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  Jeff Bailey   5/28/200,  5:34:02 PM
Pivot Matrix for tomorrow. Link

  Jonathan Levinson   5/28/200,  3:59:14 PM
You know I have been hearing all day about the orders data being that of April and muddied up due to the war. I wonder what the explanation is going to be tomorrow for the claims data being over 400K again. This is real time data and post war for the month of May. To me it is amazing that all indications say this market should go lower but doesn't. What will be the catalyst that causing the market to react the way it is suppose to when faced with bad data.?

Thanks for asking, Angel. I believe it will be an avalanche of supply hitting the market at current or higher levels. That's trite, but not as much as you think. If we ignore the news and view the market as a liquidity meter, measuring money flows from the fed and from refinancing/debt activity, then the uptick in bond yields could put a crimp in the recent flood of new mortgage applications, which cut choke off the supply of debt-based liquidity in the market. That's my tired guess at this moment. See my long term charts in tonight's futures wrap. Again, just a halfbaked guess at this point. The news has been consistently bad, and the market has consistently ignored it.

  Linda Piazza   5/28/200,  3:54:58 PM
It appears that bearish OEX traders were favored this last 30 minutes, as the OEX daily candle shows a doji that's nearly a gravestone doji. This is a potential reversal signal. Although the reversal would not be confirmed until the close of trading tomorrow and daily oscillators do not yet hint at weakness, bullish traders should evaluate the risk vs. rewards of holding overnight.

  Linda Piazza   5/28/200,  3:37:17 PM
Scanning the daily chart, I notice that the OEX daily candle is a small-bodied candle with a long upper shadow. That's not the kind of candle that bullish players want to see on the daily chart of this index or the others, so bullish traders will hope for a move back toward today's high in the last 30 minutes of trading, transforming that potential reversal signal into a larger white candle with a minimal upper shadow. Bearish traders want to see the OEX maintain current levels or even fall, forming a doji, with tomorrow's trade confirming that potential reversal signal. So far, daily oscillators still look bullish.

  Jonathan Levinson   5/28/200,  3:32:50 PM
The oscillators on the 30 minute candles profiled in our nightly Futures Wraps are reflecting the uptick in the futures right above their ascending oscillator trendlines.

  Linda Piazza   5/28/200,  3:32:32 PM
Volume patterns show something of shift in sentiment on the NYSE-traded issues. Advancers remain ahead of decliners by a 19:14 ratio, and up volume remains ahead of down volume, but is now only a neutral 1.2 times down volume. Up volume remains almost twice down volume on the Nasdaq, however, and advancers lead decliners there by a 19:13 ratio, similar to that seen on the NYSE. Total volume is 1.2 billion shares on the NYSE and 1.7 billion on the Nasdaq.

  Jonathan Levinson   5/28/200,  3:16:24 PM
QQQ prints above 29.20.

  Jonathan Levinson   5/28/200,  3:06:22 PM
MSFT is dusting itself off, currently back up to a 35 cent loss on the day. Its divergence from the broader market remains noteworthy. QQQ is up to 29.19, testing the afternoon's ceiling for the fourth time. Yields closed in the green but near their lows of the day.

  Linda Piazza   5/28/200,  3:04:53 PM
Perhaps OEX 478.40 might properly be considered the neckline of that potential H&S on the OEX five-minute chart, as that's the level from which the OEX bounced. So far at least, a fall through the neckline has been rejected.

A glance at the hourly chart shows something surprising: the blip down after lunch sent the 5(3)3 stochastics all the way down toward oversold levels, with the fast line currently measuring 18.02 and the slow line currently measuring 39.91. The hourly RSI has hinged back up again.

  Linda Piazza   5/28/200,  2:51:57 PM
The OEX five-minute chart shows a rough H&S formation with a neckline either near 479.20 or near 478.80, depending on how you draw the neckline. If confirmed, the conservative minimum downside target would be 474.30-474.70, which happens to be the location of the gap down from the 5/16 close to the 5/19 open. It's difficult to tell when the formation might be confirmed, however, as it's so rough that it's difficult to pinpoint a neckline. The formation perhaps is so malformed that it's not predictive of downside targets, especially since five-minute charts don't provide good predictions anyway.

  Linda Piazza   5/28/200,  2:45:40 PM
Today, the FTSE 100 closed up 79.50 points or 1.99%, at 4071.90; the CAC 40 closed up 58.14 points or 2.01%, at 2949.61; and the DAX closed up 45.94 points or 1.60%, at 2919.54.

  Jonathan Levinson   5/28/200,  2:45:10 PM
MSFT continues lower, down 1.77%. It's either foreigners or insiders, and my guess is the latter. It's amazing how good they are at distributing their sells, isn't it?

  Jonathan Levinson   5/28/200,  2:40:57 PM
TORONTO (Reuters) - Concern about SARS shut down a Toronto-area high school on Wednesday, sending staff and students into quarantine and raising fears the virus may have spread from hospitals to the broader community.

More than 6,400 people, including 2,000 from the school, are now in quarantine in greater Toronto after Severe Acute Respiratory Syndrome resurfaced six days ago.

  Jonathan Levinson   5/28/200,  2:39:48 PM
News that SARS has shut down a school in Toronto, quarantining 6,400 people.

  Jonathan Levinson   5/28/200,  2:36:03 PM
FVX has taken a dive to a 1.7 bp gain just now, and the spike in demand for treasuries doesn't bode bullish. However, with QQQ firmly within its current range, it's more of a hint than anything else. The US Dollar index is fighting with the 93.40 level currently.

  Jonathan Levinson   5/28/200,  2:22:53 PM
Quotetracker, my primary quote and chart source, seems to be failing today. My data source is still online, though, so I can watch the tape live. We're getting another test of QQQ 29.17-.20. TRINQ, TICK.NQ and QQV are all neutral- more indecision at current levels. 29-29.20 seems to be the range for the moment.

  Linda Piazza   5/28/200,  2:21:57 PM
Reader Question: just thinking about your oex 487 (highs back to 8/18, 12/1) comments. spx already +/- returning to its highs during those same two periods. are you expecting to play a breakout or a rollover there? what other indicators will you be using at those levels to make your decision? after 955ish spx here, and if breaking 965, does 990 look like next stop? if this plays out, how will you play oex? several overhangs just under 500, in addition to a psychological one. i'm very curious to see if we're simultaneously drawn to round numbers for oex spx,dow and how we react to such an event. the way things are going, this seems to be more and more likely.

Response: This reader is probably referencing my comment earlier today that I would exit my bullish OEX play ahead of OEX 487, standing aside and seeing what happened at that level. As this reader and I have both mentioned, there are also the OEX 490 and 500 levels to concern a trader. As it happens, I've already exited my bullish play for a small profit, as I didn't like the way the hourly candles appeared. My personal style dictated moving my (mental) stops up once I was profitable and letting the market behavior take me out. Once I was profitable, my main goal was staying that way, especially as this was meant to be a short-term trade to capture only a few points. I was taken out during the lunchtime lull.

Once/if the OEX hits those enumerated resistance levels between 487-500, I'll be watching price behavior first, but correlating that behavior with VIX levels, volume patterns, other index behaviors, and indicators seen on weekly and daily OEX charts. On the daily chart, I like to watch RSI, 5(3)3 and 21(3)3 stochastics, and ADX. I'll also glance at CCI and MACD, although they're not my favorite indicators. On the weekly chart, I'm usually watching the 5(3)3 stochs and RSI. I like the nine-week RSI. On the daily chart, I watch the 21-dma, 50-dma, and both the simple and exponential 200-dma's. On the weekly chart, I watch the exponential 10-week and 30-week moving averages for bullish or bearish crossover that indicate intermediate trend changes.

My first premise is that the enumerated levels are strong resistance and have turned back the OEX in the past. The OEX moved into the 10-month-long trading range while declining, so market wisdom says that it will probably exit the range while declining, too. However, that's far from a given. The first scenario I will watch to unfold will be an OEX downturn either from those levels or current levels--as hourly charts predict may happen--while weekly and daily oscillators all turn down in concert. I'll look for confirmation from other indices and from the behavior of the VIX. If that downturn happens, I'll begin watching for a 38.2% to 50% pullback. However, even with overbought oscillators, it's possible for bullish sentiment to carry the indices further, so I won't rely on oscillator evidence alone.

One strong contra-indicator to this possible scenario is today's Wilshire 5000 break out of its similar trading range, but I will want to see a close above that range today and possibly for two or three days, or a 3% move above that trading range before I feel that it's confirmed. As far as the SPX is concerned, I'm looking for a sustained move above 966 to confirm the break out of its similar trading range.

  Linda Piazza   5/28/200,  2:19:51 PM
My cable provider's service has been spotty today, so that I've been getting knocked offline repeatedly. I'm now working from the dial-up once again.

  Jeff Bailey   5/28/200,  2:08:24 PM
OEX Intra-day chart at 02:00 PM EST screen capture. Right back at 480 level and only "level" that has seemed to have any technical correlation has been the 19.1% retracement from DAILY.Link

  Jonathan Levinson   5/28/200,  1:54:08 PM
June gold is now above 365.50, as MSFT falls lower, currently -.35 or 1.41%.

  Jeff Bailey   5/28/200,  1:50:50 PM
Market Volatility Index (VIX.X) 22.07 +1.37% .... has just been sitting here the past three sessions. Doesn't seem to budge despite yesterday's gains.

I'm monitoring more for some type of "sharp" daily move with bullish % high to hint of some type of institutional activity, but just not seeing it at this point.

  Jonathan Levinson   5/28/200,  1:49:27 PM
MSFT is seriously lagging the broader market, currently down 29 cents or 1.17%.

  Linda Piazza   5/28/200,  1:47:17 PM
The Wilshire 5000 tests the 9100 level, with the current level being 9103.41. This might be another important index for traders to monitor.

  Jeff Bailey   5/28/200,  1:46:41 PM
Sell program premium alert about 5-minutes ago. Once again very close to OEX 480. After multiple sell program premium alerts this morning, OEX went on to trade session high of 483.15, which was very close to our DAILY pivot analysis 19.1% retracement of 483.18, and intra-day low on OEX was 478.66 after multiple sell program alerts.

  Jonathan Levinson   5/28/200,  1:43:43 PM
The commodity futures index, the CRB, is down 1.23 to 236.23, off its low of 235.56.

  Jonathan Levinson   5/28/200,  1:41:20 PM
Thanks, Linda. Quote.com is offline for me.

The HUI weakness despite gold recovering the bulk of this session's losses shows either domestic dumping of gold shares compared with the broader "worldwide" demand for the metal itself, or possibly hedgefund antics, buying the metal and hedging with shorts on the relatively illiquid mining stocks. Will continue to keep an eye on this.

  Jonathan Levinson   5/28/200,  1:38:49 PM
Another retest of the 29.17-.20 QQQ level here.

  Linda Piazza   5/28/200,  1:38:02 PM
IB shows the HUI down 4.48, to 137.81, Jonathan.

  Jonathan Levinson   5/28/200,  1:35:18 PM
The US Dollar Index is down to 93.40, and gold is bidding at 364.90 on the June contract. HUI and XAU are still getting dumped, and I'm wondering if my quote source isn't failing here. I have HUI -5.3 at 136.99- if anyone can confirm this for me from a source other than quote.com, I'd be much obliged.

  Linda Piazza   5/28/200,  1:20:43 PM
The OEX has dropped to that first 479.70 level I was watching for support this morning, as referenced in my 9:52 post. Sixty-minute 5(3)3 stochs and RSI turn down, CCI moves down through the overbought marker, and the hourly candles are showing an evening-star pattern if the current candle does not change radically in the next 12 minutes. Balancing these signs are the still-ascending daily oscillators and still strong volume patterns. It's about the time of day when market participants return and test bullish or bearish resolve, often running stops before the markets reverse and head up or down again. Know your pain thresholds.

  Jonathan Levinson   5/28/200,  1:18:17 PM
NQ is -2.50 on the day at 1170.

  Jonathan Levinson   5/28/200,  1:16:38 PM
The failure below 29.17 is the most encouraging development bears have seen today. Add to that gold breaking back above 364 again, despite the continued weakness in HUI. The TRINQ is at .81, still neutrally bullish, TICK.NQ +39, and QQV +.80 at 25.53. 28.98 is the next test, and the slow drift lower has me thinking of a likely bounce from that level as a good place for bulls to try a scalp entry.

  Linda Piazza   5/28/200,  1:05:25 PM
Bullish OEX traders should be aware that the last three hourly candles look like a potential reversal pattern while the 5(3)3 hourly stochastics and RSI turn down out of overbought levels. The stochastics turn down at a shallow angle that sometimes predicts a turn back up, but this bears watching. A pullback during the lunchtime lull is to be expected, and volume patterns remain strong, but know your stops. Disclosure: I couldn't take the heat. I'm out for a small profit.

  Jonathan Levinson   5/28/200,  12:45:02 PM
This shallow pullback is very bullish, with QQQ finding support at 29.18 and currently holding at 29.23. QQV is up .80 at 25.53, TRINQ neutral bullish at .70, and TICK.NQ +74. FVX is up only 5.5 bps now, but still showing a clear selling bias in treasuries today.

  Jeff Bailey   5/28/200,  12:36:38 PM
OEX right back at 481. S&P Banks Index (BIX.X) 300.00. To get this type of "allignment" I'm thinking that computers have to be controlling the market's trade today. Way too correlative on the move up and now back lower from session highs.

With such "similarity" it may eventually be DIVERGENCE in the future that alerts us to some type of change in what appears to be a very bullish market environment.

  Jonathan Levinson   5/28/200,  12:31:22 PM
As with ES 955, QQQ needs to get below 29.20 for bears to avoid the dreaded intraday "higher low" setup.

  Linda Piazza   5/28/200,  12:24:43 PM
Despite the pullback, volume patterns remain strong. Total volume is 695 million on the NYSE and 1.1 billion on the Nasdaq. Adv/dec ratios are now 1.6 on the NYSE and 1.6 on the Nasdaq. Up volume is 2.2 times down volume on the NYSE and 2.6 times down volume on the Nasdaq. I'm still cautiously watching the tape, however.

  Jonathan Levinson   5/28/200,  12:18:43 PM
Although June gold is holding above 360/oz, the HUI and XAU are getting trashed, -5.68 to 136.61 and -261 to 71.94 respectively.

  Jonathan Levinson   5/28/200,  12:16:47 PM
Agreed, Alan, and if it bounces at 955, that would be a higher low.

The put to call ratio is lower, at .72, with the equity pcr .44 and index pcr 19.3.

  Linda Piazza   5/28/200,  12:11:23 PM
Careful, bullish OEX traders--that last pullback was the result of the DJI being knocked back from its attempt to broach 8850. On the one-minute charts, the DJI completed a miniature H&S, with the minimum target projected down to about current levels, depending on where you place the neckline. Turning back to the OEX one-minute chart, I see that the decline brought the OEX back to the ascending trendline it has been following since about 10:30 this morning, but carried it below the 482.20 level that had provided brief S/R today. So far, all is still working okay as pullbacks are expected, and a pullback to 481 would still keep the OEX above an ascending trendline that began forming about 2:00 yesterday afternoon. We're now entering the lunchtime doldrums, so bids may drop on lower volume and you should know where your personal stop will be if you're in a short-term trade.

  Jonathan Levinson   5/28/200,  12:02:14 PM
The US Dollar Index is breaking up from its bullish descending wedge, but has less steam behind the bounce than I'd expect, with a failure below 93.60. Meanwhile, the yen is down 1.24% relative to the buck at 1.1744 on the offer. It looks to me like Al Green's friend Yasuo Fukui-san is behind the buying. Treasury yields have backed off their highs, with FVX up 8 bps, TNX +7.9 and TYX +9.1. Flat yield curve still looks bullish for equities, though.

  Jeff Bailey   5/28/200,  11:59:56 AM
Dow BEAR credit spread .... I'm going to suggest that traders that established my previously profiled BEAR credit spread, take a chance here, and BUY back the $86 strike for a LOSS, but HOLD the $87 call.

Strategy for trade now becomes to SELL the $87 call, when it becomes PROFITABLE enough to result in BREAK EVEN for entire strategy.

I will suggest that once the $86 call is BOUGHT back, lets follow with a stop on the $87.00 long call just under WEEKLY R2 of 8,824, with stop at 8,800, which would be approximately DIA $87.50.

I think from here 8,848/$88.71, Dow/DIA has shot at MONTHLY R2s of 8,919 and $89.38.

  Linda Piazza   5/28/200,  11:56:33 AM
To clarify my position on the markets, I'm simply trading what I see today, and today showed me indices that were going up, a dollar that was firming, gold that was dropping, bonds that were going down, and volume patterns that confirmed the bullish tenor of the trading. Because the OEX and other indices did not retrace even the minimum 38.2% on the recent pullback, I'm fairly certain there's another pullback in the future. I'm trading cautiously, and still am not certain what to expect when those next overhead levels of resistance are hit as they could be ideal points from which those pullbacks could occur. On the OEX, for example, I'm cautious as the index approaches 487-490 and would be even more cautious as it approached 500. I'm in a short-term trade only, having set a profit goal that will get me out ahead of 487-488. If I see signs that trading is deteriorating ahead of that profit goal, I'll get out earlier.

  Linda Piazza   5/28/200,  11:49:24 AM
The DJI just climbed above 8850, another confirmation for those in bullish trades on other indices, too.

  Jonathan Levinson   5/28/200,  11:48:45 AM
New HOD for ES and QQQ.

  Jeff Bailey   5/28/200,  11:46:43 AM
S&P Banks Index (BIX.X) 301.10 +0.9% ... this is the chart of the BIX.X in 11:00 update. Links in e-mail won't work until HTML department uploads the 11:00 Update. So... here's the chart I showed in that update. Link

  Jeff Bailey   5/28/200,  11:43:06 AM
OEX Intraday-chart update. Trying to show staggering of INDU/NDX weekly R2 with how OEX has traded. Link

  Jonathan Levinson   5/28/200,  11:37:33 AM
Potentially bullish economic indicator:



  Jonathan Levinson   5/28/200,  11:35:10 AM
The put to call ratio is up to .79, which is a pretty neutral reading. It's comprised of an equity pcr of .51 and an index pcr of 2.20. QQQ is flagpoled just below the top of the rally, same for ES and NQ futures, for that matter. The intraday oscillators are topping, but the TRINQ at .56 is still at the bullish end of neutral. QQV is up .68, with the increase constituting a weak bearish divergence, in my opinion. TICK.NQ +121.

  Jeff Bailey   5/28/200,  11:33:25 AM
11:00 Update has been e-mailed and should be posted to the site in approx. 5 minutes.

  Linda Piazza   5/28/200,  11:32:30 AM
I'm now watching OEX 481.27, the low of the trough between the two 482.14 and 482.16 peaks on the one-minute chart. A fall below that 481.27 level should test 480.40, just below next support. Targets on one-minute charts are not predictable, however.

  Linda Piazza   5/28/200,  11:19:16 AM
Perhaps it's because I'm personally in a trade or perhaps because of issues behind the hesitancy I mentioned in the Market Wrap last night, but this advance feels "iffy" to me. However, volume patterns remain strong, and have even improved somewhat from my earlier report, and the OEX did make a higher high, even if was only minimally higher, so I'm trying to keep myself from jumping out of the trade too early. I'm watching that 480.50-480.70 level, however.

  Linda Piazza   5/28/200,  11:06:13 AM
OEX bulls can breathe a little easier now, with a move above the day's previous high. Stay watchful, however. Disclosure: I'm testing the waters today with a directional bullish OEX option play, too, but am cautious and will probably jump out ahead of 487 if that level is approached. That's my personal trading style, however, to jump out ahead of what's assumed to be strong S/R and watch how the index behaves, then get back in. Each of you has a trading style that fits your needs and hopefully will have set your own stops and profit targets before entering a play.

  Jonathan Levinson   5/28/200,  11:04:11 AM
TRINQ is down to .53, getting into Mad Bull territory again.

  Jonathan Levinson   5/28/200,  11:02:42 AM
The US Dollar Index has headed straight south since the 8:30 data was released, but the move looks like a bull wedge to me on my hazy 15 minute USDX chart. June gold last traded at 362.10 but is currently offered at 361.70, and HUI is back down to 138.30, -4, with XAU -1.80 at 72.75. FVX is up 9.3 bps and TYX +10.4 bps, with QQQ returning to its highs of the day, 29.34 last.

  Linda Piazza   5/28/200,  11:00:46 AM
The Wilshire 5000 continues to trade strongly today, with the current 9130 being just below the current day's high. If the Wilshire maintains this level, the next resistance is up near 9325.

  Linda Piazza   5/28/200,  10:51:27 AM
Early volume patterns are bullish, with adv/dec ratios of 1.4 on the NYSE and 1.5 on the Nasdaq. Up volume is 1.5 times down volume on the NYSE and 1.9 times down volume on the Nasdaq. Total volume is 347 million shares traded on the NYSE and 624 million on the Nasdaq.

  Jeff Bailey   5/28/200,  10:50:59 AM
S&P Banks Index (BIX.X) 299.81 +0.47% .... testing the 300 level in today's session. This was "psychological" resistance on 05/16/03. For OEX/SPX bulls, this is sector I think to look for a break higher of 300 to then lend to further OEX/SPX bullishness. BIX.X break of 300 then sets stage for trade at 308, which was bullish objective from reverse head/shoulder pattern.

  Jonathan Levinson   5/28/200,  10:50:27 AM
Given the serious overhead resistance just a few points away, I am impressed with the courage of buyers at current levels. Managing risk on open short positions is another matter entirely, but frontrunning a bullish breakout at the top of a rally is a very aggressive strategy. Note that it has also been a profitable one so far. FVX is currently up 8 bps as treasuries continue to sell, and TYX is up 9.6 bps after yesterday's 10+ bp gain.

  Linda Piazza   5/28/200,  10:47:06 AM
On one-minute charts, the OEX made a lower high. This is micro-managing, but I feel compelled to do just that because of the risks to both bulls and bears right now. I'm now watching the 480.50-480.60 level for signs of support.

  Jonathan Levinson   5/28/200,  10:41:06 AM
The put to call ratio made it up to .86 this past half hour.

  Linda Piazza   5/28/200,  10:39:20 AM
SONY (SNE, 25.79, down $.31): Sony's restructuring plan apparently did not please U.S. investors. Japanese investors have not yet had time to react to the plan as it was released after the Nikkei's close today. Sony has already traded slightly more than a quarter of its average daily volume, but I haven't followed it closely enough to know if this is a typical pattern for Sony, as some stocks trade big portions of their volume in early and closing trades. Sony remains within the potential bear-flag pattern on the daily chart, and is drifting toward the lower supporting line of that channel again. Daily oscillators are beginning to flatten or hinge down, but haven't yet committed themselves to a downturn. I continue to follow this stock for the benefit of readers who might be in trades, but do not intend to trade it myself because of the way it might be impacted by Japanese banking and government decisions, as it is a widely held stock by Japanese banks and pension funds.

  Jonathan Levinson   5/28/200,  10:37:43 AM
QQQ still dealing with 29.20 resistance. The best that bears can hope for here is a lower high. On that same theme, note that unless gold jets north from here, it too has just put in a lower high on this latest wave that peaked below 375/oz.

  Jeff Bailey   5/28/200,  10:31:48 AM
QQQ $29.16 +0.24% .... Jeff: I currently hold the Sept. $28 puts you have profiled in earlier trades, but also sold the current month June $28 puts. Would you suggest taking the profits in the June $28 puts off the table with Q's finding resistance at your W2?

No! I wouldn't do anything at this point. I have an upward trend right now at the QQQ $28.00 level. The only time I'd think about buying these back, would be if the QQQ trades near $28, and we've seen some type of reversal in the bullish %, or even the New High/New Low ratio. Try and just let the June $28 premiums erode at this point.

  Jonathan Levinson   5/28/200,  10:31:14 AM
QQQ is back to resistance now at 29.20 with the short oscillators still climbing. TRINQ is down to .80 on this push, QQV down to a .31 gain, TICK.NQ bullish at +327.

  Linda Piazza   5/28/200,  10:30:25 AM
During that pullback, the OEX did steady at 478.50, or slightly above at 478.66, with five-minute oscillators turning back up and confirming the move this time. If a day is going to be one of a strong trend in one direction--as yet unproven for today's trading--those short-term oscillators such as the five-minute oscillators are sometimes the only guide for traders. Longer-term intraday oscillators such as 60-minutes may remain pinned in overbought (or oversold, if market is trending down) levels all day. In a strongly trending market, even the shorter-term oscillators will not issue good signals for the moves going against the trend. Bulls next want to see the OEX move above the current intraday high of 481.80. Until then, they're on shaky footing.

  Jeff Bailey   5/28/200,  10:24:01 AM
Current thought process is that early selling is largely computer driven and feeding out of stock at a level (INDU/NDX WEEKLY R2) and not necessarily market participant negativity regarding today's economic data. Most likely, institutional programs were set up to do some selling at INDU/NDX WEEKLY R2.

As always, the question is "how much?" I don't think a lot at this point after break to new relative highs yesterday.

  Jonathan Levinson   5/28/200,  10:23:58 AM
QQQ bounced at the sub-29 level, which is 23.6% off the high of 29.31. June gold is taking the 362 level now, with HUI down 3.81 and XAU -1.66. Quote.com, now displaying the time as 2:22.51PM, says that the FVX is up 6.3 bps. As Alan pointed out, the ES 950 level held, with resistance now acting as support- bullish, but still below the all-important 960-65 level.

  Jeff Bailey   5/28/200,  10:19:44 AM
Dow Industrials (INDU) 8,781.84 (unch) .... session high of 8,827.95 was just enough to get a WEEKLY R2 trade of 8,824.70.

Still.... saw INDU, NDX both at WEEKLY R2, when some selling pushed major indexes from their highs. Only SPX/OEX, which look to be staggared in the WEEKLY matrix compared to INDU/NDX haven't traded close to WEEKLY R2.

As such, then SPX/OEX "must" be closer to their WEEKLY R1's, which would then have me looking for support correlation with INDU/NDX.

Does this make sense to pivot traders? If INDU/NDX trade WEEKLY S2 and find selling, then would think SPX/OEX WEEKLY S1 is somewhat of a level where we look for computer buying and correlative support for INDU/NDX, which might otherwise appear to come from "nowhere."

  Linda Piazza   5/28/200,  10:18:04 AM
Those not-yet-turning five-minute OEX oscillators made me doubtful of the steadying of the OEX near 479, a doubt that turned out to be well founded. Next intraday support comes near 478.50, a level being tested as I type. On the hourly chart, the 5(3)3 stochastics have begun to roll, but have not yet rolled out of overbought territory, and other oscillators have flattened but not rolled.

  Jonathan Levinson   5/28/200,  10:15:24 AM
Gold regained the 361 level, but HUI and XAU aren't even twitching, still down 4.22 and 1.92 respectively. FVX is up 6.5 bps, and the TRINQ has just broken 1.0, now in neutral territory.

  Linda Piazza   5/28/200,  10:11:54 AM
OEX 479.79 fell. Next to watch is the 478.90-479 level, as mentioned in my 9:52 post. So far, that seems to be holding, but five-minute oscillators have not yet begun to turn up.

  Jonathan Levinson   5/28/200,  10:10:27 AM
Put to call ratio .62, with equity pcr .45 and index pcr 1.42.

  Jeff Bailey   5/28/200,  10:10:11 AM
Dow Indu. / SPX now in the red, look to follow weakness in NDX.

OEX 479.10 holding fractional gain.

  Jeff Bailey   5/28/200,  10:08:21 AM
Looks like profit taking starting to pick up by bulls. Biotechnology (BTK.X) 448.96 -1.61% was down about 0.9% when I was noting sector weakness, now down 1.6%. Has been "on fire" in recent sessions.

  Jonathan Levinson   5/28/200,  10:08:04 AM
Nice and fast, felt "impulsive", but just a shake so far.

  Jeff Bailey   5/28/200,  10:06:27 AM
NASDAQ-100 (NDX.X) 1,170.60 -0.16% .... dips fractionally red. Session high has been 1,177.83, which was just shy of WEEKLY R2 1,178.0 (noted in the QQQ too).

  Linda Piazza   5/28/200,  10:06:17 AM
Here's the pullback. I'm still watching that OEX 479.79 area, as mentioned in my 9:52 post as a first sign of strength or weakness.

  Jeff Bailey   5/28/200,  10:04:59 AM
Sector strength Broker/Dealer (XBD.X) 485 +1.7%, Internet (INX.X) 136 +1.6%, Retail (RLX.X) 314 +1.5%, Home Construction (DJUSHB) 415 +1.17%

  Jeff Bailey   5/28/200,  10:03:17 AM
Sector weakness Gold/Silver(XAU.X) 72.42 -2.85% and Airline (XAL.X) 43.13 -1.32%.

  Jeff Bailey   5/28/200,  10:00:35 AM
Percentage gain OEX +0.55%, SPX +0.47% .... not that much of a difference, but mentioned possibility that OEX might be a near-term % gainer as SPX battles December highs, while OEX still has room to its December high. Was purely "psychological," but may be somewhat in play early in session.

  Linda Piazza   5/28/200,  10:00:29 AM
The BIX has just moved over 300, although barely, now at 300.08.

  Jonathan Levinson   5/28/200,  10:00:23 AM
Al Green has replaced the expiring 7.5B overnight repo with a 6 day 4.75B repo. There's still room to add an overnight repo today, but so far it's a net drain of 2.75B.

  Jeff Bailey   5/28/200,  9:58:11 AM
QQQ $29.25 +0.54% .... session high has been $29.32, a penny shy of WEEKLY R2 $29.33.

  Jonathan Levinson   5/28/200,  9:57:37 AM
TICK.NQ, TRINQ are both neutral in bullish territory. QQV is up .89, a bearish divergence, but nothing to get excited about. The yield curve is still flat and well in the green. June gold is struggling to hold above 360.

  Jeff Bailey   5/28/200,  9:55:46 AM
OEX 480.74 +0.36% ... here is intra-day chart of OEX on 5-minute bars. Have added DAILY pivot analysis retracment along with DAILY S1 and R1.Link

  Linda Piazza   5/28/200,  9:52:07 AM
The first reversal and S/R test of the day usually begins about now. On the OEX, first support should now be found at 479.70, next support at 478.90-479, then 478.50. Bulls would actually prefer to see a retest stop at or before the first support level, which may well happen if bullish sentiment continues strong. Those in or entering new bullish plays should keep all risks in mind when doing so and decide on appropriate stops before entering any play. Those contemplating a bearish play should wait for a clear failure or a move up to 487-490 and a clear failure there, also keeping risks in mind and deciding on appropriate stops before entering any plays.

  Jonathan Levinson   5/28/200,  9:50:10 AM
Interactive brokers is showing me wonky quotes, ie MSFT offered at 8.43 (I wish :)

  Jeff Bailey   5/28/200,  9:49:12 AM
OEX 481 +0.42% ... looking long/bullish here from Index Trader Wrap

  Jonathan Levinson   5/28/200,  9:48:58 AM
I suppose that the bulls can take their time getting there, but so long as the SPX stays below the 960-65 level, it might be premature to be celebrating their victory.

  Jeff Bailey   5/28/200,  9:46:45 AM
Another sell program premium alert SPX 953.96, OEX 480.62

  Jonathan Levinson   5/28/200,  9:45:37 AM
Awaiting news from the fed regarding the expiring 7.5B in intervention money for today. The update is due at 10AM.

  Jeff Bailey   5/28/200,  9:44:30 AM
SPX 954.34 +0.3% ... upside alert here at the December high. May also coincide with program premium alerts being seen this morning.

  Jeff Bailey   5/28/200,  9:43:36 AM
2 more sell program premium alerts OEX holding tough at 480.45. May be some computer programs feeding some liquidity. Would look long/bullish on OEX trade at 481 as that may signal end of program selling to WEEKLY R2 of 484.

  Jonathan Levinson   5/28/200,  9:42:23 AM
HUI and XAU are getting creamed, already down 4.80 and 1.80 respectively.

  Jeff Bailey   5/28/200,  9:38:20 AM
Sell program premium alert OEX 479.88

  Jeff Bailey   5/28/200,  9:37:25 AM
QQQ $29.24 +0.51% ... breaking above yesterday's high. Most likely gives look that other major indexes get pulled higher.

  Linda Piazza   5/28/200,  9:36:55 AM
Currently at 9107.24, the Wilshire 5000 has now exceeded the 9096.27 high achieved the week of August 18, 2002. This is a move above the trading range in which the Wilshire has traded since last July. To confirm, I would want to see at least one close over this level and perhaps several closes and/or a 3% move over that 9096 level.

  Jonathan Levinson   5/28/200,  9:35:05 AM
June gold has just printed 359.40, down 8.50.

  Jeff Bailey   5/28/200,  9:34:48 AM
Offseting buy/sell program premium alerts here at the open. Mentioning this as S&P 100 Index (OEX.X) 480.06 +0.22%, right at this 480 level from Index Trader Wraps.

  Jonathan Levinson   5/28/200,  9:32:25 AM
Opening TRINQ .85, QQV +1.3 to 26.03, TICK.NQ +357, QQQ sudden drop to 29.14.

  Jeff Bailey   5/28/200,  9:21:14 AM
09:00 Update has been e-mailed, and will be uploaded to the site within 5-minutes.

  Jonathan Levinson   5/28/200,  9:17:06 AM
KKD is way up today on blowout profit news. They also make a damn good donut, for what it's worth. Tasted my first one in Canuckistan one month ago, and still have to fight the urge to go get more almost every day.

  Jonathan Levinson   5/28/200,  9:14:23 AM
The CDN dollar is down 1.00% today to the USD at 1.3891.

  Jonathan Levinson   5/28/200,  8:49:18 AM
Quote.com is displaying the quotes as of 12:48:09PM, but I have FVX +8.9, TNX +6.4 and TYX +6.3 bps. The flat yield curve and falling bond prices is bullish for equities.

  Jonathan Levinson   5/28/200,  8:41:56 AM
Quote.com is messing with my yield quotes. Am I correctly seeing FVX up 8.2 bps and TYX up 5.9 bps?

  Jonathan Levinson   5/28/200,  8:34:49 AM
Durable goods orders fell 2.4% in April, vs. expectations of a .9% loss following March's 1.4% gain. Orders for core capital goods fell 3%. Shipments of durable goods dropped 0.7%. Unfilled orders fell 0.3% percent in April. This all signals economic contraction, but the futures are ignoring it so far.

  Jonathan Levinson   5/28/200,  8:26:26 AM
Wow! The US Dollar Index is up to 93.70, a big rise off the lows. The buying appears to be Japanese. June gold is bidding at 362, last trade 361.70, down 6.10. ES3M hit a high of 957.50, last at 954.50, with NQ 3M up 9 to 1181.50. QQQ is trading 29.35.

  Linda Piazza   5/28/200,  7:07:15 AM
Good morning. As I began research for this post last night, I called up my usual sources. First, I called up a listing of global markets, and noted that the Nikkei was then trading up nearly 146 points or 1.8%. Turning to my next source, I read a Bloomberg.com headline that stated that "Japan's Production Probably Fell in April; Joblessness Is Near Record High." That headline and the Nikkei's then-current trading level certainly didn't appear to be in synchrony, but that's been the dilemma for traders of late. Market action and fundamentals don't appear to match. In early trading Wednesday, the Nikkei zoomed up past 8300, but fell back to bounce repeatedly from 8250 during the rest of the day, finally dipping back at the close to 8216.48, up 113.94 points or 1.40%. Most other Asian markets gained, too, with South Korea's Kospi up 2.29%, Hong Kong's Hang Seng up 0.95%, and Taiwan's Weighted up 0.52%. China's Shanghai Composite was one of only two losing Asian markets, down 1.05%.

The Bloomberg article mentioned production cuts due to the economic effect of SARS on countries importing Japanese goods or producing goods needed by Japanese manufacturers, and to waning consumer demand in Japan. However, as other articles verified, exporters led the gains in the Nikkei and other Asian markets. Honda was one of the companies mentioned as cutting production, but it gained. So did Sony, although the consumer-electronics manufacturer's production might also be impacted by SARS-related issues. Sony was scheduled to release its restructuring plan after the close of trading on Wednesday.

When released, that Sony restructuring plan included a focus on improving the company's electronics and games business, with $2.56 billion (300 billion yen) to be invested over a three-year period in those restructuring efforts. Sony's goals are to reduce costs, successfully launch new products, and increase its operating profit margin. This year, 140 billion yen of those 300 billion yen will be spent. Sony introduced the PSX, a version of PlayStation2 that features a built-in recordable disk drive and an operating system that makes it easier for users to download games and video from the Internet. The PSX will be available in markets outside Japan next year, but will be introduced in Japan later this year.

European markets currently build on the gains seen in U.S. markets yesterday and Asian markets Wednesday, with the FTSE 100 currently over the psychologically important 4000 level. The dollar gained against the euro, which helped boost European markets. Perhaps more importantly, yesterday's U.S. economic numbers and strong stock market performance also buoyed hopes that a rebound in the U.S. economy and demand for European products would outweigh the effects of the falling dollar. Yesterday morning, companies with the most exposure to the U.S. economy performed the worst in European trading, but today they performed well. Nokia, Philips, and Axa had each added close to 4% in early European trading. Insurer Axa depends heavily on the U.S. markets, and was also buoyed today by the strong performance of financials. Many expect the ECB to ease rates in its meeting next week, with that hope perhaps also impacting European trading.

As of this writing, the FTSE 100 trades up 59.50 points or 1.49%, to 4051.90, its highest value since May 16, when it reached an intraday high of 4080.80, but closed at 4049.00. The CAC 40 trades up 56.38 points or 1.95%, at 2947.85; and the DAX trades up 56.88 points or 1.98%, at 2930.48. Stockcharts.com has not updated the DAX's chart to show today's trading, but from the linked chart it is possible to determine that today's trading will have brought the DAX up to test the underside of the depicted violated H&S neckline and the converging 200-sma, currently at 2967.12. Link

  Jim Brown   5/28/200,  3:05:21 AM
Yesterday's Market Monitor has NOT been archived due to a hardware error. It will be archived later today. You may view it and any previous days here: Link

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