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  Alan   10/24/02,  11:15:53 PM
Pivot numbers for Friday: ES: 868, 872, 877-879, 880, 883, 885, 887, 892, 895, 900, 902, 905
NQ: 935, 950-55, 972, 988, 1000 Dow Cash: 8100-8150, 8200, 8250-8270, 8350, 8400, 8440-50, 8500, 8550

  Alan   10/24/02,  11:12:24 PM

11 PM quotes: ES 879s, YM 8282, NQ 969.50
About 9 PM tonight, ES had dipped back to 877 (Thur's day low), bounced to kiss 880 before the futures close at 11 PM for one-hour.
Perspective: ES right here between 878-880 is at the Wed 2:10 PM level immediately following the Beige Book release; it went up 25 ES points from there, made a new Month high Thur at 905 and sold off 25 points to current 880 level.

One bearish thought re market manipulation off the Elections and Fund's October tax-lossing selling being over by month end: Funds may have been waiting for any last-minute tax-selling to see how how the Election market manipulation took the markets before they started doing that "last-minute tax-loss selling". If that is the case, we could sell off into the rest of next week if indeed Thur was "the top".

Remember Arnold Schwarzenegger and his line from the Terminator film? "I'll be back" It seems Arnold is making Terminator 3.

Also, I'm sure there are funds who would love to show a positive gain for the month of October and will also start selling to lock in Long Profits if the selling indeed "is back" Are the bears/shorts now saying "I told you that I'll be back" ?

The contrarian in me wonders if Friday has dip buyers showing back up at some point

  Alan   10/24/02,  10:51:55 PM
8:30 Durable Orders, 9:45 MI Sentiment, 10:00 New/Existing Home Sales

  Alan   10/24/02,  10:48:24 PM
The Futures Wrap has been posted: Link

  Jim Brown   10/24/02,  9:45:03 PM
The Swing Trade Game Plan has been posted: Link

  Jeff Bailey   10/24/02,  6:51:30 PM
Inchworm?... Per 06:16:17 comment, I believe the subscriber was talking about an update I wrote on 05/23/02 at 01:00 PM. Link

While that article was "looking for bullishness," what ended up happening soon thereafter was that the "tail" of that inchworm scenario ended up being covered with WD-40 and slipped lower, dragging everything else down with it!

In today's commentary, I made some comments of concern regarding technology having perhaps gotten ahead of itself. My "measure of performance" is that the deep cyclicals as depicted by the CYC.X, have just barely moved back above the September 2002 relative highs and still trade BELOW their 50-day SMA. While Treasuries are the "piggy bank" for equities, the deep cyclicals can be viewed as the "piggy bank" for technology spending. With productivity running high, my thinking is that the deep cyclicals will only need to spend, or actually spend/increase IT budgets when the bottom line ramps up. Right now, the CYC.X Link , while showing some signs of renewed bullishness, doesn't depict that of a MARKET (that always knows most everything), seeing much bullishness from the deep cyclicals, which historically are leaders out of a recessionary environment, that eventually spend on new technolgy to enhance productivity when capacity gets jammed. From $440 the CYC.X represents bullish risk to $410, where a sell signal would occur. That's about 6.8% downside risk.

Comared to the NDX.X on $10 box scale Link (NDX is roughly 2-times the value of the CYC.X, so using a $10 box on the NDX versus $5 box on the CYC) I currently see 90-points of risk from 990, which is about 9% downside risk to the 900 "sell signal."

As it relates to an "inchworm" I've felt for two-years + that the cyclicals were a place that bulls would find better performance if we were to ever come out of a slower economy.

One way we test that thinking is relative strength. Here's a RS chart of the NDX.X versus the CYC.X Link . Right now, it looks like the "tail" of the inchworm (NASDAQ-100) is leading the charge. We've seen this before on a short-term basis, but the NDX has been longer-term weakness hasn't it?

  Jeff Bailey   10/24/02,  6:16:17 PM
The Inchworm ... Jeff, Do you think we are seeing your "inchworm" this morning and yesterday?? In particular I refer to the fact of "weaker stocks" rallying last. Viz., the Wireless sector which has been rallying. CNBC has been talking the sector all morning, etc. but it's interesting that this the weakest of techs is rallying after everything else!

Incidentally, I loved those commentaries and the analogy. I've monitored the market and you are dead on with this during the last year. Keep up the great work and please continue to point out the correlation between stocks and the bond market as well (you're right on with that too).

You make a good point and may be in play as the weak usually follow the strong and bellwether's higher. While not "wireless" I was watching Agilent (NYSE:A) $13.05 +8.75% yesterday breaking down -4% and all off a sudden see large "crossing" of stock right at the sesson lows of $11.70, and buying into the close of $12.00. Sure enough, gaps higher this morning and built a gain to $13.55. I think BIG short seeing losses build as too much bullishness in other positions and bear looks to cover weaker Agilent before they too go poof!

Today's 01:00 Intraday update is important in my mind. This summer, the NASDAQ Comp. Bullish % reversed very similar to current. For the most part, all technicals look just about the same. You get the feeling that the rising tide of late is beginning to lift all boats. This is very normal, not only in a cyclical bear market like we've been in, but also a longer-term bull market.

The KEY WILL BE Treasuries. I don't think we're going to really "know" anything about a stock market bottom for the next month or so. To find a bottom, we need to see DIVERGENCE from the past.

The bullish % charts did a very good job in alerting traders/investors that we were near a HIGH RISK level for BEARS a couple of weeks ago. Yesterday's reversal up in the broad NASDAQ Composite Bullish % hints that market makers are probably "flat" if not more bullish in their inventory. In the past, its been either the narrow Dow Industrials Bullish % ($BPINDU) or NASDAQ-100 Bullish % ($BPNDX) to reverse lower first, to give us the heads up for internal weakening. At that time, it would be the past losers that continue to lose on the downside first.

The market makers (NASDAQ) and specialists (NYSE) have an advantage over you and I no doubt, as they have better feel for order flow. However, you and I can perhaps "sense" potential order flow by keeping an eye on Treasuries. As described in the past, this is the "piggy bank" for equities.

I'll discuss some of this in tonight Index Trader's wrap.

  Kent Barton   10/24/02,  6:12:28 PM
AMZN ($19.86, +0.11): By all appearances the company reported strong earnings. Q3 EPS came in 4 cents better than expectations, with sales rising by 33%. Amazon also said that it expects to see Q4 sales in the $1.325-$1.425 bln range, versus the consensus estimate of $1.264. You'd think that shares would be trading higher on this news, but that's not the case - AMZN is moving nearly one dollar lower in the extended session. Briefing.com is reporting on the conference call and thus far we haven't seen anything to explain the decline. This might simply be a classic case of "sell the news." Shares have risen roughly 25% over the past month, indicating that perhaps tonight's positive results have already been priced in.

  Jeff Bailey   10/24/02,  5:27:42 PM
December Light Sweet Crude futures (cl02z) $28.04 -0.56% ... edging below today's lows, which may be a little surprising to those speculating on a war with Iraq and today's news that foreign journalists were being expelled.

  Kent Barton   10/24/02,  5:12:31 PM
NVDA ($10.44, -0.58) might be worth watching tomorrow. I haven't had a chance to go over the finer points of the ERTS report, but the strong uptick in revenues suggests brisk sales of its X-box videogames. This would bode well for Nvidia, who provides Microsoft with the X-box graphics chips. It'll be interesting to see how the videogame sector behaves ahead of the all-important holiday season.

  Kent Barton   10/24/02,  4:54:49 PM
After-hours action: Electronics Arts annihilates earnings...Q2 EPS came in at 34 cents. Consensus estimate was only 17 cents. Revenues rose 88% on a year-over-year basis, and the company also guided higher for Q3. Shares trading two dollars higher in the extended session after closing at $65.91.

  Alan   10/24/02,  4:23:33 PM
415PM futures close ES 880.00, YM 8278, NQ 968.50

  Alan   10/24/02,  4:12:41 PM
futures just sold hard, was 883s at 405 PM, off the 3:30 PM support of 877-879, now at 411 PM is back to 879-880; YM dow futures were sideways at 8300, and now are 8271; NQ (ndx futures) remain sideways at 969

  Alan   10/24/02,  4:07:18 PM
AMZN $21s, up over $1 after hours, apparantly on good forward guidance.

  Jim Brown   10/24/02,  4:06:25 PM
Picks I apologize to everyone I could not get to on the play suggestions. I have about 50 emails left and will try to get to them later tonight.

  Jim Brown   10/24/02,  3:54:28 PM
Hi Jim,I'm right here working really hard to keep my promise for all of you.......surely has not been easy,but the final result is what it counts.......Goooooddddddddd luuuukkk to all of US.....A big C I A O from Rome, Valter

Valter we really appreciate all your hard work! Now don't stay away so long this time!!

  Jim Brown   10/24/02,  3:52:51 PM
Swing Trade Signals
With the Dow appearing to hold 8300 but with multiple levels of resistance overhead I am planning on holding the SHORT signal overnight. With Sentiment, Durable Goods and Home Sales tomorrow there is a good chance more negative news will appear. Also, with IRAQ heating up we could see the remaining bulls taking profits before the weekend. Some suggest Saddam could go preemptive if he thinks the cavalry is coming.

  Jim Brown   10/24/02,  3:49:02 PM
Who is the crystal ball reader that predicted the drop in the markets today on your earlier post? He advised a down 200 day, and what a call he made. We need to hear more from him. thanks. Sm

Valter is a reader in Italy and he appears every few weeks and I don't think he has been wrong yet. Now the pressure is on!! Haven't heard from Weldon lately. He must be working and not playing golf. Usually when Valter calls a down day or Weldon plays golf we do pretty good.

  Alan   10/24/02,  3:48:06 PM
After missing the big 130 PM Iraq news from being at lunch, and while the prior 2 trades were technically good entries, they did not work, so was reluctant to suggest yet another long at ES 878-879 (as ES 877 is also a lower support area), with the noted resistance above of 880 and 885. One thing for sure, shall be not be taking lunch tomorrow and miss another move like this one.

  Jim Brown   10/24/02,  3:45:55 PM
Jim, Nice change of pace will have the bulls making that hard decision whether or not to hold over what will no doubt be awful consumer sentiment numbers tomorrow... then again, we are buying ALL the bad news now, aren't we. Have a great evening and please send my regards to Valter. Coleen

Let's don't all give Valter a big head now - he will start feeling like he has to make a call everyday!! (grin) I think you pegged the drop exactly. Consumer Sentiment could be nasty. Bulls take profits. Details at 10:PM

  Jim Brown   10/24/02,  3:43:17 PM
where is that little italian guy i want to give him a kiss 200 pts. right on!! Name deleted!

Come on now let's keep our emotions in check!!!

  Jim Brown   10/24/02,  3:39:03 PM
Swing Trade Signals
Kiss 8350 goodbye and maybe 8300 if we don't get some buying here pretty quick. It looks like the buyers lurking just under 8300 have stalled the drop but don't have enough strength to cause a bounce. The A/D line at -849 is still dropping.

  Alan   10/24/02,  3:37:13 PM
Index Futures
Futures Trade Signal EXIT
At 3:30PM, ES stop loss was triggered at 882.00 for -1.50
First day in several, there has not (so far) been a late day reversal of afternoon trend.
ES is now exactly at the same levels 878-880 that it was at during yesterday's 2 PM Beige Book release. Currently, there's not one bullish trigger unless ES firmly gets back over 880.

  Jonathan Levinson   10/24/02,  3:36:18 PM
So much for 1300-1310 s/r on the COMPX. It fell after half an hour.

  Jim Brown   10/24/02,  3:34:46 PM
OIN plays

First pass it looks like:
Calls = JNJ, LLL, RJR

All of these won't make it but this is our final review list for tonight.

  Alan   10/24/02,  3:27:52 PM
Thoughts on close: ES 880 is HUGE support, now in the chop area of 883-85, likewise 887 to 890 is resistance; how ES trades out of this current area is likely to dictate the close

  Jeff Bailey   10/24/02,  3:27:10 PM
03:15 Update is posted. Link

  Alan   10/24/02,  3:23:32 PM
Index Futures
Futures Trade Signal ENTRY
At 3:19 PM, LONG ES filled at 883.50, maintain stop of 882
A very large area of resistance is right above at 885, place a sell to close order at 888.50.

  Jonathan Levinson   10/24/02,  3:18:13 PM
Our faithful reader, Rick, was good enough to send me the following. Thanks, Rick. You owe him one, Wes!

I work in the business so I guess I understand it a bit.

In the event of a price jump producers will try and start pumping like mad to get oil to market. Oil like most commodities is sold as futures and on the cash market so a big price hike does not necessarily allow producers to start printing money. Refiners who bought oil on futures contracts benefit from larger margins, while producers benefit from any remaining production that is sold on the cash market.

For example, my field has about 30-40% capacity shut-in. We could bring some on immediately, but the rest would require well work before that production could be added to the total. That work requires the services of companies like SLB, HAL, etc.

So my take is a short term spike benefits big producers like XOM,BP,RD. Anything longer would also help the service companies. The refining side of the business is still a mystery to me and most everyone else.

In anticpation of this event I bought Jan XOM and HAL calls back in August.

Hope that helps

  Jonathan Levinson   10/24/02,  3:16:39 PM
GE has slipped under the 20 day EMA at 25.89 and is currently trading 25.74. Next stop appears to be the bollinger bands midpoint/20 day sma at 25.03.

  Alan   10/24/02,  3:16:27 PM
Index Futures
Futures Trade Signal ENTRY
Given the lateness of the hour, won't open a short here; but will place an ES buy stop at 883.50 with a stop at 882.00. In other words, don't long ES until it prints 883.50

  Linda Piazza   10/24/02,  3:15:23 PM
KO: KO 46.68 -1.26. KO now filling its gap from a couple of days ago. A break through the 46.65 area should send KO down to test that important 43.50-45 area.

  Alan   10/24/02,  3:14:33 PM
Index Futures
Futures Trade Signal EXIT
Tight Stop Loss of YM 15 points hits at 3:08 PM for -15 pts, $75.
Dow cash failing 2 attempts at 8350 was the catalyst for additional selling; now ES 880 and Dow cash 8300 levels should provide support, if they do not, it could get very ugly indeed. Perhaps 15 YM points was much too tight a stop, but with the possibility of the market dying under 8300 it made sense. At Dow 8330, it simply felt "too late" to open a short. I'm still leaning toward a long trade going into the close, but need to await 880 and 8300 truly holding. I do not expect the same frenzle rally we saw yesterday at the close if it happens.

  Jim Brown   10/24/02,  3:08:54 PM
More Suggestions:

AOL short Nov. 15 Puts bought at .90c and waiting!!!! William

That should be a safe play but AOL is a giant and something funds can throw money at as we close October. With earnings out there is not much risk for investors over the next month. Be careful!

AMGN - target $44. Rich

It did move under the 200DMA at 49.84. My only worry would be that techs fall out of favor and funds throw money at biotech to dress up their October books. Definitely worthy of consideration.

How about IBM?? -Donna.

I assume you are thinking of a put on IBM since it has failed to clear $75 for several days. If we are going to get a market failure IBM would be a good choice. Only down -1.93 today would make me think the bulls have not decided to leave yet. If it breaks $72 I think it would be a good play!

Thanks Jim, Fol. for your consideration:
Hope you like at least one. Farhang

No time to scan them all. Do you need a job Farhang?

  John Seckinger   10/24/02,  3:03:21 PM
For a bear, the ideal settlement would most likely be under 8294 (Wednesday's low). The bond market is now closed, which should only add to the volatility. Let the sea of red continue.

  Alan   10/24/02,  3:01:32 PM
3 PM : ES 884 (so far holding key 883 support, next lower is 879-880), Dow cash 8332, YM dow future 8324 (holding key 8300 support), NQ 974 (holding key 972 support) : Once the bond market is now close at 3 PM, bulls and bears now watch to see if these nearby key support levels hold.

  Jim Brown   10/24/02,  2:59:44 PM
Jim - Saw your post regarding reader suggestion for a put on BBOX. Note BBOX is currently trading near $43, right at its 200-dma. Looks like a good one to me – maybe you typed in the wrong symbol? -Mark

Thanks for correcting me - your right! I tried to go back and see what symbol I typed and could not recreate the chart I saw. I definitely agree it looks like a short. Dead stop on the 200DMA. Clear candidate

  Alan   10/24/02,  2:56:15 PM
Index Futures
Futures Trade Signal ENTRY
Long YM Dow$5 futures at 8324 entry, and will use a very tight 15 point stop loss.

  Jim Brown   10/24/02,  2:55:44 PM
Valter said 200 point drop today - Great intuition from Valter! - Peter

  Alan   10/24/02,  2:53:26 PM
Index Futures
Futures Trade Signal ENTRY
Go LONG YM Dow futures 8335 or better.

  Jeff Bailey   10/24/02,  2:51:08 PM
Defense Index (DFX.X) 161.01 -1% ... rather quiet after news that Iraq was ordering foreign journalists out of the country. Here's a list of components. Link

  Alan   10/24/02,  2:49:52 PM
ES 50% retracement of yesterday's low 873 to today's high 905 is 889, currently at 883. Dow, 8336, is only 40 points above yesterday's low and is the weakest of the 3 indices. Once the 2:30 PM attempt to get ES back over the 892 pivot failed, additional selling came in.

Whenever war news comes in, I like to watch the defense stock NOC; which has gone down in price once this Iraq news hit. One might wonder why its not going up instead.

  Jim Brown   10/24/02,  2:46:30 PM
Swing Trade Signals
Look out below! The 8350 level is being tested now and we could start seeing some serious numbers if 8350 and 8300 break.

  John Seckinger   10/24/02,  2:45:20 PM
The Dollar is now underneath 108 at 107.99. This should get the attention of currency traders. Also noteworthy is the '18 tick rise out of the December 30-year contract to 108'06. Remember, the intra-day low is 107'02, meaning that bonds are up 1'04 during the last few hours of trading. This, coupled with a Dow close under 8400, should be meaningful heading into trading on Friday.

  Jim Brown   10/24/02,  2:45:16 PM
Misc Play Suggestions:

VECO - Long - Denise

Very "spikey" (technical term) Resistance at 13.50 and $15. Look for a pullback.

How about CVD to the upside (calls) - Mark

WOW! Really spikey! Clear over recent resistance but very unsupported.

JNJ - Long - Steve Price

Come on Steve, you know that boat anchor is heading for single digits! You still owe me lunch ! Nice try. (grin)

Steve did not send that but I thought I would get in a jab - we had a bet on JNJ last week. I actually like JNJ for the long term - more later.

QLGC as a long - PnF breakout of recent downtrend. PnF Buy signal today or yesterday, use slight pullback as an entry if support found near 30-31, which is 50 DMA. - Chris

I like QLGC but I would not want to play it without a pullback as you suggested. Something in the $30 range?

Hi Jim, have a look at RX.
Nice double bottom at $ 13.00, higher low, moved above EMA50 today. Sector is Business Products (Dorsey&Wright), Sector Bullish Percent is 28%, Bull Alert in row of X.
Kindly regards - Frank

It looks ok but the down trend from June 17th bothers me.

Howz about GE as a Long play? Jonathan

Come on Jonathan - you just want us to play it so your puts have a chance!! (grin)

Jim - Look at HDI. John

Man, I don't know. The resistance at $55 is very strong and dates back to last December. I would have to pass.

How about Q(west) as a "cheap as an option" suggestion (as you did for PVN some months ago) - it appears the old US West portion of the company will be able to sustain the old Qwest portion until demand reemerges for fibre bandwidth. The recent refocus on customer service is very welcome. - Ira.

I think if it could get over $3.75 it may have a chance. I have a son who works there and he is loading up.

FRE sure looks like a good short with a stop around $65.70 or so - Matt

We think the falling bond market is good for FRE, FNM, SLM. I would not short it unless the Fed lowered rates again.

Hey Jim, I am looking at FLIR as over-extended... I bought into the stock under $ 28 / share on the GAP FILL 2 weeks ago ... now I am considering writing the 35 CALLS against that position as a hedge, as well as buying the 45 PUTS ...since you are going into your meeting ..you may consider FLIR as a potential PUT candidate..Nice top formation, and the window for INSIDER selling is open until the end of November. Sincerely, Hawk

I would agree FLIR has trouble breaking $50, currently $46.61. Would I short it going into heated war talk today? I don't know.

I am still wondering about HNT which has pulled back with the rest of the healthcare sector on what I guess is profit taking. I think their earnings are out tonight. You mentioned it over the weekend as a calendar spread. Thanks, John

We try not to hold plays over earnings and also try not to play them for a week after to allow all the volatility to pass. Thanks!

  Alan   10/24/02,  2:40:07 PM
Now I see what caused that large futures drop at about 1:40 PM
13:37 BAGHDAD, Iraq (CNN) -- The Iraqi government will expel all foreign journalists from the country next week, Iraqi officials said Thursday.

And that might have the usual afternoon dip buyers re-consider.
Shorts want to see Dow cash lose 8350 now; IF that does not occur, it's possible we see some short's taking some profits.

  Jonathan Levinson   10/24/02,  2:39:39 PM
Re: Oil. That's the answer I was looking for!!!

Well, glad to be of service with my non-answer :)

Citicorpse is printing another low of the day, currently 34.88, while GE is 1 tick away from doing the same. As a GE bear who endured endless abuse from his parents and their broker (and have been shorting it successfully from 31), I'm heartened by the volume today, which, at 24M so far, is on track to exceed the previous days' volume and maybe even the ADV. A slew of holders piling for the exit door suits me just fine.

The COMPX is now at 1310 support, and dip buyers will be looking at this level as we are. Watch your stops.

  Jeff Bailey   10/24/02,  2:35:19 PM
CNBC reports that Iraq orders foreign jounalists out of the country.

  Alan   10/24/02,  2:28:39 PM
As sometimes happens, you sit for 3 hours waiting for the break in "sideways" and it occurs when you finally leave for lunch at 1 PM. Can't find any 'news' story to explain the hard and fast drop at 1:40 PM
ES retested the 890 level, Dow is -150 from the day highs, and back to it's 8400 level matching it's breakout higher level from 2 PM yesterday. I"m now leaning toward a long entry into the close.

  Jeff Bailey   10/24/02,  2:28:35 PM
Current View Right now I'm a "longer-term bull" with the bullish % charts all back in X, but we're seeing a little more BUYING in Treasuries today, which to me hints that we might be seeing some gains in stocks being taken off the table and perhaps moving to the sidelines over the next couple of weeks.

Technology gains in my opinion have OUTPACED gains in the deeper cyclicals by too great of a degree to justify some of the 30% gains we've seen since the lows. As such, I think some of these stocks are prone to retracing 1/2 of their current gains over the next couple of weeks.

I do think some of the "targets" outlined in the Index Trader's wraps are achievable near-term, but I would urge traders to ERROR ON THE SIDE OF CAUTION and protect gains where you've got them. If holding NOVEMBER expirations from the bullish side, those may be most suspect near term.

  Jonathan Levinson   10/24/02,  2:26:54 PM
Jon, I was wondering, if oil hits this $50 p/bl being banded about what in your opinion would be the best equity to be long or short. If this is not your area of expertise please forward it.

I've looked into oil slightly. Firstly, I'd expect a deflation in oil prices before inflation, but experts differ and I'm not one. Secondly, because of the incredible degree to which oil is taxed and regulated, there's a great deal of distortion in the relationship between the price of oil and the price of oil service equities. Third, I have no idea. Is anyone following oil equities?

  Jim Brown   10/24/02,  2:25:09 PM
Jim - slnk, fdry,flex,htrn, Thanks W.

Comments below:
SLNK - volume only 19K today. we need 400-500K to play
FDRY - I like it if it can break the 50 DMA at $7.32
FLEX - I like this long term but it has to break resistance at $10 first.
HTRN - Basing at support at $8 but volume only 40K

  Jim Brown   10/24/02,  2:20:10 PM
BBOX - Looks like a short to me. Grant

I agree but we try not to short anything below $20. They tend to get explosive on any good news.

  Jonathan Levinson   10/24/02,  2:19:15 PM
We have a pattern of lower highs and lower lows emerging on the COMPX, but bears should be careful about breaking out the party hats and sasparilla juice. The TRINQ is still bullish (though rising) at .66, the QQV is up a modest 1.15 and there are a number of support lines below, the first major of which is at 1310, although the entire 1300-1310 level was a doozy on the way up. Yields continue to fade, FVX now off by 7 basis points, and so I don't see much bullishness here- but bears should remain cautious. It's been a brutal two weeks, but those still standing aren't out of the woods yet.

  Jeff Bailey   10/24/02,  2:19:08 PM
3M (MMM 127.75 -1.29% ... perhaps the "strongest" stock in the Dow Industrials over the past year. Came close to $130, but fell short yet again with a day high of $129.80. Link

While www.stockchart.com p/f chart isn't correct as the stock did trade $130.60 on 05/16/02 and again on 07/09/02 at 130.09, this is a stock that in my mind "should" trade $132 to show me that bulls are convinced the markets are headed higher.

I'm thinking bears perceive this stock as low risk/ higher return type of bearish trade with stop at $132, but as stock has shown, is usually "last to fall" on broader market weakness.

  Jim Brown   10/24/02,  2:12:43 PM
OIN plays for today We are going into our Tuesday pick meeting in about 30 min. If you have a stock (with volume please) that you think we should consider then email me now. If we use it I will give you credit in the monitor. jim@OptionInvestor.com

  Jim Brown   10/24/02,  2:08:12 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
If you took the 8400 entry point for another leg into the current SHORT signal then you are patting yourself on the back right now. The next leg in for me would be a trade below 8350.

  Jim Brown   10/24/02,  2:06:33 PM
Fed Speech just released
Productivity growth: A realistic assessment Remarks by Vice Chairman Roger W. Ferguson, Jr. Link

  John Seckinger   10/24/02,  2:04:23 PM
Just like yesterday, things look good so far. Higher bond prices, steep yield curve, lower equities, and today there is weakness in the Oil Sector. Also like yesterday the 22 PMA crossed underneath the 50 PMA (five minute chart). I was surprised with yesterday's late day rally, and I hope it does not happen again today.

  Jim Brown   10/24/02,  2:03:52 PM
Swing Trade Signals
SOX is about to go negative after being up strongly all day. Someone look outside and see if pigs are flying.

  Jim Brown   10/24/02,  2:01:43 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
An earlier entry point for adding to the SHORT signal could be a trade under Dow 8400 which is also a support point. Just FYI

  Jim Brown   10/24/02,  1:58:38 PM
Jim, Thanks for a great job. Hope you are feeling well after your operation.

Just thought would bring to your notice that THE KISS OF DEATH COLLIDE WITH THE 100 DMA . Same for the COMPX and also all the indexes have not crossed this average for many months now and provides the next immediate major resistance.

MSFT similar situation but only with it's 200 DMA instead of the 100 DMA.

Any inference here ???

Warmest Regards from Spain, Farhang Polad

Good point ! I check the charts and you are exactly right. I would "infer" from this that the double top from Monday at 8550 and today at 8558 is much stronger than we thought. Thanks for pointing this out. Link

Now, a couple questions since you have the time. When will the average be broken, how long is this current dip going to last, should I play DJX, OEX, SPX, GE or MMM options? Please give your suggested strikes and reasons for each along with a current quote. Please only give me the winning strikes please.

Seriously, I get emails like this. Thanks again for heads up.

  Jim Brown   10/24/02,  1:47:24 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
You should now have entered the second leg of your SHORT position as the Dow has broken 8440. The next entry point for adding to this position would be either a break of support at 8350 or lower support at 8300.

  Jim Brown   10/24/02,  1:45:00 PM
Jim: Lately, since your medical leave, I've noticed that the markets sink around or before 3 pm giving a sense of collapse then rallying into the close.
Coincidently, I have used this to buy puts and have either broke even or profited. I have been bidding $1.00 below the ask at 3:50 (+ or -) and have been getting fill at the low but it doesn't get posted until after the close.
Example was yesterday, I was filled on the OEX nov 430 puts for $7.20. I have since closed those for $7.20 and hope for a rally today to enter again. ams

A couple other readers had noticed lately that buying puts with a serious discount to ask was possible at/after the close. Looks like the MM are clearing the boards to get ready for the new morning.

  John Seckinger   10/24/02,  1:43:28 PM
It looks like we finally have the break bears were looking for. The Dow is currently at 8460, and should not reverse back above 8485 (would most likely signal a bear trap).

  Jonathan Levinson   10/24/02,  1:42:28 PM
All I see is that yields keep dropping, with FVX now down almost 5 basis points. Equities have been rangebound but bonds continue bidding up- I'll follow the larger bond market in determining short term direction. QQV is up .78, so the other "smart" money agrees. The COMPX is in a very tight range at 1323, with QQQ trading 24.46. The TRINQ is at .45, showing continued buying pressure. Either equity buyers or bond buyers are wrong here.

  Linda Piazza   10/24/02,  1:42:05 PM
While we're waiting for markets to break out of today's consolidation pattern, I've been re-reading about market movements that are against the prevailing trend. Until recently, we've been in a bear market, and this rally has been a reaction against that trend. Here's what Pring has to say about these countermovements: "These . . . are notoriously difficult to forecast . . . as they will amost invariably be subject to confusing whipsaws." Does that sound familiar to anyone trying to trade this rally?

  Steven Price   10/24/02,  1:40:45 PM
Reader Question: Steve, I entered mrk on a dip yesterday. Bought the jan 47.50 puts. Of course the stock rallied immediately thereafter.Should I have waited alittle longer for a stronger move under 50? The stock seems solid above 50. The news of aetna'splan did not seem to have as great an affect on mrk as I expected.Please give your take on the play. Thanks, Bill

Merck (MRK): $51.52 +0.16 I think the move under $50 yesterday and intraday resistance at that level looked like a good short, so I don't think you jumped the gun. However, I am not thrilled with what now looks like support at that level. There was a Dow Jones story today saying that Aetna's decision not ot outsource prescriptions will not lead other HMOs to do the same. I'm not sure that story is based on anything more than an opinion, and I think actions speak louder than words. However, MRK certainly got back over $50 and the play doesn't look quite as good as it did yesterday. Looking at the point and figure chart, though, the stock is right at bearish resistance after a big run up and would require a trade of $53 for a breakthrough. It has not broken through bearish resistance since December 2000. The last time it reached bearish resistance, it reversed down from $54 to $45. I would use $53.00 as the stop loss for the short and not punt on the play yet.

  Jim Brown   10/24/02,  1:38:03 PM
Hi Jim. Naz 100 is completing a H & S top on the 5 minute chart. jpw Link

Looks pretty convincing

  Jim Brown   10/24/02,  1:31:24 PM
Swing Trade Signals
lower highs, higher lows, it can't get much tighter than this. The last five candles on the Dow 3 min chart have had about a 5 point range from high to low. It is going to blow soon!

  Jim Brown   10/24/02,  1:25:57 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Just in case things start moving quickly here in a few minutes (wishful thinking?) I would add to the 1/4 short position on a Dow trade at 8440 which is just below the low of the day at 8444. This would be a breakdown of the current stalemate and indicate a worsening in overall sentiment. Dow 8352 would be the next support.

  Kent Barton   10/24/02,  1:20:42 PM
Jet Blue (JBLU) $37.54 +1.10 Wow...An airline splitting their stock?! That's something we haven't seen in quite awhile. Of course, JBLU IPO'd in April and is one of the few U.S. carriers not bleeding red ink everywhere. The company announced today that its Board of Directors had declared a 3-for-2 stock split for shareholders of record on December 2nd. The distribution date is December 12th.

  Jim Brown   10/24/02,  1:17:39 PM
GE Glad to see you caught up with the news David (grin)

  Jim Brown   10/24/02,  1:17:08 PM
Swing Trade Signals
Remember that "kiss of death" chart from yesterday? Here is the updated version and it still applies. Link

  Steven Price   10/24/02,  1:16:16 PM
Reader Question: Hi Steve, I'm really amazed by the action in the semi,I'm really dying to short it real bad at this level,but every five minutes that I go to put the order they keep going up very strongly,do you think we are close to the roll over,and if so how big do you think it could be? Thank you as usual for your comments...

Semiconductor Sector Index (SOX): 292.35 +6.49 The SOX reached a high of 299.18 today, before pulling back. I think 300, or 310 will be the rollover level. However, while the news seems 99% bad in the sector, the group is still heading higher. I have also been looking for a rollover to short, since I think the downside could be all the way down to the low 200's. However, no matter how badly I want to pull the trigger, I am going to wait for the rollover. There is no reason to swim against the tide and "wish and hope" it goes my way. Each dip has been bought and it did not fail the 50-dma like it did in August. Since the news is not driving the stocks down (just the opposite), we'll have to wait for the technicals to tell us when the buying is over.

  Alan   10/24/02,  1:10:00 PM
Jim, I have the way to move the market for you. I've sat here for an hour "waiting" for it to move either up or down during this mega-low volume, sideways action. I am now leaving for lunch and would likely expect a move when I'm gone. [grins]

  John Seckinger   10/24/02,  12:47:52 PM
The two-year note is outperforming the 5's and 10's by a few basis points, currently yielding 2.13% with a price of 100'00. Staying with the cash market, five's are up 4.5, ten's are higher by 10.5, and the 30-year is up 8 ticks. When combined with futures' activity, price action is still 'neutral' to 'slightly bearish' towards stocks. Speaking of stocks, the 50 PMA (five-minute chart) was penetrated at 8465 and is just underneath at 8466.

  Jim Brown   10/24/02,  12:42:52 PM
GE - Suria cancel - Jim, from what I hear he cancelled after his boss got pressure from a few big brokerage firms that do biz with GE. That ain't good; of course, we're back to the bad old days, so who cares?! Party on! Herb Greenberg

  Jim Brown   10/24/02,  12:39:08 PM
GE Ravi Suria cancelled out on his negative GE talk today according to a reader.

  Alan   10/24/02,  12:23:17 PM
AIG and TYC telling "us" something
2 classic examples of this market's tone of 'Buy Bad News" AIG is the largest insurance company in US and a Key financial sector stock. 3 months ago, on their July earnings they missed badly, but the stock (which usually trades in the 70 to 85 range for year 2001) was already so beaten up ahead of it at $48, that earnings miss 3 months ago was a "buy AIG on the missed earnings-it's priced in at $48-52" (a sentiment I would agree with)
AIG has been drifting sideways $62 to 65 the last 2 weeks, and had earnings this morning.
They missed again (by 3 cents this time), stock opened at 62 and was bought all day with it now at 65. On pure fundies (fundamentals), AIG missing by 3 cents "should have" sent it back to the 52-55 support area from the 62 open, BUT it did not.

Tyco (TYC): got the Trifecta this morning : Earnings miss, Warning going forward, and re-statement of prior financials (could TYC news be any worse?)
Result of this news: Opens at $13, and upticks to current $15
No position in either stock, nor any type of trade suggestion; merely an observation regarding to the market in general.

For the xth day in a row, futures volume has dried up ever since 11 AM.

  Jim Brown   10/24/02,  12:22:04 PM
GE Misc comments I received

Ravi Suria is speaking about GE at the Octoberfest today and Ravi is unlikely to say how great GE Capital is.

On tax break problems in Hungary - "Big name investors have a lot of money at stake. GE bought the Hungarian lightbulb manufacturer Tungsram in 1989 and since then has invested more than $1 billion in Hungary, where it employs 14,000 workers making a variety of products from aircraft engine parts to power control systems.

"Hungary is important to us," said Louise Binns, a spokeswoman for GE International. While she declined to comment on the tax tussle, other companies and Hungarian officials lashed out. Foreign firms account for more than 40% of Hungary's exports and they employ one in ten of its workers. Those jobs aren't necessarily threatened, but the government fears the tap of future inflows will be turned off. "

  Jonathan Levinson   10/24/02,  12:11:03 PM
GE has just put out a press release, but only to announce that it has installed its 300th PET scanner (grin). Perhaps the market was hoping for 310?

Seriously though, price has come off its lows but it never realy recovered and is currently falling back off. Citicorpse (C) is 4 cents off its lows just put in a few moments ago.

  Alan   10/24/02,  12:08:32 PM
Index Futures
NQ (NDX futures) has been leading the general market higher the last few days almost in a stealth-like fashion (example, until last night I had not realized NQ was at month highs). Dow has been weakest index today, and a few minutes ago NQ did break that psych 1000 barrier but stalled instantly at 1001.50.
It lasted less than 60 seconds. By the time I saw it print 1001, and formed the thought to suggest a NQ short trade signal, it was already 997 and dropping fast (currently 993).
Other than "scalp" type trades, today is rather quiet. Last night I truly was expecting a large blowout move in one direction: either a burst over Dow 8500 heading to the 8600/8750 area, or a total exhaustion top failure sending the Dow back down to the 8350-70 level. I didn't expect 'sideways'
As a guess, I would say that ES has spent 80% of today between 902 and 897, and Dow between 8460-8520.
SOX index stalled an inch under the pysch level of 300.
Since NQ has lead the market up today, and now appears to be retracing on some Long Profit taking from its earlier 1001 print (NQ was approx 800 on Oct 10th), I would use NQ as a market 'tell' for direction.
You can almost "feel" a desire for traders to open shorts; BUT so far, index shorts are VERY quick to cover em as 'they' are still in a dip buying mindset.
Back in August, Shorts had no Fear.
Now, seems Bulls have no Fear.
MMM appears to be 'done' helping the Dow bulls, $130 came close to printing this morning, and historically (for months and months), the 130 level for MMM has been the "wall of death", by weight, MMM is the largest mover in the Dow based on its price.

  Jim Brown   10/24/02,  12:00:27 PM
Jim it is official, today is one of those D day.....get ready as we are going to drop at least -200. Valter (Italy)

Valter, you have never let us down before so we are counting on you today!

  John Seckinger   10/24/02,  11:58:47 AM
Looking at a daily chart of the December Bond (ZB02Z, which accounts for electronic trading), I feel a bear trap materializing. Today's low is 107'02, just underneath a consolidation area which took place from mid to late August. The low on August 19th was 107'05. Bond prices will most likely need to rise above 108'23 to confirm such suspicion. Obviously, weakness back towards 107 will prove this theory wrong. If correct, bond prices could rise as high as 110; thus lowering yields in the process.

  Jim Brown   10/24/02,  11:54:05 AM
Swing Trade Signals
Internals are improving significantly despite the lack of performance on the major indexes. The RUT is climbing. The A/D line is +1048 and advancing volume is rising. This would make me believe we are being held back by a few bigcaps and unless selling picks up we could see a breakout later in the day.

However there are bearish factors to consider. The Nasdaq futures can't seem to break over 1000 and hold. SPX futures are trapped at 905. The Dow has a clear double top at 8550 which corresponds to 903 on the cash SPX and 458 on the OEX. This double top from Monday appears to be strong resistance and every move close to those numbers draws heavy selling. BUT, the sellers are not chasing the indexes lower. This would indicate a lack of conviction. As long as the internals continue improving we will continue to nibble away at that resistance. We will either break through or depending on the time of day see their program accelerate with a drop to lower highs.

  Steven Price   10/24/02,  11:44:22 AM
Panera Bread (PNRA) $32.95 +1.20 OI call play PNRA, entered at $30.95, is up on same store sales increases once again. I think the immediate upside target is $35, so I would wait on new entries for a break above that level or a pullback. Current support looks like $31.50 and the stock is struggling to get above $33.00. A pullback to $31.50 could be a long entry point.

  Steven Price   10/24/02,  11:34:50 AM
Semiconductor Sector Index (SOX.X): 298.26 +12.40 We are at a pivotal point for the semis, with the SOX now testing 300. This is certainly a more convincing rally than the one in August, but if we are going to see some exhaustion, I would expect it at either 300 or 310.

  Jonathan Levinson   10/24/02,  11:33:07 AM
COMPX high of the day at 1329, TRINQ at .39, QQV -.36, TICK.NQ +291. But yields are down, with FVX off nearly 3 basis points. This looks like a pretty extreme divergence to me, with bonds and stocks rising together.

  Alan   10/24/02,  11:30:33 AM
NQ (NDX 100 futures) assaulting 1000 for 4th time today, now at 998s

  John Seckinger   10/24/02,  11:19:55 AM
Pattern Recognition: During trading on Wednesday, the rally really didn't start until after the 50 PMA (five minute chart) was cleared at 8345. Currently, the Dow is at 8465 and this 50 PMA (exponential) is below at 8448. With that said, look for selling pressure to accelerate if this MA is broken. If prices fail to follow-through lower, odds are it was a bear trap. I wish it was more of a science, but it isn't. Just trying to increase one's odds.

  Jim Brown   10/24/02,  11:16:10 AM
Swing Trade Signals
Looks like we are nearing the decision point. The Dow has been trapped all morning and that trap is narrowing. Link

  Alan   10/24/02,  11:15:36 AM
Indices continue to make lower highs: ES 905, 904, 901s, 900.50, 899 as one example.
A Short wants to see ES lose day lows (and pivot support) at 892.
Appears NQ is the "least weak" index today, with the Dow the weakest.
NQ has 'tried' 3 times to breakout into the psych 1000 level.
ES currently 896s is slightly below today's 50% retracement of 899 (low 893/high 905), if ES holds 895 here, that would make a higher low.
$SOX semi index - shocking, but NEW Month Highs here at 293s, Oct 10th low was about 210.

  Jim Brown   10/24/02,  11:06:04 AM
Swing Trade Signals
I agree with Jonathan. There is something wrong with GE. It is trading close to its low of the day at 26.13 and looking very weak. I can't find any news either but something is stinking here.

  Jim Brown   10/24/02,  10:54:43 AM
Swing Trade Signals
Looks like we may go back to test the highs of the day with the Dow lagging the Nasdaq and the SPX/OEX. This is a retest of the Monday highs as well and a breakout here could start a decent short covering buying spree. Another failure here could also energize the bears. The A/D line is getting a little stronger along with the advancing volume. It will take some increased selling to blunt this bounce but we have seen that selling appear at critical levels many times recently. This far away from the open traders will be more reserved and a direction change or confirmation should be meaningful.

  Jonathan Levinson   10/24/02,  10:53:17 AM
The COMPX is back to within 2 points of its daily highs, which are also the highs of this rally. This level represents a test of the right shoulder of the head and shoulders formation that peaked on the daily candles at the August highs. The TRINQ reports continued strong buying pressure at .44, while the QQV at .49 shows that the options market is nervous. GE has now done 1/3 of its ADV after the first hour and a half of trading and is down .58 to 26.2, or 2.16%. Still no news that I've heard.

  Steven Price   10/24/02,  10:42:42 AM
Reader Question: hi, TXN has been moving up what are your thoughts? thank you rick

Texas Instruments (TXN): $15.62 (+0.74) TXN has bounced since guiding 4Q revenue lower Monday after the bell, as have a number of other semis. As I said in last night's wrap, there has been nothing but lower guidance coming out of this sector, with no real plan as to when things will turn around. However, there has also been lots of buying, which tells me that things aren't as bad as some institutions were expecting. That being said, the Semiconductor Index (SOX) 289.55 +3.69 has posted a 35% gain since October 9 and is about to run into resistance at 300. There is also a descending trendline in TXN which looks like it may put a ceiling on the stock just over $16, along with the 50-dma just above at $17.83. I would actually be looking at TXN as a short on a rollover from those levels, as well as a SOX rollover from 300.

  John Seckinger   10/24/02,  10:38:25 AM
Two developments getting my attention are Oil and the yield curve. The XOI.X index is lower by 1.73% at 443.51, but more importantly reversed down from its 22 DMA and should not stop until near 439. A lower oil index usually means weaker equity prices, historically speaking. Turning to the yield curve, fives are up 2.5 while tens are unchanged. I expect this trend to continue all session long, and could signal a short-term high in yields. Higher yields usually means lower stocks as well.

  Jeff Bailey   10/24/02,  10:37:58 AM
HMOs under pressure this morning after Wellpoint Health (NYSE:WLP) $80.80 -4.4% reported Q3 EPS yesterday of $1.17 per share, which was 4-cents better than consensus. Revenues of $4.52 billion was also above consensus of $4.39 billion. Link

Point/figure chartist will note current bullish vertical count is $100. Stock may have gotten a little over-extended. Look for stock to find support near current levels and past "spread-triple top" buy signal of $80.

United Health (UNH) $98.43 -1.87% another name with very bullish p/f chart, but here too, a bit extended near-term. Looking for pullback entry near $94-$95 as bullish vertical count is $110. Link

Oxford Health (OHP) $42.78 -2.6% another name that looks to be poised for move higher after recent "triple-top" buy signal at $44 and threatens a "spread-triple-top" at $46. Bullish vertical count is currently building at $62. Link

  Alan   10/24/02,  10:35:33 AM
Index Futures
Well, that wasn't fun: For the last 30 minutes, I've been without my cable modem and TV; seems there's a TV repair truck outside working and that the cable modem will be cutting on and off until about 11AM.
So far, ES has held the lower part of 892-895 pivot with today's lows of 893, after failing near 10 AM to pierce the 905 new resistance level. ES 892 was also the level at 7 AM today.
NQ's high was 997, as sellers came in ahead of the psych 1000 level
Dow resistance remains strong at 8550, which is now a double top. ES and NQ made new monthly highs this morning, Dow did not.

The tone of this morning is :fade the gap, BUT technically, as long as ES does not lose 892, this is still a 'bullish' day in the larger picture.

  Jeff Bailey   10/24/02,  10:22:42 AM
PETsMart (PETM) $20.90 -0.09% ... stock traded a new 52-week high this morning. However, p/f chartists will note stock has achieved bullish vertical count of $20.50. Link Subscribers holding this one as bullish may look to take some profits off the table as first sign of weakness would be trade at $16.50.

  Jonathan Levinson   10/24/02,  10:15:33 AM
The Fed has just added 4.75B in overnight repos, for a net addition of $3.25B. This is a modest amount with which to jam the markets, though we have no way of knowing whether the money will find its way into equities or bonds.

  Jonathan Levinson   10/24/02,  10:12:01 AM
GE is trading at its low of the day, down 2.04% on nearly 20% of its ADV after 40 minutes of trading. I don't know what's affecting the stock, but it can't be good.

  Jeff Bailey   10/24/02,  10:08:41 AM
Duke Energy (DUK) $19.20 -4.6% ... Reported Q3 EPS of $0.52 a share, $0.05 below consensus. For 2002, company sees ongoing EPS of $1.95-$2.05 (consensus $1.95) saying "This range is achievable, but with current performance and market conditions, we expect our results to be at the low end of the range." For 2003, DUK expects earnings to be flat (consensus $1.93). Link

  John Seckinger   10/24/02,  10:05:59 AM
Checking Intermarket Relationships: Dollar higher and above 108 (108.12), bullish for stocks. Bonds down fractionally but curve steep (better bid in five years); neutral reading. Oil and Utility Sector both at solid pivot areas (near or on 22 DMA). Ok, back to the Dollar. The Greenback still has to get above 108.50 and then 109 in order for bulls to become aggressive. Weakness under 107.25 should shift sentiment to more neutral levels.

  Alan   10/24/02,  10:03:16 AM
Index Futures
Some may recall my comments of how ES often has its pivots move up/down in increments of 10 points. ES 892-895 several times in the last week have proven to be resistance, 10 pts above that is 902-905. We saw 902 be the top several days ago, and have seen 905 be the 'top' so far this morning at 9:33 AM
Dow cash so far has hit that double top at 8550, sold off to dip under 8500 and is now retracing back higher. There's no trade until a clear breakout over 8550 occurs, or a clear breakdown under 8500.

  Jim Brown   10/24/02,  9:59:01 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Change the entry point on the LONG signal to Dow 8575. This allows for the wider stop on the open SHORT signal to 8575 as well. This is above the high of the day at 8558.

  Jim Brown   10/24/02,  9:57:54 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's change the stop on the current SHORT signal to Dow 8575 to get above the high of the day at 8558. That was a pretty solid top this morning but lets give it room to test again.

  Jonathan Levinson   10/24/02,  9:57:17 AM
There's been a lot of smoke but the COMPX is virtually unchanged at 1321, TRINQ .46. I'm watching some heavy trading in GE which has already done more than 10% of its average daily volume and is down 1.30%. There's trader talk that yesterday was the last day for fund managers to buy stock and have it show up in their year end positions. If that's the case, today could be a lot less bullish than was yesterday, but I prefer to watch the charts. That said, I'm still waiting to see what the fed's going to do with the expiring 1.5B from yesterday.

  Steven Price   10/24/02,  9:53:25 AM

Response: $57.45 +1.97 Wal-Mart which said it saw fullyear revenues slightly ahead of predictions yesterday, has lifted the whole sector. While WMT is still climbing, I would hold off on short entries in KSS.

  Jim Brown   10/24/02,  9:51:07 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the 1/ 4 position SHORT signal at 9:45:06 when the Dow hit 8500. OEX 455.32, SPX 897.72, DIA 85.07, SPY 90.10, DJX 84.99, NDX 985.28, Compx 1317.28, QQQ 24.50, Emini 897.00. The initial stop loss will be tight at Dow 8550 and that is also the entry point for a LONG signal. I see the 8500-8550 level as critical and we could go either way today.

  John Seckinger   10/24/02,  9:47:27 AM
Lehman has revised its Fed forecast. At first, the company expected 75 bps of easing by year's end. Lehman now expects that the first Fed ease will be in January and that easings will total 50 bps. The investment house is also expecting sub-2% growth over the next two quarters.

  Steven Price   10/24/02,  9:44:29 AM
Two of our short Watch List candidates, Sigma-Aldrich (SIAL) $44.00 (-0.72) and International Paper (IP) $37.05 (-0.69) were downgraded this morning. IP seems to be hanging in above support, but I like a short entry in SIAL under $43.75.

  Jim Brown   10/24/02,  9:39:44 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
In case the market sees another bounce go LONG the broader market with 1/4 position at Dow 8550. The initial stop loss for this signal will be Dow 8500.

  Alan   10/24/02,  9:39:36 AM
Index Futures
In the first 8 Min. of trading, ES has hit the 905 resistance level and retraced a few points to 900; YM (Dow) never printed over 8550, nor did NQ climb over the 1000 psych level.
So far, the trend is selling into this gap up, with the morning highs occuring at 9:33 AM

  Jim Brown   10/24/02,  9:38:46 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go SHORT the broader market with 1/4 position at Dow 8500. The initial stop loss for this signal will be Dow 8550.

  Linda Piazza   10/24/02,  9:36:21 AM
NEM: Newmont Mining Corp. announced yesterday that it would restate three years of financial statements, reducing earnings by $6.5 million over the past three years. NEM is one of the companies included in the .XAU.

  Steven Price   10/24/02,  9:36:02 AM
United Health (UNH) $100.33 (+0.01) UNH managed a close over $100 for the first time yesterday, which is a good sign for new entries. A trade over $101.00 would be the alternative for conservative traders. Let's watch a few minutes for signs of support over $100.

  John Seckinger   10/24/02,  9:33:13 AM
Bonds starting to trade on a more "normal" basis. Initial claims lower, bond prices lower. Dow higher, bonds lower. The 30-year is currently down '11 ticks at 107-09, and there should be solid support from 106'24 to 107.

  Jonathan Levinson   10/24/02,  9:31:50 AM
5 point gap up on the COMPX to 1325, TRINQ at .41, TICK.NQ +360.

  Alan   10/24/02,  9:30:12 AM
Index Futures
Futures will open at MONTH Highs: ES 903s, YM 8545, NQ 995

  Steven Price   10/24/02,  9:29:11 AM
I'll be watching 900 in the SPX this morning to confirm any long play entries. While it's nice that companies are cutting capex to trim the fat, it won't do much for the supplers that rely on that capex. Be cautious of telecom suppliers after the SBC comments.

  Jonathan Levinson   10/24/02,  9:28:28 AM
The fed has announced a $2B 28 day repo. This refunds 2B expiring from the previous 28 day repo. 28 day repos are generally between 2 and 4B and I've never noticed enough of a correlation to make them a reliable indicator. The 28 day annoucements usually precede the overnight repos, which is where the real action is. There remains 1.5B expiring today, and the announcement should follow within an hour.

  Jim Brown   10/24/02,  9:24:14 AM
Swing Trade Signals
Interesting morning. Kodak is cutting more jobs but Jobless Claims are less than expected. SBC misses estimates and cuts capex to $7.5B from $11.2B in 2001. The only thing investors appear to have been interested in was the jobless claims with futures reversing an overnight loss to end with a strong gain.

The game plan for today was to go LONG over 8550 with a stop at 8500 and go short under 8500 with a stop at 8550. It appears that 8550 will be tested at the open and that will setup the first play. We are not going to try and play the opening bounce and will look for the first pause for direction.

  Jonathan Levinson   10/24/02,  8:46:03 AM
Initial jobless applications fell by 25,000 for the week ended Saturday to 389,000 from 414,000 the week before, beating expecations of a drop to 405,000.

Futures have returned to flat from negative territory, with NDX -.50 and S&P +1.50.

  Jonathan Levinson   10/24/02,  8:03:33 AM
NDX futures never made it out of triple digits, but it sure was close with a high at 999 that has bled down 984.50 for a loss of 8 points from the open. S&P futures are down 3.90. The US Dollar Index is hovering at 108.20. The Nikkei was off almost 200 points but recovered off its lows to close down almost 100 points.

The fed has 1.5B in overnight repos expiring today. We saw that yesterday's 500M drain might have created a weak negative bias, but was generally insignificant to market direction. While the fed's open market operations give us a good window on liquidity and thus market direction, it is not an absolute predictor because of the multitude of sources of liquidity. I am in the process of writing an article on this.

  Jeff Bailey   10/24/02,  3:27:09 AM
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   10/24/02,  3:26:56 AM
Index Futures
9 PM: ES 901s, YM (not yet open), NQ 996
4 PM: ES 897, YM 8483, NQ 991

  Jim Brown   10/24/02,  3:26:39 AM
The Swing Trade Game Plan has been posted: Link


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