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  Jim Brown   6/5/2003,  4:38:52 PM
New 52-week highs hit a new record today at 1125 with only 19 new lows.

 
 
  Jim Brown   6/5/2003,  4:23:58 PM
Intel
There is ZERO earnings guidance or margin guidance in the press release. The conference call starts at 5:30 and there are rumors that Intel will NOT give any guidance. This would be negative in my view and imply they are struggling to make the numbers if true. It is just a RUMOR at this point. Remember they cut prices across the Centrino product line which is a regular event when sales are NOT booming. This could increase revenue but lower margins.

 
 
  Jonathan Levinson   6/5/2003,  4:18:45 PM
Bought the mystery, selling the history- INTC is 50 cents off its high.

 
 
  Jim Brown   6/5/2003,  4:15:56 PM
Intel Update
$6.6-$6.8 billion in revenues. Narrowed from $6.4-$7.0 billion in prior guidance.
Hardware at high end of seasonal pattern. All other components unchanged.
Communications products remain soft.
Press release: Link

 
 
  Jeff Bailey   6/5/2003,  3:55:10 PM
Geron Corp. (GERN) $6.37 +23.9% ... upside alert here at MONTHLY R2. Trader can raise stop to the MONTHLY 19.1% retracement of $5.85 is he/she wants to trade the levels.

 
 
  Jonathan Levinson   6/5/2003,  3:48:06 PM
INTC has gone vertical.

 
 
  Linda Piazza   6/5/2003,  3:47:22 PM
Merrill Lynch has an early-cyclical index and a late-cyclical index. I haven't been able to find the components of these, but the early cyclical index is composed of stocks that tend to do well early in a recovery, while the late cyclical index is composed of stocks that do well once the recovery is well underway. Today, I note that the early-cyclical index is up 0.84%, while the late-cyclical index is down 0.17%. Both underperform the SPX, currently up 1.46%, but the early-cyclical outperforms the Wilshire 5000, currently up only 0.47%.

 
 
  Linda Piazza   6/5/2003,  3:41:08 PM
Since about 2:15, the OEX has been moving up, falling back in a bull-flag pattern on the one-minute chart, then breaking out of that bull-flag pattern to climb higher. That changed about five minutes ago. The OEX attempted an upside breakout, then fell through the bottom of the potential bull-flag pattern. The OEX needs to make a lower intraday low, at least lower than the 494.37 low at about 2:15, before this can even begin to be given any credence, however. I don't know if that's going to happen this close to the end of the day or if short-covering will push it up again instead.

 
 
  Jonathan Levinson   6/5/2003,  3:39:03 PM
I'd probably be hoping for one more panic squeeze higher, possibly after hours, and try to sell into that, if I were feeling reckless.

 
 
  Jonathan Levinson   6/5/2003,  3:35:34 PM
The put to call ratio has printed .62, with the equity pcr .46 and the index pcr 1.63.

 
 
  Linda Piazza   6/5/2003,  3:30:04 PM
For reference, the FTSE 100 closed down 22.30 points or .54%, at 4104.30, just managing to hold onto 4100. It had fallen to a low of 4083, but climbed off its low in the afternoon. The CAC 40 closed down 29.78 points or 0.97%, at 3034.07; and the DAX close down 40.26 points or 1.31%, at 3039.76. The DAX reached 3106.27 at one point during the day, but closed nearer its low of 3020.46 than it did that day's high.

 
 
  Jonathan Levinson   6/5/2003,  3:24:13 PM
Hyperinflation is precisely what's causing this rally, imho.

 
 
  Jonathan Levinson   6/5/2003,  3:12:33 PM
Jim's precis of the FT article is a clear argument for the ownership of gold, as hyperinflation and the competitive devaluation of foreign currencies will jeopardize the intrinsic value of the dollars we hold.

 
 
  Linda Piazza   6/5/2003,  3:10:23 PM
To continue the H&S discussion, even if it relates to 2-minute charts only and to very short-term movements only: Once again, the pattern of downside targets not being met continues. Just as we can't always trust oscillators in a trending market, perhaps the last months have shown us that we also might not be able to trust downside targets predicted by chart formations. When that changes, we might know that there's some divergence with recent rally mode.

 
 
  Jonathan Levinson   6/5/2003,  3:00:46 PM
As Linda was typing about it, the h&s on QQQ flipped around and lauched to its target on a reverse h&s basis- in under 2 minutes.

 
 
  Jeff Bailey   6/5/2003,  3:00:11 PM
Short Interest Link Jeff: From time to time you mention short interest on a stock. Where do you get this info from?

I get it from the NASDAQ site. Here's a Link I think will work. I punched in QQQ as I discussed this yesterday I think.

 
 
  Linda Piazza   6/5/2003,  2:57:32 PM
Now that I have mentioned the dreaded "H&S" words, though, did you notice the nice little reverse H&S forming on the chart linked to my 14:46 post, with the same neckline as the regular one? That neckline is being broached to the upside as I type. Which one wins? Of course, it's also possible to draw a slanting neckline for the original H&S formation, and that's just now being tested. Perhaps that was the correct neckline after all. However, these are two-minute charts, so we shouldn't give too much credence to their actions except as they might predict the start of a bigger, more extended movement in the indices.

 
 
  Jonathan Levinson   6/5/2003,  2:52:20 PM
MSFT is resting on a daily head and shoulder neckline, valid from about 23.90 to 24.00. Odds are that it bounces from here, but this is the third or fourth test of 24 support, and today is as good as any for it to break and for MSFT to get a little closer to its true valuation. It was a better short yesterday, 81 cents higher, and should be a safer short below 23.90.

 
 
  Linda Piazza   6/5/2003,  2:51:59 PM
Of course, the OEX shows a H&S formation similar to the one on the DJI, as pointed out by the reader in my 14:46 post and the one Jonathan has pointed out in the QQQ. Perhaps it was because I was too focused on watching the regression channels or perhaps because I'm a little gun-shy of pointing out H&S formations the last few days, but I didn't even notice it.

 
 
  Jeff Bailey   6/5/2003,  2:51:15 PM
Geron Corp (GERN) $6.13 +19.2% ... here's my chart of GERN with WEEKLY and MONTHLY pivot analysis. Not unlike last night's Index Trader Wrap thoughts, how a trader can simply use retracement to manage a trade.Link

 
 
  Linda Piazza   6/5/2003,  2:46:27 PM
Reader Question: Do you see the nice HSH in the 2 minute DOW chart .. neck 8983. J, The Netherlands

Response: Good eye, J. Jonathan may have commented on a similar H&S on the indices he watches. I think I would have placed my neckline a little higher than you've placed yours. Since your email was sent, the DJI has come up twice to test that neckline and has twice failed to broach it. Link

 
 
  Jonathan Levinson   6/5/2003,  2:41:20 PM
So we have bonds selling off, the US Dollar selling off, and gold rallying in the middle of its downphase. Oh, and equities are treading water. Starting from broadest to narrowest markets, the currency markets tell us that foreigners are bailing. Bonds are telling us that they're bailing on their US denominated assets, which conveniently hit multidecade highs yesterday. And, equities are just holding steady, while the smallest market, gold is rallying. "One of these things is not like the others..." On a risk/reward basis, the downside on equities looks far more compelling than the upside to me.

 
 
  Linda Piazza   6/5/2003,  2:37:00 PM
My five-minute OEX chart grows crowded. Since falling out of the upward-slanting regression channel, the OEX has been trading in a downward-slanting regression channel. It's moving up toward the top of that channel now.

 
 
  Jonathan Levinson   6/5/2003,  2:29:46 PM
There were negative statements about the negative impact from competing systems like Linux that hit the wire last night. But note that there's mostly red in the big cap techs today, and the VXN is leading the QQV higher. Confusing setup, but MSFT has been weak through this entire rally.

 
 
  Jeff Bailey   6/5/2003,  2:27:11 PM
Thought I'd wait .... I'm growing a little impatient with gern bucking the bullish trend. What is your take at this point?

Received this e-mail on 05/27/03. GERN just sitting sideways last couple of weeks and building large consolidation wedge.

Now.... the "impatient" bull has probably decided that it was best to get rid of this stock/trade from his/her portfolio. That is fine. Place an alert on the stock just below the WEEKLY R2 of $5.58 and if the stock slips back below that level, then move on and DO NOT LOOK BACK.

This is what I do when I grow impatient with a trade, but I like to make this decision while the stock is still in my "impatient" mode. For instance... I can get in the mindset even here that when I/you/he/she was impatient at $5.00, that I would surely LOVE for the stock to get back to $5.58 (or whatever level) so I could get out with small profit/break even and move on.

Then.... on a day like today, suddenly I'm REFRESHED and HOPEFUL? Nope.... set your stop and stick with your NEW plan to free up capital and move on to a stock that will trade with the trend.

 
 
  Jonathan Levinson   6/5/2003,  2:26:38 PM
Could always try reconfiguring the hot keys to swap "buy" with "sell" :)

 
 
  Linda Piazza   6/5/2003,  2:16:56 PM
It appears that the OEX retest of the broken ascending channel (one-minute and five-minute charts) has failed. Bears next want to see the OEX drop out of the longer-term ascending channel seen on the hourly chart, and below the day's low.

 
 
  Jonathan Levinson   6/5/2003,  2:16:46 PM
Me too, Jim, and particularly so if the bounceless MSFT continues to drop.

 
 
  Jonathan Levinson   6/5/2003,  2:10:32 PM
A rollover from QQQ 30.37 would begin printing the descending profile of the right shoulder of that h&s, neckline 30.27.

 
 
  Jonathan Levinson   6/5/2003,  2:09:25 PM
Watching the $vix, $vxn, and $qqv creep up's like watching an elephant trying to sneak out of the room. Funny thing is, I think they're getting away with it ;-)

($vxn in particular's making a 2nd try at a sloppy cup and handle)

Good point, Matt. QQV's slowed down, but its peers are doing well. This bearish divergence has been in play for most of this week.

 
 
  Jonathan Levinson   6/5/2003,  2:07:54 PM
From my 50 tick chart of the Qubes, I see a potential head and shoulder neckline at 30.27. A break below should tarket 29.97 if the pattern fulfils. Meanwhile, treasuries are selling off, with FVX +5.9 bps, TNX +3.6 and TYX +2.7 bps. I'm heartened to see that equities have not really followed yields higher, so the most bullish interpretation of this intermarket relationship can be shelved for the moment.

 
 
  Linda Piazza   6/5/2003,  2:02:16 PM
It looks as if the 1:45 test was a test of support. (The drop actually began at 1:42, it appears.) That tested support failed, with the OEX falling out of the regression channel seen on the five-minute chart. However, the test is not yet complete until there's been a retest that turns the OEX back again and/or the OEX then falls beneath the day's low.

 
 
  Jeff Bailey   6/5/2003,  1:54:51 PM
Geron (GERN) $5.57 +8.5% ... stock "jumps" in last 10-minutes and looks to follow the BTK.X action higher.

Disclosure: I continue to hold the GERN Sept. $5 calls from prior bullish profile for SPECULATIVE bulls.

 
 
  Jeff Bailey   6/5/2003,  1:46:37 PM
Content Uploader is broken. e-mail and update delayed.

 
 
  Jonathan Levinson   6/5/2003,  1:44:51 PM
MSFT had better hold the 23.90 level, because a failure at that level brings in a head and shoulders target around 21.50.

 
 
  Linda Piazza   6/5/2003,  1:44:42 PM
1:45 ET approaches: time to test next support or resistance. With the OEX near the middle of its day's range, I can't guess which it will be.

 
 
  Jonathan Levinson   6/5/2003,  1:36:29 PM
I think I may have screwed everybody up! I bought to close my naked puts today. Thought I wouldn't get greedy. Must mean things are going up.

Perhaps, but as a different mentor once told me, always leave a little something on the table for the next guy- good karma.

 
 
  Linda Piazza   6/5/2003,  1:31:57 PM
I've been scanning a lot of charts lately, trying to maintain a neutral bias as I do so. It seems to me that in chart after chart, a single day's trading could completely change the outlook. Many seem poised at the lips of cup-and-handle formations or have climbed in what appears to be a bear-flag formation right up to the site of a large gap down (Sony comes to mind as one example) or are about to confirm a double bottom. For example, a single day's trading could drop JBX's candles below the lip of the incipient cup-and-handle formation or pop the stock soundly above that lip. A single day's trading could send Sony spiraling down from the gap it's now approaching or pop it up into that gap. Many stocks have given fresh new P&F buy signals but are just underneath bearish resistance lines and bar chart resistance, too. Daily oscillators are almost uniformly in territory indicating overbought conditions, but a single day's trading could turn them up or turn them down. As I said about the OEX earlier, I could easily make both a bearish and a bullish argument for many of these stocks. Because I could, it's impossible to make any case with conviction. Everywhere I look, markets seem poised for . . . something.

 
 
  Linda Piazza   6/5/2003,  1:21:44 PM
Reader Question: How can all the generals (large cap TECH )be down-MSFT,ORCL,CSCO,INTC,AMAT,EBAY... and yet we are up. Who is in charge here? How can the small fry lead us?

Response: It may be the mid-fry who are leading us, as I noted at one point today that when most other indices were down, the Russell stayed green. The BIX was green at that time, too. As I scan my sector list, I notice the BIX (up 1.93%), RLX (up 2.39%), XAL (up 2.77%), and Dow Jones Homebuilders (DJUSHB, up 2.46%) among the sector leaders today. However, I, too, wonder about the divergence you're noting and what it says about next direction for the markets.

 
 
  Jonathan Levinson   6/5/2003,  1:19:16 PM
A pat on the back for Jamil, and Angel, and Chris, and Barb, and Dan, and the numerous other readers watching the tape in stunned disbelief. We all agree, with varying levels of amazement. Just don't get killed in the process. The market can remain irrational longer than we can remain solvent, so keep stops on the positions and respect them.

 
 
  Jonathan Levinson   6/5/2003,  1:15:10 PM
Not to be me right here, but QQQ is printing a finger formation on the 50 tick bars, dropping 20 cents from its highs. It filled the gap and flunked out, textbook-style.

 
 
  Jonathan Levinson   6/5/2003,  1:13:00 PM
MSFT is most notably diverging from the rest of the Teflon Market, down 3.14%. Perhaps Al Green should be advised and add it back to the quote list.

 
 
  Linda Piazza   6/5/2003,  1:12:48 PM
It looks as if those returning from lunch didn't like what they saw and decided to test support again. The OEX, though, still remains within its ascending channel. Bulls especially do not want to see the OEX drop below the day's low before achieving a new high, though, as doing so now would confirm a double top on the five-minute chart, at least.

 
 
  Jonathan Levinson   6/5/2003,  1:08:36 PM
FVX spiked up on that move in stocks, now green by 2.1 bps, TNX gone flat and TYX still -2.1 bps. If selling in bonds is equating to buying in equities, the bull run in stocks could just be starting. What a thought.

 
 
  Jonathan Levinson   6/5/2003,  1:04:55 PM
It's cold and grey in Montreal. Just finished off part of a homemade bread with some homemade pepper jam, while fantasizing about a barbecue.

 
 
  Ray Cummins   6/5/2003,  1:04:50 PM
Spread/Combos & Premium-Selling -- Portfolio Activity

Another great day for option traders as the volatility continues in the broader equity markets. The big mover in our portfolio is Icos Corporation (NASDAQ:ICOS), which is up over 12% at $36.80 on the heels of positive drug (Cialis) data. Our synthetic position in the issue has achieved a profit of almost $4 in less than two weeks. Other strong stocks in the morning session include Angiotech Pharmaceuticals (NASDAQ:ANPI), Boston Scientific (NYSE:BSX), Best Buy Company (NYSE:BBY), Biogen (NASDAQ:BGEN), Celgene (NASDAQ:CELG), Chiron (NASDAQ:CHIR), Capital One Financial (NYSE:COF), ImClone (NASDAQ:IMCLE), Michael's Stores (NYSE:MIK), and Omnivision (NASDAQ:OVTI). Also worth mentioning is the buying pressure in Sony (NYSE:SNE) and traders in the recent debit straddle can now lock-in a nice gain on the speculative position.

At the same time, a number of bearish plays warrant attention as the underlying issues are encroaching on the sold (call) strikes in their respective positions. These include Autozone (NYSE:AZO), Dupont Photomasks (NASDAQ:DPMI), L3 Communications (NYSE:LLL), Barr Labs (NYSE:BRL), and Wal-Mart (NYSE:WMT), among others. Some of the issues previously listed on the "watch" list: Kohl's (NYSE:KSS), International Paper (NYSE:IP) and Illinois Tool Works (NYSE:ITW), have breached the "break-even" point and are now moving into negative territory, thus they should be exited or adjusted in a timely manner.

 
 
  Jonathan Levinson   6/5/2003,  1:00:21 PM
The COMPX has already traded 1.41B shares today, a very heavy day so far.

 
 
  Linda Piazza   6/5/2003,  12:59:10 PM
We could almost expect a pullback as the OEX approached yesterday's highs. The question is: how much of a pullback.

 
 
  Linda Piazza   6/5/2003,  12:57:52 PM
The SOX is still down .30%, but changing as I type.

 
 
  Jeff Bailey   6/5/2003,  12:55:11 PM
Looking to play some momentum in the biotechs? Human Genome Sciences (HGSI) $15.98 +5.6% .... PnF bullish with vertical count of 31.00. Can play bullish at $16, which would be 3-box reversal back higher. Then follow with a stop and look for a "catapult" type move on the reversal higher with another double-top buy signal at $17. On 3-box reversal at $16, then stop goes underneath at $14. Link

 
 
  Jonathan Levinson   6/5/2003,  12:53:29 PM
MSFT is still down 2.77%, no participating at all.

 
 
  Jonathan Levinson   6/5/2003,  12:50:45 PM
We have green across the indices, except for YM -4.00 but rising. Clearly headed for fills of the opening gaps. A textbook contrarian play would be to short the restest of gap resistance. QQQ is about a dime away at 30.48.

 
 
  Linda Piazza   6/5/2003,  12:49:24 PM
Here's one thing I'm noticing on the five-minute OEX chart: Link

 
 
  Linda Piazza   6/5/2003,  12:42:15 PM
Like it not, this is just one of those days when we have to wait and see what's going to happen. I can look at charts and make a viable argument for either the bullish case or the bearish case.

 
 
  Jonathan Levinson   6/5/2003,  12:33:08 PM
Here's a chart of the US Dollar Index, delayed. I've tried to find the symbol for US Dollar Index futures on Interactive Brokers, but neither I nor their customer service rep could find it. Link

 
 
  Jonathan Levinson   6/5/2003,  12:31:54 PM
The US Dollar Index has found some support in the 92.20 area, currently struggling with the 92.40 level. June gold hit a high of 370 but couldn't hold it, currently 366.00 x 368.90. HUI continues to holdits gains, +3.75, XAU +1.96.

 
 
  Jonathan Levinson   6/5/2003,  12:21:27 PM
QQQ 30.40 held back that advance, but the pullback is very unimpressive, as usual. Treasury yields are tracing a very narrow range, not unlike equities. Both treasuries and equities are holding onto yesterday's gains by their fingernails, but the lack of pullback in either asset class remains most impressive. The fed has boosted 3.25B in intervention money into the markets today, which is too small to account for the strength today, particularly in light of the massive liquidation of US Dollars as depicted by the US Dollar Index..

 
 
  Jeff Bailey   6/5/2003,  12:20:26 PM
12:00 EST Internals ...

NYSE = Vol. 627m A/D 16:14 NH/NL 326:0

NASDAQ = Vol. 1.01b A/D 15:14 NH/NL 194:4

 
 
  Linda Piazza   6/5/2003,  12:15:12 PM
The OEX climbs back into this morning's gap, reaching another higher high on the day, and still trading within the ascending channels seen on the five-minute-and-under charts and the hourly chart. It's currently testing the top of the gap, with the outcome of that test not yet known. Boy, somebody is less scared than I am of buying at current overextended levels. It's not that I'm necessarily convinced that markets will plummet, but that I'm less convinced that they can continue to climb forever without at least pausing to digest those gains.

 
 
  Jonathan Levinson   6/5/2003,  12:08:56 PM
QQQ is starting an upside break from the pennant depicted in my earlier chart. TRINQ at 1.61 continues to show net selling pressure, TICK.NQ +259. QQV +.88. FVX is holding at a -1.5 bp loss. 30.40 is next resistance before 30.57.

 
 
  Linda Piazza   6/5/2003,  11:58:32 AM
Here's the OEX channel I've been watching this morning, but as shown on the five-minute chart rather than the one-minute chart. I wanted to include the various levels of historical and trendline resistance that stopped the OEX within that channel this morning, and that was best shown on the five-minute channel. Note: this is a smaller channel within the larger regression channel seen on the 60-minute OEX chart, but a fall out of this shorter-term channel will also threaten a fall out of the 60-minute one. Link

 
 
  Jonathan Levinson   6/5/2003,  11:53:18 AM
June gold has a new high at 369.60, HUI +3.70 and XAU +1.96. Was it Millhouse on CNBC who referred to gold investors as "the lunatic fringe"?

 
 
  Jonathan Levinson   6/5/2003,  11:47:37 AM
Here's the QQQ pennant forming, along with my random trendline thoughts on the QQQ 50 tick bars: Link

 
 
  Linda Piazza   6/5/2003,  11:42:11 AM
I'm watching a one-minute chart of the OEX this morning, watching as the OEX trades within an ascending channel. Although the channel began forming after a drop from yesterday afternoon's high to this morning's low, I'd hesitate to consider it a potential bear-flag pattern. That's because the drop wasn't deep enough and the channel itself is rather wide in comparison to the previous price movement. We didn't have the precipitous drop and then tight pattern of higher highs and higher lows that has me on the alert for a potential bear-flag pattern. Nevertheless, a fall out of that pattern and a trade below the previous low of the day could be a sign that weakness was creeping into the OEX trading. So far, the OEX has bounced every time it's hit the bottom of that channel. We'll just have to wait to see what happens.

 
 
  Jeff Bailey   6/5/2003,  11:36:03 AM
11:00 Update posted at this Link

 
 
  Jonathan Levinson   6/5/2003,  11:32:23 AM
The session is pretty much flat so far, which is astounding given the big moves we had yesterday, complete with upper bollinger band violations, and the terrible economic data today. I'd call the current prices extremely bullish, firmly within the intermediate term uptrends- shock and awe continues.

 
 
  Jonathan Levinson   6/5/2003,  11:20:56 AM
June gold continues to hold its gains, with HUI up 3.01 to 144.41, XAU up 1.69 to 76.79.

 
 
  Jonathan Levinson   6/5/2003,  11:19:46 AM
A moment of silence for bears trapped in LNUX, going vertical right now.

 
 
  Jonathan Levinson   6/5/2003,  11:17:43 AM
MSFT is down 3.18% already, headed for support at 24.00.

 
 
  Linda Piazza   6/5/2003,  11:08:20 AM
Advancers now lead decliners on both the NYSE and the Nasdaq-traded issues. Total volume is 430 million on the NYSE and 755 million on the Nasdaq.

 
 
  Linda Piazza   6/5/2003,  11:01:12 AM
Bears got their wish and the OEX turned back from within today's opening gap, but bears are far from getting confirmation of continuing weakness as yet. That would require a move below the current day's low, as a start.

 
 
  Jeff Bailey   6/5/2003,  10:57:41 AM
Time Warner Telecom (TWTC) $8.35 +18% .... big move today on no news that I can find. NASDAQ shows short interest at May 15 of 1,785,415 compared to April 15 1,849,669, so not thinking short squeeze.

 
 
  Jonathan Levinson   6/5/2003,  10:57:01 AM
On this pullback, FVX has dunked back to a -2.2 bp loss. So far, there's been no volume pickup on the pullback, which leads me to expect that the pullback could be light. TRINQ is at 1.50, showing net selling pressure for a change, TICK.NQ +128, QQV almost flat at +.02. Both VIX and VXN are sitll holding their more substantial gains.

 
 
  Linda Piazza   6/5/2003,  10:56:36 AM
Up volume has now eased slightly over down volume on the NYSE. Down volume still leads on the Nasdaq. Decliners still lead advancers on both the NYSE and the Nasdaq-traded issues, but by fewer issues now.

 
 
  Jonathan Levinson   6/5/2003,  10:47:14 AM
Volume has dropped off significantly on this intraday up-phase on QQQ, and it's looking like a bear wedge to me. However, the move is so sharp as to make a projection difficult. 30.40 turned back yesterday's morning spike, and the oscillators look toppy on my 3 minute candle chart.

 
 
  Linda Piazza   6/5/2003,  10:46:12 AM
On the OEX, we're now getting a test of the opening gap. Bulls wants to see the OEX surmount the top of that gap, climbing first above yesterday's late S/R at 494.25, and then above yesterday's OEX close at 494.83. Bears want to see the OEX stopped by or ahead of one of those levels.

 
 
  Jonathan Levinson   6/5/2003,  10:40:35 AM
Put to call ratio climbs to .74, FVX climbs to -0.1 bps, and YM is back above 9000.

 
 
  Linda Piazza   6/5/2003,  10:40:03 AM
Volume patterns remain negative, by not by as great a proportion as was seen earlier. On the NYSE, down volume barely trumps up volume now. Down volume remains about twice up volume on the Nasdaq, however. Adv/dec ratios show 13:16 numbers on the NYSE and 11:16 on the Nasdaq. Total volume is 286 million on the NYSE and 565 million on the Nasdaq.

 
 
  Jeff Bailey   6/5/2003,  10:35:19 AM
Intel straddle ...With INTC to release a potentialy big market mover today after the close ,wouldn't you think about a INTC 20/22.5 stradle (for 0.75$) or QQQ 29/31 stradle (for 0.75$) . Still has over 2 weeks to go ,looking relativly cheap (VIX @23). I think INTC can go to 24-25$ on the up or 18.5$ on the down(I myself think they will dissapoint,21 area is very important resistance).

If you agree ,which will you play INTC or QQQ ? It will very inresting to see you do that on the MM(slide into position and mange it afterwards).

I haven't priced either strategy discussed by the trader, but if playing the Intel news, then I'd play the straddle in Intel (the driver of the news) and not the QQQ, that may dilute with 99 other stocks. Since trader is "bearish" I'd use a target of the 21-day SMA, look for some higher VIX to get a premium pop to close out.

 
 
  Jonathan Levinson   6/5/2003,  10:28:24 AM
Yahoo is reporting that the ECB rate cut of 50 bips was so widely expected that, in fact, all eyes are on the US weakness, leading to a rally in the Euro on the day of a rate cut announcement. Every day is a new day in this market.

 
 
  Jonathan Levinson   6/5/2003,  10:25:56 AM
FVX is selling now, at its day lows and down just 0.3 bps, TNX -1.5 bps. The economic data is not just being ignored, it's being faded.

 
 
  Jonathan Levinson   6/5/2003,  10:18:52 AM
An overnight repo of 2B added to the expiring 1.25 reverse repo for a net addition of 3.25B from the fed today, the first addition in a week. Looks like Al Green was spooked by the morning's data.

 
 
  Linda Piazza   6/5/2003,  10:18:03 AM
The 491-492.20 OEX represents resistance all day Monday and support all day yesterday, with 491.75 being a particular number to watch. Those hoping to see more downside want to see a sustained move below this zone. Those hoping for a continued rise or at least consolidation want to see this zone's support hold.

 
 
  Jonathan Levinson   6/5/2003,  10:17:57 AM
I agree- I think that interest rate cut in Europe is a bad omen. Europe is seeing they are seeing Disinflation as well. Globally prices are coming down regardless of currency. This can't be good for the fight against deflation since everyone will have to lower rates and even the currencies may come down together or be forced down together... meaning supply will outstrip demand even the currency world and that would be a huge problem. Economically does this make sense?

Yes. This is why I think that items in finite supply, such as gold and commodities will benefit as currencies continue to be "oversupplied", or devalued.

 
 
  Jonathan Levinson   6/5/2003,  10:12:48 AM
The put to call ratio was .72 for the first half hour, with the QQV up .80, VXN up 1.50 and the VIX +.99.

 
 
  Jonathan Levinson   6/5/2003,  10:10:32 AM
This is a very significant plunge in the US Dollar Index, returning to bear market support in the mid 92's: Link

 
 
  Linda Piazza   6/5/2003,  10:10:29 AM
Early volume patterns show decliners beating advancers by just under 2:1 ratios. Down volume leads by even stronger ratios. This is still early, however, and volume patterns can be distorted. Still, it's leaning toward a "all ducks in a row" kind of day, with all or most intermarket relationships leaning the same direction: higher VIX and VXN, higher gold, higher bonds, negative volume patterns, and lower markets.

 
 
  Linda Piazza   6/5/2003,  10:04:20 AM
Here's a 60-minute OEX chart showing the OEX in relationship to its ascending channel. Link

 
 
  Jonathan Levinson   6/5/2003,  10:01:16 AM
Largest drop since Nov 2001. Time for the Plunge Protection Team to spark a huge rally :)

 
 
  Jim Brown   6/5/2003,  10:00:03 AM
Factory Orders -2.9 vs est of -1.9%%
Largest decline since 2001. This is an April number and still impacted by the war. (at least that is what the bulls will say)

 
 
  Linda Piazza   6/5/2003,  9:59:42 AM
I've been watching the OEX one-minute chart, and in particular, the way the OEX behaves in relationship to the running gaps seen on that chart. After falling to the morning's low, the OEX hit the bottom of one of its running gaps printed this morning, at 492.80, and promptly turned down again. Then it hit the top of another, at 492.27, and found one-minute support, rising again, testing that previous gap from 493 to 492.80. It's hesitating a little as it moves above the top of that gap, and may be turning back again. These running-gap moves are not tradable on the OEX, of course, but I'm watching for signs of first strength or weakness.

 
 
  Jonathan Levinson   6/5/2003,  9:59:35 AM
Jim, it appears that the only real thing left is the fed.

 
 
  Jonathan Levinson   6/5/2003,  9:52:19 AM
Yields are down again, FVX -2 bps, TNX -3.1 bps and TYX -4.3 bps. June gold is holding its gains and the TRINQ is now up to 2.43, TICK.NQ -57. It's a bit of a mind-bender to understand why the US Dollar Index has tanked on news of an ECB rate cut of 50 bips. Were traders actually expecting more? Something important appears to be happening here, but for the moment, I'm puzzled.

 
 
  Linda Piazza   6/5/2003,  9:48:27 AM
The OEX has moved back above the 491.75 level I was watching. As I mentioned earlier, with only a brief close as yet below that level, I was trying not to draw too many conclusions. This morning's downturn has pulled some of the OEX hourly oscillators into a bearish mode, tugging them down out of overbought levels, but it has not pulled the prices out of their ascending channel as yet. On the ADX, +DI turned down yesterday and -DI turned up.

 
 
  Linda Piazza   6/5/2003,  9:41:19 AM
The OEX now drops just below that first 491.75 level I was watching, but there's as yet been only one five-minute close below this, so I'm trying not to make too many assumptions as yet. Below this, I'll be watching 489-489.75.

 
 
  Jonathan Levinson   6/5/2003,  9:40:00 AM
The TRINQ is only up to .74 despite the heavy selling, TICK.NQ -201, QQV +.68 to 29.34.

 
 
  Jeff Bailey   6/5/2003,  9:37:57 AM
QQQ $30.11 -1% ... finds early morning resistance at DAILY Pivot of $30.24. Looks morning vulnerable to DAILY R1, with nice zone of support from $29.65-$29.70.

 
 
  Jeff Bailey   6/5/2003,  9:36:45 AM
Factory Orders for April due out at 10:00 AM EST. Consensus is for -1.8%

 
 
  Linda Piazza   6/5/2003,  9:32:04 AM
I'm watching OEX 491.75 as a first point at which the strength of the drop might be gauged.

 
 
  Jonathan Levinson   6/5/2003,  9:31:39 AM
The US Dollar Index is getting croaked, and is back below 92.90.

 
 
  Jim Brown   6/5/2003,  9:27:39 AM
The market Monitor will be reloaded, please reconnect in 5 minutes

 
 
  Jonathan Levinson   6/5/2003,  9:27:27 AM
I put dailly charts of the 30 year bond yield vs the S&P 500 for the past few years above each other, and with some lags here and there, they seem more or less similar - equities go down as yields go down and vv. Now, what can we make of the major diversion from this trend since about April 7 th, when the yield was about 5.5% and the S&P about 875. Now the yield is down to about 4.3% and the S&P is breaking out to new highs - a major diversion from the regular scheme of things. I get the point that all asset classes are being bought, but I didn't realise the diversion was so pronounced. Are there past examples of this and how did they resolve themselves? Could this be the reason for some of the strangeness of the market, assuming hedge funds are betting on a return to the norm? Is there a simple way to play this? Maybe this has been discussed somewhere and I missed it - if so could you direct me to it?

I don't have historical charts of the relationship. Furthermore, given the historical measures being adopted by the fed and the historically high (as in, alltime) levels of consumer debt, I don't believe that extrapolation is going to do it here. Historically, the Kondratieff Cycle dictates major deflation, and Al Green clearly aims to fight it. I believe that he will fail- other than creating a lot of jobs in China and some asset bubbles domestically, his rate cuts have failed. The high unemployment numbers are a thorough indictment of the soundness of Al Green's measures, in my opinion. To play this, I believe that commodities and precious metals will be the winners, and that the move in equities will fail. However, I've been wrong so far about equities. We must trade the trend when using options and futures- fading it must be done with tight stops and a tight seatbelt.

 
 
  Jonathan Levinson   6/5/2003,  9:22:43 AM
June gold is up 6.10 to 368.70. That downphase is in trouble here, but note that its on our daily candles, and so it will take a big move on a closing basis for the day to change the picture. If it blows off from here, we'll get a shooting star doji, a bearish candle, for the day. NQ is down 11 to 1213.50 and ES -6 at 980.25. The YM 9000 number with which my perpetually bullish uncle berated me last night is no more, down 50 to 8985.

 
 
  Jeff Bailey   6/5/2003,  9:21:13 AM
09:00 Update posted at this Link

 
 
  Jonathan Levinson   6/5/2003,  9:12:02 AM
Al Green has announced a 5B 28 day repo, which is a net wash so far against the expiring 28 day repo. A 1.25B reverse repo expires today, which will be a net addition if nothing further is done. We await the 10AM announcement.

 
 
  Linda Piazza   6/5/2003,  9:11:15 AM
The FTSE 100 has dropped below 4100, down 36.10 points or .87%, to 4090.50. The CAC 40 and DAX both maintain the 3000 level, although both continue to drop, too. The CAC 40 is down 39.85 points or 1.30%, to 3024; and the DAX is down 47.02 points or 1.53%, to 3033.

 
 
  Jonathan Levinson   6/5/2003,  8:56:46 AM
June gold now up 5.60 at 368.20.

 
 
  Jonathan Levinson   6/5/2003,  8:46:04 AM
Spot gold has gone vertical, and June gold is up 3.90 to 366.50. Meanwhile, NQ is down 7 and ES -4.75, YM back below 9000 -39.

 
 
  Jonathan Levinson   6/5/2003,  8:37:25 AM
Initial claims +16,000 for the week ended May 31, up to 442,000. Analysts expect 420,000. The 4 wk MA is up to 430,500 from 427,500. Al Green's economic recovery discussed in Berlin two days ago appears, yet again, to be not just possibly imaginary but also jobless.

 
 
  Linda Piazza   6/5/2003,  8:37:18 AM
So far, it's a sell-the-event reaction in Europe, with the FTSE, CAC, and DAX now at or near their day's lows. The FTSE 100 is down 26.60 points or 0.64%, to 4100; the CAC 40 is down 31.62 points or 1.03%, to 3032.23; and the DAX is down 29.81 points or 0.97%, to 3050.21. The European markets may at least partly key off our markets after the U.S. open.

 
 
  Jonathan Levinson   6/5/2003,  8:35:03 AM
We might not see a pullback in gold at this rate as the bids and offers continue to advance. If GC3M can push back to the 370 level, it could be sufficient to truncate the downphase and give us fresh buy signals. Such a move would bring in the possibility of a retest of the highs and a move toward 400/oz.

 
 
  Jonathan Levinson   6/5/2003,  8:30:49 AM
I've been following the oscillator downphase in gold for 2 weeks, and so far, no price traction whatsoever to the downside. June Gold (GC3M)has just gapped up 2.60 on the ECB news, currently 365.20. I expect first support to hold at 358, and traders looking to go long should target entries in the 358 area if we see it. Weaker support is at 360. I would not be shorting it except on a scalp basis from here, because so far the downphase has been very shallow.

 
 
  Jonathan Levinson   6/5/2003,  8:07:53 AM
Same thing here, Linda, with NQ down 3 to 1221.50, ES -1.75 to 984.50 and YM -10 at 9025.

 
 
  Linda Piazza   6/5/2003,  8:06:26 AM
Immediately after the release of the ECB decision, European bourses bounced weakly, but have turned down again without sustaining a move into the green. Currently, the FTSE 100 is down 16 points or 0.39%, to 4110.60; the CAC 40 is down 16.20 points or 0.53%, to 3047.65; and the DAX is down 16.74 points or 0.54%, to 3063.28.

 
 
  Jonathan Levinson   6/5/2003,  7:54:52 AM
And, no sooner did I hit "submit" then that red is reversing back toward unchanged.

 
 
  Jonathan Levinson   6/5/2003,  7:53:44 AM
I see red for a change, with the futures down, NQ at 1221, ES 983.75 and YM 9015, with QQQ trading lower by 7 cents at 30.30. June gold is bidding at 362.60, while the US Dollar Index is back down again and struggling with the 93.50 level.

 
 
  Linda Piazza   6/5/2003,  7:52:17 AM
The ECB cuts interest rates by 50 basis points, as had been hoped.

 
 
  Linda Piazza   6/5/2003,  7:07:18 AM
After the release of the Bank of England decision, the FTSE 100 drifts down, but the reaction is not yet extreme. Currently, the FTSE 100 trades down 4.5 points or 0.11%, to 4122.10.

 
 
  Linda Piazza   6/5/2003,  7:03:51 AM
The Bank of England leaves the benchmark rate unchanged, at 3.75%.

 
 
  Linda Piazza   6/5/2003,  6:54:24 AM
Good morning. The Nikkei gapped up almost 100 points in early trading on Thursday. Staying strongly positive all day, the Nikkei nevertheless drifted down until a bout of buying at the close drove it back above the opening high. The Nikkei closed up 99.37 points or 1.16%, at 8657.23. Most other Asian bourses also climbed, with the exception of China's Shanghai Composite, which fell 1.13%, and Hong Kong's Hang Seng, which fell 0.25%.

Buying proved to be broad-based. Chip and computer-related stocks advanced, with chip stocks apparently helped by the climb in the spot price of a double-data-rate memory chip, according to Bloomberg.com. This is the most widely used computer-memory chip and this marked the fourth day of climbing prices. The WHO announced that Wednesday saw no SARS deaths, with this the first instance of a day with no new deaths since late March.

While those factors helped the Nikkei and other Asian bourses, the Nikkei shrugged off news that Q1 capital spending by Japanese companies declined 3% from the year-earlier period. The breakdown included a 5.5% decline in capex spending by manufacturers and a 1.9% decline by non-manufacturers. Hong Kong's PCCW's shares were suspended from trading today due the news that Cable &Wireless sold its stake in PCCW.

In anticipation of rate-cut announcements by the BOE and ECB within the hour, the FTSE trades near the flatline, and the CAC 40 and DAX trade down. Expectations, or perhaps hopes, are for the ECB to cut 1/2 point. Anything else may be greeted with disappointment. BOE members do not telegraph their intentions as well as those of the ECB, so market pundits find it more difficult to predict their decision. In other economic news, German unemployment figures showed May unemployment fell by 4,000 while overall unemployment remained at 10.7%. Currently, the FTSE 100 trades up 1.70 points or 0.04%, at 4128.30; the CAC 40 trades down 15.47 points or 0.5%; and the DAX trades down 18.25 points or 0.59%; at 3061.77.

 
 
  Jeff Bailey   6/4/2003,  11:14:40 PM
The Index Trader Wrap has been posted: Link

 
 
  Jonathan Levinson   6/4/2003,  11:14:31 PM
The Futures Trader Wrap has been posted: Link

 
 
  James Brown   6/4/2003,  11:14:24 PM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

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