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  Jeff Bailey   3/10/03,  6:12:59 PM
Pivot Matrix for tomorrow. Link

In Friday evening's market monitor, I made note of "wall of support" with correlations at various WEEKLY and MONTHLY S1's. The S&P Bank Index (BIX.X) 262.30 -3.25% "cracked" this wall of support on a closing basis, most likely due to St. Louis Fed President Poole's comments today. If the WEEKLY/MONTHLY correlative support levels are to hold, then the BIX.X break of this level is a "crack" in the dam, which could open some "flood gates" to lower levels in the SPX and OEX, which have heavier financial exposure.

  Jeff Bailey   3/10/03,  4:05:45 PM
The 3:15 PM Intraday Update has been posted. Link

  Linda Piazza   3/10/03,  4:02:40 PM
The OEX close below Friday's low does not bode well for tomorrow.

  Linda Piazza   3/10/03,  3:49:55 PM
Swing Trade Signals
We were in the Swing Trade short play from OEX 414.80 to approximately 410.20, depending on how quickly you keyed in your orders to sell. It would have been nice to be collecting a bit more premium now, but with the TRIN so high, with NYSE down volume so heavy in comparison to up volume, and two potential bounce points just beneath the then-current levels, it seemed most prudent to exit. This gives Steve a clean slate, too. No one will be happier to see Steve return than I will be!

  Linda Piazza   3/10/03,  3:45:22 PM
Those aggressive traders who elected to stay in the OEX play should now be watching for a move below the weekly S1 at 409.80, but there's still the strong historical support just below at 407. Both are possible bounce points. Disclosure: I have a bearish play on the OEX, entered before today, with risk capital only.

  Jonathan Levinson   3/10/03,  3:41:07 PM
The QQQ's are trading like a money market fund, barely budging. QQV +1.89 so far, TRINQ 1.41. Perhaps they're passing out dramamine tablets in the ND futures pits.

  Linda Piazza   3/10/03,  3:38:36 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's get out now, ahead of possible end-of-day shortcovering. The official signal is to exit now, with OEX currently at 410.20 and just below Friday's low of 410.22, a possible bounce point.

  Jonathan Levinson   3/10/03,  3:26:08 PM
The TRINQ, the TRIN for the COMPX, made it down to 1, and is currently 1.34. This is a very low reading, and it's been low all day, particularly when compared with the TRIN which has been peaking. I don't know what to make of the divergence.

  Linda Piazza   3/10/03,  3:25:09 PM
Swing Trade Signals
The OEX is moving below its five-minute 21-pma at 412.10. Perhaps those were sell-on-close orders coming in! Without a break of OEX 407 today, all traders should be considering the possibility of a bounce attempt tomorrow morning and making decisions appropriate to their account management practices.

  Linda Piazza   3/10/03,  3:19:53 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's lower the exit to OEX 414. It's the time of day when close-of-day orders should be coming in, and a move up now probably means more buy-on-close orders.

  Linda Piazza   3/10/03,  3:11:22 PM
At 37.27, the VIX is only .16 off its day low of 37.11, but moving up as I type this entry. This is another reason for caution for bearish plays, along with the high TRIN level Jim mentions on the futures monitor. Like Mark, I believe that it's likely that the VIX will move up through that descending trendline, but that might not happen before there's another bounce attempt.

  Linda Piazza   3/10/03,  3:02:12 PM
Swing Trade Signals
Conservative traders who want to preserve their commission costs, too, could set an exit at OEX 414, as this would be an almost $.50 move above the previous five-minute high and also would be above today's S1, but the official exit will be left at breakeven for now.

  Jonathan Levinson   3/10/03,  3:00:43 PM
Note that the TRINQ has been surprisingly low all day. The COMPX is back at 1283, FVX closed for the day down -6.2 bps.

  Linda Piazza   3/10/03,  2:56:59 PM
Swing Trade Signals
Unless there's a big drop in the last hour and we have lots of cushion on the OEX play, I'm going to exit before the day's end, whether stops are hit or not. Over on the futures monitor, Jim is talking about the high TRIN, and the OEX currently sits above several bounce points.

  Kent Barton   3/10/03,  2:54:17 PM
The SOX.X is leading the NASDAQ lower with a 2.0% loss and looks to be on course to close below its 21-dma (282.41) for the first time in nearly a month. A violation of short-term support at the relative low of 278.44 would open the door to a possible retracement of the large daily candlestick that was created by the February 14th rally. Meanwhile, sector leader INTC ($15.91 -0.10) is showing some relative strength while holding above its next clear support level at $15.00.

  Linda Piazza   3/10/03,  2:47:06 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
I'm going to lower the exit to the entry point at 414.80. That's more than a point above today's S1 level of 413.40 and is also above the March 5 low of 413.98. The OEX hasn't been above the 414.80 level since early this morning, so moving above that level now would be a clear change in tenor. Less conservative traders might want to set an alternate exit 417, just above today's pivot and just above the 60-minute 21-pma at 416.25, but the official exit will now be set at breakeven.

  Jonathan Levinson   3/10/03,  2:43:11 PM
It's about time for someone to locate Osama's bookkeeper's stepson's girlfriend and announce it worldwide. Any guesses as to what they'll cook up next?

  Linda Piazza   3/10/03,  2:35:16 PM
Swing Trade Signals
There we go. A new day's low of 411.27 on the OEX, but let's see if the move down holds. This does, however, negate the possibility of a reverse H&S pattern on the five-minute OEX chart. We're now looking again at the 410.22 low from Friday, watching how the OEX behaves at that level.

  Jonathan Levinson   3/10/03,  2:32:12 PM
The COMPX is in a narrow range down here near the lows, with QQQ resting just above 24.00. FVX is now down 6.2 bps, TRINQ 1.88, TICK.NQ -392. HUI and XAU are getting trashed again, HUI -5.07 and XAU -2.32.

  Linda Piazza   3/10/03,  2:30:16 PM
Swing Trade Signals
As the OEX dips toward the day's low, the VIX actually eases a bit in the last ten minutes. Without a new day's low soon, I'm considering lowering stop again.

  Linda Piazza   3/10/03,  2:27:12 PM
Volume patterns still confirm the weakness in the markets, but still make me a bit wary, especially as the markets refuse to fall beneath the next levels of support. Adv/dec ratios are .37 for the NYSE and .42 for the Nasdaq. New lows far outpace new highs. Down volume is 10 times up volume on the NYSE and 4.3 times up volume on the Nasdaq. Total volume is 754 million shares traded on the NYSE and 728 on the Nasdaq. If the Dow finally succumbs to this selling pressure, the whoosh down should be strong, but if not, I'm worried that sellers will switch sides.

  Jeff Bailey   3/10/03,  2:20:37 PM
The 1:00 PM Intraday Update has been posted. Link

  Linda Piazza   3/10/03,  2:19:03 PM
Currently at 1989.99, the Dow Jones Transportation Index is near the day's low of 1989. This index is below its October low, but not yet at its February intraday low of 1973.67, reached February 25. The index bounced strongly that day, so you might set an alert for $TRAN 1973.67 to monitor the overall market health if that level should be reached.

  Mark Phillips   3/10/03,  2:08:10 PM
VZ $32.76 (-1.30) Telecom weakness has driven our VZ put play to new lows of the day and after a feeble bounce, it looks the stock is headed back down to test those lows. Down more than 3% now, the North American Telecoms index (XTC.X) is acting like a sledge hammer, driving VZ ever lower. That $29-30 target for the play is looking ever more achievable as the day grinds along.

  Linda Piazza   3/10/03,  2:07:11 PM
The OEX moved above the 5-minute 21-pma and had a brief move, but no five-minute close, above today's S1 at 413.40 before moving down again. Traders next want to see a move below 412, which appears to be happening as I type, and then below today's lows. A failure to do so before another move up through and close above the 413.70 area would set up a potential reverse H&S pattern on the five-minute chart. The target predicted by that potential five-minute reverse H&S pattern would bring the OEX back toward 417.40.

  Jonathan Levinson   3/10/03,  1:59:54 PM
As the COMPX pulls back from its bounce highs, I'm hearing Robert Duvall in "Apocalypse Now" shouting- "S,OK, it's just a flare, just a flare." It's still early to call the top of this move, but the FVX is holding its lows, down 5.7 bps, QQV is holding its gains at 41.63, +2.45, and the TRINQ is still at the upper reaches of neutral at 1.72. The 5 minute 10(5) stoch is topping on the COMPX. The bounce is not over, but it's already sputtering.

  Linda Piazza   3/10/03,  1:44:22 PM
Swing Trade Signals
Looks as if a test of today's OEX 413.40 S1 level is underway. Traders who want to lower the stop loss for their own trades to breakeven levels would not get any quarrel from me today, with all the risks inherent in the market, but so far, I'm still looking at an exit just above today's pivot.

  Linda Piazza   3/10/03,  1:35:58 PM
As happened in earlier trading today, the five-minute 21-pma appears to be capping the OEX's upward movements, with that moving average currently at 412.25. The OEX has moved briefly above that moving average this afternoon, but hasn't yet closed above it. A close above it might be a first signal of a change in tenor.

  Jonathan Levinson   3/10/03,  1:23:44 PM
Wasn't the capture of Osama imminent on Friday morning, as "they" announced a type of OJ Simpsonesque car chase or something to that effect? I wonder if anyone was held responsible for that televised rumor about the capture of two of Osama's sons.

The COMPX continues to struggle just above 1280 support, the TRINQ 1.84, FVX -5.5 bps now, and gold trading up 4.40/oz.

  Jeff Bailey   3/10/03,  1:13:55 PM
Boots&Coots (AMEX:WEL) $0.63 +26% ... new 52-week high after CNBC mentions stock on the move on thoughts of Iraq setting bombs at oil fields.

  Linda Piazza   3/10/03,  1:09:09 PM
The VIX just now moved above 38 again, although it's currently dropped back to 37.95. The day's high has been 38.26, reached earlier today. Mark has pointed out the importance of the 39 level. Traders wanting final confirmation of a bigger move down will want to see a number over the now-psychologically important 40 level.

  Linda Piazza   3/10/03,  1:06:11 PM
OEX five-minute candles are growing smaller now, indicating a possible big move ahead. I don't see key levels for the OEX causing the pause as much as key levels on the DJI and COMPX causing that pause, as the COMPX tests 1280 and the DJI tests 7600.

  Linda Piazza   3/10/03,  12:58:08 PM
At 411.65 currently, the OEX is printing new lows as I type. I would expect a test now of Friday's low at 410.22. This is critical, as it's also just above the weekly S1 at 409.80.

  Jeff Bailey   3/10/03,  12:57:28 PM
S&P 500 (SPX.X) 811.69 -2.07% ... nearing WEEKLY S1 of 809.3, where we found correlative support from MONTHLY S1 of 810.10, which defines a tight "zone of support" from 809-810.

Today's inability to even try and test the WEEKLY pivot of 830.8 at the open, should have resistance firming at the 821-823 zone from WEEKLY and MONTHLY retracements. I showed this chart in Friday evening's market monitor.

  Jonathan Levinson   3/10/03,  12:54:22 PM
TA works well on price, as well as on derivatives of price, because it's simply a way of measuring trends on a chart. I've seen charts of ratios such as SPX:VIX and VIX:CPC, etc., and only the more esoteric chart patterns, such as head and shoulder tops, etc., become dubious because they're based on psychogical cycles derived from price movements.

  Linda Piazza   3/10/03,  12:51:30 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's lower the stop to OEX 417.25. This is .45 above today's OEX pivot as well as .50 above the 60-minute 21-pma. A move above these levels would be a clear change in tenor of the market, but let's give it that .50 wiggle room.

  Mark Phillips   3/10/03,  12:49:07 PM
In our ongoing debate of the validity of technical analysis on the VIX, I think it will be interesting to see at what point the VIX finally "breaks loose". So far, your lower trendline has been capping the rallies in the VIX, with a couple intraday spikes to that upper trendline. It is interesting that the upper trendline now sits just below 39 -- so a break of that trendline could very well coincide with that print at 39 on the PnF chart. You've talked at great length over recent months about the behavior around the 200-dma, and it is interesting how it has provided consistent support for the VIX over the past month. Like I mentioned over the weekend, I think you got this one right -- despite the fact that the VIX is a derivative of price action, TA is entirely valid and useful, just as if the VIX were a directly traded instrument.

  Jonathan Levinson   3/10/03,  12:44:06 PM
We're approaching the timezone for the "COMEX crush", when the gold shorts unload on the price of gold with heavy selling.

  Linda Piazza   3/10/03,  12:42:54 PM
The OEX moves down again to retest the day's low and that candlestick support from February 13. So far, I don't see any signs of an incipient rally, but we must be especially watchful. If OEX 412 is broken, we next watch as Friday's OEX 410.22 level is approached.

  Jonathan Levinson   3/10/03,  12:42:43 PM
Actually, Linda, it was a bullish descending wedge on the VXN, but whatever formation it takes to spike the premium in my puts will be fine with me at this point. The QQV has been in the cellar, with the 44-45 level like a ton of bricks, currenly 42.47. A break above the levels we're discussing will be bad news for the indices.

  Linda Piazza   3/10/03,  12:38:51 PM
Yes, I noticed the VIX, Mark. Today's high moved it up to my "inside" trendline, but not to yours which includes the shadows. (I've now got both marked on my charts.) Also, reader T.G. is pointing out the potential for a reverse H&S pattern in the VIX, with a neckline at 51. I think Jonathan has mentioned this potential formation, too, in the past. I'm not as familiar with the VXN as I am the VIX.

  Jonathan Levinson   3/10/03,  12:37:07 PM
This bounce off the 1280 support line isn't inspiring me to strum a guitar or sing a tune- it's flying like a lead (sic.) zeppelin so far. 24.00 QQQ and 1280 COMPX are clearly the next line in the sand for bulls, and a break below will probably run a lot of sell stops. TRINQ at 1.84 is miles from extreme, and the FVX is dropping, now -6.5 bps.

  Mark Phillips   3/10/03,  12:34:24 PM
Linda, speaking of the VIX, did you notice that we're once again testing that descending trendline, now at roughly 38? I'm still expecting market weakness and corresponding strength in the VIX. If the VIX pushes to 39, that will be a PnF Buy signal, with a vertical count that projects up to 52...and that's getting into the neighborhood of the kind of volatility readings seen last October and July.

  Jeff Bailey   3/10/03,  12:34:10 PM
Boots & Coots (AMEX:WEL) $0.55 +10% ... our little HIGHLY SPECULATIVE "oil well fire" putter-outer showing some gains today.

Hmmmm... as I typed this CNBC saying the Reuters reports that U.S. officials have said it has gathered intelligence that says Iraq is placing explosives around oil wells in Iraq.

Disclosure: I currently own SMALL and SPECULATIVE bullish position in WEL

  Jonathan Levinson   3/10/03,  12:31:45 PM
Can you explain this hedging thing a bit. I have some calls on AEM figuring if the market would drop, this would rise, but it is not happening! What do you think will happen with AEM?

My guess, which is Jim Sinclair's theory to explain the HUI / Gold divergence this year, is that hedge funds are going long the metal, but they're hedging the play by shorting mining stocks. That way, if gold falls, presumably the miners will fall too. Of course, the mistake is that the miners have such low capitalizations that the shorts are sinking the index, and the covering will rally it. That is, if this theory is correct, and I don't know that it is. It certainly explains what I'm seeing currently. As for AEM, it's on sell signals and a break below 12.20 confirmed with a print targets next support at 10.50. This is not looking like a strong chart at all on a daily basis, and neither is HUI, for that matter, although the weekly HUI is still within its uptrend.

Daily chart of AEM: Link

  Jeff Bailey   3/10/03,  12:29:57 PM
Forest Labs (FRX) $50.95 -0.11% ... stock holding pretty "tough" today. Will make note per previous comments that FRX's relative strength chart did give "buy signal" on Friday, and in my opinion, should bode well for stock and gives observation that stock looks to be showing continued "leadership" despite some broader-market weakness. Link

Bar chart shows stock has reached upper-end of Bollinger band (21,2), which has upper Bollinger starting to turn higher. In past, this has had stock consolidating near upper Bollinger level, then making a move higher next couple of weeks. Link

Disclosure: I currently hold bullish positions in FRX

  Linda Piazza   3/10/03,  12:25:06 PM
Here comes the test of OEX S1 and of historical support near 413.40-413.80 from below. So far, I note that the VIX is climbing back toward its day high, the VXN is still green, bonds are still green, and the dollar is still in the red. So far, so good for bearish plays.

  Mark Phillips   3/10/03,  12:15:56 PM
DGX $51.02 (-1.43) It is looking more and more like that PnF Buy signal at $54 was a bull trap, as the stock continues to fall, under pressure with the rest of the market. DGX hasn't been able to mount anything approaching a rally since that trade above $54 over a week ago, and with this morning's weakness, the stock is now trading below our $51.25 stop. There don't appear to be any encouraging signs for this play, and barring a miraculous afternoon rebound (not likely), we'll be dropping it tonight.

  Linda Piazza   3/10/03,  12:11:11 PM
Swing Trade Signals
OEX 412 is the 50% retracement of the larger-than-normal white candle that started the move off the lows on February 13. That may be why the OEX decline stopped at that level just now. Again, it's natural and normal for markets to rise and test broken support, so I would expect a retest--from below this time--of the broken OEX 413.40 S1 and historical support level. The five-minute 21-pma is also near that level now, at 413.55. When I see how the OEX behaves during this retest, I'll decide whether to lower the exit to near breakeven levels. Of course, those of you participating in the trade can and should make whatever decisions feel comfortable for you in such a tense trading climate. Bears want to see that test fail and then the OEX 412 support fail.

  Jonathan Levinson   3/10/03,  12:09:16 PM
Thank you so much for the heads up on the FNM new. Bought 10 put contracts right away and they did great. Thanks! You are the greatest.

Thanks for the props, Marie. I hope you did your TA on that play before buying the contracts. Often, news will cause a spike up or down, but it's very dangerous to trade news events with options because the premium jumps right away, causing you to pay more for the contracts than you would otherwise.

  Jonathan Levinson   3/10/03,  11:58:05 AM
This remains a pretty tranquil selloff in the COMPX, with the TRINQ just 2.02 right now, on a broad base of -473. QQV is +2.91 at 42.1, FVX down 5.7 bps. Support of 1280 is now in play.

  Jonathan Levinson   3/10/03,  11:56:38 AM
The HUI and XAU are getting sold heavily today, despite the strength in the metal. I suspect that it's hedged plays being put on, with the mining stocks on the receiving end. The HUI is at support on the daily chart, below which is 115 support, and then 101.

  Linda Piazza   3/10/03,  11:55:21 AM
Swing Trade Signals
OEX S1 has now been broken with two five-minute closes below that level. Now at 412.44, the OEX currently sits just below the 50% retracement of Friday's big first five-minute candle at 412.75. A sustained move below this level should send the OEX down to test Friday's lows near 410, another area at which we must be watchful. The OEX 410 level also sits near the 409.8 weekly S1 for the OEX, and also near the minimum target predicted by that double-top formation on the five-minute OEX chart. So far, so good, but I'm really babysitting this one today because of all the risks. After I watch a while longer, I may lower the stop loss nearer breakeven levels, but let's see how things go first.

  Jeff Bailey   3/10/03,  11:45:08 AM
The 11:00 AM Intraday Update has been posted. Link

  Linda Piazza   3/10/03,  11:37:06 AM
The Russell 2000 has now clearly broken below an ascending trendline in place since last October. The COMPX is breaking below its own, although it has not yet had a close below that level, as has the Russell 2000.

  Jonathan Levinson   3/10/03,  11:30:43 AM
Through the next weeks and months we'll be seeing increasingly bearish comments from the mainstream financial media and on the GE telethon, CNBC. I would normally take these as a bullish indicator, because like Dan Niles, Abby Joseph and others of their ilk, their calls are best faded. There's only one caveat to this rule, deriving from the fact that the public remains heavily invested to the long side. At the "point of recognition", a wave of selling will presumably commence when those who have been leaving their monthly statements unopened decide to bail out. It may never happen. But if it does, expect to see it reflected on CNBC and the mainstream media- in that extreme case, the bearish forecasts and comments from our favorite contrarian indicators will not be bullish.

  Linda Piazza   3/10/03,  11:30:02 AM
So far, the OEX's upward movement is being arrested by the five-minute 21-pma, currently just overhead at 414.29. Many levels of resistance now line up just above that level, battling the support a point below at 413.40. So far, volume patterns appear reassuring for bearish players, although one contrarian alarm sounds. Down volume now ranks 8.9 times up volume on the NYSE-traded issues and 5.5 times up volume on the Nasdaq. I've seen higher on both, particularly than the Nasdaq numbers. Adv/dec ratios are .34 on the NYSE and .37 on the Nasdaq. Volume totals are 342 million shares on the NYSE and 374 million on the Nasdaq.

  Jonathan Levinson   3/10/03,  11:23:48 AM
Poole's comments can't be making Al Green or Ben Bernanke too happy- it's an uncharacteristically clear admission of the mortgage bubble and the huge threat it represents. This points to the "10 sigma" perfect storm that Puplava and others have been mentioning, and coincides with my own comments and articles since last summer.

  Jonathan Levinson   3/10/03,  11:14:07 AM
WASHINGTON, March 10 (Reuters) - An unexpected financial shock at either of the top U.S. home finance companies, Fannie Mae (NYSE:FNM - News) or Freddie Mac (NYSE:FRE - News), could inflict heavy damage on the U.S. economy, St. Louis Federal Reserve Bank President William Poole said on Monday.

"Should either firm be rocked by a mistake or by an unforecastable shock, in the absence of robust contingency arrangements the result could be a crisis in U.S. financial markets that would inflict considerable damage on the housing industry and the U.S. economy," Poole said at a conference on the two government-sponsored enterprises, or GSEs.


  Linda Piazza   3/10/03,  11:10:43 AM
Swing Trade Signals
Here's where we stand on the OEX. On the five-minute chart, the OEX is trading in a tight descending regression channel with lower highs and lower lows. The next swing to the bottom of that regression channel should take the OEX below its daily S1 level, but so far, that level has been supporting prices. Since I always examine the possibility that a tight pattern of lower highs and lower lows is a bull-flag pattern, why am I not mentioning that possibility today? Because bull-flag patterns occur after a sharp rise, not after a sharp fall. Nevertheless, an upside break through that regression channel should send the OEX up to test next resistance, which appears to be near our entry. On that same five-minute chart, the OEX has completed and confirmed a double-top pattern with a minimal target near 410, but that of course depends on a break of today's S1 level. Of interest is the fact that confirmation of that double-top formation came with a break of 414.80, our entry. A ten-minute chart shows a possible distribution pattern--a sharp fall, then consolidation at a support level. The break of today's S1 level then appears key.

  Jonathan Levinson   3/10/03,  11:05:50 AM
The Kansas City Manufacturing Index, a minor report, has just been released, showing economic contraction: Link

  Jonathan Levinson   3/10/03,  11:00:20 AM
Gold is off its highs, now up 4.30$/oz, with HUI and XAU sinking further, and FVX off its lows, now down 5.2 bps. Bears should tighten their stops. This could be just a well-needed intraday pause, or it could be heralding another flagpole rally.

  Linda Piazza   3/10/03,  10:58:38 AM
European markets currently trade as follows: FTSE 100 at 3451, down since my last post about European markets; CAC 40 at 2529, down since my last post; and the DAX at 2351, down since my last post.

  Mark Phillips   3/10/03,  10:45:19 AM
Mondays have not been kind to the bulls lately, and today is certainly no exception, with most of Friday's short-covering ramp now history. This weakness is clearly seen on the OIN Put list, as detailed below.

BBOX - Right back at the bottom of the gap. Watch for a break below $38

MHK - Taking out Friday's lows right here and looking for a test of the lower end of support near $44 later today. Recall that we're looking to harvest gains in the $44-45 area

PII - Friday's low of $44.90 looks to be within reach later today, with solid support seen near $44.40.

TIN - Getting hammered lower here with a nearly 3% loss and taking out Friday's low. Watch for more weakness as the stock falls into the 10/15 gap at $38.

UTX - Now back at the $55.75 support area, with the next likely stop at the lows from Friday, near $55. Still targeting $51 for this play.

VZ - $34 resistance held, and VZ now back near the $33 level. Friday's low of $32.90 looks achievable today, and we'll continue to target the $29 level on the downside.

  Linda Piazza   3/10/03,  10:42:18 AM
With the SPX and the NDX already below daily S1 levels, the Dow and OEX struggle to hold above theirs. So far, all still works in favor of bearish plays, with bonds up, VIX and VXN up, and the dollar down, although the dollar has moved off its lows and bears watching.

  Jonathan Levinson   3/10/03,  10:36:24 AM
The RUT has broken Friday's low, and COMPX is well on its way. FVX -6.4 bps now, and the price of gold is holding strong, despite the weakness in HUI and XAU.

  Linda Piazza   3/10/03,  10:36:06 AM
The OEX currently tests is S1 level at 413.40 and its March 5 low of 413.98. Bears want to see the OEX break below that S1 level.

  Jonathan Levinson   3/10/03,  10:24:17 AM
HUI and XAU are now negative despite gold being up $5. This is the type of divergence that makes me nervous. Either hedgies are going long the metal and hedging with HUI/XAU shorts, or Al Green and Bernanke have wheeled out the spot light to summon the PPT from Gotham.

  Linda Piazza   3/10/03,  10:18:30 AM
Early volume patterns favor bearish plays, with decliners far ahead of advancers, new lows outnumbering new highs, and down volume swamping up volume. Volume is light, as yet. The $TRAN is dropping beneath October lows, and the DJI is testing its February 13 lows. So far, all is still working in the favor of bearish plays, but I continue to watch the VIX as it approaches its descending trendline.

  Jonathan Levinson   3/10/03,  10:18:08 AM
The TRINQ is quite mellow at 1.91, TICK.NQ -551, FVX -6.3 bps, QQV +2.74.

  Linda Piazza   3/10/03,  10:14:49 AM
It's natural for markets to come back and up test broken ranges or trendlines, but OEX bears will feel more comfortable once today's S1 level of 413.48 is broken, too. So far, with bonds up, the VIX and VXN up, and the dollar down, all is working in our favor.

  Linda Piazza   3/10/03,  10:05:53 AM
The VIX is currently 37.61, and within striking distance of its descending trendline today. This makes the Swing Trade play both dangerous and potentially profitable, as a break above that trendline would likely signal a new down leg in the markets, while a test and failure of that trendline might signal a bounce. We've got our stops in place, however, and I urge you to honor your stops today.

  Jeff Bailey   3/10/03,  10:04:47 AM
McKesson (MCK) $25.38 -1.24% ... Company announced today that it has begun search to find a successor for Senior Vice President and CFO William Graber, who plans to retire at the end of the company's fiscal year in April 2004. Mr. Garber was one of the key execs that helped turn MCK around after major accounting scandal, which had the company restating earnings in July 1999 for prior 3-years.

  Linda Piazza   3/10/03,  10:01:53 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
With an entry at OEX 414.80, the current stop is 418.75. I'll be watching during the day and lowering that exit as appropriate.

  Jonathan Levinson   3/10/03,  10:01:12 AM
Al Green has just added a modest 2.25B in overnight repos. If the fed's 22 primary dealers use it to chase the breakout in bonds, then yields will plunge lower. If they buy the dip in equities, then they should be able to jam the tape for awhile. If they use it to try to support the dollar, then they should be able to jam it for a very short while. We'll have to see.

  Linda Piazza   3/10/03,  9:59:09 AM
Swing Trade Signals
The Swing Trade was entered at 9:57 ET on a break of 414.80.

  Jonathan Levinson   3/10/03,  9:57:34 AM
Spot gold is up 4.70. On Friday, before the fictitious OBL-Offspring-Ramp-Job, the flagpole rally was preceded by a selloff in gold that lasted for several minutes. I am still wary of the indices flatlining and not setting lower lows, but nervous bears with stops in place can relax a bit given the predictable strength in gold this morning.

  Linda Piazza   3/10/03,  9:51:35 AM
Swing Trade Signals
The OEX continues to rise up and test the daily pivot at 416.90. Currently, the OEX appears to be moving back down from a test of that level. OEX 415-415.80 has proven resilient lately, but a move below 415 is a break of the recent trading range. There are many dangers here due to the location of a S1 level at 413.48, near the lows of March 5, a weekly S1 at 409.80, and strong historical support at 407, near today's S1 at 406.70. If the OEX does drop below the current trigger, we'll be watching for a target just ahead of 407. If the OEX instead moves above 418.75, we'll pull the current trigger and watch for an opportunity to get in on a rollover at a higher level. Consider the risks before taking this entry.

  Jeff Bailey   3/10/03,  9:50:36 AM
Sector action broadly negative in early going. Only Gold/Silver (XAU.X) 67.73 +0.43%, Natural Gas (XNG.X) 167 +0.34% and Oil Index (OIX.X) 246 +0.12% showing gains.

Early weakness has Airline (XAL.X) 29.44 -2.67%, Forest/Paper (FPP.X) 252 -1.9% and Broker/Dealer (XBD.X) 359 -1.5%

  Jonathan Levinson   3/10/03,  9:50:09 AM
1294 support, then 1280, then 1260, then airball on the COMPX. FVX is staying low, down 5.1 bps today. This doesn't rule out an hysterical flagpole rally again today, whether on real or fabricated internationally broadcast news, but I see little strength so far on the COMPX.

  Vlada Raicevic   3/10/03,  9:42:51 AM
This is not helping the market:

09:11 ET Poole says crisis possible for Fannie Mae, Freddie Mac : St Louis Fed President Poole said this morning that a "crisis is possible" for FNM and FRE and that they pose a threat to the economy if they fail; he also said that the govt should end the implicit guarantee of the two, and indicated that the GSEs should increase capital holdings.

  Linda Piazza   3/10/03,  9:38:27 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Enter short at OEX 414.80, with a stop at 418.75.

  Linda Piazza   3/10/03,  9:32:10 AM
Markets open down, with the OEX headed to test the daily pivot at 416.90.

  Jonathan Levinson   3/10/03,  9:31:46 AM
10 point gap down to COMPX 1295, TRINQ 1.21, QQV +2.65 at 41.83, FVX -5.8 bps.

  Jonathan Levinson   3/10/03,  9:29:59 AM
Mr. Glassman's seminal work: Link

  Jeff Bailey   3/10/03,  9:29:41 AM
True Story In the mid-1980's I was walking down the 16th Stree Mall here in downtown Denver with a fellow Mobil Oil employee. He grabbed me by the arm, nudged me in the rib with his elbow and pointed to a book in the window display at a bookstore. "Dow 3,000" was on the cover. We had a good laugh as the Dow would never trade 3,000! If it did, my friend would be a millionaire he said.

While Mr. Dent thinks demographics have NASDAQ at 10,000 by end of decade, his Dow projection is 30K+. I need to find a chart that Mr. Dent showed of the Dow based on his projections, but I do remember a rather LARGE pullback taking place in the early 2000's. The chart I remember him showing looked like the back of your left hand. At the time I saw it (years ago) we were probably at the ring finger. I would think we're somewhere between the index finger and the thumb per his analysis.

  Larry Wales   3/10/03,  9:28:18 AM
Good Morning All. Have been under the weather all weekend with a miserable chest cold but we are here this morning. Looks like a open just under today's pivot of 822.50. I expect a move up to test the point of control at 824.50 and then the upper value area of 827.00 and possibly fill the gap at 828.50. But that would be too much to ask for. Let's see if we can get over the pivot first.The lower value area is pegged at 820.50 right where the low of the morning is.Below that next support is 817.00 area on the ES

  Jonathan Levinson   3/10/03,  9:25:48 AM
Harry Dent has just announced Nasdaq 10,000 by the end of the decade on CNBC. Hmmm. I think I'll hold my put position for the time being.

  Jeff Bailey   3/10/03,  9:24:18 AM
The 9:00 AM Intrday Update has been posted. Link

  Linda Piazza   3/10/03,  9:06:16 AM
Swing Trade Signals
With futures lower this morning, the desired rollover from OEX 420-422 may not be available, and the game plan may need to be altered to watch for a fall through 415 instead. I'll watch the first five-minute candle before determining whether and when an entry signal will be issued.

  Linda Piazza   3/10/03,  9:00:22 AM
Currently, the FTSE 100 trades at 3480, relatively steady from this morning's earlier reading, while the CAC 40 slides further, to 2537, and the DAX also slides, to 2363.

  Jonathan Levinson   3/10/03,  8:58:57 AM
Al Green is owed 2B in expiring overnight repos, the announcement for which is due at 10AM. Yields continue to show weakness, which leads me to expect very modest repo activity for today at best.

  Jonathan Levinson   3/10/03,  8:41:54 AM
From Bloomberg.com:

Fairfield, Connecticut, March 10 (Bloomberg) -- General Electric Co. said Friday in its annual report that its post- retirement benefit plans contributed $806 million pretax to earnings in 2002. Investors had to read a footnote 37 pages later to learn that GE's pension plan actually lost $5.25 billion, equal to 29 percent of the company's pretax earnings.

The US Dollar Index is trading below 97.90, QQQ is trading 24.38 with NDX futures at 980, SPX 822.75. More buying in bonds with FVX -4.9, TNX -3.7 and TYX -2.4 bps.

  Linda Piazza   3/10/03,  7:28:00 AM
Good morning. Perhaps it would be best to pause at that greeting for a moment, absorbing it before moving into the rest of this briefing, because there's no good news to be found in a scan of Asian and European markets this morning. Instead, it's replete with news of multi-year lows being hit across various markets.

Both semiconductor-related companies and financials were pressured in early Japanese trading on Monday. They led the Nikkei to new 20-year lows by the close. The Nikkei dropped below the key 8000 intraday, but managed to close above that level at 8042.26, dropping 101.86 points or 1.25%. Goldman Sachs cut ratings on semiconductor equipment companies Tokyo Electron and Advantest, sending those stocks lower. With the Nikkei declining, investors fear that banks and insurers will continue to suffer losses in their holdings, and again dumped financial stocks.

Perhaps the recovery off 20-year lows might have been stronger, except that news hit the Asian markets that North Korea had test-fired another missile. The Nikkei made those sub-8000 lows before market participants learned of the North Korean incident. The test-firing of a second missile had been anticipated. Yesterday, the U.S. stated that it would not negotiate with North Korea at this time, as other countries in the region should participate or take responsibility for such negotiations.

Despite the problems suffered by semiconductor-related companies in Japan, Taiwan Semiconductor Manufacturing rose on improved overseas demand. After the market closed on Friday, the Taiwanese government announced that exports rose 22% from the year-ago period. Samsung also rose on news that it would buy back or cancel 2% of outstanding shares and 470,000 preferred shares. Taiwan's Weighted Index still fell 0.7% and closed at its lowest since mid-October.

Worries about crude oil prices and their probable effect on U.S. and European economies fueled discussions on CNBC this morning. As in Japan, financials suffer in today's trading. In Europe, the insurers have been particularly hard-hit, with Swiss Life leading declines in the insurers. Exporters also declined. Currently, the FTSE trades down 5.40 points or .15%. At 3486.20, it now has slipped beneath the 3500 level after losing the key 3600 level last week. If the FTSE were to close at this level, it would be closing at a multi-year low, although in January, it recently reached an intraday low of 3391.50. The CAC 40 trades down 19.87 points or 0.77%. At 2555.04, it has moved below October's multi-year low of 2612. The DAX trades down 39.47 points or 1.62%. At 2392.19, it falls beneath a recent multi-year low of 2433.

While speaking on "Fox News Sunday," Secretary of State Colin Powell asserted this weekend that the U.S. is close to winning enough votes to pass a resolution authorizing force against Iraq and threatened France that vetoing the resolution might damage ties with the U.S. Still, foreign investors aren't so sure that the U.S. will get the needed backing, and wonder about the effect of the war's cost on our already-struggling economy.

  Leigh Stevens   3/9/03,  4:37:01 PM
The Index Trader Wrap has been posted: Link

  John Seckinger   3/9/03,  3:36:37 PM
The Futures Trader Wrap has been posted: Link

  Linda Piazza   3/9/03,  3:36:29 PM
The Swing Trade Game Plan has been posted: Link

  Steven Price   3/9/03,  3:35:50 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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