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  Jeff Bailey   6/4/2003,  10:28:37 PM
Noticdable Sector Bullish % changes per this weekend's "Ask the Analyst" column.

Semiconductor Bullish % (BPSEMI) from Dorsey/Wright and Associates rose 4.1% today and now at 76% bullish.

Oil Bullish % (BPOIL) rose 2.3% and now at 82%.

Dorsey makes note with their 10-week for Chemicals (TWCHEM), which is simply a percentage of stocks above or below their 50-day SMA, reversed back into "O" today at 74% (was 84% in early May). In this weekend's "Ask the Analyst" column, we did make note that our stock screen of potential bearish candidates seemed to have quite a few "chemical" stocks in them.

  Jeff Bailey   6/4/2003,  9:53:08 PM
QQQ $30.35 ... in extended hours. Didn't get a trade at $30.25 per 15:58:08 post and canceling bullish profile here.

  Jeff Bailey   6/4/2003,  9:47:14 PM
Pivot Analysis Matrix posted at this Link

  Jeff Bailey   6/4/2003,  4:13:06 PM
Semiconductor HOLDRS (SMH) $31.00 +3.5% ... just getting an upside alert here that I had set come time back at its December 2, 2002 high of $31.00 exactly.

  Jeff Bailey   6/4/2003,  3:58:08 PM
QQQ $30.35 +1.6% .... after seeing afternoon session high of $30.58, aggressive bulls willing to take some overnight risk and early morning risk on weekly jobless data....

Profiling bullish QQQ on Trade at $30.25, Stop under $30, target just below WEEKLY R2 of $31.16 at $30.97.

  Jeff Bailey   6/4/2003,  3:49:59 PM
Economic Data tomorrow ... Weekly jobles claims due out at 08:30 AM EST with consensus at 421,000, compared to prior week's 424,000.

Then at 10:00 AM EST, April factor orders forecasted to show a -1.8% decline, vs. March's 2.2% gain.

  Jeff Bailey   6/4/2003,  3:43:42 PM
Market Volatility Index (VIX.X) 22.41 -0.17% ... now in the red.

  Jeff Bailey   6/4/2003,  3:42:20 PM
Dow Industrials (INDU) 9,043.75 +1.35% .... trade at 9,046.62 in last 5-minutes now takes out the December high. Of the major indexes, this now "completes" the trend of higher high and higher lows and has all indexes now technically showing a longer-term bull market in place.

This should give a lift to investor psychology.

  Linda Piazza   6/4/2003,  3:38:29 PM
The Dow is now above the December 2 high at 9043.30. Next ahead is the August 22 high at 9076.90.

  Linda Piazza   6/4/2003,  3:35:14 PM
Anyone taking bets on OEX 500?

  Jonathan Levinson   6/4/2003,  3:35:01 PM
Put to call ratio .77 again.

  Jonathan Levinson   6/4/2003,  3:30:19 PM
No, a "Bud" light! Wow! QQV is now down .23, VXN -.6 but VIX +.16, TRINQ .67, TICK.NQ +494. New year highs for the indices.

  Linda Piazza   6/4/2003,  3:29:04 PM
There's nothing like the market to humble you. I no sooner post a comment about all the hourly candles having spikes and the OEX promptly moves up above the previous high of the day, eliminating that spike. The DJI, however, is just now coming up above the 9025 top of that afternoon trading range, lagging the OEX a bit.

  Jonathan Levinson   6/4/2003,  3:20:29 PM
QQV goes negative for the first time today.

  Jonathan Levinson   6/4/2003,  3:14:15 PM
Many thanks!

on StockCharts.com

for NYSE: $NYA200

for Nasdaq: $NAA200

  Linda Piazza   6/4/2003,  3:11:47 PM
The OEX hourly chart shows candles that look a bit like my hairdo, short and spiky. Those OEX spikes come from shadows that attempt to pierce next resistance, and there are now a number of them lined up alongside each other in this consolidation band. Those spikes don't cheer bulls, but this is still a consolidation zone until proven otherwise. The daily chart shows small-bodied candles chugging up along that upper Bollinger band.

  Jonathan Levinson   6/4/2003,  3:07:18 PM
Do you know where I could find the chart of percent of NYSE stocks above their 200 day moving averages from stockcharts.com or other charting web sites?

I read from the CNBC site that this percentage was above 80 last week. Doesn't this indicate a market top? Most of the sentiment indicators such as the II survey, AAII survey, NYSI, NASI, VIX, $BP and etc are indicating intermediate term top. The market still rallies like 1999 - 2000. Do these indicators fail us this time? Or this rally just sucks some bulls and kill some bears?

First of, I've seen the chart to which you refer, but can't dig it up. Here's a set that paint a similar picture: Link

With respect to your second question, we're either seeing these indicators tell us that the market is in a topping zone, or that the mother of all rallies is in its very early stages. I vote for door #1, as you know by now. The risk/reward on long plays is becoming increasingly less favorable as we scope new highs.

  Linda Piazza   6/4/2003,  3:06:16 PM
Volume patterns remain strong, with total volume now at 1.2 billion for the NYSE and 1.9 billion for the Nasdaq.

  Jonathan Levinson   6/4/2003,  3:02:56 PM
Looks like the FVX went out at its low, down 6.3 basis points, which I believe is a new yearly low. A five year treasury bond will now pay you 2.179%. Little else has changed, as the Qubes paint a very narrow range just under its highs of the day.

  Jeff Bailey   6/4/2003,  2:59:01 PM
Check your stock's bullish vertical counts! Genesis Microchip (GNSS) $16.75 -10.39% ... stock lower despite Pacific Growth reiterating their "overweight" rating on GNSS following company's warning on revenue shortfall. GNSS did say increase in gross margins and reduction in operating expense will have it meeting bottom line estimates.

Will simply note that GNSS Monday high of $20.35 was getting close to its Pnf chart's bullish vertical count of $21.50. Not a reason to "sell," but very good reason to have measured risk/reward to a longer-term target and snugged a stop up within at least $1 at $19. Link

  Linda Piazza   6/4/2003,  2:49:58 PM
As we move into the afternoon, the DJI's range has narrowed even further, as has that of the OEX, but bulls don't seem to be able to drive the markets over that next resistance. Things may change after the bond markets close, but which direction?

  Jeff Bailey   6/4/2003,  2:46:01 PM
S&P Banks Index (BIX.X) 311.06 +1.42% .... sessiion highs.

  Linda Piazza   6/4/2003,  2:40:20 PM
Once again, for reference, the day's OEX high has been 494.26.

  Jeff Bailey   6/4/2003,  2:27:35 PM
02:00 Internals...

NYSE = Vol. 941m A/D 3:1 NH/NL 433:3

NASDAQ = Vol. 1.6b A/D 2:1 NH/NL 237:3

  Jonathan Levinson   6/4/2003,  2:23:24 PM
Guys are trying to make a name for themselves by going after Stewy baby. These clowns should be going after the Enron folks more and all the analyst that hyped stocks over the past 5 years.

I couldn't agree more.

  Linda Piazza   6/4/2003,  2:21:47 PM
Since about 10:30, the DJI has been trapped in a range roughly from 8990 to 9025.

  Jonathan Levinson   6/4/2003,  2:17:36 PM
The tape is awash with the minutiae of the Martha Stewart story. Very little about IBM or other bigger matters.

  Jeff Bailey   6/4/2003,  2:15:11 PM
August Fed Funds Futures chart, which is the second chart in today's 01:00 PM Update. Link

For some reason, I think our uploader is duplicating chart links for the intra-day update. I'm working on resolving this.

  Jonathan Levinson   6/4/2003,  2:12:38 PM
The put to call ratio is up to 29.46 again, +.95, while the put to call ratio has risen to .79. It looks like puts remain in favor this afternoon.

  Linda Piazza   6/4/2003,  1:57:04 PM
Right on schedule, the DJI and OEX both gapped up at 1:44, just one minute shy of my dreaded 1:45 ET period. If this gap up holds, market participants know one thing about the markets. If it doesn't and the DJI and OEX immediately fall again, the market knows something different.

  Jonathan Levinson   6/4/2003,  1:46:20 PM
The QQV is finally chilling out, up just .46 now, and while the FVX is still near its session lows, the sideways action in the markets looks very bullish to me. If this is the pullback after today's and yesterday's moonshots, then higher highs are a distinct possibility, difficult as it is to imagine.

  Ray Cummins   6/4/2003,  1:44:16 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity

Another great session for market bulls and the majority of positions in our portfolio. However, a number of bearish plays require attention due to the recent upside activity. Harley Davidson (NYSE:HDI) is the most obvious early-exit candidate as the issue has moved above $43, well beyond the sold (call) strike at $42.50. Traders are encouraged to evaluate their outlook for this position and make any necessary closing or adjustment transactions. Other stocks on the "watch" list include Federal National Mortgage (NYSE:FNM), which is also above the sold (call) strike, Abercrombie & Fitch (NYSE:ANF), International Paper (NYSE:IP), Wal-Mart (NYSE:WMT), and Forest Labs (NYSE:FRX). In the credit-strangles group, Nextel (NASDAQ:NXTL) is trading a few cents above $15 but since the position is profitable with the stock below $15.75, we will continue to monitor the issue closely in the coming sessions.

  Linda Piazza   6/4/2003,  1:43:04 PM
Here we are back to my least-favorite time of the trading day, 1:45 ET, when stops get run as next support or resistance is tested.

  Jonathan Levinson   6/4/2003,  1:42:38 PM
It looks like accounting scandals are old news, as IBM trades higher by 85 cents today.

  Linda Piazza   6/4/2003,  1:33:28 PM
The DJI has held 8990 support since moving above that level in the first hour of trading today. A sustained fall beneath that level would be the first sign of potential weakness, but those volume patterns continue to spell trouble for bearish traders. However, the DJI hasn't been able to top next resistance, either. Today's high has been 9025.20, with the December 2 high at 9043.30 and the August 22 high at 9076.90. I'm still watching the DJI in order to correlate strength or weakness in the OEX.

  Linda Piazza   6/4/2003,  1:28:22 PM
Did you hear that prosecutors used genetic testing to determine that the "60" written on the broker's worksheet was written with a different pen than used on the rest of the worksheet? Apparently, the defendants suggest that the "60" was evidence that Stewart always intended to sell at 60. I wonder how much that genetic testing cost the government?

  Jonathan Levinson   6/4/2003,  1:26:07 PM
They'll make an example of Martha. The analysts who upgraded companies they simultaneously referred to as "POS's" settled by paying back a fraction of the money their firms reeled in, no admission of liability, but Martha and her broker will be threatened with the prospect of prison time.

  Linda Piazza   6/4/2003,  1:25:09 PM
Up/down volume patterns are easing from their earlier strength, but not in a meaningful way. Up volume is still 4.6 times down volume on the NYSE and 2.2 times down volume on the Nasdaq. Adv/dec ratios remain strong, too, with a 2.7 ratio on the NYSE and 1.9 on the Nasdaq. These numbers eased somewhat, too, but remain strong. New highs already number 642 while new lows are at 6 for the NYSE and Nasdaq combined. Total volume is 846 million for the NYSE and 1.46 billion for the Nasdaq.

  Linda Piazza   6/4/2003,  1:16:31 PM
We're seeing a normal move back to retest that OEX bull-flag formation on the five-minute chart. Bulls would preferred that the OEX zoom past the previous high first, rather than making a lower five-minute high, but so far, the OEX holds above that 491.70-492 zone that is next support. I'm still correlating the OEX's actions with those of the DJI, also retesting its own five-minute bull-flag pattern. The DJI did reach a relatively equal high, however. A sustained DJI fall beneath 8990 would confirm that double-top and suggest a downside target near 8850, although I also note interim support near 8970-8975. However, that double-top has not been confirmed and both the DJI and OEX so far appear to be conducting successful retests of their bull-flag patterns.

  Jonathan Levinson   6/4/2003,  1:08:29 PM
The bearish divergence in the volatility indices continues to progress, with QQV up 1.24 to 29.75 and QQQ up .25 to 30.111. FVX is nearing its lows of the day, -4.8 bps, with XAU up 1 and HUI up .31. TRINQ .84 and TICK.NQ +2. While a reversal is difficult to time, the risk to bulls appears to be increasing as the session wears on.

  Mark Phillips   6/4/2003,  1:05:04 PM
Thanks for the plug/advertisement Linda! How I arrived at my current trading style may be instructive to other traders who are still trying to determine what ought to be in their plan. You see, my early trading career was filled with what I would call stereotypical "male" trading -- jumping on a momentum trade that 'looked good' at the moment, following someone else's recommendation, etc. Basically it was a hodge-podge, with no defined rules as to what was acceptable or not.

As a result, I had some big winners and some big losers. It was in trying to unemotionally evaluate those results and find out what was working and what wasn't that it became clear my losing trades were largely a result of not having a coherent plan. Now that I have a clearly defined strategy that I follow, I trade much less than I used to. But the trades that I do take have a higher win ratio, which in the end is very constructive for my state of mind each time I do head into a new trade. I'm hoping that the series I'm doing on futures trading will be useful to both new and experienced traders in helping to shorten the learning curve that I (and I think most traders) have gone through.

  Jeff Bailey   6/4/2003,  12:52:06 PM
Gold/Silver Index (XAU.X) 74.93 +1.21% .... in last night's Index Wrap, we discussed how even little intra-day "head/shoulder tops", which see a potential right shoulder get broken to the upside trigger some decent short-covering moves to the upside once the pattern fails.

While the intra-day pattern failures can provide nice near-term pops for bulls that attempt to take advantage of the supply/demand shift, similar failures in a longer-term pattern can be even more powerful. Eye on XAU.X with alerts set just above the 76.00 level on this one. Link

  Linda Piazza   6/4/2003,  12:46:09 PM
For those of you watching the options monitor only, there's been a discussion over on the futures monitor about trading with a plan and the propensity of some female traders to prefer a plan. My plan includes setting up appropriate risk/reward parameters, limiting risk by not overleveraging, balancing the portfolio when appropriate, switching to less risky hedged positions when market action warrants it, reviewing trading patterns to see what's working for me and not working, and other such parameters.

When possible, I like to plan my trades in advance, but then use market action to time the entries or exits. Some of you have different trading styles, and they should be appropriate to your account size, the time you can devote to monitoring the markets, and your own personality. As I've mentioned in the past, I just am not successful with straddles, so I rarely trade them. Although I'm usually a patient trader, I want to buy in and out of those straddles and reduce my basis. I don't know why straddles affect me that way because I am certainly patient with other trades, but they do, and so I rarely trade them.

Anyone who has been reading Mark Phillips' recent series of articles on trading futures knows that trading with a plan is not limited to female traders, however. Mark set up definite parameters for his trades, and his series of articles helps all of us to evaluate what we want from our trading experience, whether male or female, trading futures or not.

  Jeff Bailey   6/4/2003,  12:45:44 PM
Market Volatility Index (VIX.X) 23.17 +3.2% .... I've got my eye on the VIX.X still and today's higher trade as yesterday's, begins to hint of call selling and put buying, which is notable considering today's gains. Here's "my" chart of the VIX.X with the retracement I like to use to divide things up.Link

This action should have a BULLS attention and advise some caution with call buying, while BEARS look for a "spike" above 25.66 and continuation higher and internal signs of weakening from the bullish % charts.

  Jonathan Levinson   6/4/2003,  12:44:22 PM
The put to call ratio has climbed to .76 and the QQV is up to 29.64. Looks like someone's willing to pay a little extra for those puts.

  Linda Piazza   6/4/2003,  12:31:57 PM
The VIX is once again above 23, near the day's high and above the 21-dma.

  Linda Piazza   6/4/2003,  12:29:04 PM
Volume patterns remain strong, with total volume 699 million on the NYSE and a strong 1.3 billion on the Nasdaq.

  Jonathan Levinson   6/4/2003,  12:27:13 PM
QQV is still climbing on this QQQ bounce, now up 1.05 to 29.56. TRINQ is above 1 as well, risen to 1.08. Bearish divergences both.

  Linda Piazza   6/4/2003,  12:26:54 PM
The potential OEX bear-flag pattern is no longer a potential pattern: there's been an upside breakout. The next tasks are for the OEX to survive a retest of that violated formation and move over the previous day's high.

  Jeff Bailey   6/4/2003,  12:25:32 PM
QQQ $30.16 +1% .... Intra-day chart of QQQ. FIRM stop for shorter-term bull just under the $30.00 if still holding long from late yesterday. Link

  Jonathan Levinson   6/4/2003,  12:16:05 PM
FVX has sunk lower to a 4.3 bp loss, and the TRINQ is now at 1.01. TICK.NQ indecisive at +33, QQV up .97. The QQV told us that something was amiss two days ago, and all of the volatility indices seem to be "basing" at current levels. If equities weren't continuing to post higher highs, this would seem like a beautiful heads-up. The put to call ratio came in at .74, neutral again.

  Jeff Bailey   6/4/2003,  12:09:18 PM
Was over at the NASDAQ site looking at short interest data. As of May 15, QQQ short interest built to 201,050,012. Link

I think we (OI) might have a subscription to commitment of traders report and want to see what the commercials are doing, but my thinking is that the build in short interest comes just after the NASDAQ-100 Bullish % reached the 70% level, which often times will see short-interest begin to grow.

  Linda Piazza   6/4/2003,  12:06:24 PM
Here's the potential bull-flag pattern I've been watching on the OEX five-minute chart. Lately, potentially bearish patterns have broken to the upside, so we got extra reason to wait for confirmation before making assumptions about the breakout. Link

  Jonathan Levinson   6/4/2003,  11:59:03 AM
FVX is now down 3.9 bps and QQQ continues to rest on the ascending trendline. June gold is bidding 362 currentl, with HUI up .38 and XAU up .94. TRINQ is up to 1.1, TICK.NQ -38 for a change, QQV up .62. Looks like some sellers arriving as QQQ breaks the trendline, currently 30.08, looking for confirmation below 30.

  Linda Piazza   6/4/2003,  11:43:56 AM
I'm still watching the DJI vacillate around 9000. Although the DJI is a narrow index, it's closely watched, and like Alan on the Futures Monitor, I believe others will be watching it, too.

Turning to the OEX five-minute chart, I notice a big move up and then a move down in a tight series of lower highs and lower lows. That's a potential bull-flag pattern, but it will need confirmation, as always. Until then, we must assume it could break either way.

  Jonathan Levinson   6/4/2003,  11:40:35 AM
The put to call ratio rose to .73 for the past half hour. Little else has happened. QQQ is resting on that secondary rising trendline, deciding whether to bounce or break.

  Linda Piazza   6/4/2003,  11:39:21 AM
I haven't been using the CCI long, but I do like to test new indicators or new settings from time to time, to see if they're helpful to me in my trading. So far, I like what I see on the CCI, although I don't base buy or sell decisions on any one indicator. I'm no expert on the CCI, so it won't do any good to ask me questions about its use, but I mention this to suggest that you try new indicators from time to time, too. Most of the time, I return to my tried-and-true favorites, but sometimes a new indicator or setting helps me fine-tune my trading and I keep it.

  Linda Piazza   6/4/2003,  11:31:34 AM
Nasdaq volume approaches a billion already, at 957 million. NYSE volume is 510 million. Volume patterns continue to be strong.

  Linda Piazza   6/4/2003,  11:28:27 AM
Although I mostly trade the OEX, it never pays to ignore the other indices. Right now, I'm watching the DJI as it vacillates around 9000.

  Mark Phillips   6/4/2003,  11:28:11 AM
Holy Cow! I've spent all morning responding to emails, as the old inbox really filled up yesterday. I just now decided to take a look at the OI play list and tht SPW play really caught my attention. The stock is up more than 6%, blasting through the next level of resistance and actually besting the 200-dma. Apparently investors liked the company's upbeat guidance, which came in slightly above analyst estimates. Our profit target was $41.25 (picked at $36.86) and there's certainly nothing wrong with harvesting some gains on today's strength -- in fact I would recommend it.

But with a fresh PnF signal under its belt, Link SPW looks like it might have more upside in store. For those traders willing to ride this one higher, I think the maximum we could hope for now is a test of the bearish resistance line at $46. If SPW can get up there (strong historical resistance) I'd say take the money and run -- FAST! With today's strong surge, we obviously need to raise our stop. Conservative traders could get really stingy, raising their stop to $40.25 (just below the top of today's gap), while traders willing to let the play breathe a bit could use a stop just under yesterday's close of $39. We're raising our coverage stop to $38.75, just below the top of yesterday's gap.

  Jonathan Levinson   6/4/2003,  11:27:18 AM
QQQ has now found support on the secondary rising trendline, the one I mentioned earlier today as forming the lower end of the bear flag on the 3 minute candles. A print at 30.10 will be a break, and below 30 we have confirmation.

  Jonathan Levinson   6/4/2003,  11:15:26 AM
I follow the Investor's Intelligence # and today's weekly # came in at 56.5% bullish and 20.7% bearish. The low bearish% reading hasn't been this low since 1992. Now I use this indicator on intermediate-term trading decisions, along with other indicators and technical charts. What is your opinion of the I.I. and its weighting in your trading decisions? Is there one indicator that you find most helpful?

I watch them too. This is yet another show of extreme bullish complacency that makes bears salivate. Everyone is loaded into the same side of the boat. The indicators I use for trading are at your disposal in the market monitor. Unfortunately, for all the bullish advisors, there are an awful lot of put buyers, which has been "crash proofing" the markets. But, the II #s you've listed are yet another example of how overdone this rally is becoming. The only other interpretation is that all these bulls are going to power the indices over the top, and into a new bull market. I doubt it, but as option traders, fading the trend is very risky business.

  Linda Piazza   6/4/2003,  11:15:07 AM
Currently, adv/dec ratios show 3.3 for NYSE-traded issues and 2.5 for Nasdaq-traded issues. Up volume is 5.6 times down volume on the NYSE and 2.9 times down volume on the Nasdaq. New highs/new lows are at their usual (lately) sky-high ratios. Volume on the Nasdaq is particularly strong, at 825 million shares traded already. On the NYSE, 434 million shares have been traded.

  Jonathan Levinson   6/4/2003,  11:10:07 AM
The secondary uptrend has just been violated on the Qubes, but it will take a print below 30.10 to violate the rise since yesterday afternoon and a move below 30.00 to confirm it. Yields are climbing, but so are the volatility indices. Tricky market here.

  Linda Piazza   6/4/2003,  11:04:57 AM
Reader Question: Are you aware of any guidelines correlating the magnitude of parabolic rises to the subsequent corrections?

Response: I'm not aware of those studies if you're using the term "parabolic" in the strict mathematical sense, although there may be studies like that. However, when I was substituting for Jeff while he was on vacation, I included information from Martin Pring's book Technical Analysis Explained that correlated the size of a move with the expected size of a retracement. The relationship is an inverse one: the bigger the move, the smaller the expected retracement; the smaller a move, the bigger an expected retracement. Since this rally has retraced all the previous movement, most would now expect a small retracement. I'm glad you asked this question, because I was doing that subbing for Jeff in early May, and it's been a while since I mentioned this information.

Pring's information actually comes from studies conducted by an earlier market technician, Gartley, who published classifications based on the work by yet-another earlier technician, Robert Rhea. I imagine Gartley's book, Profits in the Stock Market would include the exact statistics, but I don't have the book.

  Jonathan Levinson   6/4/2003,  10:59:36 AM
The US Dollar Index had dropped below 93.50 and is now back above 93.60 on the ISM data. June gold continues to bid above 361, and HUI and XAU remain positive. The TRINQ is holding surprisingly high at .95, TICK.NQ +225/ The volatility indices remain positive, and it could well be option writers buying back their short puts.

  Linda Piazza   6/4/2003,  10:57:24 AM
At 90.21, the DJX now tests the neckline of a massive potential inverse or reverse H&S formation, as seen on the weekly chart. Jane would probably be able to assess the technicals of this potential H&S formation more precisely than I can, but the right shoulder is nearly as large as the head, so it's not a perfect formation. This is either a point from which a new leg up might be launched or congestion can ensue or the neckline be rejected with a strong move down. In other words, yet-another key moment is at hand.

  Linda Piazza   6/4/2003,  10:44:47 AM
The OEX 60-minute chart shows that the OEX has just completed a normally bullish tower-bottom formation--a long black candlestick followed by congestion and then a long white candlestick, so that the two longer candlesticks form towers--except that the OEX has not been declining and is not at a bottom. I can't find any information that shows this as a typical continuation pattern, so I'm not sure what to make of it. What I've decided to make of it is a conclusion that there's no use looking for a pattern in everything. A similar pattern set up on the 29th-30th, followed by congestion and then another move up.

  Jonathan Levinson   6/4/2003,  10:43:46 AM
I'm bidding on some front month INTC puts here, but it will take a push higher for me to get my price.

  Jonathan Levinson   6/4/2003,  10:41:28 AM
Put to call ratio .69, QQV, VXN, VIX all positive, FVX still down 3.3 bps. Bearish divergences.

  Jonathan Levinson   6/4/2003,  10:39:41 AM
YM 9000.

  Jeff Bailey   6/4/2003,  10:38:37 AM
QQQ $30.26 +1.3% .... intra-day chart at this Link

QQQ bulls from late yesterday $29.85 now raises stop to $29.85 or break-even, or more aggressive stop just under $30.00. Target of $30.30 achieved with session high of $30.33 so far, but looks to have potential into "zone of resistance" $30.40-$30.47.

  Linda Piazza   6/4/2003,  10:33:14 AM
At 493.44 as I type, the OEX has hit the 493.40 target predicted by that double bottom formation on the OEX intraday charts, mentioned in an earlier post. I didn't know it was going to happen quite so quickly. Those targets are supposedly minimal targets, but I don't take targets predicted by intraday charts too seriously anyway. We're approaching next resistance on the OEX, but I'm not sure how strong it will be.

  Jonathan Levinson   6/4/2003,  10:32:44 AM
Shock and awe! Bonds rallying, equities rallying, everything rallying! Where's the money coming from?

  Linda Piazza   6/4/2003,  10:28:50 AM
As I mentioned last Wednesday and Thursday, when the OEX printed two potential reversal signals in a row, those reversal signals must be confirmed. Although I know my constant cautions can become irksome, action this week points out necessity to wait for that confirmation. Although Wednesday's doji printed above a big white candle can be a potential reversal signal, it could also have been a sign of indecision near an important level, as it turns out it was. I also pointed out that the Bollinger bands slanted up strongly and that it was possible that the OEX could just follow those BB's up, as they'd done at other times. When the markets manage a move above a doji, they've become "refreshed" according to Japanese candlestick lore. Still, here comes another caution: prices won't follow the BB's up indefinitely. The bullish positions in my portfolio are performing well, but you can bet I'll remain watchful and not complacent about them.

  Jeff Bailey   6/4/2003,  10:28:01 AM
Airline Index (XAL.X) 47.83 +5.21% ... making a bullish move here above its November 6, 2002 relative high of 45.93, which served up formidable resistance on rally high of May 6th. Nice break from large base here. Link

  Jonathan Levinson   6/4/2003,  10:27:44 AM
Looks like I fixed the word wrap problem. Thanks Russ. Everyone, press "enter" before and after entering links.

  Linda Piazza   6/4/2003,  10:23:49 AM
The OEX has just moved above Monday's 491.75 high, currently printing a 491.87 number.

  Jeff Bailey   6/4/2003,  10:22:22 AM
S&P Banks Index (BIX.X) 308.97 +0.8% ... getting "upside alert" here at 308.85, which was our reverse head/shoulder top objective.

Will monitor from here for "erational exuberance" or a "reversal" as technical target achieved from pattern recognition.

Is the economy on the mend and about to explode? Or has all this bullishness from the banks simply been technical driven?

  Jonathan Levinson   6/4/2003,  10:21:12 AM
Word wrap doesn't seem to be on.

  Jonathan Levinson   6/4/2003,  10:18:46 AM
Hmm. Yields are lower still, FVX -3 bps now, and the VIX, VXN and QQV are all up. TRINQ is up to .96, and the HUI and XAU are still positive.

  Jeff Bailey   6/4/2003,  10:16:55 AM
QQQ $30.07 +0.7% ... intra-day chart of QQQ at this Link

Will now raise stop to break-even here on trade at DAILY R1 of $30.05.

  Linda Piazza   6/4/2003,  10:14:14 AM
For reference, Monday's OEX high was 491.75.

  Jonathan Levinson   6/4/2003,  10:11:59 AM
The put to call ratio is down to .65 from yesterday's +1.0 readings, equity pcr .52 and index pcr 2.10.

  Jonathan Levinson   6/4/2003,  10:10:11 AM
Alternatively, it's possible that Al Green is putting "his" (well, really our) money where his mouth is, and signalling that he actually believes that the "recovery" he mentioned yesterday in Berlin is here. If he persists in draining the punchbowl, the markets could come under pressure.

  Linda Piazza   6/4/2003,  10:09:48 AM
The OEX has confirmed the short-term double-bottom formation on the 15-minute (also visible on the 30-minute) chart, a formation I mentioned earlier this morning. As I also mentioned earlier, that predicts a target near 493.30, but targets predicted by intraday charts are not always reached.

  Jonathan Levinson   6/4/2003,  10:07:13 AM
FVX is dropping back lower, despite the massive drain of intervention money by the fed just now. Equities don't seem to be achieving escape velocity as one might otherwise expect here, but it's only been a few minutes.

  Jeff Bailey   6/4/2003,  10:05:31 AM
QQQ $30.04 +0.6% ... jumps to our DAILY R1 of $30.05 on the ISM data. (see Index Trader Wrap) Link

  Jonathan Levinson   6/4/2003,  10:04:58 AM
QQV has ticked up to 28.86, TRINQ back to .37, TICK.NQ +553. The bullish hysteria continues to grow. FVX up to a 2.1 bp loss, TYX a 1.5 bp gain. HUI is up .80 and XAU +.41.

  Jeff Bailey   6/4/2003,  10:03:59 AM
ISM Services for May at 54.5 was better than the 52.0 consensus.

  Jeff Bailey   6/4/2003,  10:01:51 AM
OEX 489.09 +0.2% .... early trade has OEX above its "right shoulder" from Index Trader wrap (yesterday's intra-day), which was marked by the December high of 487.94, and that's been the morning low. Action at that level does hint that bears are turning a bit and offering morning support there. Still... tight range of 489.48-488.03 in early going. ISM Services may get a reaction.

  Jeff Bailey   6/4/2003,  9:58:41 AM
ISM Services due out any minute. Consensus number is 52.0

  Jonathan Levinson   6/4/2003,  9:56:07 AM
The fed has just done a reverse overnight repo of 1.25B, allowing 5.49B in maturing repos to expire, for a total 6.75B drain. It looks like the President's "strong dollar" comments made it through the lead and kryptonite walls of the Marriner S. Eccles Building.

  Jonathan Levinson   6/4/2003,  9:52:06 AM
Despite the fade in equities, treasury yields are creeping up from their lows and the volatility indices are creeping down. It looks bullish, except that the equities feel "heavy" right here.

  Linda Piazza   6/4/2003,  9:48:37 AM
A glance at the OEX 15-minute chart shows the OEX on the verge of confirming a double bottom or being turned back from the confirmation level, with the bottoms at 484.50 and the confirmation level at 488.90-489. A sustained move through that confirming level would predict about 4.40 more upside in the OEX, so a move to about 493.30. This would bring the OEX into what some deem to be next strong resistance. I'm hesitant to give too much credence to targets just now, ahead of the 10:00 numbers and especially when they're predicted by short-term intraday charts. In any case, wide bid/ask spreads make it difficult to profit from 4.40 moves in the OEX, even if you catch the exact beginning and end of the move. If instead, the OEX falls through 484.50, and sustains that movement, it will have confirmed a double top!

  Jonathan Levinson   6/4/2003,  9:45:42 AM
The intraday head and shoulders on QQQ 3 min might have failed, but it's still in a bear flag formation, and appears to be softening somewhat since the opening bell. A print at 29.70 would represent a downside breakdown from current levels.

  Linda Piazza   6/4/2003,  9:39:42 AM
Today's first five-minute OEX candle sprang up from just above the 487.94 December 2 high, but the OEX price now falls below the opening level. That's not something that bulls want to see, but I would reserve judgment ahead of the 10:00 numbers.

  Jonathan Levinson   6/4/2003,  9:38:02 AM
From the WSJ: More than $3.1 billion in shares were sold last month by corporate insiders, the largest amount of such selling in two years.

  Jonathan Levinson   6/4/2003,  9:36:54 AM
Congrats, Jeff!

  Jonathan Levinson   6/4/2003,  9:31:39 AM
Opening levels TRINQ .53, TICK.NQ +293, QQV +.64 to 29.15.

  Jeff Bailey   6/4/2003,  9:26:01 AM
Subscriber note regarding auto stocks ... Jeff: GM received a 4% increase in sales but it was due to the 27 work days this May versus the 26 last May (3.8%) more days to get it done. Being associated with the business as I am, I can tell you it came at one heck of a greater cost to them this year than last. (Ex. $4000 rebate on a $12,000 Cavalier.) It works for me on the retail side but these guys have got to be getting hit hard.

Does look to at least be showing up in comments from DCX late yesterday.

Note: I do not know if the subscriber holds a bullish/bearish position in GM's stock.

  Jeff Bailey   6/4/2003,  9:18:38 AM
09:00 Update posted at this Link

  Jonathan Levinson   6/4/2003,  9:01:26 AM
Here's a thought on those numbers. The market's reaction to news has been unpredictable through the ages, leading one of my mentors (the one who ignores chart patterns) to speculate that the market is not a "forecasting" or "discounting" mechanism, but just a liquidity meter. It's for this reason that we follow Al Green's maniacal open market activity. A reader once asked what the sources of money supply increases were, and one of them is credit activity. The blowout refinancing activity creates fresh debt to trade through the financial system, and thereby increases liquidity. These numbers just out look like bad news for bears, as more liquidity = higher prices if the theory is correct. This is very general stuff, and at the outer reaches of my understanding. But if we see a rally continuation over the coming weeks, we'll know to watch the mortgage index more closely.

  Jonathan Levinson   6/4/2003,  8:57:02 AM
New record highs on the mortgage indices:

Market Index - 1856, +13.6%

Purchase Index - 460, +16.4%

Refi Index - 9977, +12.9%

  Linda Piazza   6/4/2003,  8:54:35 AM
Sorry, Jonathan. The post has now been corrected. I was replying to your post and hence punched your name. It's too early, I guess, for me to be thinking correctly.

  Linda Piazza   6/4/2003,  8:53:43 AM
Does that mean I get to be barbecued bear #1, Jonathan? I don't know if I can accept the honor, however, as I confess I've got half and half bullish and bearish positions in my portfolio. I guess I'd have to be a skewered bear, caught trying to straddle the fence.

European markets continue to trade either side of the flatline. Currently, the FTSE 100 trades down 11.40 points, at 4104.30; the CAC trades down 5.71 points, at 3033.70; and the DAX trades up 14.75 points, at 3041.57.

  Jonathan Levinson   6/4/2003,  8:47:18 AM
I'm pretty sure that Linda posted that under my tag, but as a fellow rotisserie-rider on Jeff's grill, she's more than welcome to do so.

  Jonathan Levinson   6/4/2003,  8:38:20 AM
Q1 GDP was revised up to a 1.9% gain from the 1.6% "pro forma". Factory productivity was revised down to 1.9% from 2.1%, below expectations. Labour costs were revised down to a 2.6% gain from 2.7% first reported. The yield curve has steepened, with FVX -3.3 bps now and TYX +2.3 bps. QQQ is down 1 cent, NQ -1 and ES -.50.

  Jonathan Levinson   6/4/2003,  8:24:07 AM
Barbecued bear #2 checking in. Was fortunate enough to encounter Stuart, the Ameritrade Photocopy Boy, and the Dell Dude on the way to the office, and administered a sound thrashing to each. Well, maybe not, but it sounded good. No actus reus, as they say. In any event, the US Dollar Index is holding in the 93.60 area, trying to pick a direction. June gold is 363.70, while equity futures are flat, ES 972.75, NQ 1201.50, YM 8930. QQQ is trading 29.86, also unchanged. FVX -.6 bps, TNX +1.1 and TYX +3 bps.

  Jim Brown   6/4/2003,  7:33:59 AM
Reloading Market Monitor (Server will be down for 5 minutes)

  Linda Piazza   6/4/2003,  6:59:10 AM
Good morning. The Nikkei closed slightly down Wednesday, falling 6.63 points or 0.08%, to 8557.86. The market started out strong in early trading, opening above 8600 and trading up into the midday break. After the break, however, the Nikkei plunged, closing at the day's low and more than 100 points below the day's high. South Korea's Kospi closed up 0.52%, but Hong Kong and Taiwan markets were closed.

Newsletter writers last night mentioned the positive spin being attributed to Alan Greenspan's speech yesterday, and those remarks echoed in Japan last night, too. Japanese Prime Minister Junichiro Koizumi also remarked at the G-8 meeting in France that the yen was overvalued against the dollar. The difference between his remarks and Bush's is that evidence shows that the Japanese government is willing to put actions behind their words, whether or not those intervention efforts are successful in the long run. These factors got the Nikkei off to its running start in early trading. Yesterday's reports also showed Japanese automakers gaining market share in the U.S., and those automakers gained in Wednesday's trading.

Neither Bush's remarks this weekend nor Greenpan's and Koizumi's remarks yesterday could hold the dollar up through the afternoon's trading in Tokyo. The dollar fell, and so did Japanese tech and export stocks. In addition to auto stocks, one exporter holding onto its gains was Sony.

The FTSE, CAC, and DAX have traded both sides of the flat-line level in today's trading, and it's possible that trading could remain choppy ahead of tomorrow's ECB decision. This morning, Reuters released a May European services number that showed the services industry rising to 47.9 from April's 47.7. The reading remained below 50, however, and surveyed managers reported that prices and new business declined faster than they had in April, according to a Bloomberg report. While Japanese automakers gained, DaimlerChrysler has been dropping in European trading, dragging down some of the other European automakers to trade flat or slightly weak. Airliner KLM rose after reporting 10% slower passenger traffic in May, mostly due to the effect of SARS.

As of this writing, the FTSE 100 trades up 5.90 points or 0.14%, at 4121.60. The CAC 40 trades up 8.71 points or 0.29%, at 3048.12; and the DAX trades up 23.92 points or 0.79%, at 3050.74.

  Jim Brown   6/3/2003,  1:22:51 AM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

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