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  Jim Brown   4/22/03,  4:39:12 PM
PSFT - earnings = act .12 , est .11, revs slightly light, recovery fragile

  Jim Brown   4/22/03,  4:17:29 PM
EBAY - earnings = act .32 (.36 gross) , est .31, raised guidance $1.41 for 2003 (est 1.31)

  Jim Brown   4/22/03,  4:05:32 PM
STK - 15 cents, beat by +2

  Jim Brown   4/22/03,  4:03:46 PM
GLW = -17 cents, raised guidance +10%

  Jim Brown   4/22/03,  4:03:12 PM
AMGN 42 cents, raised guidance

  Linda Piazza   4/22/03,  3:55:12 PM
We now have those bearish kisses on the OEX 60-minute 21(3)3 and 5(3)3 stochastics, but the slow lines haven't yet rolled over and none of the lines have crossed out of overbought levels. These bearish kisses are tentative as yet.

  Linda Piazza   4/22/03,  3:47:04 PM
On the OEX, the upper Bollinger band is now located at 459.68, so I would look for a pullback (not necessarily today) at least to the top of that BB.

  Jonathan Levinson   4/22/03,  3:45:06 PM
Put to call ratio: total .96, equity .84, index 1.43

  Jonathan Levinson   4/22/03,  3:42:04 PM
We're getting a pullback here, but I'm afraid that it's looking shallow so far, just the oscillators taking a breather. TRINQ .49, TICK.NQ +112, QQV -1.04 at 29.17.

  Linda Piazza   4/22/03,  3:35:13 PM
Is that a cup-and-handle formation on the Wilshire 5000 daily chart? The Wilshire 5000, the broadest of our markets, has moved above the three levels of resistance pinpointed in this morning's 11:32 post, and in doing so, looks to have moved above the lip of a possible cup-and-handle formation. Upon further inspection, though, this doesn't meet the parameters for a cup-and-handle formation. Volume should drop during the dip that forms the handle, and then explode on a breakout above the lip. Those patterns didn't show up. The formation of the handle also was perhaps too extended in time, too.

  James Brown   4/22/03,  3:33:04 PM
The VIX is dropping pretty fast, guys. Now at 23.38, down 0.89 or 3.6%. This is an 11-month low for the VIX. The VXN is hitting new all-time lows at 33.60, down 5.29%.

  Linda Piazza   4/22/03,  3:27:19 PM
When I mentioned early this afternoon my new scenario that the OEX would move toward 465 and the top of that rising wedge while the VIX dropped further toward support, I didn't anticipate that the OEX would move so far toward that level today! Currently, the OEX is at 463.10 and the VIX measures 23.50. The VIX is currently in the middle of a congestion zone, but 22, 20, and 19 look like likely candidates for the next level at which the VIX might steady.

  Jeff Bailey   4/22/03,  3:20:23 PM
Buy program premium alert Dow= 8,475, SPX= 911, OEX= 462.9, NDX= 1,101, QQQ= $27.41

  Linda Piazza   4/22/03,  3:18:49 PM
The fast lines on the 60-minute 21(3)3 and 5(3)3 OEX stochastics now tip over, but there's been no bearish kiss as yet, and they can redraw themselves even after they've made that bearish kiss. Both of these stochastics are hinting at bearish divergence (equal highs on stochastics and higher highs on price), but that's not confirmed until and unless the stochastics do tip over from here. If they should turn up instead, there's no divergence. Whatever happens, it at least seems that we'll get a more interesting week this week.

  Jonathan Levinson   4/22/03,  3:06:49 PM
Lots at stake today, we may be watching the debate over whether Bush gets 2 terms -- if this rally doesn't "take", the only other shot will be this Autumn, and we could be deep into an overt recession by then.

Your guess is as good as mine. Perhaps they overdid it with Al Green's anaesthetic and he punched an extra "zero" into his bat-phone jamorama order... The put to call ratio has drifter lower to .99, and the tenacity of put volume is starting to affect my intraday spirits. Until that p/c ratio drops back to the mid .70s, I'm going to be smelling the next launch around the corner. Then again, the five year treasury closed up, with FVX 1.1 bps. I just can't wait for this session end.

  James Brown   4/22/03,  3:04:18 PM
I don't know what the story is with luxury goods doing so well during this weak economic environment but another winning stock is Harman Intl. (HAR), a company known for its high-end stereo equipment. Shares have been consolidating sideways for months and after bouncing from its 200-dma in early March it's been a strong rally forward. The recent rally looks very overbought but you can't deny the breakout over $65. I'd keep this on my eye on this one for a pull back to the $65 level. Earnings are expected on April 30th.

  James Brown   4/22/03,  2:58:11 PM
I've been watching shares of EchoStar (DISH) for weeks now. The pull back to the simple 50-dma held over a week ago and shares have been consolidating along its rising 50-dma since then. I like the way the MACD is starting to forecast a bullish crossover near the zero line and daily stochastics and momentum are also turning higher. The +3% today is on an upgrade by Moody's of DISH's credit rating. Aggressive traders might consider long positions here near the bottom of its rising channel while more conservative traders may do better by waiting for a move over $30 or resistance at $30.50. The upward trend appears pretty strong but June or September call options might be your best bet (over May options).

  Jonathan Levinson   4/22/03,  2:54:45 PM
QQQ 27.42, TRINQ .39, TICK.NQ +305. Looking at the VXN, the 10 week RSI is down at 20.59, which is the lowest its been since October 2001, but my data doesn't go back farther than that.

  Jim Brown   4/22/03,  2:53:53 PM
Yes, Linda you are looking at it correctly. The Dow is also right at its EMA at 8283. Definitely a critical point.

  Linda Piazza   4/22/03,  2:46:27 PM
If the OEX closes above its exponential 200-dma at 458.49, this will mark the first time the OEX has closed above that average since September, 2000, if I'm reading the charts correctly. Currently, the OEX trades at 462.48. Many technicians caution against drawing too many conclusions with a single close over an important MA or resistance level. Some wait for more than one close, or wait for a certain percentage move over the resistance, such as a 3% move above that level.

  Jim Brown   4/22/03,  2:37:41 PM
Very interesting pattern developing on the SPX cash. We have a longer term down trend from August 22nd and a bearish wedge intersecting this downtrend at 910 TODAY. This should be interesting. Link

  Jonathan Levinson   4/22/03,  2:35:58 PM
I have 27.47, 27.39 and 27.20 as the 3 QQQ highs in 2003. QQQ is currently printing 27.33.

  James Brown   4/22/03,  2:34:05 PM
The strength in the software sector is also showing up in OI's call play ERTS. Actually, it was today's strength that pushed the stock through our trigger to go long at $61.25. Currently trading at 61.40.

  James Brown   4/22/03,  2:25:46 PM
I'm still looking at some of the hardware stocks. Symbol Tech (SBL) a networking-equipment company, is doing very well. We're witnessing a major breakout on both the daily and the point-and-figure charts. The stock is a little cheap to play options on and I'd be careful going long here with shares up seven days in a row. The $11 level, which was resistance, should now be support. Interested investors might want to watch this level.

  Kent Barton   4/22/03,  2:23:05 PM
Reader question: The PnF chart on CTXS has a breakout too. Looking at the $GSO, 100 level was support and the 200-ema looks to be resistance. In addition a Fib Retrace from the $GSO December high and March low, give a 50% retrace at the 109 level. Which we are currently at today. What's your view of the $GSO and CTXS chart?

Response: Good call on CTXS! That double-top buy signal and simultaneous breakout above descending resistance should have the bears feeling a little hot under the collar. The weekly chart also looks good, with no historical resistance until the $18-$19 region. Citrix is defintiely one to keep an eye on. The company reports earnings tomorrow, after the bell.

You're also correct in noting several converging technical levels on the GSO.X. With the daily stochastics (5,3,3) approaching the overbought extreme a case could certainly be made for some sideways consolidation under the March high of 111.44. On the other hand, a breakout above that level might fuel a rally towards the 2003 highs near 118.

  Jeff Bailey   4/22/03,  2:20:31 PM
10-year YIELD ($TNX.X) 3.998% now up 2.2 basis points and equity bulls should like this action. Should also see this begin to press bears in equities and they begin to step up short-covering.

Dow Industrials (INDU) 8,462 +1.6% now trades a "bullish triangle" and should look for further gains here. Those bulls that may have stepped aside in the SPX now see it trading 908.70. Can play bullish the Dow here and look for it to play "catch up" with the SPX and demand pattern similar and should outstrip supply.Link

  James Brown   4/22/03,  2:19:55 PM
Shares of Lexmark Intl (LXK) are rising and have traded back above the $70 level of resistance. The company came out with earnings yesterday, which were higher with strong ink sales. I'm not recommending a play, but an aggressive trader with a bullish bias could go long here at 70.50 with a stop at 67, which is about 5% from current levels.

  Linda Piazza   4/22/03,  2:17:36 PM
All volume patterns remain strongly positive. Total volume is just over 1 billion shares on both the NYSE and Nasdaq.

  Jonathan Levinson   4/22/03,  2:12:45 PM
FVX is now flat, TNX +1.6 bps and TYX +1.2 bps as the COMPX breaks to new highs, targeting 1450 resistance. TRINQ .45, TICK.NQ +497, QQV -1.36 to 28.85.

  James Brown   4/22/03,  2:12:04 PM
...ah.. it takes all kinds to make a market. Just heard on CNNfn that this is the "real thing". Their guest commentator is saying the path of least resistance is now "UP" and now is the time to buy. Wonder what his time frame is?

  Linda Piazza   4/22/03,  2:09:57 PM
Currently at 461.36, it looks as if the OEX is going to make a stab at achieving the 465 level. The daily chart shows that the OEX is extended far above its Bollinger band. I'm not sure I'd jump on any bullish move this afternoon with resistance above at 465 and 470, and with the big punch through the BB indicating a possible need to retrench.

  Jeff Bailey   4/22/03,  2:09:23 PM
Dow Industrials (INDU) 8,441 +1.34% .... quickly approaching its WEEKLY R1 of 8,455. A trade at 8,450 is "bullish triangle" and bullishness builds above 8,550 with "spread-triple" top. Link

Thursday and Friday brings a host of economic reports.

  Kent Barton   4/22/03,  2:08:46 PM
Black Box (BBOX) $32.39 +0.99: On Sunday's OI Watchlist we pointed out that BBOX was trading just below a large overhead gap. Shares have now moved into that gap after several weeks of sideways consolidation. Shorts seem to be running for cover, as evidenced by the stock's 3.2% gain. Although bulls might want to see a bit more volume behind the breakout, it looks like BBOX might have a clear shot at its descending 50-dma ($34.30). The top of the aforementioned gap is way up at $38.80.

  Jonathan Levinson   4/22/03,  2:01:39 PM
Yes, great chart, Linda. The bearish ascending wedge, according to Bulkowski, breaks south approximately 75% of the time. Likelihood increases, if memory serves, where volume diminishes as the formation progresses.

  James Brown   4/22/03,  1:59:02 PM
Linda, those weekly charts really help put things in perspective. Thanks!

  Jeff Bailey   4/22/03,  1:57:41 PM
S&P 500 Index (SPX.X) 905.18 +1.47% .... trade at 905 gets another "X" on the p/f chart. This now allows for a potential 3-box reversal to 890, which would come right back to the apex of the bullish triangle. Also this WEEK's Pivot of 886.20, which should be a level to look for support on a pullback for new bull entries. Link

Today's trade looks to "eat at" that overhead supply from January, but supply begins to become more limited.

From bar chart, Stochastics did indeed turn back higher and now move back above the "overbought" level. Link

  James Brown   4/22/03,  1:57:27 PM
The BKX and BIX banking indices continue to climb higher. The BIX is moving strongly above its simple 200-dma, which has been resistance in the past. I also noticed that shares of BAC are moving strongly above resistance at $72.50. The next level of resistance for BAC is closer to $77.

  Jonathan Levinson   4/22/03,  1:55:53 PM
Hi Jonathan, this approach seems to working OK for me so far as a close of day trader -- half in $xau ($hui or asa would be better) the rest evenly divided among all sectors over their March 21st close. It's hard to conceive of a serious down-turn that wouldn't rocket gold (and it's leaking up anyways), and keeping in the sectors which have bettered their March 21st close (March 24, the next trading day, was the biggest recent down day) keeps me where buyers have shown enough conviction to move above the last place where they got smacked hard enough for it to hurt.

Great strategy, Matt. My only caution would be that at the July lows (I forget if this occured in October as well), precious metal stocks got spanked along with the rest of the market, though I believe they outperformed. I remember watching it and taking note. Just as the rising indices seem to have carried the HUI and XAU for the past few days (though not today), we could see across-the-board selling take down our miners as well.

  Linda Piazza   4/22/03,  1:53:21 PM
Here's an update of a weekly OEX chart I've shown at various intervals throughout the last month. It depicts how close the OEX could be to breaking above its long-term descending trendline near 470, a level that also just happens to be the apex of that (usually bearish) rising wedge I mentioned in my 13:31 post. That also means that this chart depicts how close the OEX could be to being turned back soundly as that wedge rises into strong resistance. The rising wedge isn't as easy to see on this weekly chart as it is on the daily chart, but I wanted to put all the information on one chart. (Note: when a stock or index has made a big move, I switch to a log rather than a linear chart.) Link If the OEX can't maintain levels above that April 7 460.44 high, then I would watch for a move back down to the bottom of the rising wedge, just above 450, and would watch for the possibility of a breakdown there. Right now, before I trade anything, I do want all my ducks in a row. As was demonstrated this morning, even that's not a guarantee, but I want as much validation as possible that I'm making the right move.

  Kent Barton   4/22/03,  1:49:42 PM
Software bulls will also be interested to see that the GSO's p-n-f chart is showing a double-top buy signal, following a rebound from bullish support: Link

The recent sector strength has led to a nice breakout in Adobe (ADBE), which is currently a long play on PremierInvestor. We have an profit-target set at $35.98. But given the lack of overhead resistance, more ambitious traders might want to aim for a move to the $37-$38 area.

  Jonathan Levinson   4/22/03,  1:49:02 PM
Another alternative is to check out Parnos' column. His CPTI strategies look very good to me, and he's been having a great year.

  Jeff Bailey   4/22/03,  1:48:35 PM
NASDAQ-100 Index (NDX.X) 1,093.75 +1.17% ... In last night's Index Trader Wrap, I highlighted the MONTHLY R1 of 1,096.60 level. It wasn't necessarily "correlative" with other levels noted in the Matrix, but was a level that had not been traded in April. NDX session high has been 1,096.90.

  Jonathan Levinson   4/22/03,  1:46:59 PM
I have to agree with you. The amount of "energy" the market has used up to move to these levels has to be astronomical. Mind you the PPT has all the "ink" in the world. I'm thinking this is a blow out top. With stochs as overbought as they are and vix, vxn, and qqv where they are, I feel an 800- 1200 point drop is in the near future. Looking to buy June 26 qqq puts. Any thoughts?

Grant, we agree, but it doesn't make us right. On that basis, I'd counsel very prudent account management. I'm already fully loaded with puts. I cannot advise you as to which month or strike to buy or sell because of SEC rules, but I would counsel buying plenty of time and scrimping on premium, or, alternatively, setting and respecting tight stops. If this is a major top forming, which it smells like to me, then it doesn't have to tank right away. We saw that the top build following the October rally took weeks and months- this is the consideration if you're going long put contracts.

  James Brown   4/22/03,  1:41:23 PM
If you're bullish on Software stocks, the action in the GSO index looks encouraging. Check out the break in this trendline. Link

  James Brown   4/22/03,  1:41:17 PM
If you're bullish on Software stocks, the action in the GSO index looks encouraging. Check out the break in this trendline. Link

  Jeff Bailey   4/22/03,  1:40:19 PM
01:00 Update posted at this Link

  Jonathan Levinson   4/22/03,  1:37:58 PM
The US Dollar Index has made it up to 99.80 on what looks like a bear flag formation (15 min candles). FVX still negative, -1.1 bps. These are not bullish indications from the largest of markets, currencies and treasuries.

  Jonathan Levinson   4/22/03,  1:35:31 PM
Looks like we agree, James.

  James Brown   4/22/03,  1:35:19 PM
Don't we need a "wall of worry" for the markets to climb higher? Could we not be that wall of worry? Just voicing some possible opinions from our readers.

  Kent Barton   4/22/03,  1:32:36 PM
Rather than leading the NASDAQ higher today, the chip sector is simply going along for the ride. The SOX.X has ascended in tandem with the Composite and is sitting above the March high of 337.87. The breakout looks nice, but after five consecutive up days (working on a sixth) some bulls may be hesitant to move into semiconductor stocks. Possible resistance looms overhead at the 340-342 congestion region and the January highs near 348.

  James Brown   4/22/03,  1:32:30 PM
Jon, I do not disagree with your pessimistic viewpoints on this breakout. I also believe that we're bound to see another turn lower, especially as earnings news fades and we're left with dour economic numbers and a slow, uninspiring summer. However, I think it's dangerous to try and short tops, especially as stocks and indices are literally breaking out above resistance. I totally agree that technical indicators can reach new ground but we're also taught to trade what we see. I'm seeing bullish breakouts. Yet because of my bearish bias I'm reluctant to go long. If I were to go long or had any open positions I would be very careful to monitor my stops and keep them as tight as I felt comfortable.

  Linda Piazza   4/22/03,  1:31:00 PM
James, I've marked a rising wedge on one of my OEX daily charts, with an apex near 470, and with the top line currently crossing near 465 (but rising each day). (See James's 13:03 post.) I'm watching to see how the OEX behaves now that it's tested the April 7 high of 460.44 before I make a decision. When the OEX bounced from support this morning, I began favoring the scenario of the OEX moving back up to the top of that rising wedge while the VIX moves down toward next support (22? 20?) before reversing. However, that scenario was predicated on the OEX being able to maintain levels above that 460.44 high. Currently, the OEX sits at 460.22, and it's moved outside the Bollinger bands.

  Jonathan Levinson   4/22/03,  1:25:18 PM
James, I'm full of doubt currently on today's market action. The thing about oscillators, moving averages, and statistical models, is that the future is still the future. Nothing stops the VIX from breaking new ground, or the MacD from diverging to an unprecedented degree, or the NDX:VXn ratio from setting a new record. The QQV is doing that today. The thing is, I won't invest my money on that outcome. History tends to repeat itself, so I'll continue to short this mess until it becomes apparent that the price isn't merely printing a short term headfake. In the meantime, it hurts.

  James Brown   4/22/03,  1:24:27 PM
The Dow Jones Transportation Average (TRAN) has broken out to a new relative high.

  Jonathan Levinson   4/22/03,  1:21:58 PM
Funny, the textbook play would be to go long above 905 SPX, or 1435 COMPX, or QQQ 27.20. No way would I put my money on that trade. The FVX seems to be the only thing on my screen that makes sense. They're still buying gold and five year notes, despite the apparent "breakout".

  James Brown   4/22/03,  1:20:24 PM
Interesting thoughts, Jon. I was curious because I've been following Mark Phillips' research on the VIX and its deviation from its 200-dma. Supposedly, it should have held firm at the 24 area. I suspect, like many of you, the market "could" continue to climb for several more days as the VIX continues to slide lower. Then as equities turn higher - powered by this "bullishness" we see Q1 earnings news start to fade just in time to see the bullish percents approach overbought and we get a reversal downward.

  Jonathan Levinson   4/22/03,  1:10:09 PM
Somehow, gold is still positive, with June gold trading 335.20, +1.30. HUI is flat, +.03 at 130.14, XAU -.20 at 68.65.

  Jonathan Levinson   4/22/03,  1:07:11 PM
James, the VIX has deviated farther from its 200 dma than it has at other times, even when under 20, and by that measure, equities are topping now. I'm recounting this anecdotally because I don't have the details in front of me. The COMPX is not at its year high, but it sure looks like it's aiming for one. All I see is that complacency is at peaks normally associated with major market peaks. The NDX:VXN ratio, which I saw somewhere, is echoing this position. The market can go much, much higher, but the odds do not favor it based on what I follow. The wildcard is whether Toshihiko Fukui and Al Green have other plans for us.

  James Brown   4/22/03,  1:03:39 PM
Question for the group ...We've got upside breakouts in the NASDAQ Composite (over 1430) and the S&P 500 (over 900). Should we attempt to operate under the belief that the markets will continue to head up until traders drive the VIX closer to 20, its more traditional boundary that signals market tops? Of course as I say this, the Futures guys are all going short. Geez...

  Jonathan Levinson   4/22/03,  1:02:39 PM
QQV is now down 1.3 to 28.91, a new all time low. FVX is still negative but rising, -1.6 bps now. The longer yields are now flat, with TYX +.2 bps and TYX unchanged.

  Jeff Bailey   4/22/03,  12:54:19 PM
S&P 500 Index (SPX.X) 904.84 +1.43% ... upside alert here at WEEKLY R1 of 904.10. Haven't gotten a buy/sell program premium alert at this point.

Starting to see a little more selling come into Treasuries, with 10-year YIELD ($TNX.X) rising to 3.971%.

  James Brown   4/22/03,  12:52:36 PM
LLL Q1 earnings beat estimates by 3 cents with 50-cents a share. Like LMT and other defense stocks today, the company said sales to the government were strong while aviation products were weak. The company reaffirmed 2003 sales growth of 20% with operating income to increase by 25%. These estimates put expected sales for 2003 to jump from 4.01 billion to 4.81 billion. Shares are up 6% but are still trading under resistance at $43 and the 200-dma at $45.

  Jonathan Levinson   4/22/03,  12:52:13 PM
The treasury market just isn't confirming a breakout in equities, FVX -2.6 bps now, but it sure feels like they want to run higher. TRINQ is down to .48 now, TICK.NQ +261, QQV -.68 after being down over 1 point a few moments ago.

  Linda Piazza   4/22/03,  12:50:27 PM
I mentioned early this morning that the day was lining up to be the all my ducks in a row kind of day, with early volume patterns; early direction of the indices; and gold, VIX, and bond yield levels all indicating likely weakness in the OEX. This used to be my favorite kind of trade, but I'd mentioned that the absence of sellers made me reluctant to enter a directional trade to the downside even if the OEX did violate the support just underneath then-current levels. That support was never violated, so I wouldn't have entered the trade, but this is another example of tricky trading these days, and another reason to examine your account management practices.

  Jim Brown   4/22/03,  12:49:12 PM
The Dow is testing resistance at 8400 but the Nasdaq has moved strongly over resistance at 1425. The S&P is now over 900 and approaching resistance at 905. This is critical territory for all the indexes. The Dow has strong resistance at 8450-8485 and should be the controlling factor.

  James Brown   4/22/03,  12:47:17 PM
Still monitoring the GHA.X hardware index. It has now broken out above the 180 level. IBM still not much help but components EMC and NTAP, up 5.39% and 4.14% respectively, are certainly pushing the group higher. Unfortunately, NTAP is right at resistance near $15.00, while EMC could climb another six percent before hitting resistance at $10.00.

  Linda Piazza   4/22/03,  12:44:12 PM
At 458.69 as I type, the OEX eases over its exponential 200-dma, currently at 458.46. Daily MACD cups up slightly, while 21(3)3 and 5(3)3 stochastics turn up again. The last time the OEX touched its 200-ema was April 7, and the time before that was December 2. The OEX failed at this MA those previous two tests. Stochastics are moving toward overbought levels on the daily charts, as well as on the hourly chart, but aren't yet turning down, and can stay near overbought levels through many candles. On the daily chart, the top of a rising wedge pattern currently crosses near 465, so it's possible that the OEX might attempt a push up toward that level.

  Jonathan Levinson   4/22/03,  12:43:36 PM
Most recent put to call ratio: 1.18 total.

  Ray Cummins   4/22/03,  12:38:53 PM
Spreads/Combos - Notable Events

There was a flurry of post-earnings news in the Spreads/Combos portfolio this morning as share values soared in the wake of upbeat quarterly reports.

Slot-machine maker International Game Technology (NYSE:IGT) saw its stock rise after posting quarterly profits that topped expectations as casinos and lottery operators expanded and upgraded their technology. The company, which controls two-thirds of the slot machine market in North America, also said it expects its full fiscal-year earnings to exceed consensus estimates. The issue rallied on the news, up over $2 to $83.65 at mid-day, and it is poised to test its all-time high (and our sold call in the bearish credit spread) near $85-$86. Traders should monitor the position closely in the coming sessions.

Another active issue in Tuesday's trading is L-3 Communications (NYSE:LLL), which is up over 5% on news that quarterly earnings rose substantially amid increased sales to the U.S. military and acquisitions. Looking ahead, L-3 said it expects sales growth in 2003 of about 20% and operating income growth of more than 25%, due to future sales of secure communications systems for the military and bomb-detection gear for airport security. Our bearish spread in the issue has been on the "watch-list" for the past week and today's rally sealed its fate. Traders who closed the spread (MAY45C/MAY40C) early in the session were able to limit the losses in the position to $1.45-$1.50.

  Jeff Bailey   4/22/03,  12:38:17 PM
S&P Banks Index (BIX.X) 284.30 +1.1% ... very close to its WEEKLY R1 of 284.60 here and has S&P 500 Index (SPX.X) 902.83 just off session high of 903.56. This is VERY close to my WEEKLY R1 bullish target and worthy perhaps of some profit taking by bulls.

I'd look to take some bullish gains off the table here. 10-year YIELD lags a bit at its WEEKLY pivot of 3.965%. 10-year YIELD at 3.967% right here.

  Jonathan Levinson   4/22/03,  12:32:15 PM
The QQV is now down at 29.81, TRINQ .55, TICK.NQ +276. QQQ is trading 27.14 and showing no sign of fatigue. The put to call ratio printed 1.38 for the 12PM EST reading, and I'm awaiting the next one. It seems to me that it will take more upside to persuade bears to give up, which is the principle way to get a market to go down. However, this is just a nervous gut feeling here as QQQ scopes for day highs. FVX is still down 2.8 bps on the day.

  Linda Piazza   4/22/03,  12:12:26 PM
Volume patterns are strongly positive at the moment, with adv/dec ratios of 1.74 on NYSE-traded issues and 1.29 on Nasdaq-traded issues. Up volume is 2.18 times down volume on the NYSE and 1.69 times down volume on the Nasdaq. Total volume is 631 million shares on the NYSE and 635 million on the Nasdaq. New highs vastly

  Linda Piazza   4/22/03,  12:02:45 PM
James mentioned the strong performance of the transports this morning. (See his 10:42 post.) I agree that a push over near-term resistance could see the transports move up toward next strong resistance near 2400. Currently the transports are up 1.05%, while its sister index, the industrials, is up only .42%. The divergence between these two indices still bothers me, as I watch the transports finding support for several days on its exponential 200-dma, while the INDU has not yet approached that MA, still overhead at 8531.84. Of course, traders might expect there to be a slight delay between the two indices, but the longer the divergence persists, the more it worries me. Currently the INDU seems to be finding resistance at its simple 200-dma, currently at 8390.74, just above the INDU's current 8372.

  Jeff Bailey   4/22/03,  12:01:06 PM
Bed Bath Beyond (BBBY) $38.81 -1.29% .... HI i have BBBY MAY 40 CALL what's your comments please??? waiting for your replay thanks Stock gave a spread-triple-top buy signal at $38.00 and currently trades at upper-end of Bollinger band (21-day SMA, 2 Std. Dev).Link

According to Dorsey/Wright and associates, retailing sector bullish % (BPRETA) is "bull confirmed" at 45.33%.

Out the money call for current month expiration is tricky as stock is bullish, but time erodes and declining VIX.X works against the option trader and presses the issue. Out the money with declining volatility is not good. Would look to take profit and roll out expiration.

  Jonathan Levinson   4/22/03,  11:54:52 AM
Another push higher, TICK.NQ +559, TRINQ .76.

  Linda Piazza   4/22/03,  11:54:43 AM
Currently at 23.88, the VIX just made a fresh recent low.

  Jeff Bailey   4/22/03,  11:51:56 AM
S&P 500 (SPX.X) 899.46 +0.83% ... making a run here to challenge morning high of 900.91 and will monitor any move higher near correlative resistance from WEEKLY R1 of 903 closely. Today's trade at 900 triggers the "bullish triangle" pattern at 900 and should have BEARS further jittery here as pattern of higher lows and now higher highs develops from consolidation. Link

With dollar weakness and buying in Treasuries, BEARS may be working against each other, with each rolling to cover every time new technical strength is found.

  Jonathan Levinson   4/22/03,  11:50:58 AM
Here here :(

  Jonathan Levinson   4/22/03,  11:48:09 AM
Out of desperation, I'm trying some intraday oscillators on the TRINQ. They're looking quite oversold here, which tells me that some very short term selling pressure is due.

  Jeff Bailey   4/22/03,  11:46:31 AM
U.S. Dollar Index (dx00y) 98.57 -1.02% ... I'm 30-minute delayed here, but dollar tried to rally back to morning highs of 99.00, but fell short at 98.68 and drift back lower here. Observation here is likely rally on "Saddam rumor" and fade on "white powder" findings.

  Jim Brown   4/22/03,  11:44:06 AM
CNN is now reporting that 4 of 5 comprehensive tests on the powder in Tacoma have proved negative. 5th test is now underway and is the most comprehensive.

  Jonathan Levinson   4/22/03,  11:41:50 AM
Hi Jon .... if u can, please keep us posted on the tick minus - plus ... regarding the market .. u usually do but today with all the excitment perhaps it has been ignored.

My apologies. The TICK.NQ is currently +75, also in neutral territory along with the more bullish/neutral TRINQ at .72.

  Jeff Bailey   4/22/03,  11:41:11 AM
11:00 Update posted at this Link

  Jonathan Levinson   4/22/03,  11:39:40 AM
The FVX is down 5.1 bps here, and so the price level of the COMPX and the short t-bill yield are moving together. QQV is up just .12, TRINQ .98, and so our breadth indicators are neutral. That put to call ratio is very high, but it's not the only indicator on our screen- note that when the put to call ratio is smoothed by moving averages on a closing basis, we see that it is still at the lower end of its range. Link

  Jonathan Levinson   4/22/03,  11:35:33 AM
The most recent put to call ratio has just printed 1.42.

  Linda Piazza   4/22/03,  11:32:15 AM
A scan of the Wilshire 5000, the broadest of the markets, shows that the index again challenges several levels of resistance, as it did on April 7. This is an update of a chart you've seen several times over the last couple of weeks. Oscillators show that it's possible that the Wilshire could push up toward its exponential 200-dma, but that further moves might prove difficult, at least without pulling back and regrouping. Famous last words, right? As I type, the Wilshire has pulled back below 8500, to 8492.56. Link

  Linda Piazza   4/22/03,  11:15:13 AM
The VIX dropped to a new recent low of 23.93 about fifteen minutes ago. The 32% deviation from the 200-dma, the maximum deviation Mark Phillips had noted after examining several years of data, now measures 24.27, with the VIX currently at 24.46.

  Jeff Bailey   4/22/03,  11:12:29 AM
SureBeam (SURE) $2.62 +9.6% ... stock jumped from $2.40 level on MSNBC report that a white powder found at mail distribution center in Tacoma, WA showed initial tests revealed some type of biotoxin. Authorities say it will take at least another hour to identify powder.

  Jim Brown   4/22/03,  11:07:34 AM
The brown powder in Tacoma Washington is now thought to be botulism or plague.

  Jonathan Levinson   4/22/03,  11:07:22 AM
The put to call ratio is back up to 1.21, and it did so on a rising equity p/c ratio of 1.11 and a declining index pcr of 1.72. I'm hoping that the bullish pop that this reading projects has just been seen, given the put position I'm holding.

  Jeff Bailey   4/22/03,  11:06:45 AM
Buy/sell program premiums for today HL Camp & Company has their computers set for program buying at $0.22 and set for program selling at $-2.05.

  Jonathan Levinson   4/22/03,  11:04:45 AM
Jesse L. said to never add to a position that "shows you a loss". That said, averaging down has saved me a few times. So far, the upper resistance has held, but the pullback is so far very shallow.

  Linda Piazza   4/22/03,  11:03:48 AM
I've lost Q-charts for the moment. While I'm sorting out the problem, I note that the FTSE 100 is now up 27.80 points or .71%, to 3917; the CAC 40 is now up 18.15 points or .63%, to 2916.76; and the DAX is now up 12.09 points or .42%, to 2911.87.

  Jim Brown   4/22/03,  10:57:41 AM
White powder discovered at a Florida airport per MSNBC

  Jonathan Levinson   4/22/03,  10:56:02 AM
I have a trendline connecting this month's major tops, and it has just contained the Qubes, but there's no sign of a meaningful reversal yet. FVX is down 3.2 bps now, no confirmation of a breakout in equities yet, but bears need to be careful here.

  Jim Brown   4/22/03,  10:54:15 AM
Rumor is they caught Saddam and that is the reason for the bounce.

  Jeff Bailey   4/22/03,  10:52:39 AM
NYSE Composite (NYA) 5,033 +0.56% ... getting upside alert here. Had set an alert at this level to alert to multi-month high dating back to January 22, 2003.

  James Brown   4/22/03,  10:47:55 AM
The GSTI Hardware Index (GHA.X) is working on its sixth up day in a row and trying to break above resistance at 180.

  Jonathan Levinson   4/22/03,  10:43:33 AM
The put to call ratio tumbled down to 1.03, still quite high. FVX -4.3 bps. The equity pcr is down to .77, with the different made up in the index pcr. There's no easy way to interpret the numbers, but it looks like some large bearish bets were placed in the first half hour, mostly using index puts. Whether they were hedges for bullish plays or the principle leg in bearish plays is unknowable, but the sudden spike is what one would expect after seeing a total pcr that high at the open.

  James Brown   4/22/03,  10:42:13 AM
The consolidation we have been seeing in the Transports the last few days almost looks like a bullish flag pattern. Should it breakout above the 2330 level I could see a strong move up to resistance at 2400.

  Jeff Bailey   4/22/03,  10:41:59 AM
Dow Industrials (INDU) 8,338 +0.12% ... Finds support at UPWARD trend from 04/10 low to 04/17 low and WEEKLY 61.8% retracement of 8,270.78. Rally brings Dow back up through "zone of resistance" from CONVENTIONAL 38.2% retracement of 8,338 and this WEEK's Pivot of 8,328.60.

Merck (MRK) $58.35 +2.4%, Boeing (BA) $27.41 +2.3% and American Express (AXP) $37.14 +1.83% are percentage gainers.

  Linda Piazza   4/22/03,  10:41:30 AM
At 335.76 as I type, the SOX is spending its third day in a row trying to break cleanly above its exponential 200-dma, currently at 333.30.

  James Brown   4/22/03,  10:38:37 AM
The Dow Transports are helping lead the markets higher, right behind Biotech and Defense.

  Jim Brown   4/22/03,  10:37:15 AM
The Dow is now butting against the down trend line from yesterday afternoon and struggling with the 8340 level.

  Jim Brown   4/22/03,  10:35:42 AM
The major markets are all positive now and the internals are picking up strongly. There is no news to match with this spike other than the Dow breaking its 200 DMA again or the "not anthrax" announcement on CNBC.

  James Brown   4/22/03,  10:34:41 AM
The SARS deathtoll rises to 236 with ten more fatalies today. So far the illness has infected more than 4300 people worldwide. Meanwhile, Japan's NIKKEI index lost 178 points to 7790.

  Jonathan Levinson   4/22/03,  10:34:08 AM
Looks like I submitted that too soon :)

  Jeff Bailey   4/22/03,  10:34:02 AM
Capital One (COF) $36.61 -1.82% ... stock jumped higher in yesterday's after-hours trade after reporting EPS of $1.35, which handily beat analysts estimates of $1.03.

Stock couldn't hold those gains overnight and gets varying views from fundamental analysts this morning.

UBS cuts to "neutral" from "buy" as firm is concerned about margin and balance sheet growth trends over the next several quarters. One concern is UBS believes COF's margin and receivable growth will converge. UBS is also concerned that COF's Chief Operating Officer's decision to reduce his responsibility creates some uncertainty about the longevity of the company. UBS lowered its 2003 EPS estimates to $4.50 from $4.56 and 2004 estimates to $5.10 from $5.30 to reflect compressing margins and slower receivable growth. UBS also lowered its bullish target from $38 to $36.

On the other side is Jefferies. In November, Jefferies downgraded COF on credit quality concerns. However, it now sees improving credit trends and greater earnings visibility, which should help drive expansion over the next 6 to 12 months. Jefferies believes a multiple of 9 to 10-times EPS is easily warranted as fundamentals improve. Jefferies $45 bullish target is based on 9.5-times its revised estimates of $4.75.

  Jonathan Levinson   4/22/03,  10:33:46 AM
The COMPX printed new highs up to 1425.00 even. FVX has pulled up only slightly from its lows, now -4.6 bps on the day.

  Linda Piazza   4/22/03,  10:29:34 AM
Volume patterns still show more decliners than advancers, but the gap is narrowing. Down volume still swamps up volume, but new highs continue to vastly outnumber new lows.

  Jim Brown   4/22/03,  10:29:12 AM
Despite the quiet selling this morning and the flurry of earnings the markets still remain confused. The "white powder" news has alternately depressed and then relieved the markets while the Dow struggles to regain 8300. The A/D line is now -206 issues, up from -1482 on the opening dip. The Nasdaq is trying to reach 1425 again but still falling short. The trend is up but volume is still weak.

  James Brown   4/22/03,  10:26:22 AM
yes, but they ARE saying it is a biotoxin of some sort.

  Jim Brown   4/22/03,  10:25:49 AM
The bounce appears to be on an announcement on MSNBC that the white powder is not Anthrax as originally thought.

  Linda Piazza   4/22/03,  10:25:44 AM
The pivot analysis matrix that Jeff is so kind to produce for us each evening indicates the importance of the OEX 450 level, as 450.59 is the daily S1 and 450.1 is the weekly pivot. A 60-minute OEX chart also shows that three types of historical support converge near that level, too. One is the oft-mentioned 38.2% retracement of the Oct/Dec move at 449.69. After the OEX fell through its steeply ascending trendline off the March 12 low on April 9, it's been forming a new and less-steep ascending trendline. That trendline also now crosses near 450. In addition, the 60-minute 21-pma is located at 451.18, and this MA appears to be providing some support this morning. So far, this is the kind of all-ducks-in-a-row day I used to like to trade, when all indicators seem to support the direction of the markets: markets falling, bond yields down, dollar down, gold up, VIX up, volume patterns negative, for example. I would plunge in with a directional play as soon as important support was violated. However, used to is the operative phrase here because of the lack of sellers recently. Markets seem ready to turn over, and then don't.

  Jonathan Levinson   4/22/03,  10:22:41 AM
HUI and XAU have given up their gains, with HUI +.13 and XAU -.14, while June gold futures pull back to 335, +1.10 today. QQQ and COMPX simply won't go down, with the COMPX /QQQ having set a low of the day just above the 200 day ema's, 1409 / 26.59.

  James Brown   4/22/03,  10:18:36 AM
Shares of Kimberly-Clark (KMB) are up 2.6% on its Q1 earnings news. The company beat estimates by 3 cents and shares are breaking out above resistance at $48. Unfortunately, there is a lot of congestion between $50 and $51.

  James Brown   4/22/03,  10:16:08 AM
Shares of MMM are looking weak. Currently down $1.66 to minor support at $128. The stock could drop another couple of points and still be above its point-and-figure chart support line.

  Jonathan Levinson   4/22/03,  10:13:40 AM
The high put to call reading was comprised of an equity pcr of 1.01 and index pcr of 3.78- this is still a bearish configuration to me, but the absolute levels are way too high.

  Jonathan Levinson   4/22/03,  10:09:52 AM
Anyone but me wondering why the indices seem to be unwilling to sink lower? The opening put to call ratio just printed 1.36. I'm hoping that it's either bad data (I doubt it) or that the next reading corrects. I'll start scanning the option chains for big volumes this morning.

  Jim Brown   4/22/03,  10:02:18 AM
White powder found at a mail distribution center in Tacoma Washington. HazMat treams on the scene.

  James Brown   4/22/03,  10:01:40 AM
I'm noticing a few more insurance companies trading higher today, most likely in response to RE's strong move today. Shares of XL are up 4.74% but remain under resistance ($84-85). XL is expected to announce earnings on April 29th. Meanwhile, Chubb (CB) is up 2.2% to $51.12 and almost looks bullish. Aside from the potential resistance at $52.00-52.50, this stock might have a shot at trading to its 200-dma near $55 should the markets cooperate. CB is expected to announce earnings on May 1st.

  Jonathan Levinson   4/22/03,  9:59:52 AM
The fed has added a 4B overnight repo, which is a net add of 1.25B against yesterday's 2.75B repo expiring today.

  Linda Piazza   4/22/03,  9:57:54 AM
It's too early to draw too many conclusions from volume patterns, but so far, decliners are nearly twice advancers, and down volume swamps up volume. New highs continue to outnumber new lows.

  James Brown   4/22/03,  9:56:41 AM
I noticed that Kent's pet stock, NTES, is up another 3% this morning. Sooner or later, this stock is going to roll.

  Jeff Bailey   4/22/03,  9:55:41 AM
AOL Time Warner (AOL) $13.00 +0.77% Link ... announced this morning that it would sell 50% of its interest in Comedy Central to Viacom (NYSE:VIA) $41.30 +1.05% Link for $1.225 billion.

  Linda Piazza   4/22/03,  9:54:23 AM
I'm back a day early from my trip and will be posting. I may be a bit slower than usual as I acclimate myself to the markets again. It's amazing how much you lose when you don't watch the flow of the markets for a single day. As I study the European markets now, I see that the FTSE 100, CAC 40, and DAX are all just off their lows of the day, reached after our markets opened. So far, the bounces don't look convincing, but we'll have to see how things progress as the day unfolds. Currently, the FTSE 100 is down 3.80 points to 3885.40, the CAC 40 is down 28.53 points to 2870.08, and the DAX is down 44.28 points to 2855.50.

  James Brown   4/22/03,  9:53:46 AM
I don't see the earnings news yet but shares of Everest Re Group (RE) are up over 10% to $67.84 on strong earnings news before the bell today.

  Jonathan Levinson   4/22/03,  9:51:28 AM
A very quiet session since the gap down open, with QQQ trading the 26.70's as the TRINQ climbs slowly and QQV and VXN give up their initial gains. FVX is still near its intraday lows, though, currently -5.6 bps.

  James Brown   4/22/03,  9:50:03 AM
watching my list of major sector indices there's a lot of red. Nothing is getting crushed just overall weakness. The only sectors in the green are gold and defense.

  James Brown   4/22/03,  9:45:46 AM
The $XAU.X Gold & Silver index has gapped open above its 200-dma, but remains below the 70 level of potential resistance. This corresponds with a $2.00 gain in June Gold futures to $335.90.

  Jim Brown   4/22/03,  9:41:18 AM
We are seeing a slight bounce from the initial drop and the Dow is trying to get back to 8300 but the effort looks weak. The fight is on.

  Jim Brown   4/22/03,  9:38:46 AM
EBAY is under pressure today at 88 time earnings as traders exit the stock before the earnings tonight. EBAY is down -1.13 at 89.60. There is still a good possibility of a 2:1 stock split with earnings tonight.

  James Brown   4/22/03,  9:37:07 AM
The world's biggest drug company, Pfizer (PFE), announced Q1 earnings before the bell this morning. The headline number was a massive 76 cents a share but this included a one time gain of almost $2 billion. Excluding one-time items, PFE's earnings were up 13 percent and the company did beat concensus estimates. Revenues rose 10% to $8.53 billion but the Street was looking for $8.6 billion. The stock is opening just slightly lower.

  Jonathan Levinson   4/22/03,  9:33:03 AM
Remember the descending trendline connecting yesterday's highs that got violated in the mid-afternoon? It just provided QQQ support on the gap down at 26.65. Let's watch that as near support. Current TRINQ 1.92, QQV +.55 to 30.96, TICK.NQ -291.

  James Brown   4/22/03,  9:31:01 AM
Lockheed Martin (LMT) rocketed past analysts estimates of 42 cents a share with Q1 results of 55 cents, or $250 million. Net sales were up 18 percent. The company is raising its full-year estimates by 5 to 10 cents a share to $2.20 to $2.30. The stock has been under pressure and did not participate in Monday's Defense sector's bullishness. We could see a move to the upside that might break through its descending trendline of resistance.

  Jeff Bailey   4/22/03,  9:28:27 AM
09:00 Update posted at this Link

  Jim Brown   4/22/03,  9:25:58 AM
The futures are weak this morning after weak earnings outlooks by several companies. SCH posted earnings down from last year and said customer trades remained soft. We already knew this from the very low market volume over the last few weeks. Sprint also cut its outlook due to the uncertain economy.

40 S&P companies report earnings today as well as many other smaller companies. 409 companies report earnings this week.

Asian stocks ended mostly lower after traders returned from a four-day weekend. Tokyo dropped -2.2% overnight but Hong Kong finished flat. Taiwan closed at a one week low. South Korea fell -2.8%. The SARS epidemic is taking its toll on Asian exchanges as outlooks for earnings are tempered by the increasing number of cases and restrictions on travel and meetings.

Chain Store Sales rose +1.9% as the Easter holiday provided a final bounce to consumer sentiment. This was the second consecutive week of gains.

Futures are weak as the quality of earnings declines the deeper into the earnings cycle we go. Initial support should be in the Dow 8250 range.

  Jonathan Levinson   4/22/03,  9:12:52 AM
June gold futures are now up 2.10 to 336.00, while ND futures are down 6.50, QQQ 26.77. FVX down 5.8 bps confirms the weakness in equities this morning.

  James Brown   4/22/03,  9:10:46 AM
Verizon Communications (VZ), the country's largest telephone company, turned in a Q1 profit this morning. Net income was $1.41 a share, or $3.9 billion, but this included a one-time gain of $2.1 billion (77 cents a share). More importantly, VZ said that 2003 revenues will be flat to up two percent over last year.

  Jonathan Levinson   4/22/03,  8:49:47 AM
ND futures are at their session low, 1078.50, with QQQ trading 26.76.

  Jonathan Levinson   4/22/03,  8:47:28 AM
Thanks to Barb for remembering that Al Green is scheduled for prostate surgery today, similar to that which he underwent in 1994. He is expected back to work later this week.

  Jonathan Levinson   4/22/03,  8:32:05 AM
Bonds have begun trading and are finding bidders, with FVX -5.1 bps, TNX -3.7 bps and TYX -3.3 bps.

  Jonathan Levinson   4/22/03,  8:14:16 AM
The US Dollar Index got croaked last night, bouncing just above the 98.60 level and currently trading 98.80. Gold is up 2.20 spot to above the 335/oz level, while equity futures are fading, ES down 3.50 to 889.50, ND down 5 to 1079.50. QQQ is trading 26.81.

  Jeff Bailey   4/22/03,  2:03:13 AM
The Index Trader Wrap has been posted: Link

  Vlada Raicevic   4/22/03,  2:03:07 AM
The Futures Trader Wrap has been posted: Link

  James Brown   4/22/03,  2:02:58 AM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

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