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  Jeff Bailey   3/12/03,  6:36:53 PM
Pivot Matrix for tomorrow. Link

Both of the WEEKLY S2 levels for the SPX and OEX held support today, so these remain as levels of support again tomorrow. It may now be time to test their levels of correlative resistance at WEEKLY S1, where we once again see a correlative level of resistance show up in the SPX DAILY R1.

NASDAQ-100 remains to be in somewhat of a "world of its own" and traded either side of NDX/QQQ WEEKLY and MONTHLY S1s.

  Linda Piazza   3/12/03,  3:56:37 PM
The VIX has fallen back to 39.08 and sits right on top of its descending trendline from August to the present.

  Steven Price   3/12/03,  3:49:10 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Just as I was breathing a sigh of relief, we caught a bid and went positive, stopping us out on the 1/4 short at 7525 at 15:46:38. I'm going to sit on the sidelines until the end of the day and try to decide if we are seeing at least a short-term bounce after those H&S fulfillments or just some short covering. I'm not afraid to step back in short if we take out OEX 400, but the risks I highlighted earlier certainly came back to haunt me.

  Linda Piazza   3/12/03,  3:43:35 PM
Trading at 285.50 as I type, the SOX has now bumped above its 21-dma at 284.19. An alert reader also pointed out the non-classic morning-star formation on the SOX. I'm not sure how much credence I give that three-candle formation (red candle, doji, then white candle) because the white and red candles are not particularly large, and the doji does not sit under those two candles. Nison suggests giving some leeway to index patterns, especially if they occur near support, but another consideration is that the SOX hasn't been in a real decline, but in more of a consolidation. A confluence of historical resistance levels and MA's sits just overhead, too, at the 290-300 levels, so I'm not yet ready to declare the bear/bull fight resolved.

  Jeff Bailey   3/12/03,  3:41:44 PM
The 3:15 PM Intraday Update has been posted. Link

  Linda Piazza   3/12/03,  3:38:26 PM
On the 60-minute OEX chart, the 21-pma now has cycled down to 408.29, just above the February 13 low of 407.79. This morning's break seemed to come from that 407-408 level, too, so it should prove an important level to watch the last twenty minutes of trading and early tomorrow morning. In an earlier post, I had speculated that the 21-pma on this chart might cycle down to this level about the time the OEX rose to that level. (Isn't it handy how that works out sometimes?) This will be the first real test of OEX strength, although other resistance levels lie above, too.

  Jonathan Levinson   3/12/03,  3:29:45 PM
After poking above the upper bollinger band entirely for a few candles, the COMPX 10 minute is back below it. The 20 period sma on that timeframe is now at 1260, which will provide support on a run back down. No guidance from my breadth indicators, except for the TICK.NQ which is back in the red, -198. HUI and XAU are back in positive territory, +.38 and .64 respectively.

  Linda Piazza   3/12/03,  3:29:43 PM
What's your trading style? I'm hearing from a lot of traders planning to front-run an expected rally today, a tactic that can work well when close support levels exist and positions can be exited as soon as those supports are violated. It's not my style, however, as I prefer that markets show me the direction they're going. If I wait, I miss the first part of the movement, of course, but I take some risk out of the entries. I'm a position trader who stays in trades for days or even weeks, and I want to know the intermediate trend, not the short-term trend. Until proven otherwise, longer-term trends are down, and weekly charts still show me some risks to bullish plays, so bullish entries aren't yet right for me. That doesn't mean that short-term traders can't profit wildly from bear-market rallies or that one of those rallies might not turn out to be more than a bear-market rally. If that happens, I'll know it. Know your own style when you make trading decisions. A decision that would be right for position traders might not be right for daytraders, and the opposite is true, too.

  Jeff Bailey   3/12/03,  3:15:16 PM
S&P 500 (SPX.X) 800 -0.08% .... just off best levels of the afternoon and morning high of 801.89. Only resistance I see is from MONTHLY retracement of 80.9% at 801.35, which found selling. Looking for pullback support at 796.

  Linda Piazza   3/12/03,  3:06:53 PM
The VIX of course moved below 40 by the time I posted my last comment about it remaining above 40. It does, however, remain above the descending trendline. This last push has not yet moved the SOX above its 21-dma, although it's now less than a point below that moving average. The $TRAN has now moved almost two points above its September 2001 intraday low.

  Jonathan Levinson   3/12/03,  3:01:24 PM
The COMPX has just entered positive territory as QQQ touches 24.00. The TRINQ is .66, QQV -.23, TICK.NQ +343 and bonds closed with FVX and TNX in the green. HUI and XAU have gone flat. The 20 period sma on the 30 minute candles, coinciding with round number resistance on the QQQ is holding back the advance for the time being.

  Steven Price   3/12/03,  3:00:03 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Stops are set on the 1/4 short at 7525. This was quite a recovery and it looks like we will be stopped out. As I said I was playing with fire and it appears I may get burned.

  Linda Piazza   3/12/03,  2:57:22 PM
The VIX remains above 40 on this afternoon push, as well as above its descending trendline. The $TRAN remains below its September 2001 low, although it's off its low of the day. The SOX remains in the green, currently once again trading within striking distance of its 21-dma at 284.07, with the SOX currently at 282.97. It's tough to sort out all the various messages, but they all signal short-term turning point. Just which direction?

  Jeff Bailey   3/12/03,  2:53:42 PM
NASDAQ-100 Index (NDX.X) 960 +0.13% ... edges into positive territory for the first time this afternoon. Morning high was 966.63.

Altera (ALTR) +5% Link , Nextel (NXTL) +3.7% Link and RF Micro Devices (RFMD) +3.4% Link are index leaders here.

  Linda Piazza   3/12/03,  2:50:07 PM
Volume has topped a billion shares traded on both the NYSE and Nasdaq.

  Kent Barton   3/12/03,  2:41:06 PM
Widespread weakness in the big-caps: No less than seven of the Dow components are trading at or near multi-YEAR lows: BA, GM, HON, KO, MCD, SBC, and T.

  Jonathan Levinson   3/12/03,  2:31:00 PM
Resistance at the 20 period sma on the 10 minute candles is now support at 1258 COMPX. All other indicators look the same, with FVX adding a touch to its gains, now +2.3 bps. HUI and XAU are back in the green, in a hair-raising save after a dip below support intraday on those indices. QQQ is currently trading 23.69.

  Linda Piazza   3/12/03,  2:16:21 PM
As markets attempt a bounce, traders in bearish plays should be considering appropriate stops for their risk tolerance/strikes/expiration dates/account-management style. I notice that on the 60-minute OEX chart, the 21-pma slopes strongly down, currently at 409.69, and looking to be headed toward the 407.90 level that has figured so strongly in this month's trading. Bears would want the 407.50-410 area to be defended.

  Jim Brown   3/12/03,  2:10:54 PM
If you are experiencing any problems with the new Market Monitor please do not email me. Send your questions and comments to IT@OptionInvestor.com. We have extra staff on site today to monitor the performance as more readers log on. Thanks

  Steven Price   3/12/03,  2:10:14 PM
Swing Trade Signals
Keeping an eye on the 21-pma and 50-pma on the 5 min charts in the Dow/OEX/SPX; the 21-pma had provided a lid on each rally attempt since Tuesday afternoon, but has now been broken. The 50-pma, which sits above, has also been crossed. I'm not as sure about the short position as I was earlier and am glad to have only risked a 1/4 short. I'm not yet giving up, since I think continued resistance at 7500 would signal another leg down, but the last bounce highlights the HIGH RISK category that we are now in for shorts.

  Jeff Bailey   3/12/03,  2:06:42 PM
The 1:00 PM Intraday Update has been posted. Link

  Jonathan Levinson   3/12/03,  1:58:16 PM
The COMPX is making its first run at the 20 period bollinger band midpoint on the 10 minute candles (a 20 period sma) since the opening spike. Once again, 1260 is the magic number. The TRINQ is 1.08, TICK.NQ rising to -214. FVX is up 1.5 bps, TNX -1.1 bps, TYX -3.6 bps.

  Linda Piazza   3/12/03,  1:56:30 PM
The OEX has now had three five-minute candle closes above its five-minute 21-pma. I wouldn't build too many expectations into a five-minute chart's behavior, but this is a divergence from the OEX's behavior since yesterday afternoon and should be watched. Someone is watching that moving average, because one of the candles bounced exactly from the moving average. The OEX looks to be testing it again from the top, and the moving average still slants down slightly, although it's beginning to flatten. That MA is now at 401.26. Note: I am definitely not signaling a suggestion to go long right now. I still am in my bearish positions. However, those of you in bearish positions might be considering appropriate stop profits/losses.

  Kent Barton   3/12/03,  1:51:37 PM
A scan of the major sector indexes shows red across the board, with the exception of the XAU.X gold index (defensive action), XAL.X airline index (stabilizing near its all-time lows after getting whacked earlier in the week), and SOX.X semiconductor index. That relative strength in the SOX.X is a potentially bullish sign for the NASDAQ. But as Linda mentioned earlier, the index isn't exactly a bastion of technical strength as it languishes under the 21-dma at 284.

  Linda Piazza   3/12/03,  1:47:40 PM
The afternoon push comes right on schedule. For the last two days, the OEX high of the afternoon (not day) has come between 13:40 and 13:50 (1:40 and 1:50 ET). Will today follow that pattern, too?

  Linda Piazza   3/12/03,  1:42:26 PM
The last five-minute OEX candle touched the 21-pma but did not move above it. That moving average is beginning to flatten a bit. Candles grow smaller again. Something feels ready to happen, but what? The five-minute 21-pma now lies at 401.14, and the OEX appears to be trying to move above it again.

  Linda Piazza   3/12/03,  1:40:04 PM
Volume patterns continue to worsen, with adv/dec ratios now at .42 for NYSE-traded issues and .48 for Nasdaq-traded issues. Down volume is now 3.8 times up volume on the NYSE and 2.7 times up volume on the Nasdaq. Volume is 814 million shares traded on the NYSE and 818 on the Nasdaq. This is an increase in volume on a down day--not a good sign for bulls--but not high enough volume yet to signify a capitulation day.

  Mark Phillips   3/12/03,  1:39:04 PM
Finally back on line -- in a manner of speaking -- cable modem dead, so having to revert to old-fashioned dial-up access.

Noticing that our slow and steady call play AMGN is getting dragged lower with the rest of the market, currently testing support at the 20-dma, just above $54. Aggressive traders looking for yet another entry into the play will want to watch for a rebound from that level in anticipation of another run at the $56 ressitance level. Of course, we want to wait for the bounce, preferably accompanied by some sort of lift in the BTK index as well!

  Steven Price   3/12/03,  1:33:14 PM
Swing Trade Signals
That OEX 400 level is proving awfully tough, with a low of 400.25. The weekly S2 sits at 399, as well. A break below those levels should get us on our way to the PnF target of 390, but so far they are holding firm. Aggressive traders can thinnk about adding to the position if the OEX hits 398, but my target will be 390 to start.

  Jonathan Levinson   3/12/03,  1:31:58 PM
The COMPX is just walking down the 60 minute lower bollinger band. The TRINQ continues to show almost perfectly neutral breadth at 1.28, with the TICK.NQ at -429 and QQV near flat at +.12 to 41.28. FVX is up 1 basis point. Very little to report on the COMPX, as it's just treading water below 1260 support.

  Kent Barton   3/12/03,  1:30:40 PM
Morgan Stanley (MWD) $32.60 -1.72: Stabilizing above $32.50 after free-falling during the first half-hour of trading. Very short-term traders who entered this PremierInvestor short play up at our action point of $34.19 might want to consider taking profits at current levels, or using a tight stop slightly above $33.00. The stock is hitting new multi-month lows on the strongest volume of the year, thanks to a profit outlook reduction from Wachovia. The firm slashed its 2003 forecast from $3.00 to $2.90 and 2004 expectations from $3.36 to $3.23, citing weakening consumer credit trends.

  Linda Piazza   3/12/03,  1:29:16 PM
The OEX trades just cents above a recently achieved new low of the day, but refuses to fall below 400. Typing this entry and posting it will probably ensure that it will do so in the next few moments, however!

  Linda Piazza   3/12/03,  1:09:39 PM
Go ahead and discuss the VIX, Jeff. Lots of questions from readers about the VIX today.

  Jeff Bailey   3/12/03,  1:08:31 PM
Crud I'm working on a chart of the Market Volatility Index (VIX.X) for 01:00 Update, and CNBC now discusses.

  Linda Piazza   3/12/03,  1:02:12 PM
It will soon be time for the early-afternoon push. The outcome should tell us much about the final direction of the markets.

  Jeff Bailey   3/12/03,  12:56:21 PM
Major Indexes all back near their lows. If you took the chart labels off of them and their values, the 5-minute bar charts would look identical.

This hints of a very orderly and rather "non-strategic" type of sysematic selling today. Many times, we'll see some differences in the intra-day charts.

  Jeff Bailey   3/12/03,  12:51:52 PM
Forest Labs (FRX) $48.24 +0.92% ... back near its session highs and stock has held up well after yesterday's drubbing. Per yesterday's comments regarding Celestica/Lexipro cannibalization, perhaps those thoughts in play still. Yesterday, we looked at $0.50 chart with some levels defined Link and $47.50 was tested and looks to have held so far.

Here's updated $0.50 chart Link , which is unconventional, but helping us "fine tune" things a little. Still have an upside alert set at $51.50 for new entries.

Disclosure: I continue to hold bullish positons from past profile in May $55 calls.

  Jonathan Levinson   3/12/03,  12:46:54 PM
The COMPX has a reversal doji formation at the lower breach of the 20-200 bollinger band on the 10 minute candles, but very little loft on the bounce- not even a challenge of 1260. QQV is actually negative again. The selloff in C makes me wonder what news could be out there, but it's idle speculation as we watch the tape. We're seeing strength return to precious metals, and FVX is still green, but not by much, +.6 bps.

  Steven Price   3/12/03,  12:45:18 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on the 1/4 short position when the Dow traded 7339 at 12:44:00. The stop is currently set at 7525. As I have said I am risking a small amount above support in an ugly market.

  Linda Piazza   3/12/03,  12:37:25 PM
The OEX currently rises to test its five-minute 21-pma at 402.46, with the OEX currently at 401.81. The OEX has not been above this moving average since about 3:00 ET yesterday.

  Steven Price   3/12/03,  12:36:44 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
If this latest bounce at 7450 fails I am going to risk a very small position short. Go short a 1/4 position at Dow 7439. Set stops at 7525. We have serious weakness in almost all sectors, but we are still above OEX 400 and I'm going to take a small risk with a tight stop. This is a HIGH RISK entry.

  Jeff Bailey   3/12/03,  12:35:08 PM
Dow Industrials (INDU) 7,456 -0.89% ... "recovers" off the lows of 7,425 here. It would be my opinion that this is because the SPX and OEX both held there weekly S2s.

Some money for institutional buying may be freeing up from the shorter-dated 5-year Treasury, as its YIELD ($FVX.X) slightly higher at 2.522% for bulk of morning session. This is "interesting" as the 5-year is "safer" that the 10 and 30.

Quick check of June Fed Funds futures (ff03m) 98.96 shows little action today, with 100% chance of Fed lowering rates to 1% between now and June.

  OI Technical Staff   3/12/03,  12:32:17 PM
The Market Monitor server needs to be rebooted. Please reconnect your market monitors to continue to receive updates.

  Jonathan Levinson   3/12/03,  12:28:25 PM
I'm using bollinger bands to keep an eye on the action, using breaks of the lower band to watch for reversals.

  Linda Piazza   3/12/03,  12:26:49 PM
With oscillators of little benefit today, consider turning to the moving averages for guidance. The SOX remains below its 21-dma, and also keeps failing in its attempts to push above its hourly 21-pma. The index keeps pushing briefly above that moving average, currently just overhead at 281.25 with the SOX at 279.87, but hasn't been able to sustain a move above that moving average for more than a few hours since dropping below it in early March.

  Linda Piazza   3/12/03,  12:22:22 PM
Volume has begun to pick up, with 604 million shares traded on the NYSE and 626 million on the Nasdaq, with these numbers higher than what's been seen lately at this time of day. Volume patterns continue to worsen, with a .46 adv/dec ratio on the NYSE and a .51 ratio on the Nasdaq. Down volume is 3.5 time up volume on the NYSE and 2.46 times up volume on the Nasdaq. New lows continue to vastly outnumber new highs.

  Jeff Bailey   3/12/03,  12:16:42 PM
Cisco Systems (CSCO) $12.50 -3.99% ... trade at $12.50 is "triple-bottom" sell signal, but comes just above bullish support trend. Per 11:00 Intra-day update, looking short/put on this break, but just partials at this point. Link

Now has bearish vertical count of $10, which would be used for preliminary risk/reward target. Vertical count could grow, but this is first assessment.

According to Dorsey/Wright and Associates, they've classified CSCO as "computer group." This sector bullish % is currently "bull correction" status at 24.9% after reversing lower from 48% in early December. As a benchmark, this sector bullish % fell to 14% at the past October low reading. This sector bullish % tends to find historical bottoms near 18%-16%, so still looks to have some downside in this sector indicator.

  Linda Piazza   3/12/03,  12:11:34 PM
Currently at 40.99, the VIX is above January and February highs, headed toward the 45 level predicted by the confirmed double-bottom formation formed from November's low and January's low.

  Linda Piazza   3/12/03,  12:08:11 PM
The SOX has just dropped beneath last week's 278.44 low, currently trading at 278.31.

  Steven Price   3/12/03,  12:07:51 PM
Swing Trade Signals
I am beginning to feel like I'm standing at the station watching the train pull away. However, we are approaching the H&S downside objectives in the SPX (787-790) and the OEX (just below 400). The Dow has completed the pattern the way I drew it over the past month, targeting 7500. Do we get short now? Tough call, but certainly nothing to suggest any bullishness, with the COMP now below 1260. I think yesterday morning's suggested entry for aggressive traders just over 7600 was thebest chance, but I have no reason to believe we can't re-test the Octoebr low at 7197. With the OEX sitting just over 400, I really don't want to chase the drop, but if I had entered I'd probably be lowering my stop to lock in some gains. Possibilities depending on risk tolerance are 7525 or 7660.

Current levels: Dow 7427/COMP 1254/SPX 789.22/OEX 400.46

  Jonathan Levinson   3/12/03,  12:07:34 PM
C is getting absolutely hammered, now down 3.65% at 30.40.

  Jonathan Levinson   3/12/03,  12:06:05 PM
Well, that was quick. COMPX 1260 has been violated, bringing in 1250 support. The TRINQ is still neutral at 1.28, and the QQV is finally in the green by .22. In other words, there is still no sign of even a hint of fear in the QQQ options market, and breadth on the COMPX is neutral. It will be very interesting to see whether the COMPX catches up to the other markets.

  Jeff Bailey   3/12/03,  12:04:30 PM
S&P 500 Index (SPX.X) 790.78 -1.24% ... session low here, and just 1 point away from WEEKLY S2. FULL position bears may look to take 1/4 or 1/2 off the table here to once again, free up cash for any type of rally back near a level of resistance.

S&P 100 Index (OEX.X) 400 -1.54% ... also 1-point above its WEEKLY S2. Traders can begin weighing risk/reward in their trades here to the bearish vertical count of 390.

  Jeff Bailey   3/12/03,  11:58:08 AM
The 11:00 AM Intraday Update has been posted. Link

  Linda Piazza   3/12/03,  11:50:50 AM
At 40.26 as I type, the VIX is at the high of the day.

  Linda Piazza   3/12/03,  11:47:41 AM
Today's downdraft carried the Wilshire 5000, the broadest of the markets, below its July closing low of 7601.84, although not yet below its July intraday low. That intraday low was 7396.63, and the Wilshire 5000 is currently at 7536.29. The October intraday low was 7282.42. I don't see any support levels between here and the July intraday lows, but that doesn't mean that markets can't turn around in thin air. There's nothing on the charts to indicate it's about to do so, however.

  Linda Piazza   3/12/03,  11:43:53 AM
The SOX continues to trade in the green, currently at 280.68, but the index failed in its test of its 21-dma. The low of last week's consolidation was 278.44, and a move below that level would be the lowest for the SOX since February 14. There might be some slight support below near 275 from brief consolidation at that level in early September last year, but that support should be slight. Of course, the battle with that overhead 21-dma may not yet be settled.

  Jonathan Levinson   3/12/03,  11:41:47 AM
Thanks again to Maria on CNBC for giving bears the heads up to stay short today.

The bounce from the widely telegraphed support level at 1260 COMPX has been quite weak so far. TRINQ neutral at 1.16, QQV -.45 at 41.01, TICK.NQ -499.

  Linda Piazza   3/12/03,  11:32:17 AM
European markets are cratering, with the FTSE currently down 174 points to 3278, the CAC 40 down 87 points and clinging to 2400, at 2406, and the DAX down an astounding 111 points to 2193. The DAX began the year at 3000 after falling 40% last year.

  Jonathan Levinson   3/12/03,  11:29:16 AM
The COMPX is parked near the lows of the day, currently 1264. The TRINQ is still in neutral bullish territory at .89, TICK.NQ -352. The FVX is off its highs of the day, +1.9 bps. The banks continue to get sold, C at its low of the day, QQQ printing a new low as I type at 23.75.

  Linda Piazza   3/12/03,  11:19:58 AM
Decliners gained a little ground over advancers since my last report, but the ratios have remained relatively stable, with a .53 ratio on the NYSE-traded issues and a .55 ratio on the Nasdaq-traded issues. Down volume is 2.26 times up volume on the NYSE, and has now pulled ahead on the Nasdaq, too, being a relatively mild 1.34 times up volume. Total volume is 405 million shares traded on the NYSE and 444 million on the Nasdaq.

  Linda Piazza   3/12/03,  11:13:43 AM
Taking a microscopic look at the OEX, I notice that it's currently challenging its five-minute 21-pma, with that moving average just overhead at 404.63. Just above that is the 405 level of both support and resistance through 12 five-minute candles (one hour) this morning. As I type, the OEX begins to print a red candle, pulling back from that moving average.

  Steven Price   3/12/03,  11:11:46 AM
MHK $43.80 -1.13 This put play, closed for a gain last night, is giving put holders some additional profits this morning. It finally gave up the $44 level and is now sitting just above its October low of $43.75. There was some intraday resistance at $45.05 and $45.35 yesterday and traders can think about lowering the alternate stop of $46.05 to $45.50.

  Linda Piazza   3/12/03,  11:01:44 AM
European markets continue to be troubled, with the FTSE 100 currently down 121 points, the CAC 40 currently down 65 points, and the DAX down 92 points.

  Steven Price   3/12/03,  10:56:24 AM
Swing Trade Signals
I would really like to enter a short trade officially, but I keep looking at those bullish percents in oversold territory and the COMP sitting just above 1260. I'm also looking at the drop of the past few days and thinking that shorting after all that action seems silly (to use a traditional technical term). I'd much rather short a failed bounce back up to the targets I highlighted yesterday morning (7650 or 7750). However, I can't find any reason right now to be bullish from this level and I'm not sure I'll get that entry. I am definitely struggling with myself while watching this market level. I still think the bears are in control, but I'm hoping we can get another Osama rumor to give us a temporary boost (GRIN).

  Jeff Bailey   3/12/03,  10:54:21 AM
Speaking of bullish support trends the "default" chart at stockcharts.com of the NDX.X Link shows a break of bullish support trend, which seemed to hold on the February pullback.

However, the "conventional" 25-point box chart Link still shows trend holding. This give the NDX somewhat of a "mixed" look, and still think this one, along with QQQ a very good index straddle/strangle type of trade.

  Jeff Bailey   3/12/03,  10:51:06 AM
Black Box (BBOX) Oh my!.... I was just looking a the OI "put" play list. They dropped this one last night because it was "trading sideways." My thinking is subscribers didn't get a chance to close this one out until this morning. Subscriber short/put get the gain, but not the OI play list.

Lesson learned I hope regarding the bullish support trend. No wonder it was "trading sideways." Link

  Linda Piazza   3/12/03,  10:46:12 AM
Volume patterns have been negative in early trading, but selling appears orderly and not excessive. Adv/dec ratios are .57 for the NYSE and .58 for the Nasdaq. Down volume is 1.8 times up volume on the NYSE and roughly equal on the Nasdaq, showing some buying balancing the selling--perhaps in semi-related companies? New lows reach an imbalanced 215 against 9 new highs on the NYSE, sending a first contrarian signal, but are not nearly as imbalanced on the Nasdaq, with 71 new lows and 15 new highs. Total volume is 275 million shares traded on the NYSE and 322 million on the Nasdaq.

  Steven Price   3/12/03,  10:43:32 AM
Swing Trade Signals
We are testing the lows of the day once again after the failed rebound at Dow 7500. I'm looking for evidence of some base forming here and so far the only thing I can find is the S1 levels holding firm on a 5 min basis, but even they are starting to fail. On a more macro basis, things look ugly, especially now that we failed at what I thought might be support.

Current levels: Dow 7476/SPX 794.42/OEX 403.25/COM 1264

COMP 1260 should be a crucial level, since that was our bounce point on the last journey to these levels.

  Jeff Bailey   3/12/03,  10:42:36 AM
Dow Industrials (INDU) shorter-term traders, as bullish % very low and DIA reaches a bearish vertical count, can add DAILY pivot analysis retracement. Here we see lots of DAILY/WEEKLY/MONTHLY resistance around DAILY pivot. Link

As such, no "bearish excuses" above 7,570 and does look further vulnerable on break of 7,486

  Linda Piazza   3/12/03,  10:39:29 AM
Currently at 1932.20, the Dow Jones Transportation Index continues to drop below September 2001 lows. No strength to be seen here, yet.

  Jeff Bailey   3/12/03,  10:33:54 AM
Dow Industrials (INDU) here's a 5-minute bar chart of Dow Industrials, with overlaid WEEKLY and MONTHLY retracement levels. Link

  Linda Piazza   3/12/03,  10:32:11 AM
Just to let you know and not to give any particular credence to the news, rumors persist that Osama bin Laden has been captured and that Pakistan will announce his capture later today. I mention the persistence of the rumors to urge traders to decide how they'll react to a sudden spike in the markets without knowing the reason behind that spike. Is it a rumor that's soon to be disproved? Is it a buy program that will trigger other buy programs? Without crystal balls or a direct link to the CIA, about all we can do is set appropriate stops and stick to them.

  Jonathan Levinson   3/12/03,  10:29:05 AM
QQV is actually negative, though the VXN is holding its gains. QQQ continues to trade with the stability I'd expect of a money market fund... well, slight exaggeration. With the SOX up 1.4%, we see a 9 cent gain on the day in QQQ.

  Jeff Bailey   3/12/03,  10:28:19 AM
Networking Index (NWX.X) 133.08 -2.08% ... slipping below its 200-day SMA today Link and looks to be "following the leader" CSCO Link from recent three session.

  Steven Price   3/12/03,  10:24:06 AM
Jef beat me to it - great observation on the VIX!

  Linda Piazza   3/12/03,  10:24:04 AM
Q-charts now shows the current value for the VIX. At 40.10, it's moved above the descending trendline that had been capping upper movements and above the important 40 level. As yet, it remains below the 40.68 level that was the February 13 high.

  Jeff Bailey   3/12/03,  10:22:52 AM
Market Volatility Index (VIX.X) Upside alert here at 40.00. I've seen in past weeks/months that this has seemed to be a level where we've found "premium seller" come in on put options. (01/27/03, 02/10/03, 02/13/03)

  Steven Price   3/12/03,  10:22:30 AM
Swing Trade Signals
Dow just made another run at 7500 from the downside and its just clinging to that level. I think a failure here on a 5 min closing basis would look bearish,and so far we are seeing a battle.

Current levels: Dow 7497/SPX 797.72/OEX 405.05

  Jeff Bailey   3/12/03,  10:20:38 AM
Buy Program Premium Alert Dow=7,498, SPX=797, OEX=405, NDX=960

  Linda Piazza   3/12/03,  10:19:34 AM
As readers are pointing out, the SOX outperforms today. Currently at 282.39, it rose to test its 21-dma, currently at 284, but has not been able to push above that level. Daily RSI turns up, MACD still flattens, and 21(3)3 stochs still slant down. There are still mixed messages here, but something has to give. Either the semis are going to hold up the rest of the markets, stabilize them, and help them to rise, or else the semis are going to get pulled down with the rest of the markets.

  Jonathan Levinson   3/12/03,  10:19:23 AM
QQV is very tame, +.43 only at 41.89. The 44 resistance level hasn't even been tested yet on this decline. The TRINQ is still very low at .63, TICK.NQ -435. VXN is at 48.06, +.53, dealing with the upper trendline of that descending wedge highlighted in my Saturday article.

  Jeff Bailey   3/12/03,  10:18:14 AM
Dow Industrials (INDU) 7,473 -0.68% ... just noticed this morning's rally high came at 7,540 and got "whacked" there, which is WEEKLY S1 of 7,541.

I would think bears will note this, and can snug down some stops to 7,555, which would give a little "wiggle room" above WEEKLY S1. Now targeting WEEKLY S2 of 7,342.

  Mark Phillips   3/12/03,  10:17:48 AM
No, Linda. I haven't seen the VIX update at all yet...still showing unchanged. Of course, I figured it was part of the overall data-feed problems I'm having -- charts intermittent over the past 30 minutes, and looking like it is related to throughput issues on my cable modem, with all other online apps acting slow to non-responsive. I'll be back when I can sort it out...

  Steven Price   3/12/03,  10:15:46 AM
MHK $44.16 -0.77 We closed this OI put play (entered at $49.27) last night in order to harvest some gains for readers. We suggested an alternate stop of $46.05 for those who wanted to give it some more room to the downside. The stock is currently seeing some support at $44, but trading near its lows of the day. There is some support in the $43-$44 range from last October, so shorts should be aware of those levels when deciding whether of not to take their chips off the table.

  Jeff Bailey   3/12/03,  10:15:30 AM
Dow DIAMONDS (DIA) $75.00 -0.38% ... This is bearish vertical count for DIA.

S&P 100 Index (OEX.X) 403.90 -0.7% ... still about 13-points away from its bearish count of 390.

I've got my buy/sell program premium alerts set today, and haven't seen anything from this since DIA traded $75.00

  Linda Piazza   3/12/03,  10:13:39 AM
Is anyone getting an accurate quote for the VIX today?

  Jeff Bailey   3/12/03,  10:12:30 AM
10-year YIELD ($TNX.X) 3.582% .... fractionally lower in YIELD here. Last two-session's YIELD resistance has been right around 3.6%, and for short-term traders in equities, might be a level in YIELD to set alerts at. Quick check of our pivot matrix has WEEKLY pivot of 3.636%, which might correlate with a "wall of resistance" for the matrix.

  Linda Piazza   3/12/03,  10:12:23 AM
Traders new to technical analysis should be aware that oscillators are of little use in strongly trending markets and may not give reliable signals today. In particular, as long as the strong downdraft is in place, "buy" signals will not be reliable and will likely just signal consolidation or a slowing in the decline. It will therefore be difficult to determine whether a "buy" signal is a signal that markets are about to turn around or just signaling consolidation. As I always do in my own trades, be sure you let price action determine your buy or sell decisions today rather than relying on oscillator evidence.

  Jeff Bailey   3/12/03,  10:08:02 AM
S&P Banks Index (BIX.X) 256.55 -0.91% .... trades "heavy" again today and will weigh on the SPX and OEX. Current trade right at MONTHLY S2, if bulls are going to defend, now would be the time.

However, according to Dorsey/Wright and Associates, their "banking sector bullish %" (BPBANK) just recently reversed lower to "bear confirmed" at 56%, and may still have some risk to be removed. In October, this sector bullish % fell to 42%.

  Steven Price   3/12/03,  10:07:32 AM
Swing Trade Signals
We are setting new lows of the day after the fade and those traders getting in short a 7490 have just been triggered.

Current levels: Dow 7488/OEX 404.48/SPX 796.38/COMP 1268.91

  Linda Piazza   3/12/03,  10:07:19 AM
As a notation of possible interest, the October 10, 2002 low on the OEX was 387.80. It's possible to draw a slightly ascending trendline from the July to October lows, with the extension of that line crossing currently at 394. This would tie in well with (traditional) P&F and H&S targets for the OEX, as well as with targets predicted by the typically-middle-of-the-fall type of consolidation we were seeing in February. If markets should plunge today, traders in bearish positions might do well to consider profit stops just ahead of that 394 level. If the OEX should continue to plunge and then fall straight through that level, traders could of course set trailing stops and watch carefully. There's the potential for big moves either direction today, so all traders should be looking at both profit stops and stop losses, making decisions, and sticking to them.

  Jonathan Levinson   3/12/03,  10:02:55 AM
This repo drain could explain the higher yields as the fed's 22 primary dealers sell bonds to raise the cash to refund the 1.5B due.

  Jonathan Levinson   3/12/03,  10:01:52 AM
Al Green has just drained 1.5B by adding a mere 2.75B overnight repo.

  Steven Price   3/12/03,  10:00:43 AM
Swing Trade Signals
Yields are still trading near thier highs of the day, but equities are starting to fade. Are we forming a base now that we achieved the Dow H&S target this morning? I'm not really sure, with no clear direction. Certainly the bounce was very small and aggresive traders can still use the earlier short entry at 7490. This would put us below the day's low. I'm holding off on an official entry for the moment.

  Linda Piazza   3/12/03,  9:58:43 AM
Currently just under 1939, the Dow Jones Transportation Index is again trading below its September 2001 low of 1942.40. Weekly MACD still looks bearish, as does weekly RSI, with the weekly RSI oversold but still slightly above its level when the $TRAN made that 2001 low.

  Jeff Bailey   3/12/03,  9:53:42 AM
Dow DIAMONDS (DIA) $75.53 +0.17% .... morning low has been $75.11 and not quite the $75.00 needed to achieve it bearish vertical count. Dow Industrials (INDU) 7,534 +0.16% morning low has been 7,495, so this might tie in with CNBC's Maria "calling the bottom." (per Steve's 09:31:45 post).

Maybe Maria is a point-and-figuretollogist!

  Steven Price   3/12/03,  9:52:49 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Back above the highs of the day, with 5 and 10-yr yields green as well. I am going to cancel the last short signal at 7490 and look for a better entry near resistance, rather than on a breakdown.

  Jonathan Levinson   3/12/03,  9:49:25 AM
The TRINQ is showing strong net buying pressure, with the TICK.NQ -345. This tells us that the strength in the COMPX is coming from huge buying in a small number of issues. Watch the TICK.NQ for signs of the buying spreading with higher readings to confirm strength in the market. On that note, the five year yield is up 3.1 bps, while the longer treasuries are showing negative yields.

  Jeff Bailey   3/12/03,  9:46:28 AM
Cisco Systems (CSCO) $12.90 -0.91% ... per 09:42:49 post regarding BBOX, today's news further weighs on CSCO. In yesterday's 01:00 Intra-day update (bottom) Link we made note of UK-based Dimensional Data missing earnings. Today's BBOX lowered guidance raises concern with CSCO on near-term basis too.

Salomon Smith Barney saying that BBOX warning reinforces their concerns about CSCO's April quarter, particularly in its Small Market Business.

  Steven Price   3/12/03,  9:46:13 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go short a 1/4 position at Dow 7490. Set stops at 7660

  Mark Phillips   3/12/03,  9:45:52 AM
BBOX $28.74 (-10.40) We dropped our BBOX put play last night, just in time for this morning's big drop (wry grin). The company revised earnings expectations lower last night after the close, and the response this morning has not been kind, with the stock plunging more than 25% as of this writing. Traders still holding open puts should take this as a gift of an exit point, as an oversold rebound is highly likely.

  Jeff Bailey   3/12/03,  9:42:49 AM
Black Box (BBOX) $28.84 -26% ... stock is this morning's % loser after warning on Q4. Now guides Q4 EPS to $0.53-$0.54 (ex items), expects to record a $9-$10 million one-time pre-tax charge, or $0.29-$0.32 per share for a restructuring charge of $6-$7 million primarily related to adjusting staffing levels for its European Operations and real estate. Current consensus (ex items) is for BBOX to have earned $0.74 per share. Link

Quick check of bearish vertical count for BBOX's p/f chart is $26. Since just $2.84 from a bearish target, would lower stop (if short/put) to $29.75-$30 and be done with it.

  Jonathan Levinson   3/12/03,  9:42:35 AM
The denial of the capture of Bin Laden caused the futures to fall. Reports of his capture were not the stick save. Let me point out that the consensus among journalists is that the film of the capture of Khalid Mohammed was staged. Most think he was captured sooner than reported. If Bin Laden had been caught it would be in Bush's interest to keep it quiet until after a UN vote since the tie between Iraq and Al - Queda is the centerpiece of the argument for attacking Iraq. I must say that you are becoming quite predictable, as I assumed you would be writing about a bullish conspiracy today before I even turned this thing on.

Thank you, Wes, both for the information and the personal comment. My goal is to be as predictable as possible, as I go to great pains to explain my thinking and the reasons for it. If everytime a piece of nonsense is used to explain manipulation of financial markets you think of me and my reaction to it, then I'm a happy writer. It's a fact that large interests move the price. It helps to know about in order to be a successful trader. I promised this morning not harp on it, and I'm sticking to my promise.

Everytime we approach critical support levels, bearish traders need to be wary of a bounce. Whether it's because of program robots placing their "pong" paddles under it, or it's because the Working Group on Capital Markets is intervening, or because Osama's 14th son missed his hockey practice... irrelevant. The goal is to make money by correctly anticipating where the market's going to go next.

  Steven Price   3/12/03,  9:39:59 AM
BBOX $28.90 -10.24 Timing certainly is everything! We removed this put play, entered at $39.87 from last night's newsletter, meaning this morning would have been traders' first opportunity to close the play. Those holding puts on the stock should be registering an $11 profit. I'd lower stops to the top of the opening range at $30.50. Conservative traders can take a big profit here.

  Jonathan Levinson   3/12/03,  9:37:56 AM
I will closing out a number of my open put positions if the COMPX can break 1282.

  Jeff Bailey   3/12/03,  9:33:35 AM
The 9:00 AM Intraday Update has been posted. Link

  Jonathan Levinson   3/12/03,  9:33:08 AM
Yes, Steve, good call :)

  Steven Price   3/12/03,  9:31:45 AM
Swing Trade Signals
oh my, Maria just called a bottom - maybe I should just go short now!

  Jonathan Levinson   3/12/03,  9:31:18 AM
5 point gap down to 1266 COMPX, TRINQ .78.

  Linda Piazza   3/12/03,  9:24:04 AM
As the European markets attempt to move off their lows, it might be instructive to take a look at an intraday chart. This is a delayed chart of the FTSE 100, courtesy of Bloomberg.com. Link Anyone familiar with technical analysis might notice that the countermove off today's lows, in a tight pattern of higher highs and higher lows, might be a potential bear-flag pattern. It's not a confirmed bear-flag pattern as yet, but the other major European markets show similar patterns, with the DAX perhaps instead showing a possible "b" distribution pattern. My best guess is that European markets have stabilized, awaiting the opening of U.S. markets, and that the tenor of our markets might determine whether those potentially bearish patterns are confirmed or whether European markets continue to move off their lows. Although the FTSE 100 has climbed off today's lows, for example, there's certainly not been a geyser effect that might be expected if a massive rally were going to occur off the lows.

  Steven Price   3/12/03,  9:21:58 AM
Swing Trade Signals
We are currently flat, but I have stated a bearish bias, with aggressive entries having been suggested above the 7600 mark on Tuesday. I an particularly interested in how the broader markets react as they approach their approximate H&S targets of Dow 7500/OEX 400)/SPX 890. These targets correlate to some other technical levels, such as the PnF bearish vertical counts of 75 in the Dow Diamonds and 390 in the OEX. 7532 was also the July bounce point in the Dow. The bullish percents are all into oversold territory, with the Dow as low as 10%. The Dow has reached lows in that category of 4% and 8% in July and October and if we are going to bounce, this is a possible level from which it would be logical. It appears that we will be sinking below Dow 7500 and SPX 800 on the open. Once we set the opening range, I will consider a short entry. However, since we are approaching these levels and will have completed most of the downside targets, I will label the entry as high risk and start with a 1/4 position. Rather than set an entry on the open, I want to allow for the possibility of a bounce at, or close to, 7500. Aggressive traders can go short as soon as we break that mark.

  Linda Piazza   3/12/03,  8:49:06 AM
As the Osama bin Laden rumor is debated on the airwaves, the news of the assassination of the Serbian Prime Minister Djindjic doesn't draw as much notice.

Currently, the FTSE 100 is down 95.60 points, the CAC 40 is down 50 points, and the DAX is down 56.

  Jonathan Levinson   3/12/03,  8:42:02 AM
Gold is being sold, no doubt due to the sudden return of global financial and geopolitical stability this morning (grin), with spot prices down 2.90 to 247.00.

  Jonathan Levinson   3/12/03,  8:28:45 AM
With the futures falling off a cliff, a miraculous stick save has just been attributed to a rumor that Osama was captured, which I'm hearing the CIA is currently denying. Let me register my unmitigated disgust at the nonsense being used to attempt to move the markets. I will not rant about it again today.

The US Dollar Index took out 97.80 on a downside spike and is now trying to get back above 98. The ND futures are trying to break 952.50. ES at 796.50, while bonds are being bought again, FVX -1.1, TNX -2.7 and TYX -2.7 bps. QQQ is trading 23.60.

  Linda Piazza   3/12/03,  7:42:28 AM
The sell-off in European markets has abated a bit, as markets attempt to steady, but at low levels. The FTSE 100 is currently down 116 points, the CAC 40 is currently down 63 points, and the DAX is currently down 60 points.

  Linda Piazza   3/12/03,  7:12:19 AM
My first post this morning discussed Taiwan Semiconductor's rise on news that it would gain new orders from Intel and Texas Instruments. A reader contributed the information that Texas Instruments issued a news brief retracting TSM's statement. Here's a link to the retraction: Link

  Linda Piazza   3/12/03,  7:00:00 AM
European selling continues to build, with the FTSE now down 132 points, the CAC now down 60 points, and the DAX now down almost 69 points. S&P futures drop down to 793.50 as I type.

  Linda Piazza   3/12/03,  6:40:09 AM
Good morning. As I type, Europe experiences a broad-based sell-off, with selling suddenly accelerating in the last few minutes. Let's talk about the little good news to be found among the world's markets, however, before addressing the European markets. By midday in Japanese trading, investors had driven stocks up to a 0.8% gain on hopes that the government and the Japanese central bank would buy shares, with planning meetings beginning today. Big caps led the gains, as investors speculated they would be the first stocks purchased in an effort to stabilize the financial markets. Banks and insurers face the need to sell stocks due to declines in their holdings, and the central bank's efforts are meant to keep those stocks from being sold on the open market and further depressing equity markets. Mizuho Holdings, Japan's biggest bank, today figures in the news, as it canceled plans to sell shares overseas. Instead, it's selling shares to its clients, in a plan some call questionable. Still, the Nikkei held onto the early gains and built on those, closing up 80.61 points or 1%, at 7943.04.

In Taiwan, Taiwan Semiconductor gained on news that it would get new orders from Intel and Texas Instruments, and also on news from Altera, which raised expectations for Q1 sales.

With alarm in their voices and hurried movements, European commentators speak of fresh multi-year lows and a broad-based sell-off that has begun accelerating. Some European bourses began the day relatively well, actually trading in the green early on, before the sell-off accelerated. BP fell after J.P. Morgan Chase cut their recommendation; electric generation power-equipment maker Alstom dropped after announcing plans to sell shares and businesses; and Swiss bank Julius Baer Holding plummeted after announcing the lowest profit in six years. It was difficult to find a sector or stock that was doing well in the broad-based sell-off, but specialty-chemical maker Clariant rose in early trading when it announced that it would not sell shares to raise money.

As I type, the FTSE 100 has dropped 104.90 points or 3.04%, to 3347.80; the CAC 40 has dropped 45.39 points or 1.82%, to 2448.03; and the DAX has dropped 64.57 points or 2.80%, to 2240.73.

In the geopolitical arena, EU members were stating that they would not help finance an Iraqi recovery if the U.S. were to act alone in disarming Iraq.

  Jim Brown   3/12/03,  3:23:30 AM
New Market Monitor - The new and highly improved market monitor is now available for everyone to download. We have had over 100 beta testers working on it for the past week and the few minor problems we have seen have been corrected. many of the testers are raving about the differences.

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Ability to have the Market Monitor and Futures Monitor open at the same time.
Much more stable and flexible.

The old desktop monitor will cease to function on Monday. This version is so much more reliable there is no reason to continue it. As of Monday there will only be two versions. The browser version with a 3-5 min refresh and this desktop version.

This is a screenshot of the new application: Link

You can have one window or multiple windows open all at once with no degradation in performance.

Don't delay, download it now and get current!

Click here to download: Link

  Jim Brown   3/12/03,  2:01:44 AM
The Nikkei snapped a 6-day losing streak to close up +80.61 at 7943 but still below the 8000 level. Analysts think this was a simple oversold bounce after closing at 20 year lows for several days. Traders think it will resume its plunge to 7500 as early as tomorrow.

The ES contract is trading at 804.00 at 2:AM and rising steadily. If this continues we could see a short covering bounce at the open of the US markets as long as Europe does not continue their drop over night. France CAC-40 opened down -9.97, Greece -38.

ES 807 is the first resistance with 810 strong resistance and the likely real test of the morning strength.

  Jeff Bailey   3/11/03,  11:39:44 PM
The Index Trader Wrap has been posted: Link

  Vlada Raicevic   3/11/03,  11:39:34 PM
The Futures Trader Wrap has been posted: Link

  Steven Price   3/11/03,  11:39:28 PM
The Swing Trade Game Plan has been posted: Link

  Steven Price   3/11/03,  11:39:22 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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