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  Jim Brown   12/27/02,  4:50:38 PM
Are you going to lose the Market Monitor?

If you have not signed up for the 2003 renewal special you are in danger of losing access to the market monitor beginning on Jan-6th. We think the information on the monitor is critical to any active trader. Beginning on Jan-6th we are going to be charging 75 cents a day extra on an annual basis for access to the monitor. If you have not already signed up for the 2003 renewal special you need to do so quickly before it expires.

Are the intraday thoughts of Jeff, Steve, Jonathan, Linda, Mike, Mark Phillips, Mark Wnetrzak, Kent, Ray, John and myself worth 75 cents a day? That is for you to decide.

Signing up for the annual rate for the newsletter and the monitor will also get you (2) option expiration mouse pads, (7) books on trading, (2) videos of Jeff, Buzz and myself. These are worth the extra 75 cents alone and they are free to Market Monitor subscribers.

Lock in the cheapest rate possible with a ton of freebies now! Click here: Link

 
 
  Jeff Bailey   12/27/02,  4:31:59 PM
Coal Index ($DJUSCL) Hi Jeff, here might be another link to that Coal Index you are looking for ... $DJUSCL

Fantastic! I looked around the internet and couldn't find one. This is just great!..... Link looks like a tight little pennant is forming on the bar chart. Nice little "kiss" and test at the 200-day day SMA too. Link Looks like a break above $65.10 or $67 is needed on the bar chart for another leg higher.

How funny. Now I "know" why this index is finding some resistance right now. Yes, there's some overhead supply dating back to February-July (red 2 - red 7), but that bearish resistance trend is in play right now. Looks like a break higher at $67 is needed to get bullish, right now. Link

Hey.... I'm getting several e-mails about this index now. Good work from subscribers that "know their indexes."

Another subscriber found one at bigcharts.com that also lists the components. Link

 
 
  Jim Brown   12/27/02,  4:24:24 PM
All bets are off? - I was reviewing the indicators for the weekend wrap and just noticed the TRIN closed at 3.60 and the Put/Call ratio at .94. These are very strong indications when taken together that the oversold conditions are too extreme to continue without a bounce. That bounce could be a simple +50 point opening spike like we got today or something more significant. These indicators would make me more cautious on Monday morning. Both can correct instantly but this closing extreme on the TRIN is unusual.

 
 
  Jim Brown   12/27/02,  4:08:20 PM
Looks like the big money won by a nose with the Dow closing at 8303. I am not sure you can call it a win with a -128 point drop but they were able to hold the line. Next week could be very volatile with tax selling, portfolio rebalancing and the beginning of a flood of earnings warnings.

 
 
  Linda Piazza   12/27/02,  4:01:38 PM
I've been posting retracement levels all day. Normal retracements are between 1/3 and 2/3 of a prior movement, with 1/3 to 1/2 being most normal. That correlates well with 38.2% and 50% Fibonacci retracement levels. But are we just in a retracement of a rally? Will the rally resume? Only time will tell, but this weekly OEX chart looks fairly bearish to me. Link There's bearish divergence on the RSI, the MACD is turning down from below the zero level, and the bearish weekly candle sits underneath the 10 and 30-week moving averages. The significance of the double bottoms may be called into question if markets continue to move down past normal retracement levels. Caution: This is a weekly chart and doesn't preclude a bounce from nearby support levels, of course, but it's useful to dial out now and then to get a longer-term look at the markets.

 
 
  Steven Price   12/27/02,  3:56:07 PM
Swing Trade Signals
A close below 8300 in the Dow would certainly look bearish, but the percentage play still looks like there is solid support right around this level. While this is a swim against the tide, it is still a dip in the shallow water, with decent upside. There are several Dow stocks that are bouncing above recent lows and I'll leave the position open over the weekend. Traders unwilling to assume that risk can feel free to close out.

Current levels Dow 8308/SPX 875/OEX 443/COMP 1349.

 
 
  Jim Brown   12/27/02,  3:54:17 PM
Looks like 8300 is still in trouble. A close under that level could trigger some new technical selling on Monday. This is not going to be taken well by retail traders home for the holidays. I suspect the big money will try to hold just above 8300 to preserve the last little bit of reality they can muster before the next wave begins next week. The battle is going to be fierce as we near the close.

 
 
  Jim Brown   12/27/02,  3:50:25 PM
EWBC - I tripped over this one today while looking over potential plays for the weekend. It has lower volume than we would choose for the newsletter but the trend is too good to pass up. It is threatening to break out of substantial resistance today and out of a bullish wedge at 35.75. It is actually positive today which indicates some better than average relative strength.

 
 
  Kent Barton   12/27/02,  3:49:46 PM
PremierInvestor short play Tech Data (TECD, $27.04 -0.26) has drifted back to the lower end of the $26.75-$28.50 trading range. Shares actually set a new relative low today before they managed a small intraday rebound. Glancing at a 5-minute chart, it looks like someone was really leaning on the stock at $27.00. The past twenty minutes saw TECD move above this level, but those gains didn't hold. This bodes well for a retest of today's low ($26.67). A move below this level could send the stock towards our exit-target at $25.11.

 
 
  Jonathan Levinson   12/27/02,  3:41:25 PM
The US Dollar is now printing 102.40.

 
 
  Steven Price   12/27/02,  3:40:19 PM
American Int'l (AIG) $56.88 (-1.42) OI put play AIG finally got the breakdown on the last rollover from $60. Traders who entered this play when we listed it at $61.15 may want to tighten stops to harvest some gains, or possibly take some chips off the table in case of a bounce. There is not much support before $53, but each minor breakdown has been followed by a bounce, so traders should manage positions according to their individual risk tolerance.

 
 
  Jeff Bailey   12/27/02,  3:38:53 PM
The 3:15 PM Intraday Update has been posted. Link

 
 
  John Seckinger   12/27/02,  3:38:23 PM
One concern I do have with the Dow is the close under the mid-part of the Bollinger Bands on a Weekly basis. This level comes in at 8422. The last time the Dow closed under the mid-point of this band was the week of May 19th when the average came in at 10,133. It then didn't test the mid-point again until the week of October 27th. It should also mean that shorts will look to cover if 8423 is taken out. Additionally, the Dow will also close under the 38.2% retracement derived from October's low to December's high.

 
 
  Jonathan Levinson   12/27/02,  3:35:39 PM
The put to call ratio continues to march higher, currently .94. The TRINQ remains in lukewarm sell territory, 1.63. QQV still up almost 1 point. HUI and XAU are holding their losses. It's a strange, thinly traded market today. I have no idea if the COMPX will try to extend this pause into a bounce or not.

 
 
  Linda Piazza   12/27/02,  3:33:00 PM
It's interesting that new highs remain above new lows today on both the NYSE-traded stocks and Nasdaq-traded stocks. New highs number 32 versus 22 new lows on NYSE-traded stocks, while new highs number 43 versus 40 new lows on Nasdaq-traded ones. Despite that bullish news, adv/dec figures are .46 and .50 for the NYSE and Nasdaq issues, respectively. Down volume is 7.6 times up volume on the Dow, and 3.85 times up volume on the Nasdaq.

 
 
  Linda Piazza   12/27/02,  3:26:09 PM
When I posted retracement levels this morning, I omitted levels for the NDX, also important to monitor. Here they are: for the movement from the 8 October low of 795.25 (the NDX reached its low a couple of days ahead of the other indices) to the 2 December high of 1155.68, a difference of 360.43 points: 38.2% retracement=1018, 50% retracement=975.47. Jonathan mentioned earlier that the COMPX 38.2% retracement at 1363.69 is likely to provide resistance now. In the same vein, watch for resistance on the NDX as it tries to move above that 1018 level.

 
 
  Steven Price   12/27/02,  3:25:52 PM
Swing Trade Signals
We are still hanging around Dow 8300, with a brief trip below. There is an awful lot of noise between 8250 and 8300 going all the way back to October and so far it has held. As I mentioned earlier, conservative traders can punt with the breakdown under 8300, but I'm going to keep my stop at 8240 and let that noise act as support. My intial target will be the 50-dma of 8546, to which the last several bounces have taken us, but my eventual target is resistance in the 8625-8650 area.

Current levels: Dow 8317/SPX 877/OEX 444.07/COMP 1351

 
 
  Jonathan Levinson   12/27/02,  3:17:11 PM
The latest put to call ratio came in at .90- definitely no longer overly optimistic, which is less bearish than we've seen all day.

 
 
  John Seckinger   12/27/02,  3:16:01 PM
The 30-year went vertical during the last few minutes of trading and should cap any attempted rallies in equities during the last hour. To buy bonds above obvious resistance of 112'16 makes me think that there was a lot of risk owning stocks at levels seen about 30 minutes ago (8320). With the 30-year closing above 112'16, I have to look upwards to 114 before seeing any solid areas of resistance (read: an area to sell bonds and buy stocks).

 
 
  Linda Piazza   12/27/02,  3:03:33 PM
News services are reporting that the Pentagon confirmed that battle groups were being prepared, but then that's not really news, is it?

 
 
  Mark Wnetrzak   12/27/02,  3:03:23 PM
Thanks John, it is simple but works. I had several emails from readers asking for the calculator or how it is used.

 
 
  Jeff Bailey   12/27/02,  3:01:22 PM
Coal sector Have gotten several questions regarding a "coal sector" or index symbol. I don't know of any and tried searching the internet last night.

However.... I went to my q-chart and looked up some stocks in the "coal" group (under energy). Symbols Q-charts gave me, sorted by today's volume... HDWR, MEE, BTU, CNX, ACI, NRP, ARLP, WLB, FDG. Volume really drops off after NRP. Reason I sorted by volume, is I'd want to only really try and trade those with some volume, that institutions might look to be trading, or getting some exposure to.

 
 
  Steven Price   12/27/02,  2:59:23 PM
Anyone think Tyler Matheson got that tie from one of his kids for Christmas? I hope so!

 
 
  John Seckinger   12/27/02,  2:52:08 PM
Mark, that is a great calculator. Very cool.

 
 
  Mark Phillips   12/27/02,  2:48:34 PM
ROOM $53.30 (-2.64) After another big loss today, ROOM is closing in on the 200-dma at $52.98. While there is definitely the possibility of further downside, conservative traders that entered up near the $60 level may want to harvest partial gains toward the end of the day in anticipation of a possible rebound next week. There isn't anything in the price action to suggest such a bounce -- this is just prudent position management. At a minimum, I would favor tightening stops to the $55 level, or possibly even 454, depending on your tolerance for giving back today's gains.

 
 
  Mark Wnetrzak   12/27/02,  2:48:14 PM
Covered-Calls Calculator
A simple Excel calculator is available for download on the OIN website. The link is at the top of the page that comes up if you hit the link on the left-side of the home page for covered-calls under the title "Strategies." Tabs near the bottom of the calculator will open pages for Naked Puts and simple Credit/Debit Spreads too. Notes at the bottom offer an explanation of the columns. The link to download the covered-calls calculator is at the top of the page here:

Link

 
 
  Jonathan Levinson   12/27/02,  2:48:07 PM
I was always partial to the cocktail umbrellas under which Wile E. sought shelter from falling boulders, catapults, etc. With the COMPX failing to hold 1350 for longer than a couple of minutes, I think Jim's got the right idea.

 
 
  Jonathan Levinson   12/27/02,  2:40:59 PM
The Dollar Index is getting croaked, now holding just above 102.50.

 
 
  John Seckinger   12/27/02,  2:40:41 PM
The session continues to get interesting. Dow under pressure, Gold lower, and the dollar lower as well. The Sox, on the other hand, still has not traded the 295 level. Currently at 296.12 and down 1.35%, the Sox has been in an incredibly tight range all session (302.29 to 296.20). Bonds are also higher by '26 ticks at 112'17 and is now at some good resistance. Bonds at resistance, the Dow near 8312, and the Sox above 295....we could see a bounce here if the Dow can close a period above 8320 (read: only looking for 8340).

 
 
  Jim Brown   12/27/02,  2:39:14 PM
The Dow is edging even closer to that 8300 cliff. Can't you just see Wylie Coyote hanging over the edge by his fingernails and the RoadRunner about to drop that 500 pound anvil on his head? Beep beep!

 
 
  Jim Brown   12/27/02,  2:36:36 PM
The editors play Put on GS is well under way with the stock down -1.64 today to $67.89. This was a long term play using Apr/July puts. The stock was $71.69 on Sunday with a trigger at $70. The target for this trade was $60 and with continued negative news this seems very likely to happen. I recount this only to remind those who may have been distracted earlier in the week that this could be a good choice for an early 2003 trade.

 
 
  Jonathan Levinson   12/27/02,  2:35:05 PM
Although the 5 week stochastic is oversold, this week's candle is going to be another gravestone hammer, the same candle we saw on yesterday's daily chart. Not bullish. The TRINQ is surprisingly low and has been all week, which I credit at least in part to Al Green's endless repo train (perhaps a new record album available through a holiday TV offer?). Nevertheless, while the markets look oversold on the shorter timeframes, the TRINQ is not, and the monthly 5(3) stoch has just given another sell signal. In other words, I could see short term bounces developing, but I believe that we've seen the rally.

 
 
  Mark Wnetrzak   12/27/02,  2:31:50 PM
Covered-Calls Portfolio
Avid Technology (NASDAQ:AVID) continues to move higher on heavy volume and is now above a 3-year high. One of the few stocks not worried about a down market. Biomarin Pharma (NASDAQ:BMRN) is now testing its 150-dma and is at a key moment. Oversold in the short-term? Yes. Can it move lower? Yes. The calls could be bought back for around $0.50 (NUR-AU 0.30 x 0.55) freeing up the stock which would allow several options: take the small loss and sell the stock; roll-forward and/or down; chance waiting for a rally, etc. Decisions...

 
 
  Steven Price   12/27/02,  2:28:12 PM
Hotels.com (ROOM) $53.26 (-2.68) OI put play ROOM is sitting right above the 200-dma of $52.98, which corresponds to the PnF breakout level of $53. Traders who entered tha play when we listed it at $59.45 may want to take some chips off the table in the event of a bounce from here.

 
 
  Steven Price   12/27/02,  2:20:41 PM
Swing Trade Signals
Getting some acceleration to the downside here and about to test Dow 8300. Things are not looking healthy across the board and conservative traders can think about closing out on a trade below 8300. My plan was still to accumulate long above support in this area and I'll stick to that plan, but traders who would like to bail out certainly can make an argument for overall market weakness.

Current levels: Dow 8311/SPX 876.56/OEX 443.54/COMP1350.65

 
 
  Kent Barton   12/27/02,  2:19:02 PM
Peoplesoft (PSFT) $19.37 -0.41: Hmmm...That looks an awful lot like a Head & Shoulders formation. The recent rollover from $20.00 has started to create the right shoulder, with the left shoulder formed by the early-November highs and the head formed by the mid-November spike above $21. The rolling oscillators are hinting at a breakdown below the 200-dma at $19.26. Although a move under this level could send the stock towards the $17.00 area, bears need to be aware of possible support at the 50-dma ($18.57), which also happens to be the location of previous resistance on the 10-minute chart.

 
 
  Linda Piazza   12/27/02,  2:14:23 PM
Prudential announced that it would raise 2003 target for crude and natural gas due to tensions in Iraq and Venezuela. Although the broker believes that the situation with Iraq will soon be resolved and that the resolution will drop crude oil prices back to $20 a barrel, the broker raises its 2003 target to $23 from $20. Prudential raised its 2003 natural-gas target to $3.80 per million cubic feet, from $3.25 previously.

 
 
  Jeff Bailey   12/27/02,  2:12:54 PM
A lot of technical break downs .... not only in stocks, but the benchmark 10-year YIELD ($TNX.X) 3.848% p/f chart. This too hints that its DEMAND gaininig the upperhand in Treasuries, as YIELD falls below bullish support trend. Link

30-year YIELD chart ($TYX.X) 4.820% Link still holds above trend, but leadership to downside in 10-year not boding well for my March 30-year YIELD calls. Need to continue to offset with some equity puts is my thinking.

 
 
  Jonathan Levinson   12/27/02,  2:08:34 PM
The COMPX has put in a low below 1350, as the TRINQ finally breaks into sell territory at 1.75. Yields have broken down with FVX down 7.5 bps. The put to call ratio is at .76, which shows an amazing resilience on the part of bulls and is definitely bearish for the markets. Note that all day, the put to call ratio has been calling for lower lows, and we've been getting them. It's still low, but well off the opening .56 reading. Bears can expect a bounce at some point, but I believe that we'll see higher p/c readings before that occurs.

 
 
  Jim Brown   12/27/02,  2:03:38 PM
If we were going to get a reaction bounce it should have come at 8328, which was the low from last Thursday. This would have been a key point for the bulls to target. The lack of a material bounce should be an indication that trouble is coming.

 
 
  Linda Piazza   12/27/02,  1:59:44 PM
At 8327.60 as of this writing, the DOW has moved below its 38.2% Fibonnaci retracement level (of the movement from the 10 October low of 7097.49 to the 2 December high of 9043.37). That 38.2% retracement level is 8338.24. If you're in a short-term bearish trade, be careful of a potential bounce from these levels.

 
 
  Linda Piazza   12/27/02,  1:52:32 PM
At 43.55, KO is approaching its July low of 43.43. Here's the P&F chart for KO, showing a descending triple bottom breakdown and also showing levels of P&F support for KO: Link

 
 
  John Seckinger   12/27/02,  1:52:29 PM
I have support in the Dow at 8312. I got this from using the excel spreadsheet many subscribers asked for. Just put in the high, low, and close from Thursday and you will get 8372 (a good level so far today) and 8312 as the two support levels. Let us see if the market can hold there.

 
 
  Linda Piazza   12/27/02,  1:48:24 PM
At 2297.59, the Dow Jones Transportation Index broke below the psychologically important 2300 level, and also below its 22 and 50-ema's, at 2324.20 and 2314.79, respectively. This index has been oscillating around these averages for quite some time, so a single close beneath them is probably not final evidence of a further fall in this index. However, the index might also have broken down from the bottom ascending line of a consolidating pennant formation. (5)(3) daily stochastics show that the securities making up this index are in oversold levels, perhaps predicting that the index won't fall much further, but the RSI indicator is far from indicating oversold levels as yet. Link

 
 
  Steven Price   12/27/02,  1:47:19 PM
Swing Trade Signals
That bottom at Dow 8350 has failed, as well as support at SPX 880, but I still think we are within the Dow 8300-8660 range. Some of my fellow analysts here are looking at the bearish action and leaning short and they may turn out to be right. However, I still think the we've got another bounce from this level. If we break down below the 8250 mark, which Jim highlighted earlier, my confidence will certainly be shaken to the point of no longer playing a bounce from support, but that has not happened yet. I'm leaving the stop at Dow 8240.

 
 
  Jeff Bailey   12/27/02,  1:47:15 PM
The 1:00 PM Intraday Update has been posted. Link

 
 
  John Seckinger   12/27/02,  1:46:59 PM
Jeff, you got your "spread-triple bottom" sell signal in the OEX on a $2.5 box scale p/f chart as the Index hit 445.

 
 
  Linda Piazza   12/27/02,  1:37:46 PM
Markets are dangerously close to the lows again. (See my 12:50 post for day's lows.)

 
 
  Linda Piazza   12/27/02,  1:34:51 PM
Volume patterns remain at similar levels to those seen earlier, although with such light volume, any moderate buy or sell program could change the cast of the numbers entirely. On the NYSE, ratio-method adv/dec comes in at .57, and on the Nasdaq issues, it's .55. Down volume still exceeds up volume on both the NYSE and Nasdaq-traded stocks. Volume stands at 392 million shares traded on the NYSE and 448 million on the Nasdaq.

 
 
  John Seckinger   12/27/02,  1:24:43 PM
Note on using pivot analysis: For Monday, remember to use Friday's levels. Moreover, start with a weekly chart and work your way to shorter time periods. Also, use other trading tools for confirmation. Retracement analysis seems to match up well, while Bollinger Bands lets me know if there is more risk in buying above a level or waiting for a failure. This is just me.

 
 
  Ray Cummins   12/27/02,  1:14:50 PM
Spreads/Combos - Another Great Question!

Ray...I'm working on a bearish spread position you offered last week but I have yet to be filled at the target price and I am not sure how long to leave the order open. This is probably occurring because the stock is moving away from the sold strike, just as I would want after the order is filled. Can you suggest any guidelines regarding the "target" price that I might use to help place the initial order. Also, How do I decide when the trade is no longer a good trade? Thanks GA

Regarding the "target" prices: Don't be too disappointed. The truth is, you can't always achieve the target credit published for the spread and combination positions. In fact, that's why it's called a "target." It is simply a recommended entry point; just MY opinion of what a trader might use as an initial "limit" for the spread order and hopefully, it will be a reasonable price to initiate the play even with small changes in the stock and option quotes. The target is always less than the straight BID/ASK prices (we don't pay "market" for spread orders) and generally, you can expect to shave a minimum of $0.10-$0.20 off the overall BID/ASK credit (or debit -- depending on the strategy) when opening or closing even the smallest spread order. The margin can be more or less, depending on the price of the options, whether they are ITM or OTM, the time value remaining, the volatility of the stock, etc. I simply try to give the beginning trader an idea of the value of the position because the option prices are always different the next day. You will need to adjust this target based on the activity of the underlying issue, the daily volume of its options and/or the implied volatility of the series being traded.

The real problem comes when you don't get filled initially (do you chase the play?) or when the issue moves in opposition of the expected trend after just a few sessions (regardless of whether you have already opened the position). That's the primary reason why every decision you make about trading must be based on your analysis of the underlying issue and your forecast for its future movement. This assessment is then factored into the risk/reward outlook for the strategy (and position) you are using. Of course, that's a very subjective task, thus the best advice I can offer is that, if the current conditions dictate that the position is no longer viable -- based on your personal criteria -- then it should be closed (or avoided). Hope that helps!

 
 
  Linda Piazza   12/27/02,  1:09:09 PM
With today's lows holding so far, the 60-minute (5)(3) stochastics are hinging up on all the indices. (See note at the end of the entry.) These (5)(3) stochastics are notorious for giving false signals and redrawing themselves, but I like the early warnings these signals give. It's a tradeoff: quick signals for some false alerts. The COMPX's stochastics signal may be the most "iffy," though. Although the fast line turned up, the slow one still points off toward the side of the chart, not yet turning up. Especially with these (5)(3) stochastics, watch for both lines to turn up as well as watching for crossovers. (Note: in the time it took for me to type this entry, that COMPX stochastic changed character, with the fast line turning back down.)

 
 
  Jeff Bailey   12/27/02,  1:07:29 PM
Randgold Resources (GOLD) $30.41 +10.6% .... Hi Jeff: I got some Rangold Res. (GOLD) and stock's trading up pretty good again today. What do you thing of this precious metals stock? Is there any news? I can't find any.

No news to explain today's rise that I can find. Stock looks a bit over bought and tough to control risk, however, even tougher if short. Retracement taken from $15 to bullish vertical count of $51.50 has 38.2% retracement at $28.95. Bulls long can snug a stop under $28.75. Link

 
 
  Jim Brown   12/27/02,  1:07:15 PM
It definitely appears the Dow is trying to put in a bottom at 8350 and that would be just above last Thursday's low of 8328. This would be a good place for traders to suck it up and try to make a stand. The internals are improving very slightly and it could be early indications of a bounce. The key point here is not that we could get an oversold bounce but how high can we expect it to go. There is strong resistance at the 100 DMA at 8412, the 50 DMA at 8457, the 20 DMA at 8567, the 30 dma at 8605. There is horizontal resistance at 8512 and 8625. With North Korea, Iraq, Venezuela, weak holiday sales and two weeks of concentrated earnings warnings in our immediate future I just don't see any bounce being significant.

However, markets are built by climbing walls of worry and there is a significant mountain of worries in our future. This would be the kind of bounce that could catch shorts off guard and in stunned disbelief. I know, I have been there many times. When all factors are pointing in one direction the market sometimes produces strong surprises. With the market teetering on the 8300 cliff we should get an answer very soon. A break under 8300 should bring one more round of buyers off the sidelines but a break under 8250 could bring a flood of sellers to join the party. I am still comfortable with my short comments at 8450 from yesterday until proven wrong.

 
 
  John Seckinger   12/27/02,  1:00:43 PM
The Sox is under 300 at 299.49, but never did hit the 295 support level I wondered about earlier. Bonds remain above the 112 support area at 112'04, and the dollar continues to trade soft. Also, Utilities Index (UTY) is under 260 at 256 and even the Oil Index (XOI) is off by 1.5%. With that said, things don't look great for equities; however, I will be looking at the Sox to see if it can get about 300 and stay there.

 
 
  Steven Price   12/27/02,  1:00:12 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the 1/2 LONG signal when the Dow traded 8371 at 12:54:38. This now completes the full position. Stops are set at Dow 8240.

I like the base we found at 8350 and conservative traders can use a break below that level for an alternative stop. However, with strong support at 8300 and repeated bounces from that level, the likelihood of a bounce coming from this range (8300-8400) are greater than any other. That is not to say that we will have a tremendous rally over the next year, just that playing a bounce from this level is a higher percentage entry.

 
 
  Jonathan Levinson   12/27/02,  12:56:04 PM
Hey Ross, perhaps Santa Claus had one too many for the road and wound the sleigh into a smokestack. Perhaps the reindeer were blinded by the thick cloud of cigar smoke and patchouli incense above the Federal Reserve Building as Al Green held forth over the holiday :)

 
 
  Jonathan Levinson   12/27/02,  12:53:12 PM
The US Dollar Index has just made a new multi-year low. Here's the short term chart: Link

 
 
  Jim Brown   12/27/02,  12:53:00 PM
I'll bet that was Santa Clause wearing his Great Pumpkin costume in October. I wonder if we saw the January effect back there too. -Ross

Ross, it sure looks like the October rally was the closest one to a holiday we are going to get. I am surprised to see the indexes continue to bleed lower as we near the end of the year. There is no strength anywhere and bullish traders keep trying to buy the historical trend despite the fact the trend has vanished. Considering the volatility we can expect over the next 10 days the lack of a positive holiday bounce is suggesting much of that volatility will be down. Maybe we should start hoping for a Valentines Sweetheart rally instead!

 
 
  Jonathan Levinson   12/27/02,  12:51:35 PM
The put to call ratio printed its last reading at .70. Still lots of bottom fishing out there, still a bearish excess of bullishness in the options market. They'll sold the HUI and XAU a bit, but they're still well off their lows of the day.

 
 
  Linda Piazza   12/27/02,  12:50:16 PM
As a guide, the day's lows so far (which may or may not be exceeded by the time I finish typing) are as follows: COMPX 1356.11, NDX 1004.91, DOW 8349.10, SPX 879.26, and OEX 445.04.

 
 
  Jonathan Levinson   12/27/02,  12:41:31 PM
Something to note for those asking me about long plays in the COMPX/QQQ here. That 1363 fib level that Linda nailed is going to act as resistance on any upmove, and I'd be inclined to think of it as a key pivot point. With a tight stop, you can jump in anywhere at anytime, but we have to give away the spread and the comms. If you can't wait for a confirmation above the 1363 pivot before going long, please be aware of it and keep a tight stop under the trade. I'm not feeling particularly bullish here myself, but the support at QQQ 25 has so far been holding.

 
 
  Jonathan Levinson   12/27/02,  12:31:15 PM
I've been smelling a bounce for close to two hours, but it has yet to materialize. The TRINQ is neutral, while the QQV has marched a touch higher, reflecting the uncertainty in the QQQs, currently +.82 to 39.2. FVX remains unchanged. A quiet, tense moment close to the lows of the day.

 
 
  Linda Piazza   12/27/02,  12:29:37 PM
VLO update: On the 16th and 17th, I profiled a possible call play in Valero Energy on a break of the 37.50 neckline in a reverse H&S formation on strong volume, a move above bearish resistance seen on the P&F chart, and a move above the 200-dma. I offered cautions relating to geopolitical developments that day and cautions concerning the action the next day when all three conditions were met and Valero was immediately knocked back down below the 37.50 neckline. During the intervening time, I've also noted that the (5)(3) stochastics were perhaps forming a H&S formation, and that indicators could be watched for pattern breaks, too. I also noted bearish divergence on the stochastics. Today, the stochastics H&S neckline is being broken as Valero trades down .83 to 36.07. Today's action comes on light volume, there's still a P&F buy signal, and VLO remains above its 50 and 200-ema's. Link I'd originally cautioned that a weekly pattern that had taken VLO months to complete might also take months to meet its target, but I thought it possible that some traders might have purchased January options. Those people will face another two days of premium decay this weekend, so I wanted to update information for the benefit of those readers. VLO states that the Venezuelan strike actually helped its margins and that it's obtained new customers, but supply problems may begin to impact VLO if the strike continues. So far, this light-volume pullback seems just a pullback at this time, but that stochastic H&S formation alerts readers to possible weakness. Also watch for a break in the trend of higher lows on the RSI. Watch for support at 35.52 (the 22-ema) or at the 200-ema. Plan accordingly, depending on your strike and expiration month, as well as your pain tolerance.

 
 
  John Seckinger   12/27/02,  12:11:40 PM
Paul McCulley (PIMCO) said that the Fed could keep finds at 1.25% for all of 2003 and that Greenspan is more worried about deflation than inflation. Therefore, allowing for a little inflation would not be bad for the markets. I agree.

 
 
  Linda Piazza   12/27/02,  12:07:43 PM
The S&P Banking Index (BIX) is down .56% today, while the Philadelphia Banking Index ($BKX)is down 1.14%. The decline in M&A's, IPO's, and other lucrative deals predict further layoffs and revenue declines next year, say spokespersons at Morgan Stanley (MWD) and JP Morgan (JPM). Citigroup (C) trades down .86 points (2.39%), MWD trades down 1.46 (3.52%), and JPM trades down .57 (2.33%).

 
 
  Jonathan Levinson   12/27/02,  11:57:45 AM
When doing a retracement, how do you determine how far back in time to go to get the hight to start with? I want to pull one on QQQ's.

There's no right answer for that. I prefer to do my TA on multiple time frames to get a broader picture of the waves I'm trying to ride. By taking longer term highs for your retracements, you get longer term s/r lines. Then you can pick shorter term charts and get those "weaker" s/r lines. The more the merrier, as long as you don't lose track of the time frame you wish to focus on. Each trader's individual style and circumstances should dictate their approach to TA. A day trader shouldn't be focusing on monthly candles, but it's still nice to know where the broader lines are.

 
 
  Jeff Bailey   12/27/02,  11:50:42 AM
Intel (INTC) $16.54 -0.89% .... P/F chart looks a bit like the SMH doesn't it? Link

Here's the SMH discussed earlier at (10:29:03) Link ... makes sense as many feel Intel is "the" semiconductor stock.

 
 
  Steven Price   12/27/02,  11:44:57 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We are getting some support once again at SPX 880, with a low today of 880.91. I am considering a step up to a full position here, because if that 880 level holds, the Dow may not get much closer to 8300. There was some resistance at 8370 on the last bounce attempt and I'll use a move over that level for my trigger.

Go long a 1/2 position in the broader markets at Dow 8371. This will complete the full position. Stops is still set at 8240.

 
 
  Jonathan Levinson   12/27/02,  11:42:46 AM
The COMPX is doing a very slow fade as the TRINQ rises out of bull territory to neutral at 1.07. The QQV is now up .76 and bond yields are remaining steady, with the FVX down 5.1 bps. The put to call ratio has risen to .66, which is still quite low, particularly considering the failure of support at COMPX 1363. Volume is, predictably, even lighter than yesterday, with 290M shares so far on the COMPX and 233M on the NYSE.

 
 
  Linda Piazza   12/27/02,  11:38:34 AM
Yesterday, I mentioned in the Market Monitor that the mid-caps and small-caps were outperforming the large caps, staying above their 50-dma's (exponential). Today, the S&P 400 Mid-Caps and the S&P 600 Small-Caps have also fallen below their 50-ema's, although just barely. Here are their charts: Link Link

 
 
  John Seckinger   12/27/02,  11:38:30 AM
Not good news for the Dollar. The Euro is breaking above the 1.0400 level against the dollar and has strengthened 7% since October against the Greenback. The DX00Y contract is currently at 102.63 and is most likely having a negative effect on equities in general.

 
 
  Jeff Bailey   12/27/02,  11:35:52 AM
Expedia (EXPE) $66.01 -1.43% .... Trade at $66 looks further defensive. Recent column of O from $77 to $67 has bearish vertical count of $57. Looks a bit like IBM doesn't it, only no "high pole warning." Link

 
 
  Jeff Bailey   12/27/02,  11:34:24 AM
The 11:00 AM Intraday Update has been posted. Link

 
 
  Linda Piazza   12/27/02,  11:30:18 AM
Volume patterns on the NYSE issues have worsened since early trading. Down from a .79 earlier this morning, adv/dec for the NYSE issues is .52 currently. Up/down volume now shows down volume at four times up volume for the NYSE. New highs were twice the number of new lows, but now are barely ahead, at 14 new highs to 12 new lows. Nasdaq adv/dec figures stayed relatively stable, at .51, up slightly from this morning's .49 number. Down volume is about 1.8 times up volume currently, up only slightly from this morning's level. Volume remains anemic, at 202 million shares traded on the NYSE and 258 million on the Nasdaq. I remain concerned that this light volume could lead to treacherous trading conditions, so be careful.

 
 
  Linda Piazza   12/27/02,  11:20:12 AM
I was scanning charts today, and came upon this weekly chart for Orasure (OSUR). Link Immediately after glancing at the chart, I thought "b pattern." John has been writing about b-patterns and P-patterns for a while. If you'd like to read his definitive article about these patterns, here's the link: Link

Thanks, John, for explaining a tool that helps us instantly recognize accumulation or distribution patterns. In Orasure's case, I used an accumulation/distribution indicator to confirm that pattern. I noticed that the indicator was threatening to make a bearish cross of its average, although it hasn't yet done so. This isn't trading advice on OSUR, as it's got support from its 10-week and 30-week averages right in this area, as well as stronger support down in the $5.00 area. I've actually been checking OSUR's weekly chart now and then as I see a possibility for another pattern, a reverse H&S, with the right shoulder perhaps forming now. I'll get back to you if I see that shoulder being completed in the next few weeks.

 
 
  John Seckinger   12/27/02,  11:10:44 AM
Fantastic response to my pivot excel spreadsheet. Note: If you do not have excel, let me know and I can cut and paste the formula instead.

 
 
  Steven Price   12/27/02,  11:04:38 AM
American Int'l (AIG) $57.79 (-0.51) OI put play AIG set another relative low this morning, trading down to $57.36. The stock is certainly moving slowly, but remains on a triple-bottom PnF sell signal, with a bearish vertical count of $49. I like the failed rebound at $60, as $61 would have been a reversal into a column of "X." I would expect some support around $55, so new entries need to be aware of a possible bounce at that level.

 
 
  Jonathan Levinson   12/27/02,  11:00:26 AM
For our canadian readers- thanks to Doug:

Re your correspondent's questions about US brokers, I currently have accounts at OptionsXpress, Interactive Brokers, and Datek (recently taken over by Ameritrade) and have been trading US stocks through them since 1995. Unless one has a significantly large US income, tax treatment should be exactly the same as for trading US stocks through Canadian brokerages, except of course for the transaction costs being so much less. However, since IB opened their Canuck centre earlier this year and it is now possible to trade US stocks through that centre (some Provinces are still dragging their feet, however), I have been using IB almost exclusively, and this should mean that tax treatment of profits and losses will be exactly the same as for trading US stocks through other Canuck brokerages. Unfortunately, one cannot yet use IB to trade Canadian stocks on the Canadian exchanges, but most of the high volume Canuck stocks also trade on the US exchanges so this is not a big problem except for RRSPs (for which one still has to rely on TD, etc.)

 
 
  Linda Piazza   12/27/02,  10:56:04 AM
COMPX, OEX, and SPX all now trade just barely under their 38.2% retracements (1363.69, 449.69, and 883.36, respectively.) As I type, only the DOW holds above its 38.2% retracement level (8338.24). While I agree with Jeff's 10:43 post that today's action is bearish, be careful if trading on the bearish side. We're not the only traders to have calculated those 38.2% retracement levels, and many might expect a bounce when the DOW hits that retracement. They may buy ahead of an anticipated bounce, contributing to choppy and difficult trading.

 
 
  Jonathan Levinson   12/27/02,  10:55:20 AM
The US Dollar Index is putting up a fight just under 102.80. But it is under 103. Any foreigner holding US denominated financial assets must be doing the math and watching the return erode as the exchange rate on the greenback erodes. This could be a serious problem for US bonds and equities, and I expect that the fed, whose raison d'etre should be the protection of the US credit bubble, is watching closely. As governor Bernanke stated, the fed will buy thirty year treasuries if necessary to keep rates down. If foreigners begin selling aggressively, Al Green could have a battle royale on his hands.

 
 
  John Seckinger   12/27/02,  10:55:05 AM
The Dow is currently at the first support level of 8372. Note: Since IBM hit $78, shares have really accelerated lower. Currently at 77.40, next support is at 76.71. For the Dow, next support is below at 8312. Dow is now recovering above 8372....these pivot levels do work well. If you would like the simple formula, please email me.

 
 
  Jonathan Levinson   12/27/02,  10:51:10 AM
We're seeing the put to call ratio climbing slowly out of bullish territory as the COMPX breaks to new lows. The fall in yields is still pretty tame with FVX down 5.5 bps, and I expect that the 750M refund due to the fed is helping to add some selling in bonds. There's very little strength in the COMPX- just a slow slide so far.

 
 
  Jeff Bailey   12/27/02,  10:47:52 AM
Gold/Silver Index (XAU.X) 79.34 +0.08% ... recovers from earlier 2% loss and sector loser, to ONLY sector currently showing a gain. Link

 
 
  Steven Price   12/27/02,  10:46:40 AM
Hi Steven, When you go long the broader market which index do you typically use? Thanks Mike

Our readers are free to choose any product they wish to trade. Many use the OEX, however I tend to favor the DJX or DIA for the narrower bid/ask spreads.

 
 
  Mark Phillips   12/27/02,  10:46:28 AM
If you need proof that this is not a good week for trading, take a look at some of the plays on the OI play list. BEAS looks very strong on the daily chart, but so far this week has been confined to a range of $11.95-12.65, and is currently resting at $12.15, for a 7-cent loss on the day. A similar level of excitement has engulfed our CTXS play, with a weekly range of $12.97-13.50. CTXS is currently sitting at $12.97 (it's low of the week) for an 11-cent loss on the day. Both stocks have currently seen less than 1/10 of their ADV change hands today -- slow action is what we can expect until volume players return on January 2nd.

 
 
  Jeff Bailey   12/27/02,  10:43:31 AM
IBM / OEX Per last night's Index Trader Wrap and recent "Ask the Analyst" column.

Today's trade at $78 in IBM has stock back on a sell signal, and turn vertical count bearish to $73. (bad tick this morning to $84) Link Today's sell signal in IBM also has the Dow Industrials Bullish % seeing at least 1 stock (3.33%) taken from the Bullish %, which by the way is in BEAR ALERT status!

OEX trading 447.50 here and as discussed in Index Trader Wrap, looked for potential trade at $445 and spread-triple bottom on the $2.5 box scale as BEARISH. Link

THIS ACTION IS DEEMED BEARISH IN MY BOOK OF TECHNICAL ANALYSIS!!!!!

 
 
  Steven Price   12/27/02,  10:37:34 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the 1/2 long signal when the Dow traded back over 8400 at 10:34:32

 
 
  Linda Piazza   12/27/02,  10:30:07 AM
Volume patterns in early trading today were as follows: Adv/dec numbers by the ratio method were .79 for NYSE issues and .49 for Nasdaq issues. Numbers below 1.00 indicate more issues declining than advancing, for those new to using the ratio method of calculating adv/dec figures. Up/down volume indicated more down volume on both the NYSE and Nasdaq, with a 35:46 ratio for the NYSE and a 47:75 ratio for the Nasdaq. On the NYSE, new highs outpaced new lows by a 2:1 ratio, but new highs and lows on the Nasdaq were about even with 14 new highs to 13 new lows. Volume is extremely low, so that any decent buy or sell program could push the markets. Be careful with trading today.

 
 
  Jeff Bailey   12/27/02,  10:29:03 AM
Semiconductor HOLDRs (AMEX:SMH) $23.30 -0.42% .... Is it time to start looking long here?

Yes... according to Dorsey/Wright and Assoc. the Semiconductor sector is still "bull correction" status at 50% and by no means "oversold." Watch a break at $22 as short entry for 1/2 positions short/put. Should find resistance on any rallies at/near the $25 level, which finds the 50-day SMA starting to round out flat and shorter-term 21-day SMA rounding lower and getting close to crossing back below the 50-day. Link

 
 
  Steven Price   12/27/02,  10:25:12 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We are hovering around Dow 8400 level and I am going to put on a 1/2 LONG position at 8400 with a stop of 8240. If we get a bounce from this level, after failing to get through Thursday's lows, I'd like to participate. I'm going to start off with a 1/2 position and look to average into the long position if we get closer to last week's bounce level just over 8300.

Go LONG a 1/2 position in the broader market on a trade of Dow 8400. Place stops at 8240

 
 
  Jonathan Levinson   12/27/02,  10:24:51 AM
Precious metals are roaring back today, with XAU +.27 and HUI now down just .29 at 149.42. The COMPX is struggling with both sides of the 1363 fib retracement level that Linda identified. The TRINQ is still quite bullish at .65 and QQV is nearly flat, +.21 on the day. It's taking a lot of buying pressure to hold the COMPX at this level so far today.

 
 
  John Seckinger   12/27/02,  10:20:45 AM
Jeff, IBM at 78.... P&F sell signal.

 
 
  Mark Phillips   12/27/02,  10:18:52 AM
ROOM $54.89 (-1.05) Stock getting clocked again today, already showing a loss of nearly 2%, as the $55 support level is just starting to crack. Traders that entered the play on the rollover below $60 will want to keep their eye on the 200-dma ($52.99). If we don't bounce from the $55 area, than $53 will be the next likely area for prudent bears to harvest some gains. Adding credence to this major support level is the as the ascending trendline (now at $51.50) and chart support between $50-52.

 
 
  Steven Price   12/27/02,  10:14:51 AM
Swing Trade Signals
We briefly took out Dow 8400, with a low of 8394 and got a small bounce, although not a terribly strong one, failing over 8400 and back to 8388. I'd like to get a little more downside before stepping in and playing a bounce, preferrably around 8350. However, if we stall out, I may step in with a partial position in this area.

 
 
  John Seckinger   12/27/02,  10:13:48 AM
The Sox index has a range today from 302.29 to 298.23. I will look for more selling once underneath 295, while a close above 308 should take sentiment to more neutral levels. I like to consider the Sox the wildcard with equities, so make sure the ticker sox.x is somewhere on the radar screen at all times.

 
 
  Jonathan Levinson   12/27/02,  10:12:35 AM
The put to call ratio has just come in at .56- very low, and not healthy for bulls here.

 
 
  Mark Phillips   12/27/02,  10:10:30 AM
Maybe All That Glitters IS Gold Yesterday's late-day weakness in the market had Feb gold futures (GC03G) closing over the formidable $350 level, adding a bit more altitude to our NEM LEAPS play with a close at $29.98. It certainly is no surprise to see a bit of backing off again this morning as gold bulls take some profits. We've talked about the significant resistance for NEM in the $29-30 area, and it is certainly encouaraging to see the stock holding near the upper end of that range. I would continue to exercise patience in this arena -- don't chase precious metals plays higher. They'll tend to surge higher and then consolidate before the next upward move. Use the consolidation above support as the higher-odds entry point. For NEM, a pullback ande rebound from the $28 level is looking pretty solid, while a more severe pullback near the $27 level (200-dma at $27.10) looks even better.

 
 
  Jonathan Levinson   12/27/02,  10:08:45 AM
what is the HUI. I am sorry but that abbreviation I do not know.

The HUI is the Amex Gold Bugs Index, which is an index of unhedged gold miners. It's what I consider to be a "good" version of the XAU, and if you compare the charts, you'll see that $HUI has outperformed the $XAU significantly this year.

 
 
  Steven Price   12/27/02,  10:08:31 AM
Swing Trade Signals
The Dow just ticked below yesterday's low of the day and the rally off the housing data is history. We are now testing Dow 8400/SPX 885.

Current levels Dow 8406/OEX 448.64/SPX 885.54

 
 
  Linda Piazza   12/27/02,  10:07:47 AM
Yesterday, PepsiCo (PEP) lost an appeal of a lawsuit against Coca-Cola (KO), alleging violation of antitrust laws. KO prices haven't been helped by the development, as KO trades down $0.30 to $43.85. KO fell below the important 45 level six trading days ago, and has traded below that level since then, but so far remains above the important 43.50 area. Disclosure: I have a put position in KO.

These antitrust suits between KO and PEP have made their way through the courts for decades, so perhaps investors no longer care. In the late 80's, my husband was a corporate attorney for the largest PEP independent distributor in the U.S., and much of his time was spent in antitrust litigation against KO.

 
 
  Jonathan Levinson   12/27/02,  10:06:45 AM
The fed has announced a 7 day repo in the amount of 3.5B for a net drain of 750M. Given the low volume I expect today, that ordinarily small amount could well weigh on the markets and provoke selling in either bonds or in equities.

 
 
  Jeff Bailey   12/27/02,  10:06:32 AM
New Home Sales came in just above the 1 million rate and not much of a "surprise" reaction. Dow Jones Home Construction Index (DJUSHB) 311.45 -0.32%.

 
 
  Steven Price   12/27/02,  10:04:04 AM
Swing Trade Signals
So far we got a bounce right at the 100-dma in the Dow, but the SPX is below that level and the OEX is also just below. The COMP is still holding above support at the 38.2% Fib bracket from the low of October 10 to the high of Dec 2.

We are getting a bit of a bounce here following positive housing data and the Dow may re-test the failed 8450 level from earlier this morning. Current levels Dow 8443/SPX 889.40/OEX 450.60/COMPX 1368

 
 
  Linda Piazza   12/27/02,  9:59:30 AM
Each of us has favorite indicators we use to gauge market actions. One of mine is the highly technical "ten-day sticking points." With all seriousness, though, I study ten-day charts to see prices that proved pivotal over the last two weeks of trading days. Through experimentation, I've found that these areas of congestion are easiest to pinpoint (for me, at least) on a ten-day fifteen-minute chart. They're areas where bulls and bears battled it out in the past and may be likely to do so in the future. The QQQ's are now trading in one of those areas, around the 25.21 area.

 
 
  Jonathan Levinson   12/27/02,  9:57:30 AM
There are 4.25B of fed repos expiring today. We await the announcement from the fed.

 
 
  John Seckinger   12/27/02,  9:54:24 AM
There is still no real technical damage today in stocks, and a very tight first five-minute range makes it a little harder to gauge sentiment for short-term moves. My first support area in the Dow is at 8372, with resistance higher at 8528 and a pivot at 8468. Note: 8427 is the mid-Bollinger Band on a weekly chart.

 
 
  Linda Piazza   12/27/02,  9:52:40 AM
Last week, I was guilty of snapping a Fibonacci retracement tool onto charts to get quick estimates of retracement amounts. Here are the more correct calculations:

COMPX: From 10 Oct low 1108.49 to 2 Dec high 1521.44, a 412.95 difference: 38.2% retracement=1363.69, 50% retracement=1315.04

Dow Jones Industrials: From 10 Oct low 7197.49 to 2 Dec high 9043.37, a 1845.88 difference: 38.2% retracement=8338.24, 50% retracement=8120.43

OEX: from 10 Oct low 387.80 to 2 Dec high 487.94, a 100.14 difference: 38.2% retracement=449.69, 50% retracement=437.87

SPX: from 10 Oct low 768.63 to 2 Dec high 954.28, a 185.65 difference: 38.2% retracement=883.36, 50% retracement =861.46

 
 
  Jonathan Levinson   12/27/02,  9:49:28 AM
Add falling metals to the list of potentially bullish signs for equities. HUI is currently -2.17 after the first 17 minutes of trading, currently 147.59, while XAU is -.83 to 78.50. I don't watch the CRB, but with oil and gold down, it must be negative too. The TRINQ has fallen into bullish territory at .76, despite the lackluster bounce attempt in the COMPX.

 
 
  Steven Price   12/27/02,  9:43:56 AM
Swing Trade Signals
The small bounce is fading a bit, and with bonds in the green (as John mentioned) and the TICK in the red, we'll let the morning move shakeout before jumping in. Right now, the only bullish sign I'm seeing is a slight drop in oil futures.

 
 
  Jonathan Levinson   12/27/02,  9:42:14 AM
I've been using your trial period and noticed that you too...are a Canadian.

With the difference that Canadians pay versus what Americans pay in option commissions, I was wondering if you use a Canadian brokerage...I presently, use TD Waterhouse myself but find that compared to some of the ones in the states that they are quite expensive.

Do u by chance use a brokerage in the states? and if so as a Canadian, what does it do to your tax situation? ie. do u have to pay taxes in the United States? Is there some resources that could explain how to do this.

I have friends in the states that I trade with, and they tell me about the LOW COMMISSIONS that they pay, using sites like optionxpress and how cheap they are and the execution is much faster.

I hope that you can shed some light for me...

I have an account at Waterhouse which I use for being overcharged and underserviced, primarily. I also have an account at optionsXpress. I don't know the tax treatment, as this is my first year with the US brokerage, but I will be finding out within the coming months. With all the tax treaties in place, I expect that it will work out to "6 of one, 1/2 doz of the other". Waterhouse is actually excellent by canadian standards, from what I've heard, but they can't hold a candle to the alternatives available in the US of A.

 
 
  John Seckinger   12/27/02,  9:37:27 AM
Bonds continue to rally. The 30-year is higher by '16 ticks at 112'07 and above yesterday's profiled resistance of 112. Currently at 112'07 and having an intra-day high of 112'11, look for solid resistance near 112'16. With bonds so close to resistance, there is a chance equity traders are not that concerned now about a flight of capital into bonds.

 
 
  Steven Price   12/27/02,  9:37:20 AM
Swing Trade Signals
Snoooooze! Not getting much follow through on the negative sentiment heading into the open. We were off fractionally across the board, but the Dow has ticked just barely into the green and most averages are hovering around unchanged.

 
 
  Jonathan Levinson   12/27/02,  9:33:58 AM
4 point gap down open on the COMPX to 1363, TRINQ 1.18, QQV +.69.

 
 
  Jeff Bailey   12/27/02,  9:29:11 AM
The 9:00 AM Intraday Update has been posted. Link

 
 
  Steven Price   12/27/02,  9:22:02 AM
Swing Trade Signals
It looks like we may get the move under Dow 8400 I outlined in the Swing Wrap last night. I'm not going to try to catch a falling knife, so I'll be looking for evidence of support and a low risk entry on the long side with a tight stop. There is an awful lot of support in the 8250-8300 range and an entry just above that range with a stop just below that support is my target.

 
 
  Jonathan Levinson   12/27/02,  8:39:11 AM
I am culling out all the trash I am carrying in my account and I am taking my losses now.

Do you manage your year end that way?

I guess being simple is the easy way to deal with my stupid positions. Do you dump the junk at year end?

It depends on the position. The only reason particular to year end that would cause me to dump a loser I'd otherwise hold is to realise a capital loss for tax purposes. Check with your accountant before doing this, as I seem to recall a cutoff prior to Dec 31st. I could, however, be wrong. Other than that, it's just another day, trade-wise. Cutting losses is the way of winners, but only if it's a loss according to your game plan.

 
 
  Jonathan Levinson   12/27/02,  8:30:00 AM
The US Dollar Index got croaked last night, getting sold to just above 102.60. It has held with a weak bounce to just below 102.80. Equity futures are negative, SPX -2.20, NDX -.50.

 
 
  Linda Piazza   12/27/02,  7:26:48 AM
News services report this morning that North Korea has decided to expel the U.N.'s International Atomic Energy Agency inspectors. In addition, while reconnecting the cross-border road in the demilitarized zone with rail links, North Korean troops brought banned light machine guns into the zone.

In Europe, France's government statistics office released the French manufacter's number. Forecast at 96, the actual number was 99, surprising to the upside. This was the second monthly gain. Despite this good news, the CAC 40 and other European markets fell amid worries that increased oil prices will inhibit growth. As of this writing, the CAC 40 had fallen .84%, the FTSE 100 moved down 1.22%, and the DAX again moved below 3000, falling 1.82%, to 2946.37. Overnight, the Nikkei was up .16%. U.S. companies performing badly in Europe today include Dupont, Boeing, and Alcoa.

 
 
  Jim Brown   12/26/02,  10:14:30 PM
End of year renewal special - The end of year special this year has been a hit and those readers who want to lock in the cheapest rate possible with a ton of freebies should check it out! Click here: Link

 
 
  Steven Price   12/26/02,  10:14:21 PM
The Swing Trade Game Plan has been posted: Link

 
 
  John Seckinger   12/26/02,  10:13:56 PM
The Futures Trader Wrap has been posted: Link

 
 
  Jim Brown   12/26/02,  10:13:32 PM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

 
 

Market Monitor Archives