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  Jeff Bailey   10/23/02,  10:02:02 PM
Bull Alert! The very broad NASDAQ Composite Bullish % ($BPCOMPQ) from www.stockcharts.com reversed up into "bull alert" status after today's action. Link

This follow Monday's "bull confirmed" reading in the also broad NYSE Bullish % ($BPNYA) Link

This has the "offensive teams" on the field in all of the major indexes as all bullish % charts are now in a more bullish phase.

For those following, the bullish % time line has been...

NASDAQ-100 "bull alert" at 22% after 10/11/02 Link

Dow Indu. "bull confirmed" at 20% after 10/14/02 Link

S&P 100 "bull alert" at 36% after 10/15/02 Link

S&P 500 "bull alert" at 33% after 10/15/02 Link

NYSE Comp. "bull confirmed" at 33.36% after 10/21/02 Link

NASDAQ Comp. "bull alert" at 32.21% after today's action. Link

  Alan   10/23/02,  9:05:56 PM
Index Futures
9 PM: ES 901s, YM (not yet open), NQ 996
4 PM: ES 897, YM 8483, NQ 991

  Jim Brown   10/23/02,  6:24:40 PM
The Swing Trade Game Plan has been posted: Link

  Alan   10/23/02,  4:58:36 PM
on futures reopen at 445 PM: ES is at 900, NQ 998 (at MONTH highs for NQ,right under psych 1000 level

  Alan   10/23/02,  4:16:07 PM
Equity Funds report net cash outflows of $4.1 Billion for the week ended 10/16/02 for all sectors; despite a $100 Billion + increase in assets due to market action.

As futures continue to uptick ever higher after-hours, and if one just looked at charts and not news: one might think KLAC had amazing earnings, super bullish Q4 forecast, and that the Fed found Sep and Oct economic data wonderful across the board and that money was pouring into mutual funds. (said tongue-in-cheek)

  Jim Brown   10/23/02,  4:07:17 PM
911 Coast Guard The special 91101 Coast Guard Swat team that was created after 9/11 has just been deployed to active duty on the west coast. Whether it is to police the fight that is heating up with the dock workers again or there is a new threat underway is unsure. Since they did not suit up for the dock strike I think the odds are good that something may be underway. Could be war games but with the new revelations that Al Queda has been activating cells all over the world it could be a leading indicator that the threat warning may be about to escalate.

  Steven Price   10/23/02,  3:47:16 PM
Reader Question : Hi Steven, looks like KSS has moved into your rollover range. Do you have any advice to offer near the end of the day here with regards to an entry. Thank you for any help. Andy

Response Kohls (KSS) $55.57 +1.22 KSS has entered the region we were looking at for a rollover, but right now the Retail Index (RLX.X 293.45 +4.79) is looking strong and trading near its highs of the day. I think it will rollover if it reaches 300 and I would look for that rollover before initiating a new short on KSS.

  John Seckinger   10/23/02,  3:43:21 PM
As far as the economic docket is concerned, only Initial Claims is scheduled for tomorrow. For the week ending October 19th, claims are expected to come in at 405k versus 411k, prior week. In May, the report hit a 19-year high.

  Alan   10/23/02,  3:42:16 PM
Let's see: KLAC warns, terrible words from Beige Book and market is at day highs... Actually, NQ is at WEEK highs here near 990.
This makes as much sense as ES (at 1:30 AM) being 10 pts above its 4 PM close last night [grins] God Help the Bears if there's ever any truly Good news after-hours.

  Jim Brown   10/23/02,  3:37:56 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Strong support at OEX 450 held. Cancel the outstanding SHORT signal. It is too late to open a new position if we got a sudden negative surprise. Tomorrow is another day. Should be interesting!

  Alan   10/23/02,  3:36:23 PM
Just hung up phone: "CME is still experiencing problems and expects to have them resolved shortly"
As it is now 3:35 PM, given this "problem" there shall not be any Futures Trade Signals going into the close. I'm sure they'll have it fixed by tomorrow's open.

  Steven Price   10/23/02,  3:33:01 PM
I am still scratching my head over the semiconductor rally. We got news of declining revenues and several downgrades, and yet we are once again testing the 50-dma in the SOX, which is up 16.54 to 281.61. The 50-dma is 277.71 and I hesitate to say a close above it looks bullish. I'm still not betting my own dollars in that direction, for the same reasons Jim pointed out, but my guess is that as bad as guidance has been, institutions may have been looking for something worse.

  Kent Barton   10/23/02,  3:29:25 PM
J.P. Morgan (JPM) : $19.60 -0.15%: Shares have bounced back with the Dow, but still face overhead resistance at $20.00. This level is bolstered by the long-term descending trend of lower highs. The overbought daily stochastics (5,3,3) suggest a move back to the $17.00 area might be in the cards. With competing CEO Sandy Weill on the defensive regarding Citigroup's investment banking activities, some investors may choose to steer clear of the money center banks until the sector negativity subsides. Speculative short positions could be gauged on a move below $18.91.

  John Seckinger   10/23/02,  3:28:39 PM
One sector that continues to outperform is the Semiconductor Sector (Sox), higher by 6.88% at 283.31. The 50 DMA (exp) is below at 278. The intra-day low was 261, and just missed the 22 DMA at 258. A close above 278 could have traders hoping for a move towards 300 and test some solid resistance.

  Jim Brown   10/23/02,  3:27:17 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
I want to hit that SHORT at OEX 450 so bad I can taste it but let's wait for the 448.50 trigger.

  Jim Brown   10/23/02,  3:15:37 PM
WOW We touched a nerve this afternoon. My email has exploded with expletives about the Fed, the market, the conspiracy (pick any one of several) and the market outlook.

Disregarding everything but the most important thing I see and that is the climax top forming this afternoon. If the bulls/PPT cannot get the Dow back over 8500 by the close then the bears are going to smell blood and come running. If the Fed is printing money today you can bet they are throwing it at the market to avoid another drop before elections as many have said. The Beige Book was terrible and the market exploded +150 points. I just don't see ma and pa kettle saying, Gee ma looks like things are crap and getting worse. Let's invest the last of our life savings in the market today.

Conventional wisdom would bet on another pull back before the close. But then, conventional wisdom has not worked well lately.

  Alan   10/23/02,  3:10:10 PM
With regret: I pondered suggesting a ES Signal Short at 892 a few minutes ago (as that's 20 points from today lows, and an area of resistance (892-895). CME (Chicago Mercentile Exchange - Home of ES and NQ futures) BUT with this CME data problem remaining, (with data quotes being vastly different than the bid-ask prices you are seeing in your online futures platform); the 'smartest' thing is to sadly not trade Futures until this problem is fixed.

  Steven Price   10/23/02,  3:04:35 PM
To Oliver Stone :

It is actually quite ironic that exchanges tend to have the most technical problems during the periods in which they would recieve the most trading fees. It seemed a repeated pattern at the CBOE that the systems simply could not always handle sudden increases in activity. Electronic execution systems and quote dissemination always seemed to "go down" on a big opening or sudden gap in the futures. This affected the traders, as well as customers. Obviously the traders still had the advantage of hearing the orders, but would have preferred the quotes to be properly disseminated to capture more public orders. We were often left wondering what our technology fees (which traders are charged monthly) were paying for, if not to upgrade the trading systems to handle the one thing they are there for - TRADING!

  Jim Brown   10/23/02,  3:04:32 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go SHORT the broader market with an OEX trade below 448.50. This was our stopped out exit of the last short. It is also below the pull back from the initial spike. That gives it room to wiggle before hitting the trigger. It is also below the support/resistance levels of 449-450. This is a high risk signal and should only be a 1/4 position. Aggressive traders may want to hit it now at OEX 452.

  Jim Brown   10/23/02,  3:03:26 PM
I have been of the opinion that the PPT will be active at least until the election. "They" do not want to have a big plunge before it - just my intuition/conspiracy theory!! Dan Good point Dan!

  Jonathan Levinson   10/23/02,  3:02:44 PM
Jim alluded to the PPT being repsonsible for the market action this afternoon in contrast to your report of a net drain for the day. Is that possible?

I made big money by going long a few weeks back when you reported a big Fed influx number. I was under the assumption that without a big infusion of cash the PPT couldn't work. Is nothing absolute in this game?

Flat and confused

You're right, nothing is absolute, and being flat is a very prudent approach. The Plunge Protection Team or "Working Group on Capital Markets" is different from the fed, and evidently it has a multitude of tools in its toolbox. The fed open market operations are a good indicator, and I too have been using the daily activity as a gauge of market bias. Bias is not absolute. Perhaps bonds were sold and equities jammed. Perhaps foreign buying was used. I have no idea what just jammed up the markets at 2PM, but it was an awesome and dispiriting sight to behold. I agree with Jim and will add to my shorts on a rollover higher up, just as I've been doing since February or March of this year. I trade the primary trend, and while this is an awesome rally, it has yet to reverse the primary trend.

  Jim Brown   10/23/02,  3:02:02 PM
Jim - note on the economy - Major retail chain home furnishing reseller - has smallest amount of jobs running on Long Island for over 2 years - I spoke with the job manager today - Marty

Thanks for the input

  Alan   10/23/02,  2:59:26 PM
Ignore my last post - I just figured out the WHY - Isn't it a FULL MOON tonight ? !!

  Alan   10/23/02,  2:57:02 PM
Jim, the "Oliver Stone" in me finds it AMAZINGLY odd that this CME outage occured moments after the Beige Book came out. It's my view this was indeed the SP500 PIT traders then buying em Long when it happened, running online traders' short stops, and then it simply escalated as the momo trend was established. And now, you still have ONLINE futures traders who refuse to trade as they can't trust their data and online broker quotes and are just "sitting here" waiting for the problem to be fixed. Meanwhile, the ORIGINAL momo of Long still remains well intact as you now have online traders doing PHONE orders to cover em during this CME problem if they were trapped short lower. And now you also have stock and option traders who don't trade futures, seeing their ES charts over 885, 887, 890, 892 saying 'I don't know WHY its going UP, but it sure is, so I better cover/go long myself'

  John Seckinger   10/23/02,  2:51:56 PM
Time for some humor: A lady in Sweden went to check her bank account to see if her monthly child allowance check of USD$322 was there, only to find a balance of more than 93 Billion Kronor ($10 billion U.S.). This is twice the size of Sweden's defense budget. She told the bank, they reversed the error (including the 1.6 million of accrued interest), and the lady recieved some flowers from the bank. Hope you found that funny as well.

  Steven Price   10/23/02,  2:50:34 PM
Autozone (AZO): $87.13 (+0.43) I still like formaer OI call play AZO, which has continued to push higher, adding $8 since october 10. The stock continues to set higher highs and higher lows. It has bounced from the bottom of its ascending channel 4 straight times and has pulled back from the recent high of $88.45. If we get a pullback to around $85, just above the recent buy signal on the PnF at $84, and the center trendline of the channel, I'd be looking for support and then going long.

  Alan   10/23/02,  2:47:57 PM
Update on CME's outage problem: It continues, I would be VERY!! leary of doing any ES or NQ trades currently as you will trading "at risk". It appears the CBOT YM02Z Dow$5 contract is fine as it's a completely different exchange and feed. The cynic in me also says that by the time the CME fixes this, the market will then go sideways with no easy trade :(

  Kent Barton   10/23/02,  2:47:07 PM
CNN reporting that the FBI has boarded a Russian plane at JFK airport.

  Jonathan Levinson   10/23/02,  2:46:48 PM
What would Jesse Livermore do with this market? I believe he'd either be adding to his short line, or staying out. What do you think?

  Jim Brown   10/23/02,  2:46:23 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Close the long signal now at OEX 449.50. Going SHORT again.

  Jim Brown   10/23/02,  2:45:42 PM
Swing Trade Signals
Just so nobody gets confused, I still think we are at risk for another drop. I am trying to avoid missing another breakout if I am wrong with the current long signal but I think the next big play will be to the downside.

If the Plunge Protection Team caused this spike then the lack of follow through is very telling. Nobody jumped on the train once the close stops were hit. The dead stop below the highs of the day on the OEX/SPX are a warning sign. I am very close to closing the long for lack of follow through and going short again. I think this was definitely an artificial market manipulation.

  John Seckinger   10/23/02,  2:43:32 PM
As of yesterday, the December Fed Funds (FFZ2) showed a 40% chance of a 25 bp ease by year's end. After the Beige Book report, the contract actually went to a slighly higher yield (from 98.40 or 1.6%) to 1.62%, or 98.38. Note: Fed Funds at 1.75%. My point is, I would have expected the contract to fall in yield if traders started to feel the Fed would act at the November 6th meeting after such a bad Beige Book.

  Jonathan Levinson   10/23/02,  2:43:17 PM
Well, the COMPX never made it to 1310 before pulling back a touch, and the 5(3) stochastics are now overbought across all time frames from weekly to shorter. Let's not comment on the purchase of bad news- price is the only action. The put to call ratio is back down to .69, .01 from its daily low. Bearish traders should be grateful for this rise, but I'll personally crack a sweat if 1310 gets taken out. The stochastics are saying that upside is limited from here.

  Alan   10/23/02,  2:37:41 PM
Jim, with a great many futures traders being locked out at the CME due to what now appears to be an outage with a ATT internet feed from the CME; 'things' like this happen sometimes when a large majority of ONLINE futures traders are locked out. It's almost as if when this happens, the futures PIT decides to play a game and do a large run. Call me a cynic, but 'this' has happened many other times. (and you thought only stock and option market makers played 'games' [grins)

  Jim Brown   10/23/02,  2:33:36 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the LONG signal at 14:30:22 when the OEX traded over 451. SPX 888.84, DIA 84.30, SPY 89.27, DJX 84.30, NDX 977.71, Compx 1305.54, QQQ 24.31, Emini 889.25. The initial stop loss will be OEX 445.

I don't know what triggered this run but it is blowing through all the buy stops and short covering is accelerating.

  Alan   10/23/02,  2:28:24 PM
Passing along my futures broker's comment: "Problems with CME, trade CME at own risk; CBOT's YM Dow futures functioning properly"
A * BIT * "upset-ing" to wait 2+ hours for Beige Book, have the ES Trade Signal to go Long once over 880, and then not being able to execute the trade due to a technical problem at the CME exchange, and then watch it run up 5 to 8 points without you being Long.

  Jim Brown   10/23/02,  2:27:36 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were stopped out of the SHORT signal at 14:25:38 when the OEX traded at 448.50. SPX 884.42, DIA 84.09, SPY 88.92, DJX 83.90, NDX 974.40, Compx 1301.73, QQQ 24.25. Emini 886.00. This signal was initiated at OEX 447.

  Steven Price   10/23/02,  2:26:25 PM
Reader Question:Read your comment about gs. I realize that it is between it's 50 and 200 dma, and the broker dealer index has been having troubles, etc. Any comment on quad top break out of descending p&f line. Might give a bear thoughts about shorting. Thank you, Bob

Response: Goldman Sachs (GS) $72.73 (+0.23) The quad top PnF breakout at $69 was impressive and proved to be a reliable buy signal, with the stock rallying from that point. The stock did extend to resistance at $75, where there has been both support and resistance on the PnF chart going back several months. This would seem to be the logical point for a PnF reversal, after such a long extension. However, a trade of $71 would be required for that reversal and that would also require a 50-dma break. If we get that trade of $71, it would seem to be at least a temporary short signal. I don't think it's a coincidence that we're bouncing above that level.

  Jim Brown   10/23/02,  2:25:22 PM
Swing Trade Signals
Can you say "thank you Plunge Protection Team?" Why anybody would buy stocks based on the Beige Book is beyond me unless they thought it was going to be much worse.

  Alan   10/23/02,  2:21:09 PM
I'm looking at 3 different sources for futures quotes and getting 3 different numbers, this is one of those technical glitches that happens sometimes the same way with stock or options quote problems.
All i can say for sure is: ES did break out over 880; and Dow Cash over 8350.
The rule of "when you can't trust your quotes from a data provider, and the quotes from your online broker, one must do 'nothing'" comes into play. Shall advise when Globex fixes this issue, and no trade signals until then.

  John Seckinger   10/23/02,  2:21:06 PM
Waited for the Beige Book, and now watching the Dow go back through the previous pivotal area of 8376. Bonds were at Tuesday's high (108'10) as the report was released. Also interesting was the Utility Index trying to rise back to its 22 DMA (UTY at 232, DMA at 243). I will now have to see if 8376 becomes support or resistance.

  Jonathan Levinson   10/23/02,  2:19:14 PM
The COMPX has just broken 1300 for a high of the day, as the TRINQ briefly touched .45. QQV is now -.53. TICK.NQ at 264. Everything looks bullish at the moment, but we'll see how it deals with 1310 resistance.

  Jim Brown   10/23/02,  2:15:55 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Change the LONG signal at OEX 453 to an OEX trade over 451. There is significant resistance at the 449-450 range and a trade at 451 could indicate the next leg up is about to begin. Conservative investors may want to wait for the 453 level as that is over the 452.70 high of the day.

  Alan   10/23/02,  2:13:12 PM
Beige book is terrible, and guess what ?
When it came out, ES was 880, went no lower than 877s after it came out.
Futures are now holding and even catching a SMALL bid, obvious resistance remains 880 and Dow 8350.
Another case of "Buy the expected bad news" ?

CAREFUL ON FUTURES QUOTES, THERE'S A LAG WITH SOME DATA PROVIDERS. ES is 881+ breaking out, but some data is showing 879s

  Jim Brown   10/23/02,  2:05:54 PM
Beige Book Links Read it for yourself hot off the press!

National Link
Tenth District Link

  Kent Barton   10/23/02,  2:04:29 PM
Beige Book : Showing widespread weakness, particularly in automotive and retail areas. Maybe they should call it the "Red Book." Major market indices moving slightly lower on this news.

  Alan   10/23/02,  2:03:00 PM
Index Futures
DJ Beige Bk: Weak Biz Lending; Household Borrowing Strong
DJ Beige Bk: Retail Sales Weak, Including Dip In Car Sales
DJ Beige Bk: Manufacturing Fell Off; Energy Sector Slowed

  Jim Brown   10/23/02,  2:02:07 PM
Beige Book was ugly

  Jonathan Levinson   10/23/02,  1:54:42 PM
The COMPX is parked right in the middle of this week's range at 1291, with the QQV lower at +.26 on the day, TRINQ still at .76, TICK.NQ +40. The CBOE p/c ratio is creeping higher, now at .73. I guess bulls are holding their breath right now. The Beige Book will have to get this market moving again.

  Jim Brown   10/23/02,  1:53:08 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's lower the stop loss on the current SHORT signal to an OEX trade at 448.50. We still have the Dow 8368 resistance above us and resistance at OEX 447. Since we never traded at 443 we only have a 1/4 position at risk but a break over those levels would indicate a reversal of the bearish trend.

  Kent Barton   10/23/02,  1:49:53 PM
Yahoo (YHOO) : $14.72 -0.12%: Seeing some increasingly rangebound trading in YHOO. Shares exploded to the upside after the company beat earnings on October 9th. After a gain of more than 50% in less than a week, the stock looks awfully top-heavy. We'll get an "inside day within an inside day" if the current intraday range holds. The overbought oscillators and declining 200-dma ($14.73) make a compelling case for a breakdown out of this sideways consolidation pattern. Bearish traders might want to watch for a move below $14.25 to offer an entry point. A negative reaction to the upcoming earnings report from Amazon (AMZN) would provide the perfect catalyst for a downside move. In related sector news today, Overture Services (OVER) is getting whacked for a 9.8% loss after their earnings report fell short of the most optimistic forecast. The internet advertising company easily beat consensus estimates, but it looks like all the good news has already been priced in.

  Steven Price   10/23/02,  1:39:11 PM
Reader Question: Hi Steven. I am yet again short GS. Could you give me your opinion on that sector. I could get out today with a nice profit.Thanks as always

Goldman Sachs (GS): $71.85 -0.65 GS is toying with its 50-dma of $71.34. If it breaks below that level, along with a Dow break below 8300, I would hold the position with a target of $69. If it can't break through and hold below the 50-dma, I might take profits.

  Alan   10/23/02,  1:33:30 PM
1:30 PM ES 876s, YM 8293, NQ 962
The Dow has spent the last 2.5 hours in a 50 point range.
For the afternoon, I'm looking for a Trade Signal of 1) ES assaults 880 for the 4th time taking it out to the upside and we go long, or 2) we re-test the 869-872s support range before shorts cover towards the close. Similar to 12 noon comment, risk/reward does not favor opening a new Short at these levels. I do not expect any large surprises in the Beige Book, but some wild futures swings have occurred in the past during its release.

  Alan   10/23/02,  1:24:57 PM
For the last hour, futures volume is at such low levels, it "feels" like we are awaiting FOMC interest rate cut news rather than awaiting the FOMC Beige Book at 2 PM [grins}

  Linda Piazza   10/23/02,  1:20:10 PM
KO update: Currently at 47.51 -0.39, KO is resisting a drop below 46.90, the low of a couple of days ago. It's been rounding down underneath its 22, 50, and 200-dma's, all located in the 49-50 area. KO's recent drop was on strong volume, and volume has been decreasing each day as it rose to test those MA's and then consolidated beneath them. A bearish player wants to see volume lessen as a stock rises and tests MA's or previous support levels, so this volume pattern works so far for a bearish play. Currently, KO is underperforming both the S&P 500, and the food and beverage sector, the sector to which it belongs. To recap, KO warned last week that global problems might hamper the company. KO had been a safe haven stock for many investors, and the warning resulted in a sharp fall. Several analysts followed with downgrades, but a Thomas Weisel analyst upgraded KO this week. I have a conservative Jan put position in KO, and have been following the play on the Monitor for educational purposes, although the risk/reward ratio didn't seem right for a recommendation to others, particularly given the previous bullish sentiment in the markets. For this position to perform as expected, it should turn over just beneath those MA's and then retest its recent lows in the 43.50-45 area. A strong break through those levels, particularly if it is accompanied by strong volume, would complete the rounding top formation that has been forming over the last few days. Alternately, a break above those MA's would show a change in sentiment for this stock.

  John Seckinger   10/23/02,  1:17:36 PM
Apparently, the German Institute for Economic Research is urging the ECB to cut rates by 75 bps. Will an aggressive rate cut become a catalyst for growth in the EMU? A year ago I would say "no," but it might work now. Turning to the 2-year auction, the bid-to-cover was 1.69 versus 2.00 last month. The auction came in at 2.14%, and non-competitive bids were $839 million. Doesn't seem like a good auction.

  Jonathan Levinson   10/23/02,  1:17:10 PM
The 60 minute chart is showing lower highs and support at 1280 COMPX. The neutral flatlining 5(3) stochastic bears this out, though the 30 minute 5(3) stoch is overbought and starting to roll. Bearish traders will have no problem with a lower high at 1290. The TRINQ and TICK.NQ are bullish at .87 and +117 respectively, and while the CBOE p/c ratio is rising, it's negligible with the last reading at .72. QQV has faded a little more to +.55 today at 46.50. Still a lot of bullish sentiment out there.

  Jeff Bailey   10/23/02,  1:07:48 PM
Johnson & Johnson (JNJ) $57.25 -4.29% ... Hi Jeff. I think that current sell in JNJ shares is hysterical reaction. They make hundreds of products.I think is another opportunity to get entry point and if can get close to 50MA ($55.74) that will be great.What is Your opinion about that? PS. Excuse my spelling -English is my second language.

Laughing.... me, excuse your spelling? Some subscribers would think English is my second language then!

I don't think today's action in JNJ is hysterical, just a 3-box pullback on the p/f chart. Link

If holding a position in JNJ currently, I'd hold tight, but not look to add right now. Might get a little more downside to $55 support.

I think the "hysterical" response is BSX Link , which bulls there may be speculating that failure by JNJ to get FINAL FDA approval leaves them in the "hot seat." From what I've read, and I'm no expert, BSX won't have a coated stent until late 2004.

While the coated stent would give a boost to JNJ longer-term, I do agree with your thoughts about being smaller part of their business. The MARKET will eventually determine just how important the stent is to JNJ. There may have been some speculators in JNJ ahead of the FDA news. I didn't profile JNJ as bullish on the stent, but only the p/f chart, which is still bullish with a vertical count of $74.

  Alan   10/23/02,  1:07:36 PM
Index Futures
So far, I've been reluctant to give any Futures trade signals with stops over 1-2 ES points, or YM (Dow) 20-25 pts, or NQ 5 points. Stops are 'good'; both Stop Loss, and trailing Profit Stops. However, there are times when smaller size entries with slightly wider stops do make sense. Such as a 1/4 or 1/2 ES size entry with a 3 to 5 point stop, so in the future, I do foresee the possibility of trades of that type.
Before I left for lunch, had pointed out Dow cash 8300 level holding, I toyed with the idea of giving a Long YM (Dow) entry at that point, 1/4 size, with a very wide stop all the way down to 8240 Dow Cash (a stop under 8250 support).
I did not do that post, but wished to give a real world example for future reference of this type trade.

Back to the Market: It appears some shorts are covering 1) off of Dow 8300 and 2) taking some profits ahead of the FOMC Beige Book at 2 PM; and has hit the ES 880 resistance level for the 3rd time today and paused.

  Steven Price   10/23/02,  1:07:36 PM
Reader Question: Hi Steven: Glad to see your back, I to have to leave the office in a while, could you be so kind and comment on EBAY..now stock is 61.50 up .37, still short, should we exit position, thanks very much for assist.

EBAY $62.79 (+0.66) The stock cannot seem to get over previous resistance at $64, however, it also does not seem to be rolling over. Yesterday, $62 provided a ceiling which is no longer in place. I think I would close the play, given the high premium in the options which I would not want to see decay any further. While my "gut" tells me it is a short, what I am seeing no longer does. Trade what you see.

  Steven Price   10/23/02,  1:01:50 PM
Citigroup (C) : $33.80 (-1.73) For those readers holding the short play in Citigroup, I like the breakdown below recent lows. However, I am watching the S&P Banks Index (BIX.X 282.92 -2.87), which is bouncing at support around 280. I would expect (C) to gather downside steam if the index breaks below that level, but for now the drop in (C) may slow down. Now that the stock has broken below $34, I'll also be watching for intraday resistance. While OI dropped the play for sideways movement, I wouldn't be so quick to close the play today if I was still holding it.

  Steven Price   10/23/02,  12:50:48 PM
Reader Question: I'm short WMT and WMT seems to be holding on to the 55 and north numbers even when the Dow etc is pulling back. Any thoughts on what is holding this baby above 55? from a technical standpoint this old boy should be breaking down and revisiting the 45 neighborhood.

Response: Wal-Mart $56.46 (+0.36) There is a report that WMT now sees earnings for 2002 slightly ahead of forecasts, which is most likely holding up the stock and the sector. Other reports have said WMT's estimate is simply a reaffirmation of previous guidance. The Retail Index (RLX.X) is also up slightly on the day (289.83 +1.17). I still think we will be getting poor numbers from the retail sector as we head into the holiday season, but I'm not sure WMT is the stock to short. For the year it is only off 2% and has been resilient to recent swings. I generally like to use it to gauge other retail trades, looking for signs of sector weakness, rather than shorting that particular stock.

  Alan   10/23/02,  12:47:37 PM
ES flirted earlier with the 872 support, upticked slowly, but found sellers at the 877 pivot level. Currently ES is 874 and downticking, it appears there will now be a second attempt to sell into the 868-872 support area: If it holds it may form a double bottom bringing in buying, if it fails, 868 may come quickly. That would match Dow losing 8300 and testing the 8250-70 level. MSFT did indeed hold 51.0 support earlier, market volume is very light.

FOMC Beige book today at 2 PM.

  Jim Brown   10/23/02,  12:40:45 PM
Text of Greenspan's speech on productivity today - Link

  John Seckinger   10/23/02,  12:36:11 PM
It looks as though the Dow wants to test its 22 PMA (five minute chart, currently trending lower from 8332), and that is a normal occurance after a solid sell off. What has not been normal is a lack of mortgage related selling in the bond pits, which seems to be the case today. Also light is the amount of corporate bonds set to hit the market in the near term; further supporting bonds. Side notes: Bush told military to get ready, since he is getting impatient waiting for a U.N. resolution. Could bid bonds as well. Additionally, Council of Economic Advisors Chair Hubbard says he does not expect a double-dip recession.

  Jim Brown   10/23/02,  12:32:59 PM
Swing Trade Signals
Spoke too soon! That 8300 level did attract some buyers. The key will be if the support turned resistance at 8368 will hold. 8300 was the ideal drop point from last night but the method of the drop was disconcerting. I was hoping to see it at the open not at 12:30. I am sticking with the short until we see if the 8368 resistance fails.

  Jeff Bailey   10/23/02,  12:31:38 PM
Du Pont (DD) $40.85 -2.15% ... per last night's Index Trader Wrap, stock failing from downward trend on bar chart after better than expected earnings. Near-term, this would hint that bulls not overly aggressive from the buy side. Not only DD, but perhaps broader market as well. Index trader's wanted to keep an eye on this stock as well as Dow component IP $37.24 -2.25% after this morning's earnings. Both responding negative to better-than-expected earnings.

  Jim Brown   10/23/02,  12:25:38 PM
Hi Jim...in yesterday's swing trade plan, I thought I remember the "ideal long" at 436-437. If you're thinking of going additionally short now at 437, sounds like you no longer see a bullish bias to the market and this decline is more than just a casual retracement? Just checking as we're all getting our trading emotions swung both ways. Many thanks...Sam

Yes, after looking at several hundred charts this morning I would be willing to remain short below 436. I will snug up the stops but I think this could turn into something ugly if that level breaks. I should probably change it to say under 436 instead of 437 since 436.98 is the 50% retracement level.

We did not get the 8360 bounce this morning and it looks like 8300 may fail. If it does fail then I think the fair weather bulls may start deserting the sinking ship.

Amazing how thought processes change intraday. I have always been bearish on the bounce due to a lack of confirming economics but I was trying to see it from the bulls perspective in the game plans. I am actually becoming more bearish as the day wears on. The failure of the financials, the drug sector is failing and the SOX has finally gone negative. Below 8300 it ceases to be profit taking and starts looking more like desertion.

  Jonathan Levinson   10/23/02,  12:21:34 PM
The put to call ratio has been falling throughout the day to its last reading of .68. This is good news for bears, in my opinion. Bulls are getting predictable, buying calls on the dips and selling at the peaks- whenever there's a consensus forming, smart traders get ready to fade it. Here, we're seeing a relative short term high in call trading, which is most likely an indication of bullish sentiment.

  Jonathan Levinson   10/23/02,  12:17:46 PM
You might suggest that the person requesting information on AMZN wait for their earnings report to come out. Tomorrow they announce after the close. If they follow YHOO they could be up $4 or $5 dollars after earnings. OVER did the same thing on YHOO earnings announcement.

Thanks, Rick. I'll only add that the reverse could occur as well- earnings are a gamble. Note that AMZN is more of a retailer than an "internet" or media play, and the consumer is not particularly confident after the heavy mortgage and car borrowing that has taken place this year. Then again, AMZN sells relatively low priced products... questions to weigh for AMZN bulls and bears alike. Thanks again for the heads up!

  Jim Brown   10/23/02,  12:13:25 PM
Kiss of death   A reader in Germany just sent me this chart indicating why he felt the market was doomed to fail. Link

I think it is very educational for readers to send charts of their analysis. I would be happy to upload anything that is "reasonable" and share your views and analysis. I only ask that they be not more than 700 pixels wide. Thanks

  Jim Brown   10/23/02,  12:09:32 PM
JPM Maybe the buyout ran into trouble? JPM now below $19.

  Alan   10/23/02,  12:07:58 PM
Noon: ES 873.25, YM 8290, NQ 956
ES 873s is setting up to test the 868-872 pivot which matches Dow cash at 8300. It appears too late to safely open a short unless we are heading for a Dow -250 type afternoon. Shall await whether Dow cash holds the 8290-8300 level. While the advance/decline by volume is bearish for today, I'm surprised those levels aren't lower. ES is quite close to being 20 points lower than its morning highs, at prior times, that area has been a place for Shorts to take profit and shall seek a possible long reversal. MSFT currently at 51.00 and holding may also provide another clue if market is done dip buying or not.

  Jonathan Levinson   10/23/02,  12:05:44 PM
The COMPX is at 1280, in the 1277-82 congestion zone, with the TRINQ neutral at 1.17, TICK.NQ negative at -174, QQV slightly bearish at .74 and the FVX down almost 10 basis points (bearish for equities).

  Jim Brown   10/23/02,  12:03:27 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
I would suggest adding to the current 1/4 position short from OEX 447 with an OEX trade at 443. I am becoming more confident that this signal could be a strong one and I think another 1/2 position would be in order. We would look to add the final quarter position with an OEX trade below 437.

  Jeff Bailey   10/23/02,  11:57:58 AM
NASDAQ-100 Index Trust (QQQ) $23.77 -1.53% ... Hi, Jeff-- What do you think about a QQQ straddle here? It seems that they should go down, with all the negative news, but they keep on going up. They should break one way or the other, so a straddle may be the way to play this dilemma???

Yes it could be. Last night in the Index Trader Wrap, I talked about the "inside day" and how to look to play that short-term pattern. Downside breaks have come in Dow Indusrials, SPX and OEX today. NDX and QQQ still "inside" of yesterday's range right now.

  Alan   10/23/02,  11:49:54 AM
My 10:31 AM trade post contained a typo of Long ES at 800 vs the correct number of 880, it has been corrected.

  Linda Piazza   10/23/02,  11:41:50 AM
Reader Question: Noticed you were looking at the banking index...I'm long BAC Nov 75 puts but BAC is playing hard to roll over. Any thoughts on this one, where you see support and where might be a good level to close this out giving bullish market bias?

Response: The .BIX ($GSPBK on stockcharts.com) is one sector I watch to gauge overall market strength or weakness. I haven't been watching the stocks within the sector as closely, but I'll be glad to take a look at this from a technical standpoint only, not knowing of fundamentals that might change the outlook. RSI and (5)(3) stochastics are rolling with prices moving below historical resistance around 70-71. If we assume an overall bullish bias to the markets, however, pullbacks can be assumed to be more shallow. If so, I'd be looking at historical support in the 68 area. That's also the area where BAC would again touch the descending trendline from May until October, a trendline it recently broke above. That trendline should now offer support if markets have a bullish bias. Below that, historical support and the 50-dma are at 65.95 and the rising 22-dma is at 63.21. I'd watch carefully in those areas. Bounces in those areas will likely confirm the bullish bias, while breakdowns in those areas put the bullish bias in question. Currently, while the markets do appear to have an underpinning and Jeff's reports indicate a bullish bias, I'm cautious on both bullish and bearish plays until I see how deep the pullbacks will be. One problem for a put play in BAC shows up on the linked PerfChart from stockcharts.com. This chart compares relative strengths of stocks within a sector, showing that BAC is currently outperforming its competitors. While it may be that BAC will play catch-up, be careful when shorting or buying puts on the strongest stock in a sector. Link

  John Seckinger   10/23/02,  11:41:36 AM
Things are going to plan. The Dow is falling, dollar under 108, bonds higher, and Utility Index under 233 at 231. How about the yield curve? Fives up 11.5 and tens higher by 15.5. Only slightly steep, but should pick up. Note: 30-year above the 108'10 level at 108'13. Things should get exciting.

  Jonathan Levinson   10/23/02,  11:37:22 AM
Seems AMZN has a very strong resistance 19.65-20.00 and ready to roll over. Any thoughts.

Well, AMZN's chart looks like a short term fountain of strength, a tower of power, next to CSCO's. The upsloping upper bollinger band tells me that the next reversal shouldn't take price beneath the midpoint. Stochastics and MacD are toppy but show no sign of reversal just yet. Volume has been increasing on the up days as of late. Compare the CSCO link below to the link here to see the difference in the charts- CSCO looks bearish to me, AMZN bullish. Nevertheless, on a price basis, those are big bearish candles that turned back the advance to 20. On the weekly candles, this level looks even more critical. I would personally wait for an upside break through this resistance level before committing. While the chart looks good lately, AMZN trades in a broader market that's come a long way in a short time. Here's the daily view. Link

  Jim Brown   10/23/02,  11:32:00 AM
Swing Trade Signals
A reader pointed out that the 5DMA (130 period on the 15 min) was broken this morning for the first time since Oct-10th. This is a critical level and could signal trouble ahead.

  Jim Brown   10/23/02,  11:24:35 AM
(more) This furniture market is huge-- vendors from all over the world. They were sitting around talking to themselves. Usually you have to vie for their attention. They were so depressed. They put out these lunch buffets----untouched. Very telling

  Jonathan Levinson   10/23/02,  11:24:34 AM
Thanks for the info on Atml a few weeks ago. Any thoughts on Csco? I looked at the internals and it looks like it has room to run to the upside before earnings. Cheers from London, Tim

Tim, you may be right, but most of my indicators don't concur. Price has just reached resistance, with confirmation approaching at the descending upper bollinger band and a completely topped out stochastic. The MacD is still in a bullish position, but a long play here looks uphill to me.


  Alan   10/23/02,  11:21:02 AM
ES continues to chop between the supports of 877 and 880; and the first assult on 880 was turned back. Dow drifts around the 8350 support level. As often happens with futures, 11 AM brings a decrease in volume.
In the bigger picture, ES/SPX has spent days trading between 872 and 895, Dow between 8300 and 8500. While today's action so far is bearish, I wonder if Bears are getting frustrated that those levels have not yet been lost to the downside.

  Jonathan Levinson   10/23/02,  11:15:30 AM
OIN put play Citicorpse (C) is down 1.84 to 33.69, its low of the day, down 5.12%.

I've been hearing anecdotal evidence of slowdowns happening in a wide variety of areas- home renovators being called off the job because of mortgages failing to get funded at the last minute, also an esthetician who's noticed that cancellations are on the rise. These kind of stories bode ill for christmas sales.

  Jim Brown   10/23/02,  11:12:22 AM
Hi Jim, Yesterday I attended the International Furniture Market in Highpoint NC. It was a virtual ghost town. Attendance down 40%. The wholesalers I spoke to were very disappointed. Retailers are not buying. Their inventory is up and they're afraid of getting stuck. So much for for the new home sales. Guess they're building because of the low interest rates, but are not spending on furnishings. Interesting?

Matches my market view and another indication the holiday selling season could be a real flop in more than the PC sector.

  John Seckinger   10/23/02,  11:08:38 AM
The Dow has been below 8376 for 30 minutes now, and the 22 DMA (five minute chart) is poised to cross under the 200 PMA (8383). Let us hope this gives bears some ammunition. I would like to see the Dollar fall under 108 (currently at 108.04), as well as another drop in the UTY sector (232). The yield curve is starting to get steep, and this should start a mild allocation out of stocks and back into bonds. A move above 8430 in Dow should negate such short term thinking.

  Alan   10/23/02,  10:54:15 AM
Index Futures
Futures Trade Signal EXIT StopLoss hit
From the ES Long signal at 880, ES did print as high as 882.50 but did not hit our 883 profit target. At 10:35 AM, 1/2 size position was stopped out for breaken at 880, and at 10:49 AM, the remaining 1/2 postion was stopped out at 878 for -2.

It appears today broke the pattern of going long at known support levels in the 10:00 - 10:15 AM time period.

  Jim Brown   10/23/02,  10:46:51 AM
Swing Trade Signals
Tough day and it is only 10:45. My overall bias is still down but I am trying to allow for a continued bullish bounce behind every dip. The lack of a sell off in semiconductors this morning is bullish but the broader averages sold off after the initial pop. It is that contrarian thing again.

Many people have suggested that mutual funds have been fueling the recent gains. If this is the case then it is not from new money. TrimTabs.com reported that funds saw outflows in 4 of the last 5 weeks for a net outflow of nearly $10 billion. They also said nearly $18 billion fled into bonds in September. That paints a picture of continued outflows for the entire last 7 weeks. With retail investors voting against an October bounce by withdrawing funds this appears to be telling us that it is really the asset allocation programs that gave us the bounce.

With bonds at historic highs and stocks at five year lows the pension fund managers pulled the trigger on a massive portfolio rebalance. Now that the Dow is up nearly +20% from the lows the pension funds have less power and the bears are more confident. If we get a decent sell off today it will confirm the rounding top at resistance and give those bears even more confidence.

The Dow stopped the drop right at the 8360 support but there has not been a bounce. Have things really changed or is it just another trap?

  Jeff Bailey   10/23/02,  10:41:32 AM
Alaska Air (ALK) $20.82 +18.02% ... stock up after reporting earnings of $0.39 per share, well ahead of consensus of $0.33. Link

  Steven Price   10/23/02,  10:36:37 AM
I will be away for the next couple of hours, but feel free to email me. I will answer when I return.

  Jonathan Levinson   10/23/02,  10:36:30 AM
We seem to be bouncing off that kevlar trampoline at COMPX 1282 more weakly than in past attempts.

  Steven Price   10/23/02,  10:36:29 AM
Qualcomm (QCOM): $35.90 -1.06 As we said in last night's write-up, we expect a pullback for ideal entry in OI call play QCOM. Let's look for intraday support, possibly at $35 and then initiate the position. We may find support lower down, as well, just over the 200-dma of $33.09.

  Jeff Bailey   10/23/02,  10:31:45 AM
Taking some gains off the table in the previously profiled 30-year YIELD calls. From price retracement of 114'31 to 95'28, 30-year futures (us02z) have been holding 38.2% retracement of 107'21. Might be time for a near-term relief rally in bonds. If so, then look to establish new YIELD call on this bond on any rally back near 111'10, which would be 19.1% retracement.

  Alan   10/23/02,  10:31:06 AM
Index Futures
Futures Trade Signal ENTRY
ES current: 882.50 : From the LONG ES from 880, place a 2 point stoploss, and a sell to close for 1/2 position size at 883, and breakeven for rest.

  John Seckinger   10/23/02,  10:24:42 AM
The trend of higher daily lows is over for the Dow and S&P 500. I would now like to see bonds trade above 108'10 for confirmation; however, it might take some time for that to happen. Note: Utility Index fell 4 points as equities faltered. Dow is currently at 8387 and I would like to see it back under 8376 in the near term. Yield curve is slightly steep, and I will look to buy fives and sell tens once the Dow rolls back over.

  Alan   10/23/02,  10:24:41 AM
Will today be the 4th day in a row the 10:00 - 10:15 AM is a 'reversal' buy the dip timeperiod ?

  Jim Brown   10/23/02,  10:23:42 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the SHORT entry at 10:16:02 when the OEX traded at 447. SPX 880.22, DIA 83.65, SPY 88.20, DJX 83.74, NDX 955.06, Compx 1284.06, QQQ 23.75, Emini 878.00. The initial stop loss will be OEX 453.

We have failed twice at that level in the last two trading hours. This is a long way from the entry point but with the morning volatility I don't want to get too close with only a 1/4 position at risk. We will add to the current position with a trade under OEX 443 which was support on Monday. I will also lower the stop loss as we approach that level.

  Alan   10/23/02,  10:22:27 AM
Index Futures
Futures Trade Signal SIGNAL
Go LONG ES at 801 (or better), currently 879.75x880

  Jonathan Levinson   10/23/02,  10:20:15 AM
The COMPX is approaching the 1280 s/r line, that 1277-1282 range that seems to be made of kevlar or concrete. C and GE are at or near their lows of the day, yields are modestly red with FVX off 4 basis points, while the QQV is up .77 and the TRINQ is at 1.23. These measures don't show a market that looks ready to take out significant support, and, sure enough, price has just recovered from 1283 to 1286 in the time since I've started typing. More rangebound action for now.

  Linda Piazza   10/23/02,  10:19:21 AM
.BIX, the important S&P banking index, currently at 282.66, dipping just below its 50-dma at 284.08 (according to stockcharts.com).

  Alan   10/23/02,  10:17:32 AM
ES 877s is now under yesterday's lows of 882, and has also lost the 883-85 support. There's no bullish trade signal until ES climbs over the pysch 800 level as supports under it are 879.50, then 877. Next lower support is 872. Now seeking long entry.

  Jeff Bailey   10/23/02,  10:13:38 AM
DuPont (DD) $42.15 +0.95% ... after bettern-than-expected earnings, Dow component did just pierce above downward trend from the 03/20/02 relative high, which is longer-term downward trend. Edging back below here, so finding some technical resistance.

Using as a "deep cyclical" to perhaps see if bulls/bears are a believer and aggressive enough to get stock above trend.

P/F chart of DD shows stock above longer-term trend and on "buy signal" from $40.

  Jim Brown   10/23/02,  10:12:49 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Trade what the market gives us. Repeat that 100 times every day. Let's go SHORT 1/4 position with an OEX trade at 447. This is just under yesterday's and this mornings support. I was expecting a bounce at support just like we saw every day for the last two weeks but just in case that is not going to happen we need to be short below those levels.

  Steven Price   10/23/02,  10:09:52 AM
Trimeris (TRMS): $51.00 (-0.50) new OI call play TRMS is finding round number support at $51.00 on the pullback. This is also the PnF breakout point and I like evidence of support anywhere over $50 for new entries. Let's keep our eye on the Biotech Index (BTK.X), which is 343.64 (-4.09). Conservative traders can wait for the BTK to trade positive before entering TRMS.

  Jim Brown   10/23/02,  10:08:21 AM
Swing Trade Signals
Surprise, surprise! The bulls were turned back at the closing highs for the OEX/SPX. Suddenly the internals don't look so promising. The quick recovery everyone was expecting is suddenly showing weakness. It is still too early to say for sure but the dip buyers appear far less timid after the initial spurt. With the rounded top that began to form yesterday in the OEX it is entirely possible the bullish bloom is fading.

Could reality be coming back into the markets? Ok, somebody confess. You went long chip stocks this morning on the bounce, ignoring the negative news and now your contrarian play is tanking the market. (grin) The SOX is up despite the KLAC/CYMI news.

  Jeff Bailey   10/23/02,  10:07:12 AM
Treasuries have given back the bulk of earlier gains, but still holding. 10-year futures (ty02z) 112'050 +0.09%. Four sesson support has been 111'27 and if broken to downside, could see stocks breaking recent highs.

  John Seckinger   10/23/02,  10:05:41 AM
The Utility Index (UTY) is right below its 22 DMA (234) and could once again become a catalyst for equities. The short-term objective is only for a test of 238, but then I would not be surprised to see this 22 DMA become support.

  Alan   10/23/02,  10:04:15 AM
Dow cash continues to have strong resistance at 8500, failing at yesterday's high near 8490 and now sits at 8560 support; this matches the ES resistance of 892-895 as ES has stalled at 891 currenty at 887. In the overnights, Asia gapped down but rallied all day closing at day highs, Europe on the other hand has sold lower so far today and is red.
Had been looking for ES to touch 892 and then to post a short entry if that area of resistance failed, however it only got as high as 891 so the Signal didn't post.

  Steven Price   10/23/02,  9:56:00 AM
I am impressed with the semis ability to shake off the news from Cymer (CYMI) and post a gain this morning. Last night, both CYMI and KLAC traded down over $2 after hours. CYMI is up marginally and KLAC down marginally for the day.

  Jonathan Levinson   10/23/02,  9:55:44 AM
The Fed has just announced an overnight repo of 1.5B, which amounts to a small net drain of $500M. This should give the markets a slight negative bias.

  Jim Brown   10/23/02,  9:54:42 AM
Swing Trade Signals
The OEX bounced right at the 448 level where it bounced at the close yesterday. There was a sudden change of direction after the second bounce and just as we were nearing the closing highs from yesterday. It appears there are some bears alive and well. I think they will be run over quickly.

  Alan   10/23/02,  9:52:23 AM
Just as an FYI: Overnight futures at 130AM were : 899, YM 8520, NQ 979

  Jim Brown   10/23/02,  9:50:29 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the exit of the SHORT signal at 09:47:31 when the OEX traded at 451. SPX 888.08, DIA 84.47, SPY 89.15, DJX 84.41, NDX 969.90, Compx 1297.77, QQQ 24.12, Emini 888.00.

  Alan   10/23/02,  9:47:54 AM
9:45 ES 888-9, YM 8432, NQ 975
ES now has Gap fill at 888 to its 1-2 AM price area., Dow is lagging ES by 50 points. Resistance now ES 890 and Dow cash 8450

  Jim Brown   10/23/02,  9:46:31 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go LONG the broader market at OEX 453.

  Jim Brown   10/23/02,  9:45:40 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We got a second bounce with a higher low but I am not convinced yet. Futures are up, A/D is up and RUT is ticking up. I think the signs are clear. Let's exit the SHORT signal at EX 451 and look to go long at OEX 453.

  John Seckinger   10/23/02,  9:44:40 AM
All the Dow needs to do is drop below 8376 and the string of higher daily lows will be broken. The Dow posted a low of 8383 this morning. If 8376 remains untested, the Dow will have nine consecutive days with a higher low.

  Jonathan Levinson   10/23/02,  9:44:35 AM
IBM, INTC, MSFT, SMH all green on my screen.

  Jeff Bailey   10/23/02,  9:42:32 AM
Johnson & Johnson (JNJ) $58.75 -1.78% .... gets FDA advisory panel recommended approval of the company's drug-coated stent, but with conditions. JNJ indicated that it had submitted additional information on Monday adressing the problems the FDA pointed out in its September "major deficiency letter." Analyst Sheryl Zimmer at Deutsche Bank believes that the "deficiency letter" and issues contained within it, could potentially delay final FDA approval on the stent.

CIBC World Markets analyst Mara Goldstein downgraded the stock to "sector performer" from "sector outperformer," citing valuation and limited upside from $60.00.

  Jim Brown   10/23/02,  9:39:21 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's lower the stop loss on the open SHORT signal to OEX 452 and look to exit on a bounce. The bounce at 8385 was too quick to decide if it is going to hold and instead of exiting at the low let's give it room to run and see if maybe we get another dip.

  Jim Brown   10/23/02,  9:35:40 AM
Swing Trade Signals
We are nearing the support at Dow 8360, OEX 440, SPX 880 and Compx 1285. If there is going to be an initial bounce this is where it should happen.

  John Seckinger   10/23/02,  9:31:29 AM
Finally we are seeing some green within the Treasury Bond futures contract. The price of the 30-year is higher by '10 ticks at 108'01; however, the intra-day high is at 108'09 - one tick below yesterday's high of 108'10. For short-covering to start, the pattern of failing to take out the previous day's high needs to end. Above 108'10, there is resistance at 108'21, 109, and 110.

  Jonathan Levinson   10/23/02,  9:31:26 AM
Just a 4 point gap down open on the COMPX, TRINQ at 1.72, TICK.NQ -215, QQV +1.5.

  Jim Brown   10/23/02,  9:27:51 AM
Swing Trade Signals
The Dow futures are showing 8370 as the opening drop and Dow 8360 is strong support. This was my target in the game plan last night for an initial bounce. The question this morning is whether this support will hold or will we get an initial bounce and then a further sell off. A further sell off could stop at 8300 or 8250. At some point the bargain hunters will come back and the dip will be bought.

Two days of negative numbers may be too much to expect. I will be looking for strength after the open to close the short signal and go long. All the longer term indicators are showing an over bought roll over but the shorter term oscillators have already started turning back up.

The overnight news was not that bad with KLAC and CYMI leading the tech slide and LLY, GSK and JNJ hitting the drug sector. Citigroup finally started falling on questions about banking practices.

  Linda Piazza   10/23/02,  9:23:53 AM
A crawler across the bottom of the CNBC screen this morning reported that although most users wouldn't have noticed any problems, the F.B.I. was investigating unusually heavy attacks on Internet service. CNBC reported that seven of thirteen servers important to global Internet service were affected. Some speculate that these attacks on Internet functionality are terrorism. I don't know about the rest of you, but I've noticed difficulties that stem either from these problems or from problems with my broadband service. Those problems prevented me from posting to the Monitor yesterday afternoon. Be careful entering trades if you're having similar difficulties.

  Steven Price   10/23/02,  9:17:37 AM
Semiconductor Sector Index (SOX.X): The comments from Cymer (CYMI) about a double dip in the chip industry look ominous for the SOX, which has repeated its August pattern of a one day break of the 50-dma, followed by a continued drop. This failure appeared to be an early signal that the broader market rally would fail, so let's keep a close eye on the sector. Possible shorts I see there are MXIM (under the 50-dma of $28.58), KLAC (although the gap down after earnings may leave me on the sidelines), QLGC (unable to conquer the 50-dma after positive earnings)and LLTC (although I am concerned about the 50-dma at$24.68)

  Steven Price   10/23/02,  9:08:43 AM
Merck (MRK): $50.65 One of the stocks on my radar for a short play is Merck. The stock has been setting a series of lower highs since December 2000 and the President's comments about speeding up access to generics can't be too positive for the company. Also Aetna's decision to end its contract with Express Scripts and handle its prescription drug business in house may indicate similar decisions by other insurers, which could hurt Merck's Medco unit. The stock closed at $50.65 and has begun a rollover from its recent high of $51.15. The 200-dma above at $53.32 would be the stop loss on a short play here and I'm looking for a move under $50 and signs of intraday resistance at that level to trigger the short play. The LLY news should give us the break below $50, but if it gaps, I'll hold off for an intraday resistance point to be established.

  Jonathan Levinson   10/23/02,  8:39:55 AM
Bloomberg, which is a vastly better homepage than was CNNfn, reports negative news from LLY and KLAC, good news from Daimler-Chrysler. Citigroup (C) is trading down in the premarket at 34.75 from its close at 35.53.

  Jonathan Levinson   10/23/02,  8:34:55 AM
I don't have volume displayed on my charts, but it looks like a tiny double top on my 24 hour futures charts just below SPX 900, NDX 980. In any event, futures are well off those highs now, with SPX trading -14.50 and SPX -8.50. The US Dollar Index on the 15 minute chart made a lower low at 107.70, a lower high at 108.00, and is currently around 107.90. Treasury yields have just opened in the red. QQQ is trading 23.80 from its close of 24.14.

The banks owe $2B to the Fed today from its expiring overnight repo. If the Fed fails to add liquidity via repurchase agreements or some other mechanism, there will be a net drain and thus a negative bias to the markets today. I will be watching for the announcement this morning.

  Alan   10/23/02,  2:14:38 AM
Did not post it, did not trade it given the hour, but surely would have liked to Short ES at 898.50x899 [grins], goodnight...

  Alan   10/23/02,  12:25:24 AM
given the history of these EXPECTED gaps ups or gap downs, now I wonder: with everyone now expecting a morning gap to fade (sell into), do we get a gap down instead to once again have traders scratching their head at the open :)

  Jim Brown   10/22/02,  9:28:55 PM
The Swing Trade Game Plan has been posted: Link

  Jim Brown   10/22/02,  9:28:27 PM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

  Alan   10/22/02,  1:06:29 AM
1 AM : es 897, YM 8500, NQ 979 (all near day HIGHS !!!

  Alan   10/22/02,  12:17:02 AM
At 4 PM ES 889s, NQ 967
At 415 PM futures close: ES 891.75, NQ 973
KLAC warned after 5 PM
8 PM: ES 891.50, NQ 970
12 Midnight: ES 895s, YM 8485, NQ 975

Nikkei gapped down 200 pts at open, and is now back to even for day. If Europe follows US futures and Japan higher, there may be some suprised shorts at the open.

  Alan   10/22/02,  12:14:32 AM
At 4 PM ES 889s, NQ 967
At 415 PM futures close: ES 891.75, NQ 973
KLAC warned after 5 PM
8 PM: ES 891.50, NQ 970
12 Midnight: ES 895s, YM 8485, NQ 975

Appears to be 'trade the charts and not sentiment or news'


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