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  Jeff Bailey   4/2/03,  10:47:04 PM
S&P 100 (OEX.X) chart that I will discuss in tomorrow morning's 09:00 Update. Link

 
 
  Jeff Bailey   4/2/03,  6:10:16 PM
Pivot Matrix for tomorrow... Link

Wars are won with a series of individual battles being won. Today, bulls were the winners, but there is work to be done.

The gap higher at the open made it tough for index bulls to capture the full amount of gain from Tuesday evening's closing values. The NASDAQ-100 (NDX.X) found its high suspiciously close to the WEEKLY R1 of 1,066.6, while the S&P 100 (OEX.X) came close to its WEEKLY R1 of 450.90. I'm making note and for further bullishness, have upside alerts set here.

Tracking stocks like the DIA, SPY will be "thrown off" in the DAILY matrix as it relates to the INDU and SPX respectively as these tracking stocks "gapped" at their opening trade, while the underlying indexes themselves are marked from their previous night's close as if they traded those prices at the open.

 
 
  Mark Phillips   4/2/03,  4:05:15 PM
And the range holds right into the close. Just as a point of reference, the ADVDECV indicators for both the NYSE and the NASDAQ went out at their highs of the day. Roughly 1.6 billion shares on each exchange and about 85% of it was to the buy side. Tomorrow's a new day, but this one was most definitely a victory for the bulls.

 
 
  Linda Piazza   4/2/03,  3:58:19 PM
For reference ahead of tomorrow's trading, the DAX ended the day up 139.16 points or 5.68%, to 2589.35, with this index closing at the high of the day, just below next resistance. The ECB meets tomorrow, with many pointing to the need for lower rates due to recent weak economic numbers. Some have mentioned signals from the ECB that it needs more time to assess the effects of the war with Iraq before lowering the rates. The meeting may be closely watched tomorrow.

 
 
  Steven Price   4/2/03,  3:57:40 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
The market made the decision on whether to hold overnight for me. We were stopped out on the long entry at 8036 when the Dow fell back through 8274 at 15:53:34.

I thought about raising the stop to 8299 on the last move over 8300 when the TNX stalled, but wanted to give it a little more room. I can certainly see more upside tomorrow, but it looks like I'll be going home flat. I can also see another pullback from these levels, so we'll chalk this one up and go home with nothing in the oven. For those more aggressive traders with stops below 8150 and 8050, I may join you again on a pullback above those levels.

 
 
  Linda Piazza   4/2/03,  3:40:46 PM
Shortcovering and opportunistic trading: That's Art Cashin's take on today's trading.

 
 
  Steven Price   4/2/03,  3:35:24 PM
Swing Trade Signals
The Dow just took out that 5 min 50-pma and the pullback followed the close of the bond market - a pattern we have seen in the past as the asset allocation activity that fuels big moves ends after the treasuries close. With a COMP top at 1400, traders who want to capture the gain from the entry at 8036 can close out now and not worry about that resistance.

 
 
  Linda Piazza   4/2/03,  3:31:57 PM
Earlier today, I posted a link to Mark's article on the wedge formation showing up on the VIX chart, and his article mentions the wedge I've noted on the weekly OEX chart. As I was scanning various weekly charts, I noticed similar wedges showing up on other indices, such as the SOX. Those wedges give us good levels to watch for upside breakouts or downside breakdowns, especially if we correlate the breakdowns or breakouts with an opposing breakout or breakdown in the VIX, as Mark suggests we do. Those breakdowns or breakouts often occur about 2/3 of the way into a wedge, and I note that prices on many indices are moving 2/3 of the way into those wedges. As the wedges narrow down, it's possible that the whipsaws grow more violent as markets bounce from one side of the wedge to the other. Perhaps that's what's been happening lately. Of course, there's always a third possibility: prices will just trickle out sideways through the apex of the wedges, negating their relevance.

 
 
  Steven Price   4/2/03,  3:26:30 PM
Swing Trade Signals
Following up on Jeff's TNX comment, the resistance at 3.94 was pretty solid for most of the afternoon, and equity bulls should see a red flag there.

 
 
  Jonathan Levinson   4/2/03,  3:26:27 PM
COMPX 1400 held on cue for the Running of the Bulls, though it was more of a shuffle. A consolidation just below the highs of the day doesn't look at all bearish to me, but a failure below resistance does. Bears need to the see the price fall away from here instead of loiter around- particularly me, trying to exit those day puts I loaded up earlier today. No guidance from the indicators, with the TRINQ .48, QQV -.12 and TICK.NQ +17.

 
 
  Jeff Bailey   4/2/03,  3:23:27 PM
Bond market closed with 10-year YIELD ($TNX.X) finishing out at 3.932%. That was pretty close to our correlative DAILY R2 and WEEKLY pivot target of 3.933-3.930.

A quick re-entry of today's trade has tomorrow's DAILY levels for 10-year of..

S2= 38.64, S1=38.89, Pivot= 39.22, R1= 39.56, R2= 39.80.

I see correlation here at resistance of DAILY R2=39.80 and WEEKLY R1=39.84.

This has me looking for Dow, SPX and OEX WEEKLY R1s in play tomorrow. Since NASDAQ-100 NDX.X is currently trading its WEEKLY R1 of 1,066 (right now, right here), then a move higher in YIELD tomorrow morning may have its WEEKLY R2 in play of 1,086.60.

 
 
  Kent Barton   4/2/03,  3:23:10 PM
The 3:15 update has been posted: Link

 
 
  Linda Piazza   4/2/03,  3:09:29 PM
Comment from an Experienced Reader: I thought this suggestion might prove interesting for some traders who might want to use the current trading environment to test new technical analysis tools rather than risk whipsaws caused by TV trading. I've been trading the DJX and to a lesser extent, OEX. I look at a line chart of the bullish percent (instead of the Xs & Os) with a 10 day moving average. Use a crossover of that as a heads up, then use 10 & 60 min charts with MACD histo. and candlesticks to help fine tune entry. I haven't tried these suggestions myself, but find the suggestion about the bullish percent/MA crossover particularly interesting. Caution: Don't make trading decisions based on a new technique you haven't personally tested and found to fit your trading parameters. Do be open to new techniques, however. I keep trying new ones, keeping the ones that work for me and discarding the ones that don't.

 
 
  Steven Price   4/2/03,  3:07:04 PM
Swing Trade Signals
I'd love to see the COMP break 1400 before the end of the day. If it continues to stall, I am thinking about taking a gain at the end of the day, rather than risk an overnight military disappointment.

 
 
  Mark Phillips   4/2/03,  3:02:46 PM
I woke up with a migraine this morning and when I opened my charts to see a pending huge gap open, the pain only increased. I NEVER trade gap moves (either short or long-term) because of the increased risk of doing so. Obviously as a result of that rule, I have not been doing much trading lately, with more sessions gapping than not. Rather than sit through the frustration of what I expected to be a volatile grind higher, I took some drugs for my headache and went back to bed. While I was staring at the backs of my eyelids, I got an interesting email from a reader that quite clearly "gets it".

A while back you wrote an article about the advdecv.ny chart indicator. I use this quite a bit, especially on days like today. The guys in the futures monitor were trying to short the market all morning with absolutely no success and I wouldn't even think about it until this indicator showed a change in direction and it hasn't so far. My bet is that this indicator will close at its high or close to it at the close.

Exactly! If there is anything more dangerous than trying to trade reactive, news-driven gap moves (in my opinion), it is trading against the direction of that gap when the ADVDECV indicators show no sign of internal weakness. Here we are an hour before the close and that indicator is once again charging to new highs. The reader goes on to ask a very prescient question on the topic as well.

One thing I don't understand is that the major market indexes seem to be showing a slight decline starting a little past noon today. However, the advdecv.ny indicator keeps climbing and touching new highs. Why does this happen when the indexes are going down? I really enjoy your articles in the newsletter and any light you can shed on my question will be greatly appreciated.

Seems like a strange phenomenon, doesn't it? This is a key to why I prefer to watch the advancing vs. declining volume rather than the ratio of advancers to decliners. We need to remember that the ADVDECV indicator shows a running total of all the buying volume minus the declining volume. When it continues to move up even with price showing some weakness, it tells us that even on the pullback there is more buying volume than selling volume. In other words, no sign of weakness. For any sort of price move against the day's prevailing trend, we know that it has to be driven by volume and that will show up first in the ADVDECV indicators.

On days like today, the only way to book gains was to have been long from the night before. There hasn't even been enough price movement to overcome the spread on index options since 11am ET. I don't know about you, but I didn't see ANYTHING at the close yesterday that would have had me putting on long positions to hold over the close -- yet doing so would have proved quite profitable today. What we're left with is more evidence that this is a jerky, volatile, news-driven market that is exceedingly dangerous to trade. I will continue to treat it like the dangerous viper it is.

 
 
  Linda Piazza   4/2/03,  3:01:58 PM
As I thought might happen, the current OEX push up did turn the five-minute 21-pma back up again, but the upturn in the moving average is tentative as yet. Switching to the 60-minute chart, I notice that the 21-pma is also turning up, but is currently far below current prices, at 436.88, just below the important 437-438 support level for the OEX.

 
 
  Jonathan Levinson   4/2/03,  2:56:55 PM
The COMPX is reaching for a new high of the day here just below 1400. FVX has pulled back from its high, but not by much. The TRINQ at .47 has plenty of leeway to move lower, as we saw .21 this morning. QQV down .56, TICK.NQ +158. Looks like this afternoon has been a consolidation phase, but we'll see how the COMPX does with 1400 and the 200 day EMA at 1412, if it gets there.

 
 
  Jeff Bailey   4/2/03,  2:47:20 PM
Intel (INTC) $17.56 +6.82% ... just making a sessioin high here. I had set an alert "just for fun" at a session high to see if it would be hit and hint of further bullishness into the close.

 
 
  Jeff Bailey   4/2/03,  2:45:40 PM
Open-drive .... the "late" John Seckinger liked to discuss the "open" drive and it looks in play here. Major indexes making a move at their highs of the session.

 
 
  Steven Price   4/2/03,  2:40:53 PM
Swing Trade Signals
We've been flatlining for so long, I'm getting bored. We avoided getting stopped out on the pullback by two Dow points and I'd love to see a move back over the highs of the day. However, we may simply be on hold until we get more news, or the bulls may have run out of gas.

 
 
  Steven Price   4/2/03,  2:28:59 PM
Swing Trade Signals
The 5 min. 50-pma in the Dow/OEX/SPX took a while to catch up to the big jump this morning, but has provided support on the last couple of pullbacks. Short-term traders can keep an eye on this average as an indication of whether the rally holds intraday.

 
 
  Linda Piazza   4/2/03,  2:26:51 PM
Volume patterns show adv/dec ratios at 2.61 for NYSE-traded issues and 2.32 Nasdaq-traded issues. Up volume is 7.61 times down volume on the NYSE and 5.25 times down volume on the Nasdaq. As mentioned earlier, these are strong numbers, but they may be sustainable during the remainder of the day. New highs vs. new lows ratios do verge on the extreme, however. Total volume is 1 billion on the NYSE and 1.1 billion on the Nasdaq.

 
 
  Jonathan Levinson   4/2/03,  2:25:33 PM
No sign of strength from treasury bonds yet, and while that move off the afternoon low struck terror into the hearts of bears, it never challenged the highs of the day. QQV is no w down .31 at 36.33, TRINQ still hovering in the .45 area, HUI and XAU pulling themselves off their lows, and the TICK.NQ at +9. There's little hint of direction here, and to my mind the longer the indices stay in this range, the more difficult it will be to guess direction from here. I intend to close out the position I added today by session's end, because I don't want to risk having my head handed to me on a possible gap up open. Each of you will have to decide according to your own risk tolerance.

 
 
  Jeff Bailey   4/2/03,  2:21:39 PM
Geron Corp (GERN) $6.76 +0.14% ... Jeff: What's your target for this stock?

When first profiled as SPECULATIVE bullish trade from around $4.20, I was using the bullish vertical count of $12.25 as my bullish target. Link

The stock has jumped moe than 50% since profile and most likely digests some gains.

These "biotechs" that may hold the "cure for cancer" are somewhat "make or break" so don't overleverage on them. I currently hold the Sept. $5 calls and looking for stock to trade $10 or higher before expiration.

 
 
  Linda Piazza   4/2/03,  2:03:09 PM
OEX 446.68 was the closest approach to that 446.37 target on the five-minute chart. The OEX has now moved up again to challenge its five-minute 21-pma from the underside, with that moving average currently at 447.47 and with the OEX currently moved above that level, up toward the day's high. The five-minute 21-pma still looks to be rolling down, but a continued OEX increase should turn it up again.

 
 
  Kent Barton   4/2/03,  1:53:54 PM
There's been a lot of talk about the Coaltion forces "closing in" on Baghdad. Here's an interesting map (courtesy of USA Today) that provides some specific details regarding the location of the major U.S. and Iraqi divisions: Link

 
 
  Jeff Bailey   4/2/03,  1:44:43 PM
01:00 Update posted at this Link

 
 
  Linda Piazza   4/2/03,  1:38:23 PM
The OEX five-minute chart showed a miniature H&S pattern, now confirmed with a move through 447. The predicted target is 446.37, so this certainly won't be useful in planning a bearish trade, but we should watch how the OEX acts upon/if reaching that target.

 
 
  Jonathan Levinson   4/2/03,  1:34:19 PM
FVX has pulled back to an 11.4 bp gain, still well within bullish territory. The TRINQ has pulled up to .46, ditto. QQV is down .18 now, hovering around the 36.50 mark. TICK.NQ -90.

 
 
  Steven Price   4/2/03,  1:32:48 PM
Swing Trade Signals
We are starting to see a series of lower highs and lower lows on the 5 min chart in the Dow/SPX/OEX. In the longer term, the breakout would signal more upside, but we may see a pullback soon before we go higher. We also ran out of steam at previous resistance levels, so profit taking here certainly has its merits.

 
 
  Jonathan Levinson   4/2/03,  1:13:51 PM
While learning about waves, I've also begun to watch the ADX (directional movement indicator). I note with some discomfort that the trend strength has been decreasing on the move off the intraday top on the COMPX 5 minute chart. That would mean that the move down is corrective, and the move up from the gap up was impulsive. This is on a short timeframe and it's one indicator among many, but I'm throwing it out there, particularly for anyone who's just added shorts and feels too cocky to put a stop on the position.

 
 
  Linda Piazza   4/2/03,  1:09:08 PM
About 30 minutes ago, the OEX moved below its five-minute 21-pma for the first time today, and continues to trade below that flattening moving average. We can't make long-term judgments based on five-minute chart behaviors, but this is the first weakness seen today, so perhaps bears watching. This may just be a regrouping before another push up this afternoon, of course.

 
 
  Steven Price   4/2/03,  12:47:44 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
The pullback is approaching my stop of 8274 on the entry at 8036. More aggressive traders can use a stop below 8150 or 8050.

 
 
  Jonathan Levinson   4/2/03,  12:42:30 PM
The five year yield is up 11.8 basis points, with the TRINQ at .41, showing heavy but not extreme buying pressure. This feels like a distribution zone at current levels, but then, the COMPX may simply be consolidating for a renewed push higher. QQV is positive by .16, TICK.NQ -64. The 5 minute chart shows one of those Roman Archway formations that I loved to short last year. COMPX bears, if there are any left, can consider adding puts around current levels, with stops at or a few ticks above the high of the day. This is only a scalp suggestion here, but it looks good. Disclosure: I bought a 1/4 put position today in QQQ.

 
 
  Linda Piazza   4/2/03,  12:38:55 PM
Hourly OEX charts show that both 5(3)3 and 21(3)3 stochastics are in levels indicating overbought conditions. We all know how much that means--or doesn't mean--in a strongly trending market. When that trend is to the upside, "sell" signals given by the stochastics are often not reliable, as they may signal only a brief consolidation or light pullback before another move up. From March 13 until March 24, the 21(3)3's stayed in overbought territory, hinging down occasionally only to turn back up. However, stochastics at these levels can alert bulls that it's time to guard profits, as one of the apparent rollovers will be real. If the OEX should turn down from this level along with the 21(3)3, the stochastics would be showing bearish divergence. (Equal highs in stochastics, lower high on price.)

 
 
  Jeff Bailey   4/2/03,  12:37:02 PM
US Dollar Index (dx00y) 100.14 +0.99% ... good day for the U.S. dollar and this can bode well for equities. Action depicts that of foreign capital back into U.S. assets. Relative high last week was 101.71 and this would be somewhat of a "correlative" target with equity indexes recent highs of two weeks ago. Break above 101.71 from technical perspective can bring into play the 200-day SMA of 104.35 at this point as today's action has Dollar Index back above converging 21-day/50-day SMA of 99.70.

 
 
  Steven Price   4/2/03,  12:28:07 PM
Swing Trade Signals
We are approaching OEX resistance at the 61.8% retracement of the Oct-Dec range at 449.68. Similar resistance levels come in the Dow at 8338 and the SPX at 888.

 
 
  Linda Piazza   4/2/03,  12:17:25 PM
Volume patterns continue to show the buying pressure, with adv/dec and up/down ratios remaining strong but not extreme. New highs/new lows ratios also are strong, with the NYSE number continuing to show an imbalance that is becoming extreme. There are now 97 new highs to 8 new lows in the NYSE, with 106 new highs to 20 new lows on the Nasdaq. I'm not asserting that these numbers should lead bears to short the rally, but only suggesting that traders keep an eye on these numbers, as they might be signaling that buying pressure is reaching an extreme. Those kinds of signals sometimes give a heads-up signal days ahead of a reversal. There's always the possibility that they're just echoing the bullish sentiment, however, so I would never suggest trading on this information alone. It's not precise enough to do that.

 
 
  Steven Price   4/2/03,  12:15:58 PM
Re: SARS - Before traders get too excited about a company that might have the cure, they should know that SARS is caused by the Corona virus, which is one of a family of viruses that cause the common cold. If anyone had a cure for the Corona virus, it probably would have hit the market long before now. That doesn't mean there won't be any treatments, but claims of a cure should be viewed very skeptically. We saw several stocks that have rallied on the idea that they have an answer for SARS and then drop when it turned out not to be true.

 
 
  Linda Piazza   4/2/03,  12:10:39 PM
The FTSE 100 ended the day up 68.60 points or 1.86%, to 3753.40. The CAC 40 ended the day up 108.84 points or 4.13%, to 2743.80. The DAX currently trades up 117.62 points or 4.80%, to 2567.81. The FTSE 100 maintained levels near its 3778.30 high until shortly before the close, when declines took it down to 3750 support. The CAC 40 closed near the high of the day.

 
 
  Steven Price   4/2/03,  12:10:17 PM
Swing Trade Signals
If we were not in a war/news motivated environment, I would likely leave my stop much wider. The technical indicators point to a continued rally and traders who believe the charts tell you all you need to know (hello Mark) may want to leave stops wider; possibly below the area of congestion around Dow 8150, or even below the daily pivot of 8050, which was also a previously significant level of resistance.

As we close in on Baghdad, if the U.S. troops run into problems (chemical or biological) I can see a quick rollover. Therefore, I am willing to take less risk and currently lean toward profit taking earlier. That doesn't mean we won't head higher and I won't be left kicking myself if we do. That is just my risk profile at this moment in time and I suggest each trader determine their own profile and trade accordingly.

 
 
  Jeff Bailey   4/2/03,  12:08:47 PM
Buy/Sell Program alerts While trading curbs are in, traders can still monitor their buy/sell program premium alerts. Trading and firm inventory now has the "human touch," of traders at their firms trading desks. They'll be getting up to the minute reports from their computers as to inventory build/depletion and will take action in futures or cash market to adjust/hedge accordingly.

 
 
  Jeff Bailey   4/2/03,  11:53:42 AM
11:00 Update posted at this Link

 
 
  Steven Price   4/2/03,  11:48:40 AM
Swing Trade Signals
The Dow is making another assault on 8300, trading 8299. Today's high is 8304.

 
 
  Jonathan Levinson   4/2/03,  11:34:49 AM
I'm still learning how to count waves, so I won't risk confusing the issue. But, it's reasonable to guess that this pause here is a corrective/ bull flag on the 5 minute COMPX. If so, another blast up is not out of the question. On the other hand, we could be putting in a top just below major resistance. Time will tell, and stops will keep us out of trouble and protect profits, either way.

 
 
  Jonathan Levinson   4/2/03,  11:22:33 AM
The CBOE put to call ratio opened at .64 and marched up to its latest .80 reading. There's a pullback from the highs, more of a pause really, just below the significant 1400 COMPX resistance level. The 200 day EMA is at 1412. The pause here is expected, and a pullback from 1400 or, better yet, 1412, would be an obvious short entry with a stop just overhead. The FVX is still rallying, down to an 11.7 bp gain today, just off its high. HUI and XAU are near their lows. QQV has edged back up to just below unchanged. I'd watch QQQ 26.31 for a sign, as this supported the last pullback. We have a 25 cent range here near the top, from 26.30 to 26.55 QQQ.

 
 
  Linda Piazza   4/2/03,  11:14:20 AM
The Russell 2000 gains today, although its current 1.91% gain, to 375.73, lags that of the Wilshire 5000's 2.63% gain or the S&P 500's 2.78% gain. That means that the small caps are not participating as strongly as some other stocks, a potentially troubling sign that bulls might keep in mind. However, when squinting at the Russell's daily chart, I can imagine that I'm seeing a potential reverse H&S set up, with a cross of the neckline occurring at 380. This is a loosely formed reverse H&S, and that 380 level offers historical resistance, too, so it's far from certain yet that the Russell would be able to push above that level. It's something to watch, however.

 
 
  Jeff Bailey   4/2/03,  11:13:19 AM
McKesson (MCK) $25.38 +0.27% ... I'm still monitoring this one from time to time. Make notes of today's "lagging" in very bullish market. I closed out bearish position because of broader bullish % strength in markets. Keep this one on the bearish list for future though. When market bullish % get high, if MCK just hanging around and below $28.00, then this one becomes very good short candidate in my opinion. Link

 
 
  Steven Price   4/2/03,  11:10:39 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Raise the stop to 8274, let's chase this and lock in a gain. The Dow is above 8300 (8303), but the COMP is within 3 points of 1400 and if shorts are going to come back in, this could be the level.

 
 
  Jeff Bailey   4/2/03,  11:07:08 AM
Dow Industrials (INDU) 8,300 +2.85% ... 200-point away from relative high, 200-day SMA back in play at 8,384 here.

 
 
  Jeff Bailey   4/2/03,  11:05:53 AM
3M (MMM) $133.95 +2.37% ... is the "strongest stock" in the Dow leading? You bet! Traded an all-time high of $135.63. Link

 
 
  Jeff Bailey   4/2/03,  11:02:26 AM
Dow Industrials / $UST relative strength here's our relative strength chart of Dow Industrials (INDU) versus 10-year bond PRICE ($UST) relative strength chart. Look at the reversal! This is an asset allocation shift from Treasuries ... toward stocks. Link

Remember our initial experiment of how this type of chart showed that it would give an RS "buy signal" at 8,050? I thought this might mean that bulls should look for bullish entry at Dow 8,050 on pullback. Hmmmmm....

From here, next "buy signal" would be.... 8,300 on RS chart.

 
 
  Jonathan Levinson   4/2/03,  11:01:35 AM
FVX is up at or near its high of the day, +11.9 bps. Note that Al Green drained over $3B today, which is likely being sold out of bonds, but I'm ignoring that and using the yields as a leading indicator for equities. It just moved again, now +12.4 bps- bullish for equities. The Qubes are holding above 26.40 now, pushing slowly against resistance here just below 26.50. TRINQ .41, TICK.NQ +243. We might have just seen a "pullback", and it was barely even a pause.

 
 
  Jeff Bailey   4/2/03,  10:58:36 AM
10-year YIELD ($TNX.X) 3.931% ... session high so far. Get me 3.933% as an equity bull to begin feeling a little better/confident.

 
 
  Linda Piazza   4/2/03,  10:56:34 AM
Currently at 31.20, the VIX is at the high of the day, measuring as low as 30.49 at one point.

 
 
  Jeff Bailey   4/2/03,  10:55:53 AM
Semiconductor Index (SOX.X) 317 +5.95% ... mentioned this index yesterday as "concerning" to market bulls on decline back below 200-day. Thought was that market/index/sector bulls needed a rebound back above 200-day SMA "soon." Back above 200-day SMA today.

Sector bullish % (BPSEMI) from Dorsey/Wright has been very similar to what we've noted in the Index Trader Wraps in regards to other bullish % data, where little if any internal deterioration was seen in the bullish % despite the actual decline in the SOX.X itself.

I still hold bullish calls (October expiration) in Intel (INTC) $17.35 +5.6% from $18.50 level. Link

Bought "lots of time" in partial position, but need to get a trade at $19.50. Current bullish vertical count is $27.50. Risking $1.35 to stop at $16 to potentially make $6.00 here.

 
 
  Linda Piazza   4/2/03,  10:50:06 AM
With barely a pause, the SOX powered over its simple 200-dma, simple 100-dma, and simple 21-dma's this morning. Lest bulls gloat too much, though, it plummeted through those same levels Monday with nary a pause. How can traders gauge entries or exits when three important converging moving averages provide neither support nor resistance? If you find out, tell me. I do note that the SOX has maintained its position above an ascending trendline that's been forming since October.

 
 
  Steven Price   4/2/03,  10:49:22 AM
Swing Trade Signals
That mini-H&S on the TNX's 5 min chart reversed higher and it broke out to a new intraday high, which is bullish for equities.

 
 
  Steven Price   4/2/03,  10:47:54 AM
Swing Trade Signals
I have been using the 2.5 point box size on the OEX point and figure chart, which I think mirrors the Dow and SPX more closely. It reversed higher yesterday and today the traditional chart reversed as well. We now have reversals up in all three charts. Dow 8300 has been pivotal in the past, so as we apprach, I may tighten up again, especially with the COMP getting closer to 1400.

 
 
  Jeff Bailey   4/2/03,  10:46:41 AM
10-year YIELD ($TNX.X) 3.919 ... session high YIELD has been 3.925% ... equity bulls look for YIELD break higher of 3.933-3.930% (DAILY R2/WEEKLY Pivot correlation) to give thoughts of WEEKLY R1 for Indexes.

 
 
  Jeff Bailey   4/2/03,  10:42:15 AM
United Online (UNTD) $19.44 +9.89% ... upside alert here. This is an internet play mentioned last week here in market monitor. Bullish p/f chart. Link

 
 
  Linda Piazza   4/2/03,  10:39:54 AM
Today's volume patterns show the positive slant that would be expected. Adv/dec ratios stand at 3.52 for NYSE-traded issues and 2.86 for Nasdaq-traded issues. Up volume is 7.53 times down volume on the NYSE and 9.16 times down volume on the Nasdaq. These numbers are high, but perhaps not high enough to signal an imminent turnaround from a contrarian viewpoint. New highs swamp new lows: in fact, the number is so imbalanced on the NYSE that it does set up a contrarian alert. There, 73 news highs are matched against only 7 new lows. This kind of imbalance sometimes signals trouble, but not always and not always right away, either. However, I've often seen a first clue of trouble ahead from the new highs/new lows ratios. Total volume is 310 million shares on the NYSE and 390 million on the Nasdaq.

 
 
  Jeff Bailey   4/2/03,  10:38:03 AM
Dow Industrials (INDU) 8,266 +2.4% ... too bullish here. Closing out my put in DIAMONDS.

Now hold DIA Sept. $80 call (DAVIB).

 
 
  Jeff Bailey   4/2/03,  10:36:59 AM
American Electric Power (AEP) $23.03 -1.49% ... the only bearish position in my account showing a loss today. News today that company announced it has received subpoena from the SEC as part of the agency's ongoing investigation of energy trading activities.Link

 
 
  Jeff Bailey   4/2/03,  10:32:29 AM
Buy Program Premium Alert Dow=8,254 , SPX 877, OEX 445, NDX 1,058, QQQ $26.31.

About 5 buy program alerts today, 0 sell program alerts so far.

 
 
  Jonathan Levinson   4/2/03,  10:31:34 AM
26.31 QQQ didn't do much as resistance, but it's already logged an impressive job as support for the past few minutes. FVX continues to hang at a 9 bp gain, QQV is up to a 19 cent loss, and the TRINQ is up to .40, off its lows of .21 near the open. A failure here is shortable, but I don't see any trades today as having anything more than scalp potential. Everyone is so used to these monster up days that the dip buying will likely come quickly on each pullback. A few times this year, we didn't get pullbacks at all. That said, my own style prohibits me from buying at the high. Others will differ, and should trade their plans as they see fit.

 
 
  Jeff Bailey   4/2/03,  10:31:11 AM
Buy/Sell Program Notes .... remember all those sell program premium alerts that were generated on Monday near their lows? Keep that observation in mind.

Those sell programs were "absorbed" at the WEEKLY S1 (Dow, OEX, SPX) and perhaps NDX S2. My thinking is this.... if we start seeing a bunch of "buy programs" at a resistance level, then I'd sure want to see upside progression, otherwise I would think we're at a level of near-term resistance. I'm on the lookout for this type of thing at WEEKLY R1s.

 
 
  Steven Price   4/2/03,  10:29:03 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We continue to struggle at the weekly pivot and with the VIX approaching support and the TNX is forming a mini-H&S. The COMP is also sufficiently close to resistance at 1400 to worry me. I am going to take the gain on the position at 200 Dow points if we roll over from here. Set stops at 8234.

 
 
  Jeff Bailey   4/2/03,  10:22:39 AM
Interesting p/f internals from yesterday.

Yesterday's p/f action report from Dorsey/Wright and Associates is interesting and you can really "feel" the equilibrium from its action.

If you were hand charting the NYSE components, you would have charted 24 upward reversals and 24 downward reversals (3-box reversals). For the NASDAQ you would have charted 43 upward reversals and 40 downward reversals. Do you "feel" how this type of charting action would have given you the feel that yesterday's trade was some type of equilibrium? Today's move is higher from the equilibrium and I think recent two-day's lows was a point of support that now becomes ingrained in my mind. bullish above, bearish below.

 
 
  Linda Piazza   4/2/03,  10:22:37 AM
On March 26, Mark Phillips wrote an article in which he noted that, during the periods he examined, the VIX has at no time measured a number lower than 17% below its 200-dma. If I'm doing the calculations correctly, that would mean that currently the VIX should find support no lower than 29.77. Many market participants have noted a wedge setting up on the VIX, and in this article, Mark notes that the lower support line crosses just below that 17% dip below the 200-dma, lending credence to the theory that the VIX could find support there. Of course, with stocks or indices, we know that wedges can be broken to the upside or to the downside, but Mark's calculations perhaps put traders on alert here that 29-29.75 might be a potential bounce area for the VIX. Here's Mark's article for those who haven't read it. Link

 
 
  Steven Price   4/2/03,  10:21:52 AM
ROOM $54.90 (-0.77) OI put play ROOM, listed at $58.58, was downgraded this morning by Legg Mason to a sell. It said the potential acquisition by USAI would not take place at a material premium to current levels and that the company's fundamentals are vulnerable to supply challenges and could lose a major supplier in the second quarter.

 
 
  Jeff Bailey   4/2/03,  10:14:42 AM
10-year YIELD ($TNX.X) 3.906% ... session high for YIELD has been 3.925%, which is/was just shy of WEEKLY pivot. Make the "tie" here with Dow Industrials (INDU) 8,243, which did trade its WEEKLY pivot of 8,255.

My thinking at this minute is.... need more selling in bonds to get above WEEKLY pivot in Dow right now.

As such, I'm still thinking of pullback to 8,150 to close out my DIA put.

 
 
  Jonathan Levinson   4/2/03,  10:09:05 AM
U.S. factory orders fell 1.5 percent in February, about double the decline analysts had forecast.

 
 
  Steven Price   4/2/03,  10:08:16 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
I like the move thorugh Dow 8250/SPX 875/OEX 445, but the TNX is throwing a red flag by not building on gains. Of course bulls will say that stocks are still catching up. Either way, I am raising the stop again to 8035, which is a few points below today's pivot and also the breakeven level.

 
 
  Jeff Bailey   4/2/03,  10:07:41 AM
Dow Industrials (INDU) 8,254 +2.28% ... WEEKLY pivot here. P/F chart shows that recent "compression" pullback starting to "uncoil" itself. Link

 
 
  Linda Piazza   4/2/03,  10:04:34 AM
Like Jonathan, I've got so many trendlines drawn on my charts that it's becoming difficult to read them. In fact, I sometimes keep multiple versions of my OEX charts with different patterns marked on each so that I can distinguish them. On one version of my 60-minute OEX chart, I've been following a regression channel that's slightly different than the possible bull-flag pattern I mapped out on the previously posted 60-minute OEX chart. On the alternate version, the OEX violated that regression channel to the downside on March 31, but today's climb brought it back inside and then right to the top of that regression channel, where it paused. It's now attempting to break out to the upside. This kind of trading is treacherous. You can't trust downside breaks, and perhaps not upside ones, either.

 
 
  Jonathan Levinson   4/2/03,  10:00:08 AM
The fed has just done a 3.25B drain via 1.75B overnight repo against yesterday's expiring 5B overnight repo.

 
 
  Jonathan Levinson   4/2/03,  9:55:50 AM
I've drawn enough trendlines to turn my 3 minute chart into a Gann look-a-like, but little guidance there. My oscillators look toppy on the 3 minute chart, and FVX is down to a 9 bp gain on the day. No sign of a rollover here, and I'd prefer to try to catch an opening fade from 26.31 QQQ, the 13 dma. I would not be adding longs here near the highs of the day, but that's my own style. Better to be buying on dips and selling on peaks. TRINQ .31, TICK.NQ down to +143. QQV +.12 to 36.76. HUI and XAU down -3.08 and -1.32 respectively.

 
 
  Steven Price   4/2/03,  9:53:28 AM
MMM $132.86 +2.02 Looking at the chart of MMM and it shows a print of $135.63. This appears to be a bad tick and I have an intraday high of $133.26.

 
 
  Jeff Bailey   4/2/03,  9:52:31 AM
Market Volatility Index (VIX.X) alert at 31.14, with vix.x at 30.90. From retracement that I like to use (40.00 - 16.78), getting downside alert on VIX.X here. VIX.X looks to have potential to 28.40-25.66 area. EQUITY bulls would like VIX.X to continue lower, and hint of further call buying from bulls. The closer VIX.X gets to 28.40, I think equity indexes trend toward recent relative highs of two-weeks ago. Relative lows for VIX.X near 27.00 have been November and December.

Those traders that rely heavily on VIX.X, make a benchmark note here of Dow Indu 8,222 (close to WEEKLY Pivot of 8,254) and in between MONTHLY Pivot and MONTHLY R1. Tie in the VIX.X of 30.96 (close to retracement of 31.14, and begin thinking like this....

IF ... vix.x trends lower towards 28.40 retracement, THEN Dow 8,573. or IF .... vix.x moves above 31.14 THEN Dow 8,000.

I think we will be using the trends toward 28.40, as bullish % charts still have some bullishness to go toward 70%.

 
 
  Steven Price   4/2/03,  9:51:01 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Raise the stop to 7974, just below the daily and weekly S1s and the monthly pivot.

 
 
  Jeff Bailey   4/2/03,  9:48:01 AM
My Dow DIAMOND put I'm at a losing position in my Dow DIAMOND put from last week (8,150). I will close this out if Dow Industrials pulls back to 8,150 area.

This put is offset by a Dow DIAMOND call from 8,050 area.

 
 
  Steven Price   4/2/03,  9:47:19 AM
Swing Trade Signals
We are still inching toward new highs in equities, but off our high in the TNX and May Crude oil has bounced and begun to stabilize. We have a gain here of about 200 Dow points and traders looking to take their chips when they can in the current news driven environment can do so.

 
 
  Linda Piazza   4/2/03,  9:45:09 AM
Currently at 311.48, the SOX has bumped above the simple 200-dma at 309.28. The exponential 200-dma is still far overhead, at 335.85.

 
 
  Steven Price   4/2/03,  9:43:01 AM
Barr Labs (BRL) $59.13 +0.35 OI call play BRL has reached our profit target for traders between $59 and $60 and we will take the change of +$5 on the play, which was entered at $53.81 and close out.

 
 
  Linda Piazza   4/2/03,  9:42:19 AM
Here's a 60-minute OEX chart I've been posting periodically over the last couple of weeks. This morning, we may be getting an answer to the question posed in the top right corner of the chart. I like to wait for a retest before drawing too many conclusions, especially in this market environment, but I suspect today may be one of those runaway days when there is no significant retest. Link Note, the OEX continued to move up after I uploaded the chart.

 
 
  Jonathan Levinson   4/2/03,  9:41:52 AM
1381 is the COMPX HOD. Yields topped out just above an 11 basis point gain. TRINQ risen to .32 from its low of .21. Gap support is coming into view now on the COMPX.

 
 
  Jeff Bailey   4/2/03,  9:39:52 AM
Fluor (FLR) $35.79 +3.49% ... stock breaks out of its upper-regression channel here. I have retracement level of $40.19 now as trader's target. I will also utilize "stacked regression channel" technique to build other upside resistance. This is kind of my "war with Iraq" or "rebuilding Iraq" bullish play.

So far, I have not seen any news that FLR has a contract, but they have been asked to provide bids.

Technical support should now be firm at $32.50. I'm working with retracement from $20.05 to $44.95.

 
 
  Steven Price   4/2/03,  9:38:33 AM
Swing Trade Signals
Dow trades 8200, COMP has already filled the March 31 gap and the TNX is back above the 50-dma, however not really building on this morning's gains. Rather than adding after the big run, I'm concerned about the TNX not really going anywhere and I'll stick with the current small long position.

 
 
  Jeff Bailey   4/2/03,  9:34:47 AM
Forest Labs (FRX) $56.75 +1.86% ... notable 52-week high. (grin)

Bullish vertical count of $67 and upper-end of regression channel currently at $65 are targets. (regression taken from 7/11/02 low).

 
 
  Jonathan Levinson   4/2/03,  9:31:10 AM
No... a BUD light! 27 point gap up to COMPX 1375, FVX +10.7 bps, TRINQ .27, QQV +.42 to 37.06.

 
 
  Jeff Bailey   4/2/03,  9:21:43 AM
09:00 Update is posted at this Link

 
 
  Steven Price   4/2/03,  9:19:10 AM
Swing Trade Signals
We are currently long a 1/4 position from Dow 8036. I talked about adding to the position over 8100, but I'd like to see how close to previous resistance the opening takes us in both the equities and the treasuries. Current stop is set at Dow 7774, but I'll probably raise that after the open.

 
 
  Jonathan Levinson   4/2/03,  9:14:39 AM
NQ futures are now +26 and ES futures +15.25. This is very strong. That said, yields are not rising higher, for the moment. Nonetheless, I on a trading basis I would be inclined to buy the dips above 1344 COMPX and exit at resistance. In the end, your bias doesn't matter if you're playing support and resistance against each other. But betting on either a waterfall decline or a breakaway endless bullrun is a long shot, and those tend not to pay in most cases. As we saw yesterday when the ISM data came out, this market does not want to go down for the moment, whatever the news or fundamentals.

 
 
  Jonathan Levinson   4/2/03,  9:05:36 AM
QQQ is trading 25.96, just overcoming the 5 dma at 25.94. The 13 dma is at 26.31. Here's a chart: Link

 
 
  Jonathan Levinson   4/2/03,  8:48:25 AM
Yields are up strongly, FVX +9 bps, TNX +7.7 bps and TYX +4.9 bps.

 
 
  Jonathan Levinson   4/2/03,  8:46:41 AM
It surely is good news about Jessica. However, what about the 11 bodies that were found? I actually had stops in place, but it won't matter. I guess it will be interesting to see how far one news story can push the market. The economy is still a mess and the war will go on for quite some time, but no one seems to care. In this news driven market it is dangerous to hold any position over night

That last sentence is very true. This continues be a dangerous market, and for me that means scalps only, or hedged positions. Parnos' CPTI is a very good section to be following. The news is too noisy to allow us to trade with anything approaching control, and so we'll continue to play the s/r lines and indicators, with tight stops. It looks like well gap to the COMPX 1370 area, above which is relatively clean air to 1400. A gap and crap scenario could see us fail at 1370. If not, 1400 will come into view.

 
 
  Linda Piazza   4/2/03,  8:40:34 AM
European markets extend their gains, with the FTSE 100 currently up 87.50 points or 2.37% to 3772.30;the CAC 40 up 95.61 points or 3.63%, to 2730.65; and the DAX up 112.24 points or 4.58%, to 2562.43. The CAC obviously shrugged off the news that the country's budget deficit had exceeded the 3% Eurozone limit.

 
 
  Jonathan Levinson   4/2/03,  8:20:02 AM
Last night's news was indeed worth celebrating, though you'd think they'd rescued George Soros or resuscitated Jesse Livermore instead of rescuing Jessica Lynch. Gold is now below 330/oz, NQ3M is up 22.50 to 1045, ES3M is up 13.25 to 870, and QQQ is trading 25.77. The US Dollar Index is up to the 99.60 level.

 
 
  Linda Piazza   4/2/03,  6:42:51 AM
Good morning. The Nikkei's behavior proved as news-driven as our markets in Wednesday's trading. After opening positive, the Nikkei soon fell, troubled by increasing reports of SARS, but then recovered on news that U.S. troops had advanced toward Baghdad. The Nikkei ended Wednesday's trading up more than 80 points, to 8069.85.

March auto sales were reported yesterday, showing record U.S. sales by Toyota and Honda. Honda closed up, but Toyota closed down 0.2%. Nissan climbed 1.3%, helped by a report that their full-year earnings may be as much as 20 billion yen above earlier projections. Hit by expectations of lower earnings and rumors that insurers were selling bank stocks, Japanese banks fell in Wednesday's trading. For the year ending March 31, Mizuho Holdings expects to post the biggest yearly loss ever reported for a Japanese company. Sumitomo Mitsui Financial and UFJ Holdings also tumbled.

Encouraging news from Iraq appears to drive European trading today, too. Some reports this morning indicate that coalition troops have crossed the Tigris River, although Iraq disputes those reports. The troubled insurers rose in early trading as investors speculated that the war in Iraq will end in four to six weeks and stocks will rally, plumping up the value of the insurer's holdings. Auto stocks rose. Even KLM Royal Dutch Airlines rose after reporting that, in response to lower travel demand due to SARS and war in Iraq, it will cut 10% of its employees to trim costs. These advances also occurred despite the news that France's budget deficit had exceeded the 3% limit imposed on Eurozone countries. As of this writing, the FTSE 100 was up 45.60 points, the CAC 40 was up 70.08 points, and the DAX was up 90.86 points.

 
 
  Jeff Bailey   4/1/03,  10:56:49 PM
The Index Trader Wrap has been posted: Link

 
 
  Vlada Raicevic   4/1/03,  10:56:39 PM
The Futures Trader Wrap has been posted: Link

 
 
  Steven Price   4/1/03,  10:56:22 PM
The Swing Trade Game Plan has been posted: Link

 
 
  Steven Price   4/1/03,  10:55:36 PM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

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