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  Jeff Bailey   2/27/03,  11:21:41 PM
After-hours observations .... S&P futures (sp03h) settled at 838.20, and currently trade 836.00, so down 2.2 points from their close.

  Jeff Bailey   2/27/03,  6:04:37 PM
Divergence between bonds/stocks late in session ... A lot of questions as to why bonds did find buyers into their 03:00 PM EST close, and when bond market closed, why stocks recovered.

I certainly wish I had the answer to this, but e-mail from subscribers has me thinking bond markets may be trading this type of news. Link

While equities may be trading this formal announcement from Homeland Security. Link

There are two takes on today's action by the Homeland Security and its lowering of it Security Advisory System to "code yellow" from "code orange." One could assume HS doesn't view the threat of terrorism as "high" at this point. Another view I've heard is that HS wanted to lower the level to "yellow" and should the U.S. take military action against Iraq, could then once again raise the threat level to "high/orange" and not have to go to a higher level of "severe/red."

  Steven Price   2/27/03,  5:48:25 PM
Possible long and short plays that didn't make today's final list, but bear watching:



  Linda Piazza   2/27/03,  3:47:42 PM
Scanning charts, I note that CSCO is printing an inside day today, so far. CSCO fell below its exponential 200-dma Monday and unsuccessfully tested that level Tuesday and Wednesday. Today, CSCO did not test that exponential 200-dma, never having reached that high, but does remain above its simple 200-dma at 13.49. It has, however, fallen beneath its simple 50-dma after trading above that level earlier today. Today's volume is below average daily volume, which would be consistent with a consolidation pattern, but CSCO appears to be forming a lower high on its daily chart. Having traded in a 12.60 to 15.50 range since mid-November, CSCO's current peak reached only 14.78 before prices turned down again. As I mentioned yesterday, this lower high would be confirmed if CSCO reaches the bottom of its current trading range before it again touches the top of that range. It's failure at its exponential 200-dma may predict that it will touch the bottom of its range first, but nothing is a given in this market.

  Jeff Bailey   2/27/03,  3:46:16 PM
QQQ $24.77 +2.27% ... I have no clue as to why QQQ, or major indexes moved up from their lows after close of bond market. My only "reasoning" for this move is that BEARS may be jittery that "code orange" is issued AFTER the close of trading.

Will be very hard pressed for QQQ to now reach my bearish target of $24.45 by the close with 15-minutes left in trade.

Disclosure: I currently hold bearish position in QQQ.

  Mark Phillips   2/27/03,  3:45:11 PM
CB $47.35 (+1.60) Any thoughts on this big move? Looks like a roll just under 48 w/b a good entry, if we can get up there. rb

My thoughts exactly! CB is having a heck of a rebound today, following yesterday's drop to new lows. See how it doesn't pay to chase breakdowns and breakouts in the current market environment? Today's push above yesterday's opening high should have us being a bit cautious, but I see the descending trendline bearing down at 447.70, with the 10-dma looming at $48.03. Any follow through in the morning will give us a clear indication of whether it is yet another entry point, or the end of the trend. I vote for the former choice, myself. A rollover below $48 and it is a new entry point. A breakout over $48 and the play is a drop...it's that simple.

  Jeff Bailey   2/27/03,  3:41:54 PM
The 3:15 PM Intraday Update has been posted. Link

  Jonathan Levinson   2/27/03,  3:37:38 PM
Ok, I cannot for the life of me figure out what the heck is going on with EXPE. Up over 3 bucks, I can't find any news, the 60 min charts recently rolled over (but so much for that). Can y'all help me out here with this, a most annoying beast which refuses to die? I mean, c'mon.....online travel?!?! A leader in the Naz?

I feel for you. This is a prime example of too-obvious a target. While I don't have the short interest data for EXPE, I have no doubt that it's very high. So, a favorite tactic of institutions chasing quick gains is to find a high P/E, high volume, high beta candidate for a short squeeze. They unleash a buy program on it, which jacks the bid and runs short traders' stops. More short traders begin covering and attract momentum traders, who run the bid higher, blowing out more shorts and forcing them to cover on the way up. My own though is that this is how stocks such as EXPE become so expensive (PE of 64.25 according to my Scottrade feed) in the first place. I'm confident that this thing will see much lower lows, but the whole trick is in timing it, which is rendered impossible by the relentless short squeezes and jams put out on the stock.

  Jonathan Levinson   2/27/03,  3:31:17 PM
The COMPX has cleared 1320, back into this afternoon's trading range between 1318-20 and 1330-32.

  Linda Piazza   2/27/03,  3:30:18 PM
The OEX has been touching and bouncing up slightly from that ascending trendline formed from the higher Tuesday-to-today lows on the five-minute chart. Since Tuesday morning, there has not been a five-minute close beneath that trendline, confirming its importance. Nevertheless, the bounces from that level don't look particularly convincing. Treacherous trading conditions prevail.

  Jonathan Levinson   2/27/03,  3:27:40 PM
A 26B sale of short term bills has been delayed due to what the US treasury is calling "a human error": Link

  John Seckinger   2/27/03,  3:20:45 PM
It is amazing how the market(s) forces a trader to disseminate a plethora of information extremely quickly. I am searching for reasons for the bid at 7826, and then I notice resistance at the top of the opening period of 7854 coming back into play. Then I see....and of course the bond market being closed only adds to the possible volatility.

  Linda Piazza   2/27/03,  3:18:03 PM
With forty-five minutes left in the trading day, volume stands at 984 million shares on the NYSE and 989 million on the Nasdaq. Adv/dec ratios are 1.47 on the NYSE and 1.18 on the Nasdaq, with both ratios down from my last report. Up volume is now 1.6 times down volume on the NYSE and 2.6 times down volume on the NYSE, with both these numbers also trending down. New lows now pull slightly ahead of new highs on both the NYSE and Nasdaq, but the numbers are almost even.

  Steven Price   2/27/03,  3:11:29 PM
Swing Trade Signals
That fade is now flirting with a rebound to 7850. If we fail, I think we could be looking down from here and I'm second guessing my holdout on the short entry. Hindsight is 20/20, but I still get the feeling we are in the center of a range and given the unpredictability of any trade over a 2-3 day period in the current geo-political environment, I'd like to have nearer resistance on short entries. If the COMP closes over 1319, it could be viewed as slightly bullish, as that has been significant support before. My overall sentiment remains down.

  Jonathan Levinson   2/27/03,  3:08:09 PM
The COMPX is returning for a retest of 1318 from below. Bonds closed lightly in the green, while commodities continue to get sold, with the CRB down 1.69% to 245.94. HUI and XAU are extending their losses, and while a full breakout above the COMPX high of the day appears unlikely, the market action over the past two weeks has been nothing if not nerve-jangling. The TRINQ is still but near the top of its day range.

  Jeff Bailey   2/27/03,  2:54:42 PM
10-year YIELD ($TNX.X) 3.747% ... hits session low YIELD here with 6 minutes to close. Equities look vulnerable to their lows of the morning.

  Linda Piazza   2/27/03,  2:52:19 PM
I'm watching for OEX support near current levels at about 420.50, and then back at 418-418.75 again. Current level support comes from an ascending trendline that began forming Tuesday morning with a series of higher lows on the OEX. A move through this level and then down through 418 would confirm a double-top formation, also visible on the hourly chart. A confirmation of that pattern would set up a target near 410. (426-418=8 points. Subtract 8 points from 418=410.) This a potential pattern only until it's confirmed. However, if confirmed, I might feel more confident of the eventual target being approached on this formation than on the earlier potential bull-flag pattern on a five-minute chart. Part of that confidence comes about because the 418-418.75 level has been a key level that should provide resistance once broken. Another reason comes from a greater reliability in patterns formed on an hourly chart than on a five-minute chart only. A third reason lies in a greater confidence in bearish targets in a bear market. With all that said, however, we've seen the last few weeks that geo-political developments often carry more weight than anything seen on these charts. Jeff, Steve, and John have warned of the risks of bearish plays due to the low bullish percent levels. Tomorrow is a Friday, and anything can and does happen during Friday trading lately. I would not enter any play--bullish or bearish--with anything other than risk capital and might be especially cautious entering if 418 isn't broached to the downside until the last few minutes of the trading day.

  Mark Phillips   2/27/03,  2:49:13 PM
LEAPS Update The late day fade in the broad markets is hitting shares of MSFT with a vengeance, with the stock now nearing the lower end of our targeted entry range ($23.00-23.50). That's just above the ascending trendline, which has now risen to $23.24. With the stock now bouncing off its low ($23.30) the LEAPS Portfolio will log an entry into the play if the stock closes above $23.50. We'll initially start with a wide stop at $21.

  Jonathan Levinson   2/27/03,  2:41:09 PM
During the past week I've speculated on activity from the plunge protection team, options expiration manipulation by institutional contract writers, and now I'll add mutual funds to the list of potential buyers to take a paintbrush swipe at the tape. This being the end of the month, it's not unreasonable to guess that there's supportive buying to improve the end of month statements. Whew! It had to be said, and I promise not to repeat until this time next month. Notwithstanding, the COMPX has just round-tripped to its gap support from this morning, currently at 1313 after breaking 1318 support.

  Jeff Bailey   2/27/03,  2:38:03 PM
10-year YIELD ($TNX.X) 3.758% ... starting to make its move lower from consolidation. What's up here? Where's that "code yellow" that had equities rebounding from morning lows? After the close? What gives.

  Jim Brown   2/27/03,  2:35:35 PM
Market Monitor Teaser - Here is a picture of the new monitor. You can have the Market Monitor only, the Futures Monitor only or both windows open at the same time OR content from both windows in the SAME window. It is your choice and you are in control. Average time to update = 3 seconds. We are testing today and it should be ready for release on Monday. Click here! Link

  Jeff Bailey   2/27/03,  2:30:58 PM
10-year YIELD ($TNX.X) 3.766% ... after the YIELD move lower that alerted us to weakness in equities, 10-year has been very tight range. Bond market closes in 30-minutes and tensions rise a bit. Equity bears in QQQ that are targeting DAILY pivot would like to see a late round of buying come into Treasuries into their close as this could then dictate stock price actioin into their close.

  John Seckinger   2/27/03,  2:23:11 PM
Per 12:36 post, it was definitely fun to be on the phone with Bailey as the QQQ's hit my projected low of 24.60 (versus 24.62). I still like weakness in the Q's, as long as prices stay under 24.80. I do have to admit, Jeff made a great call for weakness in the QQQ's by waiting for prices to rise above 24.80 and then patiently waiting until 24.80 was broken from above. It is all about confirmation with risk clearly defined.

  Linda Piazza   2/27/03,  2:22:39 PM
On the OEX 60-minute chart, bearish kisses now present on both the 21(3)3 and 5(3)3 stochastics. If these stochastics continue to roll and prices continue to move down, both stochastics will have signaled bearish divergence (equal highs on the price, higher high on the 21(3)3 stochastics; equal highs on the price, lower high on the 5(3)3 stochastics). Dialing back down to the 5-minute chart, the OEX has dropped down for its second test of the top of this morning's descending channel. Each test of that channel has resulted in a lower high on the bounce.

  Jonathan Levinson   2/27/03,  2:16:21 PM
The TRINQ at .46 is finally above its day range, now at a merely strong bullish reading, no longer extreme. Little guidance from yields or from the QQV and VXN, and with the COMPX at 1318, it remains within its day range, at the low side of support.

  Steven Price   2/27/03,  2:11:03 PM
Swing Trade Signals
We just took out relative lows in the Dow and shorts from the failure at 7900 are looking good.

Current levels: Dow 7870/SPX 834.97/OEX 422.49/COMP 1318

  Kent Barton   2/27/03,  2:06:36 PM
A scan of the major sector indexes shows most are trading in the green, with the exception of the oil service (OSX.X), gold/silver (XAU.X), and airlines (XAL.X). The increasing likelihood that American (AMR) will go bankrupt has investors within the group wondering who could be next. The only region of underlying support for the XAL is the all-time low near $26.00. If that level gives way, look out below!

  Linda Piazza   2/27/03,  2:04:58 PM
I thought taking a longer-range view might give me clarity on what's happening with the OEX, but the weekly chart doesn't yet give much clarity. Weekly 5(3)3 stochastics cycle up from oversold levels, but 21(3)3 action proves inconclusive, as does the MACD which has flattened just under zero. Beginning in July of last year, I can draw a trendline of higher lows on the RSI. (Actually, that pattern began forming even earlier than that, back in the spring of 2001, but the line steepened last July.) RSI broke through that trendline to the downside in mid-January, came back up to test the trendline a few days ago, and now appears to be turning down from that level. That's a bearish development to balance the bullish appearance of the stochastics. Usually, I would trust the RSI evidence before that of the stochastics, especially when dealing with pattern breaks in the RSI. However, this chart doesn't provide me with conclusive evidence to support a continued overall bearish outlook except for one factor: price action itself.

The OEX has not broken through its long-term descending trendline. Until then, the bias has to be that the bear market continues. As I look at that weekly chart, one scary possibility presents itself. After the long fall from 2000 highs, the OEX slowed its decline in the middle of last year and began trading in a wide range from about 390-487. Such ranges might be reversal patterns or continuation patterns, and the outcome can't be sure until the range is broken, either to the upside or the downside. It's kind of handy that the long-term descending trendline for the OEX now crosses at about 483, strangely close to the upside breakout of that trading range. An upside move out of the current range, then, would also be a move above that descending trendline. If this is a continuation pattern instead, I don't want to even think about the ultimate OEX target.

  Jeff Bailey   2/27/03,  1:57:05 PM
The 1:00 PM Intraday Update has been posted. Link

  John Seckinger   2/27/03,  1:48:29 PM
I believe that since the coupon pass seen today at $680 mln was from mid-May 2006 to mid-November 2008, this is reason we are seeing a curve "flattening" and better bids in the long end of the yield curve. This is index extension buying and in my opinion is theoretically bullish for stocks. However, looking at equity price action, I see a lot of gravitation around the 7909 area and more indecision than anything else.

  Jonathan Levinson   2/27/03,  1:46:55 PM
Spot gold is down 7.70 to 345.50. The miners, which didn't participate in gold's breakout run to the upside, are holding, down 1.85 to 130.89.

  Mark Phillips   2/27/03,  1:39:12 PM
Hi Mark, I've been riding IYR (real estate) up for a week, and it's beginning to "feel" toppy. Mind taking a look?

Sure thing! I know this reader is a fan of trading the iShares and ETFs, and based on the continued strong action in the Housing sector, I would expect to see corresponding strength in this index.

But Yikes!, the first look at the PnF chart on the traditional $1 box size tells me to run (don't walk) to the nearest exit! Take a look for yourself. Link

IYR has been in a persistent downtrend since early 2002, and the rollover in January of this year commenced right at bearish resistance and resulted in another PnF sell signal. Looking at the $0.50 box size though and I can see where a trader may be thinking bullish with the trade at $75.50. But I sure don't like the prospects with bearish resistance on this chart looming just overhead at $76.50. Link

Looking at the standard daily candle chart doesn't provide much encouraging news either, as the stock is bumping into the descending trendline that has continued to provide resistance for close to a year. Aside from the recent crawl over the 50-dma, I don't see anything to motivate me to the bullish side on this fund. It feels "toppy" to me too.

  Linda Piazza   2/27/03,  1:37:32 PM
An update on the European markets: The FTSE 100 closed down 23.40 points or 0.65%, below the key 3600 level. The CAC 40 closed up 57.23 points or 2.15%, near the high of the day. The DAX closed just off its highs, up 44.60 points or 1.82%, but this index still closed below its key 2500 level by 5.20 points. Near the end of trading, it moved briefly above 2500, but could not maintain that level.

  Jonathan Levinson   2/27/03,  1:22:49 PM
The 60 minute COMPX candles seem to shed some light on things. We see a lower low put in on today's rise. Of course, the day's not done and this pause could simply be the buyers switching nitrous oxide tanks for the next boost higher. But so far, we see the hourly candles sinking within this tight range. The TRINQ is very low, still, at .25, QQV -.66 and bond yields flat. The TRINQ is disconcerting- will the bulls run out of money, or the bears run out of shares? This sustained low reading tells us that the breakout will be strong, but whether it's to the upside or downside is still unknown.

  Steven Price   2/27/03,  1:18:30 PM
Swing Trade Signals
Tha drop below Dow 7900 and so far failure to rebound above that level may be the opportunity aggerssive shorts are looking for. I'm still not enamored of the risk/reward level here, as the most logical stops still sit at 8060 or 8170, so I'm not going to enter here. However, if an aggressive trader is willing to take that ratio, knowing we've bounced at 7800 and 7730, I think the trade has some potential.

  Kent Barton   2/27/03,  1:18:19 PM
Amgen (AMGN) 54.19 +0.94: This OI/PI long play is climbing back towards its relative highs today after Banc of America reiterated their "Buy" rating on the stock. The BTK.X biotech index is also approaching the top of its descending regression channel at 320. A breakout above that level could quickly send the index to the 330 area, thus creating a very favorable climate for continued gains in AMGN. Traders looking to enter new long positions can watch for a move above either the relative high ($54.70) or psychological resistance at $55.00.

  John Seckinger   2/27/03,  1:12:33 PM
Still patiently watching. Tuesday's pivot at 7909 really has been a solid pivot today as well, especially during the last few hours. Moreover, the projection analysis of 7919 has not been tested in quite some time. Will we get a downside test of 50% of today's range at 7857? I think we might, but I would get nervous short if the Dow gets back above 7809. Just my two cents.

  Jeff Bailey   2/27/03,  1:09:52 PM
April Gold futures (gc03j) 348 -1.72% ... quick move lower in this gold futures contract in 35-minutes ago (I'm 5-minute delayed quotes on futures).

  Linda Piazza   2/27/03,  1:04:26 PM
Jonathan mentioned the way the chop had scrambled the oscillators, so that it's difficult to interpret the action today. I'm similarly distrustful of almost all of what I see happening today. When I first mentioned the potential bull-flag pattern on the OEX, I'd mentioned that I would wait for a move over the day's high as a confirmation of that pattern, although ordinarily that kind of confirmation wouldn't be necessary. Although I saw the potential pattern setting up, something didn't feel quite right, and the OEX's behavior since moving out of that pattern confirms that doubt. Usually, an upside break of similar patterns means a quick move up, with perhaps a quick move down to retest the pattern before zooming up again. Initially, the OEX did move up, but then stalled beneath the day's highs.

  Jeff Bailey   2/27/03,  12:59:08 PM
10-year YIELD 3.766% ... taking a bit of a dip lower here. Would be looking short the QQQ here $24.75, stop $24.92 and target DAILY pivot.

  Mark Phillips   2/27/03,  12:56:48 PM
AMGN $54.16 (+0.91) With the latest surge in the broad market, AMGN is back over the $54 level again, but just like yesterday morning, having trouble reaching the $54.50 level. The BTK has managed to slog back above the $316 level, but not showing any conviction to the upside and I believe this is holding AMGN back again today. Chasing the stock higher is still a very risky proposition, given the recent trading pattern, and I continue to favor entries on pullbacks to support, harvesting those gains near resistance. The ascending trendline has now risen to $52.40, with the 20-dma riding just above that level at $52.71. A pullback and bounce in that area will provide the next solid entry into the play, and stops should now be raised to $52.25.

  Linda Piazza   2/27/03,  12:55:10 PM
For those not watching CNBC, the news is that Turkey's Parliament has delayed until Saturday the vote to allow the U.S. to use its bases. This was an unexpected development, as the vote was supposed to occur today.

  Jonathan Levinson   2/27/03,  12:49:19 PM
The TRINQ is back to .24, and the QQV has dropped to 39.34. FVX has risen to a gain of 1.5 bps on the day as the COMPX reverses its slow slide within the range to its current 1325. The stochastics are all chopped up, as often occurs in the middle of a range. I continue to watch for a challenge of the 1330-32 zone.

  Linda Piazza   2/27/03,  12:48:08 PM
The OEX has made an upside break of the bull-flag pattern, with four five-minute closes above that pattern. The OEX has not risen above today's highs, which would be next resistance, however.

  Linda Piazza   2/27/03,  12:35:05 PM
Volume now stands at 603 million shares on the NYSE and 634 million on the Nasdaq, with adv/dec ratios of 2.28 and 1.45 respectively, down slightly but probably not significantly from earlier levels. Up volume is 3.4 times down volume on the NYSE and 4.2 times down volume on the Nasdaq, with these figures also down slightly but probably not significantly from earlier levels. New highs now outnumber new lows on the Nasdaq, but only by a 43:40 ratio. What is significant here, however, is the change from last week when new lows vastly outnumbered new highs. The new highs:new lows figure for the NYSE is 40:49, still showing more new lows.

  John Seckinger   2/27/03,  12:26:35 PM
On the phone with Bailey, and I really liked the 24.60 level in the QQQ's. Jeff had 24.62 as his level. It is funny how we can talk for some time of which level might be better (grin). As far as the Dow is concerned, I don't expect weakness under the 7857 area, which is 50% of today's range. However, I also think that Tuesday's pivot of 7909 should cap any bullishness. Most likely things will be quiet for a few more minutes. The 30-year is still above 114 at 114'14, and I do expect a nice roll out of bonds and into stocks if 114 is broken.

  Jonathan Levinson   2/27/03,  12:22:03 PM
Trader talk that Blix' report to the UN has been leaked to the BBC in London, and shows that Hussein has not been cooperative with the weapons inspectors.

  Linda Piazza   2/27/03,  12:21:45 PM
After testing the top of that possible bull-flag pattern, the OEX fell back inside the pattern. If it is a bull-flag pattern, the OEX should break out to the upside before retracing more than half the preceding up move. That 50% retracement would occur near 422.75. If the OEX falls below 422.75, then, the pattern is probably not a bull-flag pattern.

  Jonathan Levinson   2/27/03,  12:20:01 PM
The Code Yellow rally (my proprietary appellation) is sputtering below our 1332 COMPX resistance zone, turning this into another "flagpole rally", where price shoots straight up and then just hangs at the top. The TRINQ is up to .34, but the flat print all day since the bounce has superimposed my different moving averages and flatlined the oscillators, making it difficult to tell if this is the start of a climb in selling pressure or just a hiccup. The QV is down .30 to 39.84, FVX nearly flat off its highs, +.7 bps on the day.

  Mark Phillips   2/27/03,  12:17:21 PM
GS $67.54 (+1.06)

Hello Mark, I am considering puts on GS and would like your opinion. Thank you, JK

As much as I like to play the downside on this stock and do have a bearish bias on the whole Brokerage group, I'm really not a fan of such a play right here. After finding support down at $64 earlier in the month, the latest pullback found support at $65 and the stock is rebounding pretty solidly right here. Daily stochastics are turning up in a short-cycle bullish reversal and weekly Stochs have already turned solidly bullish. Additionally, the PnF chart is right on the edge of generating a new Buy signal. Today's intraday move over $68 has the stock right at PnF resistance and a trade at $69 will create that new buy signal. Link

At the same time, I woudn't be considering a bullish play here either, due to the strong overhead resistance, first at the descending trendline from the December highs, which currently resides at $70, which is also solid historical resistance, and the site of the descending 50-dma. In short, I would have a hard time making a case for a new position (either bullish or bearish) in GS right now, as there just isn't a favorable risk/reward ratio. If determined to play the stock bearish near current levels, a tight stop is warranted just above $69.

  Linda Piazza   2/27/03,  12:06:24 PM
On the five-minute OEX chart, I'm noting a sharp move up in the OEX today, and then a counter move in a tight series of lower highs and lower lows. I'm alert then to the possibility of a bull-flag pattern developing. As I type this, it appears that the OEX may be trying to make an upside breakout of the potential bull-flag pattern, but I would wait to see a move over the day's highs as confirmation of a breakout. Even if this bullish pattern develops, the OEX faces daunting resistance just ahead, and I personally wouldn't feel comfortable entering a bullish play. Instead, I offer this observation for those who might be waiting for bearish entries or those who might be facing pain from bearish entries already made.

  Linda Piazza   2/27/03,  11:56:59 AM
Here's an update of one of the OEX 60-minute chart I've been posting, showing how the OEX has been performing around midline candlestick support on the hourly chart. On this chart, I have not marked the 418.75 midline support area predicted by the five-minute candles, but am looking solely at the support/resistance levels predicted by the hourly candles. Link

  Jeff Bailey   2/27/03,  11:49:07 AM
American Elec Power (AEP) $21.25 +4.47% ... still haven't been able to find a pricing for today's 50 million share secondary. I'm left to assume that it was marked at yesterday's closing price of $20.33.

Gerald Klauer Mattison raised its raiting on AEP to "neutral" from "underperform" this morning, based on reduced uncertainty regarding cash position after today's offering.Link

I've said before that I've agreed and disagreed with James Kramer at various times. I agree with him today when he said ... "What's worsde than no deals? how about deals no one wants? Fifty million shares of AEP coming right at you."

  Jonathan Levinson   2/27/03,  11:44:20 AM
The CBOE put to call ratio has just printed .56 for the past half hour, with an intraday peak of .62. This reflects a greater than usual preponderance of call volume over put volume, which, for a contrarian, looks like too much optimism to be sustainable. However, like the TRINQ readings (still very low at .33), it's difficult to tell when the reversal will come, or whether it will equalize with a slow "drip drip" off the highs as we've been seeing lately. Resistance remains 1332, support 1318-20 and then 1305 COMPX.

  Linda Piazza   2/27/03,  11:39:27 AM
Volume now stands at 446 million shares traded on the NYSE and 471 million on the Nasdaq. Adv/dec ratios continue to show more advancers, with a 2.7 ratio on the NYSE and a 1.68 ratio on the Nasdaq, up from the neutral reading earlier today. Up volume is almost 4 times down volume on the NYSE and almost six times down volume on the Nasdaq. New highs equal new lows on the Nasdaq, a continued move away from the extreme imbalance in these figures seen last week, while new lows continue to outrank new highs on the Nasdaq. Volume patterns favor the bulls for the moment, and so do other factors, with bonds down, the dollar up, and the VIX down. I balance these observations with the note that the OEX, at least, has not yet been able to power over yesterday's highs and close higher. The day is young, however.

  John Seckinger   2/27/03,  11:27:33 AM
The Dow did hit the 7918 level based off projection analysis, and has now broken its aggressive bullish regression channel (anchored from the lows under 7800). Is this merely some longs liquidating before another run higher? Possibly. If bullish, I would like to see the 30-year fall under 114. Currently the long bond is lower by '12 ticks at 114'12.

  Steven Price   2/27/03,  11:26:50 AM
Swing Trade Signals
Aggressive traders can target a short on a move back below 7900, and preferably a failed bounce there. I think with numerous bounces at 7800, the downside max is iffy from this level, given bid/ask differential and we'll get more out of a higher entry. Once again, I'm not sure we'll get it, but playing a 100-point target to start doesn't seem worth it. We could certainly target a move to 7720, but be ready for a bounce at 7800.

  Jeff Bailey   2/27/03,  11:25:56 AM
The 11:00 AM Intraday Update has been posted. Link

  Jonathan Levinson   2/27/03,  11:14:42 AM
The April crude contract has printed $40.

  Jonathan Levinson   2/27/03,  11:11:36 AM
The fed has announced a coupon pass in the amount of 680M, which is a permanent addition to liquidity, as opposed to a repurchase agreement which is temporary.

  Jonathan Levinson   2/27/03,  11:10:30 AM
1330 COMPX turned back the latest push on this telescopic flag-pole bounce. Will we see 1332 fail on a push to 1340? The TRINQ shows no sign of turning to the upside, currently at .27, TICK.NQ is pulling back, currently +146. Yields are positive, FVX +3.3, TNX +2.7 and TYX +2.6.

  Steven Price   2/27/03,  11:05:29 AM
Swing Trade Signals
A move to Dow 7950 would touch on a descending trendline on the PnF chart. That move could come in anywhere shy of 8000 and still fit for short entries. I'm tempted to pull the trigger on a small short entry, but right now I don't have anything technical to back it up except yesterday morning's highs. I'm going to show a little more patience and hopefully not regret doing so.

  John Seckinger   2/27/03,  10:58:55 AM
The Dow was in a possible range from 7790 to 7854 until 10:30 a.m. Usually, the market(s) will double this range on a breakout move. This puts the Dow at 7918.

  Linda Piazza   2/27/03,  10:57:50 AM
CSCO ended the day yesterday sitting squarely on its simple 200-dma. Today, CSCO has moved above that moving average and now trades exactly at its simple 50-dma at 13.88. Above this level rests its exponential 200-dma at 14.18.

  Steven Price   2/27/03,  10:57:13 AM
Swing Trade Signals
We took out yesterday afternoon's resistance, but failed below the morning high of 7925. We have dropped back below 7900, but I really don't have a decent enough handle on just how far this rally could last. I'd like to see another run at Dow 8000/SPX 850 to get short and if we don't stop there, then resistance at 8050 or 8150. Not sure if I'll get it - this could be my best entry, but I see no reason to jump in and force things.

  Linda Piazza   2/27/03,  10:53:52 AM
Having just reached a high of 425.53 before falling back to the current level of 424.66, the OEX traded within a quarter of yesterday's high of 425.75 and only a penny above Tuesday's high of 425.52. Bears would like to see prices retreat from this area, while bulls want to see a close above these recent highs.

  John Seckinger   2/27/03,  10:51:06 AM
The Dow paused just above Tuesday's Pivot of 7909. Tuesday's Pivot was important going into Tuesday (my wrap title for Tuesday), and I am glad it still holds some significance. I would look for support on a pullback to the 7850 area; 50% of today's range and just above today's pivot.

  Jonathan Levinson   2/27/03,  10:50:23 AM
The April Crude contract is now up 4% to 39.20. There is clearly some disagreement in the markets, because rising oil is not bullish for stocks or the economy.

  Jeff Bailey   2/27/03,  10:49:47 AM
Dow Industrials (INDU) 7,896 +1.14% (+88 points) ... if bears are going to defend on near-term basis, this would be level to look for from pivot matrix WEEKLY pivot and DAILY R1.

  Linda Piazza   2/27/03,  10:46:45 AM
Turning to daily rather than hourly charts, I note that the OEX, now at 425.53, tests its 21-dma at 425.00. The SPX also tests it 21-dma, while the DJI lags, and the COMPX is already above this average.

  Linda Piazza   2/27/03,  10:42:21 AM
The $TRAN and the $BIX continue to trade above their 21-pma's on the 60-minute chart, while the $UTY has fallen back below this MA. The $SOX currently rises to within a point of this MA, with the 60-minute 21-pma for the $SOX currently at 287.04, also a level of historical resistance. As I type, the $SOX has risen just above that level now, at 287.09.

  Linda Piazza   2/27/03,  10:35:16 AM
An examination of the volume patterns showed a slight bullish cast to the numbers, although volume patterns might be distorted by the low volume. Adv/dec ratios are 1.76 for the NYSE and a neutral 1.07 for the Nasdaq. Up volume outranked down volume on both, with up volume almost twice down volume on the NYSE and about 2.8 times down volume on the Nasdaq. New highs still fall below new lows by a 17:37 ratio on the NYSE and a 20:26 ratio on the Nasdaq. Volume is only 191 million shares traded on the NYSE and 221 million on the Nasdaq.

  Jonathan Levinson   2/27/03,  10:32:26 AM
Gold is getting hammered, currentl 348.90/oz, with HUI -1.97 at 130.77 and XAU -1.13 at 70.07.

  Jonathan Levinson   2/27/03,  10:30:27 AM
The TRINQ is not rising at all, as the buying pressure continues to tip that indicator to the low end of its range, currently .31. My TRINQ chart looks very bottomy, but there's no sign of an upturn on any of the oscillators. In other words, it looks from here that the buying is very strong and not showing any signs of easing off. Note that the TRINQ, or "Arms Indicator" (for Dick Arms, its creator) is a very short term indicator. The COMPX has broken above the neckline, currently printing 1317 and coming up to 1318-20 resistance.

  Linda Piazza   2/27/03,  10:24:41 AM
Here was the potentially bearish triangle I was watching on the OEX, with the candlestick and historical support near 418 and with the descending top formed from yesterday's series of higher lows. The OEX has currently broken to the upside of that triangle, and has fallen back toward the top of the triangle. Watch for a close above the top of that triangle or a fall back into the formation. Link

  Steven Price   2/27/03,  10:24:08 AM
Swing Trade Signals
Big reversal off the Iraq news and the possibility that we will be lowering the terror alert level. However, we again failed below Dow 7860. I wouldn't be too worried about shorts here, but I'm not so confident to jump in yet with the current risk/reward. Shorter term traders may want to watch the futures monitor for intraday signals.

  John Seckinger   2/27/03,  10:23:50 AM
That was definitely one 'interesting' bid from under 7800. Definitely a bear trap, and I now want to see if there is resistance right above the daily high of 7854. If so, then I will back into the range trade mentality. I know Jim and Jonathon talk about the 'Plunge Protection Team.' Under 7800 would have been a good time to use their services.

  Jeff Bailey   2/27/03,  10:22:21 AM
Stocks lift back near session highs after CNBC reports that Homeland Security may lower "code orange" back down to "code yellow" by end of today.

  Jeff Bailey   2/27/03,  10:19:44 AM
Semiconductor Index (SOX.X) 282.16 +0.24% ... modest gains here. WR Hambrecht gave a 2003 outlook for WLAN and highlights substantial market share held by Intersil (ISIL) $14.86 +0.8% Link and sees a "migration" to backwards-compatible 802.11g products being significant in 2003. The report also spoke favorably on BRCM Link and its aggressive product development and Atheros dual mode solutions in a highly competitive environment.

  Linda Piazza   2/27/03,  10:16:00 AM
So far, the $TRAN and $UTY remain above their 21-pma's on their 60-minute charts, while the $BIX remains just cents below its 21-pma on that chart. By this measure alone, these important indices are showing relative strength as compared to the others. Bears should remain cautious until these levels fall, too.

  Jonathan Levinson   2/27/03,  10:14:17 AM
The President's economic advisor, Glenn Hubbard, has just announced his resignation. He is credited with structuring the President's proposed incentive plan: Link

  Jonathan Levinson   2/27/03,  10:12:47 AM
The opening put to call ratio is .56, which is awfully low for hopeful bulls.

  Linda Piazza   2/27/03,  10:12:00 AM
On the OEX chart, I'm still watching midline candlestick support at 418.75, formed from a larger-than-normal five-minute candle on Tuesday. That level comes near historical support at 418, lending the 418-418.75 area credence. In addition, yesterday's trading formed a series of lower highs on the five-minute chart, creating a potentially bearish right triangle. That potential won't be fulfilled until or unless the OEX breaks and closes below 418, however, with an upside breakout currently coming just below today's highs.

  Jeff Bailey   2/27/03,  10:10:42 AM
10-year YIELD ($TNX.X) 3.757% .... edges up from session low YIELD of 3.748% here, and rebound comes from yesterday's session low. Short-term equity index trader makes "the tie" between similar lows of YIELD and equity index lows at this point.

OK... I'm not going to give minute by minute analysis of 10-year YIELD and QQQ, but you can see what's going on right now between the two, and how day-trader's might be able to take advantage.

  Jonathan Levinson   2/27/03,  10:09:42 AM
New home sales down 15.1% in January.

The fed has added 7.5B via ON/RP for a net addition of 3.25B. Al Green is reiterating the economic threat of mass retirements of the baby boomers over the next 10 years, first noted in his testimony before Congress.

  Jonathan Levinson   2/27/03,  10:08:12 AM
The COMPX failed at the 1313 neckline of our 10 minute h&s pattern, and found support at 1305, which is the top of Tuesday's trading range. The TRINQ continues to reflect strong buying pressure at .39, and until the 1295-1305 range gets taken out to the downside, we will be looking at a short term range of 1305 to 1313, with upside resistance at 1318-20, then 1332, then 1340.

  Jeff Bailey   2/27/03,  10:08:02 AM
New Home Sales for January fell 15.1% to 914,000 annual rate. Was weaker than the 1,050,000 annual rate economists had forecasted.

  Steven Price   2/27/03,  10:07:23 AM
Swing Trade Signals
Bears need to keep an eye on the COMP, which is still holding above 1300. A move back below 1300, now that we got our 5 min close below 7800 will look awfully bearish. As I typed the Dow moved back over 7800 as Iraq confirms the Egyptian media report that they will destroy missiles. VIX just positive now.

Current levels: Dow 7818/COMP 1309/SPX 829.63/ OEX 419

  Jonathan Levinson   2/27/03,  10:05:21 AM
April crude futures are up 2% so far today. Here's a fictitious look at prices at the pump: Link

  Jeff Bailey   2/27/03,  10:03:51 AM
QQQ $24.28 and now at DAILY 61.8% retracement. I tried to get a short entry at $24.45, but missed it and QQQ has "caught up" with 10-year YIELD here.

Dow Industrials (INDU) 7,798 -0.1% also doing a bit of "catch up" after testing its DAILY pivot of 7,842 near the opening 5-minutes of trade.

  Steven Price   2/27/03,  10:03:16 AM
Swing Trade Signals
It appears the bottom is falling out after poor home sales data. 7800 did not hold and if the current candle finishes at current levels, we will have the 5 min close below that level.

  Steven Price   2/27/03,  9:58:57 AM
Swing Trade Signals
While everything looks good for shorts so far, notice we did not get a 5 min close below Dow 7800 yesterday afternoon. The closest we came was 7800.39. A 5 min close below that level will be the next significant support break.

  Jeff Bailey   2/27/03,  9:56:11 AM
10-year YIELD ($TNX.X) 3.762% and edging lower (buying in bonds). QQQ 24.38 starting to give back some early bullishness from DAILY pivot of $24.45.

  John Seckinger   2/27/03,  9:56:10 AM
I do think that if the Dow goes negative, then it is going to be very hard for bulls to remain interested. Since the 7830 level was taken out, this was a signal for us to test the 7807 level. It is interesting that the first five-minutes' range can not been taken out just yet. Clearly an indecision time for traders. If we got a move just above the 7854 area after the first five-minutes, then we could call this move lower an "open Test Drive" session. Now it is simply range bound, but testing the bottom of the range.

  Linda Piazza   2/27/03,  9:56:08 AM
A scan of charts shows that most indices have pulled back from their test of their 21-pma's on their 60-minute charts. Exceptions, and notable ones, are the $TRAN and $UTY, but both those indices appear to be pulling back a little, too, while remaining above those averages as I type.

  Linda Piazza   2/27/03,  9:52:43 AM
While most indices have tested or even moved above their 60-minute 21-pma's this morning, the SOX (and, by extention, the NDX) has not yet approached its 21-pma on the hourly chart. That 21-pma is at 287.48, near historical resistance. The SOX is 284.68 as I type.

  Steven Price   2/27/03,  9:49:43 AM
Swing Trade Signals
That last 5 min candle took out this morning's relative low and so far I have seen nothing to make me anything but bearish. 5 and 10 yr yields both in the red, as well. So far VIX has dropped slightly on the move higher this morning.

  Jonathan Levinson   2/27/03,  9:49:25 AM
The TRINQ has "rallied" all the way up to .34, while the TICK.NQ has sunk to -51. There remains strong buying pressure in the COMPX.

  John Seckinger   2/27/03,  9:48:41 AM
Note: New Home Sales and Help-Wanted Index at 10 a.m. January Home Sales are expected to fall from 1.082 mln to 1.05 mln units. The Help-Wanted index is expected to rise from 39 to 40.

  Jonathan Levinson   2/27/03,  9:45:21 AM
If you look at the 10 minute COMPX candles, you'll see a head and shoulders top, with the head peaking just above 1330 and the neckline roughly right here at 1313. The downside projection would therefore be around 1295. Did yesterday's low fulfil it? This seems to be the question with which the market is currently struggling.

  Jeff Bailey   2/27/03,  9:44:42 AM
10-year YIELD ($TNX.X) 3.772% ... from Index Trader Wrap ... finding some early morning YIELD resistance at our DAILY 61.8% retracement. This "should have" QQQ near its 61.8% retracement of $24.28 (QQQ is $24.49 here) on correlative basis.

It's important to ALWAYS trade your underlying security and honor its chart, levels and YOUR trading plan. However, current analysis is that we may be seeing some early "short covering" in QQQ right now.

  John Seckinger   2/27/03,  9:43:22 AM
The pullback was only to 7832 and not the 50% level of 7830; found based off the first five-minute period (9:37 post).

  Linda Piazza   2/27/03,  9:41:29 AM
I speculated yesterday afternoon that if the OEX managed to hold 418 at the end of the day, it might then run up to test next resistance this morning. It's currently doing that, testing the 60-minute 21-pma at 420.82 and the historical resistance near 422. Above that is historical resistance near 423.75.

  Steven Price   2/27/03,  9:39:58 AM
Swing Trade Signals
Sure enough, that rally stopped dead below the 7860 resistance level from yesterday afternoon. My guess is down from here, but without stronger resistance above, only aggressive shorts should be targeting these levels, or possibly those playing for a smaller move down to recent support.

  John Seckinger   2/27/03,  9:37:11 AM
With the first five-minutes behind us in the Dow, the range is from 7807 to 7854. Bulls would like to keep prices at least above 50% of this retracement, or 7830. Note: Today's pivot is at 7842.

  John Seckinger   2/27/03,  9:34:49 AM
Yesterday after the close, when the bullish percent figures were unchanged to higher in the DJIA, NDX, and SPX despite lower prices, I definitely took a bullish spin in my wrap. This is "relative internal strength." The indicators can be found at stockcharts.com at $BPNDX, $BPSPX, and $BPDJIA (or $BPINDU).

  Linda Piazza   2/27/03,  9:33:46 AM
In Europe, the FTSE remains under the 3600 level and the DAX remains under the key 2500 level. As I type, the FTSE 100 is down 14.60 points, the CAC 40 is up 19.61 points, and the DAX is near days highs, up 32.26 points.

  Jonathan Levinson   2/27/03,  9:31:09 AM
10 point gap up on the COMPX to 1313, TRINQ .15, QQV +.45 to 40.59.

  John Seckinger   2/27/03,  9:28:09 AM
Intra-day Pivot/Levels for Thursday (02/27/03)...

INDU : S2= 7710, S1= 7759, P= 7842 , R1= 7890 , R2= 7974

SPX : S2= 818, S1= 823, P= 831, R1= 836, R2= 845

OEX : S2= 413, S1= 416, P= 421 , R1= 424, R2=428

NDX : S2= 955, S1=965, P= 983, R1=993, R2=1011

QQQ : S2= 23.71, S1= 23.97, P= 24.45 , R1= 24.71, R2= 25.19

  Jeff Bailey   2/27/03,  9:27:01 AM
The 9:00 AM Intraday Update has been posted. Link

  Steven Price   2/27/03,  9:21:39 AM
Swing Trade Signals
With the bump in futures this morning, we are pretty much in the center of the recent range, with support at 7700 (and 7630 below that) and resistance at 8050. I 'm not sure I see enough risk/reward from these levels to enter. One pattern that has not changed recently is the failure of each rally, eventually running out of gas and heading lower.

Yesterday's rollover following Tuesday's intraday reversal certainly looks bearish, especially considering the VIX (37%) has room to hit 40% on a further decline and also the fact that 5 and 10-year yields remain negative (although they have bounced from lower levels this morning).

Aggressive shorts may want to view this morning's bounce as an entry point if it fails around yesterday afternoon's failed rally at 7860, but I think I am going to wait for a higher percentage entry point.

  Jonathan Levinson   2/27/03,  9:04:10 AM
The US Dollar Index is cranking back up again, now 99.55. Either Dr. Bernanke has just administered some adrenaline (stat!) or its due to speculation that Iraq will destroy its weapons as just mentioned in a wire release. QQQ has made it up to 24.43, off its high a few moments ago at 24.49. Yields have gone flat.

  Jonathan Levinson   2/27/03,  8:57:13 AM
The fed has 3B in 28 day repos expiring today, and 4.25B in overnight repos. The expiring 28 day repo has just been renewed this morning, and we await the 10AM announcement for the remaining 4.25B.

  Linda Piazza   2/27/03,  8:56:28 AM
European markets have moved up since the release of the U.S. economic numbers, with the FTSE 100 currently up .60 points, the CAC 40 up 26.73 points, and the DAX up 31.60 points. The FTSE remains just under the important 3600 level, and the DAX remains just under the 2500 level.

  Linda Piazza   2/27/03,  8:36:05 AM
As had been rumored, the Durable Goods number showed more strength than had first been expected. The January Durable Goods orders were up 3.3%. Jobless claims, however, were not so positive, being up 4,000 to 399,750. Initial claims were up 11,000 to 417,000. Futures have initially bumped up on the durable goods number.

  Jonathan Levinson   2/27/03,  8:33:42 AM
The US Dollar Index got croaked last night, and is currently trading just north of 99.30. The US Dollar had its worst showing against the yen in 6 months. Gold, however, is trading just over 354/oz, not really benefitting from the move, presumably due to the strength in Japan. Bonds have just opened green, with yields in the red, FVX -2.6, TNX -2.2 and TYX -.6 bps. QQQ is trading up a dime from its close, now at 24.33. The markets look set for weakness, but then, this has preceded each of the monstrous flag-pole rallies we've seen for the past two weeks. Will this time be different?

  Linda Piazza   2/27/03,  6:37:27 AM
Good morning. By midmorning in Thursday trading, declines in banking stocks drove the Nikkei to 8266.97, below last November's 20-year closing low. By the end of the session, however, the Nikkei had bounced from those lows to close flat, up 2.57 points or 0.03%. Sumitomo Mitsui led the banking stocks lower in early trading, on concerns that it will sell more preferred shares. Last week, Sumitomo Mitsui promised to gift investors buying preferred shares with extra shares when they convert to common stock if the bank's shares had fallen further before the conversion occurred. They promised to compensate for 40-50% of any losses. At the time, the move was labeled "desperate." Then, yesterday, the bank said it would increase the share sell by 15%. Another bank, Resona Holdings, also announced plans to sell new stock. Fears of a financial crisis escalated on the news. By the end of the session, however, Mizuho Holdings, another troubled Japanese bank that had plummeted since disclosing its own problems earlier in the month, had gained on the session. Some exporters also declined as the yen strengthened against the dollar. Crude oil was rising after a U.S. Energy Department report that said oil inventories were low, raising fears that crude oil prices could rise drastically if the U.S. attacks Iraq. Some Asian markets, such as South Korea, import all their oil supplies and could be severely impacted by further rises. The news that North Korea had restarted a nuclear reactor also impacted Asian markets.

Major European markets trade flat, too, but that statement masks the action behind current levels. Most of these markets began by trading up, then fell sharply into negative territory, and are currently climbing toward yesterday's closing levels. Echoing Japanese developments, German bank HVB Group reportedly plans to sell convertible bonds to increase its capital, Bloomberg says in an unconfirmed report. Yet another European insurer, AXA SA, cut its dividend today, dragging other insurers down, too. One insurer that gained, however, is Zurich Financial. Having also reduced its dividend, Switzerland's largest insurer said it will make a profit this year. In addition, Nestle, the world's largest food maker, reported lower-than-expected profits. As of this writing, the FTSE 100 trades up 2.60 points or 0.07%, the CAC 40 trades down 8.24 points or 0.31%, and the DAX trades down 2.05 points or 0.08%.

  Jeff Bailey   2/26/03,  1:24:41 AM
The Index Trader Wrap has been posted: Link

  John Seckinger   2/26/03,  1:24:34 AM
The Futures Trader Wrap has been posted: Link

  Steven Price   2/26/03,  1:23:53 AM
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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