  Jeff Bailey   9/12/02,  10:10:41 AM
Banks Both the S&P Banks Index (BIX.X) -1.24% and KBW Bank Index (BKX.X) -1.64% showing follow through weakness today. Yesterday, pointed out early weakness, which DIVERGED from braoder green in other sectors and thought negative for markets as it relates to financials participating to extend rally. Bears like today's follow through in their DJX, SPX, OEX, QQQ bearish views.

  John Seckinger   9/12/02,  10:09:20 AM
Here is something that supports the Intermarket Relationship of higher Oil, higher Dollar, and higher Dow: ECB Chief Duisenberg stating that Oil price rises are a threat to prices; however, an improvement in the Euro would offset this threat. Exactly. Therefore, as long as the US Dollar can get above 108.50, price pressures in Oil should be contained. The XOI Index, currently at 478, could probably rise to 500 without a strong dollar. With that said, we certainly have room run in all three indices.

  Jeff Bailey   9/12/02,  10:04:15 AM
McDonald's (MCD) $20.16 -5.4% ... new 52-week and multi-year low for this Dow component Link . Stock down after bearish comments from Goldman Sachs, questioning MCD's timeline for quality service initiatives being realistic, and is concerned that new initiatives to be announced at the co's mid-quarter update on Sept. 17 will dilute focus and reduce earnings growth in near-term.

Seperately, CIBC believes that management may guide down estimates by 5% during mid-quarter update, and that the Street may not have fully factored in the impact of likely negative impact to domestic store margins; thinking stock could see downside of $18-$19; says increased capex, ad spending, and discounting at MCD and Burger King also spells bad news for others in the group, including WEN Link and YUM Link

According to Dorsey/Wright and Assoc. all stocks are "restaurant" and group is "bear correction" status at 40% after a May high reading of 84% bullish and recent low reading in early August of 32%. Would take a reading of 34% for sector bullish % to reverse back into "bear confirmed" status.

  Jim Brown   9/12/02,  10:01:16 AM
Swing Trade Signals
Part of the rationale for going long the broader market this morning was the OEX intraday support at 451. The 38% retracement level at 449 and the bottom of the short term uptrend channel at 448. With three levels of intraday support closely matching Dow 8500 and Nasdaq 1300 it looked like a last level of defense by the bulls. A breakdown of all this support would be a significant change in sentiment and the possible start of a new leg down for the broader markets.

We blew though the first support at OEX 451, Dow 8500 and Nasdaq 1300 on a continuation of the opening drop and a continuation of the sell the news event from yesterday. If bulls are going to circle the wagons now is the time.

The QQQ stopped just short of the current stop loss of 23.00 at 23.02.

  John Seckinger   9/12/02,  9:57:48 AM
First it was the September S&P 500 futures contract closing at 911.00 on Tuesday. Then, on Wednesday, the New York Lottery "randomly" drew the numbers 9-1-1.

  John Seckinger   9/12/02,  9:51:27 AM
Acting resilient and most likely able to control weakness in the Dow is the US Dollar. Currently at 107.68, the Greenback remains above its 50 DMA at 107.46. The main band of resistance is at 108.50. Weakness under the 50 DMA should send the index back towards the 22 DMA, currently at 106.96. Looking elsewhere: Demand in five-year notes are firm, but not significant to have bullish traders worried. Oil and Utilities are lower, but still stronger than both the Dow and Nasdaq.

  Steven Price   9/12/02,  9:49:09 AM
Semiconductor Index (SOX.X) 292.72 (-10.04) So much for the bounce in the techs. The SOX is now below possible support at 300 and right at Monday's and Tuesday's intraday resistance levels. These levels could now provide support. On a break below 290, I would lean short the semis again after this morning's downgrade.

  Steven Price   9/12/02,  9:42:10 AM
L-3 Communications (LLL): $56.40 (+0.59) OI long Play of the Day L-3 Communications is one of the few positive movers,as defense oriented stocks are getting a boost across the board ahead of the President's testimony.

  Jeff Bailey   9/12/02,  9:42:05 AM
Knight Transport (KNGT) $18.07 -2.5% ... will reiterate short/put profile here. Below trend, nice risk/reward with stop at $19.50. Need a trade at $16.50 to get stock on a "sell signal" and get a bearish count in play. Near-term trader's target near $16.00, but if triple-bottom is achieved and we get Dorsey/Wright's transport sector bullish %, which is currently "bull alert" at 36% back into "bear confirmed" at 30%, then could get a nice move lower still.

Disclosure .... I currently hold 1/2 bearish position in the KNGT Oct. $20 puts.

  Jim Brown   9/12/02,  9:40:38 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
The LONG signal was triggered at 9:36:10 when the OEX traded below 451. (SPX 901.22, DIA 85.27, SPY 90.76, DJX 8501.68, NDX 929.07, Compx 1298.40, QQQ 23.10, Emini 902.00. The initial stop loss on this signal will be OEX 446, (SPX 893, DJX 84.25) Now we need Greenspan to make a rational exuberance speech.

  Jonathan Levinson   9/12/02,  9:34:37 AM
The COMPX is about to test 1300 support. I don't know if it will fail, given that bond yields have recovered from their worst levels of the day and selling isn't as intense as many would have thought with the TRINQ opening at 2.40. No sign of a bounce- the TRINQ has just risen to 3.23 as I type. A bounce should take us to gap resistance at 1316. A breakdown will bring 1277-80 support into view.

  Jeff Bailey   9/12/02,  9:31:33 AM
OEX Added further comments to OEX at 09:23:02

  Jim Brown   9/12/02,  9:31:00 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go long the broader market with an OEX trade below 451. (SPX 901, DJX 85.25)

  Jeff Bailey   9/12/02,  9:28:55 AM
The 9:00 AM intraday update has been posted. Link

  John Seckinger   9/12/02,  9:28:47 AM
Higher Oil prices are in the spotlight once again, with Oil futures just underneath the $30 level. During trading hours today, it is reported that President Bush will tell the UN that Iraqi President Saddam Hussein has spent more than a "decade of deception and defiance". On Jan. 17, 1991, the day allied forces first hit Iraq, the price of oil fell from $30.20 a barrel to $19.70.

  Jim Brown   9/12/02,  9:24:19 AM
Swing Trade Signals
Bush and Greenspan battle it out this morning as each take the public stage around the same time. Bush will be talking at the UN about removing Saddam from Iraq and Greenspan will be discussing the state of the economy before the house budget committee.

Greenspan's comments will likely mean more to traders after jobless claims posted another week above 400,000. First time claims rose +17,000 last week and the highest rate since April. With manufacturers feeling less optimistic and layoffs increasing Greenspan will have an uphill battle convincing the house that the recovery is underway.

Chip companies were cut again this morning as the outlook for 2002 and 2003 were lowered again. Traders shrugged off this type of data over the last several weeks but they may be more cautious today with both the big guns competing for air time.

The game plan for today was to buy support at OEX 451, SPX 901, DJX 85.25 and look for a rebound. I will be issuing a signal for that plan now.

  Jeff Bailey   9/12/02,  9:23:02 AM
OEX Trader! Thanks for all those that responded to last night's question in the Index Trader's Wrap regarding charts of the S&P 100 Index (OEX.X). I will begin showing that chart each night.

Looks short/put here Link (just like the SPX 21-SMA and 50-SMA) with a swing-trader's stop just above 468 and near-term targets of 436, then 418. Should 418 be achieved, expect a "bounce back" on some short-covering near 450. At that point, will check the S&P 100 Bullish % ($BPOEX) Link , which just like the S&P 500 Bullish % ($BPSPX) Link reversed back into "bear confirmed" status.

If you look at the OEX bullish % ($BPOEX) above, you can see a "relative" top in the recent column of X at 58%. Try associating that bullish % X column with the point and figure chart of the OEX on a $5 box scale Link . See how the "bearish resistance trend" (red +) may have warted off some bulls? If we get a 3-box reversal lower in O's to 445, then trader's stop would be 465. As it is now, this OEX MARKET is "bear confirmed," below trend, on a "sell signal" at 440 and bearish count is 390.

  Steven Price   9/12/02,  9:22:08 AM
After the passing of 9/11 did not give us the rally many investors were looking for, and the Beige Book numbers were underwhelming, Alan Greenspan would have to paint an awfully rosy picture in today's testimony to get us moving in the green after this morning's jobs data.

  Jonathan Levinson   9/12/02,  8:43:45 AM
The four-week moving average of jobless claims rose last week to a three month high of 409,500. NDX futures are down 6, S&P down 3.8. QQQ is trading at 23.20, down from yesterday's close of 23.45. I had been concerned about the ascending trendline on the COMPX holding between 1316-20, but if futures stay where they are, the COMPX should gap below it. The US Dollar Index is down to 107.50 and bond yields are in the red.

  Jim Brown   9/11/02,  10:02:51 PM
The Swing Trade Game Plan has been posted: Link

  Jim Brown   9/11/02,  10:02:43 PM
The Market Monitor for Wednesday has been archived. You may read it here: Link


Market Monitor Archives