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  Jeff Bailey   3/3/03,  6:02:32 PM
Pivot Analysis Matrix for tomorrow. Link

WEEKLY R1s held resistance just before the ISM data was released. This become the "early wall of resistance" for a bullish breakthrough in my opinion.

Early tomorrow morning, traders will look for correlative resistance in the Dow near DAILY, WEEKLY and MONTHLY pivots of 7,880, 7,876, 7,890. Interesting that DAILY Pivot of 7,880 and MONTHLY pivot 7,890 become a "zone of resistance" tomorrow, and similar perhaps to a "zone of support" that was broken and closed below today. Therefor, this is early level for traders to monitor tomorrow.

I've "dashed" in PINK the SPX WEEKLY S1 as first level of support, should Dow Indu struggle between 7,880-7,890 in early going. Here I see correlative support at WEEKLY S1 and 61.8% retracement of 823.61 from MONTHLY pivot analysis retracement. (will discuss this observation in tonight's Index Trader Wrap).

 
 
  Linda Piazza   3/3/03,  4:08:11 PM
At 23.90, GE closes the day just under an August-to-present descending trendline and the simple 50-dma at 24.11. RSI appears to be rolling. The 21(3)3 stochastics may not yet have begun rolling, although they’ve definitely flattened high in overbought territory, and the 5(3)3 stochastics move quickly up to overbought levels. If GE should manage to break above this trendline, an even longer-term descending trendline is only a point above current levels. OBV had turned up in mid-February, but from historically low levels, and appears to be rolling down a bit again. If GE should manage to push above both those trendlines, traders might then watch for a move above 28, but that move would require breaking above a P&F bearish resistance line, and daily stochastics don’t promise a lot more strength left in the current move.

 
 
  Linda Piazza   3/3/03,  3:57:05 PM
At 34.19 as of this writing, the VIX’s real body sits nearly exactly between the exponential 200-dma at 33.38 (today’s VIX open was 33.50) and the exponential 100-dma at 34.23.

 
 
  Jeff Bailey   3/3/03,  3:54:50 PM
The 3:15 PM Intraday Update has been posted. Link

 
 
  Linda Piazza   3/3/03,  3:51:47 PM
The afternoon drop pushed decliners ahead of advancers on the NYSE as well as on the Nasdaq, which had shown more decliners this morning, too. Adv/dec ratios are .89 for the NYSE and .70 on the Nasdaq. Down volume is more than twice up volume on the NYSE and more than four times up volume on the Nasdaq. New highs remain above new lows on both the NYSE and the Nasdaq, however. Volume currently measures 991 million shares traded on the NYSE and 1 billion on the Nasdaq.

 
 
  Jonathan Levinson   3/3/03,  3:50:18 PM
The COMPX bounce has so far been just 4 points, and can't get beyond 1320 for the moment. The TICK.NQ at -82 isn't very low, and could be telegraphic a move higher from here. For the moment, thoughm the current level continues to hold.

 
 
  Steven Price   3/3/03,  3:44:12 PM
Swing Trade Signals
We got an awfully big bounce on the 5 min chart off of Dow 7825. With the numerous bounces off 7800 last week, it looks like that will be our next key support level. Resistance at Dow 7850/SPX 835 would be bearish and so far those levels are turning back the rally. Conservative traders can think about lowering the stop to the break-even level of 7940.

 
 
  Jonathan Levinson   3/3/03,  3:42:49 PM
The COMPOX is back at 1320, TRINQ holding high at 2.86. The loft on this bounce off the lows will give us a good idea of the tone to expect for tomorrow.

 
 
  Linda Piazza   3/3/03,  3:34:13 PM
If the OEX should continue to decline in the last 30 minutes, traders should be aware that several levels of support come together at 418-418.75. Historical support and support from the rising trendline from February 13 to the present join there. Last week, the OEX found support in that area on Wednesday’s declines. If the OEX does not break through that level by today’s close, a bearish trader must assess the possibility that the OEX could bounce from that level and come back to retest the January-to-present descending trendline. I view today’s developments as bearish, with the OEX repeatedly testing and failing at that trendline, and would expect the OEX to fail once again if it did retest that descending trendline, but traders should assess all possibilities when deciding whether to hold overnight.

 
 
  Linda Piazza   3/3/03,  3:28:08 PM
Here’s a synopsis of the February car sales information: GM reported a 19% decrease in February sales, and reported that it would cut North American production by 10%. Ford’s February sales were flat. DaimlerChrysler’s sales fell 4.5%. These declines came despite a 9.8% increased spending on incentives.

 
 
  Jonathan Levinson   3/3/03,  3:25:09 PM
My pleasure, Mark.

 
 
  Mark Phillips   3/3/03,  3:20:55 PM
Thanks for addressing the RGLD issue in my absence Jonathan. Much Appreciated!

 
 
  Mark Phillips   3/3/03,  3:20:24 PM
My charts have been down for most of the day, but it looks like we hit a couple of the better targets in those comments in the first hour.

AMGN surged to a high just below $55 and then spent the rest of the day drifting back towards support. Support for the stock keeps moving higher and a dip and bounce in the vicinity of $53 looks goood for new entries ahead of the eventual breakout over resistance.

Much to my surprise, ATK finally broke down today. It seemed that $47.50 support would never give way, but today things changed. The ascending channel on the RS chart finally gave way and ATK finally broke to new lows, trading as low as $46.44 before catching a minor bounce. For those that decided not to enter on the breakdown, new entries may be viable if the stock now finds resistance at that former support.

 
 
  Jonathan Levinson   3/3/03,  3:19:46 PM
QQQ low of the day here, as COMPX touches 1318 support. The TRINQ shows moderate selling pressure at 2.72, TICK.NQ -181. FVX closed down 2.5 near its LOD. HUI is now -4.12, XAU -2.13.

 
 
  Linda Piazza   3/3/03,  3:14:15 PM
That Fort Hood Cavalry Division Jonathan mentioned will be landing in Kuwait, but was originally slated to be sent to Turkey before Turkey's vote on Saturday. Their supplies and machinery have been waiting in ships just off Turkey's coast.

 
 
  Steven Price   3/3/03,  3:09:57 PM
Swing Trade Signals
PnF reversal down in th eSPX comes at 835. It is currently trading 835.42, with a low of 835.10

 
 
  Jonathan Levinson   3/3/03,  3:09:12 PM
The US Army's 1st Cavalry has been ordered to the Gulf: Link

 
 
  Linda Piazza   3/3/03,  3:07:49 PM
After having traded as high as 2600.76, nudging above the 2600 for the middle of the trading day, the German DAX closed up only 2.60 points, at 2549.65. This kept the DAX below the 21-dma at 2617 and also below a S/R level at 2564.

 
 
  Steven Price   3/3/03,  3:06:12 PM
Swing Trade Signals
Those 7850/COMP 1319 levels discussed earlier are still holding with intraday lows of... 7850 and 1319.

 
 
  Jeff Bailey   3/3/03,  3:05:40 PM
U.S. Spy Plane Update ... According to Dow Jones, the intercept between North Korean jets and U.S. spy plane took place over international waters this weekend. Dow Jones cites a report by MSNBC earlier today.

Late Friday, North Korea "complained" that the U.S. made 180 spy plane flights in February. Link

 
 
  Linda Piazza   3/3/03,  2:54:52 PM
So far, the SOX is following its usual pattern of late, rolling down from today’s touch at the top of the descending regression channel and from its test of levels near the exponential 100-dma at 304.21. Daily RSI has turned down again from overbought territory. Daily 21(3)3 stochastics may be turning down, too, but its movements are more difficult to decipher. Last week, the 280.90-281.40 areas provided support for the SOX on any downward movements, so watch that level for potential support again, as that might be a level from which the SOX would try to bounce up again. Also, the simple 21-dma lies just below that at 278.72.

 
 
  Jeff Bailey   3/3/03,  2:50:04 PM
Breaking news ... reports hitting news wires that North Korean jet fighters intercepted a U.S. spy plane. Dow=-40, SPX=-5.32, OEX = -2.7, NDX=-17.5, QQQ= -$0.49.

 
 
  Steven Price   3/3/03,  2:45:53 PM
Swing Trade Signals
Note to traders: I will be on vacation Thursday through Monday and I haven't determined exactly how I will handle the position. It is still three days away, and I will have to judge the proper course of action when we get closer. However, I will not be giving official signals on those days, so any stops I leave with that are still in place will be left there. I will highlight what I see before I leave and how I would trade the position if I still have one on at that time.

 
 
  Jonathan Levinson   3/3/03,  2:42:13 PM
Good catch, Jamil!

NEW YORK, March 2 (Reuters) - Shares of Royal Gold Inc. (NasdaqNM:RGLD - News), which acquires and manages precious-metal royalty interests, appear overvalued as they trade at 65 times earnings and 30 times trailing sales, financial newspaper Barron's reported. Assuming gold prices remain constant at $350 an ounce and using discounted cash flow models, Denver-based Royal Gold's share price is worth only $4.59 a share, Barron's reported, citing a source familiar with Royal Gold but short on its stock At $400 an ounce for gold, the company would be worth only $5.14 a share, Barron's reported, citing the source. The company's stock closed at $19.45 a share on Nasdaq on Friday. Royal Gold did not immediately return a call seeking comment.

 
 
  Linda Piazza   3/3/03,  2:38:36 PM
Currently trading at 423.43, the OEX trades below its 60-minute 21-pma at 424.67. The OEX also moved below the green bearish rising formation I’d pictured in my earlier chart, and also back below the descending trendline from late January. It wouldn’t be unusual for the OEX to rise and retest that broken green trendline. A move below light support at 423 might mean that it would first fall to retest the rising red trendline instead. Link

 
 
  Steven Price   3/3/03,  2:36:24 PM
Talk about a lack of decisiveness - No Dow stocks moving more than $1

 
 
  Steven Price   3/3/03,  2:33:39 PM
Swing Trade Signals
Yields continue to move sideways and are giving us no real indication as to whether this sell-off is for real. Similar to what we saw on the last bounce over Dow 7900.

 
 
  Jonathan Levinson   3/3/03,  2:27:20 PM
Any comments on RGLD (Royal Gold)?

I don't read Barron but looks like there was an article bashing it and it is whacked!!

Here's a great example of how undercapitalized the miners actually are- a bad word from Barrons and the stock is down 28%. Note that Barrons arrived very late in the move, as the stock had already come down approx 9$ off its highs above 28$. I have no idea whether the author of the piece was short or not, but the wave of selling has brought the stock down to support in the 13.75 area on the weekly candles. If this level fails, I would look for next support at 10. As I do not follow RGLD, I can't comment on the fundamentals- however, the move is putting a big hurt on the HUI, which is down 3.24 despite relative strength in gold.

 
 
  Steven Price   3/3/03,  2:26:21 PM
Swing Trade Signals
we are seeing new intraday lows and the next important level of support I see in the Dow will be 7850. We bounced there on Friday, so that should tell us just how much conviction the bears have. I also expect support at COMP 1319.

Current levels: Dow 7865/SPX 837.42/OEX 423.40/COMP 1323

 
 
  Linda Piazza   3/3/03,  2:25:14 PM
I'm flying blind without Q-charts, but at 423.59 as I type, the OEX is at today's lows and has broken below the series of higher lows.

 
 
  Jeff Bailey   3/3/03,  2:21:34 PM
The 1:00 PM Intraday Update has been posted. Link

 
 
  Kent Barton   3/3/03,  2:11:31 PM
Having some issues with Q-charts? You're not alone. We haven't been able to get a feed here at the office for about 15 minutes.

 
 
  Kent Barton   3/3/03,  1:55:58 PM
General Motors (GM) $33.46 -0.31: Reporting a 19% decline in total U.S. sales for February. Earlier today Ford said its sales were unchanged.

 
 
  Jonathan Levinson   3/3/03,  1:54:09 PM
The COMPX is finding support at 1328, low of the day 1326. FVX is down 1.8 bps, off its lows, and the TRINQ is at 1.82, off its highs. TICK.NQ -43, neutral, while HUI and XAU extend their losses, -2.89 and -1.65 respectively.

 
 
  Steven Price   3/3/03,  1:41:47 PM
Swing Trade Signals
We continue to bounce off SPX 840 and if our short position is going to work for us, we'll need a break below that level to get us rolling. The Dow came back to just above unchanged, but has bounced back over 7900.

Current levels: Dow 7900/OEX 425.47/SPX 840.83/COMP 1327.23

 
 
  Kent Barton   3/3/03,  1:34:16 PM
GSO.X Software index (102.75 -0.45): That intraday semiconductor weakness that Jeff touched on in his 13:00 post is starting to take its toll on the GSO. A glance at the daily chart shows that the index has traded a nice pattern of higher highs and higher lows over the past three sessions. Intraday rallies have been rejected by the rising 100-dma (currently located at 104.70), while the falling 200-dma (103.03) has acted as a price magnet.

On the SOX, we're looking at a possible reversal from psychological resistance at 300. An extension of this sell-off would make it tough for software bulls to maintain the current uptrend in the GSO.X. The index has underlying support at 100 and 102.

 
 
  Linda Piazza   3/3/03,  1:30:12 PM
What do volume patterns show today? Advancers lead on the NYSE, but advancers and decliners are in a dead heat on the Nasdaq. Up volume trumps down volume on the NYSE, but down volume is 1.75 times up volume on the Nasdaq. New highs outnumber new lows on both. Total volume is 645 million shares on the NYSE and 710 million on the Nasdaq.

 
 
  Linda Piazza   3/3/03,  1:15:34 PM
Here are the two formations I’m watching on the OEX 60-minute chart. Notice how the OEX again moved above and then back below the descending red trendline this morning, as it's done several times since the end of January. Note also that, as it was moving above that trendline this morning, the 21(3)3 stochastics were breaking below an ascending trendline, providing warning that the move might not be sustained. The green rising formation is usually a bearish type of formation, but that won’t be proven until the OEX breaks below the bottom green line, currently crossing just at the 21-pma at 424.43. If that happens, I would next watch for the OEX to move down to test the bottom red line. A move above 432 would instead be an upside breakout of both formations. Link

 
 
  Jonathan Levinson   3/3/03,  1:11:11 PM
I hate to be premature, so that said, it looks like that 30 minute trendline is getting taken out to the downside with the COMPX currently at 1331.

 
 
  Jeff Bailey   3/3/03,  1:00:48 PM
Semiconductor Index (SOX.X) 291.91 -1.92% ... has set intra-day downside alert here at 292.00, which is 200-pd SMA on 5-minute chart. Had been support Thursday afternoon on pullback to 286. Alert to some further softening in tech, as SOX tends to impact psychology.

QQQ $24.95 -0.83% approaching its 200-pd SMA on 5-minute chart of $24.92.

 
 
  Jeff Bailey   3/3/03,  12:59:01 PM
Kevin Depew from Dorsey/Wright & Associates discussing Yahoo! Inc. (YHOO) $20.29 -2.68% p/f chart Link on Bloomberg TV. Looking for pullback entries on "strongest name" in Internet sector.

 
 
  Jonathan Levinson   3/3/03,  12:55:03 PM
That support line is being tested again, but it takes more than a 2 point move on the 30 minute COMPX to take out a week-long support line. TRINQ 1.18, TICK.NQ -291, FVX -2 bps.

 
 
  Jonathan Levinson   3/3/03,  12:42:38 PM
We see COMPX support on the lower ascending trendline of a bear flag on the 30 minute candles. It is indeed high lows since Feb 25 seen on that timeframe.

 
 
  Steven Price   3/3/03,  12:38:56 PM
Swing Trade Signals
We have seen a series of higher highs and higher lows on an intraday basis in the equities, since testing our lows this morning. A slow creep back to the day's highs would look more bullish than this morning's spike. Yields have moved sideways for the last hour. Does that tell us that now that the treasury buying is done traders are moving back into stocks? Or that the rally has not received confirmation from the bond market? Right now evidence suggests the former, but we can't discount the latter either. For the moment that Dow 7925 level is not providing a ceiling.

Current levels: Dow 7929/COMP 1335/OEX 427.35/ SPX 844.32

 
 
  Jonathan Levinson   3/3/03,  12:29:42 PM
Thanks, Jeffrey! Here's the link to the story of Iraqi allegations that the US and UK killed civilians in an air raid in Basra: Link

 
 
  Jonathan Levinson   3/3/03,  12:27:58 PM
The COMPX found support at 1331 and is now drifting higher at 1335, QQQ 25.02. Is this a bear flag on the 5 minute chart, a consolidation on the way down? Or is it preparation for a sudden flag pole rally back to the highs? The TRINQ is neutral at 1.05, TICK.NQ -56, QQV +1.44 at 39.93. FVX is near its lows down 1.8 basis points at 2.649%. HUI and XAU are both showing continued weakness despite the dollar weakness.

 
 
  Jeff Bailey   3/3/03,  12:25:54 PM
Ford (F) $8.16 -0.60% ... total U.S. sales for February were unchanged. Link

 
 
  Jeff Bailey   3/3/03,  12:20:37 PM
Dow Industrials (INDU) Here's a daily interval chart of Dow. Today's post-ISM data found support in "zone of support" between the WEEKLY and MONTHLY pivots. Link

Here's the p/f chart. Maybe we could have used this one as "triangle" pattern also! Link

 
 
  Linda Piazza   3/3/03,  12:08:22 PM
Currently at 426.85, the OEX again comes up to test that descending trendline, and perhaps the 430-432 resistance above that.

 
 
  Linda Piazza   3/3/03,  12:06:23 PM
It’s interesting to obtain different perspectives on the markets, and those perspectives can vary widely, as is typified by the comments made at the close of trading for the FTSE and CAC 40. (The DAX still trades.) On our version of CNBC, the comment was that finally the European markets had made some progress and significant gains. The headline comments on CNBC World were that the FTSE had fallen from its highs after the US economic data had been released and that the CAC had ended flat. In truth, both these markets closed about 30 points off their highs, with the FTSE 100 closing up 29.10 points or .6% and the CAC closing up 8.18 points or .3%. Currently, the DAX trades up 11.49 points, also off its highs.

Apparently the U.S./U.K. raid occurred in the no-fly zone overnight, with Iraq claiming that civilian sites were targeted. As these attacks occur with some frequency in the no-fly zone, it apparently hasn’t merited much notice here in the U.S., although it is being announced by European commentators.

 
 
  Jeff Bailey   3/3/03,  12:00:32 PM
QQQ quick look at QQQ with WEEKLY (blue retracement) and MONTHLY (red retracement) overlaid. Previious two weeks, WEEKLY S2 has been formidable support level under more bearish intra-day conditions.Link

 
 
  Jonathan Levinson   3/3/03,  11:57:05 AM
I've seen nothing either.

 
 
  Linda Piazza   3/3/03,  11:53:30 AM
Other than a “Breaking News” banner on CNBC World, I’m not finding any confirmation of that information about the Iraqi claims of a U.S./U.K. raid killing civilians, and the markets don’t seem to be reacting to the information.

 
 
  Jonathan Levinson   3/3/03,  11:46:06 AM
News that Saddam ordered the murder of an Iraqi missile engineer to prevent him passing vital information to United Nations weapons inspectors: Link

 
 
  Steven Price   3/3/03,  11:45:14 AM
Swing Trade Signals
The yields are catching bids (bond selling) as the Dow breaks back above 7900. Without any evidence of significant resistance below that number, it is tough to predict direction from here. Jim's timely exit on the Futures Monitor may prove the best trade of the day. The COMP still remains negative, but right now we just aren't getting many clear signals. Notice the bounce in the Dow came just two points above the weekly pivot of 7876.

 
 
  Linda Piazza   3/3/03,  11:42:18 AM
Breaking news on CNBC World is that Iraq says six civilians have been killed and 15 wounded in a U.S./U.K. raid.

 
 
  Jeff Bailey   3/3/03,  11:35:49 AM
The 11:00 AM Intraday Update has been posted. Link

 
 
  Jonathan Levinson   3/3/03,  11:30:28 AM
The US Dollar Index is printing what I'll call the Tijuana Cliff Dive formation, currently trading below 99.40. FVX is sliding lower, -1.7 bps on the day. Gold is also weak, reflecting the relative strength in the euro over the usd.

 
 
  Steven Price   3/3/03,  11:26:06 AM
Swing Trade Signals
The SPX is still holding a marginal gain, with the Dow/OEX/COMP in the red. RUT also slightly red. No real downside follow through, but I certainly wish I had added on the failure at Dow 8000. Yields finding some support here, but they were once again a nice signal for weakness in equities.

 
 
  Linda Piazza   3/3/03,  11:15:56 AM
Despite that single hourly close above the descending trendline from late January to the present, the OEX has now fallen under that trendline again. Since there have been temporary moves above that trendline on February 21, Friday, and then again today, there’s a temptation to redraw the trendline, encompassing the shadows of those candles. However, there’s always a danger in redrawing trendlines because it’s just too tempting to redraw them to fit the desired scenario. So far, despite the temporary closes above this trendline, it seems valid without being redrawn.

 
 
  Jonathan Levinson   3/3/03,  11:12:12 AM
The COMPX is breaking out to the downside of its rising wedge on the 60 minute candles. It's too early to relax, if it's even possible, but I see the formation projecting to COMPX 1300. FVX is now negative at -1.2 bps on the day, TRINQ neutral at .96, TICK.NQ -175, QQV +1.37 at 39.86.

 
 
  Linda Piazza   3/3/03,  10:54:01 AM
European markets are falling, with the CAC and DAX barely positive, and the FTSE currently up about 15 points on the day, far off the day’s highs.

 
 
  Linda Piazza   3/3/03,  10:48:22 AM
With a high of 302.06, the SOX has so far fallen short of its exponential 100-dma at 304.41, but perhaps came close enough that traders could consider this a test of that MA. In addition, that move tested the top of the descending regression channel that’s been capping the SOX’s rises for several months. The day is far from over, but so far, all is working as it has the last two times the SOX tested the top of that channel while the 21(3)3 stochastics were in overbought territory. A change in that pattern would be significant, then. One warning to bears, however, is that today’s rise above 300 created a double top breakout signal on the P&F chart.

 
 
  Jeff Bailey   3/3/03,  10:47:27 AM
S&P 500 Index (SPX.X) 843.52 +0.28% ... per this weekend's Ask the Analyst column. Today's trade at 850, then 852.34 "negates" the possibility for triangle formation to form. Not "major" technical event. Higher lows and now a equal high develops. A pullback to 830 would be "normal" and should we find that in coming sessions, would still have bulls looking for a bullish pattern at 855 in the "triple-top" buy signal. Still rather range-bound and looks to be trying to form a base. Link

 
 
  Steven Price   3/3/03,  10:46:44 AM
Swing Trade Signals
COMP fades all the way into the red. The Dow avoided a 5 min close below 7900, and I'd expect some type of bounce here, after the fade of the last 1/2 hour, but I can't seem to find many bullish signs. Support at 7900 might be one, though.

 
 
  Jeff Bailey   3/3/03,  10:41:53 AM
10-year YIELD ($TNX.X) 3.680% ... below Friday's low YIELD level of 3.692% and we've seen reversal from selling toward buying yet again. ISM Index is "obvious" reason for today's action, and to me, continues to advise cautioun toward equities.

 
 
  Steven Price   3/3/03,  10:40:32 AM
United Technologies (UTX) $58.00 -0.58 OI put play UTX continues to find support in the $57.75-$58.00 range. While the chart looks anything but bullish, I'd be looking for a break below $57.50 to enter new positions. It has already broken bullish support at $59, but so far the above levels have not given in.

 
 
  Steven Price   3/3/03,  10:36:34 AM
Swing Trade Signals
The bounce off 7912 in the Dow has taken us back into that previous resistance level at 7925 that we essentially opened above this morning. 7900 is the next level to watch on a breakdown. 7950 could be significant for bulls on a move back above. Conservative traders may want to use 7950 as a gauge as to whether to stay in the short play, now that we have moved back under that level.

 
 
  Linda Piazza   3/3/03,  10:36:34 AM
The OEX did manage an hourly close above the descending channel from late January, although it still trades within the (usually bearish) shorter-term rising pattern, and has fallen below the day’s highs. That high was 431.39, rising near 432 resistance. A fall below 427 would put OEX below that late-January-to-present descending line again if the fall occurs relatively soon. Since the line is descending, so is the support it would supposedly now provide the OEX. Today’s test of OEX 432 reinforces that level’s importance, so watch that level for next resistance.

 
 
  Jonathan Levinson   3/3/03,  10:31:34 AM
Support is at 1338, then 1334 COMPX, QQQ 25.

 
 
  Linda Piazza   3/3/03,  10:30:47 AM
At 33.84 as I type, the VIX also tests its exponential 200-dma at 33.37. For those of you who are interested, Jim’s wrap this weekend included an discussion of the VIX, with Jim including a point/counterpoint discussion of the VIX and the applicability of studying it from a technical analysis viewpoint.

 
 
  Jonathan Levinson   3/3/03,  10:27:47 AM
The ISM data showed employment and new orders down, prices paid up. This stagflationary picture has stemmed the bleeding in precious metals, with HUI now down 2.18 and XAU -1.24. The good news in the ISM data? Inventories fell.

 
 
  Mark Phillips   3/3/03,  10:27:37 AM
ATK $47.57 (-0.73) Back to testing support, shares of ATK finally broke down out of the relative strength channel with respect to the Defense index (DFI.X) tht we've been talking about for the past few days. The big questions now is whether the bears have enough conviction to drive the stock under the $47.50 level, which has proved to be stubborn support on three other occasions in the past 2 weeks. The early pop provided an opportunity for aggressive traders to open new positions as it faded just as quickly. As we've commented more than once over the past week, more conservative traders still want to see the $47.50 level break before playing.

 
 
  Steven Price   3/3/03,  10:27:11 AM
Swing Trade Signals
Interestingly, we got a bounce in yields, just as equities began to fade. However, the 10 and 5-year are in the red. The fade in yields was our signal last Friday that equities might run out of steam and so far they have been reliable today, as well.

 
 
  Jeff Bailey   3/3/03,  10:15:58 AM
Construction Spending in January rose 1.7%, which was well above the 0.4% forecast. December's previously reported 1.2% gain was revised upward to 1.5%. Strong numbers here partially offset the lackluster ISM data.

 
 
  Linda Piazza   3/3/03,  10:14:58 AM
At 14.14 as I type, CSCO again today challenges its exponential 200-dma at 14.13, having moved both above and below that level in today’s trading.

 
 
  Mark Phillips   3/3/03,  10:13:44 AM
SYY $26.90 (-0.22) New OI Put Play, SYY opened with a bang this morning. Driven by the positive open to the broad markets, the stock gapped up to the $27.50 level and promptly fell back from there. Now trading near Friday's intraday low, a continued drop below the $26.75 level can be used for new entries into the play.

 
 
  Linda Piazza   3/3/03,  10:11:38 AM
European markets saw a bit of a fade after the release of the 10:00 economic numbers, too, but nothing too telling as of yet. The FTSE had traded above 3700, but now falls back to 3694. The CAC now trades at 2784 and the DAX at 2583, both having fallen back after testing the next round number resistance, too.

 
 
  Jonathan Levinson   3/3/03,  10:08:01 AM
The fed has just choppered in a 7.25B overnight repo, which adds a new 1.85B from the expiring 5.4B. The put to call ratio came in at .57, showing a great deal of continued optimism for Al Green's anticipated infusion of funds and ISM data. Well, at least Al Green didn't disappoint. The COMPX really hasn't done much to the downside since 10:01AM, with the TRINQ still quite bullish at .58. FVX is coming down, though, now +.3 bps, and the TICK.NQ has finally gone negative.

 
 
  Steven Price   3/3/03,  10:06:01 AM
Swing Trade Signals
We got a bounce off Dow 7950/OEX 430/SPX 850, but the ten-year yield is now in the red.

 
 
  Steven Price   3/3/03,  10:03:38 AM
Swing Trade Signals
Getting a quick fade from the ISM data. A move below Dow 7948 could get us into fast-drop territory.

 
 
  Jeff Bailey   3/3/03,  10:02:21 AM
ISM Index Came in at 50.5% for February, which was below the 52.0% consensus. Levels above 50 are considered expansion, while levels below 50% signal contraction.

 
 
  Jonathan Levinson   3/3/03,  10:01:39 AM
ISM at 50.5 vs. 52 expected.

 
 
  Linda Piazza   3/3/03,  9:57:10 AM
The OEX has again moved above the descending trendline from late January. On February 21, the OEX had a couple of hourly closes above this trendline, but then moved back below the trendline. Last week, it tested the trendline, with several candles poking above it, but with no closes above it, at least the way I've drawn the trendline. Today’s move appears more substantial, however, and should put bears on alert. One problem with a bullish conclusion, however, is that resistance lies just overhead at 432, 436, and 440. Also, it’s possible to draw a completely different (usually bearish) rising formation on the OEX chart, and the OEX has not yet broken above or down from that separate formation.

 
 
  Mark Phillips   3/3/03,  9:57:07 AM
AMGN $54.94 (+0.30) Edging higher ahead of the morning's economic reports, AMGN trading a new multi-month high here and looking like it wants to continue higher. Each time AMGN has traded a new high lately, it has resulted in a return to test support at the ascending trendline. Will this time be different? Possibly, but only time will tell...

 
 
  Steven Price   3/3/03,  9:54:52 AM
Swing Trade Signals
Equities are touching new highs for the day and the SPX has made it over 850. COMP sitting right up against 1350 and the SOX holding just over 300. Yields have rolled over from highs of the day. I think the move over 850 in the SPX is bullish, but I'm not yet sure if we have simply stretched the rubber band or we are beginning to see a break. ISM out in 6 minutes and we could get a test of Dow 8000.

 
 
  Jeff Bailey   3/3/03,  9:50:55 AM
More economic data at 10:00 AM EST. February ISM Index (forecast 52.0) and January Construction Spending (+0.5% forecast).

 
 
  Jeff Bailey   3/3/03,  9:46:07 AM
Pharmaceutical Index (DRG.X) 288.87 +1.15% Link ... challenging for sector winner early on. SG Cowen things short-term bullish trading opportunity in Merck (MRK) $53.48 +1.4% Link in anticipation of this week's newsflows. Specifically, Cowen expects MRK to react favorable to two events tomorrow. First is closing of tender offer for Banyu (should be accretive by $0.03 and strengthens MRK's position in Japan). Cowen also expects a positive FDA advisory review for Emend (treats nausea and vomitiing post chemotherapy) as an add-on standard to therapy.

 
 
  Linda Piazza   3/3/03,  9:44:21 AM
At 70.46 as I type, the XAU slips just beneath its exponential 200-dma at 70.55, but appears to be rising to test it again. Although I’m watching all these factors, I wouldn’t draw too many conclusions about today’s actions ahead of the 10:00 economic numbers. All markets appear to be positioning themselves to either rally over key levels afterwards or fail from key levels afterwards.

 
 
  Steven Price   3/3/03,  9:42:14 AM
Swing Trade Signals
I must say I think the move above 300 in the SOX is troublesome for shorts. Also the fact that 7925 in the Dow provided no resistance whatsoever. So far the opening move is hlding ahead of the ISM data. As Jonathan pointed out, 1350 could be a crucial level for the COMP, as well.

 
 
  Jonathan Levinson   3/3/03,  9:38:01 AM
Linda's numbers coincide with COMPX 1350, which is fast approaching.

 
 
  Linda Piazza   3/3/03,  9:37:07 AM
As I type, the SOX peeks just over 300, at 300.68. The now-flattening exponential 100-dma lies just overhead at 304.50, and the SOX also now snugs up to the top line of a descending regression channel. The daily 21(3)3 stochastics are in overbought territory. So far since last November, the SOX has turned over each time it hits the top of that channel and the 21(3)3 stochastics hit overbought territory. Will this be the time that pattern changes? So far, there’s no evidence that it will do so, but that’s why we look at these patterns, to discern when they do change.

 
 
  Jonathan Levinson   3/3/03,  9:31:02 AM
7 point gap up open to COMPX 1344, TRINQ .76, QQV +2.41 to 40.9, FVX +2 bps.

 
 
  Jeff Bailey   3/3/03,  9:30:55 AM
QQQ $25.16 ... ticking higher at $25.27 in pre-market trade. Quick work with "new" WEEKLY and MONTHLY retracement show "zone of support" from $25.08-$25.10, and "zone of resistance" from $25.52-$25.56.

 
 
  Jeff Bailey   3/3/03,  9:28:28 AM
The 9:00 AM Intraday Update has been posted. Link

 
 
  Steven Price   3/3/03,  9:22:08 AM
Swing Trade Signals
We are currently short a 1/2 position with the stop set at Dow 8170. More conservative traders can use a stop either just above recent rally highs at Dow 8060, or Friday's high - possibly at 7970. I'll be watching the treasury yields, which looked very weak on Friday, to see just where any bounce might fail. Because we will be seeing an opening rally on the Turkish vote and missile destruction (it appears), simply closing the position on the open would me the most conservative approach and I wouldn't argue with traders simply looking to close. I can see adding to it at previous resistance around 8000, or 8050. That might change if I see some real bullishness in yields and I may simply close out and look to re-enter on a move higher, but right now the yields are showing only a small bounce.

 
 
  Linda Piazza   3/3/03,  9:09:45 AM
European markets continue to move up today, with the FTSE 100 currently up 42.10 points or 1.15%, the CAC currently up 36.18 points or 1.31%, and the DAX currently up 45.73 points or 1.80%. At 3697.70 as I type, the FTSE will soon face strong resistance at 3750. This resistance results from the simple 50-dma at 3749.06, a descending trendline in place since last July, a broken short-term ascending trendline that the FTSE now rises to test from the underside, and historical resistance/support. A move through that level would appear bullish for the FTSE. Currently on a sell signal, it has exceeded the target of its original sell signal, but has not produced a buy signal. At 2790.25 as I type, the CAC soon will soon test round-number resistance at 2800 and its 21-sma, just overhead at 2817. It now tests historical resistance in its current area. At 2592, the DAX also faces round-number resistance just overhead at 2600, as well as its 21-sma at 2617. Today appears to be a pivotal day for many markets worldwide, as many benchmarks trade just under next resistance levels.

 
 
  Jonathan Levinson   3/3/03,  8:50:13 AM
The CFO of COF has resigned after receiving notice that the SEC may charge him with insider trading: Link

 
 
  Jonathan Levinson   3/3/03,  8:40:53 AM
The fed has 5.4B in weekend repos expiring today. The announcement is due at 10AM.

 
 
  Jonathan Levinson   3/3/03,  8:39:12 AM
Personal spending fell 0.1% in January vs the expectation of a 0.1% increase; weakness in autos led the decline. Income continued its modest growth path, rising 0.3% vs the 0.4%consensus.

Link

 
 
  Jonathan Levinson   3/3/03,  8:34:33 AM
Bonds just opened seeing light selling, FVX +1.7 bps, TNX +.8 bps, TYX +.7. QQQ is trading 25.33.

 
 
  Jonathan Levinson   3/3/03,  8:06:55 AM
Gold is trading down almost $4 from its close at 347.95/oz, while the US Dollar is just above 99.70. NDX futures are trading 1018, SPX 846.75, QQQ 25.31. The put to call ratio continues to reflect tremendous optimism with high relative call and low relative put volume. The most recent commitment of traders data posted in Steven's Market Sentiment wrap showed that large traders and commercials became net shorter on the COMPX and SPX, and net longer on the INDU. What does it all mean? There are numerous bullish indicators, and numerous bearish ones. Not surprisingly, the COMPX is in a wedge on the daily chart, which is continuation pattern, but nevertheless represents a diminishing range of bulls and bears duking it out with neither gaining any ground against the other. A sustained print above 1350 will be an upside breakout of that wedge, and a victory here for the bulls.

 
 
  Linda Piazza   3/3/03,  7:10:35 AM
Good morning. Despite some saber rattling by North Korea this weekend and continued worries over share-sale plans by Japanese banks, the Nikkei rose in early trading. Manufacturers and exporters powered those gains, with exporters such as Canon, Fujitsu, and Sony showing gains. These groups benefited from the U.S. GDP number released on Friday, but Japanese banks such as Mitsubishi Tokyo Financial Group, Mizuho Holdings, and Sumitomo Mitsui again fell on worries about the dilutive effect of share sales. By the end of the trading day, the Nikkei had gained 1.5% to close just under 8500, at 8490.40. Also of importance in Japanese trading was a 10.8% gain in Softbank after the company announced a plan to decrease its stake in Yahoo Japan.

European PMI numbers released today showed gains, with the Eurozone PMI expanding to 50.1 from its previous 49.3, and Germany PMI climbing to 49.9, just under the important 50 mark. French PMI continued its gains above 51, but U.K. PMI languished at unchanged levels at 48.6, below the key 50 level. Economists had expected a contraction in the Eurozone PMI, but instead the output component increased in February to 51.6 from the previous month’s 51, and the new orders component also increased to 51.6 from 51. Despite dire predictions about the Eurozone economy just last week, this morning’s numbers prompted optimistic statements about the worst being behind the Eurozone economy. This week, the ECB meets to consider rate changes, with many having predicted an easing this month. Some economists now feel that today’s slightly rosier economic numbers may threaten that easing.

European trading is mixed, with many European markets currently trading near the middle of today’s rather wide ranges. As of this writing, the FTSE 100 trades flat, down 1.80 points or 0.05%. The CAC 40 is up 10.51 points, or 0.38%, and the Germany DAX is up 18.87 points or 0.74%. At 2565.92, the DAX trades just above 2564 resistance.

Geo-political news must be factored into market predictions today, too. Iraq destroyed a limited number of its 100-120 Al Samoud-2 missiles this weekend, prompting some in the international community to point to increased cooperation by Iraq. Those commentators also mention an Iraqi promise to provide more evidence about the destruction of VX nerve gas and anthrax, as well as this weekend’s sampling of materials from bombs at an airbase near Baghdad. The Iraqis said these bombs contained chemical and biological agents. The U.S. and U.K. have submitted resolutions to the U.N. saying that Iraq missed its final opportunity to disarm, but this resolution faces continued opposition by France, Russia, and China, and today Iraq stepped up the pace of its destruction of the Al-Samoud missiles, reportedly in an effort to avoid war.

U.S. plans were dealt another blow by Turkey’s Parliament. In a vote that had already been inexplicably delayed until Saturday, Turkey’s Parliament fell three votes short of the majority needed to approve the U.S. use of Turkish bases for a northern front in Iraq. The Parliament meets again tomorrow, but as of this writing, it was not yet clear whether another vote would be taken. Reportedly, General Tommy Franks, who would be in command in the event of a U.S. war in Iraq, has stated that his plans are flexible and do not depend on the use of Turkish bases, but the move stunned the U.S. planners, who already had more than three dozen ships loaded with weaponry and supplies for an infantry division from Fort Hood waiting off the coast of Turkey.

Khalid Shaikh Mohammed, alleged September 11 mastermind, was captured in a raid in Pakistan on Saturday. Although interrogators do not have high expectations that he will provide reliable information about Osama bin Laden’s location or other important information, they do suspect that his arrest might lead to the disbanding of terrorist cells, with their preparations to do so exposing them to detection.

 
 
  Leigh Stevens   3/2/03,  1:00:46 AM
The Index Trader Wrap has been posted: Link

 
 
  John Seckinger   3/2/03,  1:00:32 AM
The Futures Trader Wrap has been posted: Link

 
 
  Steven Price   3/2/03,  1:00:25 AM
The Swing Trade Game Plan has been posted: Link

 
 
  Steven Price   3/2/03,  12:59:44 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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