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 Jim Brown  9/24/02,  21:27:37
The Swing Trade Game Plan has been posted: Link

 
 
 Jim Brown  9/24/02,  17:47:22
Micron   Micron Technology missed earnings by several miles tonight. They posted a net loss of -$.97 cents when analysts were expecting only a loss of -.19 cents. There were huge charges for write downs of memory to current prices and sales of only 20% of last years rate. They said memory prices in the last quarter had dropped by 30% due to lack of PC sales and competitive pricing pressures.

 
 
 Jim Brown  9/24/02,  15:59:15
Swing Trade Signals
Looks like we got a little (very little) short covering going into the close. Now, if only we could get a couple high profile warnings after the close we would be set for breaking the July lows, not just retesting them.

 
 
 Jim Brown  9/24/02,  15:45:45
SOX   Can you believe the SOX is still positive for the day. The news can't get any worse and they are still buying chips.

 
 
 Jim Brown  9/24/02,  15:42:34
Swing Trade Signals
Dow just did the dead stop at 7700 routine again but this time there was no bounce. If we break that level again today I think the party is over. (just beginning for the bears)

 
 
 Steven Price  9/24/02,  15:41:58
Reader Question: Hi Steve, Your work rocks. Does the Dell deal negate the LXM put play. If not where are the entries for aggressive and conservative players? Thanks, LB

Response: Lexmark (LXK)$46.19 +3.72 The LXK play possibility listed in our Watch List was looking for a break below $40. We never got that break and the Dell deal certainly puts a new spin on things. I do find the failure at the 50-dma of $47.64 interesting on this morning's rally, which topped out at $47.38. However, the play we were looking for is on the shelf for the time being.

 
 
 Jim Brown  9/24/02,  15:39:32
Dumping now in progress - MMM just broke to new lows on heavy volume. Down -4.25 at 113.25. MMM is one of my key indiciators for Dow direction and has the strongest relative strength in the Dow. They are beginning to sell the winners.

 
 
 Jim Brown  9/24/02,  15:36:02
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
That was a safer entry as compared to the target at 416 but we are in on shrinking internals. We were triggered at 15:31:16 when the OEX traded below 414, SPX 824.71, DIA 77.46, SPY 82.63, DJX 77.33, NDX 853.84, Compx 1192.89, QQQ 21.22, Emini 823.50. The initial stop loss will be OEX 417 (SPX 832, DJX 78.00)

 
 
 Jeff Bailey   9/24/02,  15:33:37
The 3:15 PM intraday update has been posted. Link

 
 
 Jim Brown  9/24/02,  15:14:44
Swing Trade Signals
Nasdaq is too strong here. I am going to leave the 414 trigger for now.

 
 
 Jim Brown  9/24/02,  15:10:58
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go SHORT the broader market with an OEX trade below 414. If this rally fails we want to be in it from here. If it continues up to fail above 416 I will raise the entry.

 
 
 Jonathan Levinson  9/24/02,  15:07:23
It looks like a bearish ascending wedge off the fed announcement at 14:15 on the COMPX, best seen with the 5 and 1 minute charts.

 
 
 Jonathan Levinson  9/24/02,  14:56:14
The COMPX has found support in the 1180 area all day since bouncing off its opening lows. The BTK and SOX have both been relatively strong, which has been keeping the TRINQ down. The 5(3) stochastics intraday are all chopped up but far off of oversold, as is the TRINQ. The daily 5(3) stochastic is in a bullish cross out of oversold territory. The QQV is still flat to negative, but the bottom line is that the day highs have held as resistance as well, and the COMPX remains down this week. Metals and bonds continue to show strength, and without yields participating in a rally, I don't see much potential for upside in equities. The strength in INTC and the SOX should caution bears against too much exuberance here, but these oversold stocks were due for a bounce, and with the stochastics off their lows, bulls need to be careful as well.

 
 
 Jim Brown  9/24/02,  14:49:17
IBM - going to break $60 and then warn! Can it get any uglier?

 
 
 Jim Brown  9/24/02,  14:37:08
Swing Trade Signals
Dead stop on support at OEX 410. This is the showdown point. The Dow bounced off the 7700 level again and we could get a bounce from here if the bulls are thinking "double bottom" from July closing lows. I would continue to want to short a failure at OEX 415 so keep your fingers crossed that we get a decent bounce from here. I am skeptical but would love to see it. If we drop though 7700 from here then the July intraday lows are next in line of 7532.

 
 
 Jim Brown  9/24/02,  14:26:51
Swing Trade Signals
OEX 415, SPX 829 is strong resistance and a rally back to those levels now would provide an entry point on a failure at that resistance. Keep your eyes glued to these numbers if we move higher.

 
 
 Jonathan Levinson  9/24/02,  14:24:32
It looks like an attack of the program trades, with the net result going nowhere, though a lower high on the one minute COMPX chart. I'd call this a lack of direction so far.

 
 
 Jim Brown  9/24/02,  14:23:57
Swing Trade Signals
Interesting! The October crash after the meeting fizzled just above support. You see what I was afraid of? The day is far from over but there were buyers lurking below the bid and the Nasdaq has already moved back into positive territory. The next dip is the one to watch. Once the initial orders are gone then the real direction will appear.

 
 
 Linda Piazza  9/24/02,  14:19:24
Ten-year bond yields dropping to the lows of the day, currently 36.01.

 
 
 Jeff Bailey   9/24/02,  14:19:10
Day Trade Bear could look short Citigroup (C) $27.43 on break below $27.30, stop $28.01, target $26.50.

 
 
 Jeff Bailey   9/24/02,  14:17:50
Received 1 sell program at S&P 500 premium level of $-2.50 just after FOMC announcement. So far, no other premium level alerts.

 
 
 Jeff Bailey   9/24/02,  14:14:11
No change in Interest Rates

Dow Industrials -127, SPX -8.45, OEX -3.8, NASDAQ Comp -0.03 and QQQ (unch)

 
 
 Jim Brown  9/24/02,  14:10:49
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
If we do not get a rate cut OR a bounce after the decision then I want to set a SHORT trigger at 409. This is under the 410 low of the day and the current support. We will give up six points from here but avoid a potential bounce off support at 410. Repeat: Go short at OEX 409, SPX 818 if we don't get a bounce to enter at a higher level.

 
 
 Jonathan Levinson  9/24/02,  14:08:18
The 30 minute and shorter 5(3) stochastics are topping out for the COMPX, and the market is no longer oversold on an intraday basis. Biotechs continue to fuel the QQQ off support at 20.90. The TRINQ is at the low end of neutral at .55, and the QQV is flat, up .04 today. Things should get a lot more interesting in 8 minutes or so.

 
 
 Jeff Bailey   9/24/02,  13:58:35
Acambis (ACAM) $39.00 +4.83% ... stock up on Associated Press report that ACAM plans to begin safety testing of new West Nile vaccine within the next few months. The experimental vaccine is bult on the long-used vaccine against yellow fever, a cousin of the West Nile virus, and could be available for the people most at risk of dying from the virus in three years. Link

Will set upside alert at $41.

 
 
 Jim Brown  9/24/02,  13:46:25
Swing Trade Signals
At the risk of being repetitive the current short covering is just getting us back to the morning levels. We need a positive announcement to take the pressure off the downside and give us a better entry. There is so much negative sentiment that the odds of a sustained drop from here are becoming slim. Support for the OEX is 410 and 820 on the SPX. The Futures are also 820. The Dow support is 7700. As you can see these supports are not far from the current levels 415, 828, 7775. A quick drop to support could bounce just as quickly if it holds. This makes an entry on a dip risky and traders not willing to take this risk should stand aside. Tomorrow is another day and last time I checked the markets will still be open. The Nasdaq is the leading indicator here. If it is not dropping on the negative news from this morning then why should it drop this afternoon?

 
 
 Jeff Bailey   9/24/02,  13:45:08
The 1:00 PM intraday update has been posted. Link

 
 
 Linda Piazza  9/24/02,  13:42:53
I probably won't enter on the first reaction after the Fed announcement. I'll be watching either for a drop through 407-408 area, an area of previous support/resistance in the week of July 22, or else a rally. Resistance lies ahead at 417-420 area, and again at 426-427 area. A cautious trader, I don't trade against the trend, and we're still in a bear market, so I won't buy calls on a breakout, but instead will wait for a rollover at resistance before buying puts again. Waiting until a drop through 407-408 if the OEX falls without rallying first will guarantee that I'll miss a chunk of the fall, but entering before that support level doesn't feel right for my risk/reward parameters. Even then, there's more support just below at 400, so I'll be watching stops closely. Decide on your own risk/reward parameters and your ability to watch markets closely before deciding on a trade after the FOMC announcement. Not all big market movements are tradeable, if you can't identify support and resistance levels that make sense to you, allowing you to set profit targets and stop losses.

 
 
 Jim Brown  9/24/02,  13:34:28
Jim, If fed cuts we go down if they don't we go down. What am I missing here? Seriously! Rick

There is an increasing amount of email that is worried about a short covering rally regardless of the decision. We are very oversold and a surprise cut could spark a buying panic. We will not participate in any bounce other than to short it when/if it fails.

There is strong support under us on the futures and on the cash indexes. Just not cutting rates will not guarantee a drop. The statement could change opinions as well. It is entirely conceivable that there are a huge number of institutional buyers waiting for the "sell on the news" so they can fill their buy orders this close to the July bottoms without raising stock prices.

In short there are as many theories as to the reaction as there are traders. We will need to be patient after the announcement and hope for a spike. A dip will be much more difficult to play as we could simply fall to support and the rally on oversold.

 
 
 Jim Brown  9/24/02,  13:14:56
Swing Trade Signals
It is about time for the short covering to begin IF it is going to happen.

Regardless of the decision there is likely to be some extreme volatility as traders positioned for the decision or waiting for the decision to enter positions, all try to act at once.

It will be very tempting to jump on the first dip with expectations that we are going to new lows. This could be dangerous based on the "buy the bad news" scenario I outlined earlier. I would much rather see an entry on a bounce but that possibility is not likely.

Because setting a trigger point in advance is guesswork at best I will call an entry after the announcement based on the market response. Feel free to enter at any time on your own if you feel I am being too cautious.

 
 
 Steven Price  9/24/02,  13:06:57
Reader Question: Steven: My question is in regards to choosing an exit point... I've been holding WY (WYVJ)puts for over three weeks. After the gap down this morning, I sold 2/3 of my positions for a handy profit @ 5.80. Now it's around 6.80. On such a gap, should I have waited? And now since I'm holding 1/3 share ($0 cost), should I exit the play or let it ride? How do you max out on such a scenario? cm#

Response: Weyerhauser (WY) $41.64 (-8.09) When to take profits is always a tough decision (but a nice one). I would have recommended taking 1/2 to 2/3 of your profits, as some rebound is likely. You have already done that. There is PnF support right here at $42, so it could be a bounce point. A trade of $41 would be needed to break that support. I would personally let 1/3 of the position ride, as the stock still looks heavy, but use a very tight stop to lock in the rest of your profits.

 
 
 Jonathan Levinson  9/24/02,  13:05:59
On another subject, I think I wrote to you once before about my conviction in the VIX. Well, here's an observation: My Q-charts VIX data only goes back to 1997, but nevertheless, if the VIX were to close the week above 45 it would be the first time the VIX has closed two consecutive weeks in a row above 45. -Ever

Good eye, William.

 
 
 Jim Brown  9/24/02,  12:52:26
Dear Jim, I am so frustrated with myself, I must have shorted 8 stocks in August that would now be so very profitable, but I didn't have the discipline to stay with them. If I get $1000.00 ( sometimes less) of profit, I feel so lucky that I close the trade when if I had stuck with it I would have had $10,000.00. (Exp: WY) What is wrong with me? I knew the direction, but I didn't have faith in myself. MAC

You can't go broke taking a profit unless your percentage of winners and losers are way out of balance.
Peter Lynch says the most retail traders cut the flowers (sell the winners) and let the weeds grow (keep the losers thinking they will come back)

Sometimes the problem is in position size. If you are putting 20% of your capital in a single trade then you are too gun shy to let the trade play out. A quick couple of points in the wrong direction and your out.
Using smaller positions will allow you to wait out the short swings and as long as the longer term trend remains the same you can stay in the trade.

This is a real problem for OEX traders. They may trade 10-20 contracts in stocks with 2-3 point moves but when they try to trade the same position size in an index that moves 10-14 points a day they get killed because they can't stick with their convictions.
Try cutting your position sizes and broadening your stops slightly. Once profitable a couple dollars set your stops to take you out without a loss and wait for the trend to change. As long as the trend continue stay in the trade.

 
 
 John Seckinger  9/24/02,  12:49:51
It is normal that the long bond (30-year) is up only slightly (10 ticks to 114-13) before this FOMC meeting. Why? Inflation (or lack thereof) is one of the main driving forces behind bond price action, and since investors evidently feel they cannot delay purchases and wait for higher yields; they first look to shorter dated bonds. When buying shorter-dated bonds, a hedge usually takes place. How? By selling longer-term maturities. We can see this in the yield curve via futures market. 5's are up 7.5 ticks and 30-year only up 10. This is the curve steepening.

 
 
 Jim Brown  9/24/02,  12:35:36
Swing Trade Signals
The closer we get to 2:PM the more the declining volume is increasing. It appears the big money is expecting the Fed to say something negative in their announcement that will negate any possible rate cut. I don't recall a meeting with the possibility of a cut with this negative a market before the announcement. This one should go down in the history books. I have seen it down substantially when they were expecting a rate hike but never this bad when the expectations of a cut were in the 40+% range.

 
 
 Steven Price  9/24/02,  12:19:48
Abbott Labs: $42.07 (+0.37) OI call play ABT has been fighting a sinking market, but so far winning the battle. I like this as a bounce play, but would wait until after the Fed announcement to enter long positions, in case we see a broad market sell-off, which is likely to take even the best long candidates with it.

 
 
 Jim Brown  9/24/02,  12:19:24
Swing Trade Signals
Still two hours before the Fed announcement but it appears nobody cares. We have had a couple attempts to bounce but both failed. My trigger finger is so itchy I need to sit on it to stay out of trouble. This is exactly the type of setup that can get you into trouble. The Fed could be planning a surprise to put fear back into shorts but right now it is like the fox and the rabbit. The Fed (fox) may be threatening but the bears (rabbits) are totally unconcerned. Please don't throw me into the briar patch (by not cutting rates). That would be "terrible" (hee hee) and the market could really crash. (hee hee) Please, Alan don't let us fall. (hee hee)

(Am I bored or what?)

 
 
 Jeff Bailey   9/24/02,  12:13:21
Risk/Account Management It's that time of month to begin assessing how you've done for the month for the bottom line of your account and how you're going to earn a paycheck. For me, looking to take some gains in the Agilent (NYSE:A) $13.36 puts from profile above $15 and par down to 1/2 position from full ahead of the FOMC. Need these gains to achieve monthly account profit goal. Link

Will hold the Aetna (NYSE:AET) $37.96 -2.56% October $40 puts as I like the way the stock rallied to $40 and found resistance at the past triple-bottom. Holding just 1/2 position currently and would close out today on a break lower at $35, which was original target for October expiration. Link

Will continue to hold 1/2 bearish position in Duke Energy (NYSE:DUK) $19.49 -1.6% January $20 puts from Friday's profile. Still need a break of $17.50 to hint that "the Duke" is about to be beheaded.

Holding long FRX Jan $70 calls, CPB Nov. $22.50 calls, FRNT Nov. $10 calls. FRNT is my "pig" and not sure the holiday travel season is going to pan out. FRNT was small amount of capital and so far, glad it was.

Taking some excess monthly gains and rollign the dice with Bema Gold (AMEX:BGO) bullish from $1.40. There's been a large seller for the past week at current levels. Need a break above 76 in the XAU.X. If seller in BGO was/is a short, might get him/her to make a move and bid me higher. Will give it all to him/her at $1.49.

 
 
 John Seckinger  9/24/02,  12:06:21
Under normal circumstances, I would expect the Dow to continue to come under some form of selling pressure. This may still be the case; however, I would be surprised if the intra-day low of 7739 is taken out before the FOMC announcement. Looking at a micro-retracement analysis of the Dow from the 7914 relative high to today's low; 38.2% retracement is at 7806, while 50 percent is at 7827. If interest totally dries up during the next few hours, possibly the Dow will be nearer to those levels before the announcement. Usually, hours before an FOMC meeting and some time afterwards represents a time period that is difficult to trade.

 
 
 Jonathan Levinson  9/24/02,  11:55:36
Today's COMPX action as seen on the 5 minute candles looks like a bearish Broadening Ascending Wedge, as Bulkowski refers to it at page 72 of his Encyclopedia of Chart Patterns, otherwise affectionately known as the Bulloney Bullhorn. It tends to break downward 76% of the time, with an average decline of 20% occurring 61% of the time.

 
 
 Jeff Bailey   9/24/02,  11:51:30
Forest Labs (FRX) $77.95 +2.35% ... Jeff: How about an update on FRX and CPB? stock rebounding nicely today after a brief dip below the 200-day MA yesterday. Still bullish the previously profiled Jan $70 calls. At these higher levels, would no longer be buying the Jan $70's, but would prefer the Jan $75's. Current resistance at $80.

Yesterday's "news" that FRX withdrew it application for U.S. market approval of an experimental treatment for moderate to severe Alzheimer's disease may not be that big of deal near-term. Company has a "habit" of withdrawing application to further test new drugs and get a broader label for earlier treatment of ailments, not just severe stage of disease treatent. FRX said it expects to complete the refiling and the submission of the new study data by year-end. Same process of delayed FDA filing was used by FRX with Lexapro. Link

Remember when FRX was first profiled as bullish. Bull wanted to see FRX relative strength turn higher versus the SPX from a reading near 78-79 RS. That has happened and then some hasn't it? Link

Still bullish "the FRX"

Disclosure... I currently hold bullish position in the FRX Jan $70 calls.

As for CPB, no updates as described in Friday evening's market monitor. Will only mention CPB on bullish break above $23.82 and 38.2% retracement.

 
 
 Jeff Bailey   9/24/02,  11:45:01
The 11:00 AM intraday update has been posted. Link

 
 
 Jonathan Levinson  9/24/02,  11:42:24
Support for QQQ is coming in large part from the Biotechs, currently 316, +8.32 (2.70%).

 
 
 Linda Piazza  9/24/02,  11:36:16
A report that the U.S. is sending troops to the Ivory Coast may have helped precipitate the quick downdraft.

 
 
 Jonathan Levinson  9/24/02,  11:35:28
QQQ is back to 21 support, as the COMPX fades back to 1184. The TRINQ has risen slightly on this decline to a reading of .76, QQV is up 2 points off its low to 52.97, and the TICK.NQ is at -535. Gold is showing strength, and XAU is outperforming HUI for a change, +1.4 and +.71 respectively.

 
 
 Jonathan Levinson  9/24/02,  11:25:39
EDS (10.05, -36%) is getting smoked on news of excessive cash obligations, and appears to be taking IBM (61.35, -3.19%) with it.

 
 
 Jonathan Levinson  9/24/02,  11:09:08
Abby's being bullish is enough to signal a top in the markets to me :)

 
 
 Linda Piazza  9/24/02,  11:04:10
But what does Joe Battapaglia say, Jonathan? I need both Abby and Joe as confirmation before I'll move on the recommendation.

 
 
 John Seckinger  9/24/02,  10:56:02
27 percent of primary dealers (6 out of 22) do expect the Fed to cut rates by year-end. Since the Fed has been very quiet regarding recent economic events, a cut today will most likely be viewed as a surprise to the market. Looking backwards, a weak ISM report, strong housing sales release, inventories rising, consumer spending higher (most likely due to car incentives), unemployment at 5.7%, PPI lower-than-expected, Industrial Production higher, and a slight drop in Retail Sales doesn't, when added together, give a clear reading that the Fed will ease at today's announcment. That is just my opinion.

 
 
 Jonathan Levinson  9/24/02,  10:53:54
Stop everything! Abby Joseph Cohen has declared that a recovery is under way! Our favorite pundit, the Bull of bulls, has made some perspicacious and edifying statements. Bears had better think twice! (grin)

"Our conclusion is the worst is over; that we are in recovery from recession, that are now waiting for the next phase," Ms Cohen said in an address to the Australian Investment Management Conference.

Read about it at this Link

 
 
 Steven Price  9/24/02,  10:52:10
Semiconductor Sector Index (SOX.X): 239.94 +1.58 The SOX rebounded to a high today of 244.52. I would need to see a break above 250, and a close there, to believe in the strength of any bounce.

 
 
 Jonathan Levinson  9/24/02,  10:50:11
Incidentally, gold bugs in New York might want to check out the International Gold Conference, which I believe is at the Marriott Marquis in Manhattan. Some of my favorite commentators and analysts *not* already on the OIN staff are in attendance, including Bob Chapman, Dave Morgan, Jim Sinclair, Jim Puplava and Tom O'Brien.

 
 
 Steven Price  9/24/02,  10:49:06
Autozone (AZO): $75.60 +0.82 OI call play AZO has been resilient during the recent market decline. We picked it at $74.42 at the close of business Sept 13 and it is actually showing a gain since that time, as the Dow has sold off over 500 points. Unfortunately we will be letting it go ahead of tomorrow's earnings, in accordance with our earnings policy.

 
 
 Jim Brown  9/24/02,  10:48:14
Swing Trade Signals
One more thought and I will shut up. When the Fed cuts rates there is typically a bounce and then a "sell the news event" with the following day trading down. Because the sentiment is so bad we need to be aware that there is a slim possibility of a "buy the news" event. Investors expecting no cut and a market dive may be lurking just under the lows of the day to buy a "no change" announcement. I know this is hard to comprehend but did you notice how fast the Nasdaq roared off the bottom this morning. We had more bad news this morning than would fit in the allotted air space but the Nasdaq is positive for the day and the Dow was significantly off its lows. This is probably just shorts jumping in to take profits at the lows but we can never be too cautious.

 
 
 Jonathan Levinson  9/24/02,  10:47:49
The 5(3) intraday stochastics all topped out and are keeling over just below COMPX 1200 resistance. Still seems strange to refer to 1200 as "resistance". OI put play BSC made it up to 58.50 and is now back to 57.70- the 59 stop was set safely just out of harms way. The TICK.NQ is now at -301 and yields are dunking back deeper into the red. S/R levels on the way up from this morning's lows are now support on the way back down.

 
 
 Linda Piazza  9/24/02,  10:46:51
The hourly stochastic on the OEX can't decide which direction to go. It started the day turned down, tried to curve back up, and now sort of points downward. Oscillators are great tools for traders--sometimes. This oscillator is responding to price changes, not predicting them.

 
 
 Jim Brown  9/24/02,  10:42:01
Swing Trade Signals
Now comes the tricky part. Will we rise into the meeting or drop from here? At this point I don't think it is material since we did not get a +100 point Dow spike that we could short. The prudent thing to do, frustrating for gunslingers, is to wait for the announcement to avoid any unpleasant surprises. We can only hope that anybody currently short will be getting sweaty palms between now and 2:15 and that will drive the averages higher before the announcement.

 
 
 Jim Brown  9/24/02,  10:23:35
Swing Trade Signals
Since the markets are higher now than they were on the gap down traders are probably glad they did not short the open. We are now seeing some gains on the stronger than expected Confidence numbers and fear that maybe the Fed will react to today's earnings problems and cut rates unexpectedly. We will continue to look for an entry on a higher failed rally or after the announcement

 
 
 Jeff Bailey   9/24/02,  10:23:23
Gold December Gold futures (gc02z) $327.90 +1.14% ... breaking above recent resistance of 325 today. Gold stocks NEM, HGMCY and BGO all sitting right on upward trending 21-day SMAs. Aggressive gold bugs can play stocks long, stops under the 21-day SMAs. May need a gold futures above 320 to spark a move higher.

FOMC meeting will be key. I'm not sure what the MARKET response will be to any FOMC decision, so discipline is essential for traders in the gold sector.

 
 
 Jonathan Levinson  9/24/02,  10:21:47
The COMPX has just recovered the better part of yesterday's losses. The 1200-05 level is the next resistance to attack, followed by gap resistance at 1210. The QQV is down 1 to 50.93, TRINQ is at the lower end of neutral buy territory at .50, TICK.NQ showing broad buying at +385. Yields are recovering off their lows but still in the red.

 
 
 John Seckinger  9/24/02,  10:15:12
Dow remains under both its 22 and 50 PMA's (five-minute chart) at 7811 and 7828, respectively. Utility Index (UTY) continues to come under pressure, lower by another 2.5 percent and should make it hard on equities overall. Oil Index is lower by 1.53 percent. Dollar is also weaker, and the yield curve is steep. All of these Intermarket relationships point towards lower equities.

 
 
 Steven Price  9/24/02,  10:02:55
Consumer Confidence came in slightly better than expected at 93.3. This was still the fourth straight decline. Looks like a rally, but we'll have to wait and see just how strong.

 
 
 Jeff Bailey   9/24/02,  10:02:33
Buy Program at S&P 500 premium level of $1.50

 
 
 Steven Price  9/24/02,  09:55:55
Verizon (VZ) $28.90 (-0.81) Yesterday's break below $28.70, which had served as support on several prior occasions looked bearish, however the stock recovered intraday. The rebound fell short of $30, however, and I like the stock short on a break back below $28.70, with a tight stop just over $30. More conservative traders may want to wait for a trade of $28.00, which would be a triple bottom point and figure breakdown.

 
 
 Jonathan Levinson  9/24/02,  09:55:26
The Fed has taken no open market operations today, for a net flat day.

 
 
 Jim Brown  9/24/02,  09:55:03
Swing Trade Signals
Consumer Confidence is about eight minutes away and a positive number may be the only thing that will keep us in range before the FOMC meeting. A very bad number could actually spur the Fed to cut rates. Do we hope for a bad number and a rate cut or a good number and no cut? In reality I don't think it matters. After the meeting the odds are still lower lows.

 
 
 John Seckinger  9/24/02,  09:52:31
One of the best leading indicators regarding an upturn in business investment is consumer sentiment. In roughly 10 minutes, the September Consumer Sentiment figure will be released. This index is more business weighted than the Univ. of Michigan report. Consensus is for a drop from 93.5 to 92.4. In the last three months, this index has fell 15%.

 
 
 Steven Price  9/24/02,  09:50:04
Barr Labs (BRL) $60.57 -1.26 I am lowering the stop in OI put play BRL, originally entered at 66.32, to $63, just above yesterday's high of $62.63

 
 
 Jonathan Levinson  9/24/02,  09:47:52
Biotech looks to be helping fuel this rise, +2.39 to 310.07.

 
 
 Jonathan Levinson  9/24/02,  09:46:05
Look for next resistance (if the COMPX clears 1180) at 1188. The TRINQ is at .71, showing some buying enthusiasm. Yields remain in the red, and QQV is rising here, +1.14. This upward move doesn't look like it will have much of a half-life if the "smarter" money is any indication.

 
 
 Steven Price  9/24/02,  09:43:22
Johnson Controls (JCI): $74.32 -1.20 OI put play JCI below yesterday's low of the day. While the stock looks extended to the downside, so does the overall market. There is some support just under $74, so conservative traders may want to wait for a break below $73.75, but I still like the entry here, with a stop at $77 above yesterday's high of $76.80

 
 
 Jonathan Levinson  9/24/02,  09:42:38
The COMPX found some oomph and is now trying for that gap fill. First resistance should come within about 3 points at 1178-1180.

 
 
 Jonathan Levinson  9/24/02,  09:38:58
The COMPX is taking a 3 point bounce off the open into the gap, but I don't see a lot of strength at all. The TRINQ at 2.83 is in moderate sell territory but not extreme, and the QQV is flat despite the gap down. Metals are doing well, with HUI +3.18, XAU +2.21.

 
 
 John Seckinger  9/24/02,  09:37:00
In other economic news, Mitsubishi same-store sales index fell 1.7% for the week of September 21st. The Redbood month-to-date index is now flat in August. Note: Both these indices make up roughly 12% of the retail sales report.

 
 
 John Seckinger  9/24/02,  09:35:15
As the Dow opens lower, Treasury Bonds once again are setting new contract highs. The December Bond (USZ) is up 10 ticks to 114-13. News of possible layoffs at Lehman Brothers and Goldman Sachs certainly is keeping uncertainty high. Other news: Sprint avoided a downgrade from Moody's, which left their credit with a negative outlook but still at investment grade.

 
 
 Jonathan Levinson  9/24/02,  09:32:08
The COMPX has gapped down 15 points to 1170 at the open. QQQ 20.69.

 
 
 Jeff Bailey   9/24/02,  09:31:43
The 9:00 AM intraday update has been posted. Link

 
 
 Steven Price  9/24/02,  09:30:59
Lehmann Bros (LEH) $47.99 Lehman missd its earnings target by 0.17, earning 0.70/share vs. expectations of 0.87. Its revenue also came in light. OI bearish Watch List candidate Weyerhauser (WY) also warned earnings would be in 0.05-0.10 vs. 0.34.

 
 
 Jeff Bailey   9/24/02,  09:30:53
Broadcom (BRCM) $13.03 -1.36% ... Jeff: Hi jeff i have short position in brcm my stop is at 13.50 .how low do u see it to go base on your chart reading ...thanks

BRCM has been in bearish trend since.... well a long time. Recent trade at $16 was triple-bottom sell signal in early September (red 9) Link and vertical count is bearish to $5.00. I've taken a "fitted" retracement bracking (similar to what we use in the Index Trader Wrap) from $22.32, "fit" 50% at $15.44, which gives me 38.2% at $13.82 (stop above this level) and 19.1% at $11.19 (first target) and 0% at $8.57 (second target). I like short, even here in pre-market at $12.80, stop $13.05 to begin.

 
 
 Linda Piazza  9/24/02,  09:30:51
Itchy fingers, anyone? Be careful if you're tempted to enter trades ahead of FOMC decision. Market sentiment can outweigh any technical indicators we see, and markets have a way of gravitating to a certain level and staying there until the decision is reached. Looking back to the week of July 22, when OEX was last trading at current levels, it had minor S/R at 407-408, then 400, then 395 area.

 
 
 Jim Brown  9/24/02,  09:27:30
Swing Trade Signals
The markets are set to gap down again after a flurry of earnings misses and warnings and stronger talk of war. LEH missed earnings, WY warned with expected earnings nearly half of prior estimates, TIN warned with .25 cents expected vs .45 estimates. URS, NVLS, MYG were all down on earnings problems. Deutsche Bank Securities lower its outlook on tech stocks -10% to -20% over the next month and -20-30% over the next six months. EDS was cut to a SELL by Merrill. The Dow futures are at 7730 and only 30 points away from potential support at the July-22 close low. Going short at the open is still a lowing proposition. I know this is frustrating but it is fact. We need a bounce somewhere in order for premiums to deflate in order to enter a position. As much as I hate to say it we may not be able to get in until the end of the Fed meeting as shorts, who are scared of a surprise cut, cover before the announcement. I don't like it anymore than you do but that is the way I am going to play it.

The game plan is always to trade only when it is profitable and shorting the opening dip is not a high odds play.

 
 
 Jonathan Levinson  9/24/02,  09:05:47
The US Dollar index is now just above 107.40, yields are down, QQQ trading 20.66, NDX futures -15, S%P futures -15.90, and gold has broken above 325.

 
 
 Jonathan Levinson  9/24/02,  07:08:45
Obviously I'm back in Minneapolis (sniff), and still on California time! here at 3:14 EDT, the geyser has blown its stack again and from down 270 on SPX we're now just down 50.

Don't worry, folks, Shelley's looking at a different scale. My futures charts are now drawing a waterfall formation, down at their lows of the evening with NDX -13.50 and S&P -14.60. Gold continues to try for $325, and without charting it, the action over the last week has felt like an ascending triangle, higher lows and a steady high below $325. The US Dollar Index is trading 107.80.

 
 
 Jim Brown  9/23/02,  22:09:43
The Swing Trade Game Plan has been posted: Link

 
 
 Jeff Bailey   9/23/02,  21:31:35
The Market Monitor has been archived. To view Monday's comments, simply click this Link

 
 

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