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  Jeff Bailey   2/14/03,  7:12:06 PM
Pivot Matrix Updated DAILY for Tuesday, Feb. 18 trade and WEEKLY. MONTHLY levels remain in place until completion of Feb. trade. Link

 
 
  Jeff Bailey   2/14/03,  4:15:24 PM
QQQ $24.34 +1.67% ... Hi Jeff, I have not seen you shown a qqq point and figure chart. You must have one but you have not posted it to us yet. The traditional $1 box scale of the QQQ doesn't show a heck of a lot. Link

However, subscriber's comment comes at an interesting time, as after I was stopped out of day-trader's short this morning, I changed scale to introduce more "noise" into the chart.

Here is a $0.25 box scale of the QQQ. Link This might be a good scale to use as it relates to past trade as the "sell signal" at $25.75, saw a decline to $25.00, then a 3-box reversal back up to $25.75, which was pushed to a new relative low to $24.50, and this "pattern" of 3-box reveral up then 4 or 5-box reversal back lower creates somewhat of a "channel." First sign of technical strength in the QQQ based on this supply/demand chart would be $24.75.

Here is a $0.20 box scale of the QQQ. Link where we introduce a little bit more "noise". Similar type of trade on this chart, with first sign of strength coming at $24.80.

Changing box scales like this is perhaps a way that a trader can get the chart to a "level" of noise, where the pattern of trade looks CONSISTENT. Then... if he/she sees DIVERGENCE from the pattern, an observation of CHANGE is made.

Should I be bullish the QQQ right now? I don't think so. Not yet at least.

 
 
  Steven Price   2/14/03,  4:02:51 PM
Swing Trade Signals
The Dow just broke 7900 for its fifth box in the PnF reversal. That is a bigger turn than the last few bounces and throws up another red flag for bears. I am going to have a tough time playing the long side in the current environment, but I'll do my best to trade what I see, and if it does signal a higher move, then we may need to adjust our sentiment.

 
 
  Steven Price   2/14/03,  3:54:53 PM
Swing Trade Signals
I am quite amazed at the strentgh of the afternoon rally and I really can't explain it. My feeling is still that we got an oversold bounce along with the comments from Hans Blix, but that's my best guess. My stop is set at Dow 7950, and we got our PnF reversals. If recent history holds, then it should be a shorting opportunity, however, without any follow through to the downside, conservative traders may simply want to close out here.

 
 
  Linda Piazza   2/14/03,  3:52:23 PM
What’s happened today on the OEX? Yesterday afternoon, several of us talked about the bullishness of that bigger-than-normal white candle seen on the hourly charts. I mentioned the support that should be found about midway up that white candle and that a move below that support would have bearish implications. That didn’t happen. I’ve marked the midway point with a green line on the linked chart. Note what happened when the OEX moved to that level. Link What about on the daily chart? Whether the formation is the classic morning-star formation or not, anyone who knows candlestick theory recognizes the bullish implications of the three candle pattern seen in the last three days’ candles. Stochastics (both 5(3)3 and 21(3)3) cycle up out of oversold territory. Link That indicates the possibility that there’s more upside to this movement. However, ADX (not shown) measures 33.24, and has actually been rising, showing that the trend remains strong, and that current trend is down. Such a strong ADX shows that stochastics may not be giving reliable signals and that perhaps market participants ought to be watching MA’s instead. Those MA’s all still slant downward. I’ve marked a steep descending line, showing that OEX will likely end the day butted right up against that next resistance and above that lies the resistance from the recent consolidation pattern. Above that, the OEX faces resistance from the neckline of the H&S formation (not marked). To me, this signals that the longer-term trend remains intact, but that we’re experiencing the expected bear-market rally. Does that mean you should hold options over the weekend? Not necessarily. That depends on your time frame, your account management practices, your expiration date, and your pain threshold.

 
 
  Jeff Bailey   2/14/03,  3:50:43 PM
The 3:15 PM Intraday Update has been posted. Link

 
 
  Jonathan Levinson   2/14/03,  3:26:11 PM
The COMPX has pulled back from the 60 min trendline by a couple of points, but it's very close and tough to call a reversal so soon. The outcome of this move is very much in doubt either way- a perfect market moment. The TRINQ is very low, but it needn't be reversal signal on its own. The TICK.NQ is flat at -19. HUI and XAU are both near their lows of the day- a very surprising day so far.

 
 
  John Seckinger   2/14/03,  3:24:11 PM
It is interesting that the dollar didn't move much following Hans Blix's report, signaling that the opinions of Security Council members on whether or not war should be waged with Iraq most likely stayed constant. For the session, the Greenback is higher by 0.31-points at 99.89, after spending a few moments above the 100 level (intra-day high of 100.17). Definitely feels like short covering in both the equity markets and the US dollar ahead of the long weekend. The next time above 100 might have some bulls taking small positions, and this could correlate with the Dow above the 7875 level.

 
 
  Linda Piazza   2/14/03,  3:18:37 PM
Currently at 13.42, CSCO trades just underneath its simple 100-dma and 200-dma averages, with the 100-dma have just barely edged over the 200-dma. However, the 22-dma has also just moved below the 50-dma, so that these crossovers are giving mixed messages. What is clear, though, is that CSCO faces massive resistance just ahead, with the daily 5(3)3 stochastics hinting that it might be losing momentum. Even the oscillator evidence is mixed, however, as daily RSI appears to turn up on this afternoon’s push and MACD may be doing so, too.

 
 
  Steven Price   2/14/03,  3:06:40 PM
Swing Trade Signals
We got four-box reversals in the SPX and Dow and a three-box reversal in the OEX. The SPX and OEX PnF charts to made it above the last breakdwon level, but are still seeing a lower high.

 
 
  Steven Price   2/14/03,  3:01:46 PM
Swing Trade Signals
Getting another boost here into the close. the SPX is flirting with afternoon high at 825.88 and a move in the Dow over 7829 would indicate we may re-test morning highs. I'm still thinking this is a short opportunity but I don't have the smae conviction I did earlier, so I'm sticking with a 1/2 position only.

Current levels: Dow 7823/SPX 826.12/OEX 417.79/COMP 1296

I like the short position better if the COMP remains under 1300 at the close.

 
 
  Jonathan Levinson   2/14/03,  2:54:18 PM
Canadian gold bugs: John Embry, the lead portfolio manager of the Royal Precious Metals Fund and co-manager of the Royal Balanced Fund, Royal Canadian Equity Fund and Royal Global Resources Sector Fund will be leaving Royal to join Sprott Management Inc. effective in March, 2003.

 
 
  John Seckinger   2/14/03,  2:53:41 PM
The Dow remains stuck in a range between the opening high of 7783 and the formidable 7811 level. That was some solid volatility the last few hours, and it may not be over just yet. On another note: If you have plans to watch a movie tonight for Valentine's Day, I think it might be too late to order from Netflix (NFLX). This company provides tens of thousands of movie and television titles, as well as nearing five-month highs (currently at 13.71 and up 0.49 cents today). EPS is projected next year at $0.54 (p/e 25.0). Resistance is seen at 14.00 (14.28 is the multi-month high). Above this area, resistance is seen also at 15 and 16 dollars a share.

 
 
  Linda Piazza   2/14/03,  2:49:59 PM
At 71.79, the XAU now challenges its simple 200-dma at the current level.

 
 
  Jonathan Levinson   2/14/03,  2:37:19 PM
The COMPX continues its grind higher, and zooming out to the 60 minute candles, we see the price up against the top of its descending channel. If this is a descending bull flag, then a break of that formation could bring the COMPX up to the 1400 level, as is clearer from the daily candles. However, if this upper trendline holds, then it implies a plunge to below yesterday's lows, roughly the 1225 level. The TRINQ is down to .35 here, TICK +169, QQV -1.67.

 
 
  Linda Piazza   2/14/03,  2:31:43 PM
Yikes! Someone is on CNBC right now talking about cost averaging in (buying more shares for the same cost when prices are depressed, fewer shares for the same cost when prices increase) saying that practice always works. I’m fifty-three. Tell that to my contemporaries. Or, better yet, tell that to my mother-in-law, who kept buying more Lucent, averaging in.

 
 
  Linda Piazza   2/14/03,  2:20:16 PM
The SOX continues to push against the top of the 1/30-1/31 gap at 273.18, but has not been able to sustain an hourly close above that level as of yet. If the current levels hold, however, I wouldn’t be surprised to see some shortcovering into the close. If the SOX can push above that level, 282-284 should provide resistance (historical, target of rough double-bottom on the 60-minute charts). Above that, the SOX soon hits its H&S neckline, which should provide massive resistance.

 
 
  Jeff Bailey   2/14/03,  2:15:49 PM
SAP Ag (SAP) $22.26 -4.3% ... stock under some selling pressure today on rumors that foreign exchange impacts could have current estimates of analysts coming down. Deutsche Securities say taht SAP has likely been reviewing analysts Q1 modesl and may have condluded that foreign echange impace could make current estimates slightly high. Deutsche forecasts a 13% sline in the dollar vs. the Euro, but does not expect this to lead to a significant revision of forecasts.

 
 
  Jonathan Levinson   2/14/03,  2:13:27 PM
Computer crashes all afternoon- back online.

 
 
  Steven Price   2/14/03,  2:11:57 PM
Steve – Wanted to bring something to your attention; looking @ DJX on a 15-min chart, the 21-pma is demonstrating good correlation to movement, in both directions.

And by the way, please don’t take frustrated reader’s criticism too hard – that’s what happens to everyone who jumps into the swing trade hot seat during difficult market conditions. OIN has provided more than sufficient education for us to evaluate your decisions, see if it jibes with our own observations, fits within our own plan, and we can make our own decision. Gumby

Thanks for the encouragement and the observation on the 21-pma on the 15 min chart is right on. We are testing it to the downside as I write.

 
 
  John Seckinger   2/14/03,  2:03:04 PM
Airfares going higher? Has to be the higher oil costs. On Friday, there was a $10 hike each way, effective immediately, in an attempt to offset such high oil prices. Continental Airlines (CAL) and American Airlines (AMR) initiated these rate hikes. After September 11th 2001, U.S. airlines lost more than $11 billion in 2002. CAL said they spend more than a billion dollars a year on fuel.

 
 
  Jeff Bailey   2/14/03,  1:54:46 PM
The 1:00 PM Intraday Update has been posted. Link

 
 
  Linda Piazza   2/14/03,  1:51:31 PM
Currently at 72.26, the XAU again trades just above its simple 200-dma at 71.79. Previous historical support also lies in this area. The exponential 200-dma lies below at 70.43. The XAU has been trading in an ascending regression channel since last July, and fell below the midline of that channel on Monday. Since then, the midline of the channel has been capping upward movements of the XAU. For example, yesterday’s close was exactly at the midline of that channel. This week’s trading is the first time that the XAU has closed below the midline since mid-December.

 
 
  Mark Phillips   2/14/03,  1:39:59 PM
Is this a turning point? I asked that question this morning, and I still don't have the answer. The initial short-covering spike disappeared since then and now the markets are once again clawing their way higher. A look at some of the current OI put plays is rather instructive as well:

AZO $64.91 (+1.11) Testing that $65 resistance again after the $63 support failed to crack this morning. Note that the stock is now ABOVE the descending trendline of the past 2 weeks, and that should be a source of concern to the bears.

AT $44.33 (+1.24) A strong rebound with the rest of the market has this play testing major resistance near $44.50 and really not showing any significant weakness. That is a divergence from recent action and is a warning to bears to stick with their stops.

PII $49.71 (+1.54) Building on the mild rebound from yesterday's lows, PII is once again back near the $50 level. If this is a short-lived rebound, then PII should roll over again like it did on Tuesday. Note that the stock is just fractionally below the 5-week descending trendline, now at $49.85.

 
 
  Jonathan Levinson   2/14/03,  1:35:56 PM
This is becoming a frustrating day for several of the technicians with whom I chat during the day. The stochastics are becoming chopped up from the gradual, almost flat advance off the pullback from the morning highs, while the TRINQ continues to grin at me, displaying a steady .45. QQV is down 1.19 to 41.66, VXN down 1.32. HUI and XAU are holding their losses, and little else is happening for the moment.

 
 
  Steven Price   2/14/03,  1:34:22 PM
Swing Trade Signals
My other suggestion to traders involved in directional trading is that shorter moves have been somewhat easier to predict than several days movement in the current market. While I am doing my best to pick direction based on technical signals, international events have swung us wildly in unpredictable fashion over a period of several days. Jim's efforts on the Futures Monitor have met more success than I have had lately trying to take an intermediate view. I can envision several scenarios for the future, but I continue to come down on the bearish side. Of course, that is how I (and many others) felt in late July and October, as well. Traders looking for shorter term moves may want to give the Futures Monitor a try as well.

Currrent levels: Dow 7817/SPX 824.75/OEX 417.28/COMP 1290

 
 
  Steven Price   2/14/03,  1:27:44 PM
Steve, This is not a criticism because, thanks to you, I've been doing very nicely in this bear market, especially since the Jan sell off. But if we believed correctly that the market was going to sell off before a long weekend and that the action we were seeing during the Blix speech was short covering, way wouldn't you have jumped on the 126 point spike in the DOW with a vengeance. I picked up .60/option to the short side on the move back down, but because I didn't have your benidiction I sweated all the way. I'm just looking for the reasoning for not loading up on short positions when we hit 7875 +/-. John

John,

Thanks for the question. And I certainly don't mind criticism, as I understand readers are trading on my signals and we are dealing with real money. I assure you that trades that go against me bring a level of self-criticism and evaluation. I certainly wish I could have picked the top this morning. I was looking for a support level on the sell-off to judge whether we'd bounce and we did not get that support until we bottomed and sat in the 7780 range. When that support gave way, it looked like evidence to me that we had in fact seen a blow-off top like we've seen on the last couple of UN presentations. When we then took out the day's low, I was even more convinced. I will admit that since we have made up that drop and gone back over 7800, I am not as convinced and I would suggest to conservative traders that the position looks less promising at this point. I have been talking about a short-covering rally ahead of Hans Blix testimony, but I was not prepared for his positive spin on Iraqi efforts and just how high that rally took us. It is getting progressively difficult to predict the market's reaction to these events and I am doing my best to trade what I see.

 
 
  John Seckinger   2/14/03,  1:23:06 PM
Here is what I am looking at, and why I wondered about a rollover just under 7750. Please see Link

 
 
  John Seckinger   2/14/03,  1:15:26 PM
The bond market is closed, and the 30-year finished down over a full point. This should be supportive to stocks, but volatility should now pick up with one less capital market to deal with.

 
 
  Jonathan Levinson   2/14/03,  1:05:37 PM
Correction: it was turning from overbought in my 10:54:05 post.

 
 
  John Seckinger   2/14/03,  1:04:46 PM
As a side note: Equity mutual funds reported net cash outflows totaling $2.9 billion for the week ended Wednesday (2/12/03). Taxable bond funds took in a net of $2.3 billion. Moreover, International and global debt funds reported their ninth consecutive week of net inflows.

 
 
  Linda Piazza   2/14/03,  1:00:24 PM
Here’s why I’ve been monitoring that SOX gap from the 1/30 closing to the 1/31 opening, with special attention to how the SOX behaves today at the top of that gap: Link

 
 
  Jonathan Levinson   2/14/03,  12:54:05 PM
The 5 minute 10(5) stoch is turning down from oversold, and could bring us the flag break I've been watching for on the 5 minute chart. TRINQ .47, TICK.NQ -85, FVX +7.1 bps.

 
 
  John Seckinger   2/14/03,  12:53:01 PM
Didn't get the test of the daily pivot as expected in the Dow, but we are still within the opening range from 7750 to 7783. This was where the last downdraft in the Dow took place (at 11:45), so bears should defend this area (7783).

 
 
  Steven Price   2/14/03,  12:39:54 PM
Thanks for the jinx John - we are climbing slowly higher.

Current levels: Dow 7756/OEX 413.98/COMP 1284/SPX 818.29

We got our PnF reversals up that have been shorting opportunities the last four-five times.

 
 
  Linda Piazza   2/14/03,  12:38:18 PM
Total volume figures for the day show 608 million shares traded on the NYSE and 656 million on the Nasdaq. Adv/dec ratios are neutral, at .98 on NYSE-traded issues and 1.13 on the Nasdaq. Down volume is 1.1 times up volume on the NYSE and up volume is almost 2 times down volume on the Nasdaq. New highs:new lows ratios are 14:70 on the NYSE and 38:58 on the Nasdaq.

 
 
  Jonathan Levinson   2/14/03,  12:37:30 PM
This appears to be a bear flag printing on the 5 minute COMPX candles as the 10(5) stochastic works off its oversold reading. I say "appears" because it doesn't have to be, but that's my gut feeling at the moment.

 
 
  John Seckinger   2/14/03,  12:29:06 PM
On the phone with Bailey, and I told him "This is a good place for the Dow to roll lower." Underneath the opening range, and at the top of a very aggressive bearish regression channel since the day's high (five-minute chart). Objective would be to take out the daily pivot and get some longs to liquidate. I am sure I just jinxed all shorts right now (grin).

 
 
  Jeff Bailey   2/14/03,  12:26:45 PM
QQQ $23.79 -0.58% .... I need to rethink things today regarding the QQQ and its DAILY pivot.

One thing I think I did WRONG earlier today in shorting the QQQ and making observation of its PIVOT is that the NDX pivot is at 950.01.

This represents rather LARGE discrepancy and I would now have to think (as a QQQ Bearis trader) that for today at least, it would have to be the NDX itself to show a 5-minute close below its daily pivot to really show me any weakness.

 
 
  Jonathan Levinson   2/14/03,  12:16:46 PM
Powell is currently speaking.

 
 
  Jeff Bailey   2/14/03,  12:13:04 PM
Forest Labs (FRX) $45.79 -3.68% ... Jeff: would you please comment on selloff in frx and any area of support where it may stabilize.thanks.

Today's trade at $46 is bearish for FRX's p/f chart and now has bearish vertical count of $35 associated with the chart. This is DEFENSIVE in my opinion and hints to me that something might be "wrong" on the thought of company getting near-term approval for Alzheimer's drug. Here is bar chart of FRX and next support looks to be 200-day SMA near $43. Link

 
 
  Linda Piazza   2/14/03,  12:12:36 PM
Most indices follow the $TRAN’s example now and trade below their 21-pma’s on the hourly charts. Exceptions to watch are the $UTY and the $SOX.

 
 
  Jonathan Levinson   2/14/03,  12:06:22 PM
We have the beginnings of our bearish cross on the 60 minute 10(5) stochastics for the COMPX as GM, GE and IBM print lows of the day.

 
 
  Jonathan Levinson   2/14/03,  11:55:16 AM
We have a trendline break on the COMPX 5 minute candles. with a print at 1284.

 
 
  Jeff Bailey   2/14/03,  11:54:39 AM
Buy/Sell Program Alerts In your 10.24 post you just mentioned "Sell Program 820.55". What do you mean by this post? Like your work

We've had multiple buy/sell program alerts today, and I don't post all of them during a day, but tend to when I think we're at important levels of support/resistance when a program alert might be helpful to a trader that doesn't have access to the $prem. For a more detailed explanation of these alerts, or how they are derived, I have answered this question (a common one among subscribers) in the Ask the Analyst section of the newsletter. Link

 
 
  Steven Price   2/14/03,  11:53:56 AM
Swing Trade Signals
Alternative entry due to the late signal would be at current levels or possibly below the opening range low of 7750.

 
 
  Jonathan Levinson   2/14/03,  11:53:43 AM
GE and GM are hitting lows of the day. Looks like a nice entry for Steven.

 
 
  Steven Price   2/14/03,  11:51:40 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
The delay in the send function of my entry combined with the speed of the last drop led to a late signal, but we were triggered on the 1/2 short signal at 7770 at 11:48. Set stops at Dow 7950.

 
 
  Steven Price   2/14/03,  11:49:21 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go short a 1/2 position at Dow 7770

 
 
  John Seckinger   2/14/03,  11:48:57 AM
Why is the Dow pausing here? You got it, the Dow is currently at the high during the first five-minutes of trading (7783). Still under 7811 area, and the failure is now obvious at the daily R2 level. The 30-year is now lower by only '24 ticks, and showing slight equity bearishness versus bond levels seen just 30 minutes ago.

 
 
  Jeff Bailey   2/14/03,  11:45:36 AM
The 11:00 AM Intraday Update has been posted. Link

 
 
  Jonathan Levinson   2/14/03,  11:45:08 AM
The COMPX is back to resting on the lower ascending trendline on the 5 minute candle chart. The TRINQ has risen to .45, still quite low, and the TICK.NQ is -48. FVX +6 bps shows a letup in the bond selling, but still net sellers in bonds. HUI and XAU are off their lows, and the COMPX seems to be heavier at these levels, but still holding its short term up trend. The 60 minute 10(5) stochastic is trying for a bearish cross, but it's in progress and until the trendline breaks, the short trend remains up.

 
 
  Steven Price   2/14/03,  11:43:24 AM
Swing Trade Signals
I am chomping at the bit to go short again here, with the failed rallies under 7800 and the drop through several intraday retracements after the testimony. The VIX also remains higher, in spite of the rally, indicating firms are not selling premium (bullish) following the report)

 
 
  Linda Piazza   2/14/03,  11:37:39 AM
A small divergence, for what it’s worth: While the other indices I scanned showed that all had moved above their 21-pma’s on their hourly charts, the Dow Jones Transportation Index never did. It touched its 21-pma, but did not move above that level before falling back. I was watching this and mention it now because the $TRAN, like the SOX, has often provided clues about the overall market direction. The Russell 2000 and Wilshire 5000 were also later moving above their 21-pma’s than were the other indices. Here’s a snapshot of the $TRAN: Link

 
 
  Steven Price   2/14/03,  11:35:28 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
I apologize for the erroneous send on the last message that disappeared, I had a previously written signal still in one of my windows, but right now I am flat with no signaled entry.

 
 
  Linda Piazza   2/14/03,  11:28:56 AM
This is a 60-minute OEX chart. It’s telling, showing the importance of the descending trendline and also showing the importance of waiting for a close over an important level rather than a momentary push above that level: Link

 
 
  Jonathan Levinson   2/14/03,  11:20:14 AM
US bankruptcies hit a record high in 2002: Link

 
 
  Jonathan Levinson   2/14/03,  11:16:20 AM
The Blix Blitz took the COMPX to the upper ascending trendline of the rising bullhorn pattern on the 5 minute candles, and this move from the highs below 1304 COMPX is approaching the lower trendline at 1290. The TRINQ barely budged and is now .35- who would have thought that it might not be sensitive enough- and the TICK.NQ is back to neutral negative territory at -47. FVX now +5.4 as the selling in bonds abates.

 
 
  Linda Piazza   2/14/03,  11:10:38 AM
Reader Question: Your frequent references to indicators hinging caught my attention. The indicators such as stoch on QCharts are unclear at times when used after the fact. For example, on a 13 minute chart stochastics may show a time of say 11.40. Normally that means the value at the end of the 13 minute period starting 11.40, i.e., 11.53. However, because of hinging the change in the direction of stoch may be one time period later, 11.53 meaning the change printed may have been as late as 12.06.

How can the indicators be used to make decisions regarding a trading plan when it is not possible to know what time the change really took place. For example, the chart shows stoch turned down at 11.40 and the market turned down shortly thereafter. If you try to use stoch as an indicator in the future, you may find that the hinge down was not evident until after the move even though the chart shows, it took place before the move.

I know that you are not a short term trader. Any thoughts that you may have would be welcomed. Thanks.

Response: Interesting and astute observations. While expert technicians classify RSI as a leading indicator, stochastics are not. Because stochastics depend for their calculations on the previous period's close, they're always going to be delayed. The answer for me is relatively easy, because I don't use stochastics to make buy or sell decisions, but rather as warnings or confirmations of what I'm seeing on the price action. It's that price action--moves above or below trendlines or moves into or out of chart formations--that guides my buying or selling decisions. I frequently mention a hinge or a kiss because it might be giving a first hint of something that's not yet apparent on the price charts, but I act based on what I see on the price charts instead.

 
 
  John Seckinger   2/14/03,  11:07:37 AM
The 30-year is now down the 'magical' full-point level, lower by 1'05 to 112'08. This usually means that stocks will find bids throughout the session. The Dow, however, didn't get a period close above 7873 and seems to be slightly consolidating just below its daily R2. Blix has further stated that Iraq declared that it has destroyed its mustard gas (though no evidence seen), and that it will consult South Africa on disarmament. If bullish on this move, I would not like to see the Dow back under 7810.

 
 
  Steven Price   2/14/03,  11:07:22 AM
Swing Trade Signals
Beginning to think the stop was just a little too tight. The rally fades as I type and mark's assessment seems about right.

 
 
  Mark Phillips   2/14/03,  11:02:39 AM
Well now, that was exciting! Inquiring minds want to know if it just gave us the shorting opportunity we've been waiting for or if it represents a shift in near-term direction. Readers can correctly surmise, that I view the short-covering ramp-job as a transitory event in a still-shaky market environment.

It is interesting that the only area of the market failing to go along with the short-covering is Biotechnology and Healthcare. The BTK index is still fractionally negative, while the HMO index is off by 1.5% and the RXH index is weaker by 3.5%. Contrasting this to the upside explosion in the broad markets hints that this group of stocks is NOT moving based on geopolitical developments.

 
 
  Jonathan Levinson   2/14/03,  10:57:25 AM
Spot gold is down 8.90 to below 349/oz, with HUI =3.44 at 134.65 and XAU -1.90 at 72.62.

 
 
  Steven Price   2/14/03,  10:54:29 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
As Blix contiues to highlight the improvements in recent inspections and plot further activity using U2 surveillance, the market continues to climb. We were stopped out when the Dow traded 7875 at 10:51:08. Now comes the nukes report. I am going to hold off on a new entry for the moment. Certainly this portion of the report can turn things on a dime and I may see something that begs for action, but we are clearly competing with world events and it has not been easy to predict.

 
 
  Jonathan Levinson   2/14/03,  10:53:14 AM
COMPX 1300-05 resistance now in play, next level 1318.

 
 
  John Seckinger   2/14/03,  10:52:30 AM
Next Resistance seen at 7950, and the weekly pivot in the Dow. Note: The five-minute period is not over, so still looking for a period close above daily R2 at 7873. This period close would confirm the next move to the weekly pivot.

 
 
  Jeff Bailey   2/14/03,  10:52:08 AM
Buy Program SPX 830 +1.54%.

 
 
  Linda Piazza   2/14/03,  10:50:17 AM
Blix now addresses the decontamination trucks in the photos that Powell showed and dismissing their movements as possibly being routine.

 
 
  Jeff Bailey   2/14/03,  10:48:45 AM
Boots&Coots (WEL) $0.52 -1.88% ... session high has been $0.58, but seeing some weakness here. As stock to observe for market psychology, impression here is that Blix testimony slanted toward more cooperative type of resolution with Iraq can be had.

 
 
  John Seckinger   2/14/03,  10:46:25 AM
Per 9:39 post, with the Dow still unable to test its daily pivot to the downside, bulls' confidence appears to be picking up. There was certainly some serious support areas tested in all markets yesterday, and today's action could simply be a pause in the selling. Objective is at 7873. For the market to go higher, it appears to be analogous to walking up a mountain with a house on your back. For bears, when the market falls, it is like jumping out of a plane without a parachute (free falling with no support to stop the fall). Maybe I needed less strong coffee (grin), but my point is it will still be hard work to get to 7873.

 
 
  Jeff Bailey   2/14/03,  10:45:51 AM
Index Trader Wrap from 30-minute charts we looked at last night, downward trends in Dow and SPX not yet tested, but most likely in play here. Dow 7,817 and trying to show some index leadership, which it has been lacking in recent weeks. This is some DIVERGENCE from the past and hints at a shift in sentiment perhaps.

 
 
  Steven Price   2/14/03,  10:45:14 AM
Swing Trade Signals
So far no signs of weakness. We are holding over Dow 7800 and SPX 820. COMP and NDX holding most of their gains, as well, but COMP remains sub-1300. Interestingly, the VIX is slightly higher in spite of the rally.

Current levels: Dow 7816/OEX 416.83/SPX 823.26/COMP 1289

 
 
  Jonathan Levinson   2/14/03,  10:38:46 AM
Selling in bonds is accelerating, with FVX +8.1 bps now.

 
 
  Jeff Bailey   2/14/03,  10:38:08 AM
Dow Industrials (INDU) 7,817.00 +0.86% ... bullish move here. If Dow can close on 5-minute basis above the 7,811 level, then upside to 7,873.

 
 
  Jeff Bailey   2/14/03,  10:36:48 AM
QQQ $23.95 ... bearish day trader stopped from my 10:23:15 post.

 
 
  Jonathan Levinson   2/14/03,  10:36:46 AM
The COMPX appears to have re-entered the ascending bullhorn on the 5 minute candles after a brief dip below the lower trendline.

 
 
  Jeff Bailey   2/14/03,  10:34:54 AM
Blix says.... No evidence that Iraq knew the U.N Weapons inspectors were coming.

Market responds with slight bid. QQQ $23.87.

Dow reaches best levels of the session at 7,805

 
 
  Jonathan Levinson   2/14/03,  10:33:36 AM
Surprising strength on the COMPX, as the TRINQ sticks below .40, TRINQ lightly positive at -123, and FVX continues to climb, +5.9 bps now.

 
 
  Linda Piazza   2/14/03,  10:33:16 AM
Blix says that in no case have they seen convincing evidence that the Iraqi’s had advance notice of an inspection. He doesn't appear to be convinced by Powell's surveillance camera photos, it appears.

 
 
  Jeff Bailey   2/14/03,  10:32:32 AM
QQQ $23.78 ... QQQ dipped to $23.71, but once again on 5-minute chart, closes that bar at $23.75. DAILY pivot still in play here, day-trade bears sits tight, but really wants to see a 5-minute bar close below the pivot for further encouragment to weakness.

 
 
  Jonathan Levinson   2/14/03,  10:27:28 AM
We have a break of the rising bullhorn formation on the COMPX 5 minute candles to the downside.

 
 
  Linda Piazza   2/14/03,  10:26:44 AM
I set an alert yesterday afternoon for OEX 415.60, as that level had provided support for the OEX for the early part of the week before the OEX had begun dropping toward its weekly lows. Today, that alert keeps going off as the OEX moves back and forth across that level. I note that the 21-hma (hourly moving average) also sits at 415.52, giving two confirmations of the importance of this level. Just over 418 lies a descending line from January 15 high and then touching February 5 and 11 highs, so the 418 level should be the next resistance if the OEX should break above current levels.

 
 
  Jeff Bailey   2/14/03,  10:26:31 AM
Blix Report Begins Dow=7,781, SPX=820, OEX=415.1, NDX = 956, QQQ=$23.75.

 
 
  Jeff Bailey   2/14/03,  10:24:00 AM
Sell Program SPX 820.55

 
 
  Jonathan Levinson   2/14/03,  10:23:16 AM
This morning's Michigan Sentiment reading of 79.2 represents a 9 1/2 year low. Here's the full story: Link

 
 
  Jeff Bailey   2/14/03,  10:23:15 AM
My thinking .... Right now, if I put on a trade, I want to be somewhat "short-term" or "day-trade" exposure with Blix testimony coming.

Day Trade Short QQQ $23.81 -0.54% here, stop $23.95, target $23.36.

 
 
  John Seckinger   2/14/03,  10:23:14 AM
Jeff, adding to your noted sell program and Dow important 7811 area. The ES contract had a high of 822, and this is near the half-way mark between a couple important daily retracement levels (822.25). Sell program, Dow near 7811, and ES near 822.25. Bears are trying to defend here.

 
 
  Steven Price   2/14/03,  10:20:40 AM
Swing Trade Signals
We are toying with the Dow 7800 level, which served as previous support. We have so far failed to hold a 5 min candle above that level, but until we take out support at the opening range bottom of 7750, I'm not convinced the short covering can't take us higher. If we are seeing a true sign of a reversal, it is curious that it comes the day before and day of Blix testiony. This is a slightly different pattern than we got on Jan 27 (the last Blix report), when we got a big drop, a big 100-pont rally and then a sell-off.

 
 
  Jeff Bailey   2/14/03,  10:18:05 AM
Sell Program SPX 820.47

 
 
  John Seckinger   2/14/03,  10:17:07 AM
Before Blix's report at 10:15, crude oil remains near highs not seen since late 2000. Over the last 24 hours, I have read two arcticles with analysts looking for $50 a barrel. And this is coming out of winter. The March Crude Oil (CL03H) futures are higher by 2 cents at 36.36, and remains in an aggressive bullish channel that started on November 14th at 23.85. Staddling the top of its daily Bollinger Bands, an upside objective seems to be near 40 in the near-term, with support all the way down until 32.

 
 
  Linda Piazza   2/14/03,  10:14:06 AM
A move and close above SOX 272 completes a rough double-bottom formation as seen on the 60-minute chart and would predict a rise to about 282-284. Both 5(3)3 and 21(3)3 stochastics have zipped up pretty strongly on the 60-minute chart, sometimes a sign that the oversold pressure is quickly dissipating, but they’re not quite in oversold territory yet and certainly not turning down. As with the other indices, it’s not yet clear whether the SOX will be able to break through that overhead resistance. As numerous other writers have pointed out, the SOX’s behavior yesterday gave market participants a pretty good heads-up that a bounce might be imminent, so perhaps it will give us the first clue as to what we can expect.

 
 
  Jeff Bailey   2/14/03,  10:13:00 AM
10-year YIELD (TNX.X) 39.18 +1.2% ... making session YIELD high here as Dow Industrials (INDU) 7,791 (+41) nears DAILY R1 of 7,811.

Per Index Trader Wrap, never did get the early morning pullback I was looking for in the Dow. QQQ continues to lag move higher and perhaps NOT confirming Dow bullishness at this point.

Dow 7,811 may be "key" level today. For weakness, traders look for QQQ to dart to a session low as Dow reached 7,811 area... hovers... then sees selling and moves lower on QQQ action. Not sure.. but what I would look for to signal weakness.

For bullishness, just the opposite. Dow makes move higher above 7,811, QQQ rebounds from DAILY pivot of $23.75. QQQ $23.79 here.

 
 
  Jonathan Levinson   2/14/03,  10:12:11 AM
Reuters reports that US stock mutual funds had net outflows of 2.9B for the week ended Feb. 12th.

 
 
  Jonathan Levinson   2/14/03,  10:11:28 AM
Heathrow airport has reopened.

 
 
  Jonathan Levinson   2/14/03,  10:02:16 AM
The COMPX is testing the lower ascending trendline of a rising expanding bullhorn on the 5 minute candles. A break below 1280 would be a downside break on my chart.

 
 
  Jeff Bailey   2/14/03,  10:00:36 AM
Treasuries Quick look at 10-year YIELD ($TNX.X) shows range-bound so far this morning between 38.88-39.17. Break of this range could impact equities in direction of the break. Not much here to influence an equity trader at this point.

 
 
  Jeff Bailey   2/14/03,  9:58:26 AM
QQQ $23.83 -0.45% .... Did trade below today's DAILY Pivot, but never witnessed a 5-minute close. For now, observation is that there is some formidable buyers in the QQQ at that level.

 
 
  Jonathan Levinson   2/14/03,  9:58:10 AM
The fed has just announced a 2B 4 day repo. This 2$B is a net addition with no expiries today. FVX is +3.9 bps, as selling in bonds continues.

 
 
  Jeff Bailey   2/14/03,  9:56:42 AM
Dow Industrials (INDU) 7,782 +0.43% ... back at highs of the session. If Dow makes continued advance here, would expect a bid to come in on the major indexes.

 
 
  Linda Piazza   2/14/03,  9:53:09 AM
Because that descending line on the VIX daily chart descends, it’s now slightly below 40, and the VIX still challenges that line today. The daily 5(3)3 stochastics hinged up yesterday, turning up in mid-fall. Daily MA’s still slant up, with the simple 50-dma now at 32.55 and moving up toward the exponential 200-dma at 33.19. It’s unclear whether the VIX will have the strength to push through that line or will turn back once again.

 
 
  Steven Price   2/14/03,  9:52:14 AM
Swing Trade Signals
The pullback in the last couple of minutes bounced right at the bottom of the opening range in the Dow, which is 7750. The SPX never tested the bottom of its range at 814.65

Current levels: Dow 7765/SPX 818.94/OEX 414.64/COMP 1281.94

 
 
  Jeff Bailey   2/14/03,  9:49:06 AM
QQQ $23.81 -0.54% ... session low has been $23.76, a penny above today's DAILY pivot of $23.75. Early action here hints there is some squaring taking place by bears after yesterday's late session rally. Perhaps some short positions taken off the table in the QQQ near DAILY pivot, then look to take action later in the session or early next week after Blix report is reviewed.

 
 
  Jonathan Levinson   2/14/03,  9:49:05 AM
The Michigan number is 79.20. New low of the day just printed on COMPX. (forecast was 81.9)

 
 
  John Seckinger   2/14/03,  9:48:53 AM
In a recent economic survey out of the WSJ (55 economists polled), 23 reduced their forecasts for growth in the First Quarter, while 26 reduced their Q2 forecasts. From December, the average for Q1 fell to 2.6% from 2.7%, with Q2 falling to 3.0% from 3.2%. They believe geopolitical uncertainty will keep capital expenditures at bay. High oil prices also a factor to keep certain sectors from properly functioning. The majority also expects 50 bp of rate hikes by year end.

 
 
  Linda Piazza   2/14/03,  9:48:33 AM
North Korea accuses the nuclear agency of interfering, one new source says.

 
 
  Linda Piazza   2/14/03,  9:47:22 AM
The SOX’s move has brought it back into the gap from the January 30 close to the January 31 open. The SOX has tested this gap several times, even moving above the top of the gap on February 5, but it’s always failed to remain above that gap. The January 30 low was 273.18, so that level forms the top of the gap, although on February 5, the SOX moved as high as 281.12 before turning down again. These appear to be important levels to monitor.

 
 
  Jeff Bailey   2/14/03,  9:46:32 AM
Trader logic Taking in some observations this morning and my feel right now is that I'm not putting on any new trades at this point. Haven't seen the major indexes trade any of our daily or weekly pivot levels at this point. MARKET might be doing the same and just sitting tight right here.

 
 
  Jonathan Levinson   2/14/03,  9:44:32 AM
The TRINQ remains quite low at .35 showing a good deal of buying pressure, even as the COMPX gives up its day highs and fades down. QQQ at 23.78 is just below 23.6% fib support off the day high, next support is at 23.71 which is 38.2% from that level.

 
 
  Linda Piazza   2/14/03,  9:41:02 AM
January factory output was up .5%, with the ex-autos number up only 0.1%. The cars/parts factory output was up 4.9% after dropping 5.3% in December. Utilities output was up 4%, with a jump in electricity use behind this rise. Mining output dropped 1.2%.

 
 
  Jonathan Levinson   2/14/03,  9:40:50 AM
The "hoax" made it to the evening news with Peter Jennings last night, but the FBI confirmed that they have "good reason" to remain on alert.

 
 
  Jim Brown   2/14/03,  9:39:30 AM
According to ABC news some of the information leading to the current heightened terror alert was fabricated by a person already in captivity. It appears this person just made it up. This should be interesting when it filters through to the street. Link

 
 
  John Seckinger   2/14/03,  9:39:03 AM
With the first five-minutes behind us, the Dow has seen a range from 7750 to 7783. Not extremely bullish, and it only took out Thursday's high by less than two points. Solid resistance is above at the 7873 area. Moreover, I do expect some more weakness if we take out the day's pivot at 7720. Note: The aggressive bullish channel since late Thursday would be broken once the pivot is cleared. Slight resistance above from 7811 to 7815.

 
 
  Jonathan Levinson   2/14/03,  9:31:52 AM
6 point gap up open to 1283 COMPX, QQV +1.16, TRINQ .36, TICK.NQ -120.

 
 
  John Seckinger   2/14/03,  9:29:07 AM
Intra-day Pivot/Levels for Friday (02/14/03)...

INDU : S2= 7567, S1= 7658, P= 7720 , R1= 7811 , R2= 7873

SPX : S2= 800, S1= 809, P= 815, R1= 824, R2= 830

OEX : S2= 404, S1= 409, P= 412 , R1= 417, R2=421

NDX : S2= 929, S1=940 , P= 950, R1=962 , R2=971

QQQ : S2= 23.09, S1= 23.51, P= 23.75 , R1= 24.17, R2= 24.41

 
 
  Jeff Bailey   2/14/03,  9:28:44 AM
The 9:00 AM Intraday Update has been posted. Link

 
 
  Steven Price   2/14/03,  9:18:53 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
I do not normally change a stop loss, unless I am moving it in the direction of profits. However, given today's R2 in the Dow at 7873, let's raise it by 5 points. Set stops on the 1/2 short position at Dow 7875.

 
 
  Jonathan Levinson   2/14/03,  9:16:05 AM
Yields have opened in the green as bonds see some selling, with FVX +3.7 bps, TNX +2.7 bps and TYX +.2 bps. Gold is seeing some selling with spot gold down 2.10 to 355.90.

The fed has no expiries today, and so any amounts added by way of repo today will be net additions. I am watching for the 10AM announcement.

 
 
  Steven Price   2/14/03,  8:59:10 AM
Swing Trade Signals
We are currently short a 1/2 position in the broader markets with a stop at Dow 7870. I have been victim recently to stops set a little too tight and I am hoping we don't get a big short covering rally ahead of the Bilx presentation that takes me out of the short position. My plan yesterday was to short a rally of that nature and I believe that's what we saw yesterday afternoon. However, with futures up slightly there may be some more upside, especially after the Dell news was taken so positively. I am still stickng with only a partial position, as the environment is so uncertain and if I am stopped out, I'm not planning on entering before the weekend. That could change if I see something develop that looks attractive, but for now that is the plan.

 
 
  Linda Piazza   2/14/03,  8:46:33 AM
Headline numbers can sometimes deceive, and it’s important to look beneath those numbers. While the 1.37 inventory/sales ratio is the highest since March, the record low for this number is 1.35. While an increase in inventories can be deemed negative, the current inventory levels are tight enough that many may not deem small increases as worrisome or particularly important.

 
 
  Linda Piazza   2/14/03,  8:37:30 AM
U.S. December Inventories were up 0.6%, more than the expected 0.3%, and the inventory/sales ratio is 1.37. According to one news source, this is the highest ratio since March.

 
 
  Linda Piazza   2/14/03,  8:23:52 AM
As European markets await the U.N. Security Council meeting and the release of U.S. economic numbers, the CAC 40 and the DAX each trade in a wedge with an apex in the center of the day's range. The FTSE, currently just above 3619, moves toward the day’s low of 3610.80.

 
 
  Jonathan Levinson   2/14/03,  8:01:05 AM
News that Saddam Hussein has issued a decree banning the production and importation of weapons of mass destruction.

 
 
  Jonathan Levinson   2/14/03,  7:42:17 AM
A Heathrow airport terminal has apparently just been evacuated for a suspicious bag.

 
 
  Jonathan Levinson   2/14/03,  7:10:25 AM
The US Dollar began its ramp at 3AM, not quite a Corynthian Geyser, and is currently up to the 99.90 level. Gold sold off from 358/oz and is currently trading below 357/oz. QQQ is trading 23.87 on Island ECN, up from its afterhours close of 23.79 but below its market close of 23.94.

 
 
  Linda Piazza   2/14/03,  7:07:54 AM
Good morning! It was a good day for those invested in the Japanese markets, as the Nikkei climbed 1.2% in Friday’s trading. As expected, the Bank of Japan left its benchmark rates unchanged. Just before the trading day opened, the government released the GDP data for the last quarter of 2002, indicating a growth of 0.5% rather than the expected 0.3%. Most of the gains came from exports, which helped tech stocks such as Sony. An upgrade of chip-maker Tokyo Electron also helped tech stocks, and they were perhaps also impacted by Dell’s report yesterday afternoon.

Dell’s report was cited as one reason for the rise in European tech stocks. Other stocks rose on expectations that the U.S. industrial production would grow in the current quarter. Factory controls maker Invensys didn’t participate in tech gains, however, dropping after it lowered guidance for H2, saying profit might be as much as 25% less. Some worry that the company may not be able to sell bonds and refinance its debt. In addition, Lloyds added its name to the list of banks or insurers whose reserves have been damaged by the steep stock market declines. Its H2 profit fell 40% as it set aside more reserves against bad loans and deficits in its pension funds. The bank maintained its current dividend, relieving some investors who had expected a decrease. As of this writing, the FTSE 100 was up 21.60 points or .60%, the CAC 40 was up 26.02 points or .94%, and the DAX was up 48.87 points or 1.91%. The DAX has settled into a range that moves 15 points on either side of 2600, perhaps as investors await U.S. economic numbers and news from the U.N. Security Council meeting, scheduled to begin at 10:15 ET.

Mohamed ElBaradei, head of the International Atomic Energy Agency, spoke while traveling to today’s meeting and said that Iraq should show more cooperation, but that he thought the inspection process should continue. He also indicated that beefing up inspections would not be as useful as would greater Iraqi cooperation during those inspections.

 
 
  Jeff Bailey   2/13/03,  11:00:09 PM
The Index Trader Wrap has been posted: Link

 
 
  John Seckinger   2/13/03,  11:00:01 PM
The Futures Trader Wrap has been posted: Link

 
 
  Steven Price   2/13/03,  10:59:54 PM
The Swing Trade Game Plan has been posted: Link

 
 
  Steven Price   2/13/03,  10:59:19 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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