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  Steven Price   11/7/02,  5:56:42 PM
Semiconductor Sector Index (SOX.X) 302.61 (-27.23) I have received many emails asking if it was time yet to short the chip sector. We may finally be getting close as today's pullback dropped us out of the ascending channel. A trade under 300 could be the last straw. Here's a chart of the channel break Link

  Linda Piazza   11/7/02,  3:53:43 PM
An anecdote that means as little or as much as you want: a young family friend who raises cattle (I do live in Texas, after all) works other jobs when he's not running his cattle. He decided to take a job selling high-end SUV's. I gently warned him about the downturn in the industry and told him about recent figures. He took the job two weeks ago. He's been averaging two or three of these expensive vehicles a day, as a new salesperson, earning hefty commissions. So much for slow car sales, at least for this person.

  John Seckinger   11/7/02,  3:50:29 PM
Note: There are no economic reports scheduled for Friday.

  Jeff Bailey   11/7/02,  3:47:59 PM
The 3:15 PM Intraday Update has been posted. Link

  Jonathan Levinson   11/7/02,  3:39:12 PM
Someone tell Jeff that the Qubes are at 25.36.

  Kent Barton   11/7/02,  3:31:46 PM
Computer Gremlins: Jeff's machine just crashed as he was in the midst of writing his 3:15 update.

  John Seckinger   11/7/02,  3:16:40 PM
The last hour. A few minutes ago, the Dec. 30-year closed up 2'03 at 112, while all equity markets seem to be testing a bottom set earlier in the session. The Sox index below 310 at 305 is worrisome, and I am still wondering about the longs that got into the market during the last spike to 8635. Are they all out now? What about the shorts that forced some or all of those longs out? Should be a good last hour.

  Linda Piazza   11/7/02,  3:07:41 PM
One factor that's been on my mind lately relates to stochastics. We've mentioned before that stochastics don't give good signals in a strongly trending market. Specifically, in a young bull market, sell signals are not reliable when stochastics turn down from overbought levels. They often result in a consolidation rather than a move down. Buy signals do tend to be more reliable when they turn up from oversold. (The converse is true of new bear markets.) Stochastics provide better signals in mature bear or bull markets. Of course, I'm not arguing that this is a primary bull market, but only that recently stochastics have been behaving in keeping with a new bull market, whether of the intermediate type that's soon to end as all bear-market rallies do, or of new bull market. That's going to keep me cautious on both sides of a trade, looking at support levels and trendlines as being more reliable than stochastics at predicting the market's behavior. I'll watch 464 and 458 as my triggers.

  Jim Brown   11/7/02,  3:02:33 PM
Swing Trade Signals
A break below OEX 458 would be negative for any rebound scenario and could signal that the profit taking could make another leg down with Dow 8450 possible. (OEX 455, SPX 895, Compx 1350) With only a 3-5 point potential gain on the OEX I am not going to issue a short signal. I still feel this is profit taking and until my indicators turn down I am not going short. Dow 8350 (OEX 447) would be strong support.

  Jonathan Levinson   11/7/02,  3:00:45 PM
The BKX has just found its low of the day. Financials getting thrashed the day after a deep rate cut looks like bad news to me. The QQV, VXN and VIX are all well up, and yields look set to close near their lows of the day.

  Linda Piazza   11/7/02,  2:55:55 PM
I agree, Jonathan. There might be a good short-term long trade today in the OEX if it pushes above 464, but I would do it as a short trade only and only if it happens fairly quickly now, with tight stops and only if commissions and other factors would allow me to profit from a quick movement this afternoon. In my 13:38 post, I also worried about those daily stochastics, wondering if there's still enough upward bias left to push the OEX above 464 resistance. If there is, there might be a push up toward recent highs, but I don't expect that push to be long-lived before there's more consolidation at least.

  Kent Barton   11/7/02,  2:48:42 PM
Pulling back to the daily chart, it's interesting to see that the COMPX was rejected just below the August high of 1426. Bears will now be targeting a decline to the bottom of Monday's gap at 1360. This coincides with the 19% retracement level from the October lows to yesterday's high.

  Jonathan Levinson   11/7/02,  2:42:16 PM
My best medium term trades usually originate from a point where both long term and short term stochastics are lined up at an extreme. From that perspective, I would not be looking at any bullish trades as more than short term positions. With the 5(3) weekly and daily stochastics overbought or rolling south, the markets should display a downward bias on a daily and weekly basis.

  Linda Piazza   11/7/02,  2:36:47 PM
On OEX intraday charts, 60-minute stochastics are firmly turned up. On all shorter intraday periods, though, stochastics are either overbought and turning over or rounding over just below overbought. Stochastics haven't been the best predictors of market action lately, but still this makes me cautious about entering long positions ahead of a push above recent resistance.

  Jonathan Levinson   11/7/02,  2:31:37 PM
Here in Canuckistan, I can't watch the President speaking. Is this him on the right? Is Gore there too?


  Jim Brown   11/7/02,  2:25:13 PM
Swing Trade Signals
Futures just exploded.

  Jonathan Levinson   11/7/02,  2:23:25 PM
Good eye on bonds, John. Yields are down dramatically enough that I'd guess that a goodish chunk of today's repos are being poured into treasuries, with FVX down 14.4 bps, TNX down 16.2, and TYX -17.7.

  John Seckinger   11/7/02,  2:15:42 PM
A catalyst? I have to stay with the Dec 30-year, currently higher by an impressive 2'04 and above the 112 level at 112'01. I expect some bond holders to take profits at current levels (read: help stocks); however, I am not sure if stops have been triggered in the bond contract just yet. If the 30-year gets above the high set on October 15th (112'11), stocks might have to deal with another round of selling. It is pivotal here for bond holders.

  Linda Piazza   11/7/02,  1:59:59 PM
A few readers have asked me over the last few days whether I ever trade! For the last two weeks, I've traded very little, partly because of market circumstances (uncertainty over elections, FOMC, and CSCO earnings) but also because of personal circumstances. During that time I've been battling a virus. I don't make the best decisions while running high fevers, and it's difficult enough to best this market when I'm in my right mind! If you've ever traded during a move, an illness, visits from in-laws, or other trying circumstances, you know that can adversely affect your trading account. If life events make it difficult for you to make reasoned decisions or pay attention to your trades, step away for a while. A great trade will be waiting.

  Jim Brown   11/7/02,  1:54:36 PM
Swing Trade Signals
Finally got a little green showing on the intraday charts. A/D is rising rapidly as well as advancing volume. Futures are coming off the bottom and while we are not out of the woods yet the signs are promising. Dow 8650, SPX 910 and OEX 464 are still key resistance points.

  Jonathan Levinson   11/7/02,  1:50:33 PM
Someone just detonated a buy program on the indices.

Re: President Bush speaking shortly: That's it, I'm staying short...

That's been the play all year, every time he speaks publicly. However, if he's going to discuss aggressive tax cuts and business incentives, bears might get a little nervous. Watch your stops and hope for the best.

  Linda Piazza   11/7/02,  1:49:57 PM
With President Bush speaking, we'll certainly be able to gauge how strong support is, won't we, since we all know the effect his speeches have had on markets lately.

  Kent Barton   11/7/02,  1:44:39 PM
Unitedhealth Group (UNH) $95.38, +0.86: The healthcare sector is continuing to display strength in response to Tuesday night's Republican victory. UNH is looking bullish as well, having recently bounced from its 50-dma ($91.81) and the multi-month trend of higher lows. This corresponds nicely with bullish support on the p-n-f chart. The daily stochastics (5,3,3) are rising, while the MACD is leveling out just above the baseline. This bodes well for a retest of the all-time high of $101. Long positions could be targeted on a move above short-term resistance at $96.55.

  Jonathan Levinson   11/7/02,  1:44:09 PM
The President (Dana Carvey: "...they call me Dubya...") will be speaking at 2PM to discuss the Republican agenda.

  Linda Piazza   11/7/02,  1:38:37 PM
Indecision, indecision: Go long or go short? Reasons to go long include the bullish kiss on the OEX (5)(3) hourly stochastics and the steadiness around current key support levels. Reasons to go short include the ten-year yield printing a new day's low, with thirty-year hovering near its day's low, the downward hinge on the daily stochastics, higher gold and VIX. Here's why I think Jim's 464 OEX long entry would be a reasonable one for conservative traders like me: with daily stochastics starting to turn down, I'm not sure how much momentum is left in this upward move from October lows. Under those circumstances, I wouldn't be surprised to see the next movement up to be stopped at 464, a previous S/R level, by which point both hourly and daily stochastics might be in overbought territory. I wouldn't be surprised to see a new consolidation occur then as daily stochastics cycle back down out of overbought territory. If OEX does surge above 464, I'd be willing to go along for the ride, but with tight stops following the OEX all the way up. A fall through 458 might convince me to go the other direction, again with tight stops all the way down.

  Jeff Bailey   11/7/02,  1:36:08 PM
The 1:00 PM Intraday Update has been posted. Link

  Steven Price   11/7/02,  1:26:12 PM
Reader Question: SYMC appears to have bounced off support at 40.00, and is making higher lows on the 5 min chart. Would you buy it here? What other indicators do you use on intra-day charts?

Response: Symantec (SYMC)$40.16 (-1.71) SYMC bounced at $40 and then was rejected at $40.50. The Nasdaq still looks pretty heavy and if we can get a bounce there, as well, then I like SYMC on a move back over $40.50. I would look for the Nasdaq to make its way back over 1400 before entering the SYMC call play.

  John Seckinger   11/7/02,  1:25:56 PM
The markets have definitely gotten quiet. What has happened is the December 30-year made its way back up to 111'24 and almost hit the 112 objective (intra-day high of 111'31). I have been focusing on 112 for a few weeks now, so I have to imagine that some traders will be taking profits and putting the cash back into stocks for the short term. Remember, the 30-year is higher by almost two full points (64/32) and will most likely close above the 111 level even if profit taking happens.

  Kent Barton   11/7/02,  1:23:47 PM
IBM ($78.96, -2.58): Big Blue is rolling over from its 200-dma and looking like a possible short trade. Tech bulls hoping for good news out of the CSCO camp were sorely disappointed...So what's going to prop up IBM now? The oscillators are looking overextended, while the p-n-f chart has just reversed into a column of "O's." The stock has retraced roughly 19% of its rally from the October low of $54.01. Further tech sector weakness could send shares down to the 50% retracement level, near the 50-dma ($69.59).

  Jonathan Levinson   11/7/02,  1:21:15 PM
Some rambling while the markets move sideways: I'm getting a bit of internal conflict, some cognitive dissonance over the competing notions of "economic recovery" and a 1/2 point cut. The chart today shows that the markets are too. I wonder if we'd have seen the same reaction with a 1/4 point cut. Certainly the fed, in lowering rates aggressively, doesn't see what so many pundits have been announcing to us for months.

  Jonathan Levinson   11/7/02,  1:13:54 PM
A third alternative- the COMPX can bounce, tank, or drift sideways, which is what's been happening so far at this s/r level.

  Jonathan Levinson   11/7/02,  1:02:52 PM
The COMPX is either pausing or getting ready to bounce on an otherwise clear down day. 1380 is an important s/r zone, and my fingers found the "1380" key by rote, having typed it so many times this year. TRINQ at 2.33 and TICK.NQ -210 is anything but bullish, but the QQV at +.99 is a little low for a bear's liking. Watching and waiting.

  Jim Brown   11/7/02,  12:40:07 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Let's try this again. Go LONG the broader market with an OEX trade over 464. We are back above support with improving internals and a trade over 464 (Dow 8650, SPX 910) could cause a new round of buying.

  Jeff Bailey   11/7/02,  12:37:38 PM
QQQ $25.55 -3.5% ... from Tuesday's bearish profile in the November $26 puts (QAVWZ) from $0.90, I didn't get the negative reaction from the MARKET on FOMC interest rate decision I think I needed for QQQ to fall to target of $24.25. While CSCO did guide per thoughts, not bearish enough for November expiration target of $24.25. As such, looking to sell for gain should QQQ trade $25.25, which might have QAVWZ offered $1.20.

  John Seckinger   11/7/02,  12:33:31 PM
The Utility Index (UTY) did fall underneath its 50 DMA (248.35) and has managed to find some support at its 22 DMA (242.71). Currently off its lows of 243 at 245, I still expect this DMA to hold (closing basis). If this index does rise back above the 50 DMA, it could spark some buying within equities. Speaking of equities, the Dow is off 2.12% while the Nasdaq is lower by almost 3%. The Vix is higher by 3.39% at 35.69.

  Linda Piazza   11/7/02,  12:31:00 PM
Reminder: Monday is Veteran's Day. Bond markets will be closed, but stock markets will remain open.

  Jim Brown   11/7/02,  12:13:48 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were stopped out of the LONG signal at 12:05:48 when the OEX traded at 460. SPX 902.47, DIA 86.01, SPY 90.64, DJX 85.85, NDX 1025.53, Compx 1378.61, QQQ 25.50, Emini 901.25, SP 900.00, NQ 1027.00, YM 8597.0

That last sell program violated support at Dow 8600, S&P 905 and OEX 461. The bulls are following historical patterns despite the surprise 50 point cut and election victory. The Cisco news was not that bad and traders are dumping anyway. We will wait to see if this is a sentiment change or just profit taking before entering a new signal. An OEX trade back above 464 would be my best guess for a new LONG signal at this time.

  Steven Price   11/7/02,  12:09:07 PM
Retail Holders (RTH): $73.36 -1.29 Those retail sales increases over last year were not enough to lift the sector as a whole. There were cautious statements about November sales, and the fact that Thanksgiving falls later this year, shortening the official holiday shopping season. OI put play RTH is testing recent lows and new entries can look for a break under $73.00.

  Jim Brown   11/7/02,  11:54:03 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
If you were cautious about the earlier entry this morning I would be looking at an OEX trade at 464 as a new entry point. This would get us above the last intraday resistance and should be confirmation of a bounce.

  Jonathan Levinson   11/7/02,  11:51:22 AM
By the way, thanks to whoever added the color to my name- an appropriate choice! Don't think I didn't notice :)

  Jonathan Levinson   11/7/02,  11:49:58 AM
That descending wedge is alive and well on the COMPX as well, projecting to 1380 support. If it bounces, it should happen there. QQV is up modestly for such a big down day, just +1.08, while the TRINQ is at 2.12, TICK.NQ -197. HUI is down .87- imagine the gains if ECB and BOE had cut rates this morning. TYX, the thirty year yield, is down a whopping 14.1 basis points. The put to call ratio peaked at 1.06, which was the most bullish indicator I've seen today, but it's been declining ever since without a corresponding pop in equity prices. Bullish is creeping back into the ratio (which is a bearish indication to me), with the last reading at .94. Still high, but falling alongside price.

  Jim Brown   11/7/02,  11:45:13 AM
Swing Trade Signals
Just after I made the last post about the A/D line the bottom fell out and it is still dropping. We are at the support levels I mentioned and a break down here will take us out of the long. It is put up or shut time for the bulls.

  John Seckinger   11/7/02,  11:44:06 AM
Time to look at the cash 30-year bond, lower in yield (read: higher in price) to 4.92%. It was nice to see how the 5.1% yield did act as a solid psychological level (closing level only) the last few days, and today's weakness in price probably represents a few shorts that "imagined" a close above 5.1% before it happened. Ok, I did see support at 5%, and that is basically today's high after the gap down. Support will definitely turn into resistance. If the TYX contract gets back above 5%, we could see some good cash enter stocks.

  Linda Piazza   11/7/02,  11:43:52 AM
As group, Consumer Staples appear to be holding their own today. Exceptions include BUD and SLE (Sara Lee), both down on light volume, and KO, currently 44.70, down 1.52% on moderate volume. KO finally moved strongly below the critical 45 level today. Although 45 appears to have been strong support, some noise does exist down to 43.50, so it's always possible KO could bounce from any level between now and 43.50. However, KO is on a P&F sell signal and the weekly chart also shows a loose H&S formation. These give targets in the 33-36 range. If KO should break through the 43.50 level, it's breaking a six-year support level.

  Jonathan Levinson   11/7/02,  11:33:02 AM
This looks like it could be a bullish descending wedge on the SPX five minute chart. If so, bears should tighten up and bulls should watch that 905 SPX support, which looks to be the projected tip. It's imperfectly drawn, and doesn't have to break to the upside, though it's been a reliable pattern this year.

  Jim Brown   11/7/02,  11:32:21 AM
Swing Trade Signals
The A/D line has been improving ever so slightly since 11:05 despite the last couple of dips in the indexes. We are still hovering just above the support levels I mentioned earlier (8600, 905, 462) Futures have touched 906 a couple times but the real weakness is coming from profit taking in the Nasdaq. It has support at 1375-1379. Once it stops falling the rest of the market should lead us back up.

  Jeff Bailey   11/7/02,  11:25:37 AM
The 11:00 Am Intraday Update has been posted. Link

  Jim Brown   11/7/02,  11:05:57 AM
Swing Trade Signals
Getting closer to my projected support levels of 8600, 905, 462. We will get to see if there are any bulls left out there. The market is trading in slow motion today and the lack of conviction on both sides is amazing. We are going down on low volume due to lack of buyers rather than a flood of sellers.

  Steven Price   11/7/02,  11:01:06 AM
Amazing how the August rally high proivded a dead stop ceiling for the COMP. Looks like its going to take some real legs to get over the hump. I'm also looking at the rising channel in the SOX 308.35 (-21.49) and see that the sell-off has broken through the bottom of that channel. It is not the first time it has happened in this rally, but it has bounced each time. A close underneath the channel may have me salivating over shorts in the sector again -I have the intersection at 310, which also coincides with previous resistance from 9/11.

  John Seckinger   11/7/02,  11:01:02 AM
One color I am getting used to today: Red. Dollar under 106, Utilities getting crushed, Oil lower, Gold down over a percent, and the Sox index is off by an impressive 6.5%. If you like Green, time to look at bond futures. The 30-year is higher by 1'18 at 111'15 but it could take some energy to reach 112. If the ZB02Z contract falls below 111'07, I would then expect more consolidation (read: equities might stop the bleeding).

  Jonathan Levinson   11/7/02,  10:59:06 AM
With 3B in 28 day repos and net 2.5B in overnight repos, 5.5B is enough to jam the markets- it only took 4.5B at the SPX lows to start shorts covering and buyers off support, which then brought in the momo traders, and the rest is history. However, the market is overbought here, and not oversold relative to 3 weeks ago, and so I don't expect the same bang for the Fed's 5.5 billion bucks. From a bearish standpoint, I was most afraid of the BOE and ECB's action re: rate cuts. That could have sparked this rally to nosebleed territory. But, they held steady.

Two nights ago, Jim's Game Plan was so solid with respect to yesterday's trading that it helped me sleep better ahead of yesterday. Most traders were losing their heads that night. Thanks again, Jim- still thinking of that good non-cuban cigar, if such exists :)

  Steven Price   11/7/02,  10:51:03 AM
Lowe's (LOW): $40.34 (-1.30) OI put play LOW is approaching $40 support. New entries can look for a break below this level to initiate positions. One note of caution, however, is the PnF bullish support line at $38.00.

  Jim Brown   11/7/02,  10:50:44 AM
Hi Jim, You know what is going to happen... right. You have changed sides this morning and that is when things go the other way:-). In all seriousness... I told you I didn't trust this market and you know what I still don't. Where will the push to go up come from? I don't expect the Fed to provide any liquidity today. The dip buying does not appear to be as strong as its been, plus the bonds are up strongly. This is the reverse of what I would have expected due to the rate cut. I feel the market is going down today and don't be surprise if it begins to snowball... that is how weird the market is behaving. Get good news and sell off...???

Really do enjoy you guys especially since I now have faces associated with names. Angel

You don't think I hated switching sides and knowing that I am the father of contrarian indicators the last three weeks? They have bought every dip on bad news for weeks and nobody buys the dip with good news this morning. This is the stuff nightmares are made of. I expected profit taking since it is a historical trend to go down the day after a rate cut but I am hoping it will bounce at support. (8600, 905, 462)

  Linda Piazza   11/7/02,  10:47:11 AM
After being in the green earlier today, WMT (Wal-Mart) has succumbed to the pressure affecting fellow low-end retailers such as S (Sears Roebuck)and COST (Costco). TGT (Target) and FDO (Family Dollar Stores) remain up for the day.

  Jonathan Levinson   11/7/02,  10:39:34 AM
Rate cuts should, in my opinion, be supportive of financial stocks, as the cost of the money they loan has just decreased. Yet, financials on my screen are all down... for that matter, all stocks on my screen are down. Only volatility and bonds are up. This is a very memorable moment in the markets- I expect to be explaining it to my children one day (if I'm ever lucky enough to have any).

  Jim Brown   11/7/02,  10:32:26 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the LONG entry at 10:24:46 when the OEX traded at 466.00. SPX 913.40, DIA 86.98, SPY 91.86, DJX 86.75, NDX 1047.66, Compx 1399.12, QQQ 26.04, Emini 913.25, NQ 1049.50.

The initial stop loss will be OEX 460. This is well below significant support at 462-463. Looks like we were triggered on a small buy program and not a broader surge in buying interest. Still, good support below us so this we could still see a bounce here.

  Jonathan Levinson   11/7/02,  10:32:09 AM
The COMPX just got turned back from its intraday high of 1400. The TRINQ is tame at 1.29 showing a slight sell bias, TICK.NQ -170, QQV +1.08. Yields have recovered a bit off their lows. The markets appear to be trading on their own for the first time in ages- no huge market moving events on the short term horizon.

  Steven Price   11/7/02,  10:19:15 AM
Reader Question: Always appreciate your insights. In your analyssis of SYMC you talk of a bounce from $40. Do you have a definition for what defines a bounce? Do you use a technical indicator(s) or is this one of those art forms? Thanks Ray

Response: When I am looking for a bounce at a certain level, I want to see a definite support level on an intraday chart (I usually use the 5 minute). I then look for higher highs and higher lows, demonstrating that buyers have come back and begun buying pullbacks and taking the stock higher.

  Jonathan Levinson   11/7/02,  10:15:25 AM
The fed has added 6.5B via overnight repos, for a net addition of 2.5B. This is a relatively modest amount, much less than I was expecting.

  John Seckinger   11/7/02,  10:14:12 AM
The Gold Index (XAU) has gone into the red, lower by 0.32% at 69.71 and off its intra-day high of 71. I am wrestling with the concept of deflation=lower gold prices. Some analysts say that deflation means higher gold prices, but I don't believe that to be correct. The market will tell me soon. A 25 bp cut might not have signaled the word "deflation," but 50 bp certainly does.

  Jim Brown   11/7/02,  10:09:10 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We are getting closer to my 463 target price on the OEX and the SPX is nearing strong support at 907. Let's lower the entry point on the LONG trigger to OEX 466.00.

  Steven Price   11/7/02,  10:08:47 AM
Guess Wal-Mart cutting their usual monthly same store sales growth targets from 4-6% to 2-4% helped them hit the high end of the range! The sales increase was 3.7%.

  Jeff Bailey   11/7/02,  10:07:06 AM
Wholesale Inventories rose 0.5%, which was slightly above August's 0.2% gain and economist's forecast for a 0.2% gain.

  John Seckinger   11/7/02,  10:06:36 AM
The Utility Index (UTY) is certainly feeling the disappearing price pressure due to the FOMC rate cut of 50 bp, as this interest-rate sensitive index is lower by 3% at 249 but only falling back down to its 50 DMA (248.50). If support fails at that level, look for the 22 DMA below at 243 to keep in check shorts trying to go for the jugular. Note: This index has risen from 202 to 257 since mid October.

  Jim Brown   11/7/02,  10:03:13 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Let's lower the entry point to OEX 467. The internals are starting to slow their drop but not bouncing yet but there could be a million traders waiting to buy the dip when it does turn.

  Jonathan Levinson   11/7/02,  10:02:29 AM
Still no announcement from the fed regarding the expiring 2 day repos.

  Jonathan Levinson   11/7/02,  9:54:42 AM
The SPX and COMPX have broken down from their rising wedges identified yesterday and are chopping along near their lows of the day. The TRINQ is higher at 2.9, but nowhere near the blowoff levels above 4 or 5 that we've seen in the past. QQV is +1.17 to 45.27. Gold is up, US Dollar Index back below 105.60. This looks like more rangebound action to me, but the repeated failures at the rally highs look bearish to me, and I'm watching current levels for signs of further breakdown. The COMPX has printed a low of the day at 1390.90.

  Jim Brown   11/7/02,  9:53:56 AM
Swing Trade Signals
I am still hoping for more of a pull back to the 463 range. This market is very overbought and with the current bullishness I expect every dip to be bought. We desperately need to see some real profit taking to build a better base for the future. I would be really glad to see another five points disappear.

  Steven Price   11/7/02,  9:49:29 AM
Symantec (SYMC): $40.57 (-1.30) We never hit our upside trigger to go long SYMC, however the pullback is approaching $40, which is the top of the previous consolidation pattern. IF we get a tech bounce and some support at $40 in SYMC, I might consider entering long there, leaving the stop at $39 for decent risk/reward. Let's watch for intraday support in the Nasdaq and SYMC first.

  Jim Brown   11/7/02,  9:45:12 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
CORRECTION - GO LONG with a bounce over 468.00 not 467.50.

  Jim Brown   11/7/02,  9:44:06 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
My target for a long entry this morning would be a bounce from OEX 463. I am not convinced that we will see that number but my first threshold for pullback has already been passed. I am going to follow the markets down with a trigger just above the current location. I want to be long on any bounce. Go LONG the broader market with an OEX trade above 467.50. If we get a deeper dip I will lower this number.

  Steven Price   11/7/02,  9:43:12 AM
Interesting that Michaels Stores (MIK) cited low consumer confidence, when they lowered guidance. What does that mean heading into the holiday shopping season? Keep in mind when looking at retailers' numbers today that they are comparing to last year, when the country was still deep in its 9/11 hangover.

  John Seckinger   11/7/02,  9:40:27 AM
How do you think the 10 year affects the market today, especially since it's yield is under 4 percent?

Response:Certainly this will get the attention from mortgage companies and should have then extending duration (read: get longer-dated bonds) today. Moreover, Merrill Lynch said late yesterday that investors should stay short the front end of the curve. This will also bring demand to the 10-year note. Affect on stocks? Cash should be taken away from stocks and put into bonds on Thursday. If the 10-year closes back above 4%, then I will start to think differently.

  Jonathan Levinson   11/7/02,  9:32:06 AM
The Fed has just announced a 28 day repo in the amount of 5B. Note that 28 day repos are common, and this one is refunding $2B expiring today for a 3B net addition on a 28 day basis. This is separate from the expiring 4B 2 day repo today, the announcement for which I'm still awaiting.

22 point gap down open on the COMPX to 1396, TRINQ 2.6, TICK.NQ 88.

  Jeff Bailey   11/7/02,  9:29:02 AM
The 9:00 AM Intraday Update has been posted. Link

  Jim Brown   11/7/02,  9:16:40 AM
The market is shaping up rather well this morning. The Cisco earnings warning has triggered some profit taking but the underlying fundamentals are improving slightly. Federated Stores raised their guidance, jobless claims were lower than expected and the Semiconductor Industry Association released growth numbers for 2003 that were down from previous estimates but showed real growth going forward. Productivity came in strong at +4.0%

This is setting up for a dip at the open on profit taking as some of the rate cut expectations are taken out of the market but giving the bulls a reason to buy the dip. A drop back below 8700 would be encouraging and I would love to get a real dip to 8600 but that is not likely. We will be looking to go long as far below 8700 as possible.

  Linda Piazza   11/7/02,  9:12:58 AM
As of this wriring, European markets are reacting as follows to the ECB and BOE decisions: FTSE 100 is -5.30 (-.13%); CAC 40 is -60.81 (-1.89%); and DAX is -97.68 (-2.96%). The Nikkei was -32.85 (-.37%).

  John Seckinger   11/7/02,  9:11:42 AM
With the BoE leaving rates unchanged, it should not be terribly surprising that the Euro/Dollar spread rose above the highly watched parity level (1.00). Turning to bonds, the Dec 30-year is above my 'magical' full point level (32/32), higher by 1'16 at 111'13. The 112 objective still remains; however, this level could act as a pivot going forward.

  Jeff Bailey   11/7/02,  8:53:54 AM
30-year YIELD Alert! $TYX.X at 4.956%, breaks below 10/29/02 low YIELD of 4.969%. Equity bulls want to see this YIELD stay above old downward trend, which is at about 4.925% right now.

  Jonathan Levinson   11/7/02,  8:38:20 AM
Yields are in the red 6 minutes out of the gate, with the five year yield (FVX) -8.3 basis points, TNX -9.9 bps, and TYX -9.4 bps.

  Jonathan Levinson   11/7/02,  8:34:39 AM
The futures are now going el tanko, presumably as it dawns on the markets that Mr. Greenspan is all alone, unsupported by the BOE and ECB. NDX -21, SPX -11.10. Bears need to be aware that there remain today's open market operations that could turn this market around, although frankly, if this morning's trend continues at this pace, I doubt how effective a few billion dollars in repos will be. There are 4B expiring today. It's going to be a fascinating day.

  Jonathan Levinson   11/7/02,  7:53:51 AM
The ECB has just announced that it will leave rates unchanged. This should bode ill for the futures and US Dollar Index.

  Jonathan Levinson   11/7/02,  7:15:36 AM
The Bank of England has just announced that it will leave its rates unchanged. Futures had been chugging along in the red, but have just dropped sharply, SPX -7.60 at 918.10, NDX -13.00 at 1056.00. The US Dollar Index had been rising, but dropped as well, currently 105.60. CSCO is trading 12.60 on Island ECN.

  Jim Brown   11/7/02,  12:20:08 AM
The Swing Trade Game Plan has been posted: Link

  Jeff Bailey   11/6/02,  10:24:51 PM
Bull Confirmed! I missed this alert yesterday, but it looks like the rising tide continues to lift all boats. The very broader NASDAQ Composite Bullish % ($BPCOMPQ) achieved the 38% level after Tuesday's action, which is bull confirmed status. Very tough for bulls to get this broad market to the 70% level and historical highs usually near 50%. Link

The "big guns" in the NASDAQ-100 Bullish % ($BPNDX) nearing "overbought" 70%, but traders can begin making some ties as it relates to late last year and early part of this year at "red" C and 1 (December and January). Link

This shows EXTREME bullishness from the internals and will have me looking to close out recently profiled bearish QQQ trade in the November 26 puts on any type of dip back near QQQ $25 or NDX 1,000. My original target for QQQ bearish trade was $24.25, but I now think I needed QQQ close below $25.50 to be "comfortable" with holding out for $24.25 target. CSCO came through, but may not have been bearish enough.

  Jeff Bailey   11/6/02,  10:05:19 PM
Futures ... as I get ready to leave, futures rather calm with SPX/sp02z 919.50 and NDX/nd02z 1,062.00. Just up from their lows after CSCO's call ended.

CSCO settled out at $12.76 after finishing regular session $12.96. Cisco has a 4.3% wieghting in the NDX/QQQ.

Other more heavily weighted has MSFT $57 edging down at $56.30 (13.65% weight), INTC $19.15 lower at $18.91 (5.57% weight), QCOM $35.85 lower at $35.24 (4.34% weight), DELL $29.99 at $29.70 and AMGN which got hit lower by -7.7% at $46.20 off 20-cents at $46.00 (3.88%).

  Jim Brown   11/6/02,  9:43:19 PM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

  Jim Brown   11/6/02,  9:42:57 PM
The Swing Trade Game Plan has been posted: Link

  Jeff Bailey   11/6/02,  9:42:51 PM
Cisco Systems (CSCO) $12.96 ... stock fades to $12.80 on heavy trade at Cisco gives Q2 guidance (Mar) and projects revenue to be sequentially flat to down 3-4%, which implies revenues in range of $4.66-$4.85 billion, which would be below consensus of $4.92 billion. Gross margins projected in 66-68% range, with operating expense to be down slightly from fiscal Q1.

  Jim Brown   11/6/02,  9:42:43 PM
Cisco Rumor has it they were able to beat their profit estimates by repurchasing 58 million shares during the quarter. It is not nice to trick up the numbers John. IBM has been doing this for years. Looks good on the surface but eventually it comes out after the focus moves on to someone else.

  Jim Brown   11/6/02,  9:42:36 PM
Cicso - Looks like Cisco tripped in the conference call as futures just fell off the cliff. Nasdaq futures dropped to -11.00 from +6.50 and S&P futures to -5.00 from -.40. CSCO stock just hit $12.50 after coming close to $14 just a few minutes ago. Chambers said capital spending was still dropping in the tech sector and especially in telecoms.

  Jeff Bailey   11/6/02,  9:42:25 PM
QQQ ticked at $26.47 at 04:00, traded late-session high of $26.70 after CSCO first announcment, now trading $26.23 as more cautious tone seems to take hold from Chambers.

  Jeff Bailey   11/6/02,  9:42:17 PM
Cisco Systems (CSCO) $12.96 ... stock trading off best levels of extended hours at $13.10 after Chambers sayst that over short-term, most promising areas among its 9 growth markets are Security, IP, Telephony, Storage, Wireless LAN, and Data, Voice and Video Convergence. In areas that CSCO has control, and influence, he is more optimistic heading into fiscal Q2 (Jan) that he was heading into fiscal Q1 (Oct), but with respect to external factors, he is still more cautious heading into fiscal Q2 than fiscal Q1 because customer's visibility has tightened even further.


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