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  Jim Brown   11/12/02,  9:38:16 PM
The Swing Trade Game Plan has been posted: Link

 
 
  Jim Brown   11/12/02,  6:26:37 PM
Osama Bin Laden - NBC is claiming the Osama tape as authentic and verified by several sources. The call for new attacks and mention of recent events like the Moscow theater attack bring the Osama ghost back from the dead and has the potential to resurrect AL Queda as well. This was not being well received in the news media or the after hours markets. The futures dropped on the news.

 
 
  Jeff Bailey   11/12/02,  5:00:05 PM
Abercrombie&Fitch (ANF) $20.79 +2.97% ... stock dips to $20.05 after company reports Q3 earnings of $0.48 per share, 1 cent better than consensus. Revenues were $419.3 million versus consensus of $419.2 million. Stock got brief pop higher after initial announcment, but traded back after it said it expects Q4 EPS of $0.79, slightly below consensus of $0.80. Link

 
 
  Jeff Bailey   11/12/02,  4:49:29 PM
Nordstrom (JWN) $22.03 +3.08% ... stock down at $18.75 on ECNs after company announced that Q3 EPS are expected to be $0.13-$0.14 per share versus previous guidance of $0.16-$0.20. Companys said the expected shortfall primarily reflects record-keeping changes associated with the company's transition to a new inventory management system and isolated increases versus plan in selling distribution center expenses. Link

 
 
  Jeff Bailey   11/12/02,  4:11:10 PM
Jeff: How about some insight as to why the big inter day correction from over 8500 to below 8400 with the train not going over 1? Something is different.

Hmmmm.... I'm thinking MO -13.8% Link , and SBC -4.54% Link had alot to do with the reversal. Both stocks really picked up some steam to the downside in last hour of trading. Also.... one of the "generals" saw GE -1.48% Link trade against the grain all day and didn't help the Dow for a 4th straight session.

 
 
  Jeff Bailey   11/12/02,  4:04:16 PM
St. Jude Medical (STJ) $33.95 -0.14% ... Jeff, I am short STJ and was wondering if you would give me your imput on this stock. Thanks for all of your great advice.

Stock is classified as "healthcare" by Dorsey/Wright and sector is currently "bull alert" at 34%. However, STJ is NOT one of the stocks in healthcare currently showing a buy signal on its point and figure chart and trades BELOW trend with a BEARISH vertical count of $24. First sign of trouble for bear is trade at $39, so risk/reward from current levels is risking $5 to potentiall make $10 to vertical count. Not great, but not too bad risk/reward. Link

Relative strength chart of STJ versus the $RXH.X Link is rather strong and would be read... "buy signal and column of X" so need to be firm with stop at $39. My thinking here is that like many "healthcare" stocks, STJ may be under some pressure with all the stuff going on with THC and SCOR in recent sessions.

 
 
  Jim Brown   11/12/02,  4:00:56 PM
Swing Trade Signals
I think they are going to keep them positive but only by a slim margin. We are right back where we close yesterday but with far less enthusiasm. The Nasdaq was the hero with the Cisco comments providing the lift. Only 5 of the Naz 100 are negative

 
 
  Jeff Bailey   11/12/02,  3:56:17 PM
Mercury Interactive (MERQ) $26.29 +4.74% ... Jeff: I was playing MERQ as a short at 27.36 but today it appears to be rebounding up 1.92. Any technicals to support to suport a bounce up?

The support I see is from the bar chart and a still rising shorter-term 21-day SMA of $25.64. However.... if you "understand" the bullish %, yesterday we discussed how many technology stocks build long columns of X in the recent move up and BEARS needed to expect some type of decline like we saw the last couple of days, then a little rally. What this type of action does is actually move the POTENTIAL sell signal up higher. See MERQ's p/f chart? Link Currently, MERQ would not give a sell signal until it trades $15.00. Now... what would be most likely to take place is a rally back to $28, creating a 3-box reversal higher, then on weakness the stock would give a sell signal at $24, taking one stock away from Dorsey/Wright's Software Bullish % (BPSOFT), which is currently "bull confirmed" at 34%. In essence, 34% of stocks that could be classified as "software" currently show a buy signal associated with their charts.

Bear in MERQ needs to be careful and most likely only trading 1/4 position here as relative strength chart versus the GSO.X Link has been holding up.

 
 
  Linda Piazza   11/12/02,  3:51:36 PM
VOD: Vodafone pulled back with the rest of the market, but so far is staying above its 50-week dma at 17.53 and above the peak of the double-bottom formation at 16.90. This is still an aggressive and risky call play because of the weakness of the telecommunications industry and because of the way Vodafone tends to gap, but I'm glad to see this support hold on the pullback. I changed brokers this week and despite my permissions stating that I can, the online site isn't letting me trade options. I can't enter the trade myself until the snafu is resolved, but I like the way the P&F charts and double-bottom formation confirm each other's targets on the stock and the reasonable stop loss that can be set. Even if I could trade options today, though, I might wait to see how VOD opens tomorrow because of its tendency to gap up and down.

 
 
  Steven Price   11/12/02,  3:45:51 PM
Steve OI has an IBM put play recommended. Suggested entries were rollovers at 79.50-80.00 Comments in MM would be appreciated. Rich

IBM $79.10 +1.81 I like the entry in IBM under $80, particularly with today's failure just under $80 (high of 79.90). Note of caution is IBM's analyst meeting tomorrow afternoon. Negative comments could send us much lower, and positive comments could see a gap to $82 on Thursday. This trade may not be for the conservative trader, but we like the risk/reward, with today's broad market failed rally and lots of downside room in Big Blue. Stop is $80.

 
 
  Jeff Bailey   11/12/02,  3:38:31 PM
The 3:15 PM Intraday Update has been posted. Link

 
 
  Jim Brown   11/12/02,  3:33:04 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the broad market SHORT at 15:12:32 when the OEX traded at 452. SPX 885.62, DIA 84.39, SPY 88.93, DJX 84.13, NDX 1007.99, Compx 1354.84, QQQ 25.07, SP02Z 884.50, ES02Z 884.50, NQ02Z 1009.00, YM02Z 8430.0. The initial stop loss for this signal is 456.50.

Sorry for the late posting - I was in the pick meeting for OIN plays for tonight. We can't find any calls. Does that tell you anything? Any suggestions?

 
 
  Linda Piazza   11/12/02,  3:29:41 PM
Many consumer staple stocks have caught MO's illness and are slumping this afternoon. KO, PG, CL, and KMB are all down from their highs. KO had reached a high of 45.41 today, moving out of its descending channel, but is currently trading at 44.34, its lows of the day. This negates the potentially bullish morning star candle formation that had looked possible this morning.

 
 
  John Seckinger   11/12/02,  3:22:57 PM
Well, the bond market closes and equities decide to reverse. MO and GM are pressuring the Dow, while MMM gives up some of its solid gains and might just have been the catalyst to take bulls to the sidelines. I have the Dow back on the bottom of a daily regression channel, as well as just above its 22 DMA at 8381. The 50 DMA is below at 8334. Now bears need the Nasdaq to come back to the 1320 level. The comp is currently higher by 2.37% at 1350.

 
 
  Jonathan Levinson   11/12/02,  3:19:04 PM
The COMPX has come down to 1354 on this move, but the drop from its highs has done nothing to relieve the extreme TRINQ at .17, which continues to indicate an extremely overbought COMPX. The TICK.NQ is at -221, while the QQV has fallen a little further, -1.12 on the day. In other words, despite moderately broadbased selling off the high of the day, bullishness remains rampant on the COMPX.

 
 
  John Seckinger   11/12/02,  2:44:33 PM
An interesting test. The Dow did test last week's low of 8498 (intra-day high of 8504), and it should be important to see if the blue chips close above this area. If not, the "Bearish Shooting Star" formation seen last week most likely will remain strong. With the bond market at 112'28 and support not seen until 112, there is some room for assets to move out of bonds and into stocks. In my futures wrap, I had a feeling the Nasdaq would outperform if we saw a bounce in the equity markets, but to trade at 1366 was more than expected. Yes, the compx will be the wildcard heading into Wednesday.

 
 
  Jeff Bailey   11/12/02,  2:38:33 PM
30-year Treasury YIELD ($TYX.X) has reversed lower trade and now trading marginal gain. May give a boost to equities into their close. Bond market closes in approx. 25-minutes.

10-year yield ($TNX.X) trades marginally lower, but near unchanged levels at 3.848%.

 
 
  Jonathan Levinson   11/12/02,  2:18:33 PM
The TRINQ is still indicating a very overbought COMPX, current reading of .17, with the QQV down .85 to 46.84. Yields are above their lows, with FVX now down 3.3 basis points. Precious metals have recovered several points off their lows, HUI at 120.55, up .21, and XAU down .26 at 67.42. The bullishness in gold and bonds doesn't look particularly bullish for equities to me, particularly given that there's a stray 5 billion dollars of fed money floating around today. Nevertheless, the COMPX is up 40 points, which is a very respectable rally day, and it's currently trading in the resistance zone identified this morning for you. Obviously, this is a critical point to observe.

 
 
  Kent Barton   11/12/02,  2:16:39 PM
Phillip Morris (MO) $38.20 -4.76: Whoa! Investors are bailing out of MO in droves. The stock is in a freefall and trading near the lows of the day. If support at $38.00 gives way, shares could be headed for a retest of the October lows near $36.00.

 
 
  Jim Brown   11/12/02,  2:00:30 PM
Swing Trade Signals
Amazing, a support point that actually worked. The OEX bounced off 453.50 right on cue (SP futures 887) and buyers stepped in. Now we will see if the buyers have enough volume to drive the market back to resistance at 8500 (OEX 456)

If we get a failure here we could see that support fail on the next attempt. The keyword here is of course "could."

 
 
  Linda Piazza   11/12/02,  1:50:54 PM
Reader Question: Always enjoy your insightful analysis. I have a question regarding the bearish divergence. To my understanding, a bearish divergence in MACD is characterized by a higher high in price accompanied by a lower high in MACD. But how do you interpret a lower high in price and higher high in MACD? The Oex seemed have reached a lower high in early November relative to its August high, but the MACD shows just the opposite (a higher high).

Response: It's my understanding that any divergence at market tops is negative. Martin Pring notes that if the price movement doesn't make a higher high when the oscillator does, the price is tired of moving in that direction. Even though there was bigger momentum behind the push upward, prices still couldn't reach a higher level. Pring further notes that negative divergence occurs at market tops, while positive divergence occurs at market bottoms.

 
 
  Jeff Bailey   11/12/02,  1:45:04 PM
The 1:00 PM Intraday Update has been posted. Link

 
 
  John Seckinger   11/12/02,  1:34:58 PM
It is interesting how the bond market is still fractionally higher, despite the Dow testing 8500. Could this mean bond traders are looking for weaker equities down the road? Possibly. The yield curve is flat, so doesn't give a good reading at this time on equity sentiment. Oil is higher but in a consolidation period, while the UTY index has not tested the 229 level yet (at 232 and down 1.84%). The XAU index rejecting levels below the 22 and 50 DMA's is encouraging for bullish traders of Gold And Silver. It will be important to see where the XAU index settles.

 
 
  Kent Barton   11/12/02,  1:31:44 PM
Keeping an eye on MO as the stock approaches support at $40.00. Shares are currently trading lower by 5.7%, just above the relative low of $40.39. The company's comments regarding weak industry-wide volume really spooked the bulls. RJR and UST are also trading lower on the news.

 
 
  Jim Brown   11/12/02,  1:30:56 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Now that the bounce appears to be over we need to reestablish our short position if support fails. I see that support at 452.50-453.50. Let's enter below it at 452.

Go SHORT the broader market with an OEX trade at 452. The initial stop loss will be 456.50 and just over the stop we lost by 21 cents earlier this afternoon.

 
 
  Steven Price   11/12/02,  1:24:22 PM
Hi, is it advisable to go long on NVDA. I missed the entry when you suggested long stock with put. Thanks!!! KP

NVidia (NVDA) $11.60 (+1.12) We originally recommended entry to this stock play around $8.50-$9.00, using the 7.50 put. The stock has since traded up to $16.20 and pulled back to the 50-dma of $10.13, where it bounced. I like the bounce, but new stock entries may want to cover the stock a little higher, with the possible purchase the March 10 put for $1.80.

 
 
  Jonathan Levinson   11/12/02,  1:24:04 PM
A sudden spike in gold, as price takes aim at 325/oz. FVX down 4.5 bps.

 
 
  Kent Barton   11/12/02,  1:23:08 PM
Phillip Morris (MO), $41.00 -1.93: Spiking lower on reports that the company cannot confirm its previous full-year growth projection of 8-10%.

 
 
  Jonathan Levinson   11/12/02,  1:12:51 PM
A bit of follow up on the options expiration discussion from earlier, given that this wedge-driven price action is boring us all to sleep. Options are derivatives, being derived from the underlying securities. As derivatives, options should trade "secondarily" to their stocks. However, during op ex week, we see the tail often wag the dog, as market makers "pull out the stops" to kill the greatest number of contracts possible. During this week, strange or irregular price action is possible, and most experienced traders are extra vigilant with their trades. It could be argued that options don't behave as derivatives when they actually drive the price of the underlying security, but that's more of a philosophical discussion.

 
 
  Jim Brown   11/12/02,  1:08:16 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were stopped out of the SHORT signal at 13:01:06 when the OEX traded 456. SPX 892.03, DIA 85.32, SPY 89.70, DJX 85.00, NDX 1013.09, Compx 1358.62, QQQ 25.19, SP02Z 892.00, ES02Z 892.50, NQ02Z 1014.50, YM02Z 8485.

It is very ironic that we got that last spike just as the very negative business conditions survey was announced. The Dow managed to spike +4 points over 8500 and the Nasdaq came very close to 1360.

 
 
  Jeff Bailey   11/12/02,  12:54:13 PM
Southern Company (SO) $26.00 -5.45% .... stock down on rather abnormal volume of 7.8 million shares and partially responsible for Utility Index (UTY.X) 232.50 -1.63% weakness. Traders may want to monitor SO for a break at $22, but have seen recent investigations into some utilities regarding potential rate gouging and investigations by U.S. Attorney General. Link

 
 
  John Seckinger   11/12/02,  12:33:08 PM
It appears as though the daily pivot in the Dow is near 8460, and the blue chips are trying to breakout higher. However, as we saw yesterday, this is the time where longs can get caught. The 200 PMA (five-minute chart) is at 8481 and the market may need to test just above there. If the Dow falls back under 8460, there is a chance we will see some decent selling. Note: Might need move under 8440 to get new shorts involved.

 
 
  Jonathan Levinson   11/12/02,  12:32:41 PM
The SPX seems to be printing a bearish ascending wedge on the 10 minute candles, projecting to approximately 889 or 890.

 
 
  Jim Brown   11/12/02,  12:23:34 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We have been stuck just under the current stop loss of OEX 455 for an hour. There is significant resistance here and I am concerned we could get a buy program spike and take us out by a few ticks. Let's raise the stop loss by one point to OEX 456. It may help, it may not but one point at this level is not relative to profits.

 
 
  Linda Piazza   11/12/02,  12:23:02 PM
VODAFONE: At 17.87, this British telecommunications company is up 2.41 on its earnings and outlook, on about 2.5 times daily average volume so far this morning. Perhaps more important to technicians is that in the process of giving a P&F double-top breakout buy signal today (with a target so far of 22), Vodafone also completed a double-bottom formation, moving above the peak between the two recent lows. This double-bottom formation gives a target of 21.55 (16.90 peak between the lows - 12.90 lows = 4.65. Add the 4.65 to the 16.90 peak = 21.55), confirming the P&F target of 22. On the weekly chart, the 10-week average has just made a bullish cross of the 30-week average, reputedly the most reliable MA crossover signal. VOD has also just moved above the 50-week MA at 17.53. Together these appear promising for a call play for aggressive players, with a strict stop loss set at a comfort level below the 16.90 completion of the double bottom formation. Anyone who has watched VOD for any length of time knows that it tends to gap, both up and down, so this would be an aggressive and risky play. Much of its progress today is probably driven by shortcovering and it might be best to see if the new levels are going to stick.

 
 
  Steven Price   11/12/02,  11:53:41 AM
Noticing that both SYK and BLUD are continuing to fall today in contrast to the market indices. Cannot find any specific news regarding this movement. Are you aware of anything which may be driving these securities south the last couple of days. duggo

Immucor (BLUD): $23.53 (-0.42) The pullback from a recent all time high looks like profit taking to me. The series of higher highs and higher lows looks safe.

Stryker (SYK): $64.60 (-0.10) SYK pulled back into a PnF three box reversal, but is also a stock that recently reached all time highs and looks like it has experienced some profit taking. For this call play, in our write-up we were looking for a pullback with support over $65 for entry and although it appeared we were getting that on Friday, it did not hold on Monday. The series of higher highs and higher lows still seems in tact here, but we will re-evalutate this play after today's action, since it touched our closing stop of $64.00 in intraday action.

 
 
  Jeff Bailey   11/12/02,  11:50:32 AM
The 11:00 AM Intraday Update has been posted. Link

 
 
  John Seckinger   11/12/02,  11:16:47 AM
Getting a lot of insightful emails from subscribers, which is great. Dow is above the 8460 level, but seems to be getting "heavy". Could be traders eyeing the 200 PMA at 8481 on five minute chart and deciding there is good risk here going long. If this market turns around, what could be the catalyst? How about a Utility Index (UTY) losing over 2% at 231 and nearing its 50% retracement at 229. Also, the dollar is consolidating near the 105 level and might not be done with its recent long liquidation that began at 108 weeks ago. A fall in the dollar should help gold and hurt stocks.

 
 
  Steven Price   11/12/02,  11:05:44 AM
Steve, Good call on the H&S top in the Dow looks to be setting up nicely. Now take a look at the COMPX weekly chart, How about a H&S bottom? Looks like a 1400 neckline and a good support at 1200. Thanks for your time James

Interesting thought, we'll have to keep an eye on that.

 
 
  Steven Price   11/12/02,  11:01:24 AM
Semiconductor Index (SOX): After the recent 14% drop from 329 down to 283, some bounce can be expected. I'm watching the 300 level for signs of resistance. So far the high of 299 is a pretty good indication, and we could be seeing an short entry point in the sector if the rally fails. Jim called the bounce correctly yesterday for SMH put holders, but the downside may have some more room in it. Wild card will be AMAT's earnings tomorrow.

 
 
  Jim Brown   11/12/02,  10:58:27 AM
Swing Trade Signals
If the rally is going to fail this should be the time. The Dow is just below 8500, Nasdaq just hit 1350 and the A/D line has gone flat. S&P futures appear to be rolling over and the TICKS are starting to weaken. Nothing guarantees any failure but the momentum is definitely slowing.

 
 
  Jonathan Levinson   11/12/02,  10:46:15 AM
In looking at the DJX option chain I see the $86 strike has the most open interest for both calls and puts. With this observation, would I be correct in thinking the market makers would like to see the underlying trend toward this level by Friday? Thanks!

You've got it, Rich. This doesn't mean that it's a done deal, but now you know that 8600 will have a bit of "magnetic pull" on the market. I want to stress that this is not a hard and fast rule- just something to keep your eye on.

 
 
  Steven Price   11/12/02,  10:45:27 AM
Retail Holders (RTH): $72.15 +1.00 OI put play RTH has filled yesterday's gap and I'm looking at a failure and move back under $72 as a short entry point. As I noted earlier, WMT and FD release earnings tomorrow, so this play could be pretty volatile. Conservative traders not yet in may want to wait on the sidelines until after those announcements.

 
 
  Jonathan Levinson   11/12/02,  10:42:36 AM
The Fed has added 5B via 2 day repo. This is fresh money with no expiries today. 6.25B is expiring tomorrow, however, and today's 5B repo will expire the day after. Expect a modest bid in either equities or bonds- looks like we're getting both so far.

 
 
  Jonathan Levinson   11/12/02,  10:40:09 AM
The COMPX and SPX are printing new highs. The next major resistance looks to me to be 1357 COMPX and 892 SPX. The TRINQ remains overbought at .17, QQV now negative at 47.11, -.58 on the day, and TICK.NQ at a modest +60. FVX has recovered a bit off its lows, down 3.3 basis points today. Looks like a choppy day after 3 days of equity declines.

 
 
  Linda Piazza   11/12/02,  10:32:55 AM
Like KMB, KO bounced this morning, moving above its 5-dma (currently 44.86) for the first time since falling below it the middle of last week. More concerning for those in bearish plays in this consumer staple stock is the potential that today's candle will form the third candle in a morning star formation. Yesterday's candle was a doji and this morning's candle gapped up above the level of the doji. So far, KO has been knocked down every time it's moved above 45, indicating a host of sellers waiting there to exit the stock, but bearish traders would feel more comfortable with a decisive move lower that would negate the possibility of a morning star formation.

 
 
  John Seckinger   11/12/02,  10:29:05 AM
The Nasdaq is outperforming the Dow currently, as the tech-laden composite is higher by 1.66% while the blue chips are only up 0.75%. Dollar is slightly higher, and the XAU Index has tested its 200 and 50 DMA's already today at 67.11 and 66.63, respectively. The 22 DMA remains lower at 66.18. Dow should find good resistance at 8460.

 
 
  Jonathan Levinson   11/12/02,  10:20:19 AM
Good morning. Could you elaborate a little on the Round Numbers options strike phenomenon you mentioned on today MM. Posted 10:12:00 am. Just what it is and how often it occurs.

Market makers, who are the predominant writers of contracts, want to see the price of the underlying securities close on Friday at levels which will make the greatest numbers of puts and calls expire worthless. So, in planning your trades and attempting to predict direction, it's helpful to look at an option chain and examine the open interest at each strike for puts and calls. Often, price will tend toward these levels "like magic". Again, it's not a rule, but something worth keeping in the back of your mind.

 
 
  Steven Price   11/12/02,  10:16:46 AM
I think you or Jeff had mentioned short on KMB under $49.70. Just went under. Russ

Kimberly Clark (KMB) : $50.23 (+0.23) I have been looking for a breakdown in KMB below $50. It did take out the recent low of $49.70 today, trading as low as $49.54, but bounced quickly back over $50. If we can get some intraday resistance under $50, I like it short with a stop at $53.

 
 
  Jonathan Levinson   11/12/02,  10:12:00 AM
Recall that this is option expiration week for November contracts- price will try to gravitate toward round numbers coincident with option strikes. I don't trade on that basis alone- far from it- but it's a good thing to keep in the back of your mind while doing your homework.

 
 
  Jeff Bailey   11/12/02,  10:01:39 AM
Research in Motion (RIMM) $14.72 -5.8% ... to cut 10% of workforce. Link

 
 
  Jim Brown   11/12/02,  9:58:52 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the SHORT signal at 9:50:26 when the OEX traded at 450. SPX 880.59, DIA 84.09, SPY 88.51, DJX 83.87, NDX 983.16, Compx 1329.97, QQQ 24.45, SP02z 880.50, ES02z 880.25, NQ02z 985.00, YM02z 8403.0. The initial stop loss will be OEX 455.

I waited to pick the entry target until the A/D line rolled over because it was still climbing while the markets were failing at OEX 452. We can wait until all the stars line up and still have it bounce just after we enter but at least we should try to get as many on our side as possible. I also wanted to get back below the down trend line beginning from the Nov-6th high at 472.47. That down trend line is at 451 today.

 
 
  Steven Price   11/12/02,  9:54:32 AM
Hi Steve, I wanted your opinion on shorting SEBL. It is a weak stock in terms of its product line (I have been in the software industry for 15 years), and Microsoft is building a competing product.

Siebel Systems (SEBL): $7.39 +0.05 Since you have a far better background in software than I do, I'll leave the product evaluation to you. From a technical standpoint, the stock bounced yesterday from its 50-dma of $7.25 and if I were to short the stock, a breakdown in that level would be my first signal. There is support at $7.50 (requiring a trade of $7.00 to break)and around $6 on the PnF chart, as well as the daily. The stock is on a PnF reversal down, but I'm not sure that I would pick this one to short because of support close by and the fact that the new sell signal doesn't come until $5.50. I don't usually like shorting stocks this cheap, simply because there isn't that much room to fall. Cheap stocks are generally cheap for a reason, so I probably miss out on short opportunities this way, but I'd just rather find a higher dollar stock with more room to the downside. Certainly premiums are much cheaper on cheap stocks and a trader can purchase more calls/puts, so small moves can still be profitable, but I usually look for something that can build more momentum in one direction.

 
 
  Jonathan Levinson   11/12/02,  9:46:31 AM
The indices have marched back up to resistance, SPX 885 and COMPX 1335. The TRINQ has inched up a touch to .19, still deeply overbought, while the QQV is flat to positive, up .19. Yields are down across the curve as the market absorbs the thought of an ECB rate cut. Metals are down in US Dollars as measured by the HUI and XAU, as the news that Europe might devalue its currency boosts the US Dollar.

 
 
  Jim Brown   11/12/02,  9:46:00 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go SHORT the broader market with 1/4 position at an OEX trade below 450. This would represent a breakdown of the current bounce.

 
 
  Jeff Bailey   11/12/02,  9:32:15 AM
Flextronics (FLEX) $8.00 ... inching higher at $8.05 in pre-market despite CIBC downgrading to "Sector Perform" from "Sector Outperform" due to reduced estimates and recent run-up in valuation. Firm says March 2003 estimates are realistic for the EMS group, but June expectations are too high and consequently firm is cutting estimates for the sector to reflect only 5% quarter-to-quarter growth in revenue. Link

 
 
  Jonathan Levinson   11/12/02,  9:31:54 AM
We have a 9 point gap up open on the COMPX to 1328, TRINQ .15, TICK.NQ -332.

 
 
  John Seckinger   11/12/02,  9:30:30 AM
The bond market continues to power higher, and buying in the fixed income arena could bring more shorts to the equity market as assets allocate from one capital market to the next. The Dec 30-year bond is higher by '19 at 113'18 and has an intra-day high of 113'24. Resistance above 113'24 is felt at 113'29. Support is at 113 and much lower at 112. Note: Bond prices and stocks should move inversely.

 
 
  Jim Brown   11/12/02,  9:29:29 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go SHORT the broader market with an OEX trade at 446. This is just below yesterday's closing low and could represent a continuation of the trend. If we do get a higher entry then consider this a level to add to your short position.

 
 
  Jeff Bailey   11/12/02,  9:28:41 AM
Dell Computer (DELL) $29.11 ... stock gaining 17 cents to $29.28 in pre-market after JP Morgan said it believes that there is a possibility that DELL may exceed firm's Q3 revenue and EPS estimates of $9.098 bln/$0.21 due to continued market share gains and strength in industry standard servers. In addition, firm says there is a possibility that the company may guide above consensus for Q4. Link

 
 
  Steven Price   11/12/02,  9:27:41 AM
J.C. Penney beat earnings estimates this morning, however I would expect Wal-Mart (WMT) and Federated (FD) earnings releases tomorrow to have a more pronounced effect on the sector. Those readers not wanting to take chances on the RTH ($71.15) put play with those companies' earnings hitting the board Wednesday can take profits from an entry at $74.60. However, we continue to hold the play short, as it has had a slow, but continuous breakdown with each news release in the sector.

 
 
  Jim Brown   11/12/02,  9:26:57 AM
Swing Trade Signals
The futures are up slightly on better than expected retail news. However, they are not up much. Just a slight blip and well off their highs. I exited the SHORT signal at the close yesterday due to the dead stop of the Dow at 8350 and the high TRIN at 2.75 and Put/Call ratio at 1.05. This was indicating a possible oversold bounce at the open today.

It looks like we could get the bounce but on the surface it looks much weaker than expected despite good retail news. OEX 448 to 452 appears to be the maximum bounce we can expect at the open. Since this could change once stocks start trading I will look to enter a new SHORT signal on a breakdown below yesterday's lows of 446.77 and another on the failure of any bounce. With Nov options expiring this week you might consider using December options or even longer for this signal to avoid premium decay.

 
 
  Jeff Bailey   11/12/02,  9:21:35 AM
The 9:00 AM Intraday Update has been posted. Link

 
 
  Linda Piazza   11/12/02,  8:57:30 AM
Of interest to those who monitor the XAU, Newmont Mining (NEM) reported third quarter earnings. Those earnings missed expectations and were lower than comparable earnings from a year ago. NEM cited increased production costs and derivative losses, and guided full-year earnings to the low end of previous estimates. The company also announced that it has nearly completed its re-audit of 1999-2001 financial statements. It will offer restatements, correcting the accounting for prepaid forward sales and certain depreciation calculations. NEM is included in the XAU.

 
 
  Jonathan Levinson   11/12/02,  7:43:29 AM
Bloomberg reports that the European Central Bank's Chief Economist Otmar Issing is considering cutting interest rates in the near future, a 180 degree turn from his decision not to do so last week. Nothing like sure and decisive action, eh Otmar? In any event, this has the US Dollar Index coming off its lows, currently trading just below 104.70. Gold moved up slightly on the news. SPX and NDX futures are off their lows, NDX +3 and SPX +4.30.

 
 
  Linda Piazza   11/12/02,  6:39:37 AM
Today, Iraq's parliament decided by a unanimous vote to recommend rejection of the U.N. resolution to allow arms inspections. They did this despite a call by Saddam Hussein's son to accept the resolution, with the proviso that inspection teams include Arab members. Hussein's son was careful to characterize this suggested change as a "limit on certain points" rather than a "condition." After the vote, the parliament commented that Saddam Hussein would make the final decision. Many question the parliament's independence from Hussein, and some have concluded that the parliamentary vote might allow Hussein to reject the resolution, saying that he's acting on the people's will.

In other news, Vodafone's shares rose in European trading as it announced earnings that cut its loss in half and increased revenues by 67%. Vodafone, the world largest mobile phone company, has been on an acquisition trail at a time when many of its competitors have been cutting spending. It's now considering spending its cash to buy back shares or increase dividends.

 
 
  Jim Brown   11/11/02,  1:11:50 AM
The Swing Trade Game Plan has been posted: Link

 
 
  Jim Brown   11/11/02,  1:11:15 AM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

 
 

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