Option Investor
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  Jeff Bailey   5/29/200,  9:17:59 PM
Pivot Matrix for Friday. Remember! WEEKLY and MONTHLY levels will change at the conclusion of tomorrow's session. Link

  Linda Piazza   5/29/200,  3:57:40 PM
Did you just hear that fund manager speaking on CNBC? Maria pointed out that they're 40% cash.

  Jeff Bailey   5/29/200,  3:51:04 PM
Intel (INTC) $20.88 +5.67% ... makes a run to session highs. Biggest 5-minute volume of the day here at 2.85 million shares. "Cleaning up of short-cover?"

  Jonathan Levinson   5/29/200,  3:49:23 PM
Continued strength on the tech side of the market. The TICK.NQ is back to bullish at +312, QQV +.15 at 25.99, TRINQ .63. Today's highs broke above the ascending upper trendline we've been following on the 30 minute charts, but the afternoon pullback has brought the price back beneath it. This is cold comfort for bears, but the failure to take out the long term resistance lines was more substantial.

  Jeff Bailey   5/29/200,  3:48:49 PM
OEX 477.39 -0.47% .... session low has been 475.50, and that's about as close to 475 as I want to see. Trade into close has OEX looking to settle right in the consolidation top found 05/12 to 05/16. We were looking for some potential short-covering support in here and may have just gotten enough to save a bull from OEX 475 stop.

  Jeff Bailey   5/29/200,  3:46:01 PM
WEEKLY Pivot notes into the close. Are the stars alligned? INDU, SPX, OEX, all look to close very near their WEEKLY R1s, almost as if bullish/neutral in front of Friday's trade to end the week. NDX/QQQ at WEEKLY R2s

What does this mean? I think... bullish/neutral.

  Linda Piazza   5/29/200,  3:44:42 PM
Addition to my 15:41 post: Before entering any type of play, be sure you understand appropriate exit stragegies. McMillan's Options as a Strategic Investment is a great resource for understanding different options strategies, how they work, and appropriate exit strategies.

  Linda Piazza   5/29/200,  3:41:43 PM
I'm glad my credit-spread portfolio is somewhat balanced with bullish and bearish credit spreads. That gives me something to worry about at all times! This morning, I was worried about the bearish ones, approaching the sold calls. This afternoon, I'm watching the bullish ones, approaching the sold puts.

Although I'm joking about this worry, it's not a serious worry as they were chosen (most by other OIN writers and presented in the newsletter) so that support or resistance should hold and they have. With summer approaching and many of you planning vacations that will not allow you to monitor the markets moment-by-moment, I highly recommend checking out some of the combinations plays you'll find in the weekend's newsletter. They can usually be monitored once a day or so, with appropriate action planned and orders entered.

  Jeff Bailey   5/29/200,  3:41:29 PM
Tomorrow's economic data ...

08:30 AM EST Personal Income April(consensus 0.0%) after March's +0.4%

08:30 AM EST Personal Spending April (consensus +0.1%) after March's +0.4%

09:45 AM EST Michigan Sentiment revised for May (consensus 93.0) after prelim 93.2

10:00 AM EST May Chicago PMI (consensus 49.0) after April's 47.6. Readings above 50 signal expansion, reading below 50 signal contraction.

  Jeff Bailey   5/29/200,  3:29:16 PM
03:15 Update posted at this Link

  Linda Piazza   5/29/200,  3:29:00 PM
In reference to Jonathan's 15:22 post, advancers and up volume continue to lead on the Nasdaq, too, although not by as large a proportion as they did earlier. On the NYSE, down volume now pulls more firmly ahead of up volume, and advancing issues number only 88 more than declining issues. Total volume is 1.3 billion on the NYSE and 1.8 billion on the Nasdaq.

  Linda Piazza   5/29/200,  3:25:24 PM
Coca-Cola (KO, 44.64, +.48) tested its 200-sma again today, also climbing above the key 45 earlier today and reaching a high of 45.30. As has happened with other tests of the 200-sma over the last 10 trading days, KO is falling back from that test, with the day's real body below the average and the upper shadow penetrating it. KO has been finding support from the 200-ema, however, and continues to do so today.

  Jonathan Levinson   5/29/200,  3:22:12 PM
Through it all, QQQ, NQ and INTC are all positive in varying degrees. The TRINQ is still full-on bullish at .63, but the QQV at +.76 and TICK.NQ at -82 aren't as rosy. VXN is up .89 as well- these are bearish divergences from the bullish COMPX.

  Linda Piazza   5/29/200,  3:18:54 PM
The VIX has just jumped to 22.79.

  Linda Piazza   5/29/200,  3:13:42 PM
One addition to my 15:08 post: I have been noting that volume has increased over the last few days, and yet yesterday we got that doji, and today may see either a bearish shooting star or perhaps an even more bearish third candle of an evening-star formation. To me, that says that there's been some distribution, because all that strong volume hasn't been able to bring the markets up higher. Someone has been selling. Of course, that's perfectly natural, and that doji yesterday also showed that sellers and buyers were fairly evenly matched. It's what happens next that will prove important, and that's why confirmation of a potential reversal signal is required.

  Linda Piazza   5/29/200,  3:08:37 PM
Key reversal day: Another reader brings up an interesting possibility concerning today's action on the OEX and other indices, that of a key reversal day. For those who might be unfamiliar with the concept, a key reversal day occurs at the end of a long move, and usually marks the end of that previous move. Prices first move in the direction of the previous move, making an important new high or low, then reverse and close in the opposite direction. If markets had been rallying, for example, they would close down on the day. While yesterday and today's highs have been important, I'm not sure about a couple of other facets of a key-reversal day.

A key reversal day often includes a couple of other parameters. First, the initial move is often "sharp," Martin Pring and others state, often covering as big a range in the first couple of hours as is usually covered in several days' trading. That didn't happen today. Also, volume should be explosive, and above that of the recent past. While volume is on track to be strong today, I'm not sure whether it would qualify as explosive.

Today and yesterday's highs were certainly important. The previous move has been a long one. A new high was made and markets have reversed and may close down, although that's not yet certain. The other parameters don't seem to have been met, however. I'm unsure, then.

  Jeff Bailey   5/29/200,  3:01:09 PM
OEX 478.29 -0.28% ... if OEX is going to finish positive, then here's my intra-day chart, and what I think needs to happen. Bond market now closed so on alert. Link

  Jonathan Levinson   5/29/200,  2:47:49 PM
FVX now down 7.3 bps.

  Jonathan Levinson   5/29/200,  2:40:10 PM
This boring drift north is bring the NQ back to 1190 resistance. The up phase definitely feels weaker than the downphase did, which could be signally a change of trend, but it's very early to tell. A weaker, lower volume retest of the high or a premature failure here would be quite bearish. FVX is now down 6.7 bps, TRINQ .49 and TICK.NQ +77.

  Linda Piazza   5/29/200,  2:29:18 PM
Two doji in a row: I'm receiving interesting reader questions about the possibility that today's OEX candle might be another gravestone doji or other type of doji, or what would be implied if the OEX moved below yesterday's low. Some wanted to know if was rare to see two doji, especially two gravestone doji, in a row.

Nison offers at least a couple of chart examples of two doji, two spinning tops, or two other potential reversal signals in a row. In Beyond Candlesticks, he advises that doji should be considered resistance, and shows an instance or two when two doji presented before a reversal occurred. In one, the second doji was followed by a small white candle, and then the reversal occurred. In my opinion, the appearance of a second doji or a spinning top or other potential reversal signal further verifies the hesitancy to move the markets higher. The two would signal a moment when demand is being met fully by supply. The appearance of two at the current OEX level, and Nison's admonition to consider them resistance further substantiates the resistance just overhead at 487-490.

What would happen if the OEX ended the day below yesterday's low? That depends. If the OEX ended the day below yesterday's low, but by only a small amount, the candle would be a bearish shooting star, also a potential reversal signal. Everything I said about a second doji would apply to this, too. If, however, the OEX dropped at least to 473.12, the midpoint of Tuesday's range, I would consider the evening-star formation as being confirmed. I do understand that in a classic evening-star formation, the OEX would not have reached a new high, resulting in that shadow reaching above yesterday's high, but Nison himself says that some leeway should be given when non-classic patterns form at resistance.

This is all conjecture at this point, however, as the day hasn't ended and we don't know what the candle will be. A plunge to 473.12 seems unlikely, although not impossible. I wouldn't be surprised to see that second doji today and then to see another or even a small-bodied white or red candle tomorrow. We might have to wait until next week for a bearish confirmation or for a "refreshing" of the rally, as candlestick enthusiasts characterize a move up after one or more doji are printed.

  Jeff Bailey   5/29/200,  2:22:18 PM
Buy Program Premium alert SPX 953, OEX 479, NDX 1,187, QQQ $29.52, INDU 8,756.

  Jeff Bailey   5/29/200,  2:21:19 PM
5-year YIELD ($FVX.X) 2.27% ... down 6.6 basis points and right back at multi-decade lows. Boy they look overbought, but so have stocks.

Not certain anymore that there's a tie between YIELD/equities, but will place a downside alert on 5-year at 2.271%, which was the 05/23/03 low, with today's YIELD low being 2.267%. I'd have to go back and check intra-day to see if the trade below 2.271% was correlative with equity index action.

  Jonathan Levinson   5/29/200,  2:10:26 PM

  Jonathan Levinson   5/29/200,  2:10:03 PM
QQQ volume seems to be diminishing on this rise off the lows, which makes it look like a bear flag to me. FVX is down 5.8 bps, TRINQ back to .48, QQV up .37 and TICK.NQ +47.

  Jonathan Levinson   5/29/200,  1:57:47 PM
For bears only: Here's a humorous pic, good for a laugh. Hey, we can still dream, can't we? Link

  Linda Piazza   5/29/200,  1:57:04 PM
The OEX retests that broken 478.50-479 support. Next resistance above that would be the 480.60 level.

  Linda Piazza   5/29/200,  1:54:18 PM
Volume patterns have shifted. While advancers still lead decliners, the margin has narrowed, and adv/dec ratios now are a neutral 1.1 on the NYSE and 1.2 on the Nasdaq. Down volume now leads slightly on the NYSE, but up volume is still 1.7 times down volume on the Nasdaq. That ratio is smaller than the 3.5+ times down volume seen earlier today. While these volume patterns remain neutral to slightly bullish, the shift might alert traders to a potential change in short-term sentiment. If markets can bump back over broken support, I would expect that sentiment to switch again, however.

  Jonathan Levinson   5/29/200,  1:52:56 PM
Kitco is currently quoting spot gold at 370.30. FVX is down 5.6 bps. Interesting how treasury yields gave us a lead on today's drop. This hasn't been very effective for the past weeks, but today the divergence resolved itself in favor of bonds, as it should.

  Jeff Bailey   5/29/200,  1:50:41 PM
OEX Intra-day chart update on 5-minute interval. Link

  Jonathan Levinson   5/29/200,  1:50:30 PM
The US Dollar Index is down to the 92.50 level, with June gold 368.10 x 370.50. HUI is currently up 2.81, XAU +1.32.

  Jonathan Levinson   5/29/200,  1:47:52 PM
QQQ is finding reisstance on the 13 period MA on the 3 minute 2 day chart. The TRINQ never went beyond neutral bullish, currently .63, TICK.NQ -80 and QQV +.60 at 26.41. The TRINQ and QQV reflect an absence of selling enthusiasm yet, which confirms that this is only a shake. Of course, as we saw in spring 2002, it also means that when (if?) the real selling does actually start, bulls and bears will be very slow to believe it.

  Linda Piazza   5/29/200,  1:43:02 PM
Here's an update of the daily OEX chart I posted at 9:53, thanks to a reader's observations about the OEX's candles in relationship to the Bollinger bands. Link Previous behavior does not necessarily predict future behavior, but can pinpoint risks. So far, today's candles confirm the risks I pointed out last night in the Wrap. The day is far from over, however, and it's still possible for the OEX to move up, following the up-slanting top line of the BB's, and then to continue to climb for days. That sometimes happens, too, as it did during the second half of March. This post, then, is about making decisions to manage risk rather than predicting this afternoon's direction for the OEX. Bulls should honor the stops they set when entering a bullish play on the OEX. Those in bearish plays or considering bearish plays should likewise know where their stops will be and what profit goals they think reasonable.

  Jeff Bailey   5/29/200,  1:35:02 PM
Gold/Silver Index (XAU.X) 73.11 +1.86% ... now rivals SOX.X 371.35 +2% for sector winner. Bounce in XAU.X comes from morning test of upward trending 21-day SMA.

  Jonathan Levinson   5/29/200,  1:32:42 PM
TICK.NQ -400. I had forgotten what that looked like. TRINQ .71, QQV +.16. Still not just a shake, but bears can't complain- it's been a good half hour.

  Jeff Bailey   5/29/200,  1:32:44 PM
OEX 477.32 -0.49% .... nearing WEEKLY R1 of 477.13 here. Will honor OEX bullish stops as profiled.

  Jonathan Levinson   5/29/200,  1:28:47 PM
Red breaking out on my screen. GE low of the day, ES contract LOD. TRINQ up to .66. HUI now up 2.56, , YM contract LOD.

  Linda Piazza   5/29/200,  1:28:19 PM
Here comes that quick test I warned about in my 13:22 post. Let's see if the dip below support holds. Bulls should be assessing their positions if the dip holds.

  Jeff Bailey   5/29/200,  1:25:02 PM
01:00 Update posted at this Link

  Linda Piazza   5/29/200,  1:22:42 PM
The OEX now approaches that 478.50-479 level that was resistance from May 12-16 and then support yesterday. OEX bulls want to see the OEX stay above that level, finding support there again. We're entering a time when support or resistance is often tested, so don't be surprised to see a quick test of that support or a quick run-up to next resistance some time during the next 20-minute period. Don't jump to conclusions too soon.

  Jonathan Levinson   5/29/200,  1:18:20 PM
I keep wiping my glasses, but I still see red on my screen (though not much). FVX is down 5.8 bps, gold is up just below 370, TRINQ still .51, TICK.NQ -99, and QQV up .20. It's still too early to call this anything but a shake, but it feels good from a bear's perspective to see those resistance levels hold in a classic Edwards & Magee setup on the longterm charts.

  Jeff Bailey   5/29/200,  1:10:22 PM
Sell Program Premium alert ... SPX 952.73, OEX 479.35, NDX 1,182, QQQ $29.49, INDU 8,760

  Jonathan Levinson   5/29/200,  1:04:04 PM
June gold is at its HOD, 369.80.

  Linda Piazza   5/29/200,  12:54:29 PM
That first OEX support failed, and next I'm watching 480.60 and 478.60. I note that hourly stochastics have now turned down and CCI turned below overbought levels. Disclosure: This morning, I entered a put play on the OEX, a 1/4 position, being willing to take the heat up to 487-490 if necessary. This isn't a suggested play or a warning to those still in bullish plays, but just a disclosure of my current position.

  Jonathan Levinson   5/29/200,  12:47:42 PM

  Jonathan Levinson   5/29/200,  12:46:23 PM
Gold has gone GREEN, June gold up 3.10 at 368.30. HUI +1.68, XAU +.87.

  Jonathan Levinson   5/29/200,  12:39:11 PM
The put to call ratio is .72 again, comprised of a super-optimistic .45 equity pcr and a super-pessimistic index pcr of 2.43. Perhaps hedgies are going long on individual high-beta screamers and hedging with index puts. Or, perhaps the big market makers are selling tons of calls to small players and loading up on big index puts. My understanding is that the etf's such QQQ and OEX are considered as equities in computing the put to call ratios, but I'm not certain of it.

  Jeff Bailey   5/29/200,  12:35:36 PM
S&P Banks Index (BIX.X) 299.53 +0.09% .... OEX/SPX bulls may not be seeing the bullishness they want/need to see from this sector today, and slight DIVERGENCE here a potential negative.

OEX session high of 484.13 just shy of WEEKLY R2 484.51, with SPX session high of 962.08 also just shy of WEEKLY R2 962.11.

  Linda Piazza   5/29/200,  12:34:55 PM
The OEX again tests that 482.40-.60 support.

  Jonathan Levinson   5/29/200,  12:26:52 PM
Well put, Alan. That was fast.

  Jonathan Levinson   5/29/200,  12:20:19 PM
FVX is down 5 basis points, june gold is trading its day high at 364.60, HUI +.84 and XAU +.48. QQQ his near its high at 29.77. TRINQ .46, TICK.NQ +37 and QQV +.05. I believe that Jim is correct- we've seen a huge move already, and that resistance directly above is very significant. That said, volume, the bulls' #1 weapon, is heavy today. Still, they'll need a big push, and I doubt that they can do it today.

  Linda Piazza   5/29/200,  12:19:05 PM
As the lunchtime lull begins, ratios of advancers to decliners and up to down volume stay relatively steady. This is one reason I like to watch the simple ratios, as that should stay steady whether volume slacks off or increases, unlike the subtraction method, which can show distorted values during low-volume periods. I'm still watching for any shifts.

  Jeff Bailey   5/29/200,  12:09:43 PM
QQQ intra-day chart on 5-minute intervals per (12:00:51) Link

  Jeff Bailey   5/29/200,  12:00:51 PM
QQQ $29.77 +1.98% .... Holding its MONTHLY R2 of $29.73 here. For upside target (per 11:00 update), could use DAILY R2 of $30.06 for near-term further upside. Intra-day support from here on pullback comes from DAILY retracement, which has a retracement level at $29.55 and would tie in with DAILY R1 of $29.58.

  Jonathan Levinson   5/29/200,  11:59:21 AM
NQ still below 1200, ES below 963. This would make a very impressive distribution top. QQV 25.48, down .36, TICK.NQ +76, TRINQ .51. FVX down 4 bps.

  Linda Piazza   5/29/200,  11:58:29 AM
In addition to the other economic information that Jim has been posting on the Futures Monitor, also read by those choosing the "Both" option, were yesterday's April orders for core capital goods in the durable goods orders numbers. The core capital goods number excludes defense goods and civilian aircraft, and those core capital goods orders fell 3%. According to some, this number is seen as a leading indicator for the producers' durable equipment (PDE) component of the GDP. As I mentioned in last night's article, the PDE is the largest component of business investment portion of the GDP, as I learned when doing research for the article. Therefore, that orders number for core goods provides a glimpse into GDP growth in the coming quarters.

  Jonathan Levinson   5/29/200,  11:43:16 AM
QQQ bidding 2 cents above the offer. I usually try to buy cheaper, but then, my goal isn't to move the markets.

  Jonathan Levinson   5/29/200,  11:40:48 AM

When I worked in mission control at NASA we used to have a saying about doing the exact wrong thing to do in a pressure situation:

"When in question, when in doubt, run in circles, scream and shout"

The only one's running in circles right now are the bulls and their "bullhorns". Any remaining bears are so numb they do not have the energy to panic.

My personal favorite is "Don't just do something, stand there!"

  Linda Piazza   5/29/200,  11:39:19 AM
Volume patterns remain strong, with advancers about twice decliners and up volume 3.4 times down volume on the NYSE and 3.6 times down volume on the Nasdaq. Total volume is 529 million on the NYSE and 823 million on the Nasdaq.

  Jonathan Levinson   5/29/200,  11:39:08 AM
Put to call ratio .76, with index pcr 2.86 and equity pcr .45.

  Jonathan Levinson   5/29/200,  11:32:12 AM
Neither are the currency markets- US Dollar Index back below 93.

  Jonathan Levinson   5/29/200,  11:28:50 AM
FVX still down 3 bps despite the repo drain. The bond market isn't buying this equity rally one bit.

  Jonathan Levinson   5/29/200,  11:26:49 AM
I'm receiving emails showing increasing anxiety, or perhaps it's just me. Everyone, just remember the first rule of successful trading: Breathe.

This looks like prime shorting territory. The pundits are almost universally bullish, the cheerleaders on CNBC are drooling bullish, the equity put to call ratio is sub-.50 and the index pcr is well above 2. Long term resistance is being tested right now. Relax, trade what you see and use stops no matter what. We've been here before, just not to this degree. I apologize for the pedestrian nature of this post, but those remaining bears among us need to keep our heads on here.

  Linda Piazza   5/29/200,  11:22:04 AM
Sony (SNE, 27.10, up 0.75) performs strongly today in U.S. markets as it did overnight on the Nikkei. Here's a chart that demonstrates my worry about the stock, however, showing that SNE appears to be trading within a bear-flag pattern that's moving right up into strong resistance, with stochastics already making a bearish kiss, MACD perhaps flattening slightly, and RSI moving toward overbought levels, too, although not yet turning down. Link

  Jeff Bailey   5/29/200,  11:18:09 AM
11:00 Update posted at this Link

  Linda Piazza   5/29/200,  11:12:21 AM
Some time ago, Leigh Stevens, another writer among many whose opinions I respect, mentioned OEX 485 as a potential top. I'm keeping that in mind, too, as I watch the markets today.

  Jonathan Levinson   5/29/200,  11:06:54 AM
I'm hearing that pension funds are borrowing money with which to buy stocks. If this is true, I guess they're planning on worrying about the legalities later. Wouldn't such action require them to have hedge fund status?

  Jonathan Levinson   5/29/200,  11:03:59 AM
The 13 period sma is trying to cross the 21 period sma to the downside on my 50 tick 2 day QQQ chart. Bollinger band support here. A push higher wouldn't surprise me, though we may have just seen the top. The sma cross would be a sell signal for QQQ. Indecision right here at 29.65.

  Linda Piazza   5/29/200,  11:02:28 AM
The OEX now tests that 482.40-482.60 first support level.

  Linda Piazza   5/29/200,  10:54:37 AM
The dollar is down, gold is down, bonds are up, the VIX is down, and VXN is up. With some of these indications normally bullish for equities and some normally bearish, I'm cautiously keeping an eye on volume patterns as the primary indicator of likely market action, while watching for a shift in those volume patterns or in the other indicators.

  Jonathan Levinson   5/29/200,  10:50:17 AM
FVX up to a 2.3 bp loss on the day. TRINQ .59. TICK.NQ +364. QQV -.03. Nasdaq futures are approaching the 1200 level, now testing the long term trendlines profiled last night- same for the ES contract as well.

  Jonathan Levinson   5/29/200,  10:49:12 AM

  Linda Piazza   5/29/200,  10:47:58 AM
Congratulations to those OEX bulls who had more courage than I did yesterday and held onto OEX longs ahead of today's economic reports. I enjoyed my sleep last night better than I would have done if I hadn't raised my stops and let the market take me out for a small profit yesterday, but I applaud your gains. It will soon be time to assess your own profit goals, if you haven't already done that. What was your profit goal when you entered the play? How will you handle the resistance at 487-490? Will you raise your own stops as that zone is approached? Will you exit the play ahead of that level? Will you instead widen your stops so that volatility around that level will not stop you out too soon? Make the decision now, as there's likely to be some volatility if/when that zone is reached.

  Jeff Bailey   5/29/200,  10:42:03 AM
QQQ $29.66 +1.64% ... "blowing up" and session high. At top of "ascending wedge" from Tuesday's Index Trader Wrap and approaching MONTHLY R2 of $29.73. Link

  Linda Piazza   5/29/200,  10:41:39 AM
The OEX five-minute chart shows a tight pattern of higher highs and higher lows moving up in an ascending regression channel since about 10 ET. This wouldn't be characterized as a potential bear-flag pattern, however, since those patterns form after a steep drop. They're a period of measured distribution before the descent continues. That's not what we're seeing with the OEX, of course. However, I will be watching for either an upside or a downside break of the pattern.

  Jonathan Levinson   5/29/200,  10:40:25 AM
Another 4B in overnight repos just added by the fed.

  Linda Piazza   5/29/200,  10:37:53 AM
Volume patterns appear even stronger than they did earlier, although NYSE volume still appears light. Adv/dec ratios are 2.4 on the NYSE and 2.1 on the Nasdaq. Up volume is 4 times down volume on the NYSE and 3 times down volume on the Nasdaq. Total volume is 251 million shares on the NYSE and 426 million on the Nasdaq. So far, these patterns appear sustainable and support the gains shown on the markets.

  Mark Phillips   5/29/200,  10:37:47 AM
QLGC $49.47 (+1.63) Those frisky tech bulls just keep on running. Yesterday's flirtation with the $48 level seemed encouraging, but the stock couldn't quite manage a close over that level. That debate has been put to rest this morning, with QLGC breaking out over the $49 level and headed for round-number resistance at $50. While that level may provide temporary resistance, we're looking for a test of the $51.50-52.50 area (resistance from March-May, 2002) as a favorable exit location. Until then, we'll ride the wave higher, although stops should now be tightened to no lower than $46. This is well below the center of the channel and the past two days' intraday lows, as well as the 20-dma ($46.03). Traders not willing to leave that much risk in open positions may want to use a tighter stop at $46.90, just below Tuesday's intraday lows.

  Jeff Bailey   5/29/200,  10:36:57 AM
General Motors (GM) $35.05 +1% ... stock holding up well considering today's downgrade of "Big 3 autos" by UBS Warburg. Warburg note grabs some attention as firm says that while Chapter 11 for Big 3 automakers isn't imminent, but not out of the question either. Warburg thinks Big 3 are heavily-leveraged, and thinks industry trends will eventually result in a major casualty at some point in the future and lack of short-term catalyst from weaker economy will provide ample time for the company's (GM, F, DCX) to further destroy shareholder value. Warburg rated F and DCX "reduce" and GM to "neutral."

What? Reduce/Neutral after comments like that?

  Linda Piazza   5/29/200,  10:34:49 AM
Closest OEX support now is 482.20-482.40 on a historical basis, as it's been the site of support for the last 30 minutes or so.

  Jeff Bailey   5/29/200,  10:30:10 AM
OEX 483.36 +0.7% ... getting upside alert here at DAILY 19.1% retracement of 483.21. Has DAILY R1 in play at 483.60, and most likely WEEKLY R2 of 484.50.

We will see.... one level at a time.

  Jeff Bailey   5/29/200,  10:26:26 AM
NASDAQ-100 (NDX.X) 1,186.22 +1.1% .... pulling free of WEEKLY R2 1,178.0 here and next upside target is MONTHLY R2 of 8,919.90. This would equate to QQQ $29.73.

  Jeff Bailey   5/29/200,  10:23:21 AM
Intel (INTC) $20.34 +3% ... getting upside alert here. Alert comes from 19.1% retracement. (retracement from December high of $22.09 to October low $12.95).

Trader long the underlying stock, might look to sell an out the money covered call.

  Jonathan Levinson   5/29/200,  10:22:23 AM

  Jonathan Levinson   5/29/200,  10:21:52 AM
FVX is still down 3 bps. THis feels like a blowoff spike to me, right at long term critical resistance. If there was ever a place to go short with a tight stop, this is it.

  Jeff Bailey   5/29/200,  10:21:31 AM
Buy program premium alert was seen at approx. OEX 482. OEX then traded session high of 483.14, just a smidge below our 19.1% DAILY pivot retracement of 483.21, which also marks yesterday's high (see 10:04:34)

  Linda Piazza   5/29/200,  10:20:10 AM
So far, the OEX high has been 483.14, one cent below yesterday's 483.15 high. If the OEX can maintain support, I wouldn't be surprised to see the OEX try for that move toward 487-490, but a violation of 478.50 on a pullback might have me questioning that possibility. Repeated failures to move above yesterday's high would do the same.

  Mark Phillips   5/29/200,  10:20:03 AM
AMGN $63.98 (+0.23) Can you sense just how strong that $64 resistance level is? So far, that level has defined the highs yesterday and this morning. With the rest of the market challenging its recent highs, AMGN is creeping through that level, and it looks like the bulls will try to test the top of that range at $64.45, the intraday high from 4/24/03. Once through that level, AMGN will be in territory not seen since December of 2001. Next stop will be the $66 area, followed by the $68-69 area. Remember the PnF price target is $72

  Jeff Bailey   5/29/200,  10:15:50 AM
Dow Industrials (INDU) 8,846 +0.61% ... similar to NASDAQ-100, Dow back above WEEKLY R2 of 8,824. Might just get that MONTHLY R2 of 8,919 or 8,900 for those that "took the chance" and closed out the $86 call portion of BEAR CREDIT SPREAD yesterday.

  Jonathan Levinson   5/29/200,  10:15:44 AM
Gold and equity futures hitting new session highs simultaneously?

  Jonathan Levinson   5/29/200,  10:15:05 AM
Put to call ratio .65, equity pcr .41, index pcr 2.45.

  Jonathan Levinson   5/29/200,  10:14:21 AM
NQ and ES are hitting their upper ascending trendlines on the 30 minute charts profiled last night. SPX is heading for the test of its long term neckline and descending trendline from the March 2000 highs.

  Linda Piazza   5/29/200,  10:14:16 AM
The earliest volume patterns show light volume, with advancers leading decliners and up volume ahead of down volume. Although earliest patterns can be deceptive, they're supporting the buying seen so far.

  Jeff Bailey   5/29/200,  10:13:08 AM
Genentech (DNA) $60.64 -3.54% .... today's trade show break below "inside day" and this is first day we've seen a prior day's low taken out. I would use this as a "reason" to at least take profit if a trader from $40 entry hasn't done so yet. Those that have and still holding partial, stop still under our fitted retracement at $57.00 (61.8% retracement is $57.89.)

  Jonathan Levinson   5/29/200,  10:12:18 AM
June gold is priniting its high of the day, 362.90. HUI is now down just .13, and XAU is up .28. The US Dollar Index is below the 93.40 level, and despite the repo drain, yields remain near their session lows. Despite all of the foregoing, the bid in equities is relentless.

  Jonathan Levinson   5/29/200,  10:08:57 AM
The fed has added 2.99B via 6 day repo, for a big 6.26B drain against the 9.25B expiry today. Add the 1B net add on the 28 day timeframe, and we have a 5.26B drain from the fed for today.

  Jeff Bailey   5/29/200,  10:04:34 AM
OEX Intra-day chart. I've placed new DAILY retracement (gold/brown), but did leave this one in place as it relates to yesterday's trade. Get good tie in with yesterday's high. OEX looks bullish in the pivot and bull would like to see yesterday's high taken out. Link

  Jonathan Levinson   5/29/200,  9:58:37 AM
But not for long.

  Jonathan Levinson   5/29/200,  9:56:42 AM
Quick rejection at 1184 NQ3M, QQQ 24.42.

  Jonathan Levinson   5/29/200,  9:55:29 AM
New rally highs on the futures here.

  Jeff Bailey   5/29/200,  9:53:47 AM
NASDAQ-100 Index (NDX.X) 1,177.80 +0.36% ... just off session high of 1,179.44 and trading WEEKLY R2 again. My thinking for index bulls is that we'd want to see the NDX pull free of this WEEKLY resistance around 1,178.

Disclosure.... I currently hold bearish position in QQQ, bullish in OEX.

  Linda Piazza   5/29/200,  9:53:22 AM
Here's something a knowledgeable trader pointed out on the OEX daily chart yesterday after the close. Similar characteristics are seen on other index charts, too. Thanks, D.M. Link

  Jonathan Levinson   5/29/200,  9:47:53 AM
FVX scoping for lows of the day, -3.6 bps. June gold at its session high, 362.70.

  Jonathan Levinson   5/29/200,  9:47:14 AM
Speaking of MSFT, it's down .45% already despite the uptick in the QQQ and COMPX.

  Jonathan Levinson   5/29/200,  9:46:40 AM
On the other hand, insider selling is a legitimate way to diversify their portfolio risk- presumably, even 400+ million shares is risky for an insider such as Steve Ballmer.

  Linda Piazza   5/29/200,  9:45:51 AM
Below current OEX levels, I'm also watching 478.50-479, as that zone provided resistance from May 12 through May 16.

  Jonathan Levinson   5/29/200,  9:45:07 AM
Don't know if you heard the discussion late in the day yesterday on CNBC about legal insider trading. There have been some very large sales recently. If I were a bull, those numbers would have scared me to death. It sure would indicate to me that a lot of people in the know thought they sold their stock at a decent price. As always, time will tell.

Oh yes, it will. Michael Dell, Ballmer... and we've seen that insiders have a great knack for selling well. From today's WSJ by Jesse Eisinger: "With the Nasdaq evidently on its way back toward 2000, despite Michael Dell and Steve Ballmer selling stock in their respective companies, it may be useful to catalog what fund managers learned over the past three years.

That would be nothing. "

I listened to an excellent interview with Jimmy Rogers 2 weeks ago in which he noted that there are over 6000 mutual funds currently. He then said, "There just can't be that many smart 29 year olds out there, can there?"

As you say, time will tell.

  Linda Piazza   5/29/200,  9:42:05 AM
The first five-minute range for the OEX is not going to give traders clues as to eventual direction, as the candle did not span a big range. That range was a low of 479.65 and a high of 480.25. Since this candle was small, I would not consider the midpoint of its range to be particularly significant to watch, although the current test of that low might be significant. More significant than the midpoint, perhaps, are that low and the 480.60-480.70 level, as that 480.60-480.70 zone proved to be resistance through the early afternoon yesterday and support earlier in the day. I would love to see another attempt at yesterday's highs so that traders could gauge the strength of the movement. Another failure at those highs might make a bearish trade more comfortable, while a push through that level would leave this particular trader standing aside to see what happened next. It's not possible to judge just yet whether we'll have that attempt at yesterday's highs, but it's not looking promising as of this moment. That could change.

  Jonathan Levinson   5/29/200,  9:35:51 AM
June gold is trading near its session lows with 361.40 on the bid. HUI is down another 1.49 to 135.47, XAU -.38 to 71.39. QQQ is trying to break 29.30, QQV -.17 to 25.67, TRINQ .86, TICK.NQ +293. NQ at 1180 is going to try for the rally high of 1184.

  Jeff Bailey   5/29/200,  9:35:32 AM
SPX 954.60 +0.14% ... right at its December high of 954.57. Wanted to keep a close eye on things here as it relates to last night's Index Trader Wrap and comparison made between NASDAQ hitting December high and 2-day sell off. Not seeing that sell off at this point, with slight upward surprise to Q1 GDP most likely helping hold a bid.

  Jeff Bailey   5/29/200,  9:33:17 AM
Biogen (BGEN) $43.46 +2.5% .... gets FDA approval for prefilled syringe for Avonex. Link

  Jeff Bailey   5/29/200,  9:26:48 AM
SanDisk (SNDK) $36.22 ... Time to short SNDK ... I certainly don't see it at this point. Link

Another stock mentioned in prior intra-day updates regarding 52-week highs with similar technicals, pehaps a little more mature is SSYS Link

DNA Link also similar types of technicals.

Note.... all three companies are vastly different in business, but charts look very similar. SSYS has been under extreme accumulation in recent months, and may the the "model" to follow for DNA and SNDK as it relates to supply/demand?

  Jeff Bailey   5/29/200,  9:20:37 AM
Qwest (Q) $4.70 ... higher at $4.92 over New York ECN's after reporting Q1 loss of $0.03 per share, which was better than consensus for loss of $0.09. Company did say it saw a $206 million after-tax gain, which would have equated to EPS of $0.09. Qwest said revenues fell 9.4% year-over-year to $3.63 billion, which was slightly below consensus of $3.5 billion. Guidance given was "the rate of annual revenue decline is expected to be in the mid-single digit range." Based on prior revenues, a 5% decline from 2002 revenues of $15.49 billion would then equate to 2003 revenues of $14.7 billion, which would be slightly above current consensus of $14.4 billion.

  Jeff Bailey   5/29/200,  9:12:55 AM
09:00 Update has been e-mailed and should be posted to the site shortly.

  Jonathan Levinson   5/29/200,  8:57:53 AM
From the GDP data:

Gross private domestic investment -3.3% ; Equipment and Software -6.3%

  Jonathan Levinson   5/29/200,  8:56:52 AM
The fed has 4B in 28 day repos and 9.25B in 7 day repos expiring today. 5B in 28 day repos has just been added. We await the short term repo announcement due in about 1 hour.

  Jonathan Levinson   5/29/200,  8:42:15 AM
Q1 GDP was revised up to 1.9% from the pro forma 1.6% announced last month.

Initial claims for the week ended May 24 declined 9K to 424K. The seasonally adjusted 4 wk MA of jobless claims is 427K, above the 425K expected. Continuous benefits are being paid to 3.76M unemployed, up 83K and the highest level since the week ended Nov 17, 2001. Bonds are being bought, yet equities are holding up, possibly as the bulls anticipate 83K more sets of benefit checks with which to margin up long equities accounts?

  Jonathan Levinson   5/29/200,  8:31:34 AM
Bonds have opened higher, with FVX -1.8 bps, TNX -1.6 and TYX -.6 bps.

  Jonathan Levinson   5/29/200,  7:51:14 AM
The US Dollar Index has pulled back to the 93.50 level after having been positive last night, while futures were ramped up with Europe's open, NQ +2 and ES +2.25, QQQ 29.24. June gold is trading 362.20 currently.

  Linda Piazza   5/29/200,  7:23:29 AM
Good morning. With the dollar strengthening and U.S. markets holding recent gains, the Nikkei opened up 53.15 points in Thursday's trading, rose into the midday break, and added to its gains after the break. The Nikkei closed up 141 points or 1.7%, at 8375.36. Other Asian markets gained, too, with South Korea's Kospi gaining 0.7% and Taiwan's Weighted Average jumping 1.5%. Hong Kong's Hang Seng closed flat, however, down a minimal 0.02%.

Market participants ignored the release of an April Japanese industrial output number that showed a 1.2% fall, perhaps because that decline was in line with expectations or because the May number is expected to show a 2.6% increase. In South Korea, investors ignored the news that April factory input fell 1.9% rather than showing the flat growth that had been expected, and sent the Kospi higher. Other economic news in the region proved more cheerful, however, with the Philippines and Malaysia each showing at least 4% growth in the first quarter. The greatest impetus to the gains in the bourses might have been the strengthening of the dollar, however.

Japanese and other Asian exporters jumped, even those reporting bad news. For example, problems due to SARS may cause Toshiba to postpone an output increase in China, but the stock still gained more than 6%. Matsushita, the manufacturer of the Panasonic and National brands, gained almost 5% even though its factories in China remain closed due to SARS. Although Sony fell in early U.S. trading after announcing its restructuring plan after the Nikkei closed on Wednesday, it had tacked on $.25 by the U.S. close, and it climbed in Japanese trading, too.

European commentators focused on the firming of the dollar, too, as well as looking toward the end-of-week U.S. economic releases as perhaps showing more strength than had been expected. Preliminary GDP is to be released today and expectations are for a 1.8-1.9% growth, with the previous (advance) Q1 GDP being 1.6%. Of interest to some investors was the Goldman Sachs statement that although European biotechs might show volatile performance as trial results were announced, their quality was high enough to attract interest from larger firms seeking consolidation. GS expected the European biotechs to continue gains.

Today is the Ascension holiday in Europe. French and German bourses remain open, but trading is light. As of this writing, the FTSE 100 trades flat, up 2.40 points or 0.06%, at 4074.30. The FTSE fell to a low of 4044.40 soon after the open and climbed to the flat level and has been hovering there throughout the day's trading. The CAC 40 trades up 19.78 points or 0.67%, at 2969.39; and the DAX trades up 26.80 points or 0.92%, at 2946.34. Each traded in the red for a time in early trading.

  Jim Brown   5/29/200,  6:47:07 AM
Reloading Market Monitor App (please reconnect)

  Jim Brown   5/29/200,  6:40:46 AM
Reloading Market Monitor App (please reconnect)

  Jeff Bailey   5/28/200,  1:45:34 AM
The Index Trader Wrap has been posted: Link

  Jonathan Levinson   5/28/200,  1:45:27 AM
The Futures Trader Wrap has been posted: Link

  Jim Brown   5/28/200,  1:44:54 AM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

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