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  Jeff Bailey   3/28/03,  11:07:22 PM
Recent 2 WEEK's pivot Matrix + next WEEK's Here's our week-to-week-to-week matrix comparisons. Link

I'm only looking for levels in this week's matrix that correlate with recent weekly levels.


1) Dow Indu: 7,995-8,055 ... It was the week of 3/17-3/21 that the Dow broke above 8,055 that it then traded 8,500. This week's S1 (3/24-3/28) of 8,026.8 wasn't traded next week's S1 7,944.9 provides somewhat of a "zone of support" from 7,945-8,027 between the two. Lets say... 8,000. (review 20:06:59). I'm setting a "buy alert" at 8,027 for pullback entry alert for sure now. At this point, it would only take some type of very negative news out of Iraq for me to not be bullish at/near 8,000.

2) 10-year YIELD ($TNX.X): 3.786%-3.788% .... Indexes seemed to "blow up" to the upside the week of 3/17-3/21 when 10-year bond saw selling and YIELD traded 3.786% (correlate with Dow 8,055 that week). Next WEEK's S2 is 3.788% and I would look for this to be a YIELD support level. Shoot! We talked about the 10-year YIELD level of 3.8% in today's 01:00 Update Link and even tried to envision a little "trap" at 3.75%. If I were to see a Dow 8,000, 10-year YIELD 3.75-3.8% and see YIELD start acting volatile or quick move up, I'm a buyer of Dow 8,000.

3) OEX and SPX : Nice correlative support in SPX 850 and can offset a range with OEX resistance 444. Check out SPX chart and significance of 850 Link .

4) NDX : 1,066.6 : WEEK of 3/17-3/21 when NDX traded 1,066 continued rally above its CONVENTIONAL 19.1% retracement of 1,086 (next WEEKS R2 is 1,086) and traded Friday high of 1,099.61). Next WEEKS S1 of 1,035 is very close to WEEKLY pivot analysis retracement level of 1,036 for "overlapping" type of support. Would make a tie in here with Dow 8,000, 10-year YIELD 3.788%.

  Jeff Bailey   3/28/03,  10:41:14 PM
QQQ last trade at 19:59:47 was $25.94

  Jeff Bailey   3/28/03,  8:06:59 PM
DAILY/WEEKLY/March MONTHLY pivot analysis matrix. Note: The MONTHLY levels are the same ones we've been working with. Link

I'm going to eventually get a full list of "thoughts" at this post, so come back from time to time as I populate it.

1) I wanted to take it slow and first look at Monday's levels and our new WEEKLY levels before I changed the MONTHLY levels. The reason for this is that I'm just "not sure" if I should change the MONTHLY levels tonight, so we can stick with a set of MONTHLY levels all next week, or if I should wait until Monday's close to change the MONTHLY levels. However, do you see some of the correlations that show up for DAILY and MONTHLY that may be important? (Dow DAILY pivot and MONTHLY R1), (SPX DAILY R1 and MONTHLY R1), (NDX DAILY R2 and MONTHLY R2). I think of these as Monday upside potential levels and each one kind of stairsteps to the upside. Not sure what is going to happen over the weekend, but if "good news" out of Iraq, these observations may be useful.

2) Now... There are some "fascinating" DAILY levels S1 and Pivot that were really "in play" the last 2 days in the Dow Industrials (INDU). And a quick review of last night's Index Trader Wrap and the 60-minute Dow chart shown, should grap your attention. Link to Thursday evening's wrap (see second chart in wrap). In this week's Index Trader Wrap, I've been a little more focused on "last WEEKS" S1 as a level of support. So, for this WEEK, I have labeled S1 with "focus." I've kind of been looking for a Dow Indu pullback of 8,050 as my pullback entry point. WEEKLY S1 of 7,995 not too far off. Look at DAILY S2 of 8,052. See that 61.8% retracement of 8,099 (came in as support again today). Now... for MONDAY, that 8,099 level is the DAILY S1. WEAKNESS I think if on Monday morning, we break below 8,099 and most likely would get a quick drop to 8,052 and might see weakness to WEEKLY S1 of 7,995.

3) Here's a 60-minute interval chart of the Dow Indu, with conventional (pink) and new WEEKLY (blue) retracement. Compare this to Thursday evening's Dow chart, which we looked at on 60-minute interval. Link

4) So... Monday morning... WEAKNESS below 8,099, STRENGTH above 8,160.

Let's "step back" a little and see if anything ties in with point and figure chart and supply/demand. Link

Point (c) 8,150: every bear below this point that held through 7,500 to 8,500 now "jittery" and either squaring up (getting things back under control), or will cover on strength. Correlation at 8,152 in matrix. He's "happier" at (b).

Point (b) 8,050: every bear below this point that held through 7,500 to 8,500 now "real jittery" and either squaring up (saying... I never thought it would go up to 8,200 let alone 8,500) or very happy at point (a). 8,050 is 55-points above WEEKLY S1= 7,994.9 and WEEKLY 80.9% overlapping retracement of 8,001.

Point (a) 7,950: every bear below this point that held through 7,500 to 8,500 has a fresh pair of underwear on or doesn't care about money or risk management. Those that do care about risk management see 8,000 as "psycological level of support," 7,900 as an apex of a BIG triangle where bears won out for 300 points (7,700-7,450), but further resolution to upside saw bulls win out for 500 points (8,000-8,500). This 7,900 apex is 7,902 and CONVENTIONAL 61.8% retracement and becomes somewhat of a "powder keg" where bear (c), (b) and (a) are all "happy," but also where Mr. Bull on pullback are buyers with sites on 8,500.

As a bull that bought DIA $77 (7,700 on Dow before it fell to 7,450) and DIA $80 (Dow 8,000 on move higher), I feel the bullish % holding strong (no net loss of sell signals this week) and the pullback after MAJOR release of pressure, may be analogus to one of those "snakes" that spring out of a can. Or, for those that follow the p/f chart theory that a long column of X is the length of a gun barrel, the current column of "O" is like a muzzleloader packing down another ball into his barrel, with "gunpowder" from 8,150-7,950, and when/if the gunpowder gets fully tamped down to 7,900-7,950, we should be ready for some type of "explosion" back to the upside.

I sure wish I "knew for sure" what exact level to be buying was. The best strategy to use I think is similar to that before. Start with 1/4 position, wait a couple of days, take in the news from Iraq, and then build on bullishness. I think the more the Dow compresses (8,100 as starting point, 7,850 max downside) the more powerful the rebound after compression.

This is the end of this update.

  Jeff Bailey   3/28/03,  4:43:53 PM
Futures markets closed for trading, but benchmarking from 04:15 PM EST closes... (per 16:29:29 post).

extended hours has Dow DIAMONDS (DIA) $81.57 -0.56% ... trading calm in extended hours at $81.58. NASDAQ-100 Tracking Stock (QQQ) $26.08 trading down 9-cents at $25.99.

  Jeff Bailey   3/28/03,  4:29:29 PM
CNBC reporting that a Turkish passenger plane headed from Istanbul to Ankara has been hijacked.

  Jeff Bailey   3/28/03,  4:28:34 PM
UAL Corp. $0.85 +1.19% Link .... NYSE has suspended stock from trading at the big board as the stock's price no longer meets listing requirements. Moves to the pink sheets.

Should have been done a week after they filed for bankruptcy in my opinion.

  Jonathan Levinson   3/28/03,  3:55:57 PM
More madness from the CBOE put to call ratio, latest reading 1.44, equity p/c 1.49, index p/c 1.27. This is either a bullish divergence, or strange activity such as we saw this morning with that big volume in 5 cent puts. This is why end of day readings and moving averages are preferred for generating put/call ratios. Today's prints will move the moving average a bit, but it's far safer to follow the trend. That, and of course, price. So far, the COMPX has been showing no signs of strength despite these big p/c readings today.

  Jonathan Levinson   3/28/03,  3:52:22 PM
HUI is now up 8.86 on the day, XAU 4.35, huge moves.

  Linda Piazza   3/28/03,  3:45:43 PM
Volume patterns show more advancers than decliners on NYSE-traded issues, and more decliners than advancers on Nasdaq-traded issues. Both show far higher down than up volume, with down volume being 1.65 times up volume on the NYSE and more than twice up volume on the Nasdaq. Total volume is 952 million on the NYSE and 1.1 billion on the Nasdaq. New highs far outnumber new lows. Is this due to EOQ buying? A sign of underlying strength? I'm not sure.

  Jeff Bailey   3/28/03,  3:40:56 PM
Hunger/focus on war? .... Silicon Graphics (SGI) $1.56 +9.7% ... this maker of high-end graphics computers has reversed a -1.5% decline and now posts a gain in the last 10-minutes after a CNBC report on how their computers are used by the military for simulation.

  Jeff Bailey   3/28/03,  3:31:30 PM
Bond Market Closed at 03:00 PM EST. I've just run the DAILY/WEEKLY and MONTHLY pivot levels for this bond's YIELD.

WEEKLY = S2: 37.88 , S1=38.42, P=39.30, R1= 39.84, R2= 40.72.

(will make initial note that WEEKLY S2 of 37.88 not too far from 38.00 or 3.8%)

  Linda Piazza   3/28/03,  3:27:23 PM
Here's an update of a 60-minute OEX chart you've seen from me before, showing some of the things I've been watching and some new things I'm watching. Is this week's action setting up a bearish right triangle (see the thick green lines) or a potential bull-flag pattern (see the parallel top green and bottom mauve lines). Based on an overall bearish outlook, I favor the first theory, but my pocketbook dictates that I remain open to all possibilities. Link

  Jeff Bailey   3/28/03,  3:22:56 PM
Further correlations ... NASDAQ-100 and QQQ traders may also be using not just the 10-year YIELD to set up pullback entry, but other sectors as well. Here is a chart of the SOX, and how I've viewed this sector in recent months. I was more bearish the SOX on January 24th, when a subscriber asked a question regarding a bullish trade he held in the Semiconductor HOLDRS. We had been discussing the head/shoulder top formation and weaker state of the sector bullish %. Then on March 13th, the "internals" of the bullish % "confirmed" the move higher and back above our neckline of h/s top. Important level now approaching, not only in the SOX, but the NASDAQ-100 Index (NDX.X) 1,047.92 -1.31% as it approaches the 1,040 level and this WEEK's S1 level of support. Here's a chart of the SOX. Link

  Kent Barton   3/28/03,  3:22:29 PM
Reader question: Hi Kent; what do u think about SYMC for a fast play .... last hour .... goes on S & P 500 AFTER the close today ... do u think a pop is in order?

Response: There might be some additional volatility as we head towards the closing bell and fund managers make some last-minute adjustments. SYMC has rebounded from short-term support near $40.50 (visible on a 10-minute chart), but still faces overhead resistance at $41.00. Shares are also showing relative weakness versus the GSO.X software index. So basically, it's pretty tough to make a technical case for buying SYMC. Playing the stock in anticipation of a late-session bounce would require a very speculative strategy, and with 40 minutes the stock is not showing any substantial upside movement.

  Jonathan Levinson   3/28/03,  3:13:12 PM
A failure to climb back above COMPX 1372 will be a classic retest and failure at the neckline of the 5 minute h&s formation we're watching.QQV still down .99, HUI now up 8.20, XAU +4.06.

  Kent Barton   3/28/03,  3:11:57 PM
Stock split: Quicksilver (ZQK, 31.35 +0.42), a clothing retailer, announced a 2-for-1 stock split this morning. The disbribution date is May 8th, to shareholders of record on April 30th.

ZQK has recently risen to new all-time highs after breaking through long-term resistance in the $29-$30 region. Recently the stock has been trading in a narrow range near $31.00, with the bears trying to prevent a breakout above last week's high of $32.34.

  Jeff Bailey   3/28/03,  3:05:50 PM
I can't wait for today's session to end! It will be interesting to look at the WEEKLY and new MONTHLY pivot matrix to see if there aren't some duplication of levels in the matrix comparisons.

  Jeff Bailey   3/28/03,  2:51:36 PM
Dow Industrials (INDU) 8,130 -0.86% ... OK... here we are, right back where we were yesterday morning when the Dow dipped into our little "zone of support" from 8,099-8,120. Short-term bears don't question anything here and they cover, an either look for rally entry point, or play a break below 8,095.

I'm talking about "day trader" bears in this comment.

"Swing-trade" type of bearish trader's simply sit tight. YOU know what needs to happen for a break down to 8,050. YOU need buying in bonds, and a Dow break below 8,099.

  Jonathan Levinson   3/28/03,  2:47:56 PM
A bounce should take us up to the neckline at 1372-3 COMPX. 25.90-26.00 QQQ support discussed yesterday continues to hold, as expected. However, with the FVX still down 6.5 bps and the COMPX bouncing weakly, I expect to see another visit to the lows.

  Kent Barton   3/28/03,  2:47:04 PM
Wow...Talk about interesting timing! Last night we added Cooper Tire (CTB) as a short play on PremierInvestor. Link

The stock has been plagued by production cuts at the major automakers and underlying weakness in the industry. As if to emphasize that lack of demand, the company announced this morning that it only expects an EPS result of 17-21 cents for the first quarter. Analysts had been expecting 25 cents. Continuing weakness in the North American replacement tire market was cited as the main reason for the earnings shortfall.

The resulting sell-off quickly took CPB to our entry trigger at $12.24 this morning. Shares continued lower before rebounding near whole-number support at $12.00. The stock is only down 1% right now, indicating that investors may have been expecting downward guidance from Cooper. But nonetheless, this news should make it more difficult for CTB to find buyers in the near-term. Traders can watch for a move below $12.00 to offer a potential entry point.

  Linda Piazza   3/28/03,  2:34:22 PM
The SOX is now below its simple 200-dma. Although I have a long-term bearish outlook on the markets, I caution against drawing too many conclusions on a brief move below that average. Watch for a close below it, and note that there are other moving averages layered just beneath this level.

  Jeff Bailey   3/28/03,  2:34:05 PM
Downgrades in the drug sector today by Merrill Lynch "based on valuation."

My thoughts... Allergan (AGN) $69.12 -1.3% Link ... note that this stock is a "little more extended" and perhaps doesn't "shrug off" the downgrade as easily as ...

Forest Labs (FRX) $55.18 -0.1% Link ... which is still a little closer to a recent type of basing.

Barr Labs (BRL) $56.16 -2.83% Link ... maybe looks a little bit more like AGN. I'd look for firm support for BRL near 53-54 on technical basis.

It has been my general "belief" that when a firm "downgrades" on valuation, they have already told their institutional clients to "take profits" after having bought much lower.

  Linda Piazza   3/28/03,  2:32:10 PM
At 33.09, the VIX moves back above 33. The high of the day is 33.30.

  Jonathan Levinson   3/28/03,  2:27:32 PM
Breakdown on the COMPX. The head and shoulders pattern projects to a downside target of 1365.

  Jonathan Levinson   3/28/03,  2:26:07 PM
Little sign of a bounce just above the neckline of the h&s formation on the 5 minute COMPX candles. TRINQ is up to 2.18, TICK.NQ +17, FVX 6.6 bps. HUI and XAU are holding all of their substantial gains. As I type, the neckline seems to be getting tested with a print at 1372 COMPX.

  Linda Piazza   3/28/03,  2:25:07 PM
One point that's come up during an email: a target predicted by a pattern on a five-minute chart might never be realized. These micro-short-term movements sometimes predict a move down to other significant levels, so are helpful to watch, but I wouldn't trade the OEX on a five-minute pattern, with such wide bid/ask spreads. If I'd decided to enter a position for several days, I might use the 60-minute and five-minute charts to time my entry, however. As I've mentioned several times over the last few days, I'm not personally entering new positions right now.

  Jeff Bailey   3/28/03,  2:02:40 PM
01:00 Update posted at this Link

I had trouble with Professor Davis' study and table format.

  Linda Piazza   3/28/03,  1:58:57 PM
A similar potential H&S formation is showing up on the OEX five-minute chart, Jonathan, with that neckline currently crossing at 438.29. I promise I didn't deliberately draw it to cross at that level that I've mentioned so many times, once in my last post, and the neckline will change as the afternoon progresses, too.

  Linda Piazza   3/28/03,  1:49:14 PM
The OEX 438 level keeps coming into play. Remember that the 50% retracement of last week's move (not the entire move off the March 12 low) lies at 438.29. Just below that is the 437.87 50% retracement of the October-to-December move, also near the 50% retracements of the July-to-August and August-to-October moves, since all three of those moves spanned an almost equal range.

  Jonathan Levinson   3/28/03,  1:45:54 PM
Today's a good day to forget which day it is, what's planned for tomorrow, etc., all of which I did today in this trading range-induced stupor. But I know I see a head and shoulders formation on the COMPX 5 minute chart, with the right shoulder forming. The neckline is at 1373. Gold seems to be surviving the COMEX crush, with a nice gain printed for the weekend. HUI is still up 7.05 to 121.4, XAU +3.24 to 65.45.

  Steven Price   3/28/03,  1:40:33 PM
Swing Trade Signals
The TNX continues to find support at the 50-dma, which lies 0.1 above the 61.8% retracement of the Oct-Dec lo-hi range. That bracket served as support on three occasions preceding the big Feb-March drop to recent lows. If we get below that level on a closing basis, we could see a re-test of Dow 8000.

  Linda Piazza   3/28/03,  1:26:08 PM
At 313.35 and with a low of 312.36, the SOX has been challenging its simple 200-dma at 311.27. Several other MA's and levels of historical resistance lie beneath that level, so I imagine it's going to take more than a slow drift down to push through that moving average. I've long thought the exponential 200-dma a key indicator for this index, as failures often occur at that MA, but the importance of the simple 200-dma can't be ignored, either.

  Jonathan Levinson   3/28/03,  1:25:38 PM
The skewed p/c ratio is do to a large trade that CS First Boston put up today, a customer rolled long puts april 22 - 125K into May 22, same number, so your looking at 250K puts in one trade.

  Jonathan Levinson   3/28/03,  1:24:30 PM
A reader has noted that some heavy volume went through on the QQQ April 22 puts- an 80,000 contract sale occurred when the p/c ratio was at .72, next reading at 1.11. These contracts were trading below 10 cents, and I agree with the assessment that they're not unduly significant.

  Jonathan Levinson   3/28/03,  1:09:54 PM
The equity put to call ratio is now 1.98, which is off the map, as high as I've seen it. It's either bad data, or a large buy signal from the put to call ratio. I would not trade on this alone, particularly with no confirmation or even hint of confirmation from bond yields, TRINQ, TICK.NQ, precious metals (HUI now +7.13)... only the QQV, down 1.14 to 36.94, would support this put to call ratio-based buy signal.

  Jeff Bailey   3/28/03,  1:04:59 PM
A little insurance, before I "buy the house." ... I "dislike" this action in the bond markets "so much," that I'm took 1 Dow DIAMOND puts (DAVQD) at $3.40, with thinking that Dow is indeed going to slip at least to 8,050 level, where I would then be looking for bullish entry in calls.

It is also my thought, that if Dow were to not achieve 8,050 before it trades back above 8,340, then I'm going to be a call buyer there anyway.

What this type of "put purchase" does at this point is it may give me a "cushion" or some comfort when looking for bullish entry in Dow Industrials near 8,050. What I'd probably do is sit with both positions for at least a couple of days, get a feel for things, keep up to date on the bullish %, and watch bond market reaction. For a successful Dow trade on pullback, I'm looking for a 10-year YIELD to test 3.8% then rebound higher from there on selling.

  Linda Piazza   3/28/03,  12:55:14 PM
Trying to keep as unbiased an opinion as possible, I'm still watching that downward slanting regression channel on the 60-minute OEX chart for the possibility that it could be a bull-flag pattern setting up. However, within that regression channel, I also see a 60-minute 21-pma that is turning down. I see a pattern of progressively lower highs that today cannot move the OEX above the midline of the channel. On the daily chart, I'm seeing four days of trading that could not sustain a move above the 50% retracement of Monday's losses, and oscillators that are turning down. With great mental effort, I'm trying to see the bullish possibilities here, too, but I keep finding more bearish than bullish signs.

  Jeff Bailey   3/28/03,  12:50:24 PM
Treasuries continue to find buyers and YIELDS lower. Even me... Jeff Bailey, as an equity index bull looking for a pullback, doesn't like this bond market action for equities right now.

I don't know if you notice, but when stocks bid green, there doesn't seem to be a lot behind it once they get there, and then indexes edge back lower.

However, as a Cisco (NASDAQ:CSCO) $13.24 -1.9% bear and still holding bearish positions from $12.50 profile, I like the renewed weakness in CSCO and now tests 200-day SMA again. Relative strength chart of CSCO vs. QQQ continues to show this one isn't necessarily on the "buy list" of technology bulls. Link and still gives some confirmation that CSCO might have $10.00 in it.

1/2 positions only as stock is still above trend. Link

  Jonathan Levinson   3/28/03,  12:48:00 PM
The equity Only put/call ratio is at 1.10 currently, any thoughts?

Yes, many. It is a big "buy" signal for equities, except that the CBOE has been putting out strange data with increasing frequency and I no longer trust extreme's coming out of that index. We saw a huge spike in the index put to call ratio yesterday, and I ignored it, which turned out to be the right thing to do. This is why I'm not reporting on these move- I'm pretty convinced that the data's unreliable, particularly with the lack of action in the underlying price.

  Linda Piazza   3/28/03,  12:43:38 PM
Reader Question: I own IMCL and it has gapped up today. On the daily chart, is this what could be called a "reversal island"? So does this mean it would go back down on Monday? Would you characterize this chart the same as I do or do you have another scenario? On the PnF, I am reading a possible run to 21. Do you see the same thing?

Response: I thought readers might be interested in IMCL, since it is a story stock today with news that its European pharmaceutical partner will apply for regulatory clearance for IMCL's Erbitux by the middle of this year. First things first--I'm not a P&F expert, but I see a move above the bearish resistance line, another bullish sign.

You also asked about the possible reversal-island pattern. Some candlestick enthusiasts might also call the potential setup an abandoned baby bearish pattern. This pattern occurs when a (usually long) white candle is followed by a second day's candle that gaps up and forms a doji. The third--and confirming--candle is a red candle that gaps down. You've got a good eye to spot that potential, but two things are needed before it's confirmed: a closing price today for IMCL that indeed confirms that it will form a doji and then a red candle on Monday, with that candle gapping down. Without those confirmations, you might instead be looking at a running-gap that sometimes comes in a strongly trending market. The potential is there, but it's not confirmed.

This reader mentions a propensity for taking profits too soon, something I'm guilty of doing as well, but this market might be one that rewards that kind of conservative attitude. Let's look at other information on the daily candlestick chart. There I notice that OBV has been moving up since last October, as prices move up. I note the recent consolidation with IMCL breaking to the upside. In the old momentum days of 1999, traders would have jumped on this breakout, and some may be doing so now, as volume has increased in the last couple of days. Oscillators aren't much help here, as MACD has flatlined, RSI wiggles around near levels indicating overbought conditions, and 5(3)3 and 21(3)3 stochastics turn up again from near levels that indicate overbought conditions or are already there. Oscillators often are not of much help in a strongly trending market however.

Oscillators on the weekly chart show the same characteristics. Two points of interest show up, however, one on the daily chart and one on the weekly chart. On the daily chart, it's possible to begin an ascending trendline at the September low, touching the October lows, too. If that trendline is followed up, it's possible to see that IMCL broke below it in late December, followed it up from the underside through mid-January, then plunged through it toward the February low. The current rise in price brings IMCL up toward that trendline from the underside again. The line currently crosses at about 20, a nice round number that might be considered a likely spot for resistance. The weekly chart shows a bullish cup-and-handle formation that formed through January 2002 to the current period, with IMCL breaking above the lip of that formation at about 15.75. Although volume did pick up as IMCL moved above that 15.75 level, it perhaps should have increased more than it did, as it should have been strong enough to be qualified as "explosive" on a breakout of this type of pattern. I note that the base of the recent consolidation is also near 15.75, as is the 21-dma. Traders in a profitable bullish play and worried about the potential for an abandoned-baby bearish reversal pattern could ask whether a potential pullback to 18.00 (the top of the recent consolidation pattern) or the 15.75 level would fit their trading parameters when making a decision about closing out now or holding over the weekend.

  Steven Price   3/28/03,  12:32:05 PM
Swing Trade Signals
With the exception of Friday and Monday, we have traded in approximately a 175-point Dow range since the beginning of last week. It's no wonder we are having a hard time playing directionally. The more I look at the rollover, the more my gut is telling me that we are getting ready to head lower. However, I can see another round of short-covering before the weekend, as well. Those bullish percents also are hard to simply sweep under the carpet since they have been very reliable and are still suggesting a "buy the dip" strategy. Jonathan has bemoaned the lack of trading signals here and I totally agree that we are seeing as many bearish as bullish signals. I can't really see entering a position to hold over the weekend today.

  Jonathan Levinson   3/28/03,  12:26:54 PM
The COMPX 15 minute descending trendline held on that push to the day highs, and the COMPX is now just underneath the 1378-82 s/r zone. TRINQ 1.26, FVX -6.2 bps, TICK.NQ -77. No guidance there, no guidance from the rangebound price. The biggest move continues to be on the HUI and XAU, HUI now +5.77 to 120.22, XAU +3.07 to 65.28.

  Linda Piazza   3/28/03,  12:02:17 PM
Here's an OEX five-minute chart that shows the retracement levels from the latest short-term high (Wednesday) to yesterday morning's lows. This chart demonstrates that the 38.2% retracement level came into play yesterday morning, providing some resistance. The OEX finally moved above that level up to the 50% retracement, where it paused for a short period before moving up to the 61.8% level. It's failed from that levels twice and is how back below the 50% retracement again. However, one level not indicated by retracement levels alone--the 440 historical S/R--also comes into play on this chart. Link

  Jeff Bailey   3/28/03,  12:01:37 PM
Newmont Mining (NEM) $25.73 +4.8% ... this is perphaps the "sector bellwether" for unhedged gold producers and leads today's rebound in the Gold/Silver Index (XAU.X) 64.43 +3.56%, after reporting Q4 earnings of $0.19 per share, which was 2-cents better than consensus. NEM said revenues rose 72.6% year-over-year to $777.3 million, which was well above consensus of $700.6 million.

I'm starting to once again look for some bullish plays in the group as the bullish % for this sector, which reached a recent high reading of 76% in January, has now faaaaaaallllllen down to 32.26% and still "bear confirmed," but now nearing "oversold" levels of 30%.

NEM's bar chart shows a successful test of upward trend from the July lows, attached to the November pullback, and today's trade has the stock back above its 21-day SMA. Even "gold bugs" that may have lightened up on the sector when bullish % was high at 76% begins to look partial position long in NEM, say 1/4 at this point, look for stock to hold $24.00 and then look to begin adding to positions when sector bullish % begins to show improvement.

  Jonathan Levinson   3/28/03,  11:59:42 AM
Speaking of gold, it's above 331/oz on a spot basis now, with HUI up 4.57 to 118.92, XAU +2.42 to 64.63.

  Jonathan Levinson   3/28/03,  11:49:06 AM
For those who have asked, a forward repo is one with a delivery date in the future. Today's forward repo will be delivered on March 31st. In other words, that money will be disbursed on Monday, but announced today.

  Jonathan Levinson   3/28/03,  11:47:03 AM
I agree, Linda. The COMPX continues to drift gradually higher, being restrained by a descending trendline on the 15 minute chart. The break above 1382 has brought no elation to the market, and without a significant blast of buying, the multiple resistance levels above, at 1390, 1392, 1398, 1401, etc., should keep the action muted and choppy even if this drift continues from here.

  Jeff Bailey   3/28/03,  11:46:33 AM
11:00 Update posted at this Link

  Steven Price   3/28/03,  11:45:24 AM
Swing Trade Signals
Now that we bounced, the earlier chart I posted looks like a test of support. I'm not entirely convinced, but we did get yet another bounce off OEX 437. If not for yesterday's trip below those 50% retracements, I'd be feeling more bullish. I still think aggressive traders who left their stop on the long at 434 are alright, but I'm not so convinced as to recommend new entries. Jim's entry in the futures at SPM 860.50 is looking great for those traders playing the intraday moves, but I really don't have a good feel for next week. I can make an argument in both directions and will probably do so throughout the day.

  Linda Piazza   3/28/03,  11:09:49 AM
I've rarely seen such chopped-up looking oscillators on the OEX hourly chart. They're totally useless in planning a trade. We usually say to let price be the guide, but even that's difficult these days, as prices dip below critical levels, then bounce, but not above meaningful resistance. Futures traders are some of the most astute technical traders who exist, and they're having trouble deciphering the chop, too. As Jonathan mentioned earlier, this does not appear tradeable as yet, at least directionally. As I can state from personal experience, buying straddles or strangles may not be a great idea, either, with the VIX and VXN chopping around, too, and generally declining.

  Jeff Bailey   3/28/03,  11:02:14 AM
McKesson (MCK) $25.12 +0.39% ... closing out 1/2 of bearish position here. With boght Drug and Healthcare sector bullish % reversing up recently, will perhaps error on the side of caution today as it is looking like sector action is going to be a little too much to continue to hold May $25 expiration puts.

  Jonathan Levinson   3/28/03,  11:02:06 AM
The fed has just surprised us with a 3 day forward repo of 6B. This is a very rare event- usually the only multiple announcements we see are following the weekly 28 day repos.

  Jonathan Levinson   3/28/03,  10:57:50 AM
Gold is trading above 330/oz, and miners are up significantly, with HUI +3.4 to 117.75, XAU +1/67 to 63.88. The CRB is in positive territory as well. The COMPX is looking for a break above its current high of the day at 1382.

  Steven Price   3/28/03,  10:56:11 AM
UNH $91.29 +1.59 Traders who have been keeping this OI call play on the radar since we added it to the watch list last weekend have now seen two entry oppportunities on bounces off the 200-dma (currently $87.60). Those who bought the move over $90 have also been rewarded this morning with the jump to new relative highs. We've seen some incredible volatility here and I'd expect some resistance in the $94-$96 range. Aggressive traders can think about new entries at these levels, but the best entries may come on a re-test of $90 as support. I'm not sure we'll get that re-test, but if the recent range is any indication, it is a distinct possibility and would still constitute a higher low.

  Linda Piazza   3/28/03,  10:55:28 AM
Volume patterns lean to the negative side this morning. Adv/dec ratios show .87 and .79 numbers for NYSE-traded and Nasdaq-traded issues, respectively. Down volume is 1.3 times up volume on the NYSE and 1.5 times up volume on the Nasdaq. New highs outnumber new lows, though--a divergence. Volume is light at 250 million shares for the NYSE and 357 million for the Nasdaq.

  Jonathan Levinson   3/28/03,  10:49:53 AM
A rush of buying has the COMPX printing new highs at 1381. With the TRINQ neutral at .98 and TICK.NQ lightly bullish at +155, a drift higher is not out of the question. The range today remains quite narrow, as energy continues to build for a bigger move.

  Jonathan Levinson   3/28/03,  10:44:49 AM
The put to call ratio opened with a .97 reading and just came in at .80. I see nothing but chop and indecision on the COMPX- this is not currently a tradeable environment, at least not directionally.

  Steven Price   3/28/03,  10:42:28 AM
Reader Comment:

No one yet seems to have any understanding of what the US has undertaken. After the "uncertainty" of when the war will end will come the "uncertainty" of how we will "administer" Iraq, followed by a fresh round of disagreement with UN members on what is appropriate. This will be followed be renewed concerns over retaliatory terrorist strikes on US soil. The geopolitical weights on the market will be on the radar screen for many, many months to come. EVERYBODY GET USED TO IT! CKM

  Linda Piazza   3/28/03,  10:42:18 AM
Reader Request: Please look at LEH. This wedge is making me think how to game the break.

Response: Great chart! While I can't offer specific suggestions as to how to play this wedge, it's an interesting chart and I thought other readers might take a look at how to approach charts like these. First I note LEH is on a P&F buy signal and that it's pushed above the bearish resistance line, but that it's also near recent resistance at 60. On the bar chart, I note the wedge this astute reader mentioned. It's marked in green on the chart. Link Of particular importance are OBV and volume patterns, showing that volume has been increasing as LEH moved over its exponential 200-dma and toward the top of the wedge. This means that volume patterns are confirming the rise in the stock. Note, however, that RSI appears to be rolling and the daily candles are growing smaller, with some being dojis. This indicates indecision, and that indecision is occurring at a point of historical resistance near 60. Note also that the MACD is flattening along a former ascending trendline, so that it's difficult to interpret whether it's having difficulty pushing above that trendline or finding support there. I note, too, that the 21(3)3 (not shown) and 5(3)3 daily stochastics are approaching levels that show oversold conditions.

Wedges are usually played by buying stocks/calls the upside breakout or going short/put a downside breakout. When a stock is on a P&F buy signal, above its 200-ema, and shows volume patterns confirming recent strength, the assumption might be that the breakout will be to the upside, but that won't be known for sure until it happens. Especially with dojis printing, stochastics and other oscillators might be indicating that LEH's price might be a toppy and due for a pullback before making another assault on the upper green line. If a trader should decide to buy a wedge breakout or breakdown of a stock or index in this market climate, however, tight stops are in order. In this case, a trader could set stops just on the other side of the wedge's defining lines, depending on the direction of the break. Most wedges break about 2/3 of the way through, so that should happen in the next week or two. One other discouraging possibility exists, though--that a stock or index's price just meanders around near the apex, never breaking one direction or another.

  Steven Price   3/28/03,  10:41:26 AM
Swing Trade Signals
I am looking at a number of conflicting signals here. With the TNX holding above its 50-dma, I am considering trying to play a bounce. However, with the slow roll over following Monday's big drop, I'm seeing plenty to be bearish about here as well, with that candle on Monday looking like a short-term reversal. Then again, we have bullish percents turning higher and not showing any real weakness. Here is a chart with previous resistance in this level highlighted. Link . It coindices with the 50% retracement of the Aug-Oct hi-lo range. There is plenty going on in this area and a breakdown looks as promising down to 7900 as a rebound does in the other direction. Jeff is looking to play a bounce off 8050 (as he mentioned earlier) and with his AGE and wisdom - and recent track record - I'm going to give him some credibility, as well. With the war risk over the weekend, I really think it looks like a 50/50 bet in either direction from here, and traders looking itching to enter should keep in mind just how pivotal this level is.

  Jonathan Levinson   3/28/03,  10:27:05 AM
FVX -5 bps, TRINQ 1.02, QQV -.73to 37.35. It looks like a drift higher within the COMPX range.

  Jeff Bailey   3/28/03,  10:15:08 AM
Geron Corp. (GERN) $4.14 +12.8% ... I like this one as an aggressive bull's play in biotech. 3-box reversal up at $4.00 and looking for a "sling-shot" type of trade. Profiling the September $5.00 calls, risk capital only, with target of $10.00.Link

Disclosure: I currenlty hold bullish position in GERN.

I had previously noted the stock's rise on BIG volume on 03/18/03 and break above 200-day SMA Link on news that the company had announced a licensing agreement with PanCel in which PanCel would utilize GERN's human telomerase reverse transcriptase technology for the replicative immortalization of human pancreatic islet cells.

I'm profiling this play with NO stop on the options. A trader could use a stop on the underlying should it trade $3.00. The bullish vertical count (column of X $1.75-$5.00, is $12.25.

  Jonathan Levinson   3/28/03,  10:11:49 AM
Al Green has removed the rubber band and peeled off 2.25B from his pocket rocket, a weekend repo which effectively drains 3.25B with yesterday's expiring 5.5B overnight repo.

  Jonathan Levinson   3/28/03,  10:08:45 AM
Tony Blair to ask Parliament to authorize additional 5,000 troops.


  Linda Piazza   3/28/03,  10:08:16 AM
Yesterday I mentioned that when you see a tight pattern of higher highs and higher lows form after a steep decline, the words "bear-flag pattern" should go on the radar screen. When you see a tight pattern of lower highs and lower lows form after an ascent, the words "bull-flag pattern" should also go on the radar screen. Scanning out to a 60-minute OEX chart shows such a potential formation setting up--a steep climb off the March 12 lows and then a down-slanting regression channel forming this week. We won't know whether that's a bull-flag formation until it breaks one way or the other, but bulls and bears both can be forewarned. It's possible to draw more bearish-looking formations on these charts, too, so right now, it's all in the eye of the beholder. Despite my current long-term bearish outlook, it would be unwise to ignore potential bullish formations, too, and I urge everyone to look with open minds at the charts. Upside breakout of the potential bull-flag pattern is currently at 446.21, but would not be fully confirmed until a move over last Friday's highs. Downside breakdown is currently at 436.

  Steven Price   3/28/03,  10:07:59 AM
Heard a commentator on CNBC mention that they are planning on adding 100,000 fresh troops in the next few weeks. WEEKS? Guess they're not planning on ending this thing over the weekend.

I mentioned a couple of weeks ago that with the U.S. marching through Iraq and at that time seeing little resistance, about the only thing I could imagine making the news any better was a surrender (which was more or less assumed) at that time and that anything less would be a disappointment. I am wondering if we are now going to just bleed lower until we take Baghdad.

  Steven Price   3/28/03,  10:01:31 AM
Swing Trade Signals
Yields bounced back to about this morning's gap down open levels and then rolled over again. I think we'll need to see those yields into the gaps if we are going to get a real bounce.

  Steven Price   3/28/03,  9:50:43 AM
The U of M Sentiment number is more significant this week than the Confidence number, as far as gauging response to military action, since the Confidence survey ran only up until March 18 - before the war started. The U of M number includes responses from this week, but is a smaller survey.

  Jonathan Levinson   3/28/03,  9:49:12 AM
U of Michigan came in at 77.6 vs. 75 expected.

  Linda Piazza   3/28/03,  9:48:08 AM
The Dow Jones Transportation Index drops to 2152.29 this morning, currently challenging its sloping-lower simple 50-dma at 2147.40. Below the current level lies the 2120-2090 support zone that has been pivotal (historically, not in terms of pivot analysis) in the past, with the 2120 level supporting prices during consolidation in late January and early February, and with 2090 being the July low.

  Jonathan Levinson   3/28/03,  9:47:45 AM
It was a nice thought, but I didn't expect to see the COMPX flatline here either. 1375 COMPX has done this to us before, acting like a price magnet for long stretches of time.

  Jeff Bailey   3/28/03,  9:47:00 AM
SBC Communications (SBC) $20.48 -1.7% ... per previous bearish profile here in market monitor, stock breaks below shorter-term 21-day SMA after finding support last 4 sessions. Looks weak and bears can keep a stop just above the $21.85 level, or 61.8% retracement from our "fitted retracement of $31.65 - $6.00. 50% retracement of $18.81, which also marks the recent low is next target. Point and figure chart still has bearish count of $6.00. Link

Disclosure: I currently hold bearish positiion in SBC and will use as a stock that may evenutally offset a bullish trade in the Dow Industrials near 8,050.

I'm trying to "envision" SBC at $18.82 when/if Dow trades 8,050.

  Jonathan Levinson   3/28/03,  9:42:23 AM
FVX is sinking, -6.8 bps, TRINQ .86, TICK.NQ flat at -2. I'm sceptical of the slight rise on the COMPX here, expecting to see 1368-70 support tested soon.

  Steven Price   3/28/03,  9:40:56 AM
Semiconductor Index (SOX) After rolling over from its 200-ema, the SOX has been testing its 200-dma (311.27) which is descending and gave the index a bounce on 3 of the last 4 sessions. The 21-dma (which is rising)sits just below at 306 and should converge with that 200-dma within a few days. It has not been terribly significant in the past, but the converging averages may attract some attention for traders looking to either short a breakdown, or buy a bounce.

  Linda Piazza   3/28/03,  9:39:35 AM
The first five-minute OEX candle encompassed a high of 439.89 and a low of 437.72, with a midpoint at 438.81. That 437.72 is close to the 437.87 50% retracement of the October-to-December move, so has special significance. Bears want to see the OEX remain under that number today. Bulls want to see a sustained move over it.

  Jeff Bailey   3/28/03,  9:39:25 AM
Bridge incident in New York now being reported as "alcohol related" and not thought to be terrorist related.

  Jeff Bailey   3/28/03,  9:34:28 AM
10-year YIELD ($TNX.X 3.884% ... this is below yesterday's low, so I would think major equity indexes also vulnerable to yesterday's lows here.

  Jeff Bailey   3/28/03,  9:32:32 AM
Forest Labs (FRX) $55.24 (unch) ... downgraded this morning by Merrill Lynch to "neutral" from "buy." I haven't seen Merrill's reasoning for this at this point.

  Jonathan Levinson   3/28/03,  9:32:30 AM
Gap down to 1373 COMPX, TRINQ .77, QQV +.31 to 38.39. Support is at 1368-70, and potential long scalps should wait to see the whites of their eyes at that level. Bears should wait for a higher level to put on shorts, or a break below 1368.

  Steven Price   3/28/03,  9:30:31 AM
Swing Trade Signals
The TNX found closing resistance at the 50-dma from the end of Jan through the middle of February. It is once again approaching that level, this time from the top. The 50-dma is currently at 38.70. A break below that level would look bearish, but if we begin to bounce there as the Dow tests the 8000-8050 range, it might be another level at which bulls can look to play a bounce.

  Jeff Bailey   3/28/03,  9:23:54 AM
09:00 Update posted at this Link

  Steven Price   3/28/03,  9:20:56 AM
Swing Trade Signals
It appears that while I was gone those traders taking my advice for a stop on the long position at 440 with a stop under OEX 436 would have been stopped out. Those aggressive traders using a stop of 434 are still long a partial position. I think the recovery from that level gave us mixed signals and I'd like to see how the open shakes out before making a new assessment. Yesterday morning's drop looked bearish short-term, breaking below the 50% retracements of the Aug-Oct range, but the bounce off 8100 was impressive. Let's take a look at how far this morning's drop takes us - so far yields are showing no real bounce, as the last attempt rolled over again. I'm not sure if we'll get a reapeat from yesterday, or finally a test of Dow 8000. I am concerned about weekend risk with war developments and would lean away from going short with the possibly of troops taking Baghdad.

  Linda Piazza   3/28/03,  9:04:50 AM
CNBC is reporting that the Williamsburg Bridge in New York is currently closed. Two men were observed on the cables, with the men then walking into Manhattan.

  Jonathan Levinson   3/28/03,  8:47:02 AM
Personal income up .3%, personal spending unchanged:


  Linda Piazza   3/28/03,  8:45:00 AM
European markets currently trade as follows: the FTSE 100 down 21.50, the CAC 40 down 21.14, and the DAX down 65.19.

  Jonathan Levinson   3/28/03,  8:37:41 AM
They push it back up, it falls back down. That's the US Dollar Index, currently trading the 100.40 level after the spectacular 12PM ramp job yesterday and a sloppy head and shoulders formation printed over the following 12 hours or so. It bottomed at 100.30 and is rising in a bear wedge formation this morning. Equity futures also fulfilled the bear flag formation we were trading yesterday, with QQQ currently 26.23 on Island ECN. Bonds are being bought, with the FVX -4.5 bps, TNX -2.5 and TYX -2.2 bps. Gold is trading at 329.90 spot.

  Jonathan Levinson   3/28/03,  8:27:25 AM
On deck:

8:30 am ET: Personal Income for February, prior 0.3%, consensus 0.2%

8:30 am ET: Personal Spending for February, prior -0.1%, consensus -0.2%

9:45 am ET: Michigan Sentiment-Rev for March, prior 75.0, consensus 75.0

  Linda Piazza   3/28/03,  7:05:11 AM
Good morning. The declines that have plagued European and U.S. airlines hit Asian and Australian airliners in today's trading, with Korean Air, Japan Air, and Qantas Airways falling, among others. As has happened with many airlines in the last week, Qantas announced that it would cut back capacity, by 20% in Qantas's case. Rising crude oil prices impact the carriers, as does cutbacks in travel plans, but Asian carriers have an extra burden: fears related to the spread of SARS, a deadly respiratory virus. Yesterday, Moody's placed the Ba1 senior unsecured long-term ratings of Japan Airlines under review for a possible downgrade. On Wednesday, the Air Transport Association announced that some international regions would see 40% fewer bookings in the next months.

In Japan, the February jobless rate dropped from January's high 5.5% to 5.2%. Economists had expected another 5.5% month, so this number was better than expected, but economists point out the deluge of new college grads who will move into the market next month. Other economic releases were not so positive. February household spending dropped 1.5% from a year earlier. In Tokyo, consumer prices for 2002 slipped 0.9%. Under all these pressures and the additional fear that North Korea might launch a missile today, the Nikkei fell 88.51 points or 1.1%, to 8280.16.

European governments and market researchers released economic numbers today, too. They variously pointed to an eight-year low in German consumer confidence, a 29-month high in French unemployment, and a likely further slowdown in French GDP. This morning, the continued rise in Brent crude oil further pressures European economies. As of this writing, the FTSE 100 was down 16.70 points or 0.45% to 3712.40, the CAC 40 was down 23.36 points or 0.86% to 2699.48, and the DAX was down 54.95 points or 2.13% to 2529.10.

  Jeff Bailey   3/28/03,  12:03:52 AM
WEEKLY bullish % changes ... view of market internals.

1) Last Friday, NASDAQ-100 Bullish % ($BPNDX) Link finished at 48%, today's reading 49%. Slight bullish divergence considering this weeks NDX price decline. Net gain of 1 stock to reversing upward p/f buy singal.

2) Last Friday, S&P-100 Bullish % ($BPOEX) Link finished at 43%, today's reading 43% and stayed 43% all week.

3) Last Friday, S&P-500 Bullish % ($BPSPX) Link (gives broader perspective) finished at 41.2%, today's reading 41.6%, and has been here since Wednesday's close. So net gain of just 1 stock to reversing upward p/f buy signal.

4) Last Friday, NYSE Comp. Bullish % ($BPNYA) Link (very broad NYSE) finished at 40.44%, today's reading 40.74%. Moved up to 40.52 on Monday, slipped back to 40.44% on Tuesday, then edged Wed, Thurs and today. Approximately 3,000 stocks here so roughly net gain of 9 stocks to reversing upward p/f buy signals.

5) Last Friday, NASDAQ Comp. Bullish % ($BPCOMPQ) Link (very broad NASDAQ) finished at 39.82%, today's reading is 40.62%. Moved up every day this week.

To really get BULLISH, bulls want the very broad NYSE and NASDAQ bullish % to reverse up on their bullish % charts. The more bullish market environments are found when there is BROAD participation. It's been building as we saw Dow, NDX, OEX and then SPX reverse up, almost like a chain of dominos.

  Jim Brown   3/27/03,  12:49:44 AM
Attention !!!!!!!! VERY IMPORTANT

New Market Monitor - The old desktop monitor will cease to function on Monday. The new and highly improved market monitor is now available for everyone to download. You MUST download the new desktop monitor before Monday if you have not already done so.


3-5 second update time
Almost zero CPU utilization
Ability to have the Market Monitor and Futures Monitor open at the same time.
Ability to see all the writers.
Much more stable and flexible.

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

  Jeff Bailey   3/27/03,  12:40:22 AM
The Index Trader Wrap has been posted: Link

  Vlada Raicevic   3/27/03,  12:40:14 AM
The Futures Trader Wrap has been posted: Link

  Steven Price   3/27/03,  12:39:30 AM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

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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