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  Linda Piazza   5/22/200,  3:37:50 PM
I'm still having difficulties staying connect, and am having to make this post through a dial-up connection. I can't access Q-charts easily through this connection, so this may be my last post of the day. I noted that OEX 60-minute charts are showing oscillators all in territory indicating overbought conditions or nearing that territory. With buying pressure and selling pressure both decreasing today, 60-minute ADX has flattened but has refused to fall below the 20 level that would indicate that the rallying trend has ended and that we can fully trust those oscillators. Daily oscillators, however, show bullish tendencies, with the RSI turning up and 21(3)3 stochastics making a bullish kiss. Daily MACD is somewhat inconclusive, however, and ADX has been moving down strongly since May 16, indicating a lessening in the former ascending trend. (One note: when a trend is in place, we often can trust the oscillators when they give signals in the direction of the trend, but often can't trust them when they give signals opposite the trend's direction. In that case, they may indicate nothing more than consolidation.)

The daily candles also seem to predict a possible reversal. Having the hourly and the daily oscillators opposing each other makes it difficult to predict short-term direction. The markets have not yet retraced even 38.2% of the March rally, so I don't think this has completed "the" pullback; however, perhaps those daily oscillators and candlestick patterns predict another run at higher levels while the oscillators cycle back up again and then turn down for the real pullback. Perhaps that will happen after a downturn or consolidation tomorrow while the hourly oscillators reset themselves to oversold and then cycle back up again. Perhaps not, though. In the early part of the March rally, the 21(3)3 hourly stochastics stayed fully overbought for more than 40 hourly candles. For those of you who have not yet read Mark Phillips' article on his theory about what will happen next, you might access it at Link as it's looking more and more feasible. Much depends on what happens tomorrow, as a deeper pullback while the hourly oscillators reset themselves can tug those daily oscillators down again.

  Jonathan Levinson   5/22/200,  3:11:56 PM
I keep swearing I'll become a dip buyer, but I can't type and hold my nose simultaneously... QQQ is hitting new highs, but MSFT is barely twitching. Imagine what whould be happening if MSFT and GE were showing strength? FVX closed near its lows, the TRINQ is now in extreme territory at .32, QQV has collapsed to 25.49, TICK.NQ +216. So far, the shallow pullbacks are the most bullish thing I've seen, but the light volume on the COMPX during the past few days isn't indicative of a significant bottom having been printed, which implies that today's bull run is starting from shaky ground.

  Jeff Bailey   5/22/200,  3:09:53 PM
SPX 934 +1.15% ... breaks above weekly S1 in strong fashion. Intra-day target builds to 936.

  Jeff Bailey   5/22/200,  3:03:46 PM
SPX 932.71 +1% .... back for its 4th test of the day at WEEKLY S1 of 932.90. Recent intra-day lower low from will certainly test a shorter-term bull's conviction to press the index higher.

S&P Banks (BIX.X) 293.40 +0.27% trying to show a bid. Sometimes it only takes just a little bit of bullishness from a daily laggard to get the major index enough "umph" to push higher.

  Linda Piazza   5/22/200,  2:52:59 PM
I'm back on for a moment, and wanted to note that total volume is now just over 1 billion for the NYSE and 1.3 billion for the Nasdaq. Adv/dec ratios are 1.8 for the NYSE and 1.5 for the Nasdaq. Up volume is three times down volume on both the NYSE and the Nasdaq.

  Jeff Bailey   5/22/200,  2:48:44 PM
Now I've seen it all .... CNBC showing Annika Sorenstam's score at the Colonial just above the major market averages trade on their ticker. It's probably been there all day, but I'm just seeing it now.

  Jeff Bailey   5/22/200,  2:45:42 PM
S&P Banks Index (BIX.X) 292.59 (unch) .... sector "popped" at the open, but has been a laggared for SPX/OEX. Selling looks to have come when Keefe Bruyette downgraded some banks with exposure to mortgage lending. Comments were that firm believes that the thrift and mortgage spread lending industry is not healthy and couple with rate risk concernes, Bruyette also sees risk in less-mentioned areas like "free-checking" and multi-family lending (duplexes/apartments, etc.).

  Jonathan Levinson   5/22/200,  2:39:32 PM
Those bearish friends of mine have been jumping up and down about the II numbers.

  James Brown   5/22/200,  2:38:44 PM
Exactly my thoughts.. but I felt like a broken record saying it again.

  Jonathan Levinson   5/22/200,  2:37:36 PM
Yes, James. We read those with contrarian goggles though, as advisors have a habit of buying tops and selling bottoms.

  James Brown   5/22/200,  2:36:35 PM
Here is something I stumbled across that appeared interesting... the Investor's Intelligence numbers, a survey of market commentators and newsletter writers, has hit a new extreme. 56% of those surveyed are bullish (up from 54.4%) and only 20.9% are bearish (down from 23.9%). Evidently this is the most bullish reading in 15 years.

  Jonathan Levinson   5/22/200,  2:30:37 PM
I'm seeing a trendline break here, and the test will be 28.00 QQQ. TRINQ is actually up, at .48, FVX down 6 bps, QV down a whopping 1.31, Tick.NQ -342.

  Linda Piazza   5/22/200,  2:26:05 PM
I apologize for being absent. My cable modem went down or else cable service did and dial-up was impossibly slow. By the time I could get signed back on with dial-up and stare at a blank OEX chart on Q-charts for a while, hoping some candles would eventually appear, cable service was restored. My first thought concerning the OEX as I study the charts again is to watch for a move below 468.97, which was the trough level between the last two double peaks on the one-minute chart, and next to watch for a move below 467.80, the trough level between the first attempt at 470 and the last two. You know the routine: bulls want to see the OEX remain above both levels, and bears want the opposite. As I type, the OEX is testing the first of those two levels.

Note: As I was typing this message, I lost cable service again. I may be less than useful the rest of the afternoon as I struggle with connectivity issues.

  Jeff Bailey   5/22/200,  2:16:08 PM
Hmmmm... I've gotten several e-mails from BEAR credit spread traders that have put on a bear credit spread. IF you are "worried" about this trade already, because the Dow trades 8,612, then this is NOT a TRADE for YOU!

As long as you sit on your hands and do NOTHING, you should be OK!

The RISK in a bear credit spread $86/$87 is that the Dow closes between $86-$87 (generally speaking).

  Jonathan Levinson   5/22/200,  2:11:05 PM
Lately Alan, there's no other kind.

  Jeff Bailey   5/22/200,  2:10:51 PM
QQQ $28.13 +1.58% ... while I've been showing the SPX chart on intra-day basis, similar technical in play on the QQQ. Session high? $28.24. WEEKLY S1? $28.25.

Really hints of "index allignment" and may also hint that current trades is "all institutional"

  Jonathan Levinson   5/22/200,  2:07:00 PM
Zero strength from MSFT.

  Jonathan Levinson   5/22/200,  1:54:43 PM
Almost a perfect flatline on the indicators, with TRINQ .39, QQV -.84 to 25.98, TICK.NQ +82. FVX -4.7 bps. FVX a touch lower, -.34 to 30.54.

  Jeff Bailey   5/22/200,  1:51:55 PM
SPX updated intra-day chart. Still finding intra-day resistance at the WEEKLY S1 Link

Short-term bulls still have to be cautious. Remembering that SPX violated WEEKLY S2 to the downise, not able to get back above the WEEKLY S1 at this point. For strength into tomorrow's session, would want SPX to close above the DAILY R2 of 930 is my thinking, which would be near the day's highs. A close back below there, while positive for the day is somewhat of a "neutral" day close in my opinion.

  Jonathan Levinson   5/22/200,  1:37:04 PM
Do you think that marriage season in India is over? But I heard that in India marriage season is about three to four months.

If Al Green continues to talk about deliberately inflating the money supply and buying treasuries to keep down rates, driving the fed funds rate to zero, etc., the wedding season in India could go on indefinitely (grin). While it's a factor, I believe that the wedding season's being identified as the prime reason for the runup in gold is a fine example of the trite, depthless thinking that I've come to expect from Pisani and his colleagues. That said, gold had become extremely overbought on the rapid runup over the past week, and some pullback is to be expected. If it puts in a higher low on this pullback, it will be further confirmation of the bull market in which gold and other commodities currently trade.

  Jonathan Levinson   5/22/200,  1:25:37 PM
The FVX has recovered slightly, now down 5.5 bps. Another shallow pullback here on QQQ. The inability of bears to even approach the 28 level looks quite bullish to me here. If it can't go down, then it will try to go up. TRINQ at .39 shows persistent bullishness, but not really extreme. TICK.NQ -105. Continued weakness in MSFT and banks today.

  Linda Piazza   5/22/200,  1:25:01 PM
The FTSE 100 closed up 54 points or 1.37%, at 3990.40, the day's high. The CAC 40 ended the day up 22.07 points or .77%, at 2903.27, just below the day's high. Currently, the DAX trades up 20.21 points or 0.71%, at 2847.6, also just below the day's high.

  Linda Piazza   5/22/200,  1:14:39 PM
I was just listening to Pisani talk about the strong day the homebuilders were having and thinking about a young, first-time homebuyer's experience. She's buying a new home now and had originally picked out a plan with a suburban builder. That house never got started, but the builder called her nearly every day offering a steal on an inventory home in one neighborhood or another. She finally went to a different builder and did end up buying an inventory home. This builder has jumped through hoops to get her into the home by the end of the month. I remember talk about companies "stuffing the channels" at the end of the tech bubble and about other companies doing it at other times. Could homebuilders be doing it now, courting those last possible starter-home buyers? This is just one anecdotal story, but it makes me wonder.

  Linda Piazza   5/22/200,  1:02:44 PM
It will be interesting to see what happens next on the OEX. We're in possible double-top territory on the OEX one- to fifteen-minute charts, should the OEX decline further than 467.80, the trough between the two peaks. The downside target would be near 465.75 if the pattern is confirmed.

  Jonathan Levinson   5/22/200,  1:01:08 PM
June gold is getting slammed, currently down 5.20 to 367. HUI is down 2.76 to 140.61, XAU -1.52 to 74.06.

  Jonathan Levinson   5/22/200,  12:47:21 PM
FVX is now down 6.3 bps. It takes money to buy bonds and stocks simultaneously, but no sign of stopping yet. Short term oscillators on my 2 day QQQ chart show signs of beginning to roll over, but above QQQ 28, it will just look like consolidation to me. TRINQ .41, TICK.NQ +87. QQV currently very low at 25.97.

  Linda Piazza   5/22/200,  12:46:54 PM
Reader Question: Looking at the daily DJX. Can you see a left shoulder (double top) beginning May 1, the head (double top) then the left shoulder now forming?

Response: Good eye, as Jonathan says! I see the formation you're indicating, but it remains a potential formation as yet. The first task is to begin to roll that right shoulder. At that point, more confidence can be felt in the pattern. As yet, it's possible that the DJX price could still exceed the head, negating the possibility of a H&S. After/if the right shoulder forms, the next task is to confirm with a move through the neckline. I've pinpointed two possible versions of the neckline, depending on whether the shadows are included or not. Link

  Jeff Bailey   5/22/200,  12:35:37 PM
Genentech (DNA) $58.95 +4.7% ... getting upside alert here. This is from yesterday's work with retracement. Traders holding more than 1 call option from bullish profile at $40, I would ask you take profit in at least part of that position. For those that have taken some gains off the table, do nothing at this point. I'm rolling retracement higher again to determine further upside targets and once again assess risk/reward in the trade to determine new trailing stop.

  Jonathan Levinson   5/22/200,  12:32:51 PM
Another test of 28.17 resistance QQQ, and so far another failure. FVX is down 4.7 bps, no slowing in demand for treasuries, TRINQ still way low at .39. TICK.NQ +86, QQV -.81 at 26.01.

  Linda Piazza   5/22/200,  12:08:27 PM
Volume is a relatively robust 589 million shares on the NYSE and 791 million on the Nasdaq. Advancers strongly lead decliners, with a 1.6 adv/dec ratio on the NYSE and a 1.5 ratio on the NYSE. Up volume pulls strongly ahead of down volume, almost 2 1/2 times down volume on the NYSE and over 3 1/2 times down volume on the Nasdaq. New highs continue to lead new lows, but new lows are pulling into the double-digits now.

  Jeff Bailey   5/22/200,  12:06:57 PM
Bear Credit Spread in Dow Industrials, specifically the DIA.

Can sell the June $86 c $1.65 and buy the June $87 c $1.30

Can sell the July $86 c $2.40 and buy the July $87 c $2.10

This trade was set up in 05/20/03 Index Trader Wrap Link should Dow Indu trade back near 8,600. Option prices above were taken when DIA bid was $85.90, and option prices quoted were bid for sell and ask for buy.

I will be using this trade as an example at tonight's Denver Trading Group presentation. I'll post the option montage for this trade in a minute.

Here is the option montage of the DIA Link

I looked at the $DJX too, but here were the similar $86/$87 strikes

June 86 $1.50 and 87 $1.30 July 86 $2.25 and 87 $2.00 If attempting to garnish a premium, the I would view DIA as better option selection.

Not discussed previosly, but also an option would be calendar spread. My general thinking.... (shorter-term bullish, but with bullish % higher, think bullish ris will be removed, should result in lower prices) As such could...

Sell the July $86, but buy the June $87 to provide the near-term bullish protection.

If ANY of this does not make sense to a trader, then DON'T do it at this point.

By selling the $86 call, you are OBLIGATING yourself to sell the DIA at $86 (less the premium received) and you're SPENDING some money in the $87 as INSURANCE to protect a move above the stated STRIKE of $87. In essence, if you're buying the June $87, protection begins at $88.30 (87 +1.30) ** Commissions exluded.

  James Brown   5/22/200,  12:06:04 PM
We're seeing somewhat of a similar pattern (similar to the SOX) in IBM and the GHA hardware index. IBM fell from $90 to $85 in profit taking. Now it's bouncing from $85 (currently 86.40). Aggressive traders could target a move back to $90 if the market rally keeps its legs.

  Jonathan Levinson   5/22/200,  12:05:09 PM
Classic "Flagpole rally"- vertical launch up the flagpole, then leave it fluttering in a 2 or 3 cent range.

  James Brown   5/22/200,  12:01:27 PM
Really not sure if I trust it but the SOX is trying to rebound a bit from minor support, which held the SOX near 335 the previous two sessions. This is making stocks like KLAC, QLGC, LRCX and XLNX all look tempting for bulls to buy the dip.

  Linda Piazza   5/22/200,  11:57:27 AM
There's the possibility that the OEX's current pattern of lower highs and lower lows (as seen on fifteen through one-minute intraday charts) is a bull-flag pattern. If so, that Fibonacci retracement tool I snapped on the rise from Tuesday's low to today's high is going to come in useful again, as a bull-flag pattern should break to the upside by or before the decline has retraced 50% of the previous climb. That 50% retracement would occur at 464.97 or thereabouts, but a fall through the 38.2% retracement at 466.25 might do some damage to sentiment that might make the upside breakout less likely.

  James Brown   5/22/200,  11:55:42 AM
AMGN has been on the OI call list for a few days and we're finally see another bounce from the $60.00 level. Its rising trend remains unbroken. Currently the BTK biotech index is trading close to new relative highs. If the BTK closes here at 417, it will be the best close since May of last year.

  James Brown   5/22/200,  11:53:10 AM
point of concern for the bulls? The broader indices may be bouncing but they can't go too far without the financials and the BIX is only up +0.08 points, the BKX is only up +0.65 points and the XBD is down 2.03 points.

  Jonathan Levinson   5/22/200,  11:51:59 AM
the bulls seem to be tiring? it seems the other way around to me and the bulls are resuming their push up, not wanting it to drop in spite of terrible fundamentals and bad news. looks like the bears ran out of gas yesterday if you ask me after strong selling late tues.

  Linda Piazza   5/22/200,  11:43:48 AM
With the OEX fall now beneath the earlier 468.14 trough on the five-minute charts, we can now confirm a lower high on those charts.

  Jonathan Levinson   5/22/200,  11:38:22 AM
Seems bulls are tiring today. Might this be a good point to enter some long puts in prep for 3-day weekend profit taking..that could start today after lunch? brillant/silly/maybe?

No, that's a good instinct. The high p/c ratio has me nervous, but then, we're seeing another failure below QQQ 28.20. Those puts would need a tight stop due to the p/c ratio setup just discussed. I'd view a move below QQQ 27.75 / NQ 1116 as confirming the drop if you prefer a more conservative/momentum entry to trying to pick a top.

  Jonathan Levinson   5/22/200,  11:34:50 AM
me again, high index p/c, does that mean big money expecting a decline, or is that too high and we should bust higher?? thanks again mike

That's the whole question, Mike, and in fact, I don't know. That high a p/c ratio can't be good either way for bears. The big money can get into trouble just like small money, and my favorite shorts are entered when both the index and equity pcr's are very low, among other things. With both levels this high, the prospect of higher highs is a distinct possibility.

  Linda Piazza   5/22/200,  11:24:28 AM
I just snapped a Fibonacci retracement tool on the OEX move from yesterday's low to today's high. Guess where the 38.2% retracement lies? At the old familiar 466.25 level. I'm not sure that the OEX will pull back that far, since pullbacks have been shallow so far this morning, but if it should, watch that level once again. On the 60-minute charts, some oscillators begin to look a little toppy as the OEX tests that massed overhead resistance, while on the daily charts, oscillators look much more bullish as they try to roll back up again. It could still go either way, with a deep fall tugging the hourly oscillators down and rolling them over, while also turning the daily oscillators back again. Alternately, a continued move up could turn the hourly oscillators back up into overbought territory and let the daily oscillators move up into full bullish mode.

  Jonathan Levinson   5/22/200,  11:24:11 AM
Put to call ratio 1.24, equity pcr .84 and index pcr 3.46.

  Jonathan Levinson   5/22/200,  11:15:26 AM
So far there is little price traction on this downphase and violation of the ascending trendline. A shallow pullback here will imply higher highs on the next up-phase. QQQ support remains at 28.00.

  Linda Piazza   5/22/200,  11:09:18 AM
In addition to the other resistance levels located between OEX 469-472 (pivot, historical, retracement), the OEX appears to be having trouble with the hourly 130-pma, currently located at 469.36, and the 30-minute 130-pma, currently located at 471. I've been watching this moving average for a couple of weeks, testing out the OEX's behavior in relationship to the average after noticing that Jim was using it in his futures trades. I do like to test new moving averages or new settings from time to time, but often come back to the old reliables. One factor in my stodgy reliance on the old standards is that I often want to be looking at the same thing that the majority of other traders/investors/advisors are watching. I don't want to be fiddling with obscure settings if everyone else is going to react at/near a different moving average or upon another stochastics or RSI setting. I may keep this 130-pma, however, as it does often seem key.

  Jonathan Levinson   5/22/200,  11:05:54 AM
The USD Index is up to 93.56, and June gold is down to 368.90. HUI -2.32, XAU -1.11. The TRINQ is still veyr low at .37, TICK.NQ -102, QQV -.68 to 26.14, VXN flat. FVX is down 4.1 bps, showing no letup in the buying of treasuries.

  Jonathan Levinson   5/22/200,  11:03:58 AM
This break below 28.10 is th first violation of the ascending trendline discussed earlier. I have fib support at 28, then 27.89, then 27.81 and 27.72, coinciding with the "stair step" climb that brought the Qubes to these lofty heights.

  Linda Piazza   5/22/200,  10:59:18 AM
Studying oscillator patterns can be useful. Here's one example. Midmorning yesterday, the 5(3)3 hourly stochastics pushed up through a line of lower highs that had been forming since May 12. That push occurred as the OEX was basing near 461.30, and was one of the first signs predicting a move up in the OEX. Another was the CCI indicator that had just moved up through oversold levels (but not yet above zero) just previous to the stochastics move. The move through zero was a further confirmation. Link

  Jonathan Levinson   5/22/200,  10:55:09 AM
It looks to me as if the market is celebrating this morning's bad news on the expectations of a rate cut, though such seems illogical to me. All of Al Green's rate cuts have so far created tons of jobs... in China. A further rate cut would look more like panic than stimulation, in my opinion, but that's the only reason I can think to attribute to Jim's "bad news bulls" this AM.

  Jonathan Levinson   5/22/200,  10:52:46 AM
Trendline support on this vertical move is now at 28.10.

  Jonathan Levinson   5/22/200,  10:50:04 AM
Here comes the test of the 5 dma on QQQ at 28.15.

  Jonathan Levinson   5/22/200,  10:49:27 AM
Put to call ratio 1.46, with equity pcr 1.03 and index pcr 3.83- these are very high readings.

  Jim Brown   5/22/200,  10:49:21 AM
I'm long in the German DAX since our midday and since then it has moved slowly but steady downwards. I've have hoped for the opening of US markets but Germany is such in a bad shape that we couldn't take the really good move from yours. We have moved only 10 points which is nothing if you take a look to the weeks ago. You could go crazy if you see the moves in US compared to ours. I need only a print of 2850. Thanks, Torsten from Germany

Keep those global reports coming.

  Jonathan Levinson   5/22/200,  10:41:58 AM
Resistance from the 5 dma profiled last night is 28.15 QQQ.

  Jeff Bailey   5/22/200,  10:38:25 AM
SPX 931.43 +0.86% ... so here we are... just below WEEKLY S1 of 932.90. Day-trade bull from yesterday blows out here, but gets back on board on break above WEEKLY S1. Short-term swing trade bull does nothing.

  Jonathan Levinson   5/22/200,  10:38:05 AM
QQQ is taking a breather. It's difficult to project on a vertical move, but the trendline on this climb from 27.61 will provide support at 27.99 QQQ.

  Linda Piazza   5/22/200,  10:36:38 AM
European markets like the performance in our markets and are moving up, too.

  Linda Piazza   5/22/200,  10:34:27 AM
The OEX powers straight up toward that next strong resistance. It feels as if it's going to power straight through, but the OEX enters a congestion zone now with lots of possible stopping points. Be careful.

  Jeff Bailey   5/22/200,  10:33:58 AM
SPX 931.15 +0.83% ... here's an "updated" 5-minute chart. Can't print it fast enough. Link

I think some "jittery shorts" are on the run don't you?

  Jonathan Levinson   5/22/200,  10:26:42 AM
QQQ is walking up, finding support at previous resistance levels, so far 27.80, then 27.89, now challenging 27.95.

  Jonathan Levinson   5/22/200,  10:24:41 AM

  Jonathan Levinson   5/22/200,  10:24:01 AM

  Jonathan Levinson   5/22/200,  10:19:42 AM
MSFT not popping much from yesterday. Any thoughts. I would have expected a bigger pop. Especially given the green on the screen elsewhere.

Alan's just mentioned this. Obviously there remain many shares being offered from the insider sells discussed in the MM yesterday. 16.8M shares have traded already this morning. MSFT was the #1 long listed in the Ameritrade Index yesterday, which I personally consider to be "not-smart" or retail money. We'll see how far QQQ can get without MSFT.

  Linda Piazza   5/22/200,  10:19:33 AM
The OEX one-minute chart showed that the index had been trading in a steep uptrend this morning. It's just fallen beneath that steep uptrend, but this is a one-minute chart under discussion, so trends on that chart should not be taken as ultimate market direction. Watch that 466.25 level again.

  Jeff Bailey   5/22/200,  10:13:30 AM
SPX 927.73 +0.46% ... here's my intra-day chart of the SPX with DAILY pivot analysis retracement added (golden brown). Screen capture was approx. 10:00 AM EST. Link

  Linda Piazza   5/22/200,  10:11:14 AM
Those in OEX long position should remember that OEX 469.69 is an important retracement value from the past, and OEX 470 could be expected to provide historical resistance, too. Watch how the OEX behaves if it should approach that level. So far, this feels like the kind of day when dips will continue to be bought, but guard your positions.

  Linda Piazza   5/22/200,  10:08:22 AM
OEX 466.25 held on that first brief pullback, with the decline stopping at 466.48.

  Jim Brown   5/22/200,  10:04:53 AM
News from Hong King

Jim, To provide the OI community with a sense of the continuing economic impact of the SARS panic on Hong Kong economy ...... some empirical evidence:

1) two days ago on local tv news, one hotel manager was gleeful that his occupancy rate has finally hit double digits!
2) yesterday, local economists were exclaiming that since SARS in Hong Kong seems to be going away, the local future unemployment rate may not be so bad....now only 9 percent is forecast.
3) this morning, I received an email solicitation, from a prominent HK hotel, offering one free night stay at the hotel ... if you buy dinner at its restaurant.

Perhaps a take away, if you have investments in Taiwan, be careful, the problem there appears on a trajectory worse than our Hong Kong experience.

"Enter passively, exit aggressively!" Terrill, Hong Kong

Thanks Terrill! I asked last week for readers in Europe/Asia to share their market thoughts from first hand experiences and I thank Terrill for his insight.

If you live overseas please send us notes as you see things that would be interesting to the U.S. markets.

  Jonathan Levinson   5/22/200,  10:01:53 AM
Opening put to call ratio .87.

  Jeff Bailey   5/22/200,  10:00:54 AM
SPX 925.78 +0.25% .... per last night's Index Trader Wrap Link and discussion regarding the DAILY pivot matrix. Here we are at DAILY R1 of 926.50. This is where we would have the 21-day SMA too. I'll set up a chart of the SPX with WEEKLY and DAILY pivot retracements.

  Linda Piazza   5/22/200,  10:00:39 AM
Now that the OEX has moved above 466.25, OEX bulls want the index to maintain that level. Bears want the opposite, of course. I note that today's move has so far brought the OEX right up to the bottom of one of the extended lines of the violated rising wedge we were watching yesterday. This was a configuration seen on the five-minute charts, so might not have great significance, but it did at least momentarily stall the OEX's advance.

  Jonathan Levinson   5/22/200,  10:00:30 AM
A move below 27.80 QQQ would make this move a headfake.

  Jonathan Levinson   5/22/200,  9:59:52 AM
No breakaway on this attempt, with QQQ at 27.84 and NQ 1121. This could be the retest of the breakout point. A bounce from here should add loft to the advance. FVX still down 4.2 bps, bonds still being bought strongly this AM. TRINQ .38, TICK.NQ +1.

  Jonathan Levinson   5/22/200,  9:55:56 AM
The fed has just added a 9.25B 7day repo, for a net 1B addition today.

  Linda Piazza   5/22/200,  9:54:17 AM
At 2359.44, the Dow Jones Transportation Index currently trades back up to the 38.2% retracement of the March-to-March decline. It had fallen below that level yesterday, and it's currently testing it again from the underside. The 50% retracement of that move is above at 2490, a level from which the $TRAN was turned back.

  Jonathan Levinson   5/22/200,  9:51:15 AM
The indices blasted to new highs as I was typing that last entry. Breakout attempt under way. TRINQ now .36.

  Jonathan Levinson   5/22/200,  9:50:33 AM
Very choppy so far. QQQ came to a dead stop at 27.80, NQ at 1119.50. TRINQ .40 shows Mad Bull Disease continuing to run rampant. TICK.NQ -17.

  Jonathan Levinson   5/22/200,  9:45:24 AM
QQQ at 27.74 and NQ at 116.50 continues to trade just beneath the resistance levels discussed last night. NQ3M has a high of 1119, just below the upper end of the resistance zone of 1120.

  Jeff Bailey   5/22/200,  9:44:45 AM
S&P 500 Index (SPX) 923.22 -0.02% .... per my bullish profile for an SPX short-term trade from 922, I'm going to suggest the raising of stops from 910 to just under yesterday's low and 914. MACD (9.533) on DAILY interval chart looks to new rebound from "oversold," but yet to cross above Signal (13.08).Link

A short-term bull did get the "break" they needed with the break coming from the "inside day" bar chart setup.Link

One could say this was a 50/50 shot on yesterday's entry, with the only thing pushing a bull for entry was to "think like a computer" and what institutional computer programs might be doing from WEEKLY S2.

  Linda Piazza   5/22/200,  9:43:30 AM
The OEX heads up toward the 466.25 level that gave it trouble many times this week.

  Linda Piazza   5/22/200,  9:41:43 AM
The CAC 40 and DAX still trade near the flat-line level this morning, currently slightly in the red. The FTSE 100 trades up 26 points at 3962.40. I suspect these markets are waiting for direction from U.S. markets, just as we are.

  Jonathan Levinson   5/22/200,  9:38:29 AM
FVX is near its lows of the day, -4.6 bps, but the TRINQ continues to show strong buying pressure at .43 even as QQQ slips into the red, TICK.NQ -340.

  Jim Brown   5/22/200,  9:32:15 AM
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If you are using the Proxy version for cable modems and firewalls we have upgraded it to a more stable version and a much faster server. Unfortunately you will have to download the new version to benefit from the changes.

You can download the new version here: Link

The old server will be taken off line after the close on Friday and your current version of the software will cease to function.

  Jeff Bailey   5/22/200,  9:30:23 AM
PnF Internals ... Yesterday's Point and Figure action on the NYSE saw 15 stocks generate new PnF buy signals, while 4 stocks generated new sell signals for a net gain of 11. 14 stocks saw a 3-box reversal higher, while 43 stocks saw a 3-box reversal lower.

For you point and figure chartist's out there that can't find the time to chart all 3,000+ stocks in the NYSE, you would envision the 14 stocks that just reversed back up yesterday as stocks where a relative has been put in and a 3-box reversal back lower, followed by additional weakness of 1-box, would then generate a PnF sell signal. Meanwhile, 43 stocks simply reversed 3-boxes as supply was meaningful enough to outstrip demand and have the stock reversing either $1.50 (for stocks under $20-$5) or $3 (stocks between $20-$100) from a recent relative high.

NASDAQ saw 5 stock give new PnF buy signal compared to 12 stocks generating new sell signals for a net loss of 7. 24 stocks saw a 3-box reversal back higher, while 66 stocks found a 3-box reversal back lower.

  Jonathan Levinson   5/22/200,  9:28:57 AM
The fed has added 3B against 4B in 28 day repos expiring today, for a 1B drain on that timeframe. Still awaiting the update regarding the 7.25B in expiring overnight repos.

  Jeff Bailey   5/22/200,  9:12:31 AM
09:00 Update posted at this Link

  Jim Brown   5/22/200,  8:49:57 AM
Reloading Market Monitor App (Restart in 5 minutes)

  Jonathan Levinson   5/22/200,  8:36:38 AM
Treasuries getting bought, with FVX -3.7 bps, TNX -2.6 and TYX -1.2 bps.

  Jonathan Levinson   5/22/200,  8:32:40 AM
Initial claims +7000 to 428,000, 14th consecutive week above 400,000.

  Jonathan Levinson   5/22/200,  8:31:24 AM

  Jonathan Levinson   5/22/200,  8:04:47 AM
Europe is buying dollars and Japan is selling them for a change, and the USD Index is off its overnight high, back at 93.41. June gold is at 371.10, off its lows. Futures are green, with NQ3M +1 at 1116.50 and ES +2.25 at 924.25. QQQ is up one cent to 27.70.

  Linda Piazza   5/22/200,  7:18:14 AM
Good morning. The Nikkei closed up 33.15 points or 0.41%, at 8051.66. Banks soon led the Nikkei higher in early trading on Thursday with banks continuing their rebound throughout the day. Meeting expectations, April's customs-cleared trade surplus rose 1.6% from a year ago, with exports and imports both rising. In Thursday's trading, many exporters gained as the yen weakened. Even Japanese consumer electric and electronic products company Matsushita gained after announcing that four more of its Beijing workers had contracted SARS.

In other Asian news, the Bank of Korea announced that South Korea's Q1 GDP fell 0.4%, with corporate investments, domestic sales, and consumer spending all declining. Q4 GDP had risen 2%. SARS and a strike by transport workers impacted overseas sales. Nevetheless, South Korea's Kospi gained in early trading, but then slid into negative territory by the close, closing down 0.9%. Taiwan's Weighted Average managed a gain of 1.3%, making up some of the losses of the last week, with those losses at least partially driven by the impact of SARS on the island's economy. WHO has extended its travel advisory to the whole island of Taiwan instead of just Taipei as Taiwan reports 60 SARS deaths and 483 probable cases. Hong Kong's Hang Seng was up 0.79%, and Singapore's Straits Times was up 1.16%.

Most European markets trade flat to slightly up at the current time. British Telecom and asset management and brokerage firm Man Group were mentioned as market movers both in print sources and on CNBC Europe. After reporting a loss a year ago, British Telecom reported a 2% rise in revenues; a 44% rise in pre-tax profits, excluding goodwill amortization and exceptional items; and a 30% reduction in debt. However, the pension fund deficit widened by almost five times. The company plans to step up pension fund deficiency payments by 32 million pounds although Marketwatch.com quoted one source as saying that the company had been expected to pay an additional 100 million pounds. The stock was rising in early European trading, as was that of Man Group. Man Group announced that it had more than doubled the funds under its management, increasing net management fee income by 54% and net performance fee income by 108%. Brokerage earnings also moved higher. Royal & Sun Alliance Insurance Group also figured in early morning news, both print and television, after it reported higher quarterly earnings due to trimmed costs and fewer claims paid.

As of this writing, the FTSE 100 trades up 24.70 points or 0.63%, to 3961.10. The FTSE currently trades about 10 points beneath its day's high. As I have prepared this report, the CAC 40 and DAX have slipped back and forth across the breakeven points, with the CAC 40 now up 4.77 points or 0.17%, to 2885.97; and the DAX up 1.19 points or 0.04%, to 2828.44.

  Jeff Bailey   5/21/200,  1:11:20 AM
The Index Trader Wrap has been posted: Link

  Jonathan Levinson   5/21/200,  1:11:11 AM
The Futures Trader Wrap has been posted: Link

  Jim Brown   5/21/200,  12:40:40 AM
Yes, Jeff, we are always working, trading or both.

  Jeff Bailey   5/21/200,  12:32:20 AM
Time for bed! S&P futures (sp03m) 922.20 have weathered the storm so far this evening and quite trade is had. Who's up at these hours anyway to trade the S&P futures? Jim? Alan? ...

  Jeff Bailey   5/21/200,  10:45:01 PM
52-week high/low indicator ... I have quite a few questions from traders that have either subscribed to DorseyWright.com or have been trying out their free trial for point and figure charts, regarding the "high-low" charts for both the NASDAQ and NYSE, which is a way to chart the ratio between the number of new 52-week highs and new 52-week lows.

I'm going to go into greater detail and try and answer some questions regarding this indicator, which is interpreted in similar fashion as the Bullish %, but tends to move "quicker" than the bullish %. The general thought is that by measuring "both ends" of a market (strength= new highs) (weakness=new lows) that an interpretation can be made as to where the "leadership" is coming from. At the "head" or "tail" of the snake.

The high/low chart of the NYSE or NASDAQ is charted using a 10-day moving average. By doing this, some "noise" is filtered out on day-to-day fluctuations, which can be more difficult to interpret.

Here's my Excel spreadsheet where I track the NYSE and NASDAQ new highs/new lows for each day Link . Since I'm doing this on my own, I'm also creating a 5-day average. Traders that use "bearish cross-overs" in the moving averages, might find a comparison of how the new high/new low ratios on 5-day and 10-day average are doing. I've marked in "red boxes" recent points where the 5-day has slipped below the 10-day. Similar perhaps to how a 5-period moving average will alert a trader that some momentum is being lost compared to the 10-period moving average, we could make similar reference here as it relates to the ratio of new highs to new lows.

Here is a chart that I've created of the NASDAQ Composite High/Low and have charted the 10-day average of high/low ratio. Link

Trader/investors will use the NASDAQ Composite High/Low chart, in COMBINATION with the NASDAQ-Composite Bullish % Chart ($BPCOMPQ) Link , which measures the percentage of stocks that have a "buy signal" associated with their chart.

Do we see how the high/low chart tends to move "faster" and more "volatile" than the bullish % itself? Both still give traders/investors an observation of "risk." While neither indicator can be tied directly to price of the underlyng equity, the question asked to assess risk/reward is... For NASDAQ Composite Bullish %, how much bullishness can still be found (even based on historical trade) to 100% vs. downside risk to 0%? Same question for high/low. These are assessment of RISK and internal strength measurements.

Currently, RISK is HIGH, while INTERNALS are still strong. It's when RISK is high for bulls and INTERNALS begin to deteriorate, that greater downside price action is often found. Conversely, its when RISK is low for bulls and market internals strengthen, that higher price action is eventually found.

Here is my chart of the NYSE High/low Link

  Linda Piazza   5/21/200,  5:48:22 PM
Local (Dallas) news just reported an explosion in the mailroom at Yale.

  James Brown   5/21/200,  5:46:00 PM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

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