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  Jim Brown   5/13/200,  5:02:51 PM
AMAT conference call highlights.
Orders are weaker than Q1 at $971 million vs $1.1 billion.
Still a lackluster environment. Orders will be flat, revenues flat or below estimates. Company estimates 3-4 cents compared to consensus of 4 cents, guidance to low end of the range. Orders still volatile and unstable.

 
 
  Jim Brown   5/13/200,  4:20:47 PM
CSC earnings 93 cents compared to 92 estimate
Sees signs of demand stabilization in North America
Stock trading down in post market at 33.83

 
 
  Jim Brown   5/13/200,  4:08:22 PM
NTAP 7 cents vs est 7 cents

 
 
  Jim Brown   5/13/200,  4:06:08 PM
AMAT trading down in after hours at 15.27 from 15.55 close. Waiting on conference call.

 
 
  Jim Brown   5/13/200,  4:03:52 PM
ANF 26 cents, no estimate

 
 
  Jim Brown   5/13/200,  4:02:26 PM
AMAT earnings -4 cents after charges, 3 cents vs estimates of 2 cents.
SCMR -4 vs -5 est

 
 
  Linda Piazza   5/13/200,  3:54:00 PM
The frustrating aspect of the inconclusive nature of today's trading is that there's every possibility that there will be a gap opening tomorrow, after tonight's earnings reports and the overnight economic and other developments. Which direction, though? On the OEX, will it be another attempt at 480 to 487 or will it be down? It's impossible to tell and those of us not entering new trades are going to be kicking ourselves if the markets gap in the direction we expected. That's the breaks, though. What if there are bad/good numbers and little reaction? For those who didn't catch Alan 's article this weekend or didn't check out the link in my early-morning update this morning, here's a link to a Futures Trader article in which Alan discusses the ways we can use the reaction or lack of reaction in the overnight futures market to gauge market strength or weakness. Link

 
 
  Mark Phillips   5/13/200,  3:46:31 PM
EMC $10.03 (+0.09) One final comment on this LEAPS play before the close. Tonight, NTAP is expected to release its Q4 results tonight after the close. While Lehman believes the company will come in at the high-end of estimates, the stock has already had a heckuva run in the past 2 weeks and may be susceptible to a pullback in "sell the news" fashion. Any severe selling in NTAP tomorrow could spill over into trading for EMC. Take that into account when making a decision on whether to hold long positions in EMC or harvest gains before the close.

 
 
  Linda Piazza   5/13/200,  3:42:12 PM
I'm still watching GE today, down further since my 11:36 post, trading at 28.40, down .57. Hourly OBV does appear to be turning down as the day progresses, and the hourly ADX shows the downtrend gaining strength as selling pressure increases and buying pressure decreases. Daily ADX shows that selling pressure has today made a bearish upward cross of the descending buying pressure. Daily CCI dips into the red, and RSI continues to turn down. Daily OBV appears to be turning down, too. Stochastics evidence is mixed, however.

 
 
  Mark Phillips   5/13/200,  3:40:18 PM
AIG $55.52 (-0.84) Traders monitoring this AIG Put play have got to be pleased with the price action so far this week. Yesterday's euphoric ramp in the broad market was only good enough for AIG to test the top of Thursday and Friday's range. The stock has been pressured lower with the rest of the market today and is back near the lows of the past four days. One important observation is that the stock seems to have finally lost the support at the 20-dma and looks to close solidly below that measure for the first time since March 14th. AIG is currently a LEAPS Put play as well and traders that entered on one of the last two failed rallies near the 200-dma are looking good here. Relative to that LEAPS play, once AIG loses the $55 level, it should be save to lower stops to $59, just above the recent intraday highs.

 
 
  Linda Piazza   5/13/200,  3:27:05 PM
The BIX is one index that's maintaining some gains today, trading up near the 296-297 level most of the day. Unless something changes by the end of the day, which I acknowledge is possible, the BIX will print a doji on the daily chart. Is this a possible reversal signal? (My first caveat to this discussion is that nothing is truly a reversal signal in this market!) I have mixed opinions. First, I can clearly see as could anyone else that the BIX has been moving up since the middle of March, so I could say that it's in an uptrend. This doji is also occurring right at important resistance, which supposedly (in anything but a rampant buy-the-dip market mentality) would lend it special significance. However, since early May, the BIX has been consolidating in a rectangular trading range roughly from the 289 to the 297 level, so it's also possible to say that today's doji occurred during this consolidation, in which case it would not be considered a likely reversal signal. A scan of the chart shows the BIX consolidating in a similar trading band in late April and printed several doji's or near-doji's at the top of that range, too, before moving up again. Is this just a trading pattern for the BIX, then? It's a toss-up, in my opinion.

 
 
  Jonathan Levinson   5/13/200,  3:24:02 PM
Nice push from the bears! Link

 
 
  Jonathan Levinson   5/13/200,  3:19:57 PM
Sorry, that was Glassman for Dow 36,000, Acampora wrote the forward to "Dow 100,000- Fact or Fiction".

 
 
  Jonathan Levinson   5/13/200,  3:18:08 PM
Oh, I almost forgot! Apparently Ralph "36,000" Acampora is suggesting today that the dips will be bought

 
 
  Jonathan Levinson   5/13/200,  3:16:57 PM
Bears who want to try some collective meditation might wish for a push below 28.64, which could kick off a head and shoulders breakdown on my 10 minute/ 2 day QQQ chart.

 
 
  Jonathan Levinson   5/13/200,  3:13:08 PM
Volume is light on the NYSE but more moderate on the COMPX. I keep hearing Tom O'Brien's New England accent: "It's trina take aht the swing high on lightah volume but it cahn't do it, it's gonnah come right back atchah!" On the other hand, a close at or above current levels will give us a potential bullish triangle set up, which I could do without, personally. Yields closed at their lows of the day, which supports the bearish case here.

 
 
  Linda Piazza   5/13/200,  3:10:38 PM
Although there were two closes beneath that OEX 474.50 level, I wouldn't consider that five-minute double-top confirmed as yet. The bounces here might be tepid, but do at least confirm the importance of this level, which would conversely give more credence to downside targets on a break of the level. As I said earlier, though, I don't know that there's enough downside to profit on this move, even if it did meet a five-minute target. With the hourly 5(3)3 stochastic so near oversold levels and the daily oscillators not yet turning down, with the late hour in the current trading day, and with tomorrow seeing April retail sales, import/export prices, and with earnings both tonight and tomorrow, I don't know that I'd yet feel certain that this was "the" big pullback we've all been awaiting.

 
 
  James Brown   5/13/200,  3:06:31 PM
The 03:15 PM ET Update: Link

 
 
  Jonathan Levinson   5/13/200,  2:44:59 PM
QQQ bounced at the 78.6% fib retracement off the intraday high at 28.64, currently working with the 61.8% level. FVX has slid a tough lower, QQV is actually up to unchanged, TRINQ .77, TICK.NQ +31. If the Qubes manage to close negative today, then the QQQ:QQV ratio discussed in last night's Index Wrap will drop again, adding another candle's confirmation to trend reversal that bears are hoping/wishing for.

 
 
  Linda Piazza   5/13/200,  2:41:20 PM
The 60-minute OEX RSI got tugged back beneath its formerly violated descending trendline, showing a likely change in short-term trend, at least. The 21(3)3 stochastics are getting tugged out of overbought territory, showing a satisfyingly steep line of descent. The fly in the ointment, though, is that the 5(3)3's have already cycled down almost to levels indicating oversold conditions and the daily oscillators have not turned down at all, with the exception of the RSI. It's still possible, although not necessarily probable, that there could be one more 60-minute 5(3)3 cycle up before the real downdraft ensues and we see how the OEX will respond.

 
 
  Linda Piazza   5/13/200,  2:36:48 PM
I just checked volume patterns and noticed that there's been another shift, with advancers now barely ahead of decliners on the NYSE and decliners slightly ahead on the Nasdaq. Up volume is barely ahead of down on the NYSE, but more strongly ahead on the Nasdaq. To me, that shows that there's still some concentrated buying of a few issues on the Nasdaq, but that buying is slacking off. Total volume is 963 million on the NYSE and almost 1.4 billion on the Nasdaq.

 
 
  Jonathan Levinson   5/13/200,  2:25:20 PM
I'm hoping that my own observation of that support/resistance phenomenon mentioned by Linda marked the very top of this move, but we'll have to see. The US Dollar Index broke the neutral pennant to the downside, currently trading 94.65, and this coincides with gold regaining 350, with June gold currently 350.90. So far, QQQ 29 has held, and that level would have made the perfect stop for the entry I discussed yesterday at 28.90. For what it's worth, I believe that if QQQ proves to be a high, it will be on at least a swing basis, in that the top of the trend here is on a daily candle basis, and not some shorter daytrade or swing trade basis.

Yields are now read across the curve, while QQV is still down .27 despite VXN being up .42. TRINQ is at .79, TICK.NQ +23.

 
 
  Linda Piazza   5/13/200,  2:20:43 PM
Currently at 474.65, the OEX now approaches that 474.50 confirmation level of the double-top formation on the five-minute charts, but as Jonathan said earlier today, support means more than resistance lately, so I would be certain that support has been violated before forming too strong an opinion about even near-term direction.

 
 
  Linda Piazza   5/13/200,  2:08:55 PM
I'm now watching the second test of the day of the violated RSI descending trendline on the OEX hourly chart, as depicted in my 10:55 post. This time, the RSI does not appear to be hinging up ahead of the line, but could still do so at the line.

 
 
  Linda Piazza   5/13/200,  2:03:57 PM
An OEX move and close (at least five-minute, if not longer) below 474.50 would confirm a double-top formation on the five-minute charts, with a downside target of 470-470.22. As I've often warned, targets are not reliable on five-minute charts, and downside targets have not been particularly reliable on any charts during the current market trend. Still, this might be a level to watch. This would probably not be a big enough move or reliable enough one to be profitable as a day trade, but might give information into the OEX direction.

 
 
  Jonathan Levinson   5/13/200,  1:58:50 PM
Whoops, correction: 28.76 is the 21 period MA on the 15 minute, and not 10 minute candles.

 
 
  Jonathan Levinson   5/13/200,  1:57:25 PM
Put to call ratio is down to .59, equity pcr 0.48, index pcr 0.84.

 
 
  Jonathan Levinson   5/13/200,  1:55:29 PM
28.76 coincides with the 21 period MA on the 10 minute candles, as well as the 50% retracement off today's high for the Qubes.

 
 
  Linda Piazza   5/13/200,  1:50:15 PM
The 60-minute OEX oscillators are absolutely useless just now in predicting market direction, with the 5(3)3 stochs having paused in midrise after pausing in midfall, and now squiggling around in a rather attractive but confusing braided pattern. RSI heads back down to test that violated descending trendline again, however, and the 21(3)3 stochs ease ever nearer to the point when they'll be pulled down out of overbought territory. Over on the daily charts, the 5(3)3 stochs have nearly reached overbought territory again, but the 21(3)3's have not yet so much as hinged down. RSI has, though, giving a first hint of possible weakness to come. A fall below 475 would predict a move back down to test the hourly 21-pma at 473.66 or perhaps to the 469.50-470 support.

 
 
  Jonathan Levinson   5/13/200,  1:40:38 PM
That's very light volume for this time of day, Linda. A last drive to the top on light volume should be bearish, though volume analysis is very far from an exact science.

 
 
  Linda Piazza   5/13/200,  1:39:26 PM
A glance at volume patterns show that 807 million shares have traded on the NYSE and 1.1 billion have traded on the Nasdaq. Adv/dec, up/down, and new highs/new lows patterns are all positive, with some of those ratios reversing their earlier solidly bearish numbers.

 
 
  Jonathan Levinson   5/13/200,  1:36:53 PM
QQQ at 28.81 is 38.2% off the day high on the 10 minute candles, with next fib support at 28.76, then 28.71. 28.88 is the 23.6% line. Dare we hope for it to act as resistance?

FVX is down to flat on the day as bond buying reasserts itself today.

 
 
  Jonathan Levinson   5/13/200,  1:21:12 PM
The put to call ratio has fallen to .63, with the equity pcr at a very low .49, and index prc 1.01. It looks like the little guy (equity pcr) is buying the highs with both fists, and even the big guys (index pcr, I'm guessing) are relenting on their put trades. Whether my interpretation of the breakdown of the pcr is correct or not, the numbers make me bearish but nervously so at current levels.

 
 
  Linda Piazza   5/13/200,  1:20:54 PM
Nearly there--so far, the OEX daily high is only $.30 below yesterday's HOD, although the OEX currently falls back a little from that high. As I thought might happen earlier, the OEX 60-minute RSI did find support from its violated descending trendline, being the first sign that the OEX might try for higher levels again. This is why I favor the RSI or at least pattern breaks on the RSI as a leading indicator of market direction. As I also thought might happen, the 5(3)3 hourly stochs zoomed down fairly quickly and turned back up, turning the 21(3)3's back up with them, with those longer-term stochs still up in overbought territory. My best guess now is that 480 may be tough resistance for the OEX, but that a move above that should see a try for 487, at which point I do expect a failure or at least a regrouping and consolidation before a further push up.

 
 
  Jonathan Levinson   5/13/200,  1:14:33 PM
The US Dollar Index has coiled into a neutral pennant at 94.80 on the 15 minute candles, and should be breaking in either direction soon. On a coin toss, I'd *guess* that it breaks to the upside, which should have short term bearish implications for gold and other commodities. No clue what it will do for or to equities. FVX has climbed up to a 1.7 bp gain here, coinciding with the new highs on QQQ and COMPX. The gains on the day are quite small across the indices, but it sure feels like a big move off the lows, back to critical resistance from yesterday.

 
 
  James Brown   5/13/200,  1:12:07 PM
The 01:00 PM Update: Link

 
 
  Mark Phillips   5/13/200,  12:58:45 PM
EMC $10.12 (+0.18) While it can't rival the excitement of an EBAY or YHOO today, our EMC LEAPS Call play is pushing convincingly through the $10 level this afternoon and setting a new 52-week high. Those traders who have been following this play since we added it just below the $7 level know that we're looking at an exit from the play in the $10-11 area. I think we'll get a surge towards the upper end of that range before this persistent rally runs out of steam, but conservative traders may want to think about harvesting gains into this strength either later today or tomorrow.

 
 
  Linda Piazza   5/13/200,  12:50:46 PM
The U.S. Bancorp Piper Jaffray tech conference is going on today, with SSB's scheduled for tomorrow, I believe. Information about tech stocks could be coming out of that meeting, affecting trading today. For example, Siebel Systems (SEBL) reported at 9:40 this morning, and the stock began moving up about 10:30 ET, reaching a high of 9.35 about 11:20, regrouping and then currently reaching toward that day's high again.

 
 
  Jonathan Levinson   5/13/200,  12:48:31 PM
The New Currency: Link

 
 
  Jonathan Levinson   5/13/200,  12:46:47 PM
After a shallow downphase, we're watching a runup to yesterday's highs. QQQ 29 still hasn't been challenged, but it's very close. FVX is up just 0.7 bps, so the buying in bonds is continuing. CRB has given up part of yesterday's gains, as has gold, the HUI and XAU, but so far, I see no sign of a trend reversal in any of these asset classes. It's just chop, so far.

 
 
  Jim Brown   5/13/200,  12:43:06 PM
I was scanning the EBAY investor relations website for a clue to the bounce today. No clue, but I did find an interesting presentation that was given at a May-2003 tech conference. Very interesting. Link

 
 
  Mark Phillips   5/13/200,  12:42:40 PM
There are a couple of notable exceptions to the consolidation theme today though. EBAY, which really lagged during yesterday's rally, is up a strong $3, now flirting with the $98 resistance level. Another strong performer in the Internet arena is YHOO (currently a bullish trade candidate on PremierInvestor), which is vaulting higher by more than 5% today, moving through the $27 level and setting a new 2-year high.

 
 
  Mark Phillips   5/13/200,  12:41:25 PM
Now fully 3 hours into the trading day, by any measure I can find, we have a clear consolidation session. By the price action, it certainly looks bullish to me, with very minor losses on the DOW and SPX and the NASDAQ now creeping into the green. Advancing vs. Declining volume on the NYSE is just barely in favor of the bulls by a ratio of 42:38, while the NASDAQ shows bullish leadership by a ratio of 2:1. Bond yields are revealing little as they are vacillating near the flat line and individual stock performance reflects this bifurcation as well. Of the 200+ stocks I monitor on a daily basis, only 6 are down by more than $1, while 5 are up by more than $1.

 
 
  Ray Cummins   5/13/200,  12:29:48 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity

Despite the recent surge in share values, there are a few positions in the (bullish) portfolio that deserve attention including ImClone (NASDAQ:IMCLE), Silicon Laboratories (NASDAQ:SLAB) and PolyMedica (NASDAQ:PLMD), and since none of these stocks participated in Monday's rally, all of them are suspect with regard to future upside activity. One issue that is enjoying some bullish momentum this morning is Krispy Kreme Doughnuts (NYSE:KKD). Traders are buying the stock in anticipation of a favorable quarterly report, which is due out on 5/28 near the opening bell. Unfortunately, our outlook for the issue is neutral to bearish and our recent call-credit spread is profitable with the stock below $35. The upcoming report will likely determine the near-term character of the issue.

 
 
  Jonathan Levinson   5/13/200,  12:29:23 PM
Well put, Jim and Linda. Something's got to give, and with treasuries going from being sold to being bought, commodities holding their gains, and the USD really fighting for its bounce points, the bearish case is intact. But, the charts tell a bearish tale so far, and at this point, nothing could surprise me.

 
 
  Jonathan Levinson   5/13/200,  12:24:12 PM
QQQ is coming in for another run at the rally highs, now trading 28.88, while FVX sinks lower, now up just .7 bps. TRINQ .48, QQV -.27, TICK.NQ +383.

 
 
  Linda Piazza   5/13/200,  12:22:59 PM
The FTSE 100 closed at 3999.90. How's that for closing just under key resistance (at 4000 for the FTSE)? The CAC 40 closed up 1 point, at 2963.63, about in the middle of its day's range. The DAX currently trades down a minimal 3.60 points at 2933.42, having fallen as low as 2883.31 at one time today.

 
 
  Jim Brown   5/13/200,  12:20:33 PM
Every time I have looked at EBAY over the last several months I think "I will buy some when it pulls back". The pullback never comes to more than a buck or two and you just keep thinking "I would be buying the top" here. Well that top grew by almost +$3 this morning as it closes in on $100. With a PE over 100 it is one of the Internet's darlings that never lost investor confidence. The PayPal acquisition is adding torrents of cash flow and there are probably more acquisitions in the future. I will get some on a pull back. (grin)

 
 
  Linda Piazza   5/13/200,  12:19:21 PM
Interesting. As the indices rise toward their day's highs again, bond yields drop toward the day's lows, the VIX reaches toward its day's high, and futures for light, sweet crude oil do, too. These are not the usual interactions seen in the markets.

 
 
  Linda Piazza   5/13/200,  12:08:10 PM
A reader offers a solution for the SOX/OBV dilemma mentioned in my 10:43 post this morning, one I was considering myself. Daily volumes are tabulated for the SMH. While this HOLDRS is not an exact match for the SOX, it would give some idea of how OBV were behaving on the SOX, were it applicable. On the SMH, OBV has generally been trending upward since early February. Thanks, M.K., for this suggestion.

 
 
  Jonathan Levinson   5/13/200,  12:01:24 PM
USD Index back at 94.90, nearing the upper descending trendline on the 15 minute candles. FVX is down to a .8 bp gain, while gold is now below 350/oz at 349.90, while QQQ trades back into yesterday's channel, now at 28.83.

 
 
  Ray Cummins   5/13/200,  11:59:30 AM
Spreads/Combos & Premium-Selling -- Portfolio Activity

As we look back on an extremely bullish session, it's important to note the character of the most critical plays on the (bearish) "watch" list. In the technology group, Cabot Micro (NASDAQ:CCMP) is definitely a nominee for early exit and Mercury Interactive (NASDAQ:MERQ), a new call-debit spread candidate, is near the break-even point. Wal-Mart (NYSE:WMT) is the primary concern among the broader-market issues, although it has retreated significantly today, and the S&P 100 Index (OEX) call-credit spread is slightly "in-the-red" with the index above $475. The position in Dreyer's (NASDAQ:DRYR) endured a forced exit early this morning as speculation of a merger announcement became rampant, and Universal Health (NYSE:UHS) ended our hopes of salvaging any profit as the issue jumped over $2 to $43 despite a lack of public news. On a positive note, spreads in Bank of America (NYSE:BAC), Intuit (NASDAQ:INTU), 3M Corp. (NYES:MMM), Engineered Support Systems (NASDAQ:EASI, and Varian Medical Systems (NYSE:VAR) appear safe for now. Not surprisingly, Total Fina (NYSE:TOT) is back below $70 (and the sold call) after a brief run to the top of its recent trading range but the same can not be said for the Oil Service Holdrs (OIH) position, which is teetering on the profit/loss threshold with the underlying near $60.20. Of course, all of the suspect issues should be monitored closely for changes in their respective technical outlooks.

 
 
  Jim Brown   5/13/200,  11:56:06 AM
Any idea's on what's driving EBAY today? I am long term short, but am starting to wonder. Thanks, JL

I don't see any news but they should be announcing a stock split very soon. They typically split in the 75-90 range and they are well ove rthat now. It could be some advance news leaked. Anybody else have a clue?

 
 
  Linda Piazza   5/13/200,  11:55:44 AM
The OEX 60-minute 5(3)3 stochs now reach down toward oversold levels, although they're not quite there yet, and the RSI does appear to be finding support from that now-violated descending trendline. The 21(3)3 stochs cycle down, but still haven't fully rolled down out of overbought territory and can still be turned back up again. All this is occurring while the OEX holds steady between next minor support and next major resistance. The daily oscillators still show the possibility of more upside. My gut feeling is that the OEX will take another (perhaps doomed to fail) run at yesterday's highs and maybe even higher toward 480 or even 487 before those daily oscillators complete their cycle and turn down again. There's just not enough information to be sure. I'm not trading off my gut instinct, and you shouldn't, either.

 
 
  Jonathan Levinson   5/13/200,  11:44:45 AM
Most recent put to call data: total .76, equity .59, index 1.18.

 
 
  Jim Brown   5/13/200,  11:38:41 AM
SIRI has traded over 51 million shares on news that their radios will be offered in Ford, Lincoln and Mercury vehicles. The stock was up strong on news back on the 7th and has been trending down since.

 
 
  Linda Piazza   5/13/200,  11:36:00 AM
GE, 28.60, down $.37: Today, GE slipped beneath the 28.80 level that supported prices from mid-April through early May, but it has not yet fallen beneath the May 8 and 9 levels. Daily 21(3)3 stochastics and MACD are somewhat inconclusive, sloping generally down but at the rather flat angles that sometimes predict an imminent upturn. RSI definitely turns down, however. ADX appears to be weakening, with a potential bearish cross of the buying pressure and selling pressure lines setting up, but with the ADX empirical number still above 20 and still indicating a trending market. Volume appears to be tapering off as GE's price slips, too. With that tapering of the volume and with the counter-cyclical tight pattern of lower highs and lower lows occurring just after a protracted move up from GE's February low, the possibility of a bull-flag pattern must be considered. Although a breakout above the current trend of lower highs would confirm the bull-flag pattern, I would wait for a move over 30 before I would consider the potential bull-flag pattern fully confirmed. Conversely, a move below support at 28 or the 200-ema at 27.49 might be considered more bearish and would probably lead to more selling.

 
 
  Jim Brown   5/13/200,  11:35:18 AM
SUNW is holding yesterday's gains on takeover speculation. The stock has traded 42 million shares today. There is speculation that Dell, HPQ or IBM is about to announce a purchase of SUNW. HOWEVER, two vice presidents, people who should know, sold 218,324 shares on the open market according to form filed at the SEC on Monday.

 
 
  Jonathan Levinson   5/13/200,  11:35:01 AM
So far, QQQ has failed to penetrate 28.79, coinciding with my expected resistance zone from yesterday's afternoon trading range. FVX is up 1.6 bps, with the longer maturity yields in the red. The USD Index is back below 94.80 on that ramp. All of these look bearish for equities, but I'll feel more secure if, say, QQQ dumps a buck or two from here. Let's not start holding our breath just yet. QQV -.21 to 28.54, TICK.NQ +134, TRINQ .54.

 
 
  James Brown   5/13/200,  11:28:52 AM
The 11:00 AM update is posted: Link

 
 
  Linda Piazza   5/13/200,  11:24:03 AM
The OEX cleared the five-minute 21-pma, the first minor test of the weakness or strength. It's now challenging that first ascending trendline drawn off the March 12 low. The 60-minute chart showed that the RSI did hinge up when it hit the violated trendline shown in my 10:55 post, but that the hinge up is far from decisive as yet. The 5(3)3 stochastics have not yet turned up, however, but neither have the 21(3)3's rolled completely out of overbought territory. I expect the OEX to next test yesterday's high at 478.83, but I still don't believe the outcome is yet decided. As much as you or I may want a definitive answer as to final direction today, I don't believe we have it yet.

 
 
  Jonathan Levinson   5/13/200,  11:11:46 AM
Here's are some interesting charts on UBS. I heard on CNBC this morning that UBS sees things improving since most of the global uncertainties have been lifted.

Link

Link

Any thoughts on these charts?

As your charts indicate, UBS is right at channel resistance. As a good trader, you'd be naturally thinking of selling near the top instead of buying, but good news and CNBC's cheerleading have you thinking of buying. Knowing nothing about UBS or its fundamentals, I can only look at the chart, and you know what I'm going to say. I'll therefore keep it short and just reinforce it with two points. Joe Granville's maxim that "News is for suckers." And, that CNBC is owned by GE, a very large industrial company with a great big liquid stock. CNBC's job, as the world's longest running infomercial, is to get people to buy and hold stock. Trust what the chart is telling you in planning your trades. CNBC has been calling a bottom for years now. Never once have I heard of them calling a top. Now, UBS may well break out and run to new highs. With a tight stop, you could try a long trade on it. Alternatively, you could wait for UBS to clear resitance and then enter on a successful retest of the channel top.

 
 
  Linda Piazza   5/13/200,  11:08:48 AM
Currently, the FTSE 100 is up 6.20 points, but has slipped back below the 4000 level, trading now at 3993.60. The CAC 40 is down 5.74 points to 2956.89, and the DAX is down 32.66 points to 2904.60.

 
 
  Linda Piazza   5/13/200,  10:59:55 AM
Currently, volume stands at 333 million shares on the NYSE and 520 million on the Nasdaq. Based on recent days' trading, this is decent volume. Adv/dec ratios are .62 for the NYSE and .63 for the Nasdaq. Down volume is more than double up volume on the NYSE, but is roughly equal to up volume on the Nasdaq.

 
 
  Linda Piazza   5/13/200,  10:55:31 AM
On the OEX 60-minute chart, I'm watching the RSI and 5(3)3 stochs in particular. Here's why: Link

 
 
  Jonathan Levinson   5/13/200,  10:52:04 AM
The US Dollar Index just spiked above 94.80, yet the five year yield is still up 1.2 bps. The thirty is down 1.7 bps, though. Perhaps Toshihiko Fukui and Yasuo Fukuda are converting yen to buy US thirty year treasuries?

 
 
  Jim Brown   5/13/200,  10:47:36 AM
Editors Play
The Dow has dropped -80 from yesterday's highs but this is not yet enough to reflate the put side of the play which is currently trading at 15x25 cents. We will probably not see any significant gain in the price until the Doe moves under 8600 again. There are three days of significant economic reports ahead with Thursday being the heaviest reporting day. Current uptrend support for the Dow is in the 8500 range and I expect to see that by Thursday. I would love to see 8400 after Thursday's reports but there is always the possibility for good news. Keep your fingers crossed.

 
 
  Jonathan Levinson   5/13/200,  10:46:20 AM
The CRB is pulling back to unchanged on the day as FVX sinks to day lows, now up 1.1 bps. The Commodities Index is at 240.13, down 9 cents, led by cotton, heating oil, copper, crude oil FCOJ and live cattle futures. HUI is down .24 to 135.96, XAU -.28 to 25.93, and June gold 351.20, down .70.

 
 
  Jonathan Levinson   5/13/200,  10:44:02 AM
Here's a repost of that must-see chart: Link

 
 
  Linda Piazza   5/13/200,  10:43:49 AM
The SOX is down today but also currently up from the day's low, trading just now at 353.64. As I've mentioned before, MACD has been flat during the recent move up, and the 21(3)3 stochs have been trading mostly flat in territory indicating overbought conditions since mid-April. If the SOX should retreat further, an interesting test will soon occur. The 21-dma and the 200-ema now converge at 335.70 and 334.72, respectively. Those two MA's should support the SOX should it reach those levels on a pullback, especially as there's also horizontal historical support in that area as well as support from a rising trendline. A fall through that area would probably require sustained selling, and might mean a more bearish intermediate outlook for the SOX. Let's watch.

On another note, I mentioned frequently through the last few weeks that the rise in the SOX was not attended by a rise in OBV. Last Friday, an astute reader wrote asking whether the OBV indicator was valid for an index such as the SOX, where volume levels were not tabulated. It was such an obvious question that I don't know why it didn't occur to me as I know to ignore OBV on other charts such as that of the VIX. Since the OBV calculations depend on volume tallies for each day, it appeared apparent that OBV would not be applicable to the SOX, no matter whether the charts were showing values or not. Since then, both this reader and I have queried our various charting and quoting services. Q-charts said the OBV would be "moot" for the SOX, and the reader so far has received similar answers. My research of various texts hasn't enlightened me any further, but at this time, I would say that it is not applicable. This was a case of not being able to see the forest for the trees. I was so attuned to studying the various indicators that I did not pull back and think about the applicability of the OBV to studying the SOX. Thanks, B.G.R. for bringing this to my attention and for following up with research of your own.

 
 
  Jonathan Levinson   5/13/200,  10:41:10 AM
Off topic, but KKD has just arrived in Montreal, and one of the guys in my office has taken to bringing a box or two each week, just to prove my weakness on a regular basis. These things are treacherous!

 
 
  Jonathan Levinson   5/13/200,  10:37:01 AM
That red volume spike was over 1000 QQQ shares traded within 50 ticks.

 
 
  Linda Piazza   5/13/200,  10:30:17 AM
Currently at 295.76 and with a day's high of 297.05, the BIX is challenging the 297 level that has retarded further advances since last September. The upper BB is at 299.89, and the daily oscillators still maintain a bullish outlook although they're approaching or already at levels that indicate overbought conditions. This index might be a good one to monitor today and the next few days, as a push over 300 would be considered bullish, but a fall below recent support near 290 might be considered yet another failure to breach that overhead resistance.

 
 
  Jonathan Levinson   5/13/200,  10:29:47 AM
A very large negative volume spike on my chart- a sell program on QQQ.

 
 
  Jonathan Levinson   5/13/200,  10:28:57 AM
I mentioned "cold sweats" yesterday and was surprised to receive some emails agreeing with me. Well, here's a chart that puts it in perspective: Link

 
 
  Jonathan Levinson   5/13/200,  10:25:28 AM
QQQ is taking another run at the lower band of yesterday afternoon's narrow trading range. I expect to see resistance at 28.78. I'm inclined to say that a failure to retake that level shortly would be bearish, but the past two months have made me far more sceptical of resistance levels than I am of support. FVX has come off its highs, though, and is currently up 2.2 bps. The US Dollar Index has found support at 94.60, and June gold is down 1.30 at 350.60.

 
 
  Linda Piazza   5/13/200,  10:23:54 AM
The OEX pulled back from its first test of its now-trending-lower five-minute 21-pma, but remains above the first level of support today at 475 and again appears to be bouncing off that original trendline I drew off the March 12 lows. The outcome of the first minor test of "will it be strength or weakness" has not yet been decided, in my opinion. The hourly RSI looks weaker than it did earlier, but that 21(3)3 stoch has still not fully committed itself to more downside, keeping me from forming too many opinions just yet. That five-minute 21-pma is now just overhead at 477.10, with the OEX currently at 476.78.

 
 
  Jonathan Levinson   5/13/200,  10:08:23 AM
The 10AM put to call ratio has just come in at 1.07, comprised of an equity pcr of .79 and index pcr 2.18. It spiked up to these levels on a twenty cent pullback in QQQ with no downside followthrough, which looks unpleasantly bullish to me. My thesis yesterday was that perhaps the put to call ratio should be taken literally, and not in contrarian fashion, as lately we've also seen "put" buying, or the equivalent thereof, in the treasury and commodity rallies. These are much bigger and "smarter" markets than equities. Perhaps those buyers are also throwing in some index puts while they're at it? Time will tell.

 
 
  James Brown   5/13/200,  10:07:51 AM
The "Market is overbought" bandwagon is getting crowded. Bear Stearns says that most of the good news for stocks has already been priced in and investors should take profits.

 
 
  James Brown   5/13/200,  10:05:37 AM
Volume leaders this morning are SIRI, SUNW, LU, CSCO and AVNX. AVNX is up 157% this moring to $3.05.

 
 
  Linda Piazza   5/13/200,  10:03:19 AM
The OEX 60-minute charts shows 5(3)3 stochastics now in full bearish roll and RSI also rolling down. There's a bearish kiss on the 21(3)3's but not yet a full roll out of overbought territory. It's still possible to see the shorter-term and less reliable 5(3)3's kick back up after a brief pullback or a period of consolidation. MACD hints at potential weakness, however, since it looks as if it might be beginning to roll. The slight drop today has done nothing to impact the daily stochs, however, which still move up. Daily RSI has a slight downward hinge, but maintains a pattern of higher lows. So far. I would watch for an attempt to retake the five-minute 21-pma at 477.37, or alternately, a fall through 475 as the first minor signs of strength or weakness.

 
 
  Jim Brown   5/13/200,  10:01:34 AM
Editors Play
To recap yesterday's movement in this play we bought the May DIA $87 call for 40 cents and the May DIA put for 40 cents shortly after the open. We sold the Call for 95 cents when the Dow topped at 9720-8740. We doubled up on the DIA put for 20 cents lowering our cost basis in the put side to 30 cents. I anticipate no further changes in this position today.

 
 
  Jonathan Levinson   5/13/200,  9:59:13 AM
Al Green has just added a 2.25B overnight repo, which is a net addition with no expirations today.

 
 
  James Brown   5/13/200,  9:59:09 AM
The only major sector in the green right now is the XAU Gold & Silver index, currently up 0.24 to 71.97. Although gold itself is down slightly (GC03M) -0.90 to 351.00.

One of the biggest sector loser is the SOX semiconductor index, which should be no surprise after the negative comments coming from the house of Merrill this morning. The SOX is down 1.83%.

We're seeing a bit more profit taking in groups like the INX Internet index (-0.70%) and OIX oil index (-0.79%). Overall the selling appears rather mild.

 
 
  Linda Piazza   5/13/200,  9:53:31 AM
I show the OEX price currently in the process of testing the original trendline I drew off the March 12 low. Here's a chart, with a 120-minute interval so you can see the entire trendline: Link As I prepared the post, the OEX was dropping through that trendline, but the battle may not yet be decided.

 
 
  James Brown   5/13/200,  9:53:05 AM
Evidently Merrill Lynch's chip sector analyst, Joe Osha, doesn't believe Intel's President when the latter says a second half recovery for chips is coming. This morning Joe downgraded five chip stocks from "buy" to "neutral" and said he expects a 20% drop in the $SOX by the end of summer. Those lucky stocks this morning are: NVDA, the graphics chip maker who recently guided higher, SMTC, MXIM, ISIL and ATYT.

 
 
  Jonathan Levinson   5/13/200,  9:53:02 AM
A nice failure at the 21 period MA on the 50 tick bars, but until I see some actual downside happen, this will just look like a shake. As I type, QQQ is challenging support at the 13 period MA.

 
 
  Jonathan Levinson   5/13/200,  9:46:59 AM
I was starting to type that the QQQ had gone "quiet" and then it crossed its 21 period MA on my 50 tick short term chart. FVX is down 3.4 bps, and it looks like this bounce aims to challenge yesterday afternoon's range. Expect a test of resistance (if such concept still exists) in the 28.78 area.

 
 
  Linda Piazza   5/13/200,  9:43:04 AM
This morning shows the opposite configuration of yesterday morning's. Today, the indices are down while bonds are down and bond yields are up, and the dollar is up. It's too early to look at volume patterns, as they would still be distorted, but the configuration we're seeing in intermarket relationships should be predicting higher markets. Yesterday, these typical relationships weren't reliable in predicting market direction, and perhaps they won't be today, either. One relationship that is holding is higher crude oil prices coupled with lower indices.

 
 
  James Brown   5/13/200,  9:36:29 AM
WMT's Earnings Report Disappoints Wall Street Before the bell, the world's largest retailer, Wal-Mart reported Q1 earnings of 42 cents a share. This compares to 37 cents a share the same quarter last year. Despite a 14% rise in quarterly profits and sales growth of 9.7% to $56.7 billion, investors are not going to be excited with WMT's CEO's comments that Q2 will probably be flat. The CEO called the lastest quarter both confusing and disappointing and stated that inventory levels were too high. WMT said it missed its sales targets for same-store sales growth in March and April but management is feeding investors the same story that things will look better in the 2nd half of the year. Analysts had been expected WMT to turn in revenues just over $60 billion.

 
 
  Jim Brown   5/13/200,  9:35:47 AM
There was a server problem at the ISP this morning, which delayed the posting on the monitor. We apologize for the delay and everything is now back up and running.

 
 
  Jonathan Levinson   5/13/200,  9:35:32 AM
The US Dollar Index took a whack at the same time as the dismal balance of trades data was released, currently trading the 94.60 level.

 
 
  Linda Piazza   5/13/200,  9:35:18 AM
I had difficulty posting this morning, but here's my intended first post:. The Nikkei's trading was a tale of two trading patterns today: before the midday break and after the midday break. Building on the Nasdaq's gains yesterday, the Nikkei opened last night up 55.49 points, and rose into the early morning, reaching a high of 8339.07 before the midday break. Short-covering may have played a part in some of the gains, as Sony was the most actively traded issue. Not so long ago, Sony was selling limit-down each day. Japanese banks gained as Japan's economic ministers and a BOJ official began meetings to discuss emergency economic measures. Also, the dollar was weakening against the yen in early trading.

However, Japanese trading held a completely different character after the midday break, with the Nikkei falling straight through the afternoon, ending down 30.86 points or 0.38%, at 8190.26 and 150 points below the day's high. A Marketwatch.com article attributes the afternoon plummet to comments made by U.S. Treasury Secretary John Snow. Snow reportedly said that currency interventions should be kept to a minimum. Many believe the Japanese government may again recently have been selling yen to shore up the weakening dollar, but Japanese officials declined to confirm the rumors. Sony and Japanese banks maintained most of their gains, with exporters such as the automakers leading the declines. In addition to these factors, figures for Japanese March private-sector machinery orders were released today, with those orders rising 3.8% from February's levels and 11.7% from year-ago levels.

The South Korean central bank cut key interest rates by a quarter point. However, the truck drivers' strike continues in South Korea, with the government now making plans to intervene. In addition, North Korea's nullification of the accord intended to keep the Korea peninsula free of nuclear weapons weighed on the market. The Kospi fell 2.7%. Other Asian markets were mixed, with Taiwan's Weighted Index climbing 1.7% and Hong Kong's Hang Seng falling 0.4%.

Europe reacts to a variety of input this morning. That input included terror attacks in Saudi Arabia, attacks in which terrorists used force to enter gated compounds housing Westerners, where they set off car bombs. At least ten Americans died. A blast also targeted the Saudi Maintenance Company's headquarters, with that company partially owned by a U.S. citizen.

In addition, the euro was declining against the dollar in early European trading today, too, and the German May ZEW Indicator of Economic Sentiment showed an increase of 0.3 points to 18.7 points, still remaining below the key 33 level. This rise offset two earnings reports that shook German market participants. A German bank reported worse-than-expected earnings. A German truck and equipment maker reported losses, then said that it was seeing continued reluctance to spend on projects and would not give a forecast for the coming fiscal year. Several European telecoms reported news that was deemed positive, but the euro's rise led Goldman to cut its view of the European automakers to neutral. As of this writing, the FTSE 100 trades down 4.20 points or .11%, at 3983.20; the CAC 40 trades down 18.02 points or 0.61%, to 2944.61; and the DAX trades down 42.11 points or 1.43%, to 2895.15.

 
 
  Jonathan Levinson   5/13/200,  9:33:12 AM
The US Dollar Index got jammed to the upside last night as soon as Japan began trading. It sold off around midnight, ramped back up, and is currently trading 94.80. June gold sold off and is trading 350.00 currently, down 1.90. NQ futures are down 6.50 to 1153.50, ES -3.75 to 940.50, QQQ trading 28.65.

 
 
  Jonathan Levinson   5/13/200,  9:33:08 AM
Opening levels have the Qubes gapped down 20 cents at 28.65, QQV -.18 at 28.57, TICK.NQ +40, TRINQ .69. FVX +3.4 as bonds find sellers for a change.

 
 
  Jonathan Levinson   5/12/200,  11:27:33 PM
The Index Trader Wrap has been posted: Link

 
 
  Jim Brown   5/12/200,  11:27:25 PM
The Futures Trader Wrap has been posted: Link

 
 
  James Brown   5/12/200,  11:26:36 PM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

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