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  Jim Brown   9/26/02,  9:12:44 PM
The Swing Trade Game Plan has been posted: Link

 
 
  Jeff Bailey   9/26/02,  4:38:34 PM
Philip Morris (MO) $42.73 -3.01% .... stock hit lower in after-hours at $38.80 (-9.1% from close) after company cut 2002 EPS guidance to a range of 3-5% growth due to lower than anticipated volume and additional promotional spending; expects Q3 EPS of $1.26, versus consensus of $1.25; believes industry dynamics should inprove in 2003, and targets EPS growth of 8-10% for that year.

In yesterday's 03:15 update Link we noted weakness in the shares, and "suspicious" comments once again from Morgan Stanley (twice in the same week) cautioning on earnings outlook for the group. Should after-hours hold and stock opens $40 or lower, then that would be the triple-bottom sell a bearish trader with 1/2 bearish position in the or December or January puts. Link

Good "call" from Morgan Stanley on the fundamental side and those technical observations from the point/figure chart by traders at 09:30:58 yesterday morning. Maybe the early bird does get a worm now and then. Link

 
 
  Steven Price   9/26/02,  4:33:25 PM
Ask the Analyst: Just a reminder to send me your suggestions for the column this weekend. Requests can be sent to: asktheanalyst@OptionInvestor.com

 
 
  Jim Brown   9/26/02,  4:15:24 PM
SBC - SBC to cut 11,000 jobs. Says of the approximately 11,000 job cuts announced today, "about 9,000 of them should occur in the fourth quarter, with the balance occurring primarily in early 2003."

 
 
  Jim Brown   9/26/02,  4:08:45 PM
Phillip Morris just warned

 
 
  Jim Brown   9/26/02,  3:58:23 PM
IBM   - Remember that comment yesterday about shorting IBM at $63.50 in the Monitor. It would have been a winner. We almost picked it as a PUT play for tomorrow but comments from one analyst today about them beating estimates (no kidding) kept us on the cautious side. Also, with support at $60 the risk/reward from $61.75 (current) was not that good. Now, if only they would warn tonight.....

 
 
  Jim Brown   9/26/02,  3:53:55 PM
Swing Trade Signals
Pirate (a reader) pointed out that MO is leading the Dow charge to 8000. With IBM, GE and MSFT in the tank somebody needs to help out. We have not had any major warnings in the last two days. Tonight would be a good night. Thursdays typically garner their share so lookout for negative news tonight. There is definitely resistance at 8000 and the bulls just cannot push it over.

 
 
  Linda Piazza   9/26/02,  3:15:48 PM
I guess GE is along for the ride after all, although with one foot dragging the pavement.

 
 
  Jim Brown   9/26/02,  3:09:52 PM
Swing Trade Signals
Now in the last hour of trading the markets are racing to hit that magic Dow 8000 failure point from this morning. We have had a couple strong buy programs over the last hour, which could be triggering buy stops for shorts. We should see some sell stops triggered at 8000 so the rest of the afternoon should be interesting. The Russell is literally rocketing which normally means funds buying stocks again.

 
 
  Linda Piazza   9/26/02,  2:36:25 PM
Everything seems to be at key levels. Bond yields flirt with negative levels, DOW and COMPX hover above key levels. The dollar is down, but so are gold and the VIX. Unless GE decides to come along on the ride, though, it's difficult to believe the DOW can run above today's highs.

 
 
  Jim Brown   9/26/02,  2:28:37 PM
Swing Trade Signals
Another buy program just lifted the indexes off their support. The OEX has been moving sideways just above its 5DMA at 422. Link That last program was strong enough to bounce the A/D line by +400 issues over a six minute period. The Russell took a decided bounce but the futures barely showed any movement.

 
 
  Jonathan Levinson   9/26/02,  2:23:44 PM
The TRINQ is rising, now 3.03, and the QQV is grudgingly following along, +.56. Declining volume of 892M COMPX shares versue 249 advancing, while price wrestles with the 1210 support line. Following the head and shoulders top which we've just seen play out, price is chopping along trying to decide which way to go. With yields now in the red, and QQV in the green, my guess is down, but we'll have to wait for a pattern to assert itself. If this was the EOM and EOQ window dressing session, the un-dressing session should get pretty ugly.

 
 
  Steven Price   9/26/02,  1:46:35 PM
Cigna (CI): $73.09 (+1.89) Cigna's recent drop was pretty extended, and the bounce doesn't change my mind on the short position here. The Insurance Index (IUX.X) and CI have both stopped dead at their 10-dmas. After extended sell-offs, a bounce was likely at some point. The trade of $73 led to a three-box reversal, but a similar pattern developed on the last extended breakdown. The triple bottom breakdown occurred at $75, and the reversal below that level still looks attractive. Here is a link to the original play, in which we cited the possibility of a bounce and entry on failure below the breakdown levelLink .

 
 
  Steven Price   9/26/02,  1:31:35 PM
Reader Question: hi steve thanks for all the good info.BRCM and BRCD are dropping fast how low do you see them go?

Response:

Brocade (BRCD) : $8.71 (-1.66) Brocade dropped hard after the company declined to give guidance at the Bamc of America investor conference. The stock did bounce right above $8, and found some support at $8.25 as well. I don't think I'd initiate a short unless it broke below that level.

Broadcom (BRCM): $11.50 (-2.40) Broadcom saw its estimates cut by Salomon Smith Barney. The 2002 loss is now expected at -0.21/share vs earlier estimates of -0.19. The 2003 estimate was cut from +0.29/share to +0.03. I don't generally like to short stocks that are this cheap, since a significant percentage gain doesn't translate into a lot of real dollars. However, the future for BRCM looks awfully bleak. One other concern is the PnF extension. I would rather see a failed rebound with a 3-box reversal for an entry. The current column of "O"s is awfully long and a full five boxes past its $14.50 sell signal. The stock has already lost 17% today, and it feels like a chase to short it here. That being said, my "gut" sees more downside in the future, but I'd still prefer a failed rebound for entry..

 
 
  Jeff Bailey   9/26/02,  1:25:56 PM
Dow Diamonds (DIA) $78.98 +0.4% ... stopped per previously raised stop from yesterday's profile at $77.70.

 
 
  Jim Brown   9/26/02,  1:23:08 PM
GM Despite the bragging by GM today I would be shorting them here. The Consumer Confidence showed a marked drop off in the number of consumers planning on buying cars in the U.S. Also, there have been several reports that they have a $97 billion (with a B) unfunded liability for their pension plan which is not on their balance sheet. This is several times their market cap and without a new stock market bubble will eventually require major funding. GM at $42 looks like it is overvalued to me. This is contrary to my thoughts just two weeks ago but the facts continue to surface to change my mind. The zero percent financing is losing its bloom. Just my opinion.

 
 
  Jonathan Levinson   9/26/02,  1:14:38 PM
GE volume so far is 31,084,200 vs. an average daily of 29,646,044. Following our discussion on volume yesterday, GE's getting smoked for 2.67% so far on heavier than average volume bodes very ill for the stock.

 
 
  Linda Piazza   9/26/02,  1:06:58 PM
GE has now given up most of its gains from the last two days. XAU fell below 50- and 200-dma's, and is now back above both.

 
 
  John Seckinger   9/26/02,  12:47:04 PM
The December Bond (USZ2) almost fell a full-point (32/32), being down 30/32 at its worst level; however, has since recovered and is down 21 ticks. My rule of thumb is: If the bond falls/rises a full-point, significant asset allocation should continue to materialize. This was not the case today. In fact, a five-minute chart of the December Bond shows prices are in the process of setting a short term bottom. This is bearish for stocks. A confirmation would be when bonds are only down 14 ticks.

 
 
  Jonathan Levinson   9/26/02,  12:43:08 PM
GE is getting slammed, currently at a low of the day at 26.70. The bloom sure faded fast, like within 10 minutes. The COMPX is at 1215, and the TRINQ is back in bear country, 2.74. Even the QQV's perked up a smidge, +.17. Next stop should be 1210.

 
 
  Jim Brown   9/26/02,  12:41:44 PM
Swing Trade Signals
That OEX 425 level that held this morning is the 62% retracement level from the July lows to the August highs. If we break this level to the downside now the shorts should appear in volume.

 
 
  Jim Brown   9/26/02,  12:37:25 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the SHORT signal at 12:31:12 when the OEX traded below 427. SPX 850.39, DIA 79.50, SPY 85.27, DJX 79.44, NDX 872.83, Compx 1218.18, QQQ 21.68, Emini 850.25.

The reason I jumped the gun on this entry was the lack of strength in the Nasdaq and the roll over in the SOX. This weakness when coupled with lackluster Dow strength at the 8000 level pushed me off the sidelines. The networkers are tanking as well. The GE affirmation had shorts covering initially but the comments about tough conditions finally pushed it lower.

The initial stop loss on this signal will be OEX 432.00 (SPX 860, DJX 80.75)

Wish I had taken that first break over 430 now but better late than never.

 
 
  Jim Brown   9/26/02,  12:16:08 PM
GE Affirms   Unfortunately they affirmed they were having a much tougher quarter than anticipated with losses at GE Equity and their insurance unit, GE RE. These losses of -$325 million were going to be offset by a one time after tax gain of $300 million on their GXS unit. While they affirmed $1.65 for the 2002 year for the eight time, they offered no guidance for 2003. If they don't pull another one time gain out of their hat then what are they going to use to hold them up in the 4Q? Inquiring minds want to know.

 
 
  Jeff Bailey   9/26/02,  12:04:08 PM
Agilent Tech (A) $13.97 -0.7% ... day-trader bear can short here, stop above today's high $14.30 and target $13.45.

Disclosure... I currently hold bearish position in A

 
 
  Jeff Bailey   9/26/02,  12:01:46 PM
Duke Energy (DUK) $19.02 +3.65% ... correction to 10:29:52 comments as it relates to point and figure chart action today. Looks like a "bad tick" at $19.83, as the 60-minute bar chart shows today's high being $19.18. As such, can't chart a 3-box reversal at this point.

 
 
  Jim Brown   9/26/02,  11:52:45 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
That touch of Dow 7999 attracted some sellers. If we try it again I think there is adequate rationale for going SHORT the broader market with a trade at OEX 430. The risk appears to be 432-433 and Dow 8050 and it just does not look like it is going to happen. (famous last words, I know) Let's go SHORT the broader mart with another OEX trade at 430. Let's also raise the lower trigger to a trade at OEX 427. This is below the last dip at 11:15.

 
 
  Steven Price   9/26/02,  11:49:13 AM
I'm keeping in mind that after a 1300 point drop in the Dow, even a bear market rally could last a few hundred points. While my sentiment is still short, I'm going to wait for a rally to fade before initiating new short positions. Because I think the rally will fade, I'm also cautious on the long side. Sometimes the best trading decision is not to trade. I'll let this morning's action shake out and watch to see if the Dow can break above 8000. The turnback at 7999 shows some obvious supply at that level, so let's see if the buyers can exhaust the sellers.

 
 
  John Seckinger   9/26/02,  11:49:07 AM
Is the Dog wagging its tail, or is the tail wagging the dog? If the former, then the Dow will most likely control price action and 8000 could be hard to overcome. If the latter, then weakness in Gold, pressure on five-year notes (Yields higher), weakness in bonds (down 24 ticks), and bids in Utilities and Oil will power the Dow through 8000 towards 8050. The yield curve is roughly 12 ticks "flat" (bullish), and I am waiting for a flattening of at least 20 ticks before I get really bullish. I believe now is a wait and see game.

 
 
  Jeff Bailey   9/26/02,  11:43:58 AM
Dow Industrials (INDU) 7,982 +1.79% ... just off its highs of 7,999.06, which is just below "psychological" level of 8,000. Per Index Trader Wrap, 38.2% at 8,043 is our near-term technical resistance here.

Other technicals worth noting is that Dow has broken back above the mid-point of our lower trending "long-term" regression channel.

The S&P 500 Index (SPX.X) 854 +1.72% gets a follow through day to the upside after breaking above its mid-point of longer-term regression.

The S&P 100 Index (OEX.X) 429 +1.85% makes a break above its mid-point regression too.

QQQ $22 +0.59% lags a bit with Biotech (BTK.X) -1%, Software (GSO.X) +0.03%, Networking (NWX.X) -3.17% and Fiber Optice (FOP.X) -2.6%. Tech strength is ... is... is.... Telecom (IXTCX) +2.5%, Wireless (YLS.X) +1.38%.

 
 
  Jeff Bailey   9/26/02,  11:43:02 AM
The 11:00 AM intraday update has been posted. Link

 
 
  Jim Brown   9/26/02,  11:36:28 AM
Swing Trade Signals
That last little buy program broke through resistance and powered the Dow to a dead stop at 8000. The OEX broke over 430 as well. The OEX has deviated from the relationship with the Dow the last time we were in this area and is trading about a point higher than before. This would indicate that 432 could be the top if the Dow can make it to 8050. That is a big IF. Declining volume is continuing to accelerate. We could still struggle higher for that last climax spike. The day is still young.

 
 
  Linda Piazza   9/26/02,  11:27:14 AM
When assessing the strength of the markets, it's interesting to look at transports and cyclicals. Today, the DJ Transportation Index and Morgan-Stanley Cyclical Index have moved above their 5-dma's. At 2214.84 as of this writing, the transportation index is challenging former support, now resistance, and also resistance from a descending trendline. intraday stochastics are buried in overbought, but not yet turning down, so it's not clear whether the transports can push through this resistance without a pullback. Daily stochastics are still moving up. Further resistance lies overhead 2277.37, the location of the 50-dma. The cyclicals, currently at 430.23 face minor resistance in this area. Next resistance is at 450, and then stronger resistance in 460 area. Intraday stochastics are extended for this index, too, although also not yet turning down.

 
 
  Jim Brown   9/26/02,  11:26:44 AM
Swing Trade Signals
The VIX is about to break under 40 again on this last bounce. The TRIN has dropped back to .69. This is good news as it shows a gradual move from oversold back into the direction of overbought and is setting up for the next leg down. Nothing has changed in the economy. End of quarter window dressing is the only factor in this bounce other than some oversold short covering. The A/D numbers are positive but showing weakness when not influenced by buy programs. We just need to be patient and our time will come. That OEX 430 level(Dow 8050) is looking more like an entry point as the hours drag by but I am not yet ready to try shorting resistance at that level. Maybe later.

 
 
  Jonathan Levinson   9/26/02,  11:26:31 AM
The COMPX did not set any highs of the day on that last surge up, although QQQ flipped back sightly above 22 where it's currently trading. The TRINQ has remained above 1, currently 1.23, through the duration of the move. The TICK.NQ is currently -6. With yields still well in the green, the consistent bid under equities is no surprise. QQV is down a mere .19, and the QQQ options market is not looking particularly bullish or bearish at the moment. More rangebound action ahead.

 
 
  John Seckinger   9/26/02,  11:20:24 AM
Gold has fell underneath all three daily moving averages (22, 50, and 200, exp.) in just a few hours. Currently at 67.62 and recently falling under its 200 DMA (68.50), this index continues to witness assets leave to most likely enter equities. If the XAU.X can recover and get above the 200 DMA, it will be interesting to see if the Dow rolls at that time.

 
 
  Steven Price   9/26/02,  11:03:58 AM
Fiserv (FISV): $28.47 +0.37 OI put play FISV closed its gap from yesterday, trading as high as $29.45, and then fell back. I still like the short position in FISV. If you are looking for a conservative entry point, a trade below $28 would take the stock below yesterday's close, today's low, and the round number level.

 
 
  John Seckinger   9/26/02,  10:54:08 AM
In its World Economic Outlook, the IMF said Japan's economy will contract 0.5 percent this year, less than the 1 percent drop forecast in April. Last year, Japan's economy contracted 0.3 percent. Clearly the worst economy in the G7, the country contines to be hindered by bad loans of 52.4 trillion yen. Speaking of the bad loans, the Japanese Government might use taxpayer money to keep the troubled banks afloat. Japan's government spent 9.3 trillion yen of taxpayer money to bail out the nation's largest banks in 1998 and 1999.

 
 
  Jim Brown   9/26/02,  10:42:19 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Let's raise the entry point on the SHORT signal to an OEX trade at 425. We will have to worry about the 420-422 support but with internals weakening I would rather get in earlier than wait for a breakdown to the current trigger point of 419. If you are concerned about an upside reversal then only a half position might be prudent.

 
 
  Jeff Bailey   9/26/02,  10:34:51 AM
Index Trader Notes .... QQQ +0.64% and DIA +0.95%, SPY +0.94%.

Trader with a long DIA and stop outlined, and short QQQ begins a "neutral" position. Thinking become, if DIA stops out, then holding short QQQ and longer-term weakness.

If QQQ bearish works against a bear and continues higher, then my thinking is that DIA also higher and still rather "hedged."

 
 
  Jonathan Levinson   9/26/02,  10:32:11 AM
QQQ 22 is witnessing a battle royale. TRINQ is at 1.29, QQV + .55, TICK.NQ -86. COMPX at 1228, near its 1225 low of the day.

 
 
  Jim Brown   9/26/02,  10:30:02 AM
Swing Trade Signals
Suddenly the bullish trend looks a little less bullish. The markets are holding near the highs of the day but the Dow 8000 target looks farther away. The A/D line is weakening and declining volume is increasing. Futures are rolling over. I am considering moving our short entry point up from 419 to 425. I just want to avoid a pullback to 420-422 support and another rebound. Sure looking toppy here.

 
 
  Jeff Bailey   9/26/02,  10:29:52 AM
Duke Energy (DUK) $18.95 +3.2% ... Company announced it raised secondary offering to 54.5 million shares from yesterday's planned 52 million shares. Secondary was priced at $18.35. If today's action holds, then p/f chart shows support at $18.00, with potential triple-bottom sell signal on a trade at $17.50. Link

"Risk averse" bears that were looking for a $17.50 trade may move to sidelines here and wait for a trade at $17.50 to signal further downside.

I personally, will continue to hold the Jan $20 puts from previous profile, no stop, and target becomes $13.47, which would be from Professor Davis' study of triple-bottom sell being profitable 93.5% of time, for avg. gain of 23% in 3.4 months.

 
 
  Steven Price   9/26/02,  10:26:32 AM
Reader Question: Steve: Do you think AZO still a good call buy now when over 80? Thanks Sunil

Response: $80.05 (+0.78) I think AZO still has some room to around $82-83. If I were still in the play, I would tighten up my stop to around $78.50, just below today's low. However, entry here has about an even to slightly negative risk/reward, with downside to $77, where it broke out on the PnF. I would probably wait for a new entry on a pullback to that level ($77) to tip the risk/reward in my favor. I put the stock back on our Watch List with similar comments.

 
 
  Linda Piazza   9/26/02,  10:25:18 AM
.XAU now approaching 200-dma of 68.51. A break of that level would also violate the ascending trendline that's held since July. However, the 50-dma and 50-weekly MA are just below this level and should also provide support.

 
 
  John Seckinger   9/26/02,  10:22:30 AM
Side Note: Germany's stock exchange announced that it will close its Neuer Markt (German equivalent of the Nasdaq), due to the index losing 96% in its value since its peak in March 2000. The Neuer Markt as well as the small-cap SMAX segment will be shut down by early 2003.

 
 
  Jeff Bailey   9/26/02,  10:19:28 AM
Index Trader Wrap Bears can begin looking for QQQ bearish entries at our 50% retracement of $22.21, with QQQ at $22.19 +1.49%. Only partials to begin with as current risk level to retracement is $23.00 stop. Looking for 21-day SMA ($22.53) and 50-day SMA ($23.26) along with upper-end of "long-term" regression ($23.30) to begin serving resistance. Target would be $20.20 at 19.1% retracement.

 
 
  Linda Piazza   9/26/02,  10:18:36 AM
Unlike the COMPX, SOX has not yet matched yesterday's high.

 
 
  Jonathan Levinson   9/26/02,  10:18:01 AM
The fed has just announced overnight repos in the amount of 6.75B, which updates our partial information released earlier today. This amounts to a net addition of 1.25B, which is modest but additional feed for the bulls.

 
 
  Jeff Bailey   9/26/02,  10:14:13 AM
Dow Diamonds (DIA) $79.53 +1.04% ... not getting "exuberance" after new home sales. As such, to original target of $80, reward becomes $0.50, so will keep firm stop at $78.98, which is now 50/50 risk/reward to target.

 
 
  Jonathan Levinson   9/26/02,  10:10:24 AM
Advancing volume is nearly 3x declining volume on the COMPX, with 1502 advancing issues to 807 declining. Still rangebound.

 
 
  Jonathan Levinson   9/26/02,  10:06:11 AM
The COMPX is right at resistance at the unfilled gap from September 19th, which runs up to 1250, which should be our next stop if 1240 resistance gives way.

 
 
  John Seckinger   9/26/02,  10:06:02 AM
Checking the Intermarket Relationships: Oil Index up 2.4%, Utility Index higher by 3%, Five-year bonds weak (down 6 ticks, while 10-year down only 7 ticks), and the long bond (USZ2) is lower by 17 ticks. Gold is also down 4.89 percent. These are all bullish towards stocks; however, which is a leading indicator. I believe Gold and Utilities have the best chance.

 
 
  Jeff Bailey   9/26/02,  10:03:49 AM
New Home Sales +1.9% to 996,000. Better than consensus of 985,000.

Dow Indu +113 points, S&P 500 +12.65 points, S&P 100 +6.39 points, NASDAQ-100 +15.25 points.

 
 
  Jim Brown   9/26/02,  10:00:01 AM
Swing Trade Signals
Several readers have suggested we enter a new short at OEX 430 which corresponds with the 8000-8050 Dow resistance. There is strong resistance at 430-432, which could be the high for the week. I am not willing this morning to buck the positive trend. I agree with the resistance level and agree 432 has a very good chance of holding but until we actually see the weakness reappear I would rather watch. Friday could bring another spike as remaining shorts cover before the weekend. I don't want to get stopped out on that spike. I want to be patient and let the markets run until they quit, not jump into the middle of a relay race just as the next bull gets the baton.

 
 
  Jeff Bailey   9/26/02,  9:55:02 AM
Dow Diamonds (DIA) $79.45 +1% ... from yesterday's bullish profile here in market monitor of $77.70. Just ahead of new home sales, would raise trailing stop to $78.70. Will "lift" profit target of $80.00 near-term, just in case "upside" surprise from new home sales. ANY type of move above $80.45, then has me aggressively raising stop sto $80.25.

Will take note of more "risky" QQQ +1.18% with DIA +1% and SPY +1%. Per last night's Index Trader Wrap, I view QQQ is "riskier" than SPY and DIA, but seeing similar "reward" today.

 
 
  Steven Price   9/26/02,  9:54:05 AM
Reader Question: pnra closed at 27.90 pivot point 27.59 support appears to be 26.40 resistance at 28.78 pnra held in the 26.00 and 26.90 range after a BOUNCE AT 23.68 LEVEL HAVE THE TECHNICALS changed from the down trend to a Up trend ? if pnra continues to run a break of 30.00 would look like 32.50 would be the next target

Response: Panera Bread (PNRA) $28.35 (+0.45) The hold above $26.00 was impressive, and a trade over $29.50 would get the stock over resistance from the end of August. The stock bounced at PnF support of $24 (which would have required a trade of $23.00 to break) and has experienced a 3-box reversal up. Over $29.50, a play to $32.50 looks possible, but there is also resistance around $31 from the beginning of August. There is a lot of noise on the chart above the current level, and while the stock is beginning to look bullish, I have a hard time picking a point where there seems to be clear sailing above.

 
 
  Jim Brown   9/26/02,  9:53:47 AM
Swing Trade Signals
No rush to buy today. Markets are moving up slowly and more on lack of sellers than an overabundance of buyers. There is plenty of room between our current 7915 level and 8000-8050 resistance so there is likely to be more gains before the day is out. The lack of negative new is a welcome change. This should get all the bulls thinking the rules have changed and take some of the reluctance out of the buyers. When the selling begins again these same buyers will run for the exits again and add to the downside momentum.

 
 
  Jonathan Levinson   9/26/02,  9:48:55 AM
Resistance looks to begin at approximately COMPX 1237. The TRINQ is neutral to low at .53, QQV is down .34 to 48.63, and TICK.NQ is -102. These are neutral, somewhat contradictory readings, which spells chop to me. We may be looking at a range here on the COMPX.

 
 
  Jonathan Levinson   9/26/02,  9:40:41 AM
This morning's Fed update is brought to you by Russ, who has it nailed today:

Looks like a drain of 5.5 billion today. Added 2 billion of 28 day while 4.5 of overnight and 3 billion of 28 day expire today.

My guess based on this action is that this rally will be trying to run uphill today.

 
 
  Jonathan Levinson   9/26/02,  9:37:06 AM
The COMPX has commenced its gap fill, but has support first at COMPX 1227, then at 1222.

 
 
  John Seckinger   9/26/02,  9:31:09 AM
Looking at a weekly chart of the Dow, am I the only one that sees the potential for a "b" distribution pattern and move back up to either 8250 or 8350 (probably pivot)? A move under 7666 would most likely nullify this theory. The short-term objective is 8065. Note: December Bonds down 13 ticks, which is slighly bullish but not significant. The index is at 112-21 and could fall as low as 111-16 before causing technical damage. The yield curve is basically flat. Disclaimer: I am not long equities at this time; however, I do have on a bond trade that would most likely be profitable if equities rose (not a perfect correlation).

 
 
  Jonathan Levinson   9/26/02,  9:30:28 AM
A moment of silence for all the "buy & hope" investors here in Canuckistan who lost their retirements to Nortel Networks, and kudos to its then-CEO John Roth, who was in the top three highest paid Canadian CEO's during the time he did it (going by memory here- he might have been number 1).

 
 
  Jonathan Levinson   9/26/02,  9:27:14 AM
The overwelming consensus amongst readers who emailed me is that the Geyser is formed at 3AM EST by the open of European markets. Here are few:

Tuesday night I stayed up and watched them for about 1/2 hour. They spiked a little just as England and France opened, but improved along with the FTSE.

Seems to me that the spike comes when European markets open, large institutions hedging, ssttling positions against currency fluctuations, or positions in european stocks, or expected US indexes the next day.

I just checked international time. Based on New York, eastern time, London is 5 hours different, Paris is 6 hours, and Madrid is 6. Sort of fits with the 3 to 3:30. If they have info coming out 2 hours earlier as we have here, then that could conceivably be why there is an eruption at the 2:30 to 3:30 time period.

 
 
  Jim Brown   9/26/02,  9:26:43 AM
Swing Trade Signals
It looks like we are going up right on schedule as the end of quarter window dressing and short covering continues. Weekly Jobless claims dropped -24,000 to 406,000, a five week low. Also Durable Goods Orders fell less than expected.

Nortel issued another profit warning and said it would attempt a reverse stock split to boost its stock price to retain its NYSE listing. Merrill said they felt Dell was on track for the quarter but Goldman came out cautious on Cisco due to global weakness in telecom and enterprise spending.

Overhead resistance for the Dow is 8000-8050. According to the game plan we are flat and plan on staying flat until the markets roll over again.

 
 
  Steven Price   9/26/02,  9:25:57 AM
Nortel Networks (NT) 0.64 cuts its profit target once again, due to weak wireless sales in the U.S. and Asia, and will conduct a reverse stock split to avoid being delisted. This morning's continued rally looks nice, but with announcements like these, I still have little faith in a long-term rally. Of course the bounces can make for some great intraday swing trading.

 
 
  Jeff Bailey   9/26/02,  9:25:50 AM
The 9:00 AM intraday update has been posted. Link

 
 
  Steven Price   9/26/02,  9:21:42 AM
J.P. Morgan (JPM) $18.89 Lehman analyst Brock Vandervliet said that after recent discussions with JPM management, he believes his initial estimate cut for the company was not drastic enough, and he has lowered his 3rd quarter target once again, to 9 cents from his original forecast of 38 cents. he also said he sees limited earnings confidence and visibility in the future

 
 
  Jonathan Levinson   9/26/02,  8:03:28 AM
The Geyser went off at 3AM right on schedule. Who is still actually a seller at 2:59AM? Makes you want to pat Charles Darwin on the back. If anyone knows who The Buyer is, of what makes 3AM of particular significance day after day, I and many readers who have emailed me would be interested in hearing your opinion. NDX Futures are currently up 8, S&P up 3.20. The US Dollar Index is trading 107.55.

 
 
  Jim Brown   9/25/02,  11:46:10 PM
The Swing Trade Game Plan has been posted: Link

 
 
  Jeff Bailey   9/25/02,  9:49:31 PM
The Market Monitor has been archived. To view today's comments, simply click this Link

 
 

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