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  Jeff Bailey   1/29/03,  4:59:05 PM
Pivot Matrix for tomorrow. Link

Key levels that seem to be in play are the WEEKLY S1 support levels. Quick reveiw of intra-day 5-minute interval chart shows that WEEKLY S1 levels were violated, but all-be-darned if I can find a 5-minute bar CLOSE below one of the WEEKLY S1 levels. To me, this hints of some type of computer program being triggered, which perhaps has these levels "plugged in" as a level to institute some buying for the past three-sessions.

I only received one "buy program" premium alert today at premium level 0.16, and that was just after the 02:15 PM EST FOMC interest rate decision. The program had little impact on trading when SPX was trading roughly 860.

 
 
  Linda Piazza   1/29/03,  4:04:41 PM
And if there wasn't enough of a quandary for bulls and bears, the OEX apparently ends the day just $0.32 below its 50% retracement of the October-December move!

 
 
  Linda Piazza   1/29/03,  3:59:28 PM
Here's the quandary for bulls and bears. The linked chart is the same OEX 60-minute chart I've been showing all day, with the same possible bear flag formation. By definition, a bear flag moves contrary to the previous movement (down) and it moves in a series of higher highs and higher lows. It usually breaks down about 50% of the way up the last movement down, and I've marked that line, near 440, in green. As you can see, though, except for candle shadows that briefly moved out of the flag pattern, the OEX has now traded within that pattern since the 27th. Now it's near the make-it-or-break-it point as the day draws to an end. Both 5(3)3 and 21(3)3 stochastics are now in overbought territory, but daily stochastics are just turning up. Tomorrow sees the release of the GDP number. If you're bearish, do you believe this is a bear flag formation that's going to break down? If you're bullish, do you take comfort in the series of higher highs and higher lows? Know what you're risking when you decide whether to hold over or not. Link

 
 
  Steven Price   1/29/03,  3:49:02 PM
Swing Trade Signals
The rally has begun to fade after topping out at 8158, just 8 points above my stop. For what it's worth I still see this as a failed rally at a lower high. If we had entered this trade today, I likely would have placed the stop above 8959, which is the 19.1% fitted retracement based on today 5 min opening range and was remarkably reliable on the last rally. For more aggressive traders using a stop at Dow 8200, I think any failure below that level is still bearish.

 
 
  Jeff Bailey   1/29/03,  3:35:28 PM
The 3:15 PM Intraday Update has been posted. Link

 
 
  Jonathan Levinson   1/29/03,  3:32:53 PM
The TRINQ is very low at .38 but not extreme, and the TICK.NQ is now bullish at +111. QQV is down 1.32 to 38.26, a respectable but not extreme drop. This bounce today, which has tacked on a 20 point gain to the COMPX, looks quite healthy, given the solid but not-overdone breadth. The p/c ratio has also been staying relatively high, not yet showing us a reading below .75. I share Steve's sentiment, but note that the indicators aren't showing much danger for bulls thus far.

 
 
  Linda Piazza   1/29/03,  3:31:30 PM
In response to a reader question about the NDX: I'm finding it difficult to gauge the future direction of the NDX. On the 21th, it fell beneath an ascending line that had been supporting prices since October, and that has to be viewed in a bearish light. However, it maintained levels above the important 975 level, so it can be viewed as showing some strength as compared to other markets. It's moving up now, with the 5(3)3 daily stochastics cycling up out of oversold levels along with the upward price movement. However, as it moves up, it's going to face a confluence of MA's and that same former supporting line between 1034.19 (the 22-sma) and 1047.22 (the 50-sma) with the 200-sma between those two at 1041.73. There was also a gap down in this area, which should now provide some resistance. I would expect those gathered MA's and former support to provide resistance now and would look for a rollover in that area. I just don't feel as certain about future direction here.

 
 
  Steven Price   1/29/03,  3:28:51 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were stopped out of the 1/2 short signal when the Dow traded 8150 at 15:28:04.

I really cannot imagine why anyone would want to go long in the current environment, but obviously there were enough of them for an oversold bounce. Next target is a short on a rollover from the 8200-8300 resistance level.

 
 
  Steven Price   1/29/03,  3:14:20 PM
Thanks, Mark - I stand corrected!

 
 
  Steven Price   1/29/03,  3:13:19 PM
Swing Trade Signals
We took out yesterday's rally highs, for a turnaround of 175 Dow points from this morning's drop. This was done with a series of higher intraday highs and lows. That is an impressive bounce and we may finally be getting a relief rally with the Presdient's speech behind us and the FOMC meeting over, as well. I'll leave my Dow 8150 stop in place, as I have provided many other alternatives over the past couple opf days for more conservative traders. I still believe overall direction is down, but if I am stopped out, I'll look to see how the market behaves if/when we run into resistance in the 8200-8300 range.

Current levels: Dow 8118/SPX 865.09/OEX 438.12/COMP 1356.02

 
 
  Mark Phillips   1/29/03,  3:12:22 PM
Regarding the question on COF, looking for how to trigger an options trade based on stock price, Preferred Trade allows options to be bought or sold based on buy/sell stops on the underlying security. There may be others that provide this service, but I'm familiar with this feature at Preferred because I frequently use that feature.

 
 
  Steven Price   1/29/03,  3:09:14 PM
The COF call suggestion indicates entering based on a trigger. Is that simply a manual notification of the stock moving to a specific price or is there a broker or a way to actually enter a trade specifying it's execution based on the stock reaching a certain price? Is that possible? Do any brokers offer that service? Thanks, Bill

When we place a trigger on a stock, we are implying a level which we feel it needs to trade to confirm the bullishness or bearishness we are seeing. At that point, we consider ourselves "in" the play. If the stock does not trade that trigger price, then we don't feel it should be played. I favor these ion markets such as this, where direction is hard to predict and one day's move can quickly dissipate and head the other direction. Certainly, even "triggered" plays can turn on us, but it certain circumstances I feel it reduces risk.

* Please see Mark Phillips' response above for an answer to the brokerage question.

 
 
  Linda Piazza   1/29/03,  3:03:05 PM
The COMPX and NDX have remained above their 50% retracement (October to December) levels throughout January, but the DOW remains just beneath its 50% retracement at 8120.43.

 
 
  Linda Piazza   1/29/03,  2:59:47 PM
The SPX is already above its 50% retracement of the October to December move. That level lies at 861.46, and again is a calculated number, so should be exact.

 
 
  Linda Piazza   1/29/03,  2:57:23 PM
Note that the OEX 50% retracement of the October to December movement lies just ahead at 437.87. This is a calculated retracement and not one snapped from retracement lines, so should be exact.

 
 
  Jonathan Levinson   1/29/03,  2:53:08 PM
Next resistance is very close, at 25.28 QQQ and COMPX 1358 dating to January 24th.

 
 
  Jonathan Levinson   1/29/03,  2:51:58 PM
The trendline I've been watching has been violated with a print at 1352 COMPX. TRINQ .43, TICK.NQ +14, QQV -.50.

 
 
  Steven Price   1/29/03,  2:37:03 PM
Swing Trade Signals
We are catching a bid again in the equities after the pullback, confirming the move in the yield. We could go higher from here, especially if we break over Dow 8100. The SPX is already above 860 and the OEX over 435. The COMP is holding its gains, although sitting below the high of 1350, which has acted as resistance the last few days.

Current levels: Dow 8078/COMP 1347/OEX 435.52/SPX 860.58

 
 
  Kent Barton   1/29/03,  2:35:00 PM
You know how we always say that nothing goes up in a straight line? RMBS is the exception to that rule. Shares are now trading at $11.55, up 55%!

 
 
  Linda Piazza   1/29/03,  2:34:59 PM
CNBC commentators discussed President Bush's mention of Iran last night, bringing up the possibility that the U.S. might not be finished in the region when it attends to Hussein. The point was that those who see an end to conflict and the attendant problems that's causing for worldwide markets as soon as the Iraq situation is settled might be short-sighted.

Both S&P's remain within the bear flag formations on those 60-minute charts. No clear direction appeared after the FOMC announcement.

 
 
  Jonathan Levinson   1/29/03,  2:33:32 PM
The five year yield is climbing again, now up 7 basis points to its high of the day, as the COMPX prints 1347 and QQQ breaks 25.10. Here comes another run at 1350.

 
 
  Steven Price   1/29/03,  2:22:50 PM
Swing Trade Signals
Talk about anti-climactic. We got little movement following the FOMC announcement, but we are slowly fading to the downside.

 
 
  Jonathan Levinson   1/29/03,  2:20:57 PM
Hence, the Committee continues to believe that, against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness in the foreseeable future.

More at this Link

 
 
  Linda Piazza   1/29/03,  2:17:45 PM
No change in interest rates; no change in the balance of risks.

 
 
  Jeff Bailey   1/29/03,  2:17:29 PM
FOMC has policymakers leaves rates unchanged.

Dow Indu= 8,064, SPX 859, OEX 435, NDX 1,009, QQQ $25.10.

 
 
  Jeff Bailey   1/29/03,  2:13:14 PM
Rambus (RMBS) $10.85 +46% ... stock surges in last hour, yes... last hour from $7.50 to current levels after Bloomberg reported that a U.S. appeals court ruled in favor of RMBS and threw out a jury's findings that the company committed fraud while pursuing patents for its chips. The court also revived RMBS's patent infringement claim against IFX $7.14 -2.19%.

 
 
  Linda Piazza   1/29/03,  2:12:30 PM
As we head up to the FOMC statement, adv/dec figures again show more decliners, but the difference is slight. Up volume has a slight edge over down volume on the Nasdaq but down volume has a slight edge on the NYSE. As a note, Bob Pisani said trader talk isn't focusing on the FOMC meeting, but on Iraq.

 
 
  Mark Phillips   1/29/03,  2:12:04 PM
5 minutes and counting until the FOMC noise is out of the way. Bulls can be encouraged that the market is holding onto the bulk of its gains after the rebound from the lows, while bears are hoping for a spike and failure to provide fresh entries after the FOMC. All except for the most aggressive players should have exited open positions ahead of the report, as we know how difficult it is to interpret the initial reaction immidiately after FOMC announcements.

 
 
  Jonathan Levinson   1/29/03,  2:10:24 PM
The put to call ratio has held at .75 for this second half hour, as the COMPX stays just below the highs of the day and the descending trendline on the 60 minute bars at 1345. FVX continues to fade, now +2.8 bps. TRINQ .64, TICK.NQ -169. The Feb gold contract is now at 366.30/oz, with the US Dollar Index off its lows at 99.33.

 
 
  Steven Price   1/29/03,  2:03:05 PM
Swing Trade Signals
As if we haven't had enough volatility this morning, the Fed should announce its bias in about 15 min. There is no expectation for a change in rates, but an easing bias could send us higher. Traders looking be more aggressive can widen stops, possibly above Dow 8200, while those tired of the whippiness can get out.

 
 
  Kent Barton   1/29/03,  2:00:48 PM
Microsoft (MSFT) $49.02 +0.20: MSFT has managed to rebound after briefly moving below bullish p-n-f support at $48.00. Steve and I seriously considered adding the stock as an OI put play yeseterday but ultimately decided to wait to see how the market reacted to the Bush speech. The bar chart continues to look weak with no clear support until the $43-$44 area. If the intraday bounce fades, traders might be able to target short positions on a move under the morning low of $47.93. An alternate strategy for bearish entries would entail waiting for a failed rally near $50.00.

 
 
  Jonathan Levinson   1/29/03,  1:54:54 PM
While the TRINQ is still in bullish territory at .62, note that the TICK.NQ at -228 shows a net of 228 decliners. This tells me that the buying here is concentrated in a minority of stocks. It looks like distribution to me. I expect volatility to climb as we head into the fed announcement.

 
 
  Linda Piazza   1/29/03,  1:52:12 PM
Powell is speaking, saying that the information he will present next week will "fill in some of the gaps" already mentioned by Blix. He says he also will be presenting some new information that wouldn't pertain to the inspectors' work.

 
 
  Jeff Bailey   1/29/03,  1:48:36 PM
The 1:00 AM Intraday Update has been posted. Link

 
 
  Kent Barton   1/29/03,  1:44:10 PM
Reader question: What do you think about GD here? It seems to be bouncing back.

Response: The DFX.X defense index (148.73 +0.49) isn't showing any reaction to last night's hawkish State of the Union speech from President Bush. Wall Street seems to be of the opinion that defense contractors have already reaped the benefits of a military buildup in Iraq. If the coming war ends as quickly and easily as the "mother of all battles" did back in '91, Pentagon expenditures will probably be gradually reduced.

Another factor that's weighed on the defense group is the fact that many contractors also manufacture planes and components for the floundering civilian aerospace industry. For visual evidence of these problems, just take a look at the daily charts for Boeing (BA) and General Dynamics. GD ($66.78 +0.19) has managed to recoup some of the steep losses that resulted from last week's earnings miss. From a purely technical standpoint the chart looks like a decent setup for a bullish play, with no overhead resistance until the $75.00 area. General Dynamics has already fessed up to a very weak fundamental, so it seems rather unlikely that the company will come out with additional bad news in the near-term. On the other hand, the business difficulties will make it harder for GD to garner institutional sponsership. Very aggressive speculative traders might want to target long entries on a move above short-term resistance at $67.00. I'd be using a fairly tight stop-loss in the event the bargain-hunting begins to dry up.

 
 
  Jonathan Levinson   1/29/03,  1:40:06 PM
The most recent put to call reading has dropped a mere .6 to .75 after that strong surge on the COMPX. The price continues to battle it out with the descending 60 minute trendline. The TRINQ has risen to .58 on the 3 point pullback, and in the meantime, precious metals have been slammed, HUI -2.42 and XAU -1.63. The FVX has been tracking well, currently down from its high of +5.6 bps to a current +3.9 bps at 2.958%.

 
 
  Linda Piazza   1/29/03,  1:38:53 PM
Since last week, the 60-minute 21-pma has capped the transportation index's attempts to rise. Today, that 21-pma is flattening after a steep fall, perhaps hinting at a slowing in the downward momentum.

 
 
  John Seckinger   1/29/03,  1:36:43 PM
Here is an illustration of a five-minute chart of the Dow. The recent move is still within the regression channel. I definitely was surprised that the 8020 area failed to hold buyers. See link: Link

 
 
  Linda Piazza   1/29/03,  1:34:57 PM
Steve mentioned the improvement in the adv/dec ratio on the rally. Up/down volume improved, too, but only to neutral levels. On the NYSE, the ratio of up/down volume is 419/433 and on the Nasdaq, it's 475/364. It should get interesting this afternoon as the FOMC statement release time approaches.

 
 
  Linda Piazza   1/29/03,  1:23:24 PM
Here's an update on the OEX bear flag formation that began forming on the 27th. After dropping out of that formation earlier today, the OEX moved back into it and appears ready to challenge the upper level support again. Moving back into the channel could be considered somewhat bullish (since it had broken below for a period) and breaking above it certainly would be considered bullish. Note also that the 21(3)3 stochastics appear to be breaking above the descending line formed from the series of lower highs. There's danger to bears here, so make sure you know where appropriate stops should be. However, the bear flag formation remains a valid at this time. If it is a true bear flag formation, however, it will not continue past the midpoint of the prior drop. Link

 
 
  Steven Price   1/29/03,  1:23:20 PM
Ratio of Dow stocks DEC/ADV improved to 19:11 on the rally

 
 
  John Seckinger   1/29/03,  1:21:08 PM
The XAU certainly has under pressure as stocks rebounded, and the US Dollar rallied from 98.97 to 99.25 before slightly softening. The 30-year continues to weaknen, now lower by '9 ticks to 111'14 and back in the "support zone" from 111 to 111'16. Has the Dow rebounded to go green, only to fall once more? A move back under the 8050-65 area should get bulls a little concerned.

 
 
  Steven Price   1/29/03,  1:18:47 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
I am amazed by the strength of the rally and it goes to show that the Iraqi concerns are truly dominating the landscape. With everything in the green, the chances of being stopped out are looking stronger, especially ahead of the Fed meeting. Conservative traders should have been either out from the beginning or stopped out much lower on my alternate suggestions.

Stops are set at Dow 8150

Current levels: Dow 8094/SPX 862.44/OEX 436.78/COMP 1350

 
 
  Jonathan Levinson   1/29/03,  1:15:14 PM
The COMPX is right at descending trendline resistance on the 60 minute candles going back to January 16th. 1350 remains my breakout point.

 
 
  Jonathan Levinson   1/29/03,  1:06:42 PM
The put to call ratio has dropped to .81. Like the TRINQ (.47) and QQV, which is now +.58, it has room to run lower, signalling possible further upside if COMPX 1350 can be breached.

 
 
  Ray Cummins   1/29/03,  1:01:52 PM
Spreads/Combos/Premium Selling -- Portfolio Activity

The market appears to be forming some support near 850 (SPX) and that's great news for OIN readers as many our recent positions are testing the lower limits of their respective profit envelopes. Bullish spreads in P.F. Chang's (NASDAQ:PFCB) and University of Phoenix Online (NASDAQ:UOPX), and the "premium selling" play in Biosite (NASDAQ:BSTE), are clinging to profitability while a few issues such as Cerner (NASDAQ:CERN), Chiron (NASDAQ:CHIR), Intuit (NASDAQ:INTU) and Pharmaceutical Resources (NYSE:PRX) have little room for further downside movement. Cephalon (NASDAQ:CEPH), HCA Inc. (NYSE:HCA) and Pacificare Health Systems (NASDAQ:PHSY) warrant attention as they are within striking distance of the sold puts. In the bearish camp, all of the conservative positions are profitable and most of the speculative plays have provided small gains as well. CDW Computers (NASDAQ:CDWC) and Harmon Electronics (NYSE:HAR) are among the few issues on the watch-list for near-term upside activity.

 
 
  Jonathan Levinson   1/29/03,  12:59:14 PM
The more conservative 10(5) stochastics have reached overbought on the 60 minute candles, echoing the return to yesterday's high. No sign of a reversal yet despite the slight pullback on the COMPX from its high of the day.

 
 
  Jonathan Levinson   1/29/03,  12:55:49 PM
Kudos to David who saw this coming. We have the COMPX getting set to challenge yesterday's high. 1350 is resistance on this move, and it's fast approaching. The TRINQ has dropped to .49, and has room to go lower. FVX is now +2.8 bps, showing decent selling in bonds. QQV has dropped only .21, good news for bulls as QQQ option volatility stays relatively high despite the surge in QQQ to 25.08. I'm watching 1350 to see where the afternoon will take us.

 
 
  Mark Phillips   1/29/03,  12:55:06 PM
That buy program around 12:30pm really gave a lift to the COMPX, and after a bit of consolidation, the index is moving higher again, completely filling the opening gap. Internal strength is starting to show in the ADVDECV.NQ indicator as well, which just moved into positive territory for the first time today.

 
 
  Steven Price   1/29/03,  12:54:16 PM
Swing Trade Signals
As the political drama plays out, we are going to be subject to these unpredictable intraday moves. Those traders sitting on the sidelines most likely are enjoying the peace and quiet more so than those of us trying to play the market right now. I have gone back and forth on whether to close the position until after some of the turmoil passes. Certainly I could not predict the Iraqi minister's response that they would try to assuage the international community and there may be further unpredictable events. That is why this current play is only a half position and has been labeled as high risk. Please do not lose sight of the risk factor. Thebounce from this morning's lows has been convincing and shorts should be a little worried.

Current levels: Dow 8063/OEX 434.57/SPX 858.35/COMP 1345

 
 
  Mark Phillips   1/29/03,  12:51:22 PM
SYMC $46.28 (+0.18) Leading the way again, OI call play SYMC is back above the $46 level after a brief dip to just below $45 this morning. Interesting to note that the stock moved back into positive territory ahead of any of the major averages. NASDAQ struggling to hold near unchanged ahead of the FOMC meeting, but if the action in SYMC is any indication, we could have a victory for the bulls here. Remember the surge higher yesterday ran out of steam at $46.75, so it will be interesting to see what transpires if that level is tested later today. As mentioned in last night's play update, buying dips appears to be the better entry strategy into the play and those that took advantage of the early dip this morning appear to have gotten another solid entry.

 
 
  John Seckinger   1/29/03,  12:45:26 PM
Just listening to the speech on CNBC by the Iraq Foreign Minister. Paraphrasing the gentleman, "The U.S. did not succeed in the invasion of Vietnam, and will not succeed in the invasion of Iraq." I would have thought equities would soften after that sentence, and it was said when the Dow was at 8050.

 
 
  Linda Piazza   1/29/03,  12:42:06 PM
The Iraqi Foreign Minister is speaking, reacting to the State of the Union address. He claims that no weapons were found and that Iraq cooperated, but despite that, says that they are reaching out to the international community and are prepared to proactively take further steps to assuage concerns.

 
 
  Linda Piazza   1/29/03,  12:37:42 PM
The OEX moved to new highs, although it currently remains below yesterday's "inside day" high of 436.15. It has moved back up into that regression channel that defined the bear flag pattern. Was this morning's move down a trap? We'll soon see.

 
 
  Steven Price   1/29/03,  12:35:04 PM
Swing Trade Signals
we got that breakout above the S1 level and it was good for a run to Dow 8045/SPX 856/OEX 434. Right now it is continuing and we may be seeing that ramp up into the FOMC conclusion that I talked about.

 
 
  Steven Price   1/29/03,  12:26:54 PM
Swing Trade Signals
We are getting a series of intraday higher lows in the day, with a flat top at the S1/opening range support level. A breakout above that level with a 5 min close could signal another run up to the 8087 area, whereas a violation of the 7990 area could signal a re-test of the day's lows. Right now we have a 26:4 ratio in the Dow to the downside, with XOM, HD, IP and MRK in the green.

Current levels: Dow 8013/COMP 1331/SPX 853.23/OEX 432.18

the earlier lows in the SPX 845.94 and OEX 427.95 are still safe and the Dow bounced right at the 7945 level that John highlighted as a fitted retracement at 38.2% on the 5 min chart. Look for violations of those levels as very bearish signs. Right now however, the more attempts we make to break that 8016 level on a closing basis, the more significant could be the breakout to the upside.

 
 
  John Seckinger   1/29/03,  12:22:59 PM
Shares of American Airlines parent company AMR Corp. (AMR) is at an all-time low today (2.85), underneath the all-time low of $3.02 set in intraday trading in October. It was last week when the company said it posted the largest yearly loss in the aviation industry, losing $3.5 billion in 2002. It is reported that they are losing about $5 million a day. Time for low rates? AMR said they already identified $2 billion in cuts.

 
 
  Linda Piazza   1/29/03,  12:21:26 PM
Reader Question: I am trading BRCM today and am short. It is now below S2 but above its low. If it breaks its low and I cannot find support on the daily chart, how do you determine support w/o "guessing"?

Response: I see some support at 11.10-11.20 from a historical standpoint, but it's light support. Below that is only the October low to guide you.

Another idea is that you use John's idea of stacked retracement levels, as seen in the linked futures article: Link

Yet a third idea is to look at the P&F chart, where support shows up at 11 and again at 10.

 
 
  Jonathan Levinson   1/29/03,  12:21:02 PM
The COMPX is holding at 1329, QQQ 24.63. Little has changed on my breadth indicators, with TRINQ 1.16, TICK.NQ -160, and the QQV +.11 at 39.69. Precious metals are recovering with HUI slightly positive and XAU slightly negative. I expect this drift into the fed announcement, at which time we should see some action. Until then, uncertainty on top of uncertainty is causing a directionless day to unfold.

 
 
  Jeff Bailey   1/29/03,  12:00:44 PM
The 11:00 AM Intraday Update has been posted. Link

 
 
  Steven Price   1/29/03,  11:57:00 AM
Swing Trade Signals
The latest bounce had failed to achieve a 5 min candle close over Dow 8000, but it appears we will get that close. I still see the possibility of a ramp up into the FOMC meeting and even a spike afterwards if they release an easing bias. I still believe the overall trend is down, but it certainly feels as though we are fighting to get further downside on this play. I am particularly concerned about the COMP support at 1319 holding strong.

Current levels: Dow 8017/SPX 854.16/OEX 432.45/COMP1331.

 
 
  John Seckinger   1/29/03,  11:53:11 AM
Back to a five-minute chart of the Dow, I do see a nice "b" long liquidation pattern, with the apex near the profiled 7980 level. With that said, I would be surprised with a significant break above either 8021 or below 7945 in the near term. Rather, a move inside these levels and then back to 7980 before finally making a move. How about being at 7980 right at the FOMC annoucement? That would be in my perfect world.

 
 
  Steven Price   1/29/03,  11:50:42 AM
Coca-Cola (KO): $40.03 (-1.07) OI put play KO has contiunued its slide to fresh 6 year lows after underfperforming yesterday's rally in the Dow with a loss. It bounced off a low of $41.00 yesterday, but added another "O" to its current PnF column today, trading as low as $39.81. New entries can target a rollover below today's low, now that the $40 floor has been broken. More conservative traders can wait for a close below $40 to reaffirm that support break.

 
 
  Linda Piazza   1/29/03,  11:49:56 AM
Currently at 2132.43, the Dow Jones Transportation Index reached lows this morning not seen since October, after the index had begun to recover from its October lows. Support lies at the August 5 low of 2127 and the July 24 low of 2090. Above, Monday and Tuesday's lows might provide some resistance, but strongest resistance lies ahead near 2220. Seen by some as an indicator of economic strength or weakness, this index today clings to last support before plunging back to October lows. If other indices should move up, the move should be confirmed by a move higher in this index, too.

 
 
  John Seckinger   1/29/03,  11:42:20 AM
Shares of Sprint (FON) are lower by 12.47%, following rumors that the President and Chairman is stepping down. Corporate bonds offered by Sprint are lower by over $3, which is significant.

 
 
  Jonathan Levinson   1/29/03,  11:37:27 AM
I'm really eyeballing the charts here, but am coming up dry for any particularly sharp patterns to key off. The FVX is up 1.7 bps, TRINQ 1.19, TICK.NQ -53, QQV +.41 to 39.99. The COMPX continues to hang at 1328, and might be printing a very sloppy head and shoulders on the 5 minute chart, but it's too early to tell and barely merits mention. The put to call ratio is at .90, but following my comments yesterday, I'm putting more weight on the moving averages than the raw numbers, and both the 5 and 13 dmas are below .80. The 5 dma peaked at 1.20 at the October lows, to give you some perspective.

 
 
  Mark Phillips   1/29/03,  11:21:04 AM
MO $37.00 (-1.38) Thanks for pointing out the name change on MO, Jeff. You beat me to the punch! Stock got hammerred at the open in response to the beating share of KFT (currently down 11.5%) in negative response to the company's earnings last night. That was enough to drive MO down as low as $35.70 this morning. With Mo trading below $37, the PnF chart gives a fresh Sell signal and is flirting with its October lows. Traders following this LEAPS play should stick with their stops and exit the play on any strength today.

 
 
  Linda Piazza   1/29/03,  11:19:18 AM
It looks as if the OEX, at least, is settling into a triangular consolidation pattern below that bear flag formation, with this process best seen on the five-minute charts. There's nothing to do but to take some deep breaths and watch for the breakout or breakdown.

 
 
  Jeff Bailey   1/29/03,  11:11:34 AM
Altria (MO) $36.79 -4.2% ... stock jumps from $36 to $37 in last 10-minutes after reporting quarterly earnings. Gave some lift to Dow Industrials (INDU) 7,969 -1.48% off its lows of 7,950. Note: Altria is new company name for Tobacco giant Philip Morris. Link

Supply/demand chart has been bearish, and if memory serves me correct, has been profiled bearish in recent weeks either at OI or PI, or both. Stock has exceeded bearish vertical count of $39 so would only suggest partial positions short/put, and look to use weekly or monthly pivot analysis to look for correlative downside targets.

MO reported Q4 earnings of $0.93 per share, which was 1-penny better than consensus. For 2003, MO sees EPS between $2.60-$2.70, which is forward guidance range below consensus of $2.71.

 
 
  Mark Phillips   1/29/03,  11:11:31 AM
KSS $51.97 (-0.92) Flirting with the lows. With the Retail index (RLX.X) breaking the $250 level this morning, KSS is under pressure again, briefly dipping below Monday's intraday low of $51.79 to touch $51.71. Buyers are trying to prop the stock up from that level, but are unlikely to succeed for long unless the broad market finds its footing. If that is to occur, it seems unlikely to happen prior to the reaction following the FOMC meeting. Just in case markets catch fire later this afternoon, conservative traders should trail stops down to $53.50, just above the intraday highs from earlier in the week. Our official stop remains at $54.50

 
 
  John Seckinger   1/29/03,  11:08:37 AM
Per 10:42 post, the "fitted retracement" level of 7945 proved to be the exact low. S2 was 7941, so we had a good "area" of support there. I do think that the 7980 area is an "efficient" area between the lower fitted retracement level of 7945 and 8016 (low during the first five minutes). Yes, I took 50% of the range. With the Dow at 7982, things should quiet down a tad here.

 
 
  Linda Piazza   1/29/03,  11:07:25 AM
Currently, down volume comes in at 2.6 times up volume on the NYSE and 3.4 times up volume on the Nasdaq. Ratio-method adv/dec numbers are .50 for the NYSE and .38 for the Nasdaq. New highs/new lows ratios are 13:44 for the NYSE and 18:47 for the Nasdaq. While the Nasdaq adv/dec ratio may be approaching levels that are a bit too low for contrarian comfort, so far all the numbers remain sustainable. Volume does not appear heavy, with 385 million shares traded on the NYSE and 416 million on the Nasdaq.

 
 
  Jonathan Levinson   1/29/03,  11:04:24 AM
The put to call ratio has edged up to .93. There's still light selling in bonds, +.8 bps on the FVX. TRINQ 1.3, TICK.NQ -362, QQV +.31. The COMPX broke out of that bearflag perfectly before finding support just above the lows of the day. Where it will go now is anyone's guess. Precious metals remain flat to slightly down, with the Feb gold contract trading 369.10.

 
 
  Mark Phillips   1/29/03,  11:02:56 AM
TDS $41.40 (-0.52) Clearly being pressured by the broad market weakness again this morning, OI Put play TDS dipped as low as $41.25 shortly after the open, but managed to catch a weak bounce from that level that has now been almost completely erased. Can you say volatility? One factor likely to weigh on the stock and the Telecom sector is the announcement that FON's Chariman and President will be leaving the company. Investors can see the constant stream of departing executives in this industry and understand that there are still significant problems. Traders looking for a momentum entry will still need to see a trade below $41.25 before entering the play. Note that the XTC index has already broken its 200-dma, so that part of the entry strategy has already been satisfied.

 
 
  Steven Price   1/29/03,  11:00:13 AM
Swing Trade Signals
On the last rollover, we set a ne intraday low in the Dow at 7945, but it lasted only breifly. The SPX and OEX did not appraoch their intraday lows. We've since bounced and I think we'll need to see a trade below SPX 845 and COMP 1319 to get the ball rolling further downhill. Bonds are still failing to confirm the sell-off in equities and traders concerned with the short can set stops at the break-even level of Dow 7980.

Current levels: Dow 7960/SPX 848.53/OEX 429.39/COMP 1322

 
 
  Jeff Bailey   1/29/03,  10:59:36 AM
Expedia (EXPE) $62.54 -2.4% ... bearish looking stock has broken below daily S2 and looks to have WEEKLY sw of $60.74 in play. Looks short/put and should find resistance near $64.

 
 
  Jonathan Levinson   1/29/03,  10:49:31 AM
What symbol are you using in qCharts?

I have QC:PUTCALL

I believe that Qcharts displays only the equity put to call ratio, which is quite low. The CBOE gives us both equities and index put to call ratios- the index put to call ratio is quite high, and the number I post here is the total combined put to call ratio. Here's the link to the CBOE page: Link

 
 
  John Seckinger   1/29/03,  10:46:24 AM
As a quick note for Thursday and Friday's reports: Q4 GDP is expected to show growth of only one percent. However, business investment is expected to show the first increase in over 2 years. Personal spending is expected to come in at 1% after a 23% rise in Q3 durable goods spending. I am sure the 23% increase was tied to buying automobiles.

 
 
  Linda Piazza   1/29/03,  10:46:00 AM
For reference, note that Monday's OEX low was 427.03.

 
 
  Steven Price   1/29/03,  10:44:36 AM
Swing Trade Signals
As I finished my last entry abour SPX 850 and SPX 430 holding on the last rollover, those levels gave way. The next support to watch will be the lows of the day (Dow 7954, SPX 845.94, OEX 427.95, COMP 1321.30) That COMP low is just above significant support at 1319-1320

Current levels: Dow 7967/SPX 849.39/OEX 429.91

 
 
  Linda Piazza   1/29/03,  10:44:16 AM
Here's what's happened so far this morning with the OEX in relationship to that bear flag, as seen in the 60-minute Q-charts. The stochastics are 21(3)3, longer-term stochastics than the 5(3)3 ones I usually watch. These 21(3)3 give more reliable signals, but I'm watching them because I noticed something interesting yesterday--they've been making a series of lower highs, with those lower highs indicated in red. I've also included the 21-pma on this hourly chart. Link

 
 
  John Seckinger   1/29/03,  10:42:02 AM
I am trying to make sense of the day's action. 50% of the entire range is 8021, but there is a lot of higher lows on a five-minute chart in the Dow. I think bears will need a good break of 7945.

 
 
  Jonathan Levinson   1/29/03,  10:39:29 AM
The put to call ratio has just come out at .91, while the COMPX appears to be printing a bear flag at the tail end of the 5 minute candles. The TRINQ is at 1.21, still neutral, while the TICK.NQ is showing broad selling at -352.

 
 
  Steven Price   1/29/03,  10:25:45 AM
I can't seem to write and send quick enough to report the moves in a timely manner today!

 
 
  Steven Price   1/29/03,  10:25:03 AM
The VIX is off its highs with the recent bounce, and the VXN (NDX volatility) is actually down on the day, both sending some short-term bullish signals. The Semiocnductor Index (SOX) is actually up a point, another bullish sign. the Dow is up to 8025 from its lows and the SPX and OEX are squarely over 850/430. Did I say trading this week was not for the faint of heart? My fear on the short is that we get a big ramp up into the Fed meeting that stops us out and then a rollover following that run. 8150 seems a long way away, but would be a net gain of less than 70 points on the day, so it is entirely possible. As I wrote the Dow dropped slightly, but the other indices are holding their rebound gains.

Current levels: Dow 8002/SPX 852.63/OEX 431.56

 
 
  Jonathan Levinson   1/29/03,  10:24:35 AM
We have a bounce to 1333 on the COMPX, QQQ 24.75, with the TRINQ at .98 and the TICK.NQ +25. Yields are green, with FVX +1.4 bps. Percious metals are now seeing some selling with HUI -.62 and XAU -.81. QQV is currently -.05 on the day.

 
 
  John Seckinger   1/29/03,  10:22:48 AM
Daimlerchrysler (DCX) has announced that it will double its dividend. Shares of DCX are higher by 0.44 to 29.33.

 
 
  Jeff Bailey   1/29/03,  10:16:28 AM
Treasuries see modest selling with YIELDs relatively unchanged. May help put some stability under stocks here.

 
 
  Steven Price   1/29/03,  10:15:25 AM
Current levels: Dow 8001/COMP 1329/OEX 430.95/SPX 851.77

 
 
  John Seckinger   1/29/03,  10:15:24 AM
Note: Federal funds futures is pricing in a slight risk of ease through August; however, the price-based probabilities stands below 50% and gives the indication that no ease will take place.

 
 
  Steven Price   1/29/03,  10:14:28 AM
Swing Trade Signals
We are starting to see some higher intraday lows in the equities and lower intraday highs in the bond market. The Dow is back above 8000 and I'm seeing a red flag for the short position. That alternative stop is in sight for those of you who set it at Dow 8020.

 
 
  Jeff Bailey   1/29/03,  10:14:13 AM
Sector action is broadly lower. Only the Oil Index (OIX.X) 247.87 +1.73%, and Oil Service (OSX.X) 79.71 +0.51% showing green. Largest loss among sectors is CBOE Internet (INX.X) 93.54 -1.72%.

 
 
  Linda Piazza   1/29/03,  10:12:20 AM
For those who trade inside days, we have seen levels beneath yesterday's lows on the Dow and the two S&P's, where we saw those inside days or harami's yesterday. I still urge caution as we look forward to the conclusion of the FOMC meeting and tomorrow's GDP number. Some speculate that the GDP will be worse than expected, but, if so, that worse expectation may be built into the markets already. Know where appropriate stops should be for your strike and expiration, and account exposure.

 
 
  Jeff Bailey   1/29/03,  10:11:45 AM
Dow Industrials (INDU) 7,974 -1.4% ... hovering at Monday's lows and this WEEK's S2 of 7,955. For further weakness and downside risk to WEEKLY S2 of 7,778, look for 5-minute close below the DAILY S2 of 7,942.

 
 
  Jonathan Levinson   1/29/03,  10:08:27 AM
The opening put to call ratio was .84, showing continued bullish speculation. Bond yields are nearly flat, TRINQ 1.25, QQV +.18, TICK.NQ -184. The indicators are showing what is almost a perfectly neutral day in the markets. We'll which way it wants to go next.

 
 
  Steven Price   1/29/03,  10:07:17 AM
Swing Trade Signals
So far, we've seen a failed rally in the Dow at 8000. The SPX and OEX are hovering around 850/430. However, the rollover has yet to take out this morning's lows and I'll suggest an alternative stop of Dow 8020, just above the opening range low (8016) and the S1 level (8015) for more conservative traders. No real follow through to the downside and I can certainly see a holding pattern ahead of the Fed.

Current levels: Dow 7985/SPX 850.11/ OEX 430.25

 
 
  Linda Piazza   1/29/03,  10:04:53 AM
This morning, CSCO struggles with the 14 level, remaining beneath its exponential 200-dma but above its simple 200-dma, currently at 13.59. That simple 200-dma is sloping down. CSCO has shown more resilience than other stocks of late, so watch for either a fall through that simple 200-dma or a push above the exponential 200-dma overhead at 14.23 to help gauge market strength or weakness.

 
 
  John Seckinger   1/29/03,  9:59:32 AM
Not helping bonds is German PM Schroeder saying that Germany "wont let up" on peace efforts. There are also reports of liquidation from Mid-East accounts, as well as some selling by Asia that is reportedly tied to repatriation (Fiscal Year ends in March).

 
 
  Jonathan Levinson   1/29/03,  9:59:24 AM
In a teeth-grinding display of mettle and will, Al Green, the fed's number one Repo Man, has just added 1.5B via overnight repo, for a surprising 2.25B net drain against yesterday's expiring 3.75B. I'm whistling the theme to "The Good, the Bad and the Ugly" as the fed dares the markets to make it's day. I'd have expected a net addition to provide some support in the event that the world decides to get out of the USD. However, just the reverse has been done.

 
 
  Linda Piazza   1/29/03,  9:52:05 AM
Here's the violated bear flag formation I've been watching on the OEX, as shown on five-minute charts. Link

 
 
  John Seckinger   1/29/03,  9:51:16 AM
Good volatility this morning. The Dow should test the low of the first five-minutes (8016), but appears to be failing in its bounce (a five-minute close underneath 7980 should confirm a possible failure). It is interesing that bonds are only higher by '7 ticks and that the dollar is lower. Once again, most likely a flight out of the US by foreigners not wanting dollar-denominated assets.

 
 
  Jonathan Levinson   1/29/03,  9:46:49 AM
Very little buying in bonds so far, with FVX down just .9 bps. Precious metals are finding a bid, with HUI +1.23 and XAU +.26. James Sinclair, a gold analyst who made a name for himself as the trader who liquidated the Hunt Brothers' silver position in 1980 or 81, hypothesized that the relative underperformance of HUI and XAU relative to the price of gold is due to hedge funds who have been going long the metal/contract and short the stocks as a hedge. Interesting theory.

 
 
  Steven Price   1/29/03,  9:42:36 AM
Swing Trade Signals
We are finding support just above Dow 7950, which is where we bounced on Monday. We actually took out Monday's low (7957)briefly and it should be interesting now that we are back below 8000 to see how high an intraday bounce from this level takes us. Current levels:Dow 7978/COMP 1326/SPX 847.83/OEX 429.21

 
 
  John Seckinger   1/29/03,  9:41:51 AM
Going to fitted retracements for the Dow, the next level of support is at 7945. Underneath 7945, support is seen at 7900, 7856, and 7785.

 
 
  Jonathan Levinson   1/29/03,  9:41:37 AM
The COMPX is coming back for a retest of 1328 right here.

 
 
  Linda Piazza   1/29/03,  9:39:38 AM
On my charts, I show the OEX falling out of the bear flag formation that had been forming since Monday. I wouldn't be surprised to see a retest of that bear flag formation as one-minute or five-minute stochastics cycle back up. Exercise caution if considering new bearish plays, as markets are so oversold. Some theorize that the Feds will change their bias in favor of easing at today's 2:15 meeting. Although I don't know if that's likely to happen, be aware of the possibility.

 
 
  Jonathan Levinson   1/29/03,  9:38:55 AM
The COMPX just sliced through the 1328 s/r zone with the greatest of ease. The TRINQ is very tame at 1.39. A quick drop with little selling pressure- bad news for bulls.

 
 
  John Seckinger   1/29/03,  9:37:45 AM
A nice range indeed for the first five-minutes of trading in the Dow (8087 to 8016), and 50% of this range comes in at 8052. Therefore, in my opinion, only a move above 8052 should have traders NOT thinking about an "open drive" lower. S2 is at 7942, so we might have to go to fitted retracement soon.

 
 
  Steven Price   1/29/03,  9:37:18 AM
Swing Trade Signals
With the Dow hovering just over 8000, here's your chance to close out for a minimal loss on the 1/2 short if so inclined. If we are going to bounce, this could be a rebound level.

 
 
  Jonathan Levinson   1/29/03,  9:34:02 AM
The fed has 3.75B in overnight repos expiring today. We await the announcement.

 
 
  Jonathan Levinson   1/29/03,  9:31:26 AM
8 point gap down open on the COMPX to 1334, TRINQ .87, QQV +.96 to 40.54.

 
 
  Jonathan Levinson   1/29/03,  9:30:07 AM
Yields are returning to flat as we approach the open.

 
 
  John Seckinger   1/29/03,  9:29:50 AM
Intra-day Pivot/Levels for Wednesday (01/29/02)...

INDU : S2= 7942, S1= 8015, P= 8065 , R1= 8138 , R2= 8188

SPX : S2= 842, S1= 850, P= 856, R1= 864, R2= 869

OEX : S2= 427, S1= 431, P= 433 , R1= 437, R2=440

NDX : S2= 975, S1=988 , P= 997, R1=1011 , R2=1020

QQQ : S2= 24.12, S1= 24.46, P= 24.75 , R1= 25.09, R2= 25.38

 
 
  Jeff Bailey   1/29/03,  9:28:33 AM
The 9:00 AM Intraday Update has been posted. Link

 
 
  Steven Price   1/29/03,  9:21:11 AM
Swing Trade Signals
We are currently short a 1/2 position in the broader markets. Was yesterday's failure at Dow 8100 just a failed bounce and a lower high before another leg lower? Possibly, but with the Fed concluding its meeting today and the UN beginning deliberations on the Iraq issue, we are looking at another day with some unpredictability built in. The current stop is set at Dow 8150 and I am maintaining only a 1/2 position due to the higher risk nature of this week's trading. Those traders who were wishing they hadn't gone short during yesterday's rally may have an opportunity to get out on this morning's dip for a smaller loss. We could see a ramp up into the Fed meeting conclusion, which usually comes around 2:15 e.t. For now I'll leave my stop as is.

 
 
  Linda Piazza   1/29/03,  9:13:18 AM
VLO: We found out why VLO had begun violating important support last week, even though it had previously given several signals that it was a good call candidate. In their earnings statement yesterday, they guided Q1 earnings from $0.86 to $0.25, according to CNBC. I'm a firm believer that chart signals give indications ahead of such announcements, as people in the know bail out of an equity or buy it.

 
 
  Jonathan Levinson   1/29/03,  8:52:33 AM
Bond yields are sinking a bit, but QQQ is trading higher, FVX -1.3 bps, QQQ 24.75.

 
 
  Linda Piazza   1/29/03,  8:44:54 AM
My husband's conclusion was that Bush was just going to go after everyone, but knowing Bush's tendency to misspeak, I concluded he'd probably meant to say "Iraqi" rather than "Irani." For example, several days ago, he used the media to send a message to Hussein's lieutenants, saying that if Hussein issued an order to use weapons of mass destruction, they should disobey those orders. If not, when Iraq was liberated, those lieutenants would be tried and "persecuted." I think he probably meant "prosecuted," a word he did use later in his talk. I wonder how the Iranian government is reacting today.

 
 
  Jonathan Levinson   1/29/03,  8:33:30 AM
The bond market has begun trading slightly higher, with yields down just .6 bps, TNX -1.1 bps and TYX .7 bps.

 
 
  Jonathan Levinson   1/29/03,  8:23:49 AM
Does anyone recall when Jim went in for knee surgery and a whole bunch of us emailed to tell him to use magic marker to write "no, the other one" on his good leg? Someone should set up flares in Iran with a similar message. I'm not sure if the President meant to identify the Iranian people or the Iraqi people in his address last night.

 
 
  Jonathan Levinson   1/29/03,  8:04:39 AM
I thought he delivered the speech very well. Other than that "hydrogen" thing, it was very impressive. My continual question was "where will the money come from?" With the fed hostile to higher treasury yields, and most levels of government deep under water, it seemed laudable, but too good to be true. We'll have to see. In the meantime, the US Dollar Index took a plunge to the 98.80 level but has now recovered to just over 99. Futures also took a dive, but have also recovered, with QQQ trading 24.62. Gold is holding above 370/oz.

Will Al Green cut one? I'd be shocked. He mentioned that this was it the last time he did, and another cut would blow out the USD. A hike would also be a shocker, as it would be the spark in a roomful for gunpowder- debt, that is. This is shaping up to be an interesting week.

 
 
  Linda Piazza   1/29/03,  8:00:29 AM
Listening to CNBC World this morning, I notice that in Europe much attention is focusing on whether the Feds will announce a change in bias in their 2:15 ET statement today. Attention also focuses on tomorrow's GDP number. All of Europe is watching, and we should be, too. Prepare ahead of time, deciding on appropriate stops or entries.

 
 
  Linda Piazza   1/29/03,  7:24:33 AM
Good morning! It's probably a better morning for those of you who went home with short positions last night, however.

In Wednesday trading, the Nikkei fell 2.28%, closing lower for a fourth straight session. Bush's February 5 timetable for Colin Powell to present evidence of Iraqi duplicity to the UN Security Council troubled all overseas markets. The Nikkei was also affected by a report indicating that December production fell 0.1% from November. Economists attributed the slump to slowing global demand and to a policy of moving production abroad. Already weighed down by a report earlier in the week that showed that Japanese exports fell in December, Japan may have difficulty recovering from its third recession this decade.

European markets also fell. As of this writing, the FSTE 100 had fallen 1.4%, the CAC 40 had fallen 1.21%, and the DAX had plunged another 2.89% to 2594.13. Market pundits mentioned war fears and the effect of the rising euro on exporters as contributing factors, but also revived worries that insurers and pension funds were selling equities. Also weighing on the DAX in particular was the news that German Economics Minister Wolfgang Clement cut Germany's economic growth forecast to 1% from the previously lowered estimate of 2%. Germany has been teetering on the edge of its second recession in two years, but economists hope that a recently projected 4.5% export growth for this next year may help it avoid that recession. A rising euro threatens that export growth.

 
 
  Steven Price   1/28/03,  11:22:07 PM
The Swing Trade Game Plan has been posted: Link

 
 
  Jeff Bailey   1/28/03,  11:21:58 PM
The Index Trader Wrap has been posted: Link

 
 
  John Seckinger   1/28/03,  11:21:48 PM
The Futures Trader Wrap has been posted: Link

 
 
  Jim Brown   1/28/03,  11:21:36 PM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

 
 

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