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  Jeff Bailey   4/23/03,  5:49:38 PM
Pivot Analysis Matrix for tomorrow (Thursday) Link

Please note: I didn't see that the DIA traded its MONTHLY R1 until after I had gone through and put a bunch of correlative support/resistance boxes on the various indexes.

I looked at a lot of p/f charts today, and while these markets look very bullish the BIGGEST thing that has me cautious right now is where in the heck is the cash coming from?

I've really highlighted the 10-year YIELD of 4.1% on the matrix. Here's why.Link

  Jim Brown   4/23/03,  5:21:53 PM
KLAC guidance down to 14 cents, 310 million revenue, difficult environment, visibility limited. Down from 15 cents, 319 million

  Jim Brown   4/23/03,  5:05:42 PM
KLAC Conference Call - sees 2-3% growth for their sector for the year. 5-15% growth for all chips, +5% growth in cap ex spending.

  Jim Brown   4/23/03,  4:41:02 PM
OVER -3.62 in after hours, CTXS +1.07, BZH +1.70,

  Jim Brown   4/23/03,  4:35:09 PM
KLAC -1.01 in after hours

  Jim Brown   4/23/03,  4:33:59 PM
SYMC -2.94 in ater hours

  Jim Brown   4/23/03,  4:32:54 PM
MCHP rev $150 mil, 16 cents earnings, inline with est, visbility is still poor.

  Jim Brown   4/23/03,  4:30:49 PM
AFL 46 , beat by 2 cents, can reach or exceed 2003 guidance

  Jim Brown   4/23/03,  4:30:14 PM
ESRX affirmed guidance

  Jim Brown   4/23/03,  4:30:00 PM
RYL raised guidance. Says outlook still strong for home sales.

  Jim Brown   4/23/03,  4:28:06 PM
ERES raised guidance, announced 2:1 split

  Jim Brown   4/23/03,  4:23:18 PM
MUSE 3 vs est of 1

  Jim Brown   4/23/03,  4:21:30 PM
SEBL .01 rev 332 mil, inline, no guidance

  Jim Brown   4/23/03,  4:19:18 PM
SYMC 41 gap, 47 proforma vs est 46, lowered guidance to 38 cents from analysts estimates of 41, shares down over $1 in after hours

  Jim Brown   4/23/03,  4:18:58 PM
KLAC 14 cents vs 12 est, 304 mil rev inline, no guidance

  Jim Brown   4/23/03,  4:17:17 PM
ELY 64 vs 54 est

  Jim Brown   4/23/03,  4:14:19 PM
VSEA 16 vs est 14-16 rev beats, guidance down

  Jim Brown   4/23/03,  4:11:44 PM
YUM confirming 2003 guidance, 39 act vs 38 est

  Jim Brown   4/23/03,  4:11:07 PM
BVSN 4 cents inline

  Jim Brown   4/23/03,  4:09:39 PM
AWE 5 cents vs 2 est, revenue may be light

  Jim Brown   4/23/03,  4:09:31 PM
BOBJ 14 vs 13-14 est

  Jim Brown   4/23/03,  4:08:31 PM
CYTC 17 vs 15 est

  Jim Brown   4/23/03,  4:08:18 PM
OVER lowered guidance

  Jim Brown   4/23/03,  4:07:32 PM
AFFX -22 pre items, guidance 1-3 cents vs 4 censt est

  Jim Brown   4/23/03,  4:05:43 PM
FDRY 11 cents, vs 9 est

  Jim Brown   4/23/03,  4:05:31 PM
Greenspan WILL accept nomination again

  Jim Brown   4/23/03,  4:05:18 PM
CTXS 18 cents VS est 12

  Jim Brown   4/23/03,  4:04:19 PM
OVER, RYL, WLP halted ahead of earnings

  Jim Brown   4/23/03,  4:03:20 PM
VRTS - 10 cents, 17 cents proforma, 14 cents est, guidance cautious

  Jim Brown   4/23/03,  4:02:47 PM
LSI -33 gap, proforma -14

  James Brown   4/23/03,  4:01:37 PM
Given the strength in the Internet sector (INX), in shares of Yahoo (YHOO) and eBay (EBAY), I'm surprised that AMZN's rally this morning faded. The retail Internet giant's stock appears to be forming a bullish flag pattern and the spike today looks like a failed breakout. We'll be watching to see how this developes. Check out this chart here: Link

  Jim Brown   4/23/03,  4:01:36 PM
QCOM - raised quidance with earnings, beat the street by 2 cents

  James Brown   4/23/03,  3:49:53 PM
(looking out the window)
Wow! It's actually snowing pretty hard in Denver today.

  James Brown   4/23/03,  3:47:46 PM
I agree with Coleen's comments earlier this afternoon. The lack of participation by MMM in this market strength is a silent warning for the bulls that all is not well. As the biggest dollar-weighted component in the Industrials it could become a wet blanket on this party.

Meanwhile with the S&P 500 index aiming to close at its highs for the day, it looks like traders are going to keep this rally alive.

  Jeff Bailey   4/23/03,  3:30:27 PM
Forest/Paper Products (FPP.X) 280.93 +0.35% ... has been hovering near unchanged for bulk of today's trade. Link and currently trades just below downward trend that has been in place since bullish support was broken to the downside in July.

For catalyst to an upside break, look no further than Dow component Intl. Paper (NYSE:IP) $35.77 +1.64%, which has been building gains as session progresses. IP warned on earnings back on March 12, when it said Q1 will be comparable to year-ago level of $0.12, which was well below consensus of $0.20. IP blamed higher energy prices, bad weather, and weakening demand for lowered guidance.

"Similar" trade perhaps to what PSFT did after warning. However, somewhat "unlike" PSFT, we now see energy prices starting to fall.

IP earnings and MARKET response to tomorrow morning's earnings could be a "swing stock" for the Dow.

  James Brown   4/23/03,  3:27:02 PM
FYI: for those following the AZO trade... it did reach $80.30 this afternoon and is hovering just under $80 at the moment. If you're concerned about a pull back, go ahead and take some profits. This was our initial target. Should we see a market dip I would not be surprised to see a pull back in AZO to the $77 level.

  Jim Brown   4/23/03,  3:25:09 PM
Jonathan, let's don't post those links (grin)

  James Brown   4/23/03,  3:23:44 PM
Hey, I remember watching original Star Trek's with Dad. Those were "quality" times...

  Jonathan Levinson   4/23/03,  3:20:04 PM
Wow, you're not kidding, Jim. Perhaps I should post some of the links I've just dug up in tonight's Market Wrap...

With bonds closed, we're left with the remainder of our indicators to gauge the true strength of this QQQ run at 27.65 resistance. TRINQ .65, TICK.NQ +540, QQV -.73. These all look very bullish to me, but the lack of loft in the price is encouraging for bears, as long as it holds.

  James Brown   4/23/03,  3:19:18 PM
Despite the sideways slide in the markets, the GSO is still creeping higher. The intraday looks encouraging. Meanwhile the dip to $60.32 in shares of ERTS, a current OI long play, was bought and it still looks like a decent entry point for bulls.

  Jim Brown   4/23/03,  3:15:19 PM
Jonathan, she was a very early addition to Star Trek and has such a following there are even websites devoted to nudes of her. Not bad for 60+ year old actress.

  James Brown   4/23/03,  3:12:32 PM
You guys on the FuturesMonitor scare me sometimes!

  Jonathan Levinson   4/23/03,  3:12:30 PM
Ladies and Gentlemen, Jim Brown.

  Jonathan Levinson   4/23/03,  3:09:05 PM
Was Uhura around in the mid-60's? She's aged very well if so.

  Jim Brown   4/23/03,  3:08:25 PM
Jim, I can't feel bullish about 8520 when I see MMM on the verge of a major breakdown and the Dow being led by a $3.00 squeeze in T... and some early/misplaced optimism in SBC (they report tomorrow).
What I see is the Dow trading at least 50 points above where it should be and I am not feeling the bull...
I need to see a horse pulling my wagon -- not a poodle. Happy Trading, Coleen

Very well said!

  Kent Barton   4/23/03,  3:08:13 PM
The 3:15 update has been posted: Link

  Jonathan Levinson   4/23/03,  2:59:10 PM
Wow! My goodness, Jim, an epiphany! By gadfrey, I'm going bullish!

Well, maybe not :)

  Jonathan Levinson   4/23/03,  2:54:34 PM
Renewed strength for the Qubes, but FVX is still only up .7 bps. QQV +.22 to 29.18, TRINQ .61, TICK.NQ +398. If this is the best the bulls can squeeze out of a +398 TICK.NQ, then I'm thinking there's some big selling going on, and I smell distribution. Or, it's just wishful thinking, not for the first time this month.

  Jeff Bailey   4/23/03,  2:52:27 PM
Juniper Networks (JNPR) $10.10 -3.34% ... I've been monitoring this stock in recent sessions as it triggered a "bullish triangle" at $10.00. Link

While I like the "pattern," I think my "belief" that telecom/network equipment stocks are still vulnerable (may tie in with last weekend's ask the analyst column) where all traders will at times struggle with the charts and their beliefs.

Right now, I feel this pattern, in this type of market environment should have really unfolded more near-term bullish than it has and gives some confirmation near term that the MARKET might not be overly enthusiastic about some networking stocks.

I "turned on" the volume in JNPR's p/f chart and we'll note the relatively small amount of volume on the recent pullback, before the bullish triangle unfolded at $10.

Still... BULLS might keep an eye on this one for a further break higher at $10.50 as there didn't seem to be a lot of stock for sale on the pullback from $9.00 to $7.50. The pattern of higher lows on each pullback hints that traders are working the stock and have been buying the pullbacks.

  Jonathan Levinson   4/23/03,  2:49:32 PM
Great job!! Wanted to see what you think on opening up a call position on Qcom. Everytime they come out with earnings... they beat and stock usually rises two dollars or so. That would be a 100% return. The put/call is very bearish and the short interest is increasing. This could could give it a nice pop. Looking to buy the 32.50 calls. Thanks. Oh yeah, coming out with earnings tonight.

QCOM is pretty close to buy signals on my daily oscillators, but it's not there yet. It's trading on sells on the weeklies. I note only that the rise on the daily candles over the past few days (daze) looks bear-flag-ish to me, which means little in the current market environment, but it does point out a vulnerability to the downside. Furthermore, given the meteoric rise in the indices this week, QCOM looks weaker than the broad market here. Here's my chart: Link

  Jeff Bailey   4/23/03,  2:42:56 PM
NYSE Composite ($NYA.X) 5,121.29 +0.38% ... In yesterday's market monitor (10:52:39) I had made note that I had an upside alert set at 5,033. I didn't realize that this VERY BROAD market index had also triggered a "bullish trianlge at 5,020.Link

I'm going to set some "pullback entry" alerts at SPX 900 Link , NYA 5,020 and Dow 8,450 Link

My thinking here is that Dow would be "first" to trigger the alert.

  Jeff Bailey   4/23/03,  2:23:58 PM
Good comments, thought process from Jonathan at 14:09:20. Not that me thinking it was good comment means all that much, but I agree with all observations.

I can't remember where I read a little "blurb" but it was in some financial publication I was reading over the weekend. The article was very simplistic and was targeted toward travelers that use credit cards during their travels.

While "simplistic" it was a very good article that mentioned how some of the various credit card lenders actually buy/sell dollars on a daily basis based on the daily spending habit of their cardholders abroad and how this trading can actually reach the hundreds of millions each day.

While not related, the article did touch on the U.S. trade deficit, and this makes so much sense as it relates to a weaker Dollar as the U.S. demand for foreign products continues to be greater than foreign countries demand or at least their economic demand for U.S. products. This "trade balance" and deficite the U.S. runs with its trade partners sees dollar weakness.

You probably can't believe a conversation I had over the weekend with a rancher in southeast Colorado, that also builds on this. Did you know that Wal-Mart and Sam's Club are the #1 and #3 buyers of beef? Despite a very depressed cattle market in the west due to recent drought conditions, Canada and Mexico ranchers have benefited greatly in recent years with NAFTA and their currencies being weak relative to the dollar. This rancher said beef prices will be pegged for years to come and offers little opportunity for growth and the only way to make money is buy trying to build bigger. The "risk" as he found out or experience was drought.

You can't believe the conversations I'll have regarding any type of tradable commodity or stock with a rancher or farmer.

  Jonathan Levinson   4/23/03,  2:19:32 PM
I was thinking the same thing. I follow the Investor's Intelligence # and it threw me for a loop today. I watch the bearish % as an intermediate buy/sell signal. Below 0.28 is a Sell and 0.38 a Buy. Last week it was 30.3% and today bearish % was 34.8. The COT commercials ahve been net bullish in the past few wekks also?..hmmm The $BPNDX is still rising and not yet in overbought, curreently at 61. Yet the VIX and VXN is continues to hit lows. My feeling is we could be heading back into a normal range perhaps for the VIX. It took 3 years of in a bear market to raise the levels of the vIX. Could we be at an inflection point where the market maybe in between a bear and bull market, a sideways market similar to that of the '70? In that the VIX would get back to a normal 20/30 range perhaps?

No way to know. You're asking if the bear market has bottomed, and I am quite certain that it has not. Equities are still way pricey on a PE basis, and far above the levels traditionally seen at bear market bottoms (I've heard of the SPX p/e around 7-10 for a historical bottom). Bear market bottoms look like Argentina, where people think of stocks as a joke. The fed funds rate is still at multidecade lows, while personal and corporate, state and national debt levels are all alltime highs. Unemployment is persistent. At best, this could be a cyclical bull starting within a secular bear, but as option investors, the secular term is of secondary importance. In any event, I believe that the indices blasted up to current levels far too fast to be sustainable, and the next pullback will enlighten us considerably.

  Jonathan Levinson   4/23/03,  2:09:20 PM
weird -- dollars down (OK -- up a smidgeon after a strong down day), gold's down (the metal), and crude's down... got a clue?

Barely, but yes. The dollar weakness on an equity rally tells me that it's domestic dollars pumping up stocks. Whether it's Al Green's money or hedgies covering their shorts or some type of derivatives meltup, the money didn't come from abroad. Combined with the flatness in treasuries and I'm even more convinced. The weakness of commodities in US Dollars is puzzling. Gold I just assume is being dumped by central banks, but oil must be due to the news from the Dept of Energy today regarding the larger than expect jump in US reserves today.

  Jeff Bailey   4/23/03,  2:03:21 PM
01:00 Update posted at this Link

Forgot to post here.

  Jonathan Levinson   4/23/03,  2:01:10 PM

  Ray Cummins   4/23/03,  1:57:06 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity

The recent upside market activity has produced a long list of winners in the bullish sections of our portfolio. Some of the best performers over the last week include: ERES, RYL, AVID, ADI, KLAC, LLTC, MSTR, SLAB, BBH, RYL, VIP, EVG, KRON, and TBL. Among the synthetic positions, Overland (NASDAQ:OVRL) and Documentum (NASDAQ:DCTM) have both enjoyed big rallies and in the straddles section, the Lincoln National (NYSE:LNC) position has achieved profitability in only three weeks. A number of "time-selling" plays have also been profitable with Biomet (NASDAQ:BMET) and ITT Educational Services (NYSE:ESI) among the stand-outs in that group. Of course, the bearish collection of plays has not fared as well, however we currently have successful positions in a number of popular issues including CCMP, MERQ, QLGC, IGEN, QCOM, APC, ATK, TOT, CAH, GM, MHP, DGX, EASI, MMM, WLP, BAC, VAR, HCA, DRYR, and CAM.

Looking forward, the broader market (SPX) appears poised for a test of resistance near its recent trading-range top at 930-940. At the same time, many analysts are questioning the validity of this "buying spree" as the U.S. economy simply does not appear ready to support a long-term recovery in share values. The important thing to remember is the market is valued mostly on perception rather than fact and higher share values are not always the result of improving fundamentals. That reality has been evidenced over the past few trading sessions and if the major equity averages can establish a new upward trend in the throes of a mediocre earnings season, the overall outlook (among the investing public) for stocks will improve on an exponential basis.

  James Brown   4/23/03,  1:43:09 PM
While the markets continue to churn sideways (and everyone falls asleep) the internals remain somewhat positive. Advancers are beating decliners 16 to 11 on the NYSE and 16 to 12 on the NASDAQ.

New 52-week highs continue to swamp new 52-week lows.

Up volume is still out pacing down volume by more than 2-to-1 on both exchanges.

  Jonathan Levinson   4/23/03,  1:38:29 PM
The lack of upside participation from the US Dollar Index doesn't fit with the "brave new world" bull market scenario. FVX went negative briefly but is now up .2 bps, basically flat. The lack of upside bounce is encouraging, but the lack of downside tells me that little has changed, and I'm still steeling myself for more possible upside. If the latter doesn't come, I'm sure I'll get over it :)

  Kent Barton   4/23/03,  1:30:18 PM
Mantech (MANT) $14.70 +1.10: This high-risk/reward PI short play is bouncing sharply today with a gain of 8.3%. The technical picture deteriorated yesterday when MANT faded the market and sold off on very strong volume. With no apparent news to explain today's action, it's unclear what's driving the upward movement. Perhaps the shorts decided to cover en massse when the stock rebounded from a new relative low this morning.

In any case, our play's stop at $15.01. So far the intraday high is $14.93. We'd like to see shares move below the 100-dma ($14.72) and 50-dma ($14.59) before the day is over.

  Jonathan Levinson   4/23/03,  1:29:04 PM
FVX back to unchanged on the day, TRINQ up to .57, QQV +.15, TICK.NQ +48.

  Jim Brown   4/23/03,  1:09:01 PM
James, I would be VERY surprised if anybody accepted the roadmap. All parties will protest loudly.

  Jonathan Levinson   4/23/03,  1:07:39 PM
The Qubes feel like they're up in the airball zone, but clearly this 27.60-.75 level, coincident with Jim's 1467 COMPX level, is strong resistance. FVX is up only 1.1 bps after touching a 2 bp gain for a few moments. Meanwhile, June gold closed at its lows, -3.10 at 331.70. HUI is now down .22. With the QQV and VXN only marginally lower today, it's possible that the rubber band has stretched about as far as it wants to go, but we won't know for certain until it's in the rearview mirror. Until, caution is the name of the game at current levels.

  James Brown   4/23/03,  12:56:19 PM
I wanted to post another "what if" to the group. Now that the Palestian authority has finally agreed to the composition of its new Cabinet the White House says it will unveil its "roadmap" for peace relatively soon. Should there be a general acceptance of the U.S. plan would this not be a strong bullish influence on world markets?

  James Brown   4/23/03,  12:50:22 PM
(waves to the crowd)

  James Brown   4/23/03,  12:49:22 PM
AMGN's earnings report last night has spark a rally today that has surpassed its old high of $63 back in March of 2002.

  Jim Brown   4/23/03,  12:49:06 PM
Several readers have asked about James. Maybe I should introduce him. James is my son and has been the content manager for OptionInvestor and all of our other websites since 1997. He manages the writers and contributors and edits/proofs much of the content you have seen over the years. He does everything behind the scenes from designing layouts and graphics, picking and writing plays, writing wraps and was the originator of the AskTheAnalyst column three years ago which he wrote for quite sometime. He seldom gets a chance to write commentary in public due to his many other duties. With Linda, Mark Phillips and Steve out this week I drafted him to pinch hit in the monitor. If you like his content or have questions you can email him at james@OptionInvestor.com.

If you have suggestions for the newsletter or the website he is the one to contact as well. He will be putting together a reader survey soon and content comments in advance could help him formulate that process.

  Jonathan Levinson   4/23/03,  12:42:22 PM
The total put to call ratio has edged lower to .65. QQV is down .17, VXN -.24.

  Jonathan Levinson   4/23/03,  12:28:04 PM
June gold is down 2.30 to 332.50, with HUI dropping part of its gains, now up .65.

  Jonathan Levinson   4/23/03,  12:21:27 PM
HUI and XAU actually gained on this equities launch, HUI now up .91 and XAU +.78. The five year yield is climbing, but very slowly and slightly, +.9 bps. QQV is up .03 but still green, TRINQ .52 and TICK.NQ +195. Volume is quite high so far, with 947M NYSE shares and 976M COMPX shares traded so far, easily on track to blow out yesterday's volume.

  James Brown   4/23/03,  12:17:57 PM
Recent OI Watch List candidate Iron Mountain (IRM) has now broken out above the $40 level after a very strong volume breakout yesterday. While options are thinly traded, it's still worth eyeing. Earnings are expected on April 30th.

  James Brown   4/23/03,  12:07:35 PM
Educators like Apollo Group (APOL), University of Phoenix (UOPX), Corinthian Colleges (COCO) and Career Education Corp (CECO) are all up strongly today.

CECO reported earnings yesterday and beat by 5 cents while guiding higher for the rest of the year.

Part of the bullish argument here is that in a soft economy many adults go back to further their education or seek continuing education to make them more employable. The story appears on target as many educators like the University of Phoenix, who target mid-career adults have seen enrollments steadily climbing. Just check out some of the weekly charts on these stocks!

  Jim Brown   4/23/03,  12:02:55 PM
Jim - with reference to your just posted item concerning the futures and options tabs I can find neither when opening the market monitor. Perhaps you could explain how to access these features. Thanks Dave

The extended options are available on the desktop version of the monitor. There are many other options also available like selectivity by author. That version can be downloaded here: Link

  Jeff Bailey   4/23/03,  11:55:57 AM
11:00 Update posted at this Link

  Jonathan Levinson   4/23/03,  11:54:40 AM
The lack of movement at current levels combined with solid volume has accomplished nothing but a lot of shares changing hands. It could well be distribution, which is what we see at tops, but there's no way to be certain. FVX is down .3 bps currently, TRINQ .7, QQV +.05 and TICK.NQ +59. HUI is up .82. The last put to call reading was .68, with the next due in 10 minutes.

  James Brown   4/23/03,  11:34:19 AM
The market's winners continue to be the XAL airline index, now up 4.2% and the BTK biotech index, currently up 2.08%.

  Jonathan Levinson   4/23/03,  11:26:20 AM
A sudden push higher with QQQ at 27.55 has brought the QQV back to negative territory, -.04 to 28.92, TRINQ .70, TICK>NQ +170. FVX is flat, TNX +.6 bps and TYX +.2 bps.

  James Brown   4/23/03,  11:26:07 AM
I don't know about everyone else but I like to read the monitor with both windows open tiled vertically side by side.

When opening your monitor, click on the Futures tab and then the Options tab (or vice versa). Both will open up a small window. Once they connect, go to the Windows menu (top left) and choose "tile vertically" or "tile horizontally".

If you already have the Monitor window open, just click on the "F" Futures button. Then go to the Windows menu.

  Jonathan Levinson   4/23/03,  11:23:28 AM
I find it shocking that in this industry, pundits can be not just wrong, but totally wrong for years on end, and yet still be considered as experts. Or, to make statements like what Jim just quoted... 20%-40% is the equivalent of a barn door, and indicates a less-than-scientific methodology. Was that huge range pulled off a dartboard? I'm still personally waiting for Dow 36,000.

  Jim Brown   4/23/03,  11:20:49 AM
Interesting comments from Ralph Acompora yesterday. He said this rally could last until the end of the year with a +20% to +40% additional gain. "However, this may not happen if the October lows are broken at 7197." He actually said that! This is what is called hedging your bets. He has nearly a 4,000 point Dow range where he can still be "correct" in his call in some fashion. Amazing.

  Jim Brown   4/23/03,  11:11:49 AM
Expanded Monitor Content
Just a reminder for readers of the Market Monitor. You can get expanded content and comments on the intraday market by clicking the "both" tab at the top of the page on the desktop monitor. This puts the regular monitor updates and the futures monitor conversations in the same window. This way you do not miss anything that might help you make a trade decision. Link

  James Brown   4/23/03,  11:10:10 AM
Many months (couple of years?) ago there was some excitement over a new industry developing with these FDM machines (fused deposition modeling) that can produce prototype parts based on the CAD designs given the machine. About the size of a large copier, these things are amazing.

It looks like sales are pretty good as Stratasys (SSYS) beat estimates and shares have gone vertical. Unfortunately, SSYS is not optionable.

  Jeff Bailey   4/23/03,  11:07:50 AM
Sell Program premium alert Dow= 8,466, SPX= 912, OEX= 463.5, NDX= 1,103, QQQ= $27.44

  Jeff Bailey   4/23/03,  11:05:17 AM
Sigma-Aldrich (SIAL) $48.77 +6.6% ... is this morning's NASDAQ-100 gainer after reporting Q1 EPS of $0.68 per share, which was $0.07 better than consensus. SIAL Link replaced IMNX in the NASDAQ-100 on July 16, 2002.

Today's trade at $47 is BULLISH for SIAL as it not only breaks downward trend, but triggers the "triple-top buy signal". Bullish count currently builds at $62. Looks bullish for 1/2 positions here.

  Jonathan Levinson   4/23/03,  11:05:14 AM
I am heartened by the shallowness of the intraday up phase we're seeing so far, with QQQ staying below 26.55 and the FVX up out of the red by just .6 bps. The TRINQ remains neutral at .96, TICK.NQ -152. Remember when the TRINQ was a hyper-accurate short term trading indicator? I used to use it to time my put purchases, waiting for blasts higher on the Qubes while the TRINQ would dive, and as soon as it hit low levels below .40-.30, I'd fire off my order and catch the reversal usually to within a minute or two. Worldcom seemed to "break" its effectiveness, when 100's of millions of shares traded in the low pennies, blowing it all out of whack. For some reason, the indicator really hasn't served me since, except to indicate short term bottoms, where a trip to the 4.00-5.00 range and above has sometimes marked bottoms in the Qubes, but again, it mostly stays in neutral territory now, or buries itself for extended periods below .40. Not much use except on a cumulative basis now.

  James Brown   4/23/03,  11:01:47 AM
FYI -- For those interested traders out there, we've got less than a month before Shareholders for SLM Corp (SLM) vote on the 3-for-1 stock split at the May 15th annual meeting. The stock does look overbought but bears can't seem to bring it down.

  Jeff Bailey   4/23/03,  10:54:57 AM
10-year YIELD ($TNX.X) 3.996% up 1.3 basis points on fractionaly selling, but hasn't traded its DAILY Pivot 3.927% or Daily R1 of 4.015% at this point.

The SPX did trade its WEEKLY R2 of 914.70. At Friday's close, I thought the SPX had a WEEKLY R1 test in it, but not a WEEKLY R2. I now sense that while I was bullish, I wasn't bullish enough in my thinking as demand for stocks stronger than I anticipated.

  James Brown   4/23/03,  10:51:25 AM
Speaking of a short-squeeze, shares of Timberland (TBL) have been on fire since their very positive earnings report a couple of weeks ago. You can bet we'll see some profit taking once this runs out of steam.

You can bet any bears who didn't have a hard stop are saying, "I'll never hold over earnings again..."

  Jeff Bailey   4/23/03,  10:49:47 AM
QQQ $27.50 +0.25% ... has been "sloppy" around its WEEKLY R1 of $27.37 this morning hasn't it? Bulls looking to play a break above today's high on potential further short-covering move higher most likely have to begin with stop just below conventional 19.1% retracement of $27.06 as stopping point.

  James Brown   4/23/03,  10:49:09 AM
Shares of Progressive Corp (PGR), an insurance company, continue to amaze me.

Short-squeeze anyone?

  James Brown   4/23/03,  10:47:15 AM
Shares of BUD and RKY are bubbling higher today. Anheuser-Bush (BUD) announced Q1 results that were inline with estimates of 57 cents a share.

Adolph-Coors (RKY) is expected to announce earnings on April 29th.

Both stocks are trading higher but shares of RKY have broken above resistance at $51 and could try and fill some of the "gap" from its February crash.

  Jonathan Levinson   4/23/03,  10:47:09 AM
The Energy Department reports a rise in crude stocks of 9 million-barrels for the week ended April 18. Analysts had expected crude stocks to rise 3 million barrels. Total inventories are at 286.2 million barrels, which is 12.7 percent below their year-ago level.

  Jim Brown   4/23/03,  10:46:02 AM
AMR lost over $1 billion in the last quarter. More than $6 a share and twice the price of a share of AMR stock.

  Jeff Bailey   4/23/03,  10:42:41 AM
PeopleSoft (PSFT) $15.01 -6.42% .... this was a stock that I thought traders should keep an eye on after the company warned on earnings the evening of April 3rd. The morning of April 4th, stock gapped lower and held a low near $14.50. Today's gap back lower after release of earnings, hints to me that the bulk of buying that had stock rebounding to $16.00 into yesterday's close, was indeed more short-covering related than anything at this point. Link

I received an e-mail from a "bear" this morning that has been feeling some heat in recent weeks, based on the BELIEF that the economy just isn't very good and stocks that this "bear market rally" has simply caught bears by surprise and legs of bullishness just drive short-covering as losses mount.

I will confess, and have stated before, that I too "believe" things aren't that great, and that technology stocks (like PSFT) are vulnerable until corporations begin increasing their cap ex spending.

Still, no matter how much "conviction" the bearish side of me has, its price action that matters most to any trader.

I'm still bearish on CSCO from $12.50 on 1/2 bearish position, Link and while the stock hasn't given a reversing p/f buy signal and cap ex budgets keep getting cut (AT&T cut theirs again) we just never know for certain what level some bears are short. For instance, are their some "old bears" that are short CSCO at $60 and now just determined to cover and lock in their gains for HUGE profit as they see a turn higher in the cycle quarters ahead? Just as they saw the turn lower two-years ago?

  Jonathan Levinson   4/23/03,  10:38:26 AM
Put to call ratio: total .70, index 1.30, equity .56.

  James Brown   4/23/03,  10:38:22 AM
I'll open this up to the group... we knew that OPEC was set to meet this week (I thought it was today) on cutting back oil production and/or quotas to prevent a glut and another steep drop in prices. It appears Iran is the most concerned over a price drop. This is a reaction to the quick war on Iraq and the knowledge that Iraqi oil will be on the market sooner than expected. Has anyone heard the results of the meeting?

  Jonathan Levinson   4/23/03,  10:27:57 AM
The selling in bonds is decellerating, with FVX now up .6 bps, TNX +.6 and TYX +.4. The TRINQ is neutral at .96, TICK.NQ +158, QQV +.50 to 29.46. June gold futures are down 1.30 now, to 333.50, but HUI is still nicely positive at +.72 to 131.07, XAU +.52 to 69.28.

  James Brown   4/23/03,  10:24:28 AM
Up volume over down volume is still more than 2-to-1 on the NYSE while it's only 18 to 14 (up vs. down) on the NASDAQ.

  James Brown   4/23/03,  10:22:07 AM
Wow! Evidently the market doesn't care about home loan applications drifting lower for five weeks in a row. Check out the DJUSHB home construction index. The up trend in April has been unstoppable.

The latest spurt is probably boosted by very strong earnings from Centex (CTX) yesterday and we're seeing additional breakouts and very strong rallies by other home builders like Toll Brothers (TOL), Beazer Homes (BZH), KB Home (KBH), Pulte Homes (PHM) and Ryland Group (RYL).

Umm.. yes, if anyone was wondering... most of these are seriously overbought and are way overdue for some profit taking.

  James Brown   4/23/03,  10:15:19 AM
Trying hard not to sound bearish, but I just read an article that said the lack of money on the sidelines is a major stumbling block for any prolonged bull market. Mutual funds only have about 4.3% of their portfolio in cash and there hasn't been a BIG rush by the public to put fresh money in the markets given the soft economy. If I remember correctly, I believe Jim did mention that funds saw net inflows last week, which is a nice change of pace, but I don't remember it being very big.

  Jeff Bailey   4/23/03,  10:14:56 AM
JP Morgan High YIELD Fund (MSY) $6.22 ... Thanks to Frank for finding the symbol for this "junk bond" closed-end fund. Link

We've also been using the Pacholder High YIELD Fund (PHF) $8.28 Link as a way to try and track the junk bond market.

  Jonathan Levinson   4/23/03,  10:07:18 AM
The put to call ratio printed a .55 reading, (equity .46 and index .95). "Phew!" go the bears.

  James Brown   4/23/03,  10:02:41 AM
OMC +1.30 $63.72, another call play is doing well but we're anticipating potential resistance between $64 and $65. This may not be the best play to consider new entries. Aggressive short-term traders may actually want to consider taking some profits here as well.

  Jeff Bailey   4/23/03,  10:00:31 AM
Dow Industrials (INDU) 8,503 +0.21% ... trade at 8,500 has "X" getting the spot after yesterday's "bullish triangle" at 8,450. Link

S&P 500 (SPX.X) 914.41 +0.33% hasn't traded the needed 915 for "X" to get the spot after in traded the "bullish triangle" pattern yesterday's at 900. As noted in last evening's Index Wrap, SPX may have bullish resistance channel right in here at 915-920. Link

  James Brown   4/23/03,  9:59:11 AM
AZO +0.69, $79.16, a current OI call play, is approaching our first profit target of $80. Traders need to consider their exit plan - either closing the position for a gain or maybe taking profits on just part of the position and tightening their stop on the rest. It could keep going.

  Jonathan Levinson   4/23/03,  9:58:39 AM
Al Green has just added 4B via overnight repo, rolling the expiring repo of the same amount.

  James Brown   4/23/03,  9:54:31 AM
Now it's the Airline index (XAL) leading the markets with a 3.14% gain. Considering some of the headlines, it doesn't appear to be any good news from AMR.

  Jonathan Levinson   4/23/03,  9:52:38 AM
The shallowness of this pullback combined with the selling in bonds (albeit light) looks pretty good for equity bulls.

  Jim Brown   4/23/03,  9:50:49 AM
Good point James, no rush to sell means there is little fear that there is a dip in the near future. However, you can bet there are a lot of staged orders just in case.

  James Brown   4/23/03,  9:47:23 AM
hey, at least we're not seeing an immediate response to profit take on yesterday's gains!

  Jonathan Levinson   4/23/03,  9:44:59 AM
Rule #1- remember to breathe.

Yields are up, reflecting selling in treasuries, with the five year up 1.8 bps now, despite the lack of movement in equities. This should point to equity strength anytime, but so far it hasn't come. June gold is up .10 to 334.90, HUI +.74 to 131.06.

  James Brown   4/23/03,  9:38:38 AM
Some of you may have already heard but applications for U.S. home loans fell for the fifth straight week. The trend is "well above" last year but the number of applications dropped 6.9%. Has the low interest-rate home-buying and refinancing boom finally ebbed?

  Jonathan Levinson   4/23/03,  9:34:37 AM
Little direction at the open, with NQ -1.00, ES +1.00, treasury yields lightly green, and QQQ trading down 7 cetns at 27.36. TRINQ 1.2, QQV +.21, TICK.NQ +158.

  James Brown   4/23/03,  9:34:19 AM
This morning's open has been less than exciting. I realize it is only 5 minutes old but major market indices are all trading sideways. The XAU Gold & Silver index is posting the strongest gains with a whopping +0.5%.

  Jeff Bailey   4/23/03,  9:33:23 AM
Stratasys (SSYS) $19.89 ... further extends gains as this rapid prototype equipment maker's stock jumps to $21.50 in pre-market after reporting Q1 EPS of $0.20, which was 19-cents above consensus. Revenues were $10.7 million, which was slightly above consensus.

Getting close to its bullish vertical count of $28.25 and difficult to assess downside risk Link . May be the "only game in town" as 3-D Systems (TDSC) Link top management is in a state of confusion after placing its CFO on leave (Feb. 13).

  Jim Brown   4/23/03,  9:28:45 AM
Linda has been called away on a family emergency and will not be posting the rest of the day. Mark Phillips is still on vacation until Thursday. James, Jonathan, Jeff and Ray will try to fill the void.

  Jeff Bailey   4/23/03,  9:27:44 AM
BJ Services (BJS) $36.60 ... oil service provider reports Q2 EPS of $0.28, which was 3-cents better than estimates. Company said revenues rose 20.8% year-over-year to $534.6 million, wich was also above consensus. Forward guidance has BJS looking for Q3 EPS of $0.28-$0.31 (consensus $0.28) and full year 2003 EPS of $1.15-$1.20 versus consensus of $1.13.

BJS's p/f chart Link remains bullish with bullish vertical count of $50. First sign of weakness would be a trade at $31.

  Jeff Bailey   4/23/03,  9:17:10 AM
09:00 Update posted at this Link

  Jonathan Levinson   4/23/03,  9:05:54 AM
Well, I wonder what today will bring! I heard this a.m. that the World Health Org. has issued a travel advisory for Toronto due to SARS. (We're travelling there in a month.) Is that a big issue in Montreal also? We don't hear much about SARS locally. Our big news is still terror threats and the costs associated with them. (e.g., my daughter's school has been evacuated 46 times this school year because of bomb threats. The police, bomb squad and fire department all have to check the building before anyone can return.)

Most in Montreal are ignoring it entirely. I stayed home from the Montreal Intl Resources conference two weeks ago, despite my pre-registration and the chance to meet some luminaries and gold bugs. The fact is that the disease has shown up on different continents, and most people don't take the threat seriously, so I'll be concerned about it until we see widespread announcements that it's either been cured or isolated.

  Jonathan Levinson   4/23/03,  9:02:53 AM
Futures are pulling back the slightest bit, ES at 910.75, NQ 1108, YM 8468, QQQ 27.50. Treasury yields are flat, with FVX -.3 bps, TNX +.2 bps, TYX +.8 bps.

  Jonathan Levinson   4/23/03,  8:05:35 AM
SYDNEY (AFP) - The Pentagon (news - web sites) has produced detailed plans to bomb North Korea (news - web sites)'s nuclear plant at Yongbyon if the Stalinist state goes ahead with reprocessing of spent nuclear fuel rods, an Australian report said.


  Jonathan Levinson   4/23/03,  8:04:41 AM
The US Dollar Index has risen all the way to 98.92, and June gold is down to 334.30. ES futures are currently trading 914.25, up 4.75, NQ up 7 to 1111.00. QQQ is trading 27.55, up 12 cents.

  Linda Piazza   4/23/03,  7:13:39 AM
Good morning. Today, the Japanese Ministry of Finance released figures showing that the fiscal 2002 trade surplus rose 36.6%, its first increase in four years. However, those figures also showed a greater-than-expected fall in the trade surplus in March. The March surplus fell to 646 billion yen from February's revised 825.5 yen, significantly below the expected 762.5 billion yen. March exports fell 2.4%, hurt by lack of demand in the U.S. economy. Exports are likely to extend their losses as SARS impacts Asian economies. For example, Bloomberg reports that the world's biggest consumer-electronics maker, Matsushita Electric Industrial Company, shut down an inspection line at a Beijing factory due to worries over SARS. A $1.5 billion economic rescue package will be set aside to help Hong Kong businesses hurt by SARS. This morning, it was announced that Beijing schools would be closed for two weeks. These instances demonstrate the impact that SARS could have on Asian economies.

The Nikkei opened slightly down as pension funds unloaded blue chip stocks. Sony, one such blue chip stock, was down 2.4% on fears that its earnings report will suggest slowing growth. Soon, however, the Nikkei rebounded, with Nippon Telegraph and Telephone Corp. gaining on news that it would expand its fiber-optic broadband Internet service. The Nikkei moved as high as 7895.60 before pulling back 100 points and closing at 7793.38, up 2.92 points or 0.04%. Other Asian markets were mixed, with the Hang Seng down .61%, China's Shanghai Composite down 1.70%, and Taiwan's Taiwan Weighted up 8.83%.

All European markets trade currently green as the FTSE 100, CAC 40, and DAX reach for psychologically important levels today. The CAC 40 and DAX each moved minimally over 3000 this morning before pulling back. They currently trade at 2991.88 and 2989.66, respectively, up 2.65% and 0.97%. The FTSE moved within three points of its psychologically important 4000 level and now trades up 67.70 points or 1.73%, to 3985.40.

A French report showed that consumer spending rose in March. Insurers gained in morning European trading, as did car manufacturers after Nissan announced record profits in 2002. Investors ignored Nissan's prediction of a tougher 2003. Analysts downgraded two German tech companies, SAP and Infineon. When cutting Infineon to a sell from a hold, Deutsche Bank commented that recent positive DRAM pricing momentum would be undercut by supply growth and seasonality issues. A report also mentioned that German banks plan to sell billions of euros in loans as asset-backed bonds. Renault, Michelin, and Valeo have been leading the gains.

  OI Technical Staff   4/23/03,  5:12:36 AM
The Market Monitor Server will be rebooted in 5 minutes. You will need to reconnect your desktop program to continue to receive updates.

  Jeff Bailey   4/22/03,  10:10:42 PM
Pivot Analysis Matrix For tomorrow (Wednesday). Link

  Jeff Bailey   4/22/03,  9:44:03 PM
The Index Trader Wrap has been posted: Link

  Vlada Raicevic   4/22/03,  9:43:56 PM
The Futures Trader Wrap has been posted: Link

  James Brown   4/22/03,  9:43:46 PM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

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