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  Jim Brown   1/10/03,  6:33:51 PM
Futures Trading

On Monday Jan-13th we will begin posting futures trades in this monitor.

There will be two types of trades, scalps and position trades.

The scalps will be targeted to produce 3-5 point gains and average 3-4 trades per day with a 3-4 point risk per trade.

The position trades will be suggested on extremes in the markets and we estimate 1-3 trades per week.

We strongly suggest paper trading for the first week as we get the kinks out of the system in terms of posting and commentary.

Are you ready to rumble?

 
 
  Jim Brown   1/10/03,  6:32:22 PM
Futures Trading

On the new Desktop Market Monitor there is a link to the Futures Monitor. We will begin the futures commentary and trades on this page on Monday. Click this link to see how to access this information: Link

 
 
  Jim Brown   1/10/03,  6:30:09 PM
End of year renewal special - Only 3 days left to take advantage of the special. Those readers who want to lock in the cheapest rate possible with a ton of freebies should check it out! Click here: Link

Upgrade your regular subscription to a Premium level to continue receiving the Market Monitor. Click here: Link

 
 
  Jeff Bailey   1/10/03,  6:29:20 PM
Intra-day Pivot/Levels for Monday (01/13/03)..

INDU : S2=8635 , S1=8710 , P=8764 , R1=8839 , R2=8893

SPX : S2=911 , S1=919 , P=926 , R1=934 , R2=941

OEX : S2=462 , S1=466 , P=469.5 , R1=474 , R2=477

NDX : S2=1040 , S1=1063 , P= 1080 , R1=1103 , R2=1120

QQQ : S2=25.81 , S1=26.44 , P=26.85 , R1=27.48 , R2=27.89

Intra-day Pivot/Levels for (01/10/03) were ...

INDU : S2=8529 , S1= 8652, P=8720 , R1=8844 , R2=8911

SPX : S2=903 , S1=915 , P=922 , R1=934 , R2=940

OEX : S2=456 , S1=463 , P=467 , R1=474 , R2=477

NDX : S2=1043 , S1=1059 , P=1072 , R1=1088 , R2=1100

QQQ : S2=25.88 , S1=26.30 , P=26.64 , R1=27.06 , R2=27.40

 
 
  Kent Barton   1/10/03,  4:24:58 PM
The VXN.X NASDAQ 100 volatility index (42.28 -0.71) tagged an intraday low of $41.29 today. This breakdown took the index to levels not seen since late-April. Jeff has talked extensively about how the VIX.X is sitting at a crucial pivot point. With the VXN.X moving to new lows today, could the VIX.X be far behind?

 
 
  Jeff Bailey   1/10/03,  4:16:57 PM
Put/Call Ratio Jeff: Could you please tell me where I can check the historical Put/Call ratio?

Yes... each night in the Market Wrap Link it should be posted in the first part of the wrap in the daily market statistics box. For historical data, a subscriber could simply click down the scale of wraps and get it there.

 
 
  Mark Wnetrzak   1/10/03,  3:59:32 PM
Covered-Call Portfolio
Most of the early-exit candidates mentioned last Sunday (ZIXI, VISG, MEE, MOGN, EYE) have offered reasonable exits or adjustments over the last several days. A new candidate this week, McData (NASDAQ:MCDTA), unfortunately never offered a reasonable entry point after gapping-up on Monday.

 
 
  Jeff Bailey   1/10/03,  3:59:12 PM
QQQ $27.00 +1.12% ... any bets on today's close?

 
 
  Steven Price   1/10/03,  3:52:44 PM
Swing Trade Signals
Given the current drifting I think it is getting harder and harder to pick direction from here. I am encouraged that the rally has been unable to hold over 8800. I am also discouraged by the fact that we bounced so strongly from poor jobs data. I am going to hold the 1/2 short signal over the weekend and let my stop loss of 8825 do the work for me. however, conservative traders can certainly punt here and not take any further risk.

Current levels: Dow 8772/SPX 926.51/OEX 469.72/COMP 1444

 
 
  Linda Piazza   1/10/03,  3:48:26 PM
Would a look at the Wilshire 5000 tell us anything that the other indices aren't tell us? Not really. As with the other indices, the Wilshire remains below its exponential 200-dma (the COMPX is above its simple 200-dma, but not its exponential 200-dma). As with the others, it's been up one day and down another this week in movements that were hair-raising for bulls and bears alike. During the course of the week, it's moved slightly above its "left shoulder level," although it also moved above its left-shoulder level on a previous H&S formation, on September 11 as it formed the tip of the right shoulder before falling through the neckline, into the lows of October. The daily 5(3)3 stochastics are signaling overbought conditions, while the weekly ones are rolling up from oversold conditions.

I wanted the markets to show me today that it was time to get bullish, but they haven't cooperated as yet. I'm not ruling out a bullish week next week, but just not ready to commit my cash to it. I still see the DJI butting right up underneath strong resistance and failing to push through despite favorable volume patterns. I see the Dow Jones Transportation Index trying several times this week to bump above the exponential 200-dma and failing to push above that level. I see the COMPX coming within spitting distance of its exponential 200-dma and failing to follow through to close above that level. I'm not ruling out a bearish week next week, either.

 
 
  Jeff Bailey   1/10/03,  3:47:03 PM
The 3:15 PM Intraday Update has been posted. Link

 
 
  Jonathan Levinson   1/10/03,  3:43:06 PM
The put to call ratio, like the markets, is rangebound, but just printed a nice, neutral .70, which should leave the way clear for gravity to reassert itself. If most of the option trading has been calls for the past 2 weeks, and the markets are at a relative high, and the biggest sellers of contracts are market makers, then my guess is that next week should see selling in order to expire the greatest number of these calls worthless. Just speculation, of course, but that's what I'm thinking.

 
 
  Jim Brown   1/10/03,  3:41:30 PM
8797.78 at 3:PM - does that qualify as yet another failure at 8800? It does in my book. However, we all know that every attempt chips away just a little bit more of the resistance. Every attempt takes a little more confidence away from the bears. Shucks, 5-10 more attempts and the bulls might actually get though! (grin)

As we move into the last 20 min I think that 200 DMA at 1433 on the Nasdaq is the key. If it closes under the 200 DMA then the bears may start loading up the truck on Monday.

 
 
  Linda Piazza   1/10/03,  3:24:51 PM
In the zig-zagging manner it's done all day, up/down volume has now flipped again and is showing stronger up volume than down volume. Although I do look at volume as measure independent of price, these volume patterns haven't been particularly helpful today in choosing a direction.

 
 
  Mark Phillips   1/10/03,  3:23:50 PM
CSCO $15.32 (+0.35) That's right, CSCO is back over $15 and right at what I would call an important point of inflection. The stock is up 18% over the past 2 weeks, and deep into overbought on the daily Stochastics, but as we all know, that doesn't mean it can't continue higher. based on the tone of the markets heading into the weekend, I think it is entirely possible that the rally continues next week. In case you lost track of time, next week is options expiration and that means time premiums are shrinking rapidly. I wouldn't consider putting on a position today due to the weekend time decay, but CSCO might make for an aggressive expiration week candidate for those willing to play it. Currently the Jan $15 Calls are 0.50 Bid, 0.55 Ask and the $15 puts are 0.20 Bid, 0.25 Ask. Definitely a lottery play either way you slice it, but I thought I'd mention it just the same, as I would expect a decent move next week, either a breakout over resistance that ought to bring in short-covering or another rejection from resistance, that should have the bears leaning on the stock again.

 
 
  Jonathan Levinson   1/10/03,  3:20:23 PM
They may be lining up to buy, but the US Dollar doesn't go down when foreigners are trying to join the party. It looks like plenty of domestic buying, particularly with bonds flat. Once again, I'm puzzled by the markets' ability to deliver Al Green back his repo money today without corresponding weakness in equities. Nevertheless, weakness in the US Dollar Index and strength in gold (in US Dollars) makes this rally suspect. With opex week next week, nothing should be surprising.

 
 
  Jonathan Levinson   1/10/03,  3:12:04 PM
Right on, Jim!

 
 
  Jim Brown   1/10/03,  3:09:34 PM
I have to admit that the rebound from the morning lows and then the rebound from the afternoon dip is very surprising. I am amazed at the bullishness in the face of the rising unemployment and the new North Korean move. This just proves that when investors want to buy they put on the blinders and hold their nose but continue to click away.

Everybody keeps talking about the jobless recovery. Eventually those with no jobs will not be able to support the economy or buy stocks. The jobless recovery will turn into a jobless depression and all the tax cut suggestions in the world will not hold the markets up. Whoa! That was a bearish thought. I guess my fingers ran away from my brain. (grin)

Obviously investors buying stocks today are wiser than me and they either have inside information or they simply don't care. Stocks are cheap in their mind and a recovery will come eventually. That is not a bad mindset for someone that is not afraid of seeing their cheap stocks get cheaper before that eventual recovery appears. Of course buying those single-digit-midgets now does not pose much risk as long as you are confident the company is not going under. It has always been said that you should buy stocks when nobody else wants them. It appears today that everybody is standing in line to buy. Does that cause concern for anybody?

 
 
  Jeff Bailey   1/10/03,  3:09:22 PM
OEX Bullish % Going through some e-mail and subscriber that looks to be hand charting the OEX stocks on p/f hasn't seen any reversal "buy signals" as of 10:22 AM (Is my e-mail time Eastern or Mountain?).

 
 
  Linda Piazza   1/10/03,  3:06:23 PM
Interesting weekly Dow chart for those interested in candlestick charting: Link If no drastic move happens in the next hour, this week's candle will be a doji or a near-doji, depending on how much movement occurs. If so, it will complete the second of two candles in a three-candle evening-star formation. Although this doji does just barely touch the previous week's white candle, most of the doji sits high above the previous week's white candle. Pring asserts that in some markets, it's allowable for the candles to touch. Will next week's candle complete the evening-star formation? That certainly would be difficult to accomplish, although anything is possible in the markets. First, a classic evening-star formation usually forms after a stock or index has been climbing, and there's only one white candle's worth of climb here. Of course, this pattern is forming at the resistance I've marked on the chart--historical, exponential 200-dma, and resistance from a broken regression channel--and Pring also gives some wiggle room for evening-star patterns forming at resistance. Most importantly, though, in order to complete a classic evening-star formation, the Dow would have to open next week about 200 points below its current level. In order to complete even a less-than-classic evening-star pattern, the DJI would need to open sharply lower on Monday. I would never consider acting on a candlestick pattern or other chart formation that had not yet been confirmed, and I'm not suggesting you do so, but this weekly chart will keep me watchful, especially in the context of daily DJI chart I posted at 11:58.

 
 
  Jonathan Levinson   1/10/03,  3:04:04 PM
The US Dollar Index continues lower, currently below 101.30. Nevertheless, QQQ is holding above 27. For all the action today, the bond market closed nearly unchanged, although precious metals are holding their gains.

 
 
  Jeff Bailey   1/10/03,  2:57:22 PM
Fiber Optic Index (FOP.X) 57.65 +7.75% ... early "leadership" group this morning now at session high. Looks to bode well for some technology bullishness into the close.

CIENA (CIEN) $7.19 +8.93% ... bears made some "coin" on this one on the way down, but note here that today's trade has CIEN above 12/02/02 relative high, which is current Index Trader's targets for the Indexes. Seeing some old technology stocks making breaks above their 12/02/02 highs should be hint of further bullishness and put NASDAQ-100 and QQQ bear's risk back to the highs of early December. Maybe that's why the QQQ is able to get back above $27? Me thinks so.

QQQ $27.10 here and not much trouble back at $27.00, and then intra-day R1 of $27.06.

 
 
  Jim Brown   1/10/03,  2:48:27 PM
End of year renewal special - Only 3 days left to take advantage of the special. Those readers who want to lock in the cheapest rate possible with a ton of freebies should check it out! Click here: Link

Upgrade your regular subscription to a Premium level to continue receiving the Market Monitor. Click here: Link

 
 
  Steven Price   1/10/03,  2:47:32 PM
You can use this link for an update of current OI stock picks. The P/L data includes only stock movement from date listed and not the protective put.

Link

 
 
  Mark Wnetrzak   1/10/03,  2:47:32 PM
Covered-Call Portfolio: AVID
Is the streak finally coming to an end? Avid Technology (NASDAQ:AVID), a covered-call position (long the stock, short the JAN-$20 calls), is dropping sharply today after a downgrade on concerns of valuation. The stock has dropped to its 30-dma and may move towards its 50-dma around $19.75 as the volume is rather heavy. The 50-dma also coincides with the last lateral consolidation area from NOV to DEC. Definitely one to monitor closely as we move into expiration week.

 
 
  Kent Barton   1/10/03,  2:39:26 PM
Scanning through charts for today's pick meeting, these stocks popped up as possible long plays: FRX, PSFT, XLNX, LEH, WEN, GILD, NXTL, and SYMC.

 
 
  Jeff Bailey   1/10/03,  2:36:34 PM
EXPE $66.42 -1.02% ... per this morning's day-trader short. Stock hasn't taken out earlier session high. I didn't see the pullback of $66.15 last 90-minutes. Would lower stop here to just above $66.70. To hold over weekend, would only do so if QQQ closes below $27.00.

 
 
  Jonathan Levinson   1/10/03,  2:36:01 PM
You know, Jeff, on a day like today, it seems like the bulls can do anything :)

 
 
  Jeff Bailey   1/10/03,  2:33:08 PM
QQQ $27.00 +1.12% ... right back near $27.00 here. Can bulls make the press higher?

 
 
  Ray Cummins   1/10/03,  2:30:56 PM
Spreads/Combos -- GENZ Straddle

Genzyme (NASDAQ:GENZ) shares are trading over $2 higher at $31.29 amid reports that the company's application to market Fabrazyme for the treatment of Fabry disease will be discussed Monday at the FDA's Endocrinologic and Metabolic Drugs Advisory Committee meeting. In a press release today, the pharmaceutical company said it will present an overview of its clinical development program for Fabrazyme and following the discussion, FDA staff will evaluate the advisory committee's input and make a determination about the next steps toward approval. The company expects formal FDA action on Fabrazyme in the first half of 2003 and investors are apparently expecting a favorable outcome. Our speculative debit straddle in GENZ recently hit the downside "break-even" point, allowing the puts to pay for the entire position. Traders who took this route now have JAN-$35 calls "risk-free" and any bullish activity should increase their value in the coming sessions.

 
 
  Jonathan Levinson   1/10/03,  2:30:22 PM
Recall that next week is options expiration week for January contracts.

 
 
  Jonathan Levinson   1/10/03,  2:29:48 PM
That lower ascending trendline just supported the COMPX through an attempted rollover on the 5(3) stochastics on the 15 minute candles.

 
 
  John Seckinger   1/10/03,  2:22:39 PM
For most of the session the Dow has traded within its short-term Bollinger Bands (five-minute chart). With the Dow currently at 8752, the top of the band comes in at 8772, while the low band is at 8726. Bears are most likely defending this 8772 area, which is close to the top of the first five-minute period (8766).

 
 
  Jeff Bailey   1/10/03,  2:20:58 PM
52-week highs on listed stocks ... yesterday we made observation of new 52-week highs seen over 100 in both the NYSE and NASDAQ. Often times, a stock that is close to trading a new 52-week high, traders and bulls long the stock will run the stock during a week and try to "make sure" the stock posts a 52-week high on Friday (seems to be more on NYSE listed stocks). This way, the stock gets a "bold typed font" in the weekend investment paper. Will draw the attention of bullish investors, and may have them buying on Monday. Interesting little spike in volume in FRX right when it trades today's 52-week high. Bear calling it quits? Or just an old bull picking up a few more shares to a stock that's been treating him good? Link

 
 
  Linda Piazza   1/10/03,  2:16:05 PM
There are now slightly more decliners than advancers on both the NYSE and the Nasdaq. Up/down volume ratios show up volume at 1.36 times down volume on the NYSE and at slightly less than twice down volume on the Nasdaq. New highs continue to outnumber new lows, by 69:14 on the NYSE and by 62:20 on the Nasdaq.

 
 
  Jonathan Levinson   1/10/03,  2:08:07 PM
The steeply ascending lower trendline on the rising wedge (zoom in on the 30 minute candles) continues to support price higher on the COMPX, and the TRINQ, after coming up briefly for air, is headed back down as buying pressure increases, currently reading .37. The headline on Bloomberg.com continues to be U.S. Economy Sheds 101,000 Jobs, Most in 10 Months and More Than Forecasts, and yet the buying continues in our equity markets. Are the markets elated because the threat of a rate hike from Al Green has been reduced? Or is Joe Granville correct in his statement "News is for suckers"? Either way, precious metals remain strong and the US Dollar remains weak, and I admire the courage of the traders and/or computers who are currently buying the COMPX so aggressively today.

 
 
  John Seckinger   1/10/03,  2:07:25 PM
Microsoft (MSFT) is back in the news on Friday, following a federal judge refusing to dismiss antitrust cases brought by two small rival software companies. The companies filing suit are Be Inc. and Burst.com (BRST). Quoting the U.S. District Judge J. Frederick Motz, "I am satisfied there are sufficient allegations as to federal antitrust claims."

 
 
  Steven Price   1/10/03,  1:53:37 PM
oex-472.50 - Does this have to be on a closing basis or is the reversal already secure on pnf? S.O.

The PnF chart measures the power of moves regardless of closing levels. Now that the 472.50 level was reached, the buy signal is secure. The reversal on the 2.5 box actually came at 467.50.

 
 
  Jeff Bailey   1/10/03,  1:52:33 PM
The 1:00 PM Intraday Update has been posted. Link

 
 
  John Seckinger   1/10/03,  1:44:48 PM
The dollar remains under pressure, while the XAU index is higher by 1.57 points to 78. The Utility Index is down 1.15% to 267, but still above support at 260. Turning to bonds, the 30-year is higher by 3 ticks at 109'04 and well inside today's range from 109'04 to 108'19. The Sox is higher by 5.47 points to 336, but near solid resistance at 340. How can a trader use all of these relationships? A weak dollar, higher bond prices, and Sox near resistance all points to some nervousness about owning equities at current prices. Moreover, the UTY index still has room to fall; thereby giving a not-so-great bullish risk/reward scenario. The Dow is above its pivot (8720), and that takes things to a neutral stance.

 
 
  Ray Cummins   1/10/03,  1:42:16 PM
Spreads/Combos -- Portfolio Activity

Today's session seems almost lackluster with regard to some of the recent activity, however there were a few notable "movers" in our portfolio. Among the bullish issues, Gold shares were among the best performers and the XAU and ASA Ltd. (NYSE:ASA) bounced back from recent losses. Both of those issues are trading comfortably, albeit tenuously, above the sold (put) strikes for now. Lockheed Martin (NYSE:LMT) also rebounded today after Standard & Poor's published a list of mutual funds that have added LMT to benefit from the possible outcomes of an Iraq conflict. Our (bullish) position at $55 is profitable, but precarious, so monitor the stock closely in the coming week. Capital One (NYSE:COF) continues to surprise everyone with its recent rally and today the stock was up another $2 to $39. Traders say the move is due in part to new federal guidelines on sub-prime loans, which were less severe than expected.

Among the declining issues, 3M Corp. (NYSE:MMM) led the Dow industrials lower while Lexmark (NYSE:LXK) and Cognizant Technology (NASDAQ:CTSH) were among the hi-tech losers. All of these stocks are candidates in recent bearish positions so the activity is favorable. On the downside, Valero Petroleum (NYSE:VLO) and Anadarko (NYSE:APC) remain on the watch-list as crude oil prices consolidate.

 
 
  Linda Piazza   1/10/03,  1:30:48 PM
Here's my update on my anecdotal information about tech hiring. As I've mentioned before, I know a group of about six guys who are graduates of a prestigious master's program in software engineering. Although all six had been sought by many employers, all lost their jobs during the tech wreck. Some managed to cobble together jobs, some with companies that in turn went out of business, throwing them back into the market a second time. At least half had difficulty finding any job at all. One could not even get an interview for an extended period of time. I checked last night, and all are currently employed. One, at least, has been sought for interviews with another company, but he mentions that his company is also interviewing. In his company's case, the company will need more employees if the deals it's negotiating come through, but will probably go out of business soon if they don't. They're interviewing, but they're not hiring, and this man believes that the company interviewing him is interviewing under the same constraints. He mentions business deals his software company secures that are "done deals" until it's time to sign the contracts and then they're not done. It seems there's pent-up demand for their products and services, but companies are nervous and not yet ready to commit the necessary funds.

 
 
  John Seckinger   1/10/03,  1:25:05 PM
Note: 79 companies report earnings next week. Some of the names include: BAC, HI, BBT, KEY, SOTR, NCC, AAPL, KMI, GMH, and YHOO. In other company-specific news, it is reported that Citibank (C) has sold four million shares at $37. Shares of C are higher by 10 cents at 37.16.

 
 
  Jonathan Levinson   1/10/03,  1:21:08 PM
There's a bearish ascending wedge of sorts at the tail end of the 60 minute COMPX chart, but those bullish engulfing candles are a little unsettling for bears. It's as if Al Green is sitting there with an Etch-a-Sketch, but a custom one from Abercrombie & Fitch or Harrods or some such place, slapping a bullish hammer here, an engulfing there... In any event, 1436-8 looks like the lower ascending trendline.

 
 
  Linda Piazza   1/10/03,  1:09:54 PM
The Dow Jones Transportation Index is dipping below the 2400 level after failing to break through its exponential 200-dma again this morning. While the 2400 level might be a nice round number, it's actually the 2365-2375 level that's been more important historical support. This week's low has been 2366.45. I watch this important index as a measure of market health or weakness.

 
 
  Jim Brown   1/10/03,  1:06:47 PM
Just when I was beginning to think I was the only trader who still felt there was an economic dip in our future the Jobs report appeared to rebuild my confidence. Still short from 8800 after a third failure at that level, fourth if you count the 8787 attempt yesterday, and still thinking we are going back down. The fly in this ointment is the strong Nasdaq. That 200 DMA at 1433 is acting like fly paper for that average. Further below that is a confluence of averages 30,50,130 at 1400. This should be strong support. SO, with the Nasdaq stuck between 1400-1435 that index could prevent the Dow from a major drop.

That leaves me comfortable with my position but less comfortable than I was with the Nasdaq much lower. The wild card is the rush of earnings next week. This will be the first week of full earnings and actually the outlook is surprisingly good. There were very few earnings warnings this week relative to the number of earnings to be announced over the next two weeks. This means the risk for major warnings has dropped substantially and the odds are good that most companies will meet the lowered estimates. Now our challenge is the guidance. If they are not warning because the estimates are already so low a kids kool aid stand could hit them then how much lower can guidance go? If all these conflicting signals are too much to decipher on a Friday afternoon then don't worry. The market will do it for us beginning on Monday.

 
 
  Ray Cummins   1/10/03,  12:59:51 PM
Spreads/Combos -- Reader's Write: Credit Spreads

Dear Ray...Thank you for your comments. I would like your opinion about another method of saving a losing (call-credit) spread. If the stock reaches the sold strike price and it appears that the stock is going to continue to go against you, does it make sense to: buy the same strike price - but 1 month out - and also sell to close the the previously bought strike? This will bring in a profit from the sale and turn the position into a calendar spread so you are still hedged. The far month option will not rise at the same degree as the near month but at least the downside is reduced eg: original position - bear call spread dec 40/45 , the stock rises to 40.2, we sell the 45 position for a gain and buy the Jan 40 call creating a calendar spread. Please comment on this strategy. I again would really like to thank you for your help. Sincerely Yours...MK

The approach you described (buy an ATM put to establish a calendar spread) is certainly viable under the right conditions but I am not sure how well it would work on a regular basis. The probability of a successful outcome is dependent on a larger number of variables (than with the initial play) and some of the factors you need to consider include:

1) The time to expiration for the current sold option (other strategies/alternatives more favorable - at what point does this method become most viable?)

2) The price of the underlying reference the sold strike (OTM, ATM, ITM -- is adjustment timely?)

3) The volatility differential between the front-month and the longer-term options (buying additional "time'" at what premium/cost?)

4) The technical outlook for the underlying issue (is the stock likely to remain in a small range after a recent, substantial change of character?)

Since you will be adding money (risk) to the original position, it is also necessary to evaluate/compare the possible outcomes with regard to simply closing the spread for a small loss in a timely manner. Let me know how it works out...

 
 
  Linda Piazza   1/10/03,  12:56:22 PM
Mark brought up an interesting point when he mentioned the low lunch-time volume and volume patterns. As I mentioned yesterday, I prefer using the ratio method when calculating volume patterns, rather than the subtraction method used by some programs. The ratio method doesn't show as much distortion during low or high-volume periods. For example, the Nasdaq up/down volume showed a 5:1 ratio earlier today (and actually climbed higher than that at one point) and now shows a 2:1 ratio. Unless a disproportionate number of buyers of stock went to lunch and left behind a disproportionate number of sellers of stock, the ratio method should account for the lower volume, too.

 
 
  Mark Phillips   1/10/03,  12:56:11 PM
ASD $68.40 (-1.50) This latest downdraft in the broad market has pushed ASD down to new lows of the day, and the $68 support level looks like it will be tested again this afternoon. Remember from last night's play write-up that the $68 level is the site of the bullish support line and we can't rule out a bounce from this level. Traders looking to enter on weakness need to see a volume-backed move under $68 before committing capital to the trade.

 
 
  Mark Phillips   1/10/03,  12:51:45 PM
Spoke too soon? Just after my last post and Steve's comment about the 50% level at 8753 holding, we got another push down and now all the indices are trading in the red. Maybe the bears haven't given up just yet... However it is interesting that during this most recent dip, the VIX has fallen just a bit. Still more lunchtime consolidation, and the jury's still out.

 
 
  Jonathan Levinson   1/10/03,  12:50:20 PM
QQQ is returning to unchanged, currently +.09 on the day. HUI and XAU are up strongly as precious metals regain some of their gleam after being negative earlier, HUI +2.91 and XAU 1.77. The TRINQ is reading .56, now out of "hysteria" territory and back to merely "strong buying" territory, while the QQV is still down .73, at 35.35. If the sellers come out, the COMPX should have plenty of leeway to the downside. My targets remain 1418, then 1400. I'll re-assess from there if and when we get there.

 
 
  John Seckinger   1/10/03,  12:46:35 PM
Per my 11:39:26 Post, I didn't like the lack of follow-through in the OEX, YM contract didn't hit 8820, and the Dow came back underneath its high during the first five minutes. The pivot in the Dow is 8720, so I want to remain neutral to slighly bullish as long as the blue chips remain above this area; however, I am currently flat and keeping with the 'wait and see' attitude.

 
 
  Steven Price   1/10/03,  12:39:40 PM
Swing Trade Signals
Hmmmmm. All that bullishness and we weren't able to hold the gain over Dow 8800. I do agree with Mark that we simply seeing a weakening of the morning bounce, rather than a reversal of sentiment. However, the failure to hold these rallies at 8800 is also bringing in the possibility that bulls just don't have the power to continue on past a right shoulder. The 50% mark for today's range is 8753 and as long as we hold over 8750, then I think today's action looks bullish for the remainder of the day. Current levels: Dow 8753/SPX 926.89/OEX 469.98/COMP 1445.03

 
 
  Mark Phillips   1/10/03,  12:32:19 PM
After the OEX traded above that pivotal 472.50 level this morning, that's the index I'm watching for leadership today. While slightly off of its highs, there isn't a lot of weakness to be seen, as it trades near 470, finding support near where it has been finding intraday resistance earlier in the week.

The ADVDECV picture has changed somewhat in the past hour or so, as the steady uptrend has now moved into a sideways consolidation pattern. This isn't necessarily a sign of weakness, so much as a reflection of reduced volume heading into the lunchtime lull. That said, the DOW has dropped just slightly below the 8760 level that provided support on the initial pullback from the morning highs and the COMP is just below 1445, which provided support on the initial pullback. Those two indices mild weakness is pressuring the OEX back under the 470 level, while the VIX trades fractionally higher at 27.39. taken together, it is a weakening of the strong rebound we saw earlier in the day, but certainly not the sort of weakness bears would like to see.

 
 
  Linda Piazza   1/10/03,  12:26:51 PM
Nasdaq advancing/declining figures show a dip again, with advancers barely ahead of decliners. As of this writing, there were 1488 advancing issues to 1402 declining issues. On the NYSE, there were 1642 advancing issues to 1457 declining issues.

 
 
  Jonathan Levinson   1/10/03,  12:26:49 PM
The COMPX has been parked at this level for the past 45 minutes, as the put to call ratio remained flat, down .2 to .69, while the TRINQ drifted up to .47. Metals have added to their gains, with XAU well up by 1.24 to 77.76 and HUI +1.99. Treasury yields are slightly in the red, while the QQV and VXN are back to flat. I mentioned the QQV's bullish descending wedge on the weekly candles yesterday- in fact, I see that formation on all three volatility indices- the VIX, VXN and QQV. In the medium term, it's a bearish indication for equities.

 
 
  John Seckinger   1/10/03,  12:13:31 PM
Shares of retailer J.C. Penney (JCP) are lower by 3.5% to 23.68 after the company said on Friday that it would cut 2,000 jobs from its catalog business and take about $40 million in charges in 2003. It was just yesterday when the company said its December catalog sales fell 23.7 percent. On the other hand, its department stores saw a 4.7 percent rise in sales at stores open at least a year. Its online unit, included in the catalog business, posted a 20 percent jump for the November and December holiday season.

 
 
  Linda Piazza   1/10/03,  11:58:47 AM
Here's a reason I have a "show me" attitude this morning. Here's what I see facing the Dow. On the linked chart, the light green horizontal line is historical resistance. The blue channel is a regression channel that contained Dow prices until they fell through that channel in mid-December, and which now should provide resistance. The maroon line is the exponential 200-dma, and the blue line just above that is the simple 200-dma. That's mighty resistance to be pushed through with those overbought levels showing up on the stochastics. If the DJI can close above these important resistance lines, that's bullish indeed, but as Steve has mentioned, the December 2 high is just above that, too. Link

 
 
  Steven Price   1/10/03,  11:55:17 AM
Swing Trade Signals
We continue to hover close to unchanged with big spikes in both directions on the 60 min. chart. I still think this morning's big bounce looks bullish, but I'm willing to risk a 1/2 position below resistance that so far has held on the moves over 8800. I have mentioned the last couple of days that conservative traders could have used tighter stops to ensure either a profit on Wednesday's move or a break-even on Thursday's rally (this does not include bid-ask spread). That should leave only aggressive traders still short here. I think the trade of 472.50 in the OEX is significant, and most likely is signaling a move higher, as has been mentioned by several of our analysts, but the possibility of a bull trap remains. Stops are set at Dow 8825, which we came within 7 points of on the last rally.

Current levels: Dow 8787/OEX 471.49/COMP 1448/SPX 929.42

 
 
  Linda Piazza   1/10/03,  11:45:16 AM
Although the Dow Jones Transportation Index moved briefly above its exponential 200-dma (now at 2414.68), it did not close above that level, even on a five-minute chart. I'm watching all these developments with a "show me" attitude this morning. I'm ready to participate on the bullish side, but want confirmation, especially with the daily 5(3)3 stochastics overbought and attempting to roll across so many indices. John taught us a while ago that we could use the ADX as an indicator of whether a stock or index was trending or in a trading range, and the current 15.11 measurement for the ADX on the OEX daily chart shows that the OEX should still be in range-bound trading. That means that oscillators such as the stochastics can be trusted. That does not mean that the oscillators and price should roll immediately, but rather that the warning being given by that overbought level on the OEX should alert us to potential weakness in that index, at least. While the COMPX has moved above and closed above an important 200-dma, which on the surface appears different from its intraday-only move above that 200-dma in early December, I'll remain skeptical of this rally in this index, too, until it closes above the exponential 200-dma.

 
 
  Jeff Bailey   1/10/03,  11:44:59 AM
The 11:00 AM Intraday Update has been posted. Link

 
 
  Jonathan Levinson   1/10/03,  11:39:54 AM
The put to call ratio has just printed .71. Bearishness is rising as price falls.

 
 
  John Seckinger   1/10/03,  11:39:26 AM
Well, not only did the YM not reach 8820, but the Dow came back under the high during the first five minutes (8766). This cancels out the 'open test drive' theory I spoke about earlier. For me at least, it now turns into a 'wait and see' attitude. Sure feels like a 'bull trap' after the OEX traded 472.50, but I will give the market some more time to digest the morning's volatility.

 
 
  Jonathan Levinson   1/10/03,  11:33:24 AM
The TRINQ is all the way up to .31, indicating a slight ebb in the buying hysteria we saw from the early lows. HUI and XAU are back in the green. The COMPX made it to within 6 points of the 200 day EMA identified by Linda at 1463 before reversing. However, it's been a slow fade, and so far shallow. Today may be many things, but it's not boring. The 11:30 AM p/c ratio is due ou within 4 minutes or so, and I'll update then.

 
 
  Steven Price   1/10/03,  11:16:57 AM
Current levels: Dow 8781/OEX 471.44/SPX 929.48/COMP 1449

 
 
  Steven Price   1/10/03,  11:16:00 AM
Swing Trade Signals
The comments from North Korea seemed to have led to a turnaround at least for the moment. We are back to near unchanged on the day, but bouncing as I type.

 
 
  Steven Price   1/10/03,  11:13:26 AM
There was a mistake in last night's newsletter and PG was listed as a Call instead of as a Put. The play write-up is accurate and we are correcting the problem now.

Procter and Gamble (PG) $85.31 (-0.47)

 
 
  Jonathan Levinson   1/10/03,  11:08:31 AM
The put to call ratio has dropped a touch to .63. TRINQ remains at .19, TICK.NQ 59, QQV down .23 to 35.85. Precious metals in the red.

 
 
  Jeff Bailey   1/10/03,  11:04:59 AM
OEX Alert! 472.54 +0.55% .... This is double-top buy singal on $2.5 box scale per previous comments in Index Trader wraps. Link

QQQ bull from $27.07 gets some confirmation, QQQ trading $27.24 here.

 
 
  John Seckinger   1/10/03,  11:04:45 AM
Yes, there is a name for this move as well. It is called "open TEST drive". The key will be for the Dow to not trade back below the high during the first five minutes (8766). For more information on this, see link: Link

 
 
  Linda Piazza   1/10/03,  11:03:23 AM
New highs/new lows ratios remain strong, with 45 new highs to 9 new lows on the NYSE and 31 new highs to 14 new lows on the Nasdaq. Up volume is now 5 times down volume on the Nasdaq, and about 1 1/2 times down volume on the NYSE. As Mark mentioned, this is a reversal from earlier volume patterns.

 
 
  Steven Price   1/10/03,  11:03:22 AM
Swing Trade Signals
we continue to hit new relative highs and I am expecting to be stopped out today. As I mentioned earlier, the next PnF buy signals come at Dow 8850/SPX 935/OEX 472.50 (which we just crossed). With the December/August highs looming just above, if I am stopped out today, I will sit the rest of the day out, but I do believe a break over Dow 8825 will signal at least another leg to Dow 9000 for aggressive traders to play.

 
 
  John Seckinger   1/10/03,  11:01:42 AM
Jeff, OEX hits 472.50.

 
 
  John Seckinger   1/10/03,  11:00:31 AM
UAL is in the news once again, following a federal bankruptcy judge on Friday imposed temporary 14 percent pay cuts on United Airlines' 37,000 machinists. It was the machinists that had rejected the pay cut proposal. Pilots had already agreed to take 29 percent pay cuts, and wages were reduced by 9 percent for flight attendants and 13 percent for dispatchers and meteorologists. Shares of UAL are lower 0.03 to 1.48.

 
 
  Jeff Bailey   1/10/03,  10:58:49 AM
Sector Strength now has earlier strength in Fiber Optic (FOP.X) 56.94 +6.37% building from earlier noted 3% gains. Networking (NWX.X) 164 +5.84% also building gains.

 
 
  Mark Phillips   1/10/03,  10:55:15 AM
GS $75.25 (+1.53) Yesterday's session came to a rather bullish conclusion, ending at the high of the day and slightly below the $74 level and the 50-dma. We got a decent gap down this morning, and since then the buyers have been grabbing the stock with both hands. Now up more than 2% on the day, GS has blasted through the $75 resistance level, clearing the 50-dma and 200-dma in the process. Traders looking for an entry into this LEAPS put Candidate will want to stand aside in the face of this strength. At a minumum, even aggressive traders will want to see a drop and close below $74 before playing.

 
 
  Jeff Bailey   1/10/03,  10:53:07 AM
QQQ $27.09 +1.38 ... bulls looking long here above today's R1.

Then need some "confirmation" from OEX at 472.50. OEX 471.85 here.

 
 
  Linda Piazza   1/10/03,  10:51:41 AM
Although the COMPX has moved above its simple 200-dma, it has not yet moved above the 200-dma calculated by the exponential method. That 200-dma lies ahead at 1463.33. I would feel more comfortable about bullish plays if the COMPX can also clear this 200-dma. It's shown in the linked chart in maroon, while the simple 200-dma is shown in blue. Link

 
 
  Mark Phillips   1/10/03,  10:47:56 AM
Traders looking for weakness today won't find it in the ratio of advancing to declining volume on either the NASDAQ or NYSE. After the opening dip below the flat line, both ADVDECV.NY and ADVDECV.NQ have reversed and are marching steadily higher. Without a reversal in these indicators, I expect to see the broad market indices continue to march higher throughout the day in defiance of the poor employment news. This action is decidedly bullish!

 
 
  Jonathan Levinson   1/10/03,  10:46:43 AM
The TRINQ is now down to .21. I see a negative divergence on the money flow index on the COMPX 5 and 10 minute candles, but I don't have enough time with this indicator to encourage me to rely on it. The QQV has gone flat on the day, yields are positive with FVX +3.9 bps. XAU and HUI holding green, but not by much.

 
 
  Linda Piazza   1/10/03,  10:45:04 AM
As it has been doing all week, the Dow Jones Transportation Index is hugging its exponential 200-dma, just above at 2414.13. Although this index has managed to push above this MA for brief periods intraday during this last week, it has not managed a close above that level.

 
 
  Jonathan Levinson   1/10/03,  10:42:37 AM
The CBOE put to call ratio has just come in for the past half hour at .67 again.

 
 
  Linda Piazza   1/10/03,  10:41:08 AM
Just for reference, Tuesday's (and this week's) OEX high was 471.83. A few moments ago, the OEX pushed up within cents of that number, to 471.28, but so far has not pushed through this week's high.

 
 
  Jonathan Levinson   1/10/03,  10:36:28 AM
The TRINQ is indicating another round of near-hysteria buying. This would be a no-brainer short at these levels, but remember that the markets can remain irrational longer than you can remain solvent. Stick to the rules and let your stops trigger if they're being hit.

 
 
  Steven Price   1/10/03,  10:35:55 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
With this morning's amazing recovery, we need to have our stops set on the 1/2 short signal at Dow 8825.

Current levels: Dow 8780/SPX 928.44/COMP 1448/ OEX 470.86

 
 
  Steven Price   1/10/03,  10:34:02 AM
Fellow bears should take a look at Jeff's Index Wrap from last night. The OEX 472.50 level, as well as a Dow trade beyond our stop at 8850 and an SPX trade of 935 would all be buy signals. If the short play fails and is stopped out, then these are some of the levels I'll be watching for the next move higher. I do think they are higher risk longs with the August/December highs looming just above Dow 9000.

 
 
  Jonathan Levinson   1/10/03,  10:33:03 AM
The TRINQ is getting crushed yet again, currently .24. QQQ has just broken 27 for a moment.

 
 
  Linda Piazza   1/10/03,  10:31:30 AM
In earliest trading, the adv/dec ratio-method calculations showed more decliners than advancers, with a ratio of .77 on the NYSE and .79 on the Nasdaq. For those of you familiar with the subtraction method, that would show a negative adv/dec line. Up/down volume is at a ratio of 106/113 on the NYSE and 191/125 on the Nasdaq, showing slightly more shares trading on upticks on the Nasdaq than on downticks. New highs/new lows continue to show more new highs than new lows on both indices, with a 30/9 ratio on the NYSE and a 21/13 ratio on the Nasdaq. We'll see how these numbers sort out as the day goes on.

 
 
  Jeff Bailey   1/10/03,  10:31:30 AM
EXPE $66.80 -0.47% ... day trader short doesn't necessarily like today's recovery from stocks. I'm going to suggest lowering stop to just above today's high of $67.39, and look to close out on weakness near-term right above pivot of $66.20.

 
 
  John Seckinger   1/10/03,  10:26:05 AM
Despite the employment report and article in the WSJ about Venezuela having trouble with its domestic T-bills and could have a foreign-debt-servicing problem, the Dow still managed to reach the high set during the first five minutes. In my futures wrap column, I did think a dip would be bought in the YM contract (Dow mini) near S1; however, we never got there. Going forward, I have to imagine the 8820 area in the YM is pretty important. If the market softens, then it might come down to stochastics and playing a range. Note: The first five-minute high in the Dow was 8766.10, and I like to use a 10-point cushion for a breakout. The high so far is 8776.04. Just missed it.

 
 
  Linda Piazza   1/10/03,  10:22:15 AM
To Jeff's excellent discussion of the VIX, and those Mark has contributed in the past, I'd like to add a reminder that when the VIX hit November lows and then reversed up, markets did not immediately reverse, but continued higher into the December 2 peak. The move up in the VIX while markets continued up was a heads-up that something was going on, as many OIN writers commented at the time.

 
 
  Jonathan Levinson   1/10/03,  10:20:27 AM
The Fed has announced a weekend repo of 1.999B (but not 2B). That's a net drain of 5.76B. This indicator has let to unpredictable results lately, but should precipitate market weakness.

 
 
  Jeff Bailey   1/10/03,  10:17:23 AM
Market Volatility Index (VIX.X) 27.29 +1.52% .... today's high/low for VIX is inside of yesterday's range. No real move here.

 
 
  Jonathan Levinson   1/10/03,  10:15:47 AM
The put to call ratio has just printed an opening reading of .67. In other words, everyone bought the dip. The profitless, taxless, jobless recovery. I am impressed with the gusto of bulls, but the fact that they all bought this and continue to tip the boat so lopsidedly erases any thought of bullishness this little bounce has given me. Just my humble opinion, but the majority tends to be wrong. The put to call ratio below .60 would be a compelling sell signal if lined up at a resistance line. That said, the COMPX is back above its 200 dma, so perhaps this is the start of a new bull market. Well, precious metals are up and the put to call ratio and the TRINQ are down. I'll leave the jury to deliberate on that larger question for the time being.

 
 
  Jeff Bailey   1/10/03,  10:15:02 AM
EXPE $66.10 -1.50% ... back below daily pivot, while QQQ $26.72 +0.07% above its daily pivot of $26.64. Very short-term observation of relative weakness in EXPE.

Using p/f chart and RS there, EXPE also softening up a bit. Still over longer-term, EXPE has been strong stock past couple of years.Link

 
 
  Linda Piazza   1/10/03,  10:13:11 AM
European markets dived after the release of the U.S. employment numbers this morning, moving to their lows, but then clawed their way back into positive territory, if only slightly. The FTSE 100, for example, fell about 70 points (1.75%) from its high of the day about thirty minutes before the release to its low immediately afterwards, then bounced back to recover about 30 of those points.

 
 
  Steven Price   1/10/03,  10:10:19 AM
Swing Trade Signals
I really find this bounce amazing with the NDX making it all the way back into the green briefly. The bounce is fading some as I type, but I'm beginning to feel little horns poking me in the behind, as if the bulls have already knocked down my door and are letting me know they have arrived. The resistance at Dow 8800 is still firm, so my stop of 8825 on the short signal makes sense for aggressive traders, but those traders not willing to hold the short may want to punt on a move back over today's high of 8762.

Current levels: Dow 8735/SPX 923.17/OEX 468.13/COMP 1436

 
 
  Jeff Bailey   1/10/03,  10:04:59 AM
Have bears chickened out? Dow Indu 8,761 -0.16, off just 14 points here. Came back up through today's 8,720 pivot like it wasn't there.

I probably shouldn't say "chickened out." Probably some good old "risk management" at minimum.

 
 
  Linda Piazza   1/10/03,  10:04:06 AM
I've had the 463.50-463.60 area marked on my OEX daily chart for quite a while now, as it keeps coming back into view as important support or resistance. Prices gravitated around this area for a period in late June and early July, for example; it marked the 9/11/02 right-shoulder high of the eventually confirmed H&S formation that led to October lows; and it provided resistance in mid-December. Similarly, I've had the 472 area marked on my charts for a while, too, for obvious reasons. These are the two areas I'll be watching for violations. Link

 
 
  John Seckinger   1/10/03,  10:02:43 AM
With the five minute chart closing above the 50% day's retracement, the objective is for a move to the opening at 8776. If the Dow trades 8733 first, then it makes sense to look for a failure.

 
 
  Steven Price   1/10/03,  10:01:10 AM
Swing Trade Signals
Two schools of thought I'm fluctuating between here. 1) We are starting to get some poor economic data at the top end of the recent run. After running out of steam, the tide is turning and we are headed lower. 2) If a terrible jobs report and Notrth Korea pulling out of the Nuclear Non-Proliferation Treaty can't spur a real sell-off, then maybe this rally really does have some legs and it may be time to start looking in the other direction.

Current levels: Dow 8745/SPX 923.96/OEX 468.77/COMP 1436

 
 
  Jonathan Levinson   1/10/03,  10:00:17 AM
QQQ is now flat on the day. The COMPX is like the huge goon in one of those Indiana Jones movies, when Indy winds up and clocks him in the jaw, he just smiles, spits out a tooth, and keeps advancing. The TRINQ is now .49, showing aggressive buying.

 
 
  Jeff Bailey   1/10/03,  9:56:11 AM
Networking Index (NWX.X) 159 +2.52% is showing some muster here and sector strength. Fiber Optic (FOP.X) 54.56 +1.98% second biggest gainer.

Bulk of sectors just fractionally red, with Healthcare (RXH.X) -2.3% only decliner of more than 1%.

 
 
  Jonathan Levinson   1/10/03,  9:51:42 AM
The TRINQ at .68 is signalling just another bullish day in the markets, with QQQ now trading down exactly 12.3 cents from last night's close.

 
 
  Jeff Bailey   1/10/03,  9:51:12 AM
QQQ $26.64 -0.41% ... I'm thinking with QQQ back at today's pivot, if bears are going to hit it, it should be here.

Nice correlation here with EXPE's pivot of $66.20 too. EXPE trading $66.20.

 
 
  Steven Price   1/10/03,  9:50:12 AM
Swing Trade Signals
The bounce has taken us above the opening range resistance at 8710 and suggests we may be headed higher. We are still very close to the break-even point on this entry and traders unwilling to deal with the weekend time decay may want to simply take the chips off the table and wait for a re-test of 8800 or a move below Thursday's lows.

Current levels: Dow 8722/OEX 467.11/COMP 1433/SPX 921

 
 
  John Seckinger   1/10/03,  9:47:35 AM
The Dollar did continue to fall after the employment report, losing value against the Canadian Dollar as the December payroll report north of the border rose by 58k and above estimates for a 33k rise. The unemployment rate in Canada is 7.5%. The exchange rate between the Canadian Dollar and the Greenback is roughly 1.55.

 
 
  Jeff Bailey   1/10/03,  9:46:43 AM
Dow Industrials (INDU) 8,713 ... I would think even swing and short-term bears watching things here and would want to see intra-day pivot of 8,720 serve resistance. Session low in Dow has been 8,689, which is above today's S1, which would be bear's early target.

 
 
  Mark Phillips   1/10/03,  9:46:22 AM
I just finished reading Jeff's 9:00am Update and it's a piece that everyone reading this post ought to read. Along with last night's Index Wrap, I think Jeff has tied some important factors together that can be used to measure where the broad market is headed. VIX, OEX, Bullish % all wrapped up in one tidy little package (all right it's no so little this time around as Jeff fell victim to the same affliction that causes most of my articles to be short novels), but the update is definitely worth the time! Most important, it gives some concrete levels to watch that should indicate who is winning the current tug-of-war in the broad market.

 
 
  Steven Price   1/10/03,  9:40:10 AM
Swing Trade Signals
We did get a bounce off the opening drop and I'll be looking for a move back under Dow 8690 for signs of further weakening. If we instead hold above that level, conservative traders may want to think about lowering stops to Dow 8700. My stop is currently set at Dow 8825, but 8700 is the break-even level.

Current levels:Dow 8694/OEX 465.67/SPX 919.05/COMP 1424

 
 
  John Seckinger   1/10/03,  9:39:15 AM
We certainly have a nice range during the first five minutes of trading in the Dow. 8776 to 8691. The pivot at 8730 was taken out and support is seen underneath at 8652.62 and 8529.07. Note: If the market does rebound, look to see if the 50% area of 8733.50 acts pivotal.

 
 
  Jeff Bailey   1/10/03,  9:38:22 AM
Expedia (EXPE) $66.20 ... day trader short can hit it here. This is intra-day pivot for stock. S1=65.11 and S2=$63.10 are targets. R1 is stop at $68.21.

 
 
  Jonathan Levinson   1/10/03,  9:36:58 AM
Good ole 1418 COMPX was the floor under the initial drop. It seems like I've typed "1418" dozens of times during the past week or two. Let's cal 1418 support #1 and 1400 support #2.

 
 
  Mark Phillips   1/10/03,  9:32:32 AM
LOL Jonathan! I love the way you colorfully describe what is most probably going on with the Fed! I can just see those flashing lights and hear the air-raid siren...

 
 
  Jonathan Levinson   1/10/03,  9:32:31 AM
15 point gap down on the COMPX to 1423, TRINQ 2.76, QQV +.85 to 36.93.

 
 
  Jeff Bailey   1/10/03,  9:29:33 AM
The 9:00 AM Intraday Update has been posted. Link

 
 
  Jeff Bailey   1/10/03,  9:28:41 AM
QQQ ticking higher here at $26.36 ... still below yesterday's close of $26.72, but ticking every so slightly back up, just ahead of the open. Today's Pivot of $26.64 would currently be considered resistance. 5-minute bar chart shows that QQQ fell quickly to $26.50 after jobs report, held there for about 15-minutes, then fell to morning low of $26.28, which is so close to S1 it's not funny. Do you sense how specalists are using the intra-day levels. They and market makers don't yet know what kind of order flow to expect, just removing some "risk" to a next level of support before the open. Very systematic and disciplined.

 
 
  Steven Price   1/10/03,  9:20:24 AM
Swing Trade Signals
We are curently short a 1/2 position in the broader markets. I'm certainly glad we are seeing a pullback from resistance at Dow 8800 on the jobs data and North Korean news, however, I'll need to see a move below Thursday's lows to convince me we are really headed lower and this isn't just another pullback.

 
 
  Jonathan Levinson   1/10/03,  9:19:52 AM
Livecharts has added a bunch of new indicators or, as their called on the control screen, "Studies". Check em out. My favorite so far is "Choppiness". Please don't ask- I have no clue what it measures.

 
 
  Jeff Bailey   1/10/03,  9:18:14 AM
Intra-day Pivot/Levels for today.

INDU : S2=8529 , S1= 8652, P=8720 , R1=8844 , R2=8911

SPX : S2=903 , S1=915 , P=922 , R1=934 , R2=940

OEX : S2=456 , S1=463 , P=467 , R1=474 , R2=477

NDX : S2=1043 , S1=1059 , P=1072 , R1=1088 , R2=1100

QQQ : S2=25.88 , S1=26.30 , P=26.64 , R1=27.06 , R2=27.40

The QQQ is trading $26.32 right now, so just 2-cents above S1. I'd look for a break of $26.30 to see $25.88. If looking for a higher entry, I'd look for something in the QQQ near $26.50. Also note... current trading is just under yesterday's R1 of $26.34, so might see an "open drive" lower.

 
 
  Jonathan Levinson   1/10/03,  9:14:55 AM
Al Green has no doubt activated the emergency lights and sirens within the lead and concrete control room of the Fed Building. The governors are swooshing down the brass pole as the metronomic blare of the siren continues, "Whonk.. whonk.." amid the flashing yellow glow of the rotating wire-meshed ceiling bulbs. The crop dusters full of money are being fueled as pallet upon pallet of money is forklifted into the hangar...

This is longhand to say that I expect to see a significant repo announced today by the fed. We have 7.75B in overnight repos that need to be refunded just to break even for today.

 
 
  Jonathan Levinson   1/10/03,  8:58:25 AM
This is one of those rare moments during which I wish I had CNBC in front of me and don't. For all the bearishness, I note that FVX hasn't continued to drop, still down less than 6 basis points. Of course, logic dictates, as it has for the past 2 years or so, that QQQ should tank. But I have a feeling that today won't be as bad as some might be expecting. Just a feeling, and based on action in bonds. We'll see.

 
 
  Linda Piazza   1/10/03,  8:55:39 AM
Earlier this week, I mentioned that German public-service employees were threatening to strike. Last night, the government reached an agreement with the employee unions, agreeing to raise wages 2.4% in 2003, and another 1% the next year. The settlement ahead of a potential strike helped fuel those early gains in the German markets. The U.S. employment numbers erased those early gains, however, as the DAX and CAC 40 have both dived into negative territory, and the FTSE 100 is only 8.70 points above yesterday's close as of this writing.

 
 
  Linda Piazza   1/10/03,  8:40:45 AM
A bond trader on CNBC called the employment figures "dreadful."

 
 
  Jonathan Levinson   1/10/03,  8:38:37 AM
Here's the Bureau of Labor Statistics release: Link

 
 
  Jonathan Levinson   1/10/03,  8:37:51 AM
Unemployment Rate in U.S. Remains at 6 Percent; Payrolls Fall by 101,000

The U.S. unemployment rate stayed at 6 percent in December, matching an eight-year high, and payrolls fell by the most in 10 months as companies focused on cutting costs.

Here's the Bloomberg.com link: Link

 
 
  Jonathan Levinson   1/10/03,  8:36:12 AM
I was watching the Qubes trade on Island ECN before the employment data was released. Within 60 seconds, they have just dropped 37 cents like a bad habit, currently trading 26.65. After dumping bonds yesterday, traders are now buying them back, with FVX currently 5.6 bps. Gold has spiked 50 cents an ounce in the same time to above 354. QQQ is now down to 26.49. Time to go find the details on the jobs data, but it looks like a real stinker if the Qubes are any indication.

 
 
  Linda Piazza   1/10/03,  7:22:44 AM
An unexpected increase in German factory orders prompted a rise in European stocks today. Instead of the forecasted 0.6% increase, the report showed an increase in November of 1.7%. Demand from abroad contributed to the higher-than-expected number. Manufacturers rose, as did insurers after Deutsche Bank recommended some insurers, mentioning the current low valuations of the group. However, Carrefour, the world's second-largest retailer, warned that sales had dropped. As of this writing, the FTSE was up 1.42%, the CAC 40 was up .84%, and the DAX was up 1.27%, again moving above 3000, to 3076.30.

The Nikkei fell .32%, however, amid concerns over the dropping Japanese currency and North Korea's announcement that it had withdrawn from the Nuclear Non-Proliferation Treaty due to U.S. policy that it deemed hostile. Bloomberg reported recent speculation that Japan will sell its currency, as it did on June 28.

 
 
  Jeff Bailey   1/10/03,  2:24:26 AM
It is very late or should I say early Friday morning. S&P futures (sp03h) are trading 923.50, down about $1.50 from their close. Things are pretty quiet this time of day.

This morning's 09:00 Update is Looooong and I will try my darndest to get it to you in a timely fashion. We will be watching the VIX and levels discussed like a hawk tomorrow.

 
 
  Jim Brown   1/10/03,  2:24:07 AM
End of year renewal special - Only 4 days left to take advantage of the special. Those readers who want to lock in the cheapest rate possible with a ton of freebies should check it out! Click here: Link

Upgrade your regular subscription to a Premium level to continue receiving the Market Monitor. Click here: Link

 
 
  Jim Brown   1/10/03,  2:23:52 AM
Important Notice about the Market Monitor

The early Java version of the Market Monitor has been terminated. It was turned off this afternoon. The entire Market Monitor has been rewritten as a desktop application and contains no Java. The Java client was just too slow for the volume of readers and the amount of data.

Everyone using any earlier desktop application that does not look like the picture in this link needs to download the new version today. If this image does not look like the desktop version you are using then you need to download now.

Click here for picture of the new monitor: Link

The new desktop market monitor has lots of quick links, view all the posts from your favorite analyst with one click and will have the futures trades beginning on Monday. Most of all it is fast.

To download the new monitor click here: Link

The current version is about 4.5MB so plan accordingly for download time. It is well worth it.

If you have any trouble with the installation you can email the creator at Acarson@OptionInvestor.com or call him at 303-797-0200. He will be glad to walk you through it if needed. Currently it only works on Windows PCs. If you have Unix, Linux, Apple or Mac you need to continue to use the browser version.

 
 
  Steven Price   1/10/03,  2:23:31 AM
The Swing Trade Game Plan has been posted: Link

 
 
  Jeff Bailey   1/10/03,  2:23:13 AM
The Index Trader Wrap has been posted: Link

 
 
  John Seckinger   1/10/03,  2:22:53 AM
The Futures Trader Wrap has been posted: Link

 
 
  Jim Brown   1/10/03,  2:22:33 AM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

 
 

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