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  Linda Piazza   4/16/03,  4:00:53 PM
So what do we have on the OEX daily chart? A bearish looking candle that nevertheless looks to close above the simple 200-dma. RSI rolling over, MACD completely flat, 5(3)3 stochastics approaching territory indicating overbought conditions although not there yet, 21(3)3 stochastics trying to hook back up from the high-60's level but not quite sure it wants to do so. Same old confusing mix of signs: that's what we have.

  Linda Piazza   4/16/03,  3:55:32 PM
J.B., better known as G., I'm not ignoring your emails, but my replies keep getting returned to me.

  Jeff Bailey   4/16/03,  3:50:57 PM
Pacholder Fund (PHF) $8.11 +1.24% ... "junk bonds" getting some action. This shouldn't be happening if the MARKET sensed gloom and doom for the economy. The only reason to buy "junk bonds" is a hunger for higher YIELDing debt instruments, with thought of a growing economy that further strengthens the balance sheets.

Maybe they've got a bunch of Ford Motor (NYSE:F) $9.25 +10.6% bonds in their holdings?

  Jonathan Levinson   4/16/03,  3:45:08 PM
QQQ is finding support just above 26.10. The TRINQ at .56 continues to show mostly supportive breadth. Every buyer who held today is currently underwater. HUI and XAU are positive, as is the VXN, though QQV is still down .18.

  Linda Piazza   4/16/03,  3:44:28 PM
The slightly descending OEX 60-minute 50-pma, now at 445.91, had been providing support for the OEX for the last fifteen minutes, but that support may be tenuous, with the OEX at 445.94. Just below that 60-minute moving average is a more important moving average, however: the simple 200-dma at 445.20. Although I believe that the exponential 200-dma tends to be more important for the OEX, I don't devalue the simple 200-dma's influence, either.

  Jeff Bailey   4/16/03,  3:42:36 PM
Feeback From Chip Anderson at www.stockcharts.com. Their 10-year Treasury Bond Price ($UST) is a "fictitional" bond price for the 10-year, based on the combined open futures contracts of this bond. This is FANTASTIC as it takes into account "all the money" so to speak.

As such... this is why this "bond's" price doesn't tabulate on a DAILY basis.


All you p/f chartists out there will perhaps see what I see as it relates to the Dow Industrials p/f chart? A potential triple bottom at $104.50 in the $UST (still, there have been buyer above that level)

And a potential spread-triple-top buy singal in the Dow's chart. Link

A bear is saying ... "Yes!, but the $UST shows a "buy signal" on price, and the Dow is trading in a range and hasn't been able to prove anything above 8,550!"

Excellent observation from the bear! Now we'll wait and see if a buy or sell signal is given.

  Jeff Bailey   4/16/03,  3:18:40 PM
10-year YIELD ($TNX.X) bond market closes, with 10-year YIELD finishing out at 3.942%, which is "smack dab" in the middle of our "zone of support" from WEEKLY and Conventional retracement area.

Today's action has tomorrow's DAILY pivot at 3.956%, which is darned close to the 3.954% YIELD level from the conventional retracement.

So... for a short-term trader, it might be worth the "risk" to look for bullish enty in the Dow Industrials (INDU) 8,270 -1.56% on a Dow decline to/near 8,200.

This would build in some "reward" and have 10-year YIELD and Dow Indu nearly alligned in their matrix.

Passover along with day before normal April expiration is bullish. Should YIELD "pop" above the 3.954% level, then could get a nice rally tomorrow.

I'm trying to bring into the fold, today's 11:00 update Link and the 01:00 update Link

  Kent Barton   4/16/03,  3:17:06 PM
The 3:15 update has been posted: Link

  Linda Piazza   4/16/03,  3:04:35 PM
What's next support for the OEX if it continues down? The next light support lies at 446.17, the level of the 60-minute 50-pma, also a level of S/R for ten or so 60-minute candles throughout this month. Stronger support lies at 444-445.

  Linda Piazza   4/16/03,  2:59:44 PM
Speaking of "ominous for bears" (see Jonathan's last post), I note that the 60-minute OEX 5(3)3 stochastics are now reaching levels that indicate fully oversold conditions. We all know that stochs can stay oversold or overbought longer than you and I can hang onto our options premium, but as the 21(3)3's turn down, they have that flat slope that sometimes results in stochs that turn right back up. Perhaps this isn't ominious for bears so much as it's a signal for alertness. Hard selling this afternoon should result in a steeper angle. I do note that the RSI has now dipped below the rising trendline formed from the higher lows since March 10.

  Jonathan Levinson   4/16/03,  2:54:19 PM
The indices have gone "quiet", an ominous sign for bears, but all of yesterday's aftermarket and opening gains have now been vaporized, and another wave of bulls has been fleeced. Looking at the slightly broader picture, action like that just weakens the market, and we see that in the consistently lower highs on the weekly chart. Back to short term, the FVX is down 2.6 bps, TRINQ up to .55, QQV -.34, TICK.NQ -53. The selling hasn't even begun, if the TRINQ is any indication. QQQ is trading between 26.18 support and 26.26 resistance.

  Jeff Bailey   4/16/03,  2:53:21 PM
VIX.X 26.44 +1.53% ... I set an alert just above this morning's high of 26.44. Getting an "upside" alert in the VIX at this level. More of a day-trader's observation that "sentiment" is a little more bearish than earlier this morning.

  Jonathan Levinson   4/16/03,  2:34:15 PM
QQQ is sitting right on the level formerly known as resistance, 26.26ish, with next support below at 26.18, then 26.05, 25.90, and so on. The bounces so far are uninspired, but then, given the shellacking that the USD Index is taking, even a pause is pretty impressive. FVX is now down 2.3 bps, and magically, the QQV is still negative, down .34. I expect that we're watching op-ex machinations at work here, still.

  Jeff Bailey   4/16/03,  2:33:30 PM
10-year YIELD ($TNX.X) 3.942% ... OK... YIELD edges back up, but think about this. YIELD alert gets triggered at 3.937% level (from our WEEKLY retracement). Computer programs now begin initiating their instructions. As the "level" is triggered, are the bulk of computers buyers of this YIELD or sellers?

They (the computer instructions) may well be to just sit here and feed out (sell) this bond, raise some cash, and let the Indexes "catch up" to similar levels within the pivots.

YOU know the time line by now. We noted it yesterday with the buying in bonds, the major indexes seemed to "ignore it," but they are starting to pay attention aren't they?

Dow 8,281 and bears will begin pressing here with a target near 8,200. That target may grow lower with future bond market trade.

  Jonathan Levinson   4/16/03,  2:23:55 PM
The US Dollar Index is in trouble, displaying the rare "Tijuana Swan Dive" pattern. Currently challenging 99.00 support.

  Jeff Bailey   4/16/03,  2:21:35 PM
10-year YIELD Alert! now breaking below the 3.937% YIELD level.

Dow Look for weakness into Dow 8,200 as it "in unison" breaks below its WEEKLY pivot. Expect similar action in other indexes.

  Linda Piazza   4/16/03,  2:19:04 PM
The DAX closed down 9.44 points, dipping to its low of the day into the close, almost 100 points below its HOD.

Volume has already reached 1 billion on both the NYSE and Nasdaq, with advancers and decliners equal on the NYSE and declining issues slightly ahead on the Nasdaq. Down volume continues to outpace up volume on the NYSE and up volume is now only 1.8 times down volume on the Nasdaq, far lower than this morning's proportions. New highs continue to outpace new lows.

  Mark Phillips   4/16/03,  2:11:31 PM
On what has become an extremely listless and boring day, there is a bit of excitement to report from the Land O' LEAPS. Our Portfolio play on EMC got some juice from the company's positive earnings report, where the company beat estimates by a penny and guided slightly higher for Q2. That was enough to gap the stock through the $8 resistance level, and EMC is holding on to the bulk of its gains, trading $8.27 (intraday high of $8.34) as of this writing. So long as the stock holds above $8.00 at the close, our stop will be raised to $6.50, just a smidge below the 3/12 intraday low. Next resistance is $8.50, which provided resistance in mid-February, as well as last August. Reinforcing the improved technical picture, we have EMC now above its 18-month descending trendline (now at $7.25) and On Balance Volume it now at its highest point since early May of last year. It isn't a screamer, but it is steadily looking stronger.

  Jeff Bailey   4/16/03,  2:08:17 PM
01:00 Update posted at this Link

  Jonathan Levinson   4/16/03,  1:57:42 PM
My email client is offline for the moment. Apologies.

  Linda Piazza   4/16/03,  1:56:57 PM
Less than two points below the OEX's current 450.02 is the 60-minute 21-pma at 448.49. The OEX has traded above that average since Thursday morning, so it might be good to watch for a sustained move below that average or a bounce from it. The average rises steadily and has not yet flattened. The OEX 60-minute chart shows that the 5(3)3 stochastics are now close to levels indicating oversold conditions, while the 21(3)3's have been barely tugged down from levels indicating overbought conditions. Just as happened yesterday, it's possible for those 5(3)3's to turn back up and save the 21(3)3's in time to turn them back up again. I mention this possibility only because of the RSI's action. RSI had been forming a series of higher lows since March 10 on this 60-minute chart. This afternoon, the RSI descended to that trendline and then flattened along it rather than punching through. I had mentioned yesterday that I would be watching for a violation of that trendline as a sign of something changing.

  Mark Phillips   4/16/03,  1:46:57 PM
AZO $75.31 (-2.48) Where have all the bulls gone? After pushing strongly higher over the past couple days, our AZO play seems to have fallen today on a complete lack of buying interest. Volume remains on the light side (just under half the ADV), just as it has all week, but that doesn't invalidate the more than 3% loss today. We had been looking for another dip and rebound from the $75 area to provide for another entry into the play, but today's action isn't leaving me with a bullish view. The stock broke below its 10-dma (currently $75.77), and although this MA has provided support over the past week, ther hasn't been a hint of a bounce so far today.

  Jonathan Levinson   4/16/03,  1:36:48 PM
The down phase has been mostly sideways so far, though buying has accelerated in treasuries, with the FVX down 1.4 bps. The put to call ratio has climbed to a reading of .54, still showing a great excess of call trading. It smells like more opex antics to me- I wonder if the specialists aren't holding the markets up while they write calls hand over fist to retail speculators for the impending run down? Just guesswork on my part so far.

  Jonathan Levinson   4/16/03,  1:09:27 PM
From the WSJ. I swear I didn't make this up:

As the U.S. turns from bombing Iraq to rebuilding it, the U.S. government is airlifting dollars from the Federal Reserve Bank of New York to replace -- at least temporarily -- the discredited Iraqi dinar.

As an initial step, American officials charged with the reconstruction will use small-denomination bills to make "emergency" payments to hundreds of thousands of Iraqi civil servants in an effort to quiet civic unrest and to stabilize the chaotic Iraqi economy. Using U.S. dollars will make the U.S. currency the de facto currency, at least in the interim -- a move that could prove controversial in the Arab world, but one that would give the Iraqis a currency that will retain its value despite the uncertainties about the country's reconstruction.

Perhaps Al Green got some ideas from reading the Market Monitor! The bleating siren, flashing lights, and forklifters loading pallets of money into a cropduster!

  Linda Piazza   4/16/03,  12:57:31 PM
How did European markets fare after our markets opened? The FTSE continued down, closing near the low of the day at 3854.90, down 61.90 points or 1.58%. This was just five points off the day's low. The CAC 40 also fell, closing down 26.36 points or .90%, at 2895.16. This was about 11 points off the day's low, and far below the 2991.06 high that tested the 3000 resistance. The DAX currently trades at 2841.32, up 7.20 points or .25%. This is about 14 points off the day's low, but far below the day's high of 2915.69.

  Jonathan Levinson   4/16/03,  12:55:07 PM
The US Dollar Index is down to the 99.40 level.

  Jonathan Levinson   4/16/03,  12:45:36 PM
My shorter oscillators say that this was an up-phase which is now in the process of topping. The lack of upside price traction hints that the downphase could be impressive- but will watch the s/r lines for confirmation. Those are 1400, 1390, 1382, 1377, and then 1375.

  Linda Piazza   4/16/03,  12:33:41 PM
The OEX violated that 449.69 support, but then bounced from above yesterday's low. But . . . it's also retreated from its second recent test of the violated trendline from March 12. Is this bullish action or bearish action? Is anyone else's head spinning lately? Bonds, gold, crude oil, VIX, and VXN up; dollar down: this conglomeration would seem to support a bearish interpretation. However, whether you're bullish or bearish, you've seen your interpretation result in a sound trouncing of late, so I'm finding myself distrustful of any development. Can volume patterns clarify anything? Not really. Declining issues now outnumber advancing issues, but only minimally so. Down volume now trumps up volume on the NYSE, but up volume is more than twice down volume on the NYSE. The pattern has shifted from upbeat volume patterns to less upbeat, so perhaps the shift should be given strong weight. Volume levels have picked up, too, with 754 million shares now traded on the NYSE and 809 million on the Nasdaq.

  Jonathan Levinson   4/16/03,  12:28:50 PM
Good day Jon. Sure doesn't look like 9+ bil is enough to keep this market from falling. Here I go again. Was planning on getting out of all my calls today- and wouldn't you know it- every one is down- CRAP! Still hanging on to my silver coins though. Hoping tommorrow is bullish. Looking to short DJX and QQQ next week. Any thoughts would be appreciated. TIA Grant

I'm receiving a pretty even mix of bullish and bearish emails today, and myself, as you know, am mid to long term bearish and short term confused. Your stops should be there to protect your capital. If you are profitable, a good exercise is to look at your charts and find what you expect to be short term support. You can put your stops at those levels and then let them make the decision for you.

  Jonathan Levinson   4/16/03,  12:26:10 PM
Looks like ko is geting hit alittle hard to be down 2.79 to 39.75 does this look like a support level.IN 39.75 with astop at 39.40.Your opinion is valued Thanks David

The oscillators are on pretty big sell signals. I see support at 38.80 to 39.70, but those oscillators are worrisome. I agree with your decision to enter with a tight stop, and would respect it.


  Jonathan Levinson   4/16/03,  12:20:05 PM
QQQ seems to be resting on the lower ascending trendline of a rising megaphone formation, what we can affectionately think of as a "bulloney bullhorn" on the 5 minute candle chart. Yields are all red, but not by much, though the TRINQ has risen to .44, still in bullish territory. HUI and XAU are doing OK given a potentially deflationary CPI number this morning, HUI +1.1 and XAU +.28. I forget the author of the quote, but in deflation or inflation, gold is nobody's paper.

  Mark Phillips   4/16/03,  12:09:51 PM
Mark, I have been following your articles regarding the VIX. I would be interested to hear your comments regarding the open interested in the SPX. I have been following for the last month or so the June contracts. I noticed the open interest has been building in the June 800 Puts. E.g. at the end of January it stood at 29,557, after yesterday it jumped from 87,619 to 110,572! I noticed yesterday there was heavy volume in the June 700 and 800 both Puts and Calls.

In the past, I've watched both the high Open Interest strikes on the SPX, as well as looked for large block trades to signal important shifts in the market. While in the past, block trades have been instructive, I've had a hard time gleaning any useful information from this metric over the past year. In fact, I've gotten to the point where I don't even watch it anymore.

I believe Linda fielded a similar question just before the close yesterday (15:57:01), where she essentially reflected my own view that it is very difficult to interpret what is going on from this data without knowing what the potential offsetting positions are and whether the transactions are buys or sells and by whom. I hate to be difficult, but I really don't have anything of substance to add other than what Linda had to say. The data is interesting, but I don't believe there is enough information from which to draw any conclusions.

  Jeff Bailey   4/16/03,  12:06:16 PM
11:00 Update posted at this Link

Discussed the POTENTIAL triangle formation in the Dow.

  Linda Piazza   4/16/03,  11:45:54 AM
Here's an update of that crowded 60-minute OEX chart from the past few weeks, showing that so far this morning, the OEX is bouncing from the top blue retracement level marked on the chart. That gives more relevance to this level and more importance if it should be firmly broken. Some violations lately have been only temporary, however. Link

  Jonathan Levinson   4/16/03,  11:44:06 AM
The put to call ratio is "up" to .46.

  Jeff Bailey   4/16/03,  11:39:16 AM
10-year YIELD Alert! 3.954% .... session low for YIELD here, and now becomes more of an alert for equity weakness. This is also at upward YIELD trend from the March low YIELD.

Current trade now comes into a "zone of YIELD support" of 3.937%-3.954% that equity bulls really would want to see held in my opinion.

  Jonathan Levinson   4/16/03,  11:36:07 AM
The lack of fear in the QQV and VXN cannot be good for the indices. Note that the TRINQ is down at .38, up from its extreme readings, and while I don't chart or follow the cumulative TRINQ, it's got to be getting down there. The theory is that after successive days of low TRINQ readings, the TRINQ is due to rise, which means generally at least a pullback in the market. Meanwhile, it looks like a "hunchback" head and shoulders on the 5 min COMPX, with the neckline at 1401.

  Linda Piazza   4/16/03,  11:26:01 AM
FDX: A reader wrote asking me to look at FedEx's chart. First, I took a look at the P&F chart and noted the double-top breakout, a move that brought FDX above the bearish resistance line. I note, however, that the $TRAN's P&F chart does not yet show a buy signal, and that the transportation index remains below its bearish resistance line, a fact that surprised me somewhat, given the index's recent performance. With the two P&F charts working at cross-purposes, I'd be reluctant to make forecasts until the two synchronize. FDX is actually strong compared to its sector, so that when the sector reaches a buy signal, FDX should be one of the better performers.

Actually, the bar chart shows that it's been performing quite well already. This week, it's climbed above a descending trendline that's been in place since early 2002. OBV has been moving up since the middle of March, supposedly supporting the move up. However, volume didn't show the huge spikes I might have expected as FDX moved above that long-term trendline, which is somewhat worrisome. MA's have shown bullish crossovers, except that the simple 50-dma is below the simple 100-dma, also a small worry when all other MA evidence is bullish. Daily stochastics--both 5(3)3 and 21(3)3--are showing overbought conditions, but that may only indicate the need to consolidate while recent gains are digested. However, if stochastics do turn down from here while prices pull back, the stochastics are indicating potential bearish divergence, as is the RSI, which is already turning down. MACD still turns up and is above the midline. The 21(3)3 stochastics have already made a bearish kiss, but the shorter-term 5(3)3's have not yet done so. This indicates to me the possibility that FDX may either consolidate or perhaps even pull back soon, as it may be doing today. With the TRAN not yet on a buy signal, the pullback could possibly be deeper than it would be otherwise. With that descending trendline just below 58, FDX could easily pull back below the trendline again, changing the character of its chart somewhat.

Recent consolidation was in a band from about 54.80 to 57.50, so a hopeful bull looking for an entry would want to see FDX steady near the top of that recent consolidation band, and would also want to see the $TRAN give its own P&F buy signal. Pinpointing a likely bearish entry is even more problematic because of FDX's P&F buy signal and that recent support just underneath current levels. Just below that consolidation band, MA's begin grouping in close clusters all the way down to the simple 200-dma at 51.80, and each could potentially offer support. Like many stocks lately, FDX offers a confusing array of positive and negative points that are difficult to decipher. It appears to be a strong stock in a sector that's not quite as strong as one would hope. As I think Jim sometimes says, even a helium balloon goes down in a descending elevator. If the $TRAN should give a P&F buy signal, however, perhaps that elevator is headed back up.

  Mark Phillips   4/16/03,  11:21:44 AM
MMM $130.00 (-3.64) I thought the early drop in MMM might have just been bad data, but judging from the pounding the stock has taken since the open, maybe not. JPM came out this morning, trimming 2003-2004 estimates for the company just a shade. Investors didn't seem to be in a charitible mood this morning, whacking the stock back to the $130 level and there is very little sign of a rebound right here. This potential (along with earnings set to be released on Monday morning) was instrumental in prompting us to raise our stop last night. The $131.50 level hadn't been broken in the past 2 weeks, and the fact that it was smashed so swiftly this morning does not bode well for MMM's prospects heading into earnings. Conservative traders should have been stopped out on the early plunge this morning, while there may be some gunslingers still holding on with the old stop at $129.75. Either way, (barring a miraculous recovery by the close) MMM will be a drop tonight.

  Mark Phillips   4/16/03,  11:11:34 AM
Hmmm. Maybe we're onto something with that %deviation from the 200-dma for caculating a new floor for the VIX. As Linda mentioned this morning, the current calculation places the floor (based on the current level of the 200-dma) at 24.36-25.07. Isn't it interesting that the intraday low for the VIX so far today is 25.10, just above the upper edge of that range? I actually find it rather interesting that the VIX has been able to drop under the 26 area, where it found a double bottom in November and January.

Needless to say, if there is this little fear heading into the heart of what is likely to be a rather disappointing earnings season, that's all the proof I need that there is a lot more life in this bear -- he's just toying with those frisky bulls right now, but come back in a few weeks and I'll bet we'll think we're watching an episode of "When Animals Attack".

  Jonathan Levinson   4/16/03,  11:10:53 AM
What do you think the Fed is up to. That was a big influx of money and I'm wondering what they are seeing that would prompt that action. They had to know of the earnings info that came out yesterday sooo... why? Any idea what they are buying?

Nope- mortgage refis were down today, so they could be buying 30 year t-bills. Also, the US Dollar Index is getting hit, so some money could be headed in to prop it up. Just guesses.

  Jonathan Levinson   4/16/03,  11:02:05 AM
The last put to call reading was actually down to .43 (.34 equity and .70 index). This is again a very bearish reading. FVX is still flat in the green, with TNX -.9 bps and TYX -1.9 bps. TRINQ .32, QQV -.31 and TICK.NQ -139.

  Jeff Bailey   4/16/03,  10:52:59 AM
NASDAQ-100 (NDX) 1,064 +1% ... WEEKLY retracement of 1,062.72 is "support" that if broken to downside most likely has NDX filling its gap higher from this morning.

  Jeff Bailey   4/16/03,  10:51:34 AM
VIX.X 25.88 -0.61% ... now at "session high" and while this isn't a BIG move in VIX.X, a bit suspicious from bull's point of VIEW considering the buying in Treasuries.

Dow Industrials (INDU) 8,325 -0.93%... starting to look more defensive intra-day.

  Linda Piazza   4/16/03,  10:51:06 AM
With a day low of 25.10, the VIX came within a few cents of the historical maximum 30-32% variation from its simple 200-dma, with that range calculated at 24.36 to 25.07 today. Mark Phillips is responsible for the backtesting that showed a maximum historical variation from the 200-dma. Records can be and are often broken, of course, but traders should be watching how the VIX behaves in this area. A drop through 24.36 may mean that the VIX will again return to its historical trading range, with lows near 20, with the rallies continuing, but a bounce from here is dangerous for bulls. Of course, there's that third alternative that everyone dreads . . . the VIX steadies near here without giving clear signals either direction.

  Jeff Bailey   4/16/03,  10:45:37 AM
Dow Industrials (INDU) 8,350 -0.63% ... session lows here and this begins to start "confirming" yesterday's observation of buying in Treasuries.

NASDAQ-100 Index (NDX.X) 1,068 here.

  Jeff Bailey   4/16/03,  10:40:29 AM
"Amateur hour" as some traders call the first hour of trade is over, and the work really begins here.

Whey they call it "amateur hour" I'm not certain, but I think it is because "younger" traders get very emotional on jumps up or down, don't really think things through or have any type of trading plan in place, and just trade to trade and speculate.

  Jeff Bailey   4/16/03,  10:37:32 AM
NASDAQ-100 Index (NDX.X) ... on "code Yellow" NDX reached session high of 1,078.23 and now sitting right at its WEEKLY R1 of 1,072.50. If it can hold here and kick higher, then NDX has good shot at closing at a session high.

  Jeff Bailey   4/16/03,  10:35:11 AM
10-year YIELD 3.975% ... it too "spiked" up to 3.987%, which was just above the correlative YIELD resistance of 3.981% and 3.983% from DAILY/WEEKLY pivot. Now I think I've got a "level" for this YIELD (3.975%) on an intra-day basis to set an alert for a benchmark in Treasuries to compare against the VIX.X action.

  Jeff Bailey   4/16/03,  10:31:49 AM
VIX.X ... "spiked" down to 25.10 on the "code Orange" news. 25.45 here.

  Jeff Bailey   4/16/03,  10:28:32 AM
Terror Alert from Homeland Security lowered to Yellow from Orange.

Benchmarking... Dow= 8,393, SPX= 894.57, OEX= 454.3, NDX = 1,074, QQQ= $26.70.

  Linda Piazza   4/16/03,  10:28:02 AM
Volume is a light 230 million shares on the NYSE and a slightly stronger 315 million on the Nasdaq. Volume patterns are positive, with adv/dec ratios of 1.33 on NYSE-traded issues and 1.16 on the Nasdaq-traded issues. Up volume is 1.4 times down volume on the NYSE and a strong 4.3 times down volume on the Nasdaq. New highs trump new lows.

  Jeff Bailey   4/16/03,  10:27:41 AM
Intel (NASDAQ:INTC) $18.22 +6.3% .... session highs here and perhaps an important observation to some further strength in store for NASDAQ-100? Somebody "likes" the quarter is my impression.

I still hold my previous profiled Intel Oct. 20 calls. I want to see if INTC can break above that downward trend and still have some time to see if it can make the move that counts. Link

Sometimes I'll "play" with the scale/box size to try and see what's in play. Here's a $0.25 box size that adds some noise. Link

  Jonathan Levinson   4/16/03,  10:24:48 AM
The breakdown on that p/c ratio was equity pcr .34, index pcr .93. Looks like a very bearish reading to me, but that's my own interpretation only.

  Jonathan Levinson   4/16/03,  10:23:15 AM
The put to call ratio came in at .48 for the first half hour. Combined with the TRINQ at .24 and the QQV now flat, I see risk to long positions- that's a very low p/c reading there. It's either signalling a tidal wave of buying, or, more likely in my view, an overabundance of bullish speculation.

  Jeff Bailey   4/16/03,  10:22:48 AM
What I'm monitoring for right now between the VIX.X and bond YIELD is some type of "sharp" or sudden moves.

For instance... VIX.X just hovering here at 25.65, and bonds somewhat mixed with 10-year YIELD at 3.967%.

Since VIX.X somewhat lower, I feel still bullish tone among market sentiment. If so... then we should look for some type of "sell" in the treasuries and somebody to cut lose with an asset allocation.

  Jonathan Levinson   4/16/03,  10:18:17 AM
The fed has just added 11.25B in overnight and 5-day repos against 2B expiring, for a net add of 9.25B. Adam Smith just lurched in his grave.

  Jeff Bailey   4/16/03,  10:14:38 AM
Dow Industrials (INDU) 8,364 -0.4% .... couldn't get a print at 8,450 on p/f chart, which might make things "interesting" in coming weeks. This could make for a "triangle" setup in the Dow's p/f chart. Link

I could envision a 3 or 4-box reversal lower, then a 3-box reversal back up. See the potential for higher lows and lower highs, which could set up a "triangle?" Link

  Jonathan Levinson   4/16/03,  10:13:50 AM
Would you open a new short position if this bounce begins to fade? I'm glad I followed your advice yesterday. I was ready to open a short position at 1379 when you suggested waiting for a breakdown below 1375 - which of course never came. You saved me some money!

Depends on how aggressive you are. The other option is to open a short here with a stop at the high of the day. There's plenty of support (failed resistance) below. I remain entirely uncertain of the near-term bearish case above 1375 COMPX, but that's 30 points below. I believe we're just chopping along forming a major top here, but it's just a belief at this point. I know of many traders getting blown out this year, and counsel caution and survival above all. That said, shorting near a peak with a tight stop (a tight, pre-programmed, non-negotiable, non-mental stop) should present a decent risk/reward. If you're not that aggressive, remember, cash is a position, and a good one at that.

  Jeff Bailey   4/16/03,  10:07:14 AM
VIX.X Alert here at 25.66 .... OK... will see if this is a level where perhaps some put options that may have been sold, perhaps start unwinding. Some of you subscribers out there that like to follow or have picked up on some "unusual" option activity in recent weeks, have an edge perhaps on us that don't.

To better understand this type of trade, you have to have been following open interest and made notes as to open interest growing or contracting to get a feel for what was going on and scenario's in play upon your first observation.

  Jeff Bailey   4/16/03,  10:04:02 AM
Day Traders note Tomorrow tends to be a bullish day for equities, which is a Jewish holiday for Passover. My thinking right now is that we may see the indexes trend lower into today's close in a "gradual" manner, and then perhaps see this morning's highs tested tomorrow.

Again.... I don't see anything right now to forecast such a trade (rebound tomorrow), but just trying to envision how today's trade might fit in with some historical bullishness found on Passover and option expiration.

Remember! Markets are closed Friday, so option expiration is tomorrow!

  Jonathan Levinson   4/16/03,  9:59:09 AM
FVX is giving some up now, with just a .5 bp gain. QQV is nearly flat, VXN up .81. The TICK.NQ is -59, just little cracks in the bulls' armor so far. The US Dollar Index is trading below 99.60, not confirming any strength for US paper assets this morning.

  Linda Piazza   4/16/03,  9:55:18 AM
This morning's action took the OEX above the violated ascending trendline off the March 12 low and then pushed it back below that trendline again. On the surface, this is a bearish development. There's light support near 452. Also, yesterday the OEX found support near the 31.8% retracement of the October-to-December move at 449.69, so if the OEX should continue down, that might be a place to watch for signs that buyers are stepping back in.

  Jeff Bailey   4/16/03,  9:54:38 AM
Not seeing anything at this point that would have me being a BIG buyer of stocks.

10-year YIELD ($TNX.X) drips red at 3.968% (yesterday's action still eating at me), S&P Banks (BIX.X) 282.19 +0.09% not seeing much follow through (had a big couple of days though).

NASDAQ-100 Index (NDX.X) 1.065 +1.19% ... session high of 1,074, was right near our WEEKLY R1, which was a level I thought bulls might take some profits at in last Wednesday's Index Trader Wrap. Link

  Jonathan Levinson   4/16/03,  9:53:52 AM
The FVX is hanging on to that 1.2 bp gain, even as the TRINQ "rallies" to .34 (still in hysteria-buy territory).

  Linda Piazza   4/16/03,  9:50:33 AM
Depending on what happens over the next week or two with the SOX, I may be losing my faith in the OBV indicator as a gauge of underlying market strength or weakness. That SOX OBV indicator has been flat since last October, while prices have been consolidating in a wedge, and then moving back up toward the top of that wedge over this week's trading. That flat OBV volume is not supporting price increases, as it's not showing that those increases are being built on underlying accumulation. If the SOX should have an upside breakout of its wedge rather than a downside breakdown out of it, I'll have to wonder about the value of that indicator. One instance when it's not a good predictor wouldn't cause me to throw it out, but it would cause me to be cautious about drawing conclusions about accumulation and distribution based on that indicator. As I type, the SOX sits at 318.42.

  Jeff Bailey   4/16/03,  9:49:32 AM
VIX.X 25.77 -1.03% ... just above our 61.8% retracement of 25.66 from last night's Index Trader Wrap.

  Jonathan Levinson   4/16/03,  9:47:32 AM
The entire move above INDU 8400 has just nlown off into a spike. That move had been sufficient to get me an extended sympathy shoulder and neck massage last night in front of the TV :) If we'd only known.

  Jeff Bailey   4/16/03,  9:46:27 AM
Market Volatility Index (VIX.X) still waiting for an opening tick on the VIX.X here.

10-year YIELD ($TNX.X) 3.973% still below its correlative YIELD resistance from DAILY pivot and WEEKLY pivots of 3.981% and 3.983%.

  Jonathan Levinson   4/16/03,  9:44:11 AM
QQV is now down .83 to 31.13, which may be an alltime low for that young volatility index. TRINQ .29 is in hysteria territory, but if this is the beginning of a longer wave up from here, it could stay at this level for a long time. TICK.NQ 123. This is a dangerous place to go short, but risk/reward-wise, I personally couldn't contemplate going long here.

  Linda Piazza   4/16/03,  9:33:01 AM
Not that these figures have any relevance these days (grin), but the OEX 61.8% retracement of the December 2 to March 12 decline lies at 454.44, just above the OEX's current 454.23.

  Jonathan Levinson   4/16/03,  9:31:48 AM
20 point gap up open to 1411 COMPX, TRINQ .51, QQV +.65, TICK.NQ +375.

  Jonathan Levinson   4/16/03,  9:05:40 AM
QQQ is trading 26.67 now, and all maturities longer than the five year note are showing negative yields now. I'm reminded of the attack scene in Apocalypse Now, when the aircab is taking fire and an explosion goes off inside one of the hueys. Seconds later, Robert Duvall in his yellow ascot: "It's just a flare- just a flare." I thought SPX 905 would get nailed and 911 resistance would be next, but instead the ES contract is down to 896 now.

  Jonathan Levinson   4/16/03,  8:35:48 AM
8:30 data: Housing have just posted their biggest rise in 6 months. The CPIrose 0.3%, half the 0.6% gain in February, below the expected 0.4% gain. Yields are up lightly, FVX +2.1 bps, TNX +1.2 bps, TYX +.7 bps. QQQ is down to 26.71, ES 897.25, NQ 1076, YM 8429.

  Jonathan Levinson   4/16/03,  7:59:13 AM
Well, today's going to be interesting. The 200 day EMA on the COMPX is 1409. After spending most of the night north of 900, ES futures are down to 898.75, NQ 1079.50, YM 8449. The US Dollar Index bottomed at 99.50 and is now trading the 99.60 level. QQQ is trading 26.79.

  Linda Piazza   4/16/03,  7:03:29 AM
Good morning. The Nikkei opened up 84.91 points in Wednesday's trading, with an opening level of 7923.74. Computer-related stocks led the advance in Japan and in other Asian markets. Foreign investors were net buyers of Japanese stocks, with Tokyo Electron showing such an imbalance of buy orders that it did not open in early trading, according to one source. The stock advanced 6.2% on the day. However, the Nikkei fell from its opening level, climbed back to a level just below the opening, and then fell again, ending the morning up only 32.41 points. After the break, the Nikkei traded in a range with that morning low as a base, but never made it back to the opening high again. It closed up 40.66 points or .52%, to 7879.49. Most other Asian markets rose, too, with the South Korea's Kospi being the strongest performer and with China's and New Zealand's bourses being the exceptions to the gainers. The Kospi was helped by the news that the U.S. would begin negotiations with the South Korean government, and China's market was hurt by fears of the economic impact of SARS. The Hang Seng's gains were limited by the same fears.

Like the Nikkei, the FTSE 100 and CAC 40 have fallen below their opening highs, but the CAC remains in the green. In Europe, insurance stocks gain on hopes that stock markets may rebound and the values of their stock holdings will increase. Tech stocks gained, as did telecom stocks, after Texas Instruments announced Q1 sales that were increased by results on chips for wireless devices. As of this writing, the FTSE 100 is down 17.90 or 0.46%, to 3898.90, its lowest level of the day. The CAC 40 is up 28.86 or .99%, to 2950.38, just above the low of the day. Among the three I usually report, the DAX is the exception to this pattern. After climbing above its opening level, the DAX has steadied just under 2900, currently trading up 59.19 points or 2.09%, to 2893.31, but not able yet to maintain a level above 2900.

  OI Technical Staff   4/16/03,  6:01:01 AM
The Market Monitor Server will be rebooted in 5 minutes. You will need to reconnection your desktop program to continue to receive updates. Sorry for any inconvience that this causes.

  Jeff Bailey   4/15/03,  10:20:17 PM
The Index Trader Wrap has been posted: Link

  Vlada Raicevic   4/15/03,  10:19:47 PM
The Futures Trader Wrap has been posted: Link

  James Brown   4/15/03,  10:19:14 PM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

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