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  Jeff Bailey   5/21/200,  5:24:29 PM
Explosion at Yale University ... CNBC reporting there has been an explosion at Yale University. Reports indicate explosion came from the university's mail room. Link

S&P futures (sp03m) 921.50 are steady. Wednesday settlement was 922.10

  Jeff Bailey   5/21/200,  4:15:26 PM
McDonalds (MCD) $17.30 +2.06% .... slips to $17.00 on CNBC report

  Jeff Bailey   5/21/200,  4:14:38 PM
Mad cow ... CNBC just reporting that mad cow disease found in Canadian cow's herd may indeed have entered the food supply chain.

This would contradict Canadian officials comments from yesterday saying that it didn't, and that herd was fully quarantined.

  Linda Piazza   5/21/200,  4:01:33 PM
I forgot to mention how the European markets closed. The FTSE closed down 35.20 points or .89%, at 3936.40; the CAC 40 closed up 3.94 points or .14%, at 2881.20; and the DAX closed down 11.68 points or 0.41%, at 2827.25.

  Jeff Bailey   5/21/200,  4:00:39 PM
Newmont Mining (NEM) $29.99 +2.63% .... stock looks to test key resistance of $30. A trade at $31 would be further bullish with limited overhead supply for those long from prior bullish profile near $27. Link

As of last night, Dorsey/Wright's sector status for Presious Metals (BPPREC) has grown to 61.29% after reversing up to "bear correction" status in early April (red 5 on a PnF chart), which is really what had us looking for bullishness in NEM to begin with.

Still some sector bullishness to be had to the more "overbought" 70% level and we will remember how the sector bullish % reached 76% in January, but then advised caution in February (red 2 on PnF chart) when it began reversing back lower at 70% as sector risk started to be removed!

  Jonathan Levinson   5/21/200,  3:59:21 PM
Sorry, Jim. Those Mad Bulls made me so crazeee...

  Jeff Bailey   5/21/200,  3:48:10 PM
NYSE New highs ... 205:7 at the 03:00 mark. This is a build from Monday and Tuesday's 195:8 and 185:13.

Perhaps gives an OEX/SPX short-term bull a sense that there's some leadership being had in today's trade.

NASDAQ has 70:6 at 03:00 mark and may be slight deterioration from Monday/Tuesday's 118:12 and 84:8.

  Linda Piazza   5/21/200,  3:43:23 PM
Advancers now lead decliners on both the NYSE and the Nasdaq, although by only 12 issues on the Nasdaq. Up volume leads by a comfortable margin on the NYSE, but down volume still leads on the Nasdaq. Is MSFT responsible? It could be at least partly responsible as there are only 115 million more shares of down volume than up volume, and MSFT's volume is nearing 100 million.

  Jonathan Levinson   5/21/200,  3:41:07 PM
Volatility is falling to its lows here, with QQV -.12 at 27.49 and VXN -.13 to 32.09. The put to call ratio has not fallen below 1.0 all day, and I'm growing increasingly confused. So's the market, if the narrowing of today's range into an inside day is any indication.

  Linda Piazza   5/21/200,  3:30:23 PM
The OEX did run up to unsuccessfully test the underside of the violated bear-flag channel that formed after its violation of the bull-flag channel that formed after it violated its bearish rising channel. This is beginning to sound like "The House That Jack Built," and it's certainly made for a frustrating day for those who would have preferred a strong trend. It hasn't been confusing, however, as these formations continue to break exactly as they would be expected to break and are retested exactly as they could be expected to be retested. Early this morning, the proximity of near strong support and overhead resistance, as well as other factors, led me to conclude that the day might be directionless, and that's the way it's been. If we could trade the OEX as futures are traded, without worrying about those big bid/ask spreads as we scalped a little here and a little there, the day might not have been so frustrating, but that's the way it is.

  Mark Wnetrzak   5/21/200,  3:25:51 PM
Covered-Call Updates

The issues in the covered-call model portfolio are holding up relatively well during this consolidation phase in the major averages. Marvell Technology (NASDAQ:MRVL), an In-The-Money covered-call position (long stock, short JUN-$25 calls, cost basis ~ $23.62), reports earnings after the close today.

  Jonathan Levinson   5/21/200,  3:16:36 PM
Hey Jonathan...have you noticed the VERY strange action in CEF over the past week? Pull up a relative strength chart of CEF vs. GC03M and somebody is really sucking the premium out of the shares. I think it must be down to something on the order of 6-8% now. GC03M up $18 since Friday, and CEF is essentially unchanged. Just seems weird to me, and wondering if you’ve heard any news that would explain the divergence...

Yes, but it's forex news. The Canadian dollar has rallied so much against the USD that Central Fund of Canada's shares have sunk. The Canadian dollar rally has led to gold prices remaining flat in that currency, and the share premium over NAV in CEF has declined in sympathy, actually dragging down share prices over the past week. The CDN dollar rally is causing a disaster for Canadian speculators in US financial products, as the value of a US dollar in CDN funds continues to shrink dramatically.

  Jonathan Levinson   5/21/200,  3:13:46 PM
The five year yield closed right at its high of the day, up 5.4 bps. QQQ remains within this frustrating range, still waiting for a break below 27.53.

  Linda Piazza   5/21/200,  3:06:25 PM
The OEX just fell out of the not-meeting-all-parameters bear-flag channel mentioned in my 14:55 post. Even if it's not classic, a retest of the channel wouldn't be surprising, with the channel's bottom line now crossing just below 465. Neither would I be surprised by a fall down toward the top of this afternoon's violated bull-flag channel and the extended lines of the rising wedge, all now crossing near 462-462.50.

  Jonathan Levinson   5/21/200,  2:58:24 PM
The US Dollar Index is hitting its highs of the day at 93.56. Despite this, June gold is holding up, currently up 5.80 to 372.30. HUI +2.01. So, dollar up, bonds down, stocks down, gold up? Something's gotta give.

  Jeff Bailey   5/21/200,  2:55:36 PM
SPX 922.01 +0.26% .... interesting 5-minute bar chart shows some bid holding at the WEEKLY S2 of 921.40 in last 25-minutes. This may hint that some computer programs now more "even" and slight move above the WEEKLY S2 becomes "buy side" bias. As such, shorter-term bull then may look for a "sell bias" on any rally to 932.9 as computers then look to dish out some of the inventory build at recent 2-day lower levels. If volume and market participant buying were to be strong to WEEKLY S1, then shorter-term bull's target of 940 and WEEKLY pivot then in play.

  Linda Piazza   5/21/200,  2:55:24 PM
At least it's been interesting watching patterns develop today, even if my charts are now so marked up that I can't see the candles! Since moving out of the bull-flag channel, the OEX has been trading in another regression channel--this one is an upward-trending regression channel in a tight pattern of higher lows and higher highs, potentially a bear-flag pattern. However, it doesn't meet the other parameters of a bear-flag pattern. It didn't occur after a steep fall, for example. I'll watch it as it's interesting to see how these micro-view patterns play out, but I'm watching hourly and daily charts for direction longer than an afternoon. On the hourly chart, today's action has brought the 5(3)3 stochastics all the way toward overbought levels again. Hourly ADX slopes down strongly, not yet below the 20 level that indicates that we can trust oscillators to indicate real direction, but getting there. Buying pressure and selling pressure both decreased today, with selling pressure falling off strongly on the hourly chart. RSI is not near overbought levels as yet, but may be hinging down just under a descending trendline that had been capping its movements from late April through early May. The 21(3)3 stochs move up out of oversold territory, though and CCI edges into the green, signaling caution for those in short-term bearish positions wishing to guard accrued profits. When the 5(3)3's and 21(3)3's oppose each other as they appear to do on the hourly charts, I sometimes find that trading conditions are choppy. It's possible we'll experience more choppy trading ahead, although perhaps tomorrow's economic numbers will swing short-term sentiment one direction or the other.

  Jonathan Levinson   5/21/200,  2:52:49 PM
Price is currently ping-ponging between the 23.6% and 38.2% retracement levels off the lows of the day, 27.61 and 27.68. FVX continues higher, up 3.6 bps currently, and the lack of downside movement is making me uncertain. My intraday oscillators are entering a downphase, and if it's shallow, then the next up could provide some serious lift.

  Jeff Bailey   5/21/200,  2:40:19 PM
Intra-day new highs/lows plugged in the current 02:00 PM EST mark of new highs new lows for NYSE (180:7) and NASDAQ (64:7).

Has my ratio for NYSE at 96.3%, which would be up from yesterday's 96.3%, and NASDAQ at 90.1%, which would be down from yesterday's 90.1%.

(see 12:41:51) comments

  Linda Piazza   5/21/200,  2:37:30 PM
That potential OEX bull-flag pattern mentioned in my 13:57 post and shown in a linked chart was indeed a bull-flag pattern. The OEX broke out of that pattern and moved up toward the violated rising wedge, but the OEX made a temporary lower high on the five-minute chart while oscillators also made a temporary lower high. The OEX's behavior remains choppy today, however, as it turns around and tries again. I wouldn't count anything out--either another push up toward that rising wedge or a fall toward the 200-ema or just staying put right where it is--into the end of the day.

  Jonathan Levinson   5/21/200,  2:36:16 PM
A headfake above the descending upper trendline touched above 27.70 briefly but is now just below the line at 27.65. FVX is well off its lows, +3.2 bps and potentially adding fuel for equities.

  Jonathan Levinson   5/21/200,  1:59:47 PM
QQQ flunked out at the upper descending trendline and is approaching the middle trendline on that impromptu fan I drew on the intraday chart. 27.50 should provide some support on the way down. MSFT continues to lead the way, just 2 cents off its intraday low of 23.94.

  Jeff Bailey   5/21/200,  1:58:59 PM
Monster Worldwide (MNST) $17.73 +0.16% .... was listening to CNBC and discussion of stocks with high short-interest. MNST was one of 3 mentioned (PIXR and FS were other two).

After triggering a "triple-top" buy signal at $14 (note: www.stockcharts.com PnF chart is incorrect), MNST has been on a tear. This is the "old" TMPW, that changed its name to better reflect its popular Monster.com job search engine.

While the PnF bullish vertical count would be $31.50, I find three things interesting for potential "topping" action.

1) Jobs data has been very weak (fundamental) 2) According to Professor Davis' study, the triple-top buy signal in a bullish market/SECTOR environment is profitable 87.9% of the time, for an average gain of 28.7% in 6.8 months on average. From $14.00, where the triple-top buy signal was given, a 28.7% gain would give a bullish objective of $18.08 (stock traded $19.17 on Friday) 3) Not too unlike the major market bullish %, the "media" sector bullish % (BPMEDI) from Dorsey/Wright and Associates is "bull confirmed" at 66%, and nearing the more "overbought" 70% level.

This may be a stock for more "speculative" bears to keep an eye on near-term and perhaps look for partial bearish positions ahead of tomorrow's weekly jobless claims data.

I'm having some difficulty with my options chains, but would also look into a "straddle" or "strangle" options strategy on this more volatile stock.

  Linda Piazza   5/21/200,  1:57:56 PM
Here's what I'm watching on the OEX five-minute chart: Link

  Linda Piazza   5/21/200,  1:45:38 PM
So far, it looks as if that 12:52 ET retest of the OEX rising wedge may be the only one we're going to get in the near term, although I'm finding myself skeptical of OEX direction. All is behaving according to expected norms--a rising wedge (normally bearish) is broken to the downside, as is normal and expected, and then retested, as is normal and expected, and the retest failed, as is normal and expected--but I'm not sure we're seeing the precipitous fall that would be normal and expected on a failure to successfully break that resistance. That's one factor keeping me uncertain, but I do note that hourly 5(3)3 stochastics now measure in the mid-60's, nearing overbought levels, and are beginning to lean every so slightly toward the right. There's no bearish kiss as yet. RSI also hinges ever so slightly to the downside. It's all tentative as yet, and I'm feeling tentative in my conclusions, too.

  Jonathan Levinson   5/21/200,  1:35:19 PM
MSFT is under 24, definitely a wet blanket on bullish aspirations today.

  Linda Piazza   5/21/200,  1:35:06 PM
Here's a chart I first showed on May 10, depicting NYSE new high/low ratios ($NYHLR). At that time, it appeared that a reversal signal might be imminent due to the bearish divergence seen on the stochs and the highly overbought nature of the RSI. I commented that I was new to studying this ratio (my favored form of studying volume patterns) in chart format, but I was able to connect recent market peaks with peaks in this value. When I showed the chart again on May 14, those reversal signals had begun to develop. This week's behavior shows a follow-through on the development. Although I can't state that there's a day-by-day correspondence with the peaks in this value and the peaks in the market since one sometimes lags another by a few days, this does correspond with my weeks-long concern about the imbalance seen between new highs and new lows and whether that imbalance might be a contrarian indicator. On the Monitor today, Jeff has been promising to show some interesting P&F charts using different new highs/new lows calculations in tonight's update, so I'll look forward to getting his input, too, learning more along with the rest of you. Link

  Jonathan Levinson   5/21/200,  1:32:57 PM
I recall last Fall that there was a lot of talk of JPM (or perhaps GS) being extremely overleveraged to the short side on gold, and that a rally in gold to the levels we see now (360+) would crush them. Was this just talk or did such a situation exist? If this was true did they unwind or is that still looming and is this a skeleton in the closet?

Some traders referred to this as the "700-story derivatives tower". It's been less discussed this year after the financial world's failure to come to an abrupt, cataclysmic end last fall, but to the best of my knowledge it was never resolved one way or the other. The story grew out of stories of leasing of gold by central banks to investment banks (JPM, primarily), who then dumped the gold on the open market. The lease rates were reputedly very, very low- less than 1% per annum. Because most derivatives are not regularly marked to market and are over-the-counter, accurate estimates of total derivatives value are impossible. I've heard numbers like $110T, with JPM exposed to more than half of it. There's no way to verify, much less trade information like this. I have no idea whether it's true or not. Nevertheless, stories like this are one reason why goldbugs advocate the ownership of physical gold and silver, and not merely contracts or shares- in the event of a massive financial "event", only that which you hold in your hand would be accessible.

  Jim Brown   5/21/200,  1:29:58 PM
The word wrap issue has been corrected.

  Jonathan Levinson   5/21/200,  1:27:24 PM
The upper trendline has held thus far, but little downside action yet, making another test likely: Link

  Jonathan Levinson   5/21/200,  1:24:04 PM
I wonder if Millhouse is going to attribute the blast up in gold to a particularly heavy wedding weekend planned for India.

HUI is up 1.89 to 142.67, XAU +.88 to 75.16.

  Linda Piazza   5/21/200,  1:21:41 PM
The SOX still sits right above its 200-ema, currently less than a point above that level. The SMH sits less than a penny above its 200-ema. Studying OBV on the SMH daily chart (because volume levels are tallied on the SMH), I note that OBV has been declining since May 6. SMH prices continued to make a slightly higher high on May 12, while OBV made a lower high, showing bearish divergence. So far, OBV continues down.

  Jonathan Levinson   5/21/200,  1:17:15 PM
Can you spell "squeeze"? Well, it's happening to shorts in gold, June gold now up 5.30 to 371.80.

  Linda Piazza   5/21/200,  1:08:05 PM
The OEX did test the bottom of that rising wedge, rising as high as 465.57, fairly close the 465.50 I mentioned in my 12:49 post. The OEX has since pulled back, but the pullback is far from settled as yet, with 60-minute indicators being somewhat inconclusive at the moment. Chart formations seen on five-minute charts are not particularly reliable indicators anyway, but this is just one method of watching very short-term direction. I wouldn't be surprised to see another retest of that rising wedge.

  Jeff Bailey   5/21/200,  12:57:44 PM
HMO Index (HMO.X) 649.43 +1.23% starting to "pack on" further gains and session high, still looks to challenge all-time high of 664.43.

OI's "play of the day" in Oxford Health (OHP) $36.91 +1.09 back to challenge its intra-day high of $37.00.

Disclosure: I currently own bullish position in OHP (from today)

  Jonathan Levinson   5/21/200,  12:56:03 PM
QQQ holding just below 27.68 resistance.

  Jeff Bailey   5/21/200,  12:52:16 PM
Stocks lift back near session highs.

Wow!.... 30-year YIELD ($TYX.X) falling to 4.303% down 5.9 basis points, while shorter-term 5-year YIELD ($FVX.X) rises 1.1 basis points to 2.328%. This has intra-day YIELD curve flattening out and can be bullish for equities.

SPX making its "move" above 922.69 (per 12:08:34) and looking for a rally here.

  Linda Piazza   5/21/200,  12:49:29 PM
On the OEX five-minute chart, I still show the OEX running up to retest this morning's violated rising wedge formation, with the bottom of that formation now crossing near 465.50, but rising as the day goes on. I wouldn't be surprised to see a retest of yesterday's resistance near 466.25 and today's violated rising wedge be coincident, but we'll just have to see.

  Jonathan Levinson   5/21/200,  12:43:54 PM
Upside break out of that pennant on QQQ, now headed for trendline resistance, which coincides with fib resistance at 27.68.

  Jeff Bailey   5/21/200,  12:41:51 PM
52-week high/low ratio ... per 12:08:34 and last night's Index Trader Wrap. In early May, I've started my own "high/low" indicator that would be similar to how Dorsey/Wright and Associates builds their "hilo" indicator for both the NYSE and NASDAQ. Last night, I showed the high/lows for the NYSE and NASDAQ and discussed the NASDAQ's "dropp off" in new 52-week highs, which might make sense given the higher levels of bullish %. Still, it can be difficult to really "understand" high/low by itself, and building of a ratio helps put things in perspective. Even "funner" and more informative is when we chart these changed on a PnF chart. By taking the 10-day average, "noise" is reduced or day-to-day volatility. I've easily calculated a 5-day average for some of your shorter-term traders that like to look for cross-overs to perhaps signal shorter-term shifts. Link

Equation used to calculate ratio? Take the # of new highs and divide it by the sum of Highs and Lows. So... for 05/20/03 for NYSE excel equation (cell T18) would be this. =((O18)/(O18+P18))

  Linda Piazza   5/21/200,  12:38:32 PM
Volume patterns show more decliners than advancers on both the NYSE and the Nasdaq, and higher down volume than up volume on both, although the difference is minimal on the NYSE. On the Nasdaq, down volume is running about twice up volume. Total volume is 464 million shares traded on the NYSE, and 814 million on the Nasdaq.

  Ray Cummins   5/21/200,  12:38:19 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity

Another volatile session for stocks as the majority of sectors, including the technology group, continue to slump while tobacco issues and oil and gas services shares move higher. That's good news for many of the positions in our portfolio however, the recent trend has pushed a few stocks on to the "watch" list such as KLA-Tencor (NASADQ:KLAC) and Linear Technology (NASDAQ:LLTC), which are suffering alongside the semiconductor segment, and Devon Energy (NYSE:DVN) and Anadarko Petroleum (NYSE:APC), which are rallying amid the upturn in the oil service sector. On the bright side, our new selections in the healthcare group; Unitedhealth (NYSE:UNH) and WellPoint (NYSE:WLP), are soaring in conjunction with bullish momentum in that segment. Boston Scientific (NYSE:BSX) also continues to be a solid performer with the issue testing the $50 mark after the company reported favorable follow-up data on their drug-eluting stent platform (TAXUS). Investors focused on optimistic statements from the firm's Medical Director and Vice President, who said that "The results we are reporting today demonstrate consistent safety and efficacy across four studies, expansion into higher-risk patients, and that the benefit for patients is sustained past two years."

  Jonathan Levinson   5/21/200,  12:30:36 PM
QQQ is heading into a neutral pennant that should resolve shortly. The bulk of my intraday trendlines are downsloping, and downward is where my bias is pointing me for this pennant break. Yields are not giving us much further downside confirmation, though, and QQQ 27.44 remains the low of the day. A bounce from here would not surprise me, but it shouldn't get far in any event. Upper trendline resistance is currently just below 27.70.

  Mark Phillips   5/21/200,  12:22:58 PM
The Results Are In My thanks go out to all who responded to my request for feedback on my recent series of articles. The overwhelming conclusion I reaached after reading all the responses that came in over the past two days is that I need to be more clear! Of the more than 100 responses I received, 95% of those who answered my question said they liked the degree to which I was covering the MOPO trade setup and would like me to continue that series of articles as the situation continues to unfold. Thanks for the support, guys!

Unfortunately, that wasn't the question I wanted answered. What I was looking for was feedback on the series of articles I've started on putting together a trading plan for Futures trading. Like I said above, apparently I didn't phrase the question clearly enough. Fortunately, I did get some really good feedback from those of you that were able to read my mind. All of those issues and concerns that were raised are right on the money and very much in line with where I see the series continuing in our next several installments. We'll be talking about what timeframe charts I'm using, what indicators, entry/exit criteria and lots of other issues related to actual trades. Additionally, I plan on going into a fair amount of detail on account management, broker selection, trade size (related to account size and strength of a given entry signal). It ought to be an educational trip for all who choose to take it with me. We'll pick up where we left off on June 2nd, since there will be no Monday newsletter next week due to the Memorial Day holiday.

  Jeff Bailey   5/21/200,  12:08:34 PM
S&P 500 (SPX.X) 916.61 -0.3% ... Hi Jeff See there is something else on my mind but RYURX. Awhile ago you had a buy if the S&P cash hit 913, I see you have now have a trade buy @905-900 Do you still think 913 is a viable entry ? Thanks

Yes I do think SPX 913 is a viable entry, but I'm also a bit superstitious with the number "13." I'm serious! One of the poorest trades I ever made was when I bought at stock at $13.00, so.... I don't like 13.

However.... in last night's Index Trader wrap, do you remember how we placed two "conventional" retracmement on the SPX chart? I'm just noting now that today's SPX high was 922.56. I may be imagining things here, but all be darned if it doesn't look like that little "zone of resistance" with these two retracment looks to have been in play earlier this morning.

Now.... a trader with a QQQ bearish position from prior two profiles for 1/4, can certainly be open to an SPX bullish at/near 913. I tell you what. Another number, as weird as it seems that I've seen in the matrix and some daily action in the SPX in past is 911. Link (see SPX PnF chart and prior WEEKLY S2 of 911) (now everyone thinks I'm crazy/superstitious, but that's OK, and perhaps, partially true).

I'm noting today, right now, that DAILY Stochastics (5,3,3) are now "oversold." I think a bullish trade setup for SHORT-TERM bullish are in place, on a move above the 922.69 level. Ideally, a good trade setup for bull trade is to let today pass, get an "inside day" and then look for the rebound tomorrow.

If we can just hold in here today, then I get to look at the bullish % and another shorter-term PnF chart I will discuss later today. It has to do with last night's "first chart" of the market internals and new high/new low breadth. Dorsey/Wright and Associates uses the new high/low breadth to build a shorter-term supply/demand chart that tends to act like a bullish % chart, but moves a little faster at times.

  Linda Piazza   5/21/200,  12:02:29 PM
The TRAN has now fallen beneath the 38.2% retracement of the March-to-March decline, with that level at about 2357. A 38.2% retracement of the March-to-May rally is near 2275, and that may be a next target, although the round-number support at 2300 can't be discounted, either.

  Jonathan Levinson   5/21/200,  12:01:25 PM
Yields continue to sink, with FVX now -1.8 bps, TNX -5 bps and TYX -7.6 bps.

  Jonathan Levinson   5/21/200,  11:50:23 AM
Al Green has finished testifying.

  Jonathan Levinson   5/21/200,  11:48:25 AM
Yields have gone negative across the curve, while June gold is now trading above 369/oz and HUI and XAU are positive. The US Dollar Index is seeing large spikes, the one of which broke below 93.10. Still little direction near the lows, but the pattern of lower highs today continues to hold.

  Mark Phillips   5/21/200,  11:38:04 AM
We're getting to some critical levels again as the lunchtime lull approaches. Looking through the OI play list, here are the stocks and levels that I'm watching.

AIG - Currently trading $54.83, with $54.50 being key support for a continued downward move.

GM - After vacillating throughout the morning, GM once again nearing the $33.00 level. We need a solid move below this level to usher inthe next wave down.

GS - After trading both sides of the $74 support level this morning, GS appears to be weakening as resistance seems to be building in the $75 area.

JCI - Flirting with the $80 support level after yesterday's dip below and then rebound above it. 200-dma at $79.96 is the key and needs to break for a continued downward move.

MTG - This play has been incredibly resistant to move down, almost as though it is super-glued to the declining 200-dma. But with the price racking below the ascending trendline yesterday and today, it looks like weakness is gaining the upper hand. Note that the intraday lows over the past couple days are coming in just above the lower Bollinger Band.

  Linda Piazza   5/21/200,  11:38:00 AM
European markets attempt to climb off their lows, too, with the FTSE 100 currently at 3926.20, the CAC 40 currently at 2881.44, and the DAX currently at 2809.70, having regained 2800. All remain down more than 1% on the day.

  Linda Piazza   5/21/200,  11:28:56 AM
The rising wedge on the five-minute OEX charts was firmly broken to the downside. Five-minute and one-minute charts appear to show the OEX gearing up for a retest of the bottom of that rising wedge, currently near yesterday's support level at 463.60. This will be a next test for those holding bearish positions.

  Linda Piazza   5/21/200,  11:20:17 AM
Volume patterns show more decliners than advancers on both the NYSE and the Nasdaq, but by a slim margin on the NYSE. Up volume outpaces down volume on the NYSE by a small margin, but the opposite is true of the Nasdaq. Total volume is 425 million on the NYSE and 567 million on the Nasdaq. New highs continue to vastly outnumber new lows, but the number of new lows has begun to creep up. I've been mentioning this imbalance for several weeks now, and charts are beginning to show some early reversal patterns in the new highs/new lows.

  Jonathan Levinson   5/21/200,  11:16:44 AM
Put to call ratio now 1.04, with equity pcr down to .88, index pcr 1.62.

  Jonathan Levinson   5/21/200,  11:14:32 AM

  Jonathan Levinson   5/21/200,  11:13:19 AM
The Greenspan Put under gold is alive and well, with June gold bidding 369.10, HUI +.23 to 141.02 and XAU +.15 to 74.43.

  Linda Piazza   5/21/200,  11:09:42 AM
The OEX currently tests the bottom of the rising wedge that I mentioned earlier, and appears to be falling out of the wedge, but there has not yet been even a five-minute close beneath the wedge.

  Jonathan Levinson   5/21/200,  11:00:46 AM

  Linda Piazza   5/21/200,  10:58:52 AM
Studying the OEX five-minute charts, I note the possibility that the OEX has been forming a rising wedge (usually bearish, but not always) since about 2:30 ET yesterday afternoon. The five-minute 5(3)3 stochastics have just signaled bearish divergence, with a lower stochastics high as the OEX made a higher five-minute high. Again, that 200-ema is lurking just below . . .

  Jonathan Levinson   5/21/200,  10:55:01 AM
QQQ has put in a lower high here, failing at the 50% fib retracement of 27.68, now finding support at the 38.2% 27.53 level. MSFT is printing new lows, latest at 24.24.

  Jonathan Levinson   5/21/200,  10:43:10 AM
MSFT LOD, -1.24%

  Jeff Bailey   5/21/200,  10:42:21 AM
Genentech (DNA) $55.74 +1.32% .... Jeff: Are you still holding your DNA calls? I was also wondering if you had a new bullish target considering the stock has surpassed your prior bullish targets from 49.

I've sold 1/2 of my bullish position, but I'm also going to suggest we raise stops from just below $48 to $53. What I've done to determine this is simply drage the uppwer end of my retracement that I had set at $48.00 to reflect the reverse head/shoulder pattern to the highs of 12/06/01 at $58.95. "Boom!" do you see how the 80.9% retracement and 61.8% retracement do a pretty good job of tying in with recent three session trade?

I'll make up a chart for the 11:00 Update. What this does is give me a further bullish target of $58.95, but just as important, a level at $53.80, where I can now raise a profit stop to.

  Linda Piazza   5/21/200,  10:41:55 AM
The SOX managed a close just above its 200-ema yesterday and now sits little more than 1 point above that MA this morning. This is a could-go-either-way moment for the SOX, too. I believe that longer-term oscillators predict that these 200-ema's will ultimately fail, but perhaps not on this retest.

  Jonathan Levinson   5/21/200,  10:41:35 AM
Put to call ratio 1.06, with equity pcr .95 and index pcr 1.51. MSFT is headed lower still, still leading QQQ to the downside.

  Linda Piazza   5/21/200,  10:38:26 AM
Despite the climbing 60-minute 5(3)3 stochastics, the OEX keeps failing in its test of that bear-flag pattern. This doesn't look good for the OEX on the surface, but I keep thinking about that 200-ema just below. For those already in bearish OEX plays, things are looking okay for the moment, but if you intended only a short day-or-so play, then I'd be closely watching how the OEX behaves here, especially as Greenspan finishes speaking. I could envision a scenario in which the OEX pops back to near-term resistance or perhaps even to stronger resistance if those daily 5(3)3 stochastics get turned back up, or a scenario in which the OEX falls through the 200-ema and selling accelerates.

  Jonathan Levinson   5/21/200,  10:24:14 AM
Did he just pronounce it "monetory"? Oh, the humanity.

Here's the 2 day QQQ chart showing a failure at descending trendline resistance: Link

  Jonathan Levinson   5/21/200,  10:22:02 AM
QQQ is finding resistance at the 61.8% retracement off yesterday's low, 27.74.

  Linda Piazza   5/21/200,  10:19:24 AM
If the OEX should continue its current climb, next watch the 466.25 area.

  Jonathan Levinson   5/21/200,  10:18:32 AM
MSFT continues to lag the QQQ on this bounce, down .69% vs. -.20% for the Qubes.

  Linda Piazza   5/21/200,  10:16:58 AM
SONY (SNE, 24.70): For those involved in SNE plays, the stock may be dropping today beneath a possible bear-flag pattern on the daily charts as ADX shows as increase in selling pressure and a decrease in buying pressure. I would not consider that violation of the bear-flag pattern confirmed until either an unsuccessful retest of the bottom of the pattern or a fall beneath Monday's low of 24.01. As I've mentioned in other posts, I'm not recommending a play in Sony because so much of its behavior depends on decisions made by the BOJ, to which I am not privy, but I provide these updates for those already in plays. Both the bar chart and the P&F chart show bearish developments, but those currently in bearish plays should also remain aware of the April 28 low of 23.16, another possible bounce point.

  Jeff Bailey   5/21/200,  10:16:12 AM
Oxford Health (OHP) $36.84 +0.93% ... today's "play of the day" and makes me "smile." Subscriber's did well in OHP last spring/summer and I see very similar bar chart dynamics again.

"Break away gap" a couple of weeks ago an BIG volume now looks to extend. It was in early January (01/02/02) of 2002 that OHP was profiled bullish on such a gap higher. Link

Here's the bar chart of OHP up to today. Link I "like" that volume gap higher, then more volume on the move up and through the 200-day SMA. Look for 200-day support from here.

I don't know who at OI picked this one, but I LIKE it!

  Jonathan Levinson   5/21/200,  10:13:10 AM
Al Green's homies are backing him up with a 7.25B overnight repo, which adds 1.75B against the expiring 5.5B repo from yesterday.

  Jonathan Levinson   5/21/200,  10:10:11 AM
The opening put to call ratio was 1.07, with an equity pcr of .97 and index pcr 1.61.

  Linda Piazza   5/21/200,  10:08:01 AM
The VIX gapped up and currently measures 24.34, but volatility may decrease after Greenspan finishes speaking.

  Jonathan Levinson   5/21/200,  10:07:51 AM
The US Dollar Index is getting sold aggressively again, down at 93.38.

  Jonathan Levinson   5/21/200,  10:06:04 AM
FVX is up 2.1 bps while TYX is down 4.2 bps. TRINQ 1.33, QQV -.36, TICK.NQ -42.

  Linda Piazza   5/21/200,  10:05:57 AM
As OEX prices turn down from an unsuccessful retest of yesterday's OEX bear-flag pattern, 60-minute oscillators give unclear signals. The 5(3)3 stochastics had been in the process of turning up in a full bullish run, but the slow line does not now seem committed to that bullish run. RSI had hinged up, but now hinges back down. The 21(3)3 stochastics are mostly flat in deeply oversold territory. Taking a look at the daily chart shows that daily 5(3)3 stochastics near oversold levels, too, but they have not quite reached that level and have not made the slightest attempt to turn up. Other oscillators have not yet reached oversold levels. Weekly oscillators all turn down. Intermediate-term direction appears to be down, then, but I am cautious about the day's direction with those hourly oversold indicators and with the 200-ema (460.48) not so far below the OEX's current level.

  Jonathan Levinson   5/21/200,  10:02:35 AM
The simpletons on Bloomberg radio have concluded from Al Green's comments that the economy is poised to grow.

  Jonathan Levinson   5/21/200,  9:58:47 AM
Al Green is discussing the possibility of buying longer dated maturities even if the fed funds rate went to zero. Now I'm hearing "buy gold" in addition to "buy gas".

  Jonathan Levinson   5/21/200,  9:56:34 AM
June gold is now up 1.90, at 368.40, though miners are down, HUI -.89 and XAU -.44.

  Jonathan Levinson   5/21/200,  9:51:47 AM
Al Green is finding many ways to say "buy natural gas".

  Linda Piazza   5/21/200,  9:50:53 AM
I just noticed that the headline on the Bloomberg article concerning Greenspan's speech reads "Fed's Greenspan Says Forecast for Faster U.S. Growth Is 'Not Unreasonable,'" giving a positive spin to the comments. That may be predictive of other headlines.

  Jonathan Levinson   5/21/200,  9:49:42 AM
Al Green is marvelling at how businesses are discovering previously unexploited productivity in those workers who have not been fired.

  Linda Piazza   5/21/200,  9:46:38 AM
CSCO(15.72, down $.27) gapped down today on the Deutsche Bank Alex Brown downgrade Jonathan mentioned earlier, but it had been moving down all week. Here's a chart showing a formation I've been watching since January, when it appeared that CSCO might be on the verge of completing a reverse H&S formation. CSCO rejected the neckline in January, going on to form another right shoulder, as sometimes happens. Is CSCO again rejecting that neckline level? Link

  Jonathan Levinson   5/21/200,  9:45:14 AM
QQQ is just off its lows of the day, at the 23.6% retracement off yesterday's low.

  Jonathan Levinson   5/21/200,  9:36:01 AM
Weakness at the open, with QQQ down .20 at 27.60, FVX up 3.7 and giving back some of its gain, QQV +.13, TRINQ 1.25, TICK.NQ -275.

  Jeff Bailey   5/21/200,  9:28:02 AM
Gaming stocks expected to be under some selling pressure after Illinois' Governor voted "no" to expand gambling in the state. Stocks known to have some exposure to Illinois gaming are IGT Link , HET Link , PENN Link , BYD Link , MBG Link and AGY Link

  Jeff Bailey   5/21/200,  9:15:51 AM
09:00 Update posted at this Link

  Linda Piazza   5/21/200,  8:52:53 AM
Perusing Marketwatch.com for news, I note an 8:16 ET notation that CNBC is saying that an Al-Qaida (Qaeda? Why does everyone spell this differently?) statement will be issued within an hour. I didn't hear the CNBC statement.

  Jonathan Levinson   5/21/200,  8:44:18 AM
Al Green will be addressing the Join Economic Committee today. This is a great treat. Let's warm up with a view of the Marriner S. Eccles building, inside which Al Green is no doubt preening in front of a huge studio mirror: Link

  Jonathan Levinson   5/21/200,  8:41:04 AM
The fed has finally updated its open market operations page.

  Jonathan Levinson   5/21/200,  8:39:37 AM
Deustchebank cuts CSCO to "hold".

  Jonathan Levinson   5/21/200,  8:27:20 AM
The US Dollar Index is up to 93.41, and June gold is down to 365.40. Bonds are seeing selling this morning, with FVX -5.3 bps, TNX -5.1 and TYX -3.6 bps. The futures had dipped but are recovering now, with NQ -2 at 1116, ES -1.75 at 917.50, QQQ 27.72.

  Jim Brown   5/21/200,  7:56:44 AM
Reloading Market Monitor App (server will be down for 5 minutes) please reconnect after the reload

  Linda Piazza   5/21/200,  7:21:38 AM
Good morning. Many have speculated how SARS would impact global economies, especially Asian economies. Late yesterday, Japan's Cabinet Office quantified that impact for Japan. If SARS results in a decline in exports, Japan's economic growth could decline 0.05%. The blow could be worse if China endures further manufacturing industry disruptions. Despite this worry, the Nikkei opened up in Wednesday's trading. Computer-related stocks rose in reaction to Hewlett-Packard's Q2 results, announced yesterday after the bell, despite HPQ's mention that server and printer sales rose but sales of personal computers fell. Banks rebounded, helped both by the recent announcement of a government easing policy and by hopes engendered by an upcoming May 23 meeting between President Bush and Japan's Prime Minister. By the midday break, the Nikkei sank to near-flat levels. In the afternoon, the banks retained their gains, with Resona gaining 19.6%, but computer-related stocks slid, closing flat. The Nikkei declined in afternoon trading, dipping below 8000 at one point but ending down 40.97 points or 0.51%, at 8018.51. Many other Asian markets fell, too, with Taiwan's Weighted falling 0.82% and Singapore's Straits Times falling 0.65%, but South Korea's Kospi fell only 0.25% and Hong Kong's Hang Seng closed up 0.10%.

Most European markets currently trade down, most more than 1%. Bloomberg reports that Bank of England policy makers have begun signaling that a rate cut might be coming, depending on how the pound performs against the euro. Right now, the pound is at a four-year low against the euro, and would need to rise for that rate cut to be considered. The minutes of the May meeting of the U.K.'s Monetary Policy Committee reveal a 5:4 split to lower rates. One concern at that meeting was the effect of a reduction on the 3% average inflation over recent months. Inflation rates need to fall below the bank's 2.5% target for the rate cut to be considered less problematic.

The CEO of Europe's largest consumer electronics manufacturer, Royal Philips Electronics, said that the declining U.S. dollar and economic doldrums were pressuring revenues. The company's stock declined. Many other companies depending on U.S. sales or accounts also dropped, including Thomson, the maker of RCA televisions, and Axa, Europe's second-biggest insurance company, dependent on the U.S. accounts for 20% of its revenue. Perhaps of interest to U.S. investors is the news that Vivendi Vice Chairman Edgar Bronfman Jr. seeks to form a group of investors to buy back Seagram's U.S. entertainment units after his family sold Seagram to Vivendi in late 2000. Vivendi gained in early European trading.

Currently, the FTSE 100 trades down 57.40 points or 1.45%, to 3914.20, and has been declining throughout the day from its opening high of the day. The CAC 40 trades down 55.28 points or 1.92%, to 2821.98; and the DAX trades down 54.78 points or 1.93%, to 2784.15. The CAC and DAX also currently trade near their lows of the day. Although Stockcharts.com has not yet updated their charts today, I believe the DAX's trade below 2800 results in a new P&F sell signal.

  Jeff Bailey   5/21/200,  2:15:00 AM
The Index Trader Wrap has been posted: Link

  Jonathan Levinson   5/21/200,  2:14:52 AM
The Futures Trader Wrap has been posted: Link

  James Brown   5/21/200,  2:14:25 AM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

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