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  Jeff Bailey   1/16/03,  5:27:25 PM
Intra-day Pivots-Levels for tomorrow 01-17-03 are...

 Index         S2      S1       P      R1     R2
Dow Jones 8593 8646 8726 8779 8858
SPX 904 909 918 923 932
OEX 458 462 466 470 474
NDX 1042 1052 1068 1078 1095
QQQ 25.82 26.13 26.55 26.86 27.28
And can be compared to today's 01-16-03 levels of ...

 Index         S2      S1       P      R1     R2
Dow Jones 8607 8665 8760 8817 8912
SPX 906 912 922.5 928 938
OEX 461 463 469 473 478
NDX 1051 1062 1081 1092 1111
QQQ 26.12 26.42 26.89 27.19 27.66
Note: That QQQ is trading $26.17 in after hours. After-hour low has been $26.14, which is a penny above tomorrow's S1

 
 
  Jeff Bailey   1/16/03,  5:02:27 PM
Be Careful if you're trading after hours, especially from short side.

Example... I've already done some intra-day pivot levels for tomorrow in stocks. KLA-Tencor (KLAC) for example trading $37.12 here, off from $37.83 close. Tomorrow's S2=36.42, S1=37.12, P=38.26, R1=38.96, R2=40.10

 
 
  Jim Brown   1/16/03,  4:50:09 PM
MSFT 2:1 Stock split and pay $.16 cent dividend - WOW !!

They had to do something to cover up the profit warning for the rest of the year and the comments about no recovery in sight.

 
 
  Steven Price   1/16/03,  4:21:51 PM
Another positive real estate comment:

Dear Steve: The Market Monitor is awesome source of prescient market information. I appreciate the opinions of you and your colleagues. I own a real estate agency in Portland, Maine. The market is still strong, especially for apartment buildings (mulits and investment). Many people, due to stock market losses and low interest rates, have focused on real estate. Single family home sales are still brisk, but have slowed a little which I attribute to the winter, unrealistic list prices and less demand (at some point demand falters with increasing list prices). Great job! Michael

 
 
  John Seckinger   1/16/03,  4:21:23 PM
SUNW's earnings were flat, but 0.02 cents better than consensus estimates (looking for a loss of two cents).

 
 
  John Seckinger   1/16/03,  4:08:53 PM
Very interesting: I do a 50% retracement of December's decline in the Compx, and 1423.53 is the level. Very close to day's close of approximately 1424.37. Also interesting is how 61.8% of the move is 1446. Today's high is 1449. Then, if you look at the SPX index, a 50% retacement from December's high to low (2nd to 31st) comes in at 911.86. The low was 911.89. The 22 DMA (exp.) came in at 911.61, so that should have reinforced the possible support.

 
 
  Jim Brown   1/16/03,  4:05:31 PM
IBM earnings $1.34 vs est $1.30

 
 
  John Seckinger   1/16/03,  4:03:08 PM
What was interesting today was how the Dow traded between its 38.2% and 19.1% retracement area based off a retracement from S2 to R2. I first get R2 and S2, and then do a 19.1, 38.2, 50, 68.1, 80.9, and 100% retracement on this area. Since 1:00 p.m., the Dow was stuck between 8723 (38.2%) and 8665 (19.1%).

 
 
  Jeff Bailey   1/16/03,  4:00:47 PM
The 3:15 PM intraday update has been posted. Link

 
 
  John Seckinger   1/16/03,  4:00:37 PM
It looks the pivot in the Dow will be 8759 tomorrow. R1 will be 8817, and R2 way higher at 8911. S1 and S2 will be 8665 and 8607, respectively.

 
 
  John Seckinger   1/16/03,  3:56:41 PM
I have four minutes! Ok, I finally got Zone Alarm Pro and it sure works a lot smooter than what I playing with. Nothing is more frustrating. I don't think I missed any emails, but if you sent me something in the last hour - please resend.

 
 
  Ray Cummins   1/16/03,  3:55:26 PM
Spreads/Combos -- Expiration-Week Straddles

Veritas Software (NASDAQ:VRTS) fell in conjuction with technology shares today and the move below $18 provided an excellent profit in our speculative debit straddle. The short-term position (JAN-$20C/JAN-$20P) offered up to $0.60 on $1.25 invested in only one week. Another active issue in this category is Genzyme General (NASDAQ:GENZ) and readers who sold the (JAN-$35) puts to pay for the entire straddle now have "risk-free" (JAN-$35) calls worth $1.00-$1.10. With the options expiring Friday, conservative traders should consider "locking-in" profits before the stock retreats from its recent rally.

 
 
  Steven Price   1/16/03,  3:46:12 PM
another real estate tidbit... I also bought a billboard at my local grocery store at door where you enter--it has a nice picture of me and says in market for home let me put my 25 years of real easte experience to work for you-- and has my cards. It went up end of November and I have yet to receive a call. Denise in Phoenix

So far I've seen a couple of positive comments about the real estate market and a slew of negative ones. The positives came from the Northeast and a couple from Central California. The negatives came from just about everywhere else. Those homebuilding stocks that are haveing a good day (DJUSHB +2.5% and right against its 200-dma) suddenly don't sound so hot. Of course, we need to trade what we see, but anyone going long in this sector on a breakthrough may want to keep a tight stop.

 
 
  Jonathan Levinson   1/16/03,  3:42:30 PM
Most of my indicators have flatlined at current levels, along with price, except for the QQV which is trying to drag itself out of negative territory, now just -.16 on the day. The 5(3) stochastics on the 60 minute COMPX candles is trying for a bullish cross from oversold, while on the daily candles, it's in a full bear roll. An interesting setup for tonight's reports, with price very close to short term support. Bad news should be treated as bad (for a change!) while good news could provide a spring under this support.

 
 
  Linda Piazza   1/16/03,  3:37:11 PM
The OEX paused its plunge just below that 463.50 level I’d pinpointed and above the 50-dma. Sixty-minute 5(3)3 stochastics are buried so deeply in oversold territory that it seems impossible that they’ll ever move up again. They will, though. I’ve seen hourly stochastics remain buried for days, but this might be just the spot for a bounce. I don’t expect it to be a big bounce, but if you’re in January puts, can you weather any bounce at all? If you’re in January calls, can you risk a gap down tomorrow or a continued bleed throughout the day as those hourly stochastics remain buried? Only you know the risks you can weather. Charts look bearish today, following through on the bearish engulfing pattern seen yesterday, and daily 5(3)3 stochs now have definitely curled over, but no market goes straight down or straight up. Now is the time to make those account management decisions that must be made.

 
 
  Steven Price   1/16/03,  3:32:41 PM
In your opinion,how much of todays selling is related to option expiring tomorrow. regards

I've seen many theories on what happens during option expiration week and to be honest, there is only one phenomenon that I have seen in person with any real regularity. That is the nature of stocks to pin around strikes with large open interest. The reason for this is twofold. Institutions with large short premium positions tend to pin the stock while premiums decay. Long option holders are also buying dips and selling rallies against the long options as the stock crosses the strike (calls and puts) as hedges, scalping the moves in either direction.

 
 
  Linda Piazza   1/16/03,  3:30:25 PM
Kudos to Steven Price for keeping everyone out of trouble these last few days by refusing to enter Swing Trade signals under anything less than optimal conditions. I could literally hear option premium tick-tocking away while the markets held to impossibly tight ranges the last few days. He’s pinpointed the dangers in entering the market today and other days, and has suggested entries for aggressive traders.

 
 
  Mark Wnetrzak   1/16/03,  3:27:52 PM
Covered-Call Portfolio: XMSR
XM Satellite Radio, a CC portfolio position (long the stock, short the JAN-$2.50), has rallied strongly this week on very heavy volume but is now running into resistance around $4.00. A short-term head-n-shoulders bottom is readily apparent and would be confirmed with a close above $4.25 or so. The next resistance level would be the September high around $6.

 
 
  Ray Cummins   1/16/03,  3:27:04 PM
Spreads/Combos/Premium Selling - More Big Movers!

Qlogic (NASDAQ:QLGC), highlighted as a bearish candidate in yesterday's OIN, is trading down $3.55 at $28.37 after the company reported what appeared to be favorable earnings. Qlogic surpassed consensus estimates, posting a profit that grew 62% on sales of $114 million. The results were 38% better than last year's numbers and 5% ahead of the prior quarter. Revenues were also ahead of expectations and at the high end of the company's guidance for sequential top-line growth however it wasn't enough to please demanding investors. Our "premium selling" positions were less robust than expected but there were still some excellent opportunities for bearish traders early in the session.

 
 
  Steven Price   1/16/03,  3:26:25 PM
Swing Trade Signals
We got the move below 8685 I referred to earlier as a short entry possibility. I do think it's very risky going short on a day that we had negative Iraqi news and have IBM and Microsoft coming out with earnings after the bell. A move below 910 in the SPX would also look very bearish.

 
 
  Jonathan Levinson   1/16/03,  3:20:58 PM
The put to call ratio is holding on tight to the mid .80s, with the TRINQ at 2.74 showing strong selling pressure. With bonds closed in the green, we might be looking at the beginning of a down market. The QQV is still negative, however, showing an absence of fear thus far. I'll chalk that up to the standard opex week shenanigans. Precious metals are still showing strength and holding all of their gains.

 
 
  Linda Piazza   1/16/03,  3:10:20 PM
With markets breaking to a new day’s low, the new highs versus new lows on the NYSE remains an astounding 91 new highs to 9 new lows. I may soon have my answer to the question I’ve been contemplating as to the inference that could be drawn from the divergence in volume patterns. Advancing/declining patterns have not been trending up as strongly as have the new highs/new lows patterns. Divergence always catches attention, but the question has been whether the divergence showed more underlying strength than was apparent, or more underlying weakness than was apparent. I haven’t been able to find any literature that specifically addresses this divergence, so now I’ll make a note that perhaps any divergence in breadth measures might signal underlying weakness. That hypothesis can be tested the next time I see it. It’s just a hypothesis, and one test doesn’t predict future market behavior.

 
 
  Mark Wnetrzak   1/16/03,  3:04:02 PM
Covered-Call Portfolio
The model covered-call portfolio has held up fairly well for the month of January (one day left to expiration) and even a few of the closed positions rallied back into positive territory (shrug - Murphy's Law). As for the February positions, Asyst Technologies (NASDAQ:ASYT) as noted on Monday, pulled back a bit excessively and continues to move lower. A pullback towards the November high (~$8.75) or the 50-dma (~$8.10) could be forthcoming. The general Tech weakness is also affecting GlobespanVirata (NASDAQ:GSPN) - giving back much of Tuesday's gain; and J.D. Edwards (NASDAQ:JDEC) - downgraded to "neutral" today by First Albany after BOA started the company as a "buy" yesterday (hmmmm).

 
 
  Jonathan Levinson   1/16/03,  2:59:13 PM
Treasury yields are finally starting to crack, with FVX down more than 5 bps from its highs, currently +.6 bps.

 
 
  Jonathan Levinson   1/16/03,  2:50:01 PM
XAU and HUI are running back toward round number resistance at 80 and 150 respectively, HUI up 6.73 now and XAU +3.18. Amazing velocity here.

 
 
  Linda Piazza   1/16/03,  2:44:32 PM
If I’ve been a good student of John’s “b” and “p” patterns, I think I see a “b” pattern on the five-minute OEX chart with a low of 464.33, just broken. Patterns on five-minute charts may not be predictive of the rest of the day’s direction, however. Watch that 463.50 level I pointed out earlier for a possible bounce.

 
 
  Jonathan Levinson   1/16/03,  2:41:40 PM
Trouble posting for awhile.

The US Dollar Index sold off and hit a low of 101.70 before bouncing weakly, while gold has strapped on boosters, currently at 357.80, up 7$/oz, with HUI +5.93 to 145.78 and XAU +2.78 to 76.73. The COMPX bounced at 1423, 3 points below the 200 dma, perfect for running the stops on bulls and headfaking bears. It's looking like that low may be about to be retested.

 
 
  Mark Wnetrzak   1/16/03,  2:32:43 PM
Zone Alarm
Works great - I've been using it for years and even purchased the Pro version. I learned about it at Gibson's Research site which has been fishing out MSFT security holes for years. I especially like Gibson's "shields" test and "port" probe to verify that you aren't giving any information out. Gibson's Research site can be accessed here: Link

 
 
  Ray Cummins   1/16/03,  2:31:31 PM
Spreads/Combos/Premium Selling -- Notable Events

Watson Pharmaceuticals (NYSE:WPI) shares were up over $3 near $30 this morning after the company raised its fourth quarter earnings outlook in the wake of a "solid performance" at its generic drugs and women's health divisions. Watson said it is now expecting diluted earnings per share of $0.44 to $0.45, up from prior forecasts of $0.42 to $0.44 a share and the company also raised its revenue forecast to a range of $320 million to $330 million, up from $305 million to $315 million. Watson plans to report fourth quarter 2002 results on 2/4/03 and it has scheduled an analyst meeting in New York City on 1/23/03, where it will provide a 2003 outlook and discuss plans to commercialize Oxytrol, a drug to treat overactive bladders that is awaiting U.S. marketing approval. Investors are obviously happy with the news and our bullish synthetic position (MAY-$35C/$22P) in the issue is now profitable after only two weeks in play.

 
 
  Jim Brown   1/16/03,  2:23:57 PM
FYI - Zone Alarm also has a free version that works just as good as the Pro. It just does not have some browser features like popup prevention. For a firewall it still works great.

 
 
  Kent Barton   1/16/03,  2:01:29 PM
Sounds like a tempting call play, Linda! :grin:

Zone Labs (the makers of Zone Alarm) is privately held: Link They do seem to have a very hot product. Maybe they'll eventually get acquired by one of the big players in the internet security group...Checkpoint (CHKP) and Symantec (SYMC) come to mind as possible suitors.

 
 
  Kent Barton   1/16/03,  1:55:22 PM
Software Index (GSO.X) 112.33 -2.29: Looking somewhat bearish on the daily chart after rolling over below the November highs. Obviously what happens next will largely depend on Microsoft's earnings report tonight...But barring any major surprises out of Redmond, it looks like the GSO could continue to drift lower in the near-term. The bulls will be looking for support to emerge near 108, which provided resistance in December. This level happens to coincide with not one, not two, but three moving averages: The 21-dma, 50-dma, and 200-dma.

 
 
  Linda Piazza   1/16/03,  1:52:28 PM
Like Steven, I also consider myself a conservative trader and will be exiting my OEX put position before today’s close to protect profits. I’d rather miss a big chunk of the move tomorrow morning if markets gap down and then get back in at another rollover at resistance or further breakdown past support, rather than risk a Cisco-type rally. This is true even though I did not buy front-month puts.

 
 
  Jeff Bailey   1/16/03,  1:51:36 PM
The 1:00 PM Intraday Update has been posted. Link

 
 
  Linda Piazza   1/16/03,  1:45:22 PM
With all of us now downloading ZoneAlarm, should we buy calls? Is it an optionable company? (This is not serious trading advice.)

 
 
  Steven Price   1/16/03,  1:44:49 PM
Swing Trade Signals
With the move below Dow 8700 and the awfully big wick from today's failed bounce, aggressive traders may want to think about a short beneath the Jan 10 low of 8685. I realize I am repeating myself here, but it looks as though we may get that breakdown. I say aggressive traders because if we do get a bounce off of IBM's numbers, it could lead to some pain tomorrow morning. However, it certainly seems that we've seen a change in sentiment, with a "sell the good news" reaction after positive jobs data and the upside earnings surprises of the last couple of days. Conservative traders, among which I count myself ahead of tonight's earnings releases, may want to sit this one out.

 
 
  Mark Phillips   1/16/03,  1:43:31 PM
Back to trading, I got an insightful question from a reader this morning about DELL, which is currently on the LEAPS playlist.

What do you think of Dell at these levels for Jan 2005 Leap & covered calls. Dell has traded in a 22-28 range for the last 2 years with a couple of blips under & over. Stoch are oversold (daily) and dell is at the lower BB band.

Not only that, but the stock is also testing the bottom of the bullish triangle pattern (ascending trendline from the 9/01 lows), which is currently right at the current level of $25.50. The PnF chart remains bullish, and we have the added advantage of the bullish support line from the PnF chart at $25. I personally like long-term bullish entries near current levels, with an eye on the $40 level (current bullish price target) as an eventual target, risking about $2.50 to the $23 stop level. A trade at $23 would generate a PnF Sell signal and negate the current bullish target.

As I've mentioned several times before, DELL is not going to rocket higher, but should methodically continue its upward trek. This makes it an ideal candidate for the covered calls strategy that I alluded to in last night's Options 101 article. If you missed it, feel free to check it out at the following Link .

 
 
  Mark Phillips   1/16/03,  1:41:10 PM
I'm baaaacckkk...Since I run my workstation from a cable modem, (and have had some strange things occurring in the past couple weeks), I decided to take Jim's advice. ZoneAlarm Pro now installed and operating -- so I guess it would take a concerted effort to break in now. Jim's right though...it is amazing how many little intrusion attempts (whether innocuous or malicious) on a regular basis. But I feel better. I would second Jim's recommendation to any of our readers that have a dedicated Internet connection -- the $40 is cheap insurance...

 
 
  Linda Piazza   1/16/03,  1:38:19 PM
This news, released about twenty minutes ago, may be responsible for the latest downdraft: Eleven empty chemical warheads found by U.N. inspectors in Iraq. However, I do agree with Jonathan’s observation that markets often appear to move either up or down on good news or bad when, in actuality, the markets were primed to move that direction anyway, and the news was only the precipitating force.

 
 
  Kent Barton   1/16/03,  1:31:40 PM
Deluxe Corp (DLX) $40.61 +0.40: The battle for the $40.00 support level rages on. So far the bulls haven't relinquished this line in the sand. A 5-minute chart of yesterday's action expemplifies just how much traders are keying in on $40.00 - Shares repeatedly traded down to that level, but consistently found buyers throughout the session. Today the stock is ticking slightly higher after trading to an intrday low of $40.07.

On Premier Investor we tightened our stop-loss for this play to $41.34, just above break-even. We don't see much sense in waiting around for a breakdown (and possibily having to endure more sideways trading) if the current downtrend isn't enough to take DLX below support.

 
 
  Linda Piazza   1/16/03,  1:19:28 PM
For those of you in bearish OEX trades—surely I’m not the only one--I’ve noted S/R at 463.50 many times in the past. Watch for bounces from that level, as well as from the 459.60 area, the location of the exponential 50-dma and some historical support.

 
 
  Linda Piazza   1/16/03,  1:15:06 PM
Mark often mentions the watching the BKX for the same reason I watch the Transportation Index—as a measure of market health or breadth. At 289.77, the BIX, the S&P Banking Index, just moved below its exponential 200-dma at 289.83.

 
 
  Steven Price   1/16/03,  1:10:07 PM
Swing Trade Signals
The Dow is holding just above 8700 now and on a break below 8685 would have me leaning short. As I've said, IBM/MSFT after the bell could certainly shake things up and I'll sit out until those are behind us. However, it's going to take a lot of will power not to short that break if we get it. The low today is Dow 8700 from just a couple of minutes ago, and we got a bounce off that level.

Current levels: Dow 8713/SPX 916/OEX 465.67/COMP 1428

 
 
  Linda Piazza   1/16/03,  1:07:32 PM
Trouble for bears? The Dow Jones Transportation Index is putting in a surprising performance today, moving up when most indices are down. Currently at 2382.50, this index moved back above the 2366-2375 S/R level today and is currently consolidating just above the 2380 level. Hourly 5(3)3 stochastics are rolling down while daily stochastics try to cycle back up. A move back down through that listed support might be considered bearish for this index, while a move up will soon challenge the exponential 200-dma at 2412.83.

 
 
  Jeff Bailey   1/16/03,  1:05:25 PM
CNBC Reporting That U.N. weapons inspectors have confirmed that they have found 11 chemical warheads.

 
 
  Steven Price   1/16/03,  1:04:04 PM
Just read your messages about the home sales in the monitor. I am one of the laid off high tech workers looking into real estate sales. Here in the Capital District (Albany NY) things are looking good right now. The new townhouse I bought 1 1/2 yrs ago is up perhaps 20% now. A sellers market. Real estate is certainly local. Dan

 
 
  Linda Piazza   1/16/03,  1:01:07 PM
Down volume now comes in at almost 2 times up volume on the Nasdaq, although adv/dec ratio is only 14/16. Advancers remain ahead of decliners on the NYSE, but up volume is only slightly ahead of down volume. 735 million shares have traded on the NYSE and 857 million have traded on the Nasdaq—not a low-volume day after all, it appears.

 
 
  Jeff Bailey   1/16/03,  12:58:29 PM
KLA-Tencor (KLAC) $37.84 -1.58% .... slow drift lower here in last 30-minutes. Stock did indeed finds sellers from 12:13:34 post at intra-day retracement of $38.04 and skip below $38.00 was pending weakness. Now look for re-test of today's S1 of 37.66, but would now expect stock to close near low of session. Intra-day resistance should be firm at $38.40.

 
 
  Linda Piazza   1/16/03,  12:45:47 PM
Close, but no cigar. Several days ago, I posted a chart of CSCO, showing the potential for a reverse H&S. CSCO got turned away right at the neckline of that reverse H&S, so far rejecting the formation. Bullish traders should not give up yet, however, as the grouped MA’s and historical support between 13.75 and 14.25 might provide opportunity for a bounce and another test of that neckline. Stay tuned. Here’s the chart. Note the rolling 5(3)3 stochastic and the potential for bearish divergence on the MACD: Link Reader Russell S. noted many charts setting up like this.

 
 
  Jim Brown   1/16/03,  12:43:09 PM
John mentioned firewall earlier. We run a couple different firewalls on our critical PCs in the office. About three weeks ago we detected a huge spike in attempts to hack our network. Sometimes as many as 30-40 attempts per hour on some computers. One of the products we use is the ZoneAlarm Pro firewall. When a probe of a computer is detected you can click on the alert and see where the computer is that is trying to access your PC. Are you ready for this? The vast majority were from China, Cambodia, India, Pakistan, Saudi Arabia, upper Africa and the list goes on. The majority of the attempts were from Muslim countries. This traffic has increased +200% to +300% in the last three weeks. We quickly added additional security and are adding a complete new level of firewall to the network. I do not want to be part of any concentrated Internet attack by terrorists in the future. I strongly recommend anyone with a direct Internet connection to order ZoneAlarm Pro. You will not believe how much risk you have until you install it and start seeing the alerts. Link

 
 
  Jonathan Levinson   1/16/03,  12:34:01 PM
The US Dollar Index has an intraday low of 101.03, which is a hair above the support we've seen at 100.96. The lack of a bounce and the surprising strength in gold this week tells the same story, which is not bullish for equities, as John just pointed out.

 
 
  John Seckinger   1/16/03,  12:31:18 PM
I am pretty sure my computer problems today are directed at a complex firewall I tinker with. I am definitely nervous about taking it down altogether. Looking at charts once again, I see a number of H&S formations. The Sox, on a daily, and the Dow on a five-minute chart. One chart I would like to see any pattern on is the U.S. Dollar - in complete breakdown mode and in an aggressive bearish channel. This is one index that did not comply with the "weekly bullish divergence in the RSI". Currently at 101.17, even the 22 DMA is much higher at 102.40. Definitely a huge concern for equity bulls.

 
 
  Steven Price   1/16/03,  12:28:02 PM
RJ Reynolds (RJR) : $46.46 +1.37 OI call play RJR getting a boost this morning. After giving a PnF buy signal at $44 and getting through resistance at $45, it appears as though a run at $50 is in the offing. The 60 min chart shows a remarkably consistent uptrend since Jan 6 and right now the stock is in the center of that regression channel. More conservative traders can look for a pullback to $45 support, but I also like entries at the current level.

 
 
  Jonathan Levinson   1/16/03,  12:27:45 PM
The US Dollar Index has been trading choppy this morning, lots of spikes and blowoffs on the candles on most time frames, but certainly not strong. It's currently trading at 101.15 and seems to be drawing a neutral wedge on the 60 minute chart.

 
 
  Jonathan Levinson   1/16/03,  12:24:20 PM
The COMPX continues to ping pong between the 200 dma at 1426 (low of the day 1430) and the 1437 resistance area seen over the past few days. Precious metals remain sold, with HUI +2.36 on the day to 142.21 and XAU +1.32 to 75.27. Bonds continue to be sold, with FVX +5.2 bps, TNX +5.3 and TYX +4.3.

 
 
  Jeff Bailey   1/16/03,  12:19:02 PM
Trader's Reminder The markets are closed this Monday in observance of Martin Luther King.

 
 
  Jonathan Levinson   1/16/03,  12:17:20 PM
Have been with AOL for 7 yrs now. Was going to leave, and was offered a rate for half the normal price to stay, with the first 3 months free. better try to leave again, so I can get the full 9 months free!

 
 
  Jonathan Levinson   1/16/03,  12:14:48 PM
The put to call ratio has come in at .82 for this past half hour, and the TRINQ is at 2.06, QQV still down, -.45 on the day. This looks like rangebound action to me, with too much put speculation for solid downside but too much selling for solid upside- in other words, a healthy, frustrating market such as we've seen all week.

 
 
  Jeff Bailey   1/16/03,  12:13:34 PM
KLAC $37.99 -1.19% ... "should" see some sellers come in here. Intra-day retracement set from $39.92 to $36.68 has 50% at $38.40, 38.2% at $38.04 and 19.1% at $37.46. $37.46 wold be intra-day support if S1 were broken.

 
 
  Jonathan Levinson   1/16/03,  12:08:26 PM
Did you catch what Jim Grant was saying? As usual they cut him short and he never got a chance to say EXACTLY what the implications of his comments were. I did hear him say: Investors don't believe there is any chance of inflation; The Japanese 10 year bond is at 0.84% yield; Bond investors are not being compensated for possible inflation risks; The Fed is fighting DEflation now; You cant deflate currency against currency and "Gold will be the beneficiary" ????; What did i miss? Was he implying higher equity prices/lower bond prices?

I don't usually get CNBC during the day (not from my office), so I missed the interview. However, quite true, currencies can't all be deflated against each other, as their values are relative. However, with the USD deflating against other currencies because of the "soft patch" in the economy and Al Green's aggressive printing regime, other currencies are in a hurry to devalue relative to the USD in order to preserve their balance of trades flows. One such mechanism is to keep interest rates low, thus making it a bad idea for foreigners to purchase bonds in that currency, thus diminishing demand for that currency. Inflation should result in higher equity prices but diminishing value- and it's all good for gold and other commodities, which are nobody's paper. I hope this helps.

 
 
  Jonathan Levinson   1/16/03,  12:03:36 PM
The Qubes dropped a time the moment the noon data was released, and the decline has yet to stop. I've just heard (but not yet verified) that AOL is offering 9 free months of service to retain customers who threaten to quit.

 
 
  Linda Piazza   1/16/03,  12:02:10 PM
The January Fed Factory Index for January is 11.2 versus a (revised higher) 11.3 December number.

 
 
  Jeff Bailey   1/16/03,  11:55:52 AM
KLA Tencor (KLAC) $38.18 -0.72% .... session low has been $37.68. This is interesting intra-day low as daily pivot analysis is s2=36.88, s1=37.66 , P=38.40, R1=39.18, R2=39.92. Has found resistance from morning low rebound at $38.36, which is just under today's pivot.

 
 
  Linda Piazza   1/16/03,  11:52:27 AM
Traders should not forget the release of the Philadelphia Fed Survey at 12.00.

 
 
  Linda Piazza   1/16/03,  11:44:15 AM
The VIX is now negative on the day, currently at 27.70.

 
 
  Jeff Bailey   1/16/03,  11:43:00 AM
The 11:00 AM intraday update has been posted. Link

 
 
  Steven Price   1/16/03,  11:42:13 AM
Hi Steven, My wife is a real estate appraiser in the metro Detroit area. She is seeing a lot of people coming back to the refinance well and they are stunned to find out the cost of their home is not rising. Some of these people are doing refi's for the 3rd time in the last few years. Houses were goin up about 9% for the last few years but not anymore. Mike

 
 
  John Seckinger   1/16/03,  11:39:26 AM
Q-charts: Up, then Down. Almost like the Dow today. It will be interesting to see if the range between 8760 and 8720 will continue. A five-minute close above this 8760 level should give us an indication of yet another range day. Note: 50% of the entire day's range is 8764, and very close to the 8760 area.

 
 
  Jonathan Levinson   1/16/03,  11:37:03 AM
The put to call ratio has gotten up to the mid .80s, peaking at .89 for the day. The TRINQ has plummeted on this bounce, currently at a neutral 1.18. The COMPX is now dealing with 1437 from underneath, and this level should serve as resistance. The QQV is still negative, and bonds continue to sell off. I suspect that a good part of the selling in bonds is to refund Al Green's 4.75B repo drain today, but on the other hand, it could be building cash for a jam job in equities. I doubt it, but we should be aware of the risk to short positions from these positive treasury yields.

 
 
  Linda Piazza   1/16/03,  11:33:20 AM
Jim is out now with a 3-point gain. Boy, that will get your adrenaline going, won’t it? I may have to rethink being a cautious, plan-it-out-the-night-before trader.

 
 
  Linda Piazza   1/16/03,  11:26:04 AM
Over on the Futures Monitor, Jim caught a nice five-point move on a short this morning and is currently riding this boost up.

 
 
  Linda Piazza   1/16/03,  11:18:00 AM
Nasdaq volume patterns now show more decliners than advancers and more down volume than up volume. On the NYSE, advancers continue to lead by a comfortable volume and up volume remains ahead of down volume.

 
 
  Steven Price   1/16/03,  11:15:38 AM
Hello Steven, Please take a look at SNDK. It is taking a hit today and my guess is QLGC is having an effect. Thank you for all you do. J

SanDisk (SNDK) $18.10 (-1.52) The sell-off Sandisk has been significant after holding support around $20 the last few days. There is some additional support just below the current level. There is horizontal support at $18 from October and the 200-dma sitting just over $17. There is also a gap that would be filled at $16.44 from October 16-17. Even with all of that support, the stock looks very weak. The stock is sitting right on the PnF bullish support line and a trade of $18.00 would amount to a total breakthrough of that line. $18.50 is where the line sits and the move below that level today is yet another bearish sign. If it does trade $18.00, we may get a small bounce, but I'd expect it to head lower.

The wild card for all of the techs could be IBM's numbers and comments tonight. If IBM trades over $90 tomorrow, I'm not going to short anything.

 
 
  Jeff Bailey   1/16/03,  11:11:10 AM
Biotech HOLDRs (BBH) $93.43 +4% ... premierinvestor.net subscribers that also subscribe to OI were triggered long today at $92.12. Nice move under way after what looked to be a bit of a trap at $85. Vertical count turns bullish with trade at $92 to $110. Link

Here's the play write up, and it is also posted on the OI web site. Link , which would be on the left side of the front page under Premier Investor, and was the "play of the day" with a trigger attached.

 
 
  Linda Piazza   1/16/03,  11:08:18 AM
VLO: Those who entered the call play are probably profitable right now as VLO hits new relative highs today. If you’re holding January options, be aware that VLO tends to drift down as the market does. If this whoosh down continues, perhaps consider setting stops to take you out with a profit.

 
 
  Jonathan Levinson   1/16/03,  11:05:34 AM
The COMPX continues to print new lows above the 200 dma at 1426 as identified by Linda. Gold is picking up steam, with HUI +2.44 and XAU +1.59. Yields have not yet confirmed the move, with FVX +4.2 bps. An interesting divergence. The TRINQ is at 2.79, while QQV is still -.16 on the day. Many traders have yet to believe this drop.

 
 
  Steven Price   1/16/03,  11:03:46 AM
More home sales input (notice a pattern here):

Could not answer you because I was out listing a home yesterday that I sold to someone a few months ago, hoping their Scottsdale, Az home would sell at 690k. It has not sold in months, so we have to put the home they wished to scale down to on the market, to see which sells first. They are 75 years old, had retired-- but due to the stock mkt, he had to return to work, and they must sell their home and buy one half the cost. My own rental priced at last year's appraisal of 155k and nice 3 yr new home has been vacant on mkt for 3mos. After 25 years in biz, my own real estate biz is down since this fall. I did better last year after 9/11! Not looking good. Impact of job losses finally being felt, and also laid off techies are all entering real estate looking for easy money, so the pie will be sliced thinner!

 
 
  John Seckinger   1/16/03,  11:01:26 AM
Interesting bounce in the Dow. Once 8740 was taken out, I expected the lows of the session to be hit. They were not; however, it remains the objective. A move back above 8760 would null this thinking. Why 8740? Remember, it was 50% of the opening range. Once penetrated, the objective is to test the extreme of the first period. Let us see if we can get that test.

 
 
  Steven Price   1/16/03,  11:00:55 AM
Swing Trade Signals
The rally faded fast and bounced off yesterday's S2 level in the SPX at 918. The COMP is red and the SOX is well under its 50-dma up at 323.48 (trading 315). The failed rally looks bearish, with the SOX breaking down below the bounce level from last Wednesday. However, on this morning's rally, I was left thinking that the pullback and bounce from 8700 looked bullish. That tells me to stick to the plan of waiting for a breakdwon below last Wednesday's low of Dow 8580/SPX 910, or a move through the December highs (which would also require breakthrough of the 200-dma/emas). Also note the opening range breakthrough still points to a day in the green. Lots of conflicting signals right now with important earnings after the bell.

 
 
  Jeff Bailey   1/16/03,  10:58:48 AM
Forest Labs (FRX) $53.35 -2.37% ..... Stock down after reporting earnings. Remember that stock gapped up from $50 to $52.50 on 01/03/03 after company guided higher on this quarter. What I've done here today is look at the weekly range so far this week. I plugged it in using h,l,c of $56.36, $53.10, $53.10 and get S2=50.93, S1=52.02, P 54.19, R1=55.28, R2=57.45.

Now.... S2 of 50.93 would still be above the "gap" if FRX were to fill, and I note that 52.02 is just about at the apex of 01/03-01/07 3-day consolidation after gap higher. If looking for a pullback entry, I think earlier this week I looked at p/f chart as $53, and early pivot analysis using weekly has 52.02 as good support level.

Since I'm holding March expiration and looking to add to position, I do a monthly too, using December's h,l,c. here I get... S2=41.44, S1=45.27, P=50.13, R1=53.96 and R2=58.82. Not much commonality, and weekly S1 of $52.02 lies between the monthly Pivot and R1, so may look for $52 entry.

Hey, that's not bad with the p/f chart at middle Bollinger Band of $51, with the 21-day SMA just now crossing above the 50-day SMA. Link

 
 
  Linda Piazza   1/16/03,  10:56:47 AM
As Jonathan will perhaps also remind you since he watches the COMPX so closely, today’s action brings into play that touted 200-dma (simple) on the COMPX, currently at 1426.42. A break of that level could be considered significant.

 
 
  Linda Piazza   1/16/03,  10:53:08 AM
The midpoint of yesterday’s red OEX candle, the second of a bearish engulfing pattern, is 470.77 (475.09 high and 466.44 low). I had thought we might see some resistance at that midpoint level, and today’s OEX high has so far been 471.09, just above that midpoint level. We’ll see if that resistance or the other resistance levels I’ve mentioned continue to hold. As I mentioned earlier, two doji candles preceded this bearish formation, amplying the bearishness of this pattern that also formed at resistance. That does not mean that opex-week action can’t or won’t move the indices to new relative highs. This is, however, predictive of further downside. Any bullishness that would overcome these patterns would be mighty indeed.

Candlestick theory can seem like hocus-pocus at times, but it’s really based on some of the same theory that drives pivot points and Fibonacci retracements and other tools. 50% levels come into play with these tools, too. Candlesticks provide quick visual clues, however, that I don’t always find with other methods. It’s easy to spot bearish or bullish patterns.

 
 
  Steven Price   1/16/03,  10:48:07 AM
Yesterday, I asked readers to chime in on the housing markets in their areas to help everyone get a feel for just how strong the housing markets remain. I can remember home shopping on the North Side of Chicago just a couple of years ago, when my wife and I were deciding whether to put a bid on a place we were looking at. It was swarming with other prospective buyers and the price went up twice while we were there, as buyers began bidding against one another. My own experience (I now live in a loft unit in downtown Denver) has been that units in my building have been taking longer to sell over the last six months. The top floor unit asking price has been reduced by $75K in the last two months and remains unsold. Here are a few of responses I got from readers:

I am a realtor on the Central Coast of California. Home sales have slowed down especially in the upper range, $1.5-$5 million, and asking prices have dropped by 1/3 to 1/2 in selected areas. Last month a $4 million (asking price 2 years ago when it came on the market) home on the ocean finally went for $1.75 million. The lower end stuff. Mom and Pop 3 bed 2 bath 1200 - 2400 square foot homes are still in the $500-$900 thousand range. They are moving more slowly now even though this is where the largest pool of buyers exists. It is a buyers market and the buyers are far more careful. Prices have stagnated in this range for the last two years. Location is, once again, important.

Howdy! I live in a more yuppie-type area near NASA in Houston; prices are roughly $300K avg for 3000 sq.ft., avg selling time 73 days. This has not changed more than a few % points in the last two years - much to my chagrin as a homeowner, but at least my property taxes haven't increased significantly. The area was closed for further development prior to that (which did increase house prices in a big way), but has served to stabilize prices since then. I figure after the OIN crew buys up all the Enron exec houses on the market, folks will start looking at my neighborhood again.... [grin]

Live on a NICE INLAND LAKE 20 miles west of Milw. Wi. 2200 Acre that market is also soft Regards Ken

 
 
  Jeff Bailey   1/16/03,  10:42:18 AM
Semiconductor Index (SOX.X) 317.49 -2.29% ... darting to a session low here and leading sector loser. "Gig" might be up for the semi's until this summer.

 
 
  Jeff Bailey   1/16/03,  10:40:03 AM
Dow Industrials (INDU) 8,771 +0.55% ... just off best levels of the session at 8,771 (high has been 8,805). Why didn't Dow just rally right to today's R1 of 8,817?

Use that technique we discussed yesterday of taking your retracement from S2 of 8,607 to 8,912. Do you see how that retracememt has 61.8%, 50% and 38.2% really fitting nicely with the way the Dow has traded this morning? I have 38.2%% at 8,795 and 61.8% at 8,723. So far today, Dow's range has been 8,805-8,721. 50% is at 8,759.

 
 
  John Seckinger   1/16/03,  10:36:31 AM
Time to test this recent weakness. The Dow has a pivot at 8760 (same as high during the first five minutes), and this level should hold if bulls are going to mount another attack above 8800. Adding to this post: I like to see a five-minute CLOSE underneath 8760 for confirmation.

 
 
  Linda Piazza   1/16/03,  10:34:15 AM
As perhaps might be expected ahead of important earnings announcements tonight and tomorrow, volume appears light today, with only 218 million shares traded on the NYSE as of this writing and only 305 million on the Nasdaq. New highs continue their march higher in comparison to new lows, with a 42:4 ratio on the NYSE and a 45:9 ratio on the Nasdaq. As Jeff mentioned last week, these new high numbers can perhaps be expected to increase toward the end of the week. Adv/dec volume shows buying, with a 2.7/1 ratio on the NYSE and a 1.45/1 ratio on the Nasdaq. Up volume is three times down volume on the NYSE, but the ratio is nearly even on the Nasdaq, with a 138:136 ratio.

 
 
  Mark Phillips   1/16/03,  10:31:47 AM
Correction...According to Rick (a reader that's obviously more up to date than I), ATR is available from QCharts. He's got the newest beta version of the program (4.2.1.16c) and it does include ATR as one of the provided indicators.

I guess it's time for me to go download it and see what other goodies they've included this time around! GRIN

 
 
  Jeff Bailey   1/16/03,  10:31:17 AM
KLA-Tencor (KLAC) $38.00 -1.16% ... going to ease in here with a partial put position in the March $35 out the moneys. Link

Relative strength of 41.46 is weak vs. SPX and today's action isn't going to help. Link

 
 
  Mark Phillips   1/16/03,  10:28:31 AM
Biotechs are today's sector winner following the strong upside action in shares of DNA (earnings last night) and IDPH (upside preannouncement last night), and the Biotechnology holders (BBH) are up nearly 4% on the day. This is a clean breakout to new 7-month highs, and things are looking more bullish by the day. We have the 50-dma now above teh 200-dma, and the descending trend going back to late 2000 has now been decisively broken. There should be no question that the LEAPS Put play we've been tracking is stopped out on today's action. Given the constructive action on the short and long-term charts, we won't consider the downside here again in the near term -- that said, I'm hesitant to play the upside for anything more than a fairly quick swing trade. That overhead resistance in the vicinity of $100 is going to be a formidable obstacle.

 
 
  John Seckinger   1/16/03,  10:25:29 AM
Jeff, nice point in your 10:10:35 post. I like to differentiate between possible "noise" and solid resistance areas by doing more intermediate to long-term studies and comparing them to the more micro analysis. Whenever you get a number of different technical tools (or different time frames) reaching the same conclusion, certainly that area should have a greater psychological importance.

 
 
  Jeff Bailey   1/16/03,  10:22:55 AM
QQQ Straddle? Hi Jeff: The INTC Q release didn't produce a large enough swing on the QQQ. But today's MSFT still can , It is the largest component on the QQQ. A stradle on the QQQ(27$) near 16:00 should be around 0.50$ (half what it was before INTC). Exit on Friday open with a MSFT swing. Any Comments?

I tell you what. I had to trade my way out of a paper bag in my QQQ straddle yesterday to break-even, and we did it here in the market monitor using the daily pivots and plan from Index Trader Wrap of Tuesday evening. That was a heck of a lot of work for break-even.

I'm going to pass on trying it again, even closer to expiration, but I don't disagree with you that MSFT will be potentially big driver. Some thoughts on MSFT here is that they are just "so darned consistent" with their guidance and I got to thinking about this stock late last night. You know.... they probably aren't as "big" of a driver as it relates to broader technology. They aren't really "dependent" on anyone, but the consumer and I can't say that there is any company out there that is really "dependent" on MSFT. I say this as it relates to a company like IBM or Intel. You see, Intel is "dependent" on computer mfg's and their business. However, Intel's business (growth or slowing) has much GREATER impact on dependent companies like AMAT, KLAC, NVLS, where the equipment makers are DEPENDENT on Intel.

I guess what I'm trying to get at here, is that while MSFT is a "key stock" and can indeed move the QQQ/NDX, it is kind of on an island by itself. However, INTC and IBM, well, they are the dominant stock at the top of the pile, there are a lot of companies that are dependent on them and you get the "trickle-down" effect when they report earnings and make comments about the future.

 
 
  Linda Piazza   1/16/03,  10:21:05 AM
In addition to the pivot, support, and resistance levels listed by Jeff, Steve, and John, I also look at the old standby tools—MA’s, historical resistance, trendlines. On the OEX, you might watch for resistance from today’s simple 200-dma at 475.21 and exponential 200-dma at 480.20, and support from the exponential 500-dma at 559.60. This MA also coincidentally (or not) comes in right at the historical support seen from January 6-9.

 
 
  John Seckinger   1/16/03,  10:20:49 AM
Note: SUNW is also expected to report earnings after the close

 
 
  Jeff Bailey   1/16/03,  10:10:35 AM
Index Trader Wrap and our "pivot matrix". I really like the way the daily R1 of 472.50 and weekly R1 of $475 and Monthly R1 of $475 match our unconventional $2.50-box scale of the OEX as it relates to the $2.5 box size. Link

I think there is a "nice fit" with the Bollinger-band and perhaps gives impression that OEX is indeed at upper-end of a range right now. Then we'll note how we were looking at correlative support at 460 from the matrix. Indeed, nice little fit with the recent pullback to 460 and how the middle-portion of the Bollinger Band at 457.50 is most likely good support level.

All eyes on IBM and MSFT tonight.

 
 
  Jonathan Levinson   1/16/03,  10:08:50 AM
The put to call ratio has opened at .75. More of the same from yesterday.

 
 
  Jonathan Levinson   1/16/03,  10:04:20 AM
The Fed has just announced an overnight repo of 6B. So, for 14.75B draining today, there's been 10B added, for a net drain of 4.75B.

 
 
  Linda Piazza   1/16/03,  10:03:56 AM
We’ve got gold higher and the dollar lower—normally bearish for equities—but bond yields higher and VIX lower—normally bullish for equities. There’s no clear light showing the way here.

 
 
  Jeff Bailey   1/16/03,  10:03:48 AM
United Tech (UTX) $66.24 +2.87% is the Dow's "driver" today and biggest component gainer with Honeywell (HON)$25.92 +2.57% Link just behind. Will also set an alert on HON at $27, as trade there would get this Dow component back on a p/f buy signal. However, we note bearish trend in HON at $30, and I think this would be formidable resistance, especially if Dow Bullish % gets back above 70%, when/if OEX and NDX bullish % get to those levels too.

 
 
  Mark Phillips   1/16/03,  10:02:42 AM
Great Question!

I never really understood the Vix as a measure of volatility- I know its calculated from Oex put and call option prices and it represents fear -that I get. but to me volatility is really how much "range" is occuring in the market. For instance, say the average daily price bar on the spx during the last quarter of 2002 (high to low) was 15 versus say this past summer was 23- that tells me we were in a much narrower trading range and tougher conditions to day/swing trade. Do you know if Qcharts/stockcharts has a way to measure/chart this ?

I can understand your confusion on the VIX, as it certainly does seem high relative to the daily range. I think a better way to think about it is that the VIX measures the expected "range" in the market in the future. It is not a metric of what the actual range is. Yes, we are currently in a narrower daily price range, and that does impact day/swing trading in an adverse manner, but I don't think the level of the VIX really tells you that. In measuring relative activity in puts and calls, the VIX is (as you pointed out) a measure of fear in the market or a measure of market participants' expectation of movement -- at least that's how I think about it. Unfortunately, Qcharts doesn't have any way to show the average daily range, but with StockCharts, you're in luck. They have a simple indicator called Average True Range (ATR), and that's precisely what this indicator measures. Here's a link to a Sharp Chart of the OEX, with ATR shown below the chart, clearly indicating the reduction in range in recent months.

Link

This indicator is normally calculated over a 14-day period, but you can modify it to your heart's content. I've included a link to the tutorial page, where the background and calculation of the indicator are detailed.

Link

 
 
  Steven Price   1/16/03,  10:01:53 AM
Swing Trade Signals
The Dow is sitting right on 8800 once again and with green across the board, it appears the opening range break to the upside is giving us a reliable intraday signal

Current levels Dow 8804/SPX 926.03/OEX 470/COMP1447

 
 
  Jeff Bailey   1/16/03,  10:00:24 AM
S&P 500 Index (SPX.X) 925.51 +0.79% ... Strong move here from the SPX and currently above today's PIVOT. Session low of 918.22 not close to today's S1 and has my thinking that we would/could see a move lower into IBM/MSFT numbers not looking to pan out. Watch for intra-day support now at the PIVOT of 922.50.

 
 
  Jonathan Levinson   1/16/03,  10:00:01 AM
The TRINQ seems awfully high at .83 for this big runup. Either the runup is a flash in the pan, or the buyers are going to have a lot of leeway before the COMPX becomes overbought. Time's going to have to tell which way it wants to go this morning.

 
 
  Steven Price   1/16/03,  9:54:19 AM
Swing Trade Signals
John mentioned the opening range with a top at Dow 8760. We took out that range to the upside, indicating bullishness for the day.

Current levels: Dow 8788/SPX 924.02/OEX 469.89/COMP 1445/QQQ 26.88

 
 
  Linda Piazza   1/16/03,  9:54:15 AM
Late yesterday, I noted that the indices had produced bearish engulfing patterns yesterday, with red candles completely engulfing the previous day’s white candles. As I was reviewing Nison’s work last night, I was reminded that the implications are particularly bearish if the bearish engulfing pattern was preceded by a doji, as it was on the OEX, SPX, and DJI. (The COMPX and NDX has small-bodied white candles, but not doji candles.) In fact, two doji candles preceded the bearish engulfing pattern, with those candles occurring at resistance, also adding bearish implications according to Nison. These candles should now provide resistance—especially watch the midpoints of the red candles—but a move above them would indicate renewed bullish strength.

 
 
  Jeff Bailey   1/16/03,  9:53:48 AM
United Technologies (UTX) $66 +2.35% ... trade at $66 gets stock back on a reversing p/f buy signal and has bullish vertical count currently to $79.Link

This will also see a net gain of 1 stock, or 3.33% to the Dow Industrials Bullish % ($BPINDU) Link

 
 
  John Seckinger   1/16/03,  9:53:33 AM
Futures win! Well, so far. Yesterday, when I was looking at end-of-day charts before my wrap, I noticed a lot more bullishness out of the futures markets than cash (ES versus SPX), (YM versus Dow), (both NDX and NQ looked fine). Will futures lead cash on Thursday?, I pondered. I thought they would. Yes, there was risk in the SPX down to 912 (intra-day low 918.22). Glad that didn't materialize.

 
 
  Jonathan Levinson   1/16/03,  9:48:55 AM
The COMPX fell off its 1445 resistance line and is back to an intermediate support level. About the coming news: The 10(5) stochastic on the weekly COMPX candles has stopped on its upward course. The more fickle 5(3) setting is rolling over but has not yet crossed. This indicates a topping process taking place in the COMPX, which means chop without substantial upward movement. It also means that the market is transitioning from a "good and bad news are good" phase to a "good and bad news is bad phase". I will follow the oscillators. When that bearish cross occurs, all news should be bad, and the next leg down should assert itself. That is, if my guess is correct.

 
 
  Linda Piazza   1/16/03,  9:48:03 AM
VLO At 38.60 as of this writing, VLO has moved above the mid-December highs of 38.55. Watch carefully to see if Valero Energy is knocked back toward the 38.00 level again. In recent days, it appears that sellers have been exhausted, but we'll see today.

 
 
  John Seckinger   1/16/03,  9:46:24 AM
The 30-year closed yesterday right on its 22 DMA (exp) at 110'09, and has softened a little this morning to 110'02. The 50 EMA is below at 110. The range I will be following today in the 30-year is from 110'24 to 109'13. I do not expect either level to be reached, and this possible lack of movement in the bond pits might be slightly responsible for a bifurcation seen between the Dow and Nasdaq (read: less flows coming in due to asset allocation reasons).

 
 
  Steven Price   1/16/03,  9:44:18 AM
Swing Trade Signals
The Yahoo sell-off has me wondering if we'll be seeing the opposite of what we saw last fall. Then it seemed that poor earnings reports were met with buying, as expectations had fallen so low that anything but a major disaster was a pleasant surprise. Now it seems expectations have grown to an unsustainable level, as companies that beat the consensus are seeing a sell-off. First Intel, then yahoo. The cautious statements and capex reduction in Intel's case was certainly a big factor, but let's remember that theay did beat the street, as did Yahoo.

 
 
  John Seckinger   1/16/03,  9:38:03 AM
After the first five minutes of trading, the range in the Dow is from 8721 to 8760. If this bounce is going to last, I would like to see the blue chips stay above 8740. Notice that the pivot in the Dow is 8760, and the high of the Day and the first five minutes is 8760.

 
 
  John Seckinger   1/16/03,  9:34:39 AM
Intra-day Pivot/Levels for Wednesday

INDU : S2= 8607, S1= 8665, P= 8760 , R1= 8817 , R2= 8912

SPX : S2= 906, S1= 912, P= 922.5, R1= 928, R2= 938

OEX : S2= 461, S1= 463, P= 469 , R1= 473, R2=478

NDX : S2= 1051, S1=1062 , P= 1081, R1=1092 , R2=1111

QQQ : S2= 26.12, S1= 26.42, P= 26.89 , R1= 27.19, R2= 27.66

 
 
  Jonathan Levinson   1/16/03,  9:31:32 AM
2 point gap up open on the COMPX to 1440 (call it flat), TRINQ .73, QQV +.19 to 38.18.

 
 
  Jeff Bailey   1/16/03,  9:29:09 AM
The 9:00 AM Intraday Update has been posted. Link

 
 
  Jeff Bailey   1/16/03,  9:28:55 AM
Forest Labs (FRX) $54.65 .... edging up at $55.10 over New York ECNs after reporting Q4 EPS of $0.47, which was 2-cents better than estimates. Link

 
 
  Steven Price   1/16/03,  9:26:09 AM
Swing Trade Signals
We are currently flat and I don't plan on entering ahead of IBM and Microsft's earnings after the bell. We are seeing some mild bullishness following the jobs data and GM guidance and if it continues, I'll be watching the 200-dmas and emas for the first sign of a continued rally. If it fades and we head lower, I'll be watching last Wednesday's sell-off lows at Dow 8580/SPX 910 for signs that yesterday's sell-off has some real strength. A move below 8700, where we found support yesterday, would be the first sign of that.

 
 
  Jonathan Levinson   1/16/03,  9:12:11 AM
The fed has 14.75B in repos expiring today. Of that very substantial amount, 9B is comprised of 28 day repos, which have just been replaced with 4B in 28 day repos, for a net drain of 5B so far. We await the announcement with respect to the remaining 5.75B in overnight repos expiring today.

 
 
  Jonathan Levinson   1/16/03,  8:41:31 AM
The CPI rose 0.1% vs. expectations of 0.2%. The core met expectations, rising 0.1%. Link

 
 
  Jonathan Levinson   1/16/03,  8:39:37 AM
Jobless claims were down 32,000, the lowest reading in 6 weeks: Link

 
 
  Jonathan Levinson   1/16/03,  8:33:59 AM
No details yet, but here's the breaking news: Consumer prices rose 0.1% in December, less than expected; jobless claims fall to 360,000, lower than expected.

 
 
  Jonathan Levinson   1/16/03,  8:32:05 AM
Bonds have opened down, with yields rising out of the gate, FVX + 4.3 bps, TNX +2.6 bps and TYX +.8 bps. QQQ is now trading flat at 26.82.

 
 
  Jonathan Levinson   1/16/03,  8:23:50 AM
General Motors Posts $1 Billion Profit for Quarter as U.S. Sales Increase

General Motors Corp.'s fourth- quarter profit was $1 billion, as the world's largest automaker increased its share of the U.S. vehicle market

Here's the full story: Link

 
 
  Linda Piazza   1/16/03,  8:22:13 AM
If there’s a silver lining in Abbott Drug’s missed expectations, it may be this: The company cited the earlier-than-expected approval of Humira, its arthritis drug, and the attendant need to accelerate spending as the cause of those missed expectations.

 
 
  Linda Piazza   1/16/03,  7:45:25 AM
Abbott Labs is just out with earnings, coming up a penny shy according to Bloomberg television, and also cutting estimates for Q1 to $0.50-.52 versus expectations of $0.57.

This morning, TV talk about Samsung’s earnings mentions their planned 43% increase in cap-ex expenditures, with those expenditures focused on the semiconductor business. This increase diverges from Intel’s disappointing plans for cap-ex expenditures.

 
 
  Jonathan Levinson   1/16/03,  7:43:01 AM
The US Dollar Index is holding at 101.20, with gold above 350/oz. QQQ is trading down 15 cents from its close of 26.82. I'll be very curious to see how the bond market opens today in view of the bad news from Germany detailed by Linda.

 
 
  Linda Piazza   1/16/03,  7:20:07 AM
Good Morning! As I write, the German DAX has moved off its lows near 3023. Those lows were posted this morning after a government office announced that the country’s economy expanded only 0.2% last year, down from 0.6% in 2001. Q4 growth probably stagnated. With unemployment and rising taxes crimping the country’s economy, exports have driven growth, but as the dollar slips against the euro, exports are expected to suffer. EU rules require that budget shortfalls be less than 3% of GDP, requiring Germany’s Schroeder to raise taxes to meet that goal. As of this writing, the DAX was down .35%, to 3060.05. In other European markets, the FTSE 100 was down 0.2% and the CAC 40 was down 0.65%.

The Nikkei closed nearly flat, down 2.58 points or 0.03%. Samsung Electronics, the world’s largest chipmaker, reported Q4 earnings overnight. Net profit almost quadrupled, Marketwatch.com announced, but at first shares dove before recovering to close up on the day. Expectations had been for 1.8 trillion won net profit, rather than the 1.5 trillion reported. Overnight, Bloomberg commentators also blamed the early plunge on Samsung’s uncertainty about growth in demand this next year, uncertainty that echoes that heard from Intel executives.

Of possible interest to those awaiting Microsoft earnings is a statement by Microsoft’s Koide that holiday sales of Xbox game consoles in Japan failed to meet expectations due to delays in its release of the online game-playing service and best-selling game titles. Koide notes that the company still plans to meet its 2003 worldwide goals.

 
 
  Steven Price   1/15/03,  11:27:28 PM
The Swing Trade Game Plan has been posted: Link

 
 
  Jeff Bailey   1/15/03,  11:27:07 PM
The Index Trader Wrap has been posted: Link

 
 
  John Seckinger   1/15/03,  11:26:49 PM
The Futures Trader Wrap has been posted: Link

 
 
  Steven Price   1/15/03,  11:26:22 PM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

 
 

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