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  Jeff Bailey   3/5/03,  11:21:00 PM
Pivot Matrix for tomorrow Link

got started on some subscriber e-mail and forgot to post.

 
 
  Jeff Bailey   3/5/03,  10:25:59 PM
10-year YIELD info .... per subscriber e-mail.. Jeff: The volume in the 10 year bond yield was due to Changewave Investing play of the day on the April 35 strikes. The Changewave posse is potent. I am biding my time until the yield rolls at 118. Great Info. as always Charley

Thanks Charley. As I'm holding some bearish equity/option trade, I'm looking for any "trouble" and these YIELD calls has me thinking somebody may be looking for a rebound in YIELD soon. I will note that the volume in the 37.5 and 40 was all in one trade. "Smaller" lots that accumulated the 35 call volume of 457 was 10's, 5's, with one trade of 95. That's still some "coin" at 95 contracts.

 
 
  Jeff Bailey   3/5/03,  5:35:00 PM
Suspicious call volume in the 10-year Treasury YIELD calls at April 35 (TNXDG), 37.50 (TNXDU) and 40 (TNXDH) strike. Volumes were 500, with prior open interest below 100 contracts. We're never sure of directional thought, but with YIELDS low, one might think speculative YIELD bull, or an underlying bull in the bonds hedging some bets near-term with the RIGHT, but NOT the OBLIGATION to deliver some bonds at 3.5%, 3.75% and 4.0%.

 
 
  Jeff Bailey   3/5/03,  4:11:02 PM
Forest Labs (FRX) $49.75 +1.98% ... I've been seeing quite a few e-mail regarding FRX and past bullish comments.

Yes, I still hold bullish position in FRX (May $55 calls).

For new entry points, I'd look for a break above $51.50, which would be above the flatting out 50-day SMA.

Here's what I'm looking at as a "reason" for a $51.50 action point.

I've changed the scale on FRX to $0.50 box size and Monday's rally stopped just shy of $52, or found resistance at its 50-day SMA. By changing FRX box size to $0.50, I get further resistance at this level, and trade at $51.50 (action point for strength) should clear this trend. Link

I've also been monitoring FRX's relative strength chart compared to the SPX. It's been my thought that FRX has been pulled lower in recent weeks due to broader market negativity. Now we see FRX's RS chart reversing back up into X and would read "relative strength on buy singal and column of X," which is strongest of relative strength readings.

Using the $0.50 box scale on FRX's chart above and the RS chart here Link I could perhaps see "two buy signals" being created. One at the $51.50 level from the $0.50 box, and another from FRX's RS chart vs. the SPX at RS reading of 61.00.

So far, FRX has been "the stock" to be bullish on in the Pharmaceutical Index (DRG.X), as depicted by the FRX vs. DRG relative strength chart. Link

As far as I know, FRX still positive on Alzheimer's drug, and recent sales for its antidepresant drug Lexapro are coming in well above forecast.

 
 
  Mark Phillips   3/5/03,  3:56:27 PM
AMGN $55.49 (+1.37) Now that's a powerful breakout! AMGN has been struggling to move through the $55 resistance level, and today has to be logged as a success. Moving through that level early in the day, AMGN saw a bit of midday weakness, but buyers have come back with enthusiasm this afternoon and look to close the session near the high of the day. Not only that, but volume has been brisk, ticking solidly above the ADV. Throughtout our coverage of the AMGN play, we've focused on buying the pullbacks, rather than chasing the breakouts, and that has certainly worked nicely, as the stock has continued to rebound from that ascending trendline. With lots of overhead resistance, we could see another pullback to support towards the end of the week and traders still looking for an entry will now want to focus on the $54.00-54.50 area for new entry attempts.

Another metric that shows the strong buying interest is On Balance Volume, which pushed to another yearly high and is challenging the highs of December 2001. It is difficult to find another Biotech stock that is under such solid accumulation.

 
 
  Steven Price   3/5/03,  3:55:37 PM
Swing Trade Signals
Looking at the big picture, we have seen a 1200-point drop in the Dow result in a 400 point rebound, which we have now almost entirely erased. We dropped 300 points from the relative high of 7980 two days ago. I am not overly concerned for bears aftera 63 point bounce, which has failed at a lower high and below 7800. I am currently flat after this morning's stop at 7715. Good luck Linda!

 
 
  Jeff Bailey   3/5/03,  3:54:59 PM
The 3:15 PM Intraday Update has been posted. Link

 
 
  Linda Piazza   3/5/03,  3:54:20 PM
As Jonathan said, it’s an interesting end to the day. Here’s a last update of the 60-minute OEX chart I posted earlier, showing that the OEX has snugged up below that broken trendline while the 60-minute 21-pma has come right down to meet it. The 5(3)3 stochastics have reached overbought levels today, but have not turned down, while the 21(3)3’s have now cycled up out of oversold territory. Rally tomorrow? Failure and retest of recent lows? That may depend on overnight geo-political developments and tomorrow morning’s economic numbers. At least traders will have a clear-cut line of demarcation to help them decide which it’s going to be. Although I’m long-term bearish, traders should consider the possibility of a rally up to the descending trendline just over 426. Link

 
 
  Linda Piazza   3/5/03,  3:46:51 PM
Tomorrow’s economic numbers include initial claims, revised productivity, and factory orders. Initial claims and revised productivity numbers will be released before the bell.

 
 
  Jonathan Levinson   3/5/03,  3:46:01 PM
The COMPX is in the process of crossing above its 50 period MA on the 15 minute candles, heading for a retest of the 1318-20 resistance zone. The TRINQ is neutral at .98, TICK.NQ +39, and QQV -.93. The last dip set a higher intraday low, and the close is shaping up to be very interesting. Very little to go on with the bond market closed- we'll see how much nerves the shorts have here.

 
 
  Linda Piazza   3/5/03,  3:28:57 PM
Currently at 355.44, the Russell 2000 appears to be either just touching or else dipping just below an ascending trendline that has been supporting the Russell since last October, depending on how the line is drawn. The 21-dma lies just overhead at 360.89, pressuring the Russell. Link

 
 
  Jeff Bailey   3/5/03,  3:22:32 PM
Shering-Plough (SGP) $16.46 -3.9% ... released for trading.

 
 
  Jeff Bailey   3/5/03,  3:18:54 PM
Shering-Plough (SGP) ... still halted... indicating open of $16.90.

 
 
  Steven Price   3/5/03,  3:14:00 PM
Swing Trade Signals
That 7765 level in the Dow is proving awfully tough. If we break it to the upside, I expect another run at 7800.

Current levels: Dow 7754/COMP 1312/OEX 419.26/SPX 827.99

 
 
  Linda Piazza   3/5/03,  3:08:39 PM
Decliners now lead advancers on both the NYSE and the Nasdaq. Down volume measures more than up volume on both, too. This is a change from the earlier pattern.

 
 
  Steven Price   3/5/03,  3:08:35 PM
Swing Trade Signals
I must say I am quite confused by the current action. After the Powell speech ended and we headed lower, I felt we were rolling over and that was it for the signs of a rally. Now we get another boost and I'm really not sure where we are headed from here. As long as we remain below 7800, I would think down, but I don't have enough conviction to set Linda up with a new entry to have to manage in my absence.

 
 
  Linda Piazza   3/5/03,  3:05:25 PM
There were a couple of five-minute closes beneath the OEX’s descending five-minute regression channel, but now the OEX moves back inside the possible bear-flag pattern again. Was the brief move outside that channel a trap? Possibly, but more likely it was a quick reaction to Powell’s speech. The OEX now tests the top of the regression channel, so it's possible that it was a bull-flag pattern after all.

 
 
  Kent Barton   3/5/03,  3:03:38 PM
Per Jeff's 13:05 comments on the chip equipment group; Another stock that "bears" watching is CCMP ($39.40 -1.44). Cabot produces the chemical slurries that are used in in the semiconductor manufacturing process. Shares are looking very weak today after breaking below support at $40.00. CCMP is trading lower by 3.2%, underperforming not only the SOX but also related stocks such as NVLS, KLAC, and AMAT. What's particularly scary for shareholders is the fact that Cabot has no substantial daily chart support until the October lows at $32.50. Weak oscillators and a double-bottom point-and-figure sell signal bolster the negative technical picture. Traders with a bearish bias on the chip sector can watch for either a rollover from $40.00 or a move under today's low ($39.27) to provide a potential entry point.

 
 
  Jeff Bailey   3/5/03,  2:58:05 PM
Shering-Plow (SGP) Update $17.36 .... Dow Jones reports that company is giving guidance of Q1 EPS of $0.10 and 2003 EPS of $0.75-$0.85, which would be well below consensus estimates of $0.25 and $1.00 respective. Link

 
 
  Jonathan Levinson   3/5/03,  2:57:34 PM
The five year yield is now down 4.8 bps, as the COMPX closes in on the low end of the day's range, though no fresh lows of the day so far. The TRINQ is still neutral at 1.16, QQV still down, now by .78 at 38.54, TICK.NQ -194. I've seen the COMPX look healthier, but above 1298, these moves look like noise to me. HUI and XAU are lightly negative, as is the Commodities Index, the CRB, remarkable given the weakness in the USD index.

 
 
  Jeff Bailey   3/5/03,  2:53:34 PM
Shering Plough (SGP) $17.36 +1.34% ... halted at 02:41 PM EST.

 
 
  Jeff Bailey   3/5/03,  2:48:44 PM
I will say this ... the stock and bond markets seem to put more "weight" into Secretary of State Colin Powell's comments than they do Blix's.

Treasury YIELDS now at lows of the session, and equity indexes now look to follow. Dow Industrials (INDU) 7,700 once again. Right where they started the morning's session.

 
 
  Linda Piazza   3/5/03,  2:44:38 PM
On the OEX five-minute chart, another pattern of lower highs and lower lows has begun to form, and traders must again be alert to the possibility of a bull-flag formation. This is a bigger flag than the one I mentioned just as it broke to the upside. If this is a bull-flag formation, the OEX should break to the upside before the formation retraces half of today’s gains. That would mean that an upside break should occur before the OEX moves below 416.92. It may be telling that the OEX moved down to 416.82 about fifteen minutes ago and moved up from that level. However, the 21-pma at 418.14 now curves down along the upper edge of the regression channel, perhaps adding its resistance to other resistance at that level. As I type, the OEX tests the bottom of that regression channel and has moved to 416.52.

 
 
  Jeff Bailey   3/5/03,  2:41:24 PM
NASDAQ-100 Index (NDX.X) 987.13 +0.42% ... just seeing this now, but reviewed last night's Index Trader Wrap. NDX rally came to 995 and current levels of trade just under "correlative levels" of resistance noted in pivot analysis matrix. For strength from here, I'd really look for a break above the WEEKLY pivot of 997.50, which would be juuuuust above today's high.

 
 
  Linda Piazza   3/5/03,  2:28:08 PM
From a NYSE adv/dec ratio of 1.25 earlier today, the number falls to 1.02. On the Nasdaq, the adv/dec ratio is now .78. Up volume still leads down volume on the NYSE, with up and down volume still roughly equal on the Nasdaq. New lows are more than twice new highs on the NYSE and ahead of new highs on the Nasdaq. A change in the new highs/new lows figures has often preceded a change in the market tenor lately. When this new highs/new lows figure began to diverge from positive volume patterns in January, it was a first signal for traders that those positive volume figures might not continue, so this figure might bear watching. Total volume is 811 million shares on the NYSE and 919 on the Nasdaq.

 
 
  Steven Price   3/5/03,  2:23:49 PM
The Beige Book was released and pointed to weakness in just about every area, including consuner spending, commercial spending, manufacturing and the labor market. It did say that residential construction is strong. Guess they missed the Chairman's comments yesterday about a probable slowdown.

 
 
  Jeff Bailey   3/5/03,  2:23:34 PM
Question on "why here?" ... Jeff: I'm a bit confused on your thinking for a bullish play in the Dow Diamonds, when you yourself say the Dow looks vulnerable to 7,550. Could you please explain?

Yes, and I certainly "hope" the Dow trades 7,550 and that may have by KLA-Tencor MARCH puts paying a good reward near-term. However, as it relates to the Dow, I'm looking out to September, try and get past some of this "war stuff" that may never unfold, or may be very short-lived.

A 1/4 bullish position here, is no different than a bullish profile I made in the Dow back in late September near 7,900 (I think this date is correct, and looking in past archives to find it), BEFORE the Dow did fall to its then low of 7,197. The Dow bullish % was low then, and is low now and you and I "know" that at some point, the Dow should become "overbought" once again. While the bearish vertical counts are not a guarantee, I want to have some bullish exposure to help offset my bearish exposure in stocks I currently have.

A Dow Diamonds 1/4 position play may not be for everyone, that I will admit, but does give some bullish exposure at a lower risk level, with quite a few bearish targets just below, where we might look for support.

 
 
  Linda Piazza   3/5/03,  2:21:20 PM
After rising to a high of 2540, the DAX could not manage to hold onto the 2500 level into the close today, closing down 3 points at 2498.02.

 
 
  Jonathan Levinson   3/5/03,  2:15:05 PM
Powell: "Iraq still not disarming, only playing games."

 
 
  Jonathan Levinson   3/5/03,  2:14:22 PM
They're buying five year notes, the yield now down 3.9 bps. This bodes ill for the COMPX.

 
 
  Jeff Bailey   3/5/03,  2:13:12 PM
The 1:00 PM Intraday Update has been posted. Link

 
 
  Linda Piazza   3/5/03,  2:12:44 PM
If I were to repost that 60-minute OEX chart that I posted at 1:05, the only change would be that the chart has been in the process of printing a tiny candle right on the 418.75 resistance, just beneath the rising trendline that was broken yesterday. The 21-pma has continued to move down toward that rising trendline, however, with that MA currently at 420.78. The 5(3)3 stochastics are nearing overbought territory, but the 21(3)3’s still curve up out of oversold territory. RSI has flattened in midrise. Bears can be encouraged so far that the OEX is not moving above that resistance, but those mixed stochastics may warn of some choppy trading ahead.

 
 
  Jonathan Levinson   3/5/03,  2:11:49 PM
Text of the Beige Book at this Link

 
 
  Jonathan Levinson   3/5/03,  2:05:10 PM
The five year treasury note yield is going for another dunk, down 3.2 bps following a not-bullish Beige Book just released. Colin Powell is currently speaking. The COMPX is back to 1312 from above- we'll see if it bounces or continues lower.

 
 
  Jonathan Levinson   3/5/03,  2:01:41 PM
Beige Book: Economic growth remained subdued.

 
 
  Kent Barton   3/5/03,  1:59:24 PM
As Linda pointed out in her 9:39 post, shares of Coke are trading at fresh multi-year lows. Both KO and Pepsi (PEP) are being pressured by an earnings warning from Pepsi Bottling (PBG). The company is forecasting a first-quarter profit of only 12-14 cents/share (analysts were looking for an EPS result of 19 cents), citing distribution problems related to the recent bad weather in the Northeastern US. Analysts have opined that the lowered expectations might reflect a more serious fundamental problem for Pepsi.

How is the alcoholic beverage group faring? Not much better. The daily charts for both BUD and RKY are looking downright ugly, with the latter stock trading at new 52-week lows. The weekly chart shows no substantial historical support until the $43.00 region.

 
 
  Jonathan Levinson   3/5/03,  1:58:07 PM
Awaiting the Beige Book in two minutes.

 
 
  Kent Barton   3/5/03,  1:31:29 PM
Danaher (DHR) 63.61 -0.14: This PI long play continued lower in morning trading after forming a rather sizable red candle on Tuesday. But as was the case during similar pullbacks over the past two weeks, the bulls would not allow shares to fall below the rising 21-dma (currently at $62.99). Conservative traders may want to be using a stop slightly below that moving average. Our stop is set at $61.98.

 
 
  Jonathan Levinson   3/5/03,  1:27:34 PM
So far, the 1318-20 COMPX resistance zone continues to turn back the advances, and the FVX is back into negative territory, -.8 nps at 2.599%. The TICK.NQ is a touch lower at -173, TRINQ .87. QQV is off its lows, now down .44 at 38.88. Gold has been hit in the COMEX Crush, down .70 to 351.70, with HUI and XAU trading flat on the day.

 
 
  Linda Piazza   3/5/03,  1:26:34 PM
The VIX has dropped below 35, measuring 34.80 as I type. If the VIX were a stock, I’d say that it was testing the gap formed from Monday’s close to Tuesday’s open, as seen on the five-minute chart. Despite my stated interest for studying the VIX through standard technical analysis tools, however, even I’m not sure I’m ready to characterize the VIX as filling gaps.

 
 
  Jeff Bailey   3/5/03,  1:25:53 PM
Per Jonathan's 12:30:41 ... funny... John Seckinger and I had a coversation at Dow 9,000 about the "potential" for a reverse head/shoulder in the Dow, when the bullish % was high. Thinking then that "wouldn't it be a great buying opportunity" near Dow 7,500 when bullish % was low and look for a reverse head/shoulder pattern?

This has been discussed in prior Index Trader Wraps and I've been working on a chart as it relates to the Dow Diamonds (AMEX:DIA). Won't know if this is a head/shoulder bottom thought until Dow 9,050.

 
 
  Steven Price   3/5/03,  1:25:38 PM
Got his interesting comment from a reader:

Steve, Yesterday the NYSE TRIN closed over 3. Here is what I've found when NYSE TRIN has closed above 3 in the past and has led to a small gain the day after, only to result in another selloff. Those gains also came from a deeply oversold reading that we didn't have yesterday

Date Price Drop % Drop % Gain Day After

1/9/98 -222 -2.85 0.88

8/31/98 -512 -6.37 3.82

4/14/00 -618 -5.66 2.69

3/12/01 -436 -4.10 0.81

4/3/01 -292 -2.99 0.31

1/29/02 -247 -2.55 1.50

4/11/02 -206 -1.98 0.14

9/3/02 -355 -4.10 1.40

12/27/02 -128 -1.53 0.35

Average -335 -3.57% 1.32%

FWIW. R

 
 
  Jeff Bailey   3/5/03,  1:18:21 PM
30-year YIELD ($TYX.X) 4.706% ... this is "riskier" bond and seeing a move here above yesterday's highs. May indeed hint of asset allocation taking place, but comes at same time of Blix comments.

 
 
  Jeff Bailey   3/5/03,  1:06:33 PM
5-year Treasury YIELD ($FVX.X) swings back into the red (now sees buying).... keep your neck brace on, we're going for a volatile ride.

 
 
  Linda Piazza   3/5/03,  1:05:53 PM
Here’s a 60-minute snapshot of the OEX’s actions today in respect to various resistance levels. This shows the OEX’s precipitous fall once it broke below the green rising bearish formation and a less-precipitous fall once it broke through that rising trendline yesterday. It’s natural for the OEX to come up and retest that trendline from the underside, however. Note the blue horizonal line marking historical resistance near 418.75 and the blue 21-pma angling down toward that former ascending trendline. These levels should provide resistance for any upward moves on the OEX. If not, traders should look for a retest of the longer-term descending trendline from late January, now crossing just over 426. Link

 
 
  Jeff Bailey   3/5/03,  1:05:01 PM
Semi-equipment ... lagging the SOX.X 289 +1.82% gain a bit with AMAT (unch), KLAC -0.38% and NVLS -0.14% off fractionally. Most likely some hesitancy here ahead of Thursday evening's (05:30 PM EST) mid-quarter update from Intel (INTC) $17.01 +2.34%.

 
 
  Jonathan Levinson   3/5/03,  1:01:33 PM
The FVX has returned to negative as buying returns to the five year treasury note, but at -.3, equities bears would be premature to break out the champagne. The QQV is down .90 down to 38.48, just like on any other bullish day, TICK.NQ -69. 1318-20 remains the number for COMPX bulls to beat.

 
 
  Steven Price   3/5/03,  12:56:46 PM
This from a reader, regarding our HD play:

The HD near my home is directly across the street for Lowes. The HD usally has one half to one third the cars in the parking lot that Lowes does. Also the lacks staff members at HD makes it hard to get assistence and long lines at the registers. Just wondering if this is the norm or the exception.

 
 
  Steven Price   3/5/03,  12:54:13 PM
Swing Trade Signals
With the Dow topping out at 7762, only the most aggressive shorts with stops above 7800 are still in the trade. Maybe I'm just being stubborn, but I think those traders still have a shot at a nice downside move. We don't yet have a 5 min close above the daily pivot, and this candle is fading some, but it appears to be coming.

 
 
  Jeff Bailey   3/5/03,  12:53:23 PM
30, 10 and 5-year YIELDS have turned green (selling in these bonds). Note seeing any news at this time, but may be some asset allocation taking place.

 
 
  Jeff Bailey   3/5/03,  12:50:43 PM
Dow Industrials (INDU) ... Will take 1, Dow Diamonds (DIA) September $80 call (DAVIB) as first partial position.

 
 
  Steven Price   3/5/03,  12:48:00 PM
XL $69.84 +1.34 In last night's write-up on this put play, I suggested that failure at $70 may be a good entry point for shorts. However, I also suggested that traders let any rebound run its course before judging the failure and if it broke $70, then to wait for a trip back below that level. With the Dow stretching and failing at the daily pivot of 7751 (high of 7754) and now rolling over, this may be our test of $70 as well. Aggressive traders may want to initiate positions on this failed rally, while conservative traders may want to wait for the Beige Book release to see how the Dow reacts.

 
 
  Linda Piazza   3/5/03,  12:44:46 PM
Stephen Roach of Morgan Stanley will probably not be named as one of Greenspan’s favorite people. He’s speaking now on CNBC about Greenspan’s role in the current problems and speculating that Greenspan’s tenure might not be viewed kindly by economic historians. He says that Greenspan recognized the potential for a bubble in the mid-90’s and could have stopped it, but backed off when he received criticism for tightening once. Roach says that Greenspan instead became a cheerleader to justify backing off a tightening policy. Roach also allows that business leaders and others played a part in the current declines, and he says that the ECB is behind the curve. Tomorrow will give the ECB an opportunity to prove itself, perhaps, as tomorrow the ECB will meet to decide whether to ease rates.

 
 
  Jonathan Levinson   3/5/03,  12:42:16 PM
The COMPX is taking another run at the 1312 resistance area, TRINQ neutral at 1.07, TICK.NQ -71, FVX confirming at -1 bps, well off its lows.

 
 
  Linda Piazza   3/5/03,  12:36:16 PM
On the five-minute OEX chart, today’s move up has been interrupted by a tight counter move, with smaller-than-normal candles moving in a pattern of lower highs and lower lows. Sound familiar? That pattern should, as it’s often the way a bull-flag pattern begins. I can’t type fast enough, because it appears the OEX may be trying to break out of that pattern. It looks as if we may get yet-another test of the 418-418.75 level. Switching to the 60-minute chart, I note that just above that, near 420, is the former ascending trendline from February 13, broken to the downside yesterday. Just above that is the trending-down 60-minute 21-pma at 421.06. Bears want to see the OEX fail at one of these levels.

 
 
  Jonathan Levinson   3/5/03,  12:30:41 PM
I dont get CNBC, but apparently Ralph Bloch sees an inverse h&s formation on the INDU going back to July 2002. Yes- if the Dow rallies back to 9000, then it might be so. Let me suggest that we don't hold our breath just yet.

 
 
  Steven Price   3/5/03,  12:20:55 PM
Home Depot (HD) $21.92 (-0.18) OI call play HD has sunk just below $22 and is currently testing the 21-dma of $21.94. If we break that 21-dma on a closing basis, I'd favor dropping this play. I don't recommend new entries at this time.

 
 
  Linda Piazza   3/5/03,  12:15:17 PM
Today, the FTSE 100 closed down 62 points at 3563.50, closing just off the day’s lows. The CAC 40 closed down 21.27 points at 2655, near the middle of the day’s trading range. The DAX trades up, now at 2527 and near the day’s highs.

 
 
  Jeff Bailey   3/5/03,  12:12:25 PM
Dow Industrials 7,680 .... per 12:02:10 comments.... started looking around for 7,680. Oh boy! on the DAILY interval chart of the Dow, the July 23rd low was 7,682, on the next day, Dow dipped to 7,532 (darned close to my MAX weekly decline objective for this week of 7,500), but reversed SHARPLY higher. It's this July 23rd-24th declines that we monitor Dow for MASSIVE reverse head/shoulder pattern, where we might be at the "right shoulder" levels currently.

 
 
  Steven Price   3/5/03,  12:02:47 PM
Swing Trade Signals
With Hans Blix set to speak to reporters today, I am wondering if we are just seeing a little bit of short covering. I'm having a tough time picking a direction from here. Each sell-off has looked like the next leg down, only to find buyers again. While I'm still leaning short, I can envision a bullish run during or around the Blix news conference.

 
 
  Jeff Bailey   3/5/03,  12:02:10 PM
Things to look for in Dow on intra-day basis. Dow Indu (INDU) 7,723 +0.24% got a nice little bounce from the 7,664 level, identified from DAILY retracement. Here's what I see forming on an intra-day basis. Link

Remember! Fed Beige Book due out at 02:00 PM EST. One could "imagine" good news having Dow at 7,805, while "bad news" could have Dow at 7,610. 7,680 could be "key" intra-day level based on "pattern" recognition.

 
 
  Linda Piazza   3/5/03,  12:01:21 PM
Congratulations to Steve for ushering readers safely through another gain under treacherous trading conditions. Those who elected to take today’s stop can relax while markets consolidate and perhaps test next resistance again. I also second Steve’s earlier thought that I don’t see anything yet that would worry me unduly if I’d elected to set a wider stop and stay in the trade. On the OEX, the 60-minute 5(3)3 stochastics cycle up out of oversold territory now and the longer-term 21(3)3 stochastics turn up, too, but haven’t yet moved out of oversold territory. While the 5(3)3 stochastics turn up, the OEX has been consolidating rather than moving up, a divergence that appears bearish so far. OEX 418-418.75 still looks like strong resistance, with several layers of resistance just above that.

 
 
  Jeff Bailey   3/5/03,  11:49:56 AM
The 11:00 AM Intraday Update has been posted. Link

 
 
  Jonathan Levinson   3/5/03,  11:35:57 AM
The COMPX at 1307 is in the middle of its range, well below 1312 resistance and comfortably above 1302 support. The TRINQ remains neutral, QQV actually negative now, -.15, TICK.NQ -229. FVX is up to a loss of 2.9 bps on the day, confirming the move slightly higher, but the outlook remains the same. HUI and XAU lightly positive today, XAU above 70 and HUI above 130.

 
 
  Linda Piazza   3/5/03,  11:25:20 AM
Today sees GE poised just above its 21-dma at 23.16, with GE currently trading at 23.32. On the daily chart 5(3)3 stochastics cycle straight down, nearing oversold levels, but the 21(3)3 stochastics just now turn down. MACD appears to be turning down again as it tried to cross above zero, while RSI is somewhat inconclusive, flattening a bit in mid-fall from overbought levels.

 
 
  Mark Phillips   3/5/03,  11:19:06 AM
VZ $34.24 (-0.17) That latest downdraft in the broad market dropped VZ briefly below that critical $34.25 level, and after a brief pop, it's back under that level again. I don't necessarily view this as an opportunity to enter the play on weakness, but it is encouraging to see that support that has been in place for nearly 2 weeks finally starting to crack.

 
 
  Jonathan Levinson   3/5/03,  11:12:00 AM
So far, the bond market has been nailing this market today without the noise of the equity market- FVX is edging lower, now -3.7 bps as money continues to enter the five year note. The TRINQ is still neutral at 1.15, TICK.NQ -382, and the put to call ratio at .64 continues to show an entirely complacent market. QQV is up a mere .34- the QQQ option market fully expects 1298 COMPX to hold, from the looks of it.

 
 
  Linda Piazza   3/5/03,  11:08:34 AM
At 283.77, the SOX again trades just above last week’s support levels between 280.80-281.50. The simple 21-dma is just below those levels at 279.94. A SOX break and close below 280 would be further confirmation of market weakness. On the daily charts, the 21(3)3 stochastics are just turning down out of overbought territory, hinting that a SOX decline could carry the SOX much further down. the 5(3)3's near oversold territory, however, hinting that there could be some choppy trading between now and the time when the longer-term stochastics reach oversold levels.

 
 
  Steven Price   3/5/03,  11:07:44 AM
Swing Trade Signals
We set new relative lows int the Dow and SPX, which bounced at 819.00. The COMP is still hanging on to 1300, but I see no reason right now to be anything but bearish.

Current levels: Dow 7669/COMP 1303/SPX 819.73/OEX 414.41

The five-year yield has begin to sink below its morning consolidation, but the ten-year is holding steady.

 
 
  Jonathan Levinson   3/5/03,  11:04:24 AM
The US has apparently given up on Turkey: Link

 
 
  Linda Piazza   3/5/03,  10:58:09 AM
With an OEX intraday high of 417.94 so far today, the 418-418.74 level seems to be proving its relevance as prices turn down from that level and again drop toward intraday and February 25 lows.

 
 
  Jeff Bailey   3/5/03,  10:54:28 AM
10-year YIELD ($TNX.X) 3.619% ... per last night's Index Trader Wrap, 10-year YIELD below the WEEKLY S1 of 3.633%, so BEARISH equity trader begins to think... "today might not be the profit taking in bond's day." On the alert as always, but traders than can look at a 5-minute bar chart, not how that 3.633% level served as CLOSING resistance on this bonds YIELD. While this bond's YIELD saw an intra-day "spike" to 3.64%, all of the 5-minute closes have been juuuuuust below the 3.633% level, as if there is still some "hunger" for this bond's YIELD.

 
 
  Jonathan Levinson   3/5/03,  10:52:04 AM
Nothing but sell signals on the 10(5) stochastics, but until the COMPX busts 1298, it's just noise within a range.

 
 
  Linda Piazza   3/5/03,  10:51:29 AM
Volume patterns show that advancers lead decliners on the NYSE, while the opposite is true of the Nasdaq. Adv/dec ratios are 1.25 on the NYSE and .86 on the Nasdaq. Up volume is about 1.7 times down volume on the NYSE, while up and down volume are roughly equal on the Nasdaq. New lows far outnumber new highs on the NYSE, which is divergent from the other volume patterns today. New lows also outnumber new highs on the Nasdaq. Total volume is a low 254 million shares on the NYSE and 349 million shares on the Nasdaq.

 
 
  Steven Price   3/5/03,  10:51:13 AM
Swing Trade Signals
Is that a double top on the Dow chart intraday? It's starting to look like it as we roll over back toward morning lows.

Current levels: Dow 7685/COMP 1306/SPX 821.39/OEX 415.39

 
 
  Jeff Bailey   3/5/03,  10:50:32 AM
Dow Industrials (INDU)) 7,690 -0.18% .... back near morning lows, and per 5-minute chart (see 10:41/29) were at "blue" retracement of 80.9% from the WEEKLY. Look for 5-minute close below this 7,692 then look for continuation lower to 7,664, which is from DAILY retracement. Kind of like a ladder isn't it? That's what trading levels is kind of like.... "one step at a time."

 
 
  Steven Price   3/5/03,  10:47:46 AM
Amgen (AMGN) $54.90 +0.77 OI call play AMGN finally hit the elusive $55.00 mark this morning, but that was the high of the day. I like new entries on a move over $55.25 AND some evidence of support at $55. Conservative traders can look for a move on the other side o$55.50. While the stock has been a very slow mover, it also has mantained its uptrend in spite of the broad market sell-off.

 
 
  Steven Price   3/5/03,  10:43:49 AM
Swing Trade Signals
I think the lack of any real bounce following the recent sell off still looks bearish. However, the COMP has yet to give up 1300, with a morning low of 1302. As we hover on both sides of unchanged I don't see anything to convince me that traders maintaining higher stops and still short should adjust. However I'm also not seeing anything that would make me want to open a new position or add to a short. If we do break below COMP 1300 and the yields drop from their current flatlines, I can see adding to the short positions. However, with the relative low sitting at 7628, keep in mind the possibility of a bounce.

 
 
  Jeff Bailey   3/5/03,  10:41:29 AM
Dow Intra-day Chart 5-minute chart of Dow. Can really "see" how WEEKLY S1 that was broken yesterday, serving some morning resistance in early going. Link

Red lines are from MONTHLY retracement. Blue are WEEKLY, and gold/brown are from DAILY.

 
 
  Jonathan Levinson   3/5/03,  10:40:05 AM
The put to call ratio opened at .79 and dived to .57 as everyone tried to front-run the flagpole rally. The beauty of the market is that it compensates for short term patterns as soon as they become well known- here's a fine example. The FVX is now down 3.4 bps, and teh COMPX is in its trading range, now 1302-1312. The TRINQ is climbing at 1.07, TICK.NQ -533.

 
 
  Linda Piazza   3/5/03,  10:33:32 AM
It just occurs to me that when I mentioned OEX resistance this morning, I neglected to mention the 418-418.75 area as the first level of resistance.

 
 
  Linda Piazza   3/5/03,  10:31:54 AM
Although stochastics might not be the best predictor of market action, the 60-minute 21(3)3 and 5(3)3 stochastics on the OEX chart have made bullish kisses. Except for the fast line on the 5(3)3’s, they have not yet pushed up out of oversold levels, but they do warn of the possibility that the OEX could continue testing overhead resistance. A dropping VIX also warns of that possibility. As long as bonds remain higher, gold maintains its gains, and the dollar remains lower, that bounce should fail, but watch those other markets, too, for guidance.

 
 
  Linda Piazza   3/5/03,  10:24:46 AM
Reader G.M. notes that Coca-Cola’s ex-dividend date is March 12.

 
 
  Steven Price   3/5/03,  10:17:05 AM
Swing Trade Signals
We are fading here and I am wondering if I should have simply left my stop at 7741, which would still have me short. I think a move back below 7700 in the Dow is bearish, although I'd like to see the SPX below 819.50, as well. Because I will be gone the next few days and Linda will be taking over, I will be giving my opinions for the rest of the day, rather than handing off a position to her, now that I was stopped out.

Current levels: Dow 7698/COMP 1308/SPX 822.69/OEX 415.88

I think the fact that the COMP stalled below 1319 is encouraging for bears.

 
 
  Jonathan Levinson   3/5/03,  10:16:36 AM
Then again, the ISM data isn't all that pretty: 02/03 ISM services 53.9 down from 54.5; Orders down from 56.2 to 53.0; Employment down from 50.3 to 49.0; Prices paid up from 57.0 to 60.9.

 
 
  Jonathan Levinson   3/5/03,  10:14:42 AM
The lack of liftoff on the better than expected ISM data should be disconcerting in the extreme for bulls. The flagpole rally attempt aborted at the bottom of yesterday's range.

 
 
  Jeff Bailey   3/5/03,  10:14:16 AM
Nasdaq-100 Index (NDX.X) 985.43 +0.24% ... 25-point box shows no change for days. Monday's rally to 1,023.47 came just shy of a 3-box reversal. Bullish support trend of 925 is very similar to upward trend we've anchored from the bar chart's low, to recent pullback of 940. Extension of the bar chart's trend is currently at 960. Link

We can introduce more "noise" into the conventional 25-point scale box, at 10-point and perhaps come closer to a correlative Dow, SPX, OEX type of chart. Here we may "like" how the 960 level ties in with upward trend on the bar chart. Link

I'll "doctor" this one up with some channels for a later update, but will HONOR the conventional 25-box chart, as it is the one institutions will honor the most.

 
 
  Jonathan Levinson   3/5/03,  10:08:53 AM
Al Green has just added a 1.75B overnight repo, for a net drain of 5B from yesterday's expiring 6.75B repo.

 
 
  Jeff Bailey   3/5/03,  10:01:51 AM
ISM Services reading of 53.9 for February.

Dow=+25, SPX=+3.2, OEX=+1.78, NDX=+4.27, QQQ= +$0.04.

 
 
  Jeff Bailey   3/5/03,  10:01:12 AM
ISM Services due out any minute. Consensus is for 53.0.

 
 
  Jonathan Levinson   3/5/03,  9:58:13 AM
Steven, you beat me to it. The move above 1312 blew off into a candle spike. Is this a headfake or just a pause? Either way, 1318 COMPX should hold.

 
 
  Steven Price   3/5/03,  9:56:29 AM
Swing Trade Signals
It looks like the spike higher is running out of steam. Yields continue to move sideways after the gap lower this morning, failing to confirm the rally.

 
 
  Jonathan Levinson   3/5/03,  9:53:36 AM
This is another flagpole ramp- 1318-20 will be the test.

 
 
  Linda Piazza   3/5/03,  9:52:56 AM
Currently at 2034.66, the Dow Jones Transportation Index trades below its down-sloping 21-dma at 2099.10 and not far above its October low of 2008.31. The $TRAN made a lower low in February, though, with an intraday low of 1973.63 and a February low closing level at 2018. A move below 2018 might send the $TRAN back down to test its February low. Oscillators aren’t giving clear clues as to whether to expect a bounce back toward that 21-dma or a retest of those February lows.

 
 
  Jonathan Levinson   3/5/03,  9:52:41 AM
The COMPX is back up to weak resistance at 1309, with stronger resistance at 1312, then at 1318-20. The FVX is down 2.5 bps, and 1309 has just given way as I typed.

 
 
  Steven Price   3/5/03,  9:51:40 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were stopped out on the short position, entered at 7940, when the Dow traded 7715 at 9:49:12. Whle I'm not convinced we won't head lower and those more aggressive traders with stops at 7761 still have a chance at continued profits, we are above the opening range high and a 5 min close above 7702 gives mixed signals.

 
 
  Jeff Bailey   3/5/03,  9:46:09 AM
S&P 100 Index (OEX.X) 414.97 -0.07% ... similar to Dow, SPX, traders monitor OEX here and look for "confirming weakness" to Dow with a trade at 410.00, which would be double-bottom sell signal. Still in play here is bearish vertical count of 390. Firm stops at 435 keeps a bear out of trouble. Link

 
 
  Linda Piazza   3/5/03,  9:43:47 AM
The OEX approaches the February 25 low of 413.69, as well as midline candlestick support from February 13 at 412. A fall and close through those levels should portend a retest of the February low near 407. As always in this trading climate, traders must watch for a bounce. A bounce from current levels or from that support just below should face next resistance at the 60-minute 21-pma at 422.36 or above that at 425.50, 427, and 430. Those last three levels come from broken trendlines.

 
 
  Jeff Bailey   3/5/03,  9:43:18 AM
S&P 500 Index (SPX.X) 820.72 -0.15% .... quick check of 5-point box shows SPX near previous p/f level of support. Bears look for "confirming" sell signal at 815.00 as it relates to Dow (see 09:41:01 comments) Link

 
 
  Mark Phillips   3/5/03,  9:41:04 AM
SYY $25.40 (-0.90) Off to the races, SYY is plunging lower this morning following a pre-open downgrade from JP Morgan. The firm lowered their rating on the stock from Overweight to Neutral, citing valuation, an expected modest deceleration in comps over the next 4 quarters, and pricing concerns from struggling competitor, US Foodservice.

 
 
  Jeff Bailey   3/5/03,  9:41:01 AM
Dow Industrials (INDU) 7,682 -0.28% ... trade at 7,700 bearish per Index Trader Wraps. "Bearish Triangle" formation. Link

Trader's Note: Professor Davis' study for patterns was not specific to Indexes, only stocks, but from the perspective of supply demand, should bring "weak holders" to sell.

 
 
  Steven Price   3/5/03,  9:40:37 AM
Swing Trade Signals
My concerns about a possible bounce from these levels involve the Feb 13 intraday low of 7628 and the COMP holding just over 1300.

 
 
  Jonathan Levinson   3/5/03,  9:40:20 AM
The low of the day is 1302 COMPX, TRINQ mellow at 1.21, QQV +.26 to 39.58, TICK.NQ -281. 1298-1305 is the trading range, if 1305 holds on a bounce.

 
 
  Linda Piazza   3/5/03,  9:39:22 AM
At 37.85 as I type, Coca-Cola has been oscillating around 38 this morning, trading as low as 37.45 and as high as 40.44. KO now trades at levels not seen since early 1996, and a move below 36 would put KO back at 1995 levels. As I mentioned yesterday, I hesitated to suggest KO as a put play because of its nasty habit of jumping up a point or so above a logical stop-out point before continuing a decline or else sitting at support for several weeks before finally dropping below that support. I noticed that Steve mentioned KO as a “near miss” on the play list, too, so perhaps both of us are feeling the same hesitancy. Those of you who might have been watching KO on your own and considering bearish plays should be aware of that tendency.

 
 
  Steven Price   3/5/03,  9:39:05 AM
Swing Trade Signals
Current levels: Dow 7688/OEX 414.47/SPX 820.31/COMP 1303

 
 
  Jeff Bailey   3/5/03,  9:37:27 AM
Kohls (KSS) $48.60 +5.05% ... reported Q4 (January) earnings of $0.81 per share, which was a penny better than consensus, late yesterday. Rev. rose 16.9% year over year to $3.18 billion, which was inline with consensus. Link

Traders/investors will note stock came within $0.18 of bearish vertical count of $46 yesterday. Looks like decent bottom-feeder bullish here, or pullback to $48. Should be some shorts looking to cover as many had expected a substantial miss on earnings.

 
 
  Steven Price   3/5/03,  9:37:08 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower stops to Dow 7715 on the break below 7700. This should allow just a few points above the opening range top at 7702, as well as a failed rally just over 7700.

 
 
  Jeff Bailey   3/5/03,  9:28:11 AM
Cray Inc. (CRAY) $6.61 ... stock trading $7.09 in pre-market after company boosts guidance. Stock fell from 52-week high set on Monday amid rumor company might warn on earnings.Link

Companys raises previous revenue guidance of $200 million (consensus is $216 million) to "at least $220 million." Given the increased rev. outlook, company expects profitablility to be at the high end of its previous announced range of 5-10%.

 
 
  Jeff Bailey   3/5/03,  9:27:49 AM
The 9:00 AM Intraday Update has been posted. Link

 
 
  Steven Price   3/5/03,  9:21:06 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We are currently short a 1/2 position entered at Dow 7940. The stop is set at 7741. I plan on letting the opening range settle before making any adjustments. More aggressive traders may want to raise their stop to 7761 to allow for a failure at the daily pivot of 7751. An alternate stop abpve 7800 is also a possibility, as it would allow for another failure there, which is what we got on yesterday's bounce off of 7750.

 
 
  Linda Piazza   3/5/03,  9:12:14 AM
As time nears for our markets to open, European markets dip below earlier levels, with the FTSE 100 now trading at 3581, the CAC 40 now trading at 2642, and the DAX now trading at 2490. The CAC’s October low was 2612, and the DAX’s more recent multi-year low was 2433.

 
 
  Jonathan Levinson   3/5/03,  8:20:29 AM
Thanks, Linda. I had forgotten to mention the 24 or so long range bombers that were deployed to North Korea to supervise that "non"-situation.

 
 
  Jonathan Levinson   3/5/03,  8:19:38 AM
Last night was a very wild ride. The US Dollar hit a new 4 year low against the euro, and Globex currency trading was actually halted for about one hour. I've never heard of a currency exchange being closed, but the gap down in the USD was nothing if not dramatic. A chart is linked below. Currently the USDX is trading 98.4. It was looking like it could be worse, but Al Green must have hit the batphone, sending the PPT to work at Europe's open. Gold was reined in from its 357 high to its current 353, and a bid was put under the futures, with QQQ currently 24.54, with the ND contract currently 985.50, and ES last at 822.

Link

 
 
  Linda Piazza   3/5/03,  6:51:06 AM
Good morning. With increasing evidence that the U.S. might be gearing up to attack Iraq within the next week to ten days, Asian stocks struggled. The prospect that the U.S. might attack alone sent number crunchers scrambling to add up costs to the U.S. economy. In addition to the costs of an Iraqi war, the U.S. must now face increased costs in the western Pacific as it deploys long-range bombers to strengthen forces there, in order to deal with the escalating North Korean situation. New U.S. Treasury Secretary John Snow’s unconcern about the dollar’s decline confirmed fears that the dollar’s slide against the yen might continue, despite Japanese intervention efforts made last month to bolster the dollar against the yen. Not surprisingly, exporters that depend on U.S. declined. Sony, Samsung, and Hundai comprised some of the declining issues in early Asian trading. Still, the Nikkei managed a flat day, closing down only 7.6 points or 0.1%. The Bank of Japan ended its two-day meeting today without changing its benchmark rate.

As the dollar fell to four-year lows against the euro, John Snow’s attitude toward the dollar was being discussed by European commentators this morning, too, with round-table discussions about the effect of a weak dollar on European economies. European exporters will suffer, but so will financials with major holdings based on the U.S. currency. As if to elucidate these concerns, European exporters with major exposure to the U.S., such as Roche Holding and Cap Gemini, declined. So did insurers.

In company-specific news, France Telecom reported losses that Bloomberg characterizes as the largest corporate loss in French history as the company took 18.3 billion euros of write-offs and provisions. New CEO Theirry Breton reassures investors and analysts that France Telecom has overcome its liquidity crisis, however, and the stock rose .32% in early European trading. The CAC 40 trades down, however, as do all other European markets. The FTSE is down 37.60 points or 1.04%, falling beneath 3600 to 3587.70. The CAC 40 continues its slide since closing beneath 2700 yesterday, trading down 7.78 points or .29%, to 2668.56. The DAX clings to the 2500 level, but barely, trading down .21 points or .01%, at 2500.82.

In breaking news this morning, Turkey’s military Chief of General Staff Hilmi Ozkok spoke in favor of allowing U.S. troops to use Turkey’s bases in establishing a northern front from which to attack Iraq. This statement of support from Turkey’s military comes amid rumors that Turkey’s parliament may consider a second vote after Sunday’s election.

 
 
  Jeff Bailey   3/4/03,  10:49:23 PM
The Index Trader Wrap has been posted: Link

 
 
  John Seckinger   3/4/03,  10:49:16 PM
The Futures Trader Wrap has been posted: Link

 
 
  Steven Price   3/4/03,  10:49:06 PM
The Swing Trade Game Plan has been posted: Link

 
 
  Steven Price   3/4/03,  10:48:30 PM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

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

 
 

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