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  Jim Brown   9/14/02,  2:36:11 AM
The Swing Trade Game Plan has been posted: Link

 
 
  Jim Brown   9/13/02,  3:59:05 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Change the stop loss on the current SHORT signal to OEX 445 (SPX 890, DJX 83.50) as we move into the close. If we get another spike I don't want to be caught flat footed.

 
 
  Jim Brown   9/13/02,  3:57:31 PM
Swing Trade Signals
That was exciting! Just as I was posting a new stop loss at OEX 444 at 3:05 PM we lost an entire bank of servers at the ISP. Now the OEX has gone from 443 to 446 and back under 444 again. If you do not want to stay short over the weekend then now is the time to exit.

 
 
  Jeff Bailey   9/13/02,  3:54:17 PM
The 3:15 PM intraday update has been posted. Link

 
 
  Jeff Bailey   9/13/02,  2:59:54 PM
Agilent (A) $14.78 -3.07% .... Per 14:38:40 comments

 
 
  John Seckinger   9/13/02,  2:58:42 PM
This last hour, following the close of the bond market, could get ugly. The Dow is currently down 107 at 8272, and will break a string of relative higher highs and higher lows by trading under 8262. This trend is found on a five-minute chart, and began after the first 30 minutes of trading.

 
 
  Jonathan Levinson   9/13/02,  2:52:02 PM
On another note, I sent the following note to our Asktheanalyst link:

I have 5K to invest. Please provide me with picks that will result in no less than a three hundred percent gain before next Wednesday. I'm looking to upgrade my Acura to "rice rocket status" and need some quick and reliable returns.

Here's the reply:

Send a 5K check to the Bison Dele/Brian Williams investment group and you'll get your profits in about 6 mos.

Accordingly, I will be dusting off my old hightops and basketball and commencing training bright and early tomorrow.

 
 
  Jonathan Levinson   9/13/02,  2:49:52 PM
The COMPX is still pushing at that descending upper trendline, the last two attempts having blown off into candle spikes. The TRINQ is back at a neutral 1.06, QQV is down a little further to to 47.17, and FVX hsa recovered a little more. So, however, has gold, with both HUI and XAU off their lows of the day. A print at 1290 that holds should confirm an upward breakout from this descending wedge, but I'm still not entirely confident in my recognition of this pattern or in power of the bulls to actually show us a move to the 1310 level. Volume breadth is almost in a dead heat, and I suspect that I'm just squinting too hard at this point.

 
 
  Jeff Bailey   9/13/02,  2:49:44 PM
About 10-minutes left to go for trading in the bond market. 10-year YIELD ($TNX.X) 3.9%, threatening to CLOSE at 52-week low YIELD. Quite defensive in my book.

 
 
  Jeff Bailey   9/13/02,  2:38:40 PM
Day Traders Watch Agilent (A) $14.84 -2.8% on the 60-minute interval chart. See the little "pennant" forming? Look back at other little pennants (08/29) and (08/30). Day-trader shorts $14.78, stop $15.02, target $14.25 into the close. I kind of like to "think" of these little pennants as "bearish triangles" from a p/f chart.

Disclosure ... I currently hold bearish position in A in the Oct. $15 puts.

 
 
  John Seckinger   9/13/02,  2:20:25 PM
The Dow did fail to reach 8360, and recent selling as the weekend approaches will more than likely accelerate and send the Dow towards 8247. Even if 8247 isn't reached, a settlement under 8360 appears bearish. A close under 8300 would be, in my opinion, significantly bearish. Still waiting for a bid in the five-year sector to confirm cash is still entering Treasuries at the expense of equities.

 
 
  Jim Brown   9/13/02,  2:19:14 PM
I sent this to "asktheanalyst@OptionInvestor.com"

From: Bubba Contact Support
Sent: Friday, September 13, 2002 1:10 PM
To: asktheanalyst@OptionInvestor.com
Subject: request
Can you analyze all the optionable stocks and give me ten that will move +/- $5 next week?
Can you provide all the fundamental/technical analysis for both the bullish and the bearish outlooks for each?

I am on a free trial and may subscribe once I save enough money to buy a computer, I currently use the one in the library here at the prison. I make $1.25 a day. I am planning to buy one option contract a month so I can retire when I get out.
Thanks, Bubba

Steve replied back: Thanks for the question Mr. Buffet, but next time try a better disguise.

Who said Steve had no sense of humor?

 
 
  Steven Price   9/13/02,  2:06:56 PM
Reader Comment Re: AET This was in today's news, thanks for sending it in.

Hi Steve, Interesting NEWS found on YAHOO related to AET short play. Here it is 12:07PM Aetna sells off on preannouncement rumors (AET) 36.90 -2.33: We are hearing that AET gave some comments a few days ago during a conference call that new business is not going as well as expected; in addition, there is another rumor making the rounds that the co will lower their guidance at the Bear Stearns conference on Sept 19; we have no confirmation for either rumor.

 
 
  Jim Brown   9/13/02,  1:58:56 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the SHORT signal at 13:55:28 when the OEX traded below 443.50. SPX 887.11, DIA 83.27, SPY 89.24, DJX 83.06, NDX 919.55, Compx 1285.06, QQQ 22.84, Emini 886.50 The initial stop loss will be OEX 447.50, (SPX 896, DJX 84.65)

 
 
  Steven Price   9/13/02,  1:56:31 PM
Ask the Analyst: Just a reminder to send this week's questions to

asktheanalyst@OptionInvestor.com

 
 
  Jim Brown   9/13/02,  1:52:25 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Since it appears our stop loss should have been 446.37 instead of 446 I am watching the growing weakness with frustration. We are at the post lunch trend change and it appears to be changing down. Let's go short again with an OEX trade below 443.50. This is below the plateau after 12:30. If we break down to here again it could signal the bullish bounce to be over. The initial stop loss would be 447.50. Don't enter this trade unless you are willing to be short over the weekend if not stopped out.

 
 
  Jeff Bailey   9/13/02,  1:52:14 PM
The 1:00 PM intraday update has been posted. Link

 
 
  Jonathan Levinson   9/13/02,  1:51:02 PM
I seem to recall that today is opex for currency contracts- perhaps that explains the collossal spike in the USD. Despite that big upmove, the intraday receovery in the five year yield, the neutral TRINQ, slightly negative QQV, and fulfilment of the bullish descending wedge formation, the COMPX still can't muster more than a deadcat bounce. It's currently trading at 1286. I expected to see 1310-16 on this move, and while it's not over, the stochastics are already reaching overbought. Time will have to tell. Suffice it to say that a revisit to the lows of the day from here would *not* be bullish.

 
 
  Mark Whistler   9/13/02,  1:39:47 PM
Today's PPI for finished good depicted no alteration in August, falling short of analyst expectations. Producer prices fell by 0.1%, excluding food and energy. However, prices for intermediate goods (often used as a leading indicator for consumer inflation) rose by 0.4%, much stronger than originally predicted. In addition, core crude prices rose 0.4% as well. As a result, overall core prices for intermediate goods and core crude are up significantly from the start of 2002. The long term effects could be that inflationary pressure might begin to mount for finished products, though recovery still remains fragile; further alluding that despite today's numbers, consumer inflation could still be stagnate. Bottom line, slow recovery is yet to translate into any immediate activity by the Fed at the September 24th meeting.

 
 
  Steven Price   9/13/02,  1:38:10 PM
Reader Question: OI noted last night that ctx failed at its 200 and 50 dmas. Seems to be pushing up against the 50 as I write. Does this look like a good entry?

Response: CTX $49.68 I would wait for a break back below today's low of $48.40 since it got back over the 50-dma. I would like to make sure the 50-dma is toast for a new entry.

 
 
  Steven Price   9/13/02,  1:28:52 PM
Reader Question: Steve: AET has come back to 38.30 now. Is it okay to take a short position now or should one wait for it to make up the morning gap? Or is the negative sentiment is over> Please advise your views. Thanks Sunil

Response: AET $38.14 (-1.09) The rally in AET appears to be failing. Regardless of this recent attempt to make up the morning's loss, the breakdown in the stock is significant and the failed attempt to hold even its recent low of $38.30 looks even more negative. I like short entries here. It is possible that the stock will try to fill the gap, but the trend is still down.

 
 
  Mark Whistler   9/13/02,  1:27:57 PM
Although not exactly fresh news, today's ECRI Leading Indicator Report came in lower at 120.5 versus 120.7 in August. The decline can be attributed to a rise in jobless claims and a general decline in financial components. This report signals that the economic recovery is not performing as expected. Because the growth rate has fallen to 1.3%, recovery is currently threatened. Bonds yields continue to mull around 40-year lows, eroding equity expectations for the near future. Economists are concerned with the housing market, as it is one of the only masts of economic support. If inflationary pressures surface and interest rates ascend above 7%, the real estate market could see weakness, thus stifling labor wages from this sector.

 
 
  Mark Whistler   9/13/02,  1:19:58 PM
The University of Michigan Consumer Sentiment Survey reported that consumer sentiment fell to 86.2 in September from 87.6 in August. Of importance, the expectations component of the survey stumbled slightly to 80. Though today's numbers aren't exactly sterling, they do depict that consumer sentiment is stabilizing. Economists are now questioning whether consumers will continue to add a piece of the puzzle to economic growth. The problem facing the U.S. economy is that businesses have yet to increase spending, squeezing as much out of current productivity as they can. Labor markets remain weak, while consumer debt remains high. Thus, low interest rates and low inflation are supporting the current numbers. I would like to point out the survey only comprises 250 consumers... Political pollsters use a much larger sample population to gain accurate results. We then see, that the survey takes into account only 5 people's perspective, per state.

 
 
  Jim Brown   9/13/02,  1:19:28 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were stopped out on the SHORT signal at 13:14:42 when the OEX traded above 446. SPX 891.89, DIZ 83.75, SPY 89.80, DJX 83.47, NDX 926.62, Compx 1290.23, QQQ 23.02, Emini 892.75. The buy program spiked us through the 446 level only to immediately stop at 446.11. This is a strong resistance level as we know from yesterday. We will continue to watch this level for another breakdown.

 
 
  John Seckinger   9/13/02,  1:14:14 PM
Waiting patiently. The Dollar is up strongly over the last few hours, and might be the catalyst necessary for the Dow to get back above 8360. Gold continues to be weak and the CRB index is lower by 1.77 percent. Bond, Utility, and Oil prices are also higher. All of these indices are most likely reasons for the Dow finding strength.

 
 
  Mark Whistler   9/13/02,  1:05:46 PM
According to the Census Bureau of the Department of Commerce, Retail Sales (MARTS) announced that retail sales grew 0.8% in August, depicting gains for the third month in a row. Autos elevated 0.4, Auto Ex Gas increased 0.5, Motor Vehicle & Parts Dealers climbed 1.9, Furniture and Home Furnishing gained 1.7, and Building Material Dealers lofted 0.5. Gasoline Stations fell -0.8, Clothing and Accessory Stores dropped -0.3, and Electronics and Appliance Stores dipped -0.4. Long story short, consumers are taking advantage of what they perceive to be "once in a lifetime" discounting, as exemplified in outstanding auto sales. The current strength in consumer spending will support the growth number in this quarter's GDP. However, analysts are expecting consumer sales to slow as 0% financing disappears, and mortgage interest rates begin to rise. Further, economists are hoping that consumers will continue to support the current lackluster economy until businesses are ready to shoulder more of the load.

 
 
  Jim Brown   9/13/02,  1:04:11 PM
Swing Trade Signals
Looks like the bullish wedge may break to the upside after a nice series of higher lows led by the Nasdaq strength. The bears appear to be covering and taking profits and the bulls liked the dip to 440 this morning as close enough to support for gains on light volume. The test is still at 445 which has held several times today.

 
 
  Jonathan Levinson   9/13/02,  12:56:22 PM
First of all I want to say thanks and great job on your analysis of the nas. I have found your stuff to be very valuable throughout the trading day. Great job! My question is this, what points are you anchoring to the bottom of the wedge? It looks to me like more of a triangle or pennant than a wedge.

I'm starting at September 10th and chopping off the opening dip from today's gap down. The high starts on Sept 11th.

 
 
  John Seckinger   9/13/02,  12:30:28 PM
The US Dollar has certainly showed strength recently, possibly due to central banks selling Yen and buying dollars. The Dollar/Yen spread has risen from an intra-day low of 119.47 to a current rate of 121.87.

 
 
  Jeff Bailey   9/13/02,  12:14:14 PM
Campbell Soup (CPB) $22.34 +0.08% ... bidding some Nov. $22.50 calls (CPBKX) at $1.10 here. One of my "seasonal" favorites. Not stop on the options and targeting the $28 level. Technicals look terrible, seasonal play only. Link

This morning's low pretty close to the $22 level, which I was looking for on 08/20/02 in 03:00 Update. Link

 
 
  Jonathan Levinson   9/13/02,  12:11:13 PM
Volume breadth is almost even at 300M advancing vs. 320M declining COMPX shares. The upper trendline on my 15 minute COMPX chart is taking a beating but still holding. My man Bulkowski, whose Encyclopedia of Chart Patterns is high on the recommended reading list, says that descending wedges break north 90% of the time, with an average rise of 43% of the formation being met 88% of the time. One element to a bullish descending wedge is falling volume as the formation plays out. Thus, my own analysis is limited to saying that it *looks* like we have bullish falling wedge. Further caveats include noting that chartism is very far from an exact science, and all of these patterms are open to interpretation.

 
 
  John Seckinger   9/13/02,  12:07:09 PM
Looking at a five-minute chart of the Dow, the relative low of 8247 was not tested; however, the index is now testing the upper channel of an aggressive trend line and is still underneath a bullish daily trend line which comes in at 8360. This 8360 level should act as resistance going forward. Also in favor of bearish traders is the scenario of wanting to own bonds as nervousness over terrorism heightens. This action of buying bonds is usually done by selling stocks to raise the necessary cash.

 
 
  Jim Brown   9/13/02,  12:06:45 PM
Dear Jim: The old saying was Buy Rosh-Sell Yom. However this system has not worked at all during the last few years. Regards, AAR

Several readers have indicated that since the dates are based on the Lunar calendar they vary quite a bit. AAR said that in 2000 the dates were 9/30-10/9. There appears to be no consensus of opinion as to the validity of the saying other than it was buy/sell as I previously reported.

 
 
  Jim Brown   9/13/02,  11:52:02 AM
Ship Update - It appears the Liberian container ship is not a problem. Reuters is saying the container in question "is not a hazard" (BUT) the response team will continue checking ALL the containers on the ship. This entire event was under reported in my opinion but I am just a concerned citizen what do I know.

The explosion in Houston was from a leaking train car of ammonia. Firemen were trying to hose it down when it blew.

It appears the markets are recovering on the news that these events are not terrorist related.

 
 
  Jonathan Levinson   9/13/02,  11:44:38 AM
It looks like a bullish descending wedge on the COMPX 15 minute chart, with the upper trendline now around 1280. The TRINQ is in neutral sell territory at 1.25, and 1277-80 didn't offer a lot of resistance. A break above 1280 should bring the day highs back into view, and a possible run back up to recent highs and the unfilled gap to 1316. Longer intraday 5(3) stochastics are mixed but pointing up.

 
 
  Steven Price   9/13/02,  11:39:51 AM
Aetna (AET) $37.10 (-2.13) OI Put Play of the Day AET has continued its technical breakdown, established with a failure in the 200-dma and triple bottom PnF breakdown yesterday. There were two small humps to get through on the way down: 1)the possible bear trap on the first box in a triple bottom breakdown; and 2) previous support at $38.30 the last time it tested the 200-dma. The $38.30 level is now a memory and the PnF break has tagged on two additional boxes to get us through the trap. The last PnF support at $39 is also been broken.

 
 
  Jeff Bailey   9/13/02,  11:36:35 AM
The 11:00 AM intraday update has been posted. Link

 
 
  Steven Price   9/13/02,  11:32:04 AM
Reader Question: Question: Is there an options "hedging" strategy that "systematically" and "continuously" protects 50% of the potential downside by giving up 25% of the potential upside.

Meaning: if the S&P is up 5%, the options strategy is allowed to cost 1.25% so the combined return of the "hedged" S&P would be 3.75%. If the S&P is down -5%, the options strategy would gain 2.5% so the combined return of the "hedged" S&P would be down -2.5%.

I really appreciate your effort to answer me. Many thanks, Markus

Response :

Markus, while I can't say there is a strategy that will provide this exact ratio without examining the price of an option on a specific trade, I think the "risk reversal" is the closest thing to what you are asking about. It appears you are hedging a long S&P position, but the strategy applies to any long position.

The strategy involves the purchase of an at the money or out of the money put to protect the down side of a long position in the underlying product, while simultaneously shorting an out of the money call. The short call helps reduce the cost of the put, while limiting upside potential on the long position. The long put protects the downside.

The ratio is usually done 1:-1, however it can be combined for the desired ratio, depending on how much of the underlying instrument you are long.

i.e. If I own 200 shares of XYZ (which is trading at $20), I can purchase a $17.50 put for 1.50, while selling a 22.50 call for 1.00. My cost basis is 0.50, which protects 50% of my downside while limiting 50% of my upside. Often this combination is attempted at no cost to the trader - meaning you sell the call for the same amount as the put purchase. However, it is not always possible to accomplish this as downside premium tends to be higher than upside premium at the same distance from the current price of the underlying.

This example is not exactly the ratio you were asking about, but can be done in any ratio to acheive the percentage risk/return you are looking for.

 
 
  John Seckinger   9/13/02,  11:28:12 AM
Similar to Thursday's session, the Dow has set an easily recognizable relative low, rallied slightly, and now seems set on testing the earler low. If this low of 8247 is tested, more than likely it will then be used as resistance going forward.

 
 
  Jim Brown   9/13/02,  11:27:02 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
That downdraft was a result of the explosion in Houston at a chemical plant. Whatever the reason we were triggered at 11:21:14 when the OEX traded below 441. SPX 882.08, DIA 82.96, SPY 88.81, DJX 82.70, NDX 911.17, Compx 1275.10, QQQ 22.63. The initial stop loss will be wide at OEX 446 just over the high of the day. (SPX 891, DJX 83.50)

 
 
  Jonathan Levinson   9/13/02,  11:20:42 AM
Can't help you, Jim. Don't have a clue myself, and must have missed that class in hebrew school when I was 6 or 7...

 
 
  Jim Brown   9/13/02,  11:12:19 AM
Buy or Sell? - Stuck my head in a hornets nest. After posting the comment on "buy Rosh Hashanah, sell Yom Kippur" I have had several readers complain that I have it backwards. I went back and checked some prior emails and it appears there is a 50/50 consensus. A couple readers had said sell/buy while a couple others said buy/sell.

If you think about it logically it would appear that "sell Rosh Hashanah, buy Yom Kippur" would make more sense. If you were going to be out of the market for a week you would not want to be long.

I would like to get some comments from readers to straighten this out. Which is it guys? Buy/sell or sell/buy.

 
 
  Steven Price   9/13/02,  11:03:03 AM
Reader Question: QCOM - QUALCOMM 28.69 + .53 ( 1.91%), still in that trading range, we are still short, telecom sector still weak, do you see a break below 28.00 or will this be support, your comments of MM are welcomed. Thank you Michael

Response: QCOM is sitting on support at $28 (yesterday's low was $28.01), but just below that is the 50-dma at $27.91, which could also provide support. I would look for a break in the 50-dma before being convinced the stock will head back to $24. There is also a recent bottom at $26 to get through. The Combined Telecom Index (IXTCX) 97.81 is also sitting right on top of its 50-dma of 97.60.

 
 
  Steven Price   9/13/02,  10:55:27 AM
Alcoa (AA) $21.76 (-1.01) OI put play AA has now broken below the $22 mark for new short entries identified in last night's play write-up. $22.02 had served as support on the last drop and the trade of $22 created a new PnF sell signal as well.

 
 
  Jonathan Levinson   9/13/02,  10:54:23 AM
The sub-.5 TRINQ readings didn't last long, and price couldn't pierce 1290 resistance, currently at 1283. Bond yields remain weak, and the QQV is flat. A spike in the OI on QQQ 24 calls looks like the smart money is very bearish indeed today, although the 1270 support level will tell the tale in the short term. Of course, there were counterparties to that large spike, and so others are bullish here. Gold is giving back a good piece of yesterday's gains with HUI -3.72 and XAU -1.97.

 
 
  John Seckinger   9/13/02,  10:47:56 AM
Getting questions on the yield curve and how the curve slowly flattens while equities recover. Very true. I would like to see more action out of the Dollar, currently down 0.02 percent at 107.13. Gold remains volatile, down 2.3 percent at 74.31. Still in bullish technical pattern. What is interesting is that the Semiconductor Index was higher as most indices were lower earlier this morning; however, as most indices have recovered slightly, the SOX went into the red.

 
 
  Jim Brown   9/13/02,  10:46:39 AM
Swing Trade Signals
I am glad to see this bounce. This should relieve the oversold pressure and give us a better feel for the markets on Monday. OEX 448-449 is strong resistance and could be where the bounce will fail. This short covering early on a Friday could indicate a wish to leave early after a stressful week.

There is an axiom in the markets which says "buy Rosh Hashanah, sell Yom Kippur." RH was Sept 7th, Yom Kippur is Monday. This corresponds with typical September historical trends. However the September Monday before the triple witch has been up 8 of the last 11 times.

My current thoughts if we get a roll over by lunch is to go short for the weekend. The current bear market, events like the terrorist incident in Florida and further earnings warnings in the wings would seem to me to make the weekend risk larger for the bulls than the bears. There are so many things that can knock us down but very little that can spike us up.

 
 
  Jim Brown   9/13/02,  10:27:48 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Raise the entry point on the SHORT signal to OEX 441. (SPX 882, DJX 82.75) This is a more cautious entry than the current 443 level and hopefully will give the index a little more chance to move up before failing.

 
 
  Jim Brown   9/13/02,  10:21:44 AM
Swing Trade Signals
At OEX 444 we are back to the top of the afternoon downtrend from yesterday. The Nasdaq advance has slowed and this may be the pivot point for the day. An entry at 444 might give us enough room to play before we hit 436 and is close enough to the 446 level to avoid a breakout. If the A/D line begins to deteriorate I may raise the short entry. (just thinking out loud) I would like to see more of a bounce first.

 
 
  John Seckinger   9/13/02,  10:18:39 AM
The yield curve is steepening slightly, as demand for five-year notes remains greater than ten-year securities. The move is not significant; slightly bearish at best. The bifurcation between the Dow and Nasdaq remains interesting, most likely responsible for lowering volatility a few percentage points over the last 10 minutes (VIX, up 1.86 percent at 41.48). Note: Most active option appears to be the QQQ Oct 02 24 Calls, with volume of over 75k and Open Interest rising by 36 percent.

 
 
  Steven Price   9/13/02,  10:16:33 AM
The Dow (8290.91)is just below its 50% retracement (8302)of the rally from July 24 - August 22. This number has served as previous support, but allowed for intraday trades below it. A close below this level would be a head and shoulders neckline break and would look awfullly bearish.

 
 
  Jim Brown   9/13/02,  10:10:05 AM
Swing Trade Signals
It looks like the Nasdaq might pull the Dow off its lows. Bears who were short over 9/11 may try to cover today so I am not in any hurry to go short. With lots of overhead resistance at those same support points we struggled with yesterday I am not eager to go long either. My outlook would be to watch for a bounce and eventual failure then short that failure. This may not occur until Monday. I would rather let the profit takers get out of the market and the bulls run it back up and see where it fails instead of rush back into the market. Fridays are typically erratic and without a strongly directional trend it may be best to watch from the sidelines.

 
 
  Jonathan Levinson   9/13/02,  10:10:02 AM
The Fed has added 3B in 6 day repos, partially covering 4.25B in expiring overnight repos from yesterday for a net drain of 1.25B.

 
 
  Jeff Bailey   9/13/02,  10:03:52 AM
Aetna (AET) $38.24 -2.5% ... "Aetna, I'm glad I met ya" trades $39 and helps negate the potential for a "bear trap" at $40. Combined break of Triple-bottom at $40 and yesterday's break of longer-term 200-day SMA bearish. Link

Having the insurance group bullish % in "bear confirmed" status did give me some "comfort" that $40 wasn't a bear trap. Usually more concerned with bear traps when the sector and market bullish % charts are in bullish phase.

$35 is still a target. I currently own 1/2 position in Oct. $40 puts (wish it were full position). However, account managment trumps greed.

 
 
  Jonathan Levinson   9/13/02,  10:03:25 AM
The COMPX is chopping along in a tight range between 1270 and the area formerly known as support at 1277-80. I'm looking at blurry bullish descending wedge on the 15/30 minute charts, but it's far from perfect. A bullish break of 1290 will soften my current short term bearish bias, but with the numerous resistance levels above, almost every 10 points, it will take a great deal of energy to drive price significantly higher from here. The surprising resilience we're seeing in the COMPX is the work of deeply oversold 5(3) intraday stochastics. If price remains within the current range, these oscillators will gradually work off that oversold bias, and clear the way for further downside. The TRINQ is now in neutral bullish territory at .61, but the TICK.NQ is still reading -251. Bond yields, particularly the five year, are negative, and bodes ill for equities.

 
 
  John Seckinger   9/13/02,  10:02:59 AM
With the Volatility Index higher by 4.76 percent and the Dow lower by 1.32 percent, sectors underperforming the blue-chips include Airline, Telecom, Software, Cyclical, and Transportation issues. One company bucking the trend is Intel (INTC), currently higher by 2 percent at 16.

 
 
  Steven Price   9/13/02,  9:53:12 AM
I've raised stops on OMC to $62, and LLL to $54. While the OI call write-ups cite our previous stops as possible entry points, I'd like to lock in profits on these plays in the case of a head and shoulders failure in the broad markets, which is now looking like a possibility.

 
 
  Jeff Bailey   9/13/02,  9:51:40 AM
Broadcom (BRCM) $14.92 -1.06% .... in play for new 52-week low should 07/03/02 low of $14.69 be violated. P/F chartist notes recent "triple-bottom" sell signal and current vertical count is bearish to $10. 1/2 position puts look good here, but save some cash in case of rally back near $18. Link

 
 
  Jonathan Levinson   9/13/02,  9:51:28 AM
Bloomberg reports that U of M Consumer Confidence came in at 86.2, below expectations.

 
 
  Jim Brown   9/13/02,  9:50:34 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go short the broader market with an OEX trade at 435. (SPX 869, DJX 81.90)

 
 
  Steven Price   9/13/02,  9:44:44 AM
Semiconductor Sector Index (SOX.X) 283.57 (+0.02) As I wrote the entry about GNSS, the SOX made back some ground. I would still expect it to fail today after the ESST warnings. Look for a break below 275 for signs of real weakness to enter any new semi plays short. A hold above this level could signal consolidation, albeit temporary.

 
 
  Jim Brown   9/13/02,  9:44:27 AM
Swing Trade Signals
The Dow dipped to support at 8325 after the open and the OEX did the same at 440. They are holding at these levels while waiting for the Sentiment numbers. If the numbers are flat to down then we could see a further drop. We will be looking at going short below 436 but will be hesitant about a long entry on a bounce.

 
 
  Steven Price   9/13/02,  9:39:21 AM
Reader Question: Re: GNSS Hi Steve, I listened to the conference call yesterday and these guys had some good things to say. Increased revenue expectations for this quarter. I suspect it will breakout today but may be held somewhat back because of the semi sector. In looking at the PNF chart it should breakout today but I am wondering is there a way to tell how much of a drag the semi sector would be. Any input would be appreciated. Thanks, Angel

Response: Genesis Microchip (GNSS) $9.25 (+0.70) It is interesting to see the semiconductors drop after both good and bad news overnight. While software maker Adobe(ADBE) is not a chipmaker, it beat the street by 0.03 and is trading up over $2. The comments from Genesis about increased demand also was a positive for the sector, especially since demand went up in a PC realated product (flat panel screens). The fact that ESST, which makes DVD chips, warned last night, citing lack of worldwide demand heading into the Christmas season is bearish for not just PCs but for consumer electronics, has now expanded worries about the chip sector beyond the PC market.

Genesis will be pulled down somewhat by the sector, much like a Dow stock fights an uphill battle on a down day in the broader markets. Investors seem to be giving GNSS their kudos, with a gain of over 6%, but it is fighting an uphill battle today and will do so until the sector turns around. On the other hand, a company with increasing demand should snap back quickly on a sector rebound, if we ever get one.

 
 
  John Seckinger   9/13/02,  9:37:38 AM
As the Dow goes through its "rotative opening", most Intermarket relationships are relatively subdued. The dollar, down 0.08 at 107.08, is under its 50 DMA and will most likley test its 22 DMA at 106.93. December Treasury Bonds are higher by 9 ticks, while both Oil and Utilities are lower.

 
 
  Jonathan Levinson   9/13/02,  9:36:15 AM
The COMPX gapped down slightly, looked up, and now is keeling over again, printing fresh lows at 1270. The TRINQ is now rising but not extremely so at 1.78, and the TICK.NQ at -395 shows broader based selling than we've been seeing this week. QQV is up 1.29 to 49.32, and with fear rising at the open, we'll no doubt be seeing the north side of 50 shortly.

 
 
  Jim Brown   9/13/02,  9:33:41 AM
Not over yet?
Three middle eastern men were detained in Florida this morning after a waitress heard them talking about an attack in Florida on 9/13. Police pulled them over after they crashed through a toll plaza and bomb sniffing dogs found evidence of explosives in both cars. Link
A reader sent me this story. If you see something that as traders we need to know please do not hesitate to email me.

 
 
  John Seckinger   9/13/02,  9:29:02 AM
S&P Futures down 8.30, Nasdaq futures off 6.50, and the December Dow futures in the red by 90 points. FairValue for the S&P 500 today is $1.70. That price will not change during the day. According to HL Camp & Company, program buying is set at $3.00 and program selling set at $-.54.

 
 
  Jeff Bailey   9/13/02,  9:26:49 AM
The 9:00 AM intraday update has been posted. Link

 
 
  Jim Brown   9/13/02,  9:26:49 AM
Swing Trade Signals
Conflicting signals this morning have the markets heading lower at the open. ESST warned that DVD chip sales were less than expected while GNSS said unit sales were going to be up +25%. The PPI was flat and the August Retail Sales were higher then expected at +0.8%.

The big report is still to come at 9:45 is the Michigan Sentiment. This should be the market mover as it gives traders the first look at the September numbers. Estimates are for 87.6.

The futures are very negative but mainly on the HON news last night. Their warning is impacting BA, UTX and GE. All four are Dow stocks and that is pushing the Dow to about -100 points lower at the open. The Nasdaq is showing only a slightly lower open at -7 on the futures.

We will wait for the Sentiment before entering any plays.

 
 
  John Seckinger   9/13/02,  9:26:27 AM
August Retail Sales rose 0.8 percent as ex-autos sales rose 0.4 percent, both stronger-than-expected. August PPI was flat as the core fell 0.1 percent. Both PPI reports were weaker-than-expected. Note: Annual PPI growth reached a 52-year low in May.

 
 
  Jonathan Levinson   9/13/02,  8:39:10 AM
QQQ is currently trading at 22.62, from yesterday's close at 22.81. NDX futures are down 8.50, S&P down 10.30. Retail sales rose a better than expected .8%, and futures took a jump at 8:30AM, but are settling back as I type. The US Dollar Index is hovering at 107.20.

 
 
  Jeff Bailey   9/12/02,  9:28:50 PM
Market Monitor has been archived. To view today's comments, simply click this Link

 
 
  Jim Brown   9/12/02,  1:29:24 AM
The Swing Trade Game Plan has been posted: Link

 
 

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