Option Investor
Printer friendly version
  Jeff Bailey   6/16/200,  9:26:54 PM
Pivot Analysis Matrix for tomorrow posted at this Link

  Linda Piazza   6/16/200,  3:57:58 PM
Jane on the Futures Monitor has been mentioning the CPI and housing starts numbers, among others, due out tomorrow morning. If you're sitting on big gains, now is the time to assess how you feel about taking part of your profit versus holding over those numbers. So far, all news is good news, whether it's good or bad, but this is opex week and the week before the Fed meeting, so trade carefully.

  Jonathan Levinson   6/16/200,  3:52:16 PM
My comments regarding the uptrend in GE are proving timely as that stock hits a new rally high at 31.35. There is simply no weakness today. Only the NDX volatility index (QQV) is diverging, and it is doing so only slightly, up .31. Support at 1001 ES, and 1227 NQ and 30.57 QQQ never got touched on the pullback, let alone challenged.

  Jeff Bailey   6/16/200,  3:38:13 PM
03:15 EST Update posted at this Link

  Linda Piazza   6/16/200,  3:38:09 PM
The tape was so slow during the middle of the day that it's difficult to remember how big today's gains have been. The OEX is up 9.73 points as I type, having bounded over the June 6 high. The daily chart shows a big white candle that engulfed the body of Friday's candle, although not including Friday's shadow. However, the OEX has not yet broken out over that 507-508 next resistance or out of the ascending channel. It may do so if this current push continues, of course. Link

  Jonathan Levinson   6/16/200,  3:34:09 PM
The put to call ratio has come in at .63 for the past half hour, while the TRIN.NQ and TICK.NQ remain neutrally bullish, while the QQV is at its lowest point of the day, +.19, while the VIX and VXN are negative. I see so chink in the bulls' armor so far.

  Jonathan Levinson   6/16/200,  3:12:15 PM
Is this a shake or profit taking today. CPI tomorrow would be bothering me if I was a long. What if CPI shows that prices can't be passed to the consumer at higher levels?

A downside surprise in the CPI would show that companies are losing pricing power on the retail side while paying more on the wholesale side, which would demonstrate a margin squeeze and should be bearish for corporate profits... and, theoretically, stock prices. Emphasis on "theoretically".

  Linda Piazza   6/16/200,  3:11:17 PM
The flat support for the broadening formation I mentioned in my 15:04 post is near 505.25.

  Linda Piazza   6/16/200,  3:04:50 PM
I like to watch for patterns that might repeat. Since early this morning and especially since breaking out of the bull-flag pattern, the OEX hourly chart has settled into a broadening pattern (flat bottom, higher highs). I found at least two more of those broadening patterns during the rally (May 22 and 23, June 4). What happened with those other patterns? The OEX meandered out near the support level, with a small dip usually resulting below that support (less than 2 points each time) but then the market rebounding to higher levels. That doesn't mean that the same pattern will repeat this time, but now we have a possible scenario to watch.

  Jonathan Levinson   6/16/200,  3:03:08 PM
Very well put, Jim. One technique to further refine the moving average crossover signals is to add a number of shorter duration MA's and watch for "ribbon" crossovers. As well, I find that breadth tends to lead price by a bit, which is why I sometimes us the "TRIX" indicator, which tends to give earlier signals than the stochastics, which tends to be a little ahead of the MacD, which tends to coincide with the different length moving averages.

  Jeff Bailey   6/16/200,  2:55:05 PM
Barr Labs (BRL) $65.30 +2%.... company saying it has received "tentative" FDA approval for generic Niaspan. Link

  Jonathan Levinson   6/16/200,  2:47:48 PM
Thanks for the perspective Jonathan. I agree entirely and will buy you dinner when you arrive on Maui for our Kondratieff Winter conference!

I'm somewhat stunned that all these bulls don't perceive Greenspan's liquidity gusher as an alarm bell. But with Kudlow & Cramer and many others' daily clarion call to load up on equities at these prices and constant talk of Dow 10,000 who can figure?

I've set the remainder of my partial fill on those GE puts at a better entry and will average in for more. Do you think 32.50 is a more likely top? Seems like a nice down day from there would kick over the weekly.

Thanks for the generous offer! There's no way to know where this thing will top- at current levels, put buys are a gamble with a nice risk/reward setup- it's overbought but can get moreso- the uptrend is still intact. While it seems that all can smell a top at current levels, particularly in light of the overbought bullish percents and breadth indices, the price trend is nevertheless firm to the upside. Until we see a solid blast down, and preferable more than 2 consecutive down days, the trend will remain higher. Please note, timeframe-wise, that both GE and the broader market are in secular bear markets, but this cyclical rally remains in place for the time being. If it continues long enough, then the secular trend will become bullish, but we're a long way from that point.

  Linda Piazza   6/16/200,  2:44:21 PM
As of a few minutes ago, adv/dec ratios stood at 2.3 for NYSE-traded issues and 1.6 for Nasdaq-traded issues. Up volume is 3.8 times down volume on the NYSE and 2.3 times down volume on the Nasdaq. Total volume is 879 million on the NYSE and 1.3 billion for the Nasdaq.

  Linda Piazza   6/16/200,  2:39:01 PM
OEX 507 is hit. The hourly pattern that appeared to be a bull flag must indeed have been one. What's next? Today, the OEX could move up to 508.30 or so and stay within the ascending channel on its daily chart, but a move much over that is going to break the OEX out to the upside of that channel. Several times as the OEX climbed inside this channel, it's had intraday moves above the channel, but the candles have always closed inside it with only the shadows penetrating the channel to the upside. A close outside the channel would be significant, then. Although perhaps some might consider 510 to be psychologically important, I suppose, 518-520 is where the next strong resistance lies. Until the OEX does move above 408 and out of that channel, I'm trying not to draw too many conclusions, however, as this remains one possible area for a pullback to the middle of the channel.

  Jonathan Levinson   6/16/200,  2:37:18 PM
August gold is holding just north of 360/oz, with HUI holding 150.71 and XAU +.71 to 79.

  Jeff Bailey   6/16/200,  2:31:57 PM
Merck (MRK) $61.03 +3.05% ... session high here. Earlier this morning, got upside alert at $61.00, which is PnF spread-triple top buy signal. I think we've discussed MRK as bullish in past commentary for stock coming out of base as drug sector looks to improve. Link

  Jonathan Levinson   6/16/200,  2:28:57 PM
This looks like a bullish cup and handle setup on the 5 minute 2 day charts of QQQ, NQ and ES. Treasury yields are nearing their highs, and the picture would look perfectly bullish if not for the positive QQV, currently up .59. QQQ option buys continue to be very motivated to pay extra premium today. The put to call ratio remains at the low end of neutral at .66.

  Jeff Bailey   6/16/200,  2:28:26 PM
Gold/Silver Index (XAU.X) 79.12 +1.06% .... trading above 79.00 this afternoon has XAU.X currently above downward trend on bar chart if taken from the 06/04/02 high to 01/24/03 relative high. Considering today's bullish gains for equities, technical action between gold and broader markets takes on the look of economic growth/inflation type of trade. Discussed these types of technicals in June 5th wrap. Link

August Fed Funds Futures (ff03q) 99.195 have reversed earlier highs, but still have MARKET looking for 70% chance of 50 basis point rate cut by August meeting. FOMC June meeting is next week and should make some type of decision on Fed funds, which currently stands a 1.25%

  Linda Piazza   6/16/200,  2:15:52 PM
One thing about today's midday trading: you can step away from your trading screen for five minutes and come back to find the charts looking exactly as they did when you left. That may change soon, however, as the OEX finally makes it up to level at which it could challenge the current day's high. Failure or success? We'll know soon.

  Jonathan Levinson   6/16/200,  2:14:39 PM
New highs with QQQ 30.75, NQ 1241 and ES 1004.75, high of 1005.75. TRIN.NQ is down to .70, not extreme at all, TICK.NQ +219, QQV +.81.

  Linda Piazza   6/16/200,  2:02:07 PM
We're getting an OEX push back toward the day's high, but not the big push toward next resistance or support that usually comes near 1:45 ET. That makes me feel a little suspect of the push, wondering if the 507-508 resistance will hold after all. We'll soon see. I wouldn't be betting either direction right now, but that's just one scenario I'm kicking around.

  Jonathan Levinson   6/16/200,  1:57:23 PM
Hi Jonathan

I've long favored GE calls/puts as inexpensive proxy otions for the Dow.

Loaded up on some Sept 27.5 puts today. I'd be interested in your reasoning for your position in GE. Maybe I missed it earlier. The daily stochastic is screaming rollover soon but of course these days who knows.

All the best


PS. That's my ad for the maui property you keep seeing on your pages :)

You and me both, John. They're liquid, cheap, and a better deal than DJX options imo. My reasoning for GE is based on my feeling that we were due to get a failure in the indices, and that GE would lead the way down, spurred by foreign dumping of this favorite of blue chips. On a fundamental basis, my feeling remains that there is a debt catastrophe lurking for the US and, for that matter, world economy, and that GE is particularly vulnerable to this. My play on GE last week was mostly chart based- its launch to new rally highs looked unsustainable and, frankly ridiculous to me. The Friday PM/Monday AM ramp job has me thinking of bailing for a nickel's loss and awaiting a fresh entry, but like you, I smell rollover. In the meantime, it's tough to fight the fed. If you prefer, we could discuss the matter further in Hawaii, from which destination I'd be more than happy to pontificate in a more lengthy fashion on the topic of the Kondratieff Winter and its implication for the money supply and fractional reserve compounding debt-based financial system.

  Jonathan Levinson   6/16/200,  1:50:59 PM
Sell Mortimer, Sell! Hi, Jon. Take a look at your homey PVX. Strange news caused it today after going x-div.

Link That's one very sick chart- looks like I had the correct formation in mind, but the wrong symbol :)

  Jonathan Levinson   6/16/200,  1:45:43 PM
The put to call ratio is level at .66. The selloff in treasuries has eased, with yields pulling back a bit along with equities. Going out on a limb, I believe that we won't see a further equities rally fueled by selling of treasuries- I think that equities, treasuries and precious metals are all rising and falling on the fed's ocean of money, and I expect to see them continue to rally or fall. That said, the HUI has outperformed the SPX on this year's rally, and I expect that the eventual decline in equities (if it occurs) to coincide with a breakout in precious metals. This is all my own guess- the market will either agree or disagree.

  Linda Piazza   6/16/200,  1:44:26 PM
The pattern we're seeing on the OEX hourly chart--tall white candles followed by small candles in a tight pattern of low highs and lower lows--could be a potential bull flag setting up. That seems impossible, but it isn't. It's far from confirmed and I have no idea if it will be, but I offer the observation because there's an automatic tendency to see that downward-slanting trajectory and think "downside break." The possibility of a bull flag breaking to the upside seems counterintuitive, but should be put on the radar screen.

  Linda Piazza   6/16/200,  1:37:49 PM
1:45 ET approaches, the time when I often note that resistance or support is tested. Which will it be today? I'm not sure. The OEX has remained in a tight range since early this morning, as have the other indices. Both next resistance and next support are within reach. That test often tells us a lot about market behavior, as the indices will either recoil from the tested area or will move through and sustain that level, either up or down. While we still have to honor our stops since we don't know how the test will turn out, we can use this time to tell us much about the likely direction for the afternoon.

  Jonathan Levinson   6/16/200,  1:37:17 PM
Short cycle intraday stochastics on the NQ and ES futures never made it to oversold and have turned back up- this should push easily to the highs of the day.

  Jeff Bailey   6/16/200,  1:36:24 PM
01:00 Update posted at this Link

  Jonathan Levinson   6/16/200,  1:33:13 PM
August gold is up nicely, +2.60 t0 359.80. HUI +1.49 and XAU +.77.

  Jonathan Levinson   6/16/200,  1:31:35 PM
This has been a very insignificant downphase so far. TRIN.NQ is still bullish at .76, QQV still up slightly +.31, TICK.NQ still bullish at +158. 1st support on the futures and QQQ not even touched yet.

  Jonathan Levinson   6/16/200,  1:08:11 PM
Other than one red volume spike on the sell signal, volume on this pullback is light, making the move appear corrective.

  Jonathan Levinson   6/16/200,  1:06:44 PM
We have the first cycle downphase of the day taking place on the equity futures, with virtually no downside traction in price so far. It should bottom shortly with at least one surge of selling, but if that doesn't take out downside support with authority at 1000 ES and 1226 NQ, look out for higher intraday highs.

  Jim Brown   6/16/200,  12:59:58 PM
June Home Builder Index 62 vs est of 58 and 56 in May

May was revised up to 57 from 56

  Linda Piazza   6/16/200,  12:50:01 PM
With the OEX current day high at 506.76, very near that 507-508 zone that might be the appropriate level for a pullback, the hourly chart now shows a hint of a reversal pattern beginning. It's just a hint, however, and this hour's candle is not complete. My guess is that a lot depends on what happens during the rest of the lunchtime slowdown. If bears can't drive the OEX down appreciably during this lull, I would expect the dip-buyers to take a look after lunch and then push back toward 507-508 again.

  Jonathan Levinson   6/16/200,  12:48:09 PM
The move in treasuries is becoming a selloff, with FVX now up 8.2 bps, TNX up 5.7 and TYX up 4.2. Note that this selling has coincided with selling in equities and not buying over the past hour, which does not support the bullish equity reallocation thesis.

  Linda Piazza   6/16/200,  12:41:15 PM
Volume patterns continue to be strong but sustainable.

  Linda Piazza   6/16/200,  12:33:14 PM
Art Cashin on CNBC just seconded Jim's asset allocation theory from a couple of weeks ago, with Cashin saying that the comparable increases across all indices hinted at that kind of asset allocation.

  Jonathan Levinson   6/16/200,  12:20:57 PM
IB seems sketchy today- my quotes have been choppy. Apparently not even my datafeed can believe the numbers.

  Jonathan Levinson   6/16/200,  12:15:39 PM
The volume pattern is a sight to behold- the flagpole launch was on 30,000 ES contracts in a 5 minute bar, 15,000 NQs during the same period.

  Jonathan Levinson   6/16/200,  12:13:56 PM
Jim, the economic picture is not pretty, and nor are the possibilities for this rally. The sad fact is that this flagpole rally, and the series of flagpole rallies all year, defies all sense and logic. The winning strategy would be to buy every dip and get ready for the next intervention-funded vertical rocket launch. I get more bearish on every show of strength, but the markets seem to be drawn with an etch-a-sketch at this point.

  Jeff Bailey   6/16/200,  12:13:37 PM
Priority Healthcare (PHCC) $18.04 -7.4% ... new 52-week low list and today's trade at $18.00 a sprea-triple bottom sell signal. Link

Trade comes after PHCC said today that it does not expect to achieve consensus earnings estimates for Q2, blaming weakness in infertility segment, declining margins in oncology distribution, and disappointing growth in hew hepatitis C patients. Company now sees EPS of approximately $1.16-$1.22 on sales of $1.43-$1.48 billion, which is below consensus EPS of $1.29 and Revenues $1.49 billion.

  Linda Piazza   6/16/200,  12:07:38 PM
I tried to post a chart from this weekend's wrap, but was unable to do so. The OEX currently challenges the top of its ascending channel on the daily chart, and also approaches one possible zone where it might pull back toward the middle of the channel. If the OEX should pull back, the middle of the channel now crosses at just under 500, near today's low, while the lower support of the channel now crosses between 487-489. A soar out of the channel to the upside, however, might bring the OEX up to 518-520. That's not my first expectation, but that doesn't mean it won't happen. I'm currently standing aside and watching. Although I have a mixture of bullish and bearish trades in my portfolio, I'm currently flat with respect to index trades.

  Jeff Bailey   6/16/200,  12:07:01 PM
12:00 PM EST Internals ...

NYSE 5,684 +1.53% ... Vol. 509m A/D 22:8 NH/NL 285:3

NASDAQ 1,656 +1.8% .. Vol. 836m A/D 18:19 NH/NL 156:9

9 new 52-week lows is highest number I've seen since May 30. NASDAQ A/D that day was 257:9 by session end.

  Jonathan Levinson   6/16/200,  12:04:30 PM
No sign of weakness in the intraday oscillators, still pinned in overbought for QQQ, NQ and ES. Support remains at 1001, 1232 and 30.57. This brings back memories from the spring. An apparently unsupported vertical rally (flagpole) followed by a sideways range at the top (flag).

  Linda Piazza   6/16/200,  11:51:29 AM
Fuel Cell (FCEL), Ballard Power Systems (BLDP), and Plug Power (PLUG) are all up significantly today, perhaps on news circulating that the U.S. and the EU will announce a fuel cell partnership agreement. I took a look at the charts, though, and none are screaming "buy," as far as I can see. Today's increases aren't made on big volume, as compared to their average daily volume, either. BLDP perhaps looks the best of the three, but I'm not sure I'd recommend jumping on this news. Other stocks in the group--MKTY, IMCO, and MCEL--trade flat or down.

  Jonathan Levinson   6/16/200,  11:43:30 AM
Just noted that my datafeed was off on MSFT, and was not refreshing. I have cleared the cache and see that it is up, and not down. My apologies for the error.

  Jonathan Levinson   6/16/200,  11:39:12 AM
Yields are now green across the curve, with FVX +4.3 bps, TNX +.08 and TYX flat. QQV is up .69 and the TRINQ is down to .70. The put to call ratio is down to .70. My intraday oscillators are trending northward, and volume has fallen off on the "flag" portion of this morning's flagpole rally. I have support at 1001 ES and 1232 NQ, 30.57 QQQ.

  Jonathan Levinson   6/16/200,  11:27:15 AM
Note that unlike the VXN, QQV is still positive, up .45 at 29.29.

  Jonathan Levinson   6/16/200,  11:24:54 AM
What do you make of today's VXN candle? Link

This bullish hammer shows a divergence in the VXN, but the daily candle is very young. VXN is currently down .39 and sinking. If it stays above support, that will constitute a bearish divergence from the Nasdaq volatility index.

  Linda Piazza   6/16/200,  11:23:40 AM
Volume patterns still strongly favor the bulls, but not so strongly that the ratios are unsustainable. I still expect some hesitation at current market levels or just above (near 507 for the OEX), but it's difficult to predict what will happen at the end of that hesitation.

  Jonathan Levinson   6/16/200,  11:22:38 AM
FVX is currently up 3.3 bps near its highs of the day, ditto TNX +.3 bps and TYX down just .9 bps currently.

  Jonathan Levinson   6/16/200,  11:21:59 AM
No weakness whatsoever, with the TRIN.NQ idling at .83, TICK.NQ +191. NQ and ES and QQQ are leveing out, with NQ and QQQ pulling back more sharply than the stronger ES.

  Linda Piazza   6/16/200,  11:07:01 AM
OEX 507 is next, but that resistance appears to be much slighter than were the 488 and 500 levels when the OEX passed them. Still, that levels bumps the OEX up against the top of its ascending channel on the daily chart, so it's possible that the ascent could stop there. OEX 518-520 appears to be next strong resistance.

  Jonathan Levinson   6/16/200,  11:06:51 AM
Massive sustained TICK reading over 1000, currently 1187.

  Linda Piazza   6/16/200,  11:00:50 AM
The OEX looks to be clearing the last two intraday highs, if it can maintain current levels. Next would be the June 6 505.17 intraday high, which I neglected to mention a few minutes ago, and then the 507 level.

  Jonathan Levinson   6/16/200,  10:59:41 AM
Congratulations to my favorite market timer, Steve Ballmer, registered for over 1B worth of MSFT sales in the past month. MSFT has done 55M shares so far today, average daily is 64M.

  Jonathan Levinson   6/16/200,  10:57:31 AM
Note that MSFT is down 1.48% so far.

  Jonathan Levinson   6/16/200,  10:54:42 AM
Yes, Jane- it's just a shocking level is all.

  Jonathan Levinson   6/16/200,  10:50:52 AM
Nice to see the bang that 8.75 Billion US bucks can buy in equity futures. Yields are beginning to reverse upward, with FVX +1.8 bps, TNX -.7 bps and TYX -1.8 bps.

  Linda Piazza   6/16/200,  10:50:12 AM
The OEX currently bumps above the descending trendline formed off the previous two intraday highs. The next challenge would be those highs themselves, at 504.21 and 504.65. Above that, I would expect 507 to be slight resistance as seen on the weekly chart, but 518-520 would be the next strong resistance. As I mentioned in the weekend wrap, the 507 level would bump the OEX against the top of an ascending regression channel on the daily chart and would be a likely area for a pullback toward the midline or bottom of that channel, but that's not a given. The possibility of the current push up occurring was what kept me from hanging on to that put position over the weekend, even though it was a July position.

  Jeff Bailey   6/16/200,  10:48:02 AM
QQQ $30.30 +1.1% .... several questions regarding the closing out of Friay's profiled selling of the June $29 puts for $0.20 premium. I would do nothing and look for $0.00 expiration on Friday. Thinking we're playing the U.S. Open Golf tournament, have a 1-stroke lead with 5-holes to play in final round. Drive off the tee is in the middle of the fairway and competition sliced their drive into the rough.

  Jonathan Levinson   6/16/200,  10:47:46 AM
Big volume surge on those upside breakouts.

  Jonathan Levinson   6/16/200,  10:47:05 AM
The NQ futures and QQQ have just followed along into that bear wedge failure.

  Jonathan Levinson   6/16/200,  10:45:32 AM
It looks like bear wedges on both the ES and NQ 5 minute candles, with an upside vertical breakout just printing on ES.

  Jeff Bailey   6/16/200,  10:44:46 AM
S&P Banks Index (BIX.X) 312.39 +1.5% ... making its way above WEEKLY R1 of 311.90, should bode will for SPX/OEX bulls from Friday bullish entries on weakness.

SPX 999.44 +1.09%, OEX 503 +1.04%

  Jeff Bailey   6/16/200,  10:42:40 AM
Dow Jones Home Construction (DJUSHB) 477.45 +2.37% is sector winner now, just oupacing Airline Index (XAL.X) 51.97 +2.32%. Both the 10-year YIELD ($TNX.X) 3.092% and 30-year YIELD ($TYX.X) 4.151% making new lows in this morning's session. According to www.realtor.com, national average for 30-year fixed is 5.32% (0.41 points), with 15-year fixed at 4.7% (0.31 points).

  Jonathan Levinson   6/16/200,  10:42:29 AM
The put to call ratio was .74 for the first half hour and .79 for this past half hour of trading.

  Jonathan Levinson   6/16/200,  10:41:34 AM
Volume is dropping sharply on the NQ and ES futures as price continues to climb.

  Jeff Bailey   6/16/200,  10:39:48 AM
Dow Jones Home Construction (DJUSHB) 477.45 +2.37% is sector winner now, just oupacing Airline Index (XAL.X) 51.97 +2.32%. Both the 10-year YIELD ($TNX.X) 3.092% and 30-year YIELD ($TYX.X) 4.151% making new lows in this morning's session. According to www.realtor.com, national average for 30-year fixed is 5.32% (0.41 points), with 15-year fixed at 4.7% (0.31 points).

  Jeff Bailey   6/16/200,  10:34:36 AM
S&P Banks (BIX.X) 311.74 +1.32% .... index testing correlative resistance from DAILY R2 311.60 and WEEKLY R1 of 311.90 zone of resistance here with session high of 311.88. SPX/OEX bulls would like to see continue bullishness above 312 to build gains for today's session.

SPX 997.46 +0.89 here, with OEX 501.78 +0.79%.

  Jonathan Levinson   6/16/200,  10:34:30 AM

  Linda Piazza   6/16/200,  10:31:53 AM
There's a nice little cup-and-handle formation on the OEX five-minute chart with the OEX just moving above or testing the lip of that formation. I can't verify this formation's validity by studying volume patterns, though, since this is the OEX. (Volume should drop off during the decline portion of the handle's formation, for example.) Someone several years ago wrote a great article on using volume patterns to verify cup-and-handle formations. Jane, was that you?

  Jonathan Levinson   6/16/200,  10:31:09 AM
Volume is dropping through this last surge on the ES and NQ, but the price move is enough to set my stochastics trending in overbought. The TRIN.NQ at 1.08 is still neutral, TICK.NQ +87 and QQV down to 29.73, up .89 now. Gold is still positive, HUI +1.37 and XAU +.50. I expect the fed's infusions of liquidity to continue to benefit gold and to continue to damage the dollar.

  Linda Piazza   6/16/200,  10:26:55 AM
As of a few minutes ago, adv/dec ratios showed the advantage going to the bulls, with those ratios at 2.2 for NYSE-traded issues and a more modest 1.3 for Nasdaq-traded issues. Up volume was twice down volume on the NYSE, too, with up volume being 1.2 times down volume on the Nasdaq. Total volume was a slight 155 million on the NYSE and 344 million on the Nasdaq.

  Jonathan Levinson   6/16/200,  10:24:35 AM
Either that, or it was a sign of times to come from the fed (corrected since it was posted): Total Money Value of Operation (In $Bil.) 52.65

  Jonathan Levinson   6/16/200,  10:23:16 AM
There was a typo on the Fed's website showing a 52B 10 day repo. It was revised to a 4B 10 day repo and a 6.25 overnight repo. There was only 1.5B expiring today. This is a massive direct intervention in the financial markets by the fed.

  Jonathan Levinson   6/16/200,  10:19:13 AM
Agree, Alan- the shorts are clearly slacking this morning.

  Jeff Bailey   6/16/200,  10:16:53 AM
Frontier Airlines (FRNT) $8.53 +11.6% ... Winner among airlines in this morning's trade after Morgan Stanley upgrades to "overweight" from "equal-weight" based on airfare data which suggests pricing in FRNT's top markets has stabilized and is moving higher. Morgan Stanley's price target is $12.

Will note... today's trade at $8.50 is triple-top buy signal and now gives initial bullish vertical count of $14. Link

  Jonathan Levinson   6/16/200,  10:13:29 AM
The high failed to hold, but the pullback is shallow. Volume is higher relative to its Friday levels, and there is a battle royale being fought in the equity futures over the current narrow range, each side competing for a breakout or breakdown. TRIN.NQ is up to 1.12 as bears push harder, TICK.NQ +27, QQV +1.64 to 30.67.

  Jeff Bailey   6/16/200,  10:11:02 AM
Analog Devices (ADI) $33.79 -1.8% ... programable chip maker lower after Bear Stearns saying its channel checks indicate bookings for high-performance analog components, while still healthy, have flattened out after strong start earlier this year. Bear Stearns believes book-to-bill ratios are poised to decline into summer, which could have revenues flattening out into second-half of 2003. Bear Stearns then saying this could impact ADI's October and January-ending quarters as revenue upside potential could be limited later this year. Link

  Jonathan Levinson   6/16/200,  10:05:22 AM
ES at high of the day, 995.25.

  Linda Piazza   6/16/200,  10:04:44 AM
The retracement has taken the OEX only as low as 499.62, keeping it above that 499.27 retracement we were watching from the first five-minute range and so far preserving bullish sentiment. The next task is a move over the current day's high at 501.32. Failure to do so would also be viewed negatively. Thirty-minute and hourly stochastics still look as though more upside is possible, but this feels shaky so far. I do note that earliest volume patterns were positive, but the volume was far too low to draw many opinions. I currently have no OEX position, as I sold out my put position Friday afternoon ahead of a possible upturn or volatility this morning.

  Jeff Bailey   6/16/200,  10:02:29 AM
Intl. Game Tech (IGT) $97.65 +0.74% .... those that played the underlying stock from $90, on trader saying "90% of stocks that trade $90 trade $100," might look at selling the June $100 calls (IGTFT) ($0.50 x $0.75) for $0.70 with June expiration this Friday.

  Jeff Bailey   6/16/200,  9:56:21 AM
Boeing (BA) $35.70 +1.16% ... morning high here after Wall Street Journal reports Emirates Airlines announced a "massive" order of $12.5 billion with European airplane maker Airbus. In addition, Emirates also signed a $6.8 billion lease order for 26 Boeing 777-300ER wide body jets from GE Capital Aviation Services.

  Jeff Bailey   6/16/200,  9:53:19 AM
Sector Weakness has Oil Service (OSX.X) 94.45 -1.99% early loser, with Semiconductor (SOX.X) 359.57 -0.41%, Natural Gas (XNG.X) 199.70 -0.3%.

Sector Strength is Airline (XAL.X) 51.72 +1.83%, Drug (DRG.X) 333.36 +1.36%, Biotechnology (BTK.X) 474 +1%.

  Jonathan Levinson   6/16/200,  9:48:34 AM
The stochastic uptend is failing on the stronger ES contract, NQ is leading the way down but its uptrend was weaker from last week. NQ has fib support at 1212 and ES at 992, both of which are getting tested right here.

  Linda Piazza   6/16/200,  9:44:46 AM
When mentioning possible resistance levels for the OEX, I should have mentioned the current 500.50-501.50 zone, a resistance level I had marked on my chart, but failed to mention.

  Jonathan Levinson   6/16/200,  9:41:38 AM
The FVX is up 1.1 bps while the TNX is down 1.4 to 3.09%. QQQ is 30.18, its premarket level, while ES and NQ3U are holding just below their highs- just trading sideways so far. TRINQ .89, TICK.NQ +30 offer no guidance, QQV +1.36 to 30.2 shows fear.

  Linda Piazza   6/16/200,  9:40:04 AM
As those cycling-higher hourly stochastics promised, the OEX moves up in early trading. The first five-minute candle ranged from a low of 497.82 to a high of 500.71. The midpoint of that range crosses at 499.27. That provides a benchmark for us to watch in early trading, as bulls will want to keep the OEX above that level. The descending trendline formed off the last two intraday highs now crosses at about 503.50. If the OEX can stay above that 499.27 mid-point level in the first retest, due in about ten minutes, and then sustain levels above 500, I would expect first serious resistance to be encountered near that 503.50 level and then next resistance at each of the previous highs, near 507.

  Jeff Bailey   6/16/200,  9:35:15 AM
S&P 500 (SPX.X) 993.70 +0.51% ... here is the SPX chart with new WEEKLY retracement overlaid.Link

  Jonathan Levinson   6/16/200,  9:26:37 AM
Here comes our bearish cross on those 26-3-18 stochastics on the 5 minute candles for ES and NQ.

  Jonathan Levinson   6/16/200,  9:13:01 AM
Note that the NY Empire St. Index is all of 2 years old- the "alltime" nature of the record isn't exactly a barn burner.

  Jeff Bailey   6/16/200,  9:08:46 AM
09:00 Update posted at this Link

  Jonathan Levinson   6/16/200,  9:07:50 AM
The selling in bonds has been fading this morning, and the short cycle oscillators on my 2 day futures charts are all topping out. I'd guess at a gap and crap open from what I see. 1220 NQ and 994 ES are resistance.

  Linda Piazza   6/16/200,  8:44:18 AM
European markets trade markedly higher since my earliest report this morning. As of a few moments ago, the FTSE 100 trades up 28.10 points or 0.68%, to 4162.20. That's nearly 50 points off its morning low. The CAC 40 trades up 42.47 points or 1.37%, to 3151.41, about 70 points off its day's low. The DAX trades up 49.99 points or 1.58%, to 3218.70. That represents about a 90-point gain off the low.

  Jonathan Levinson   6/16/200,  8:43:36 AM
This from reader AB:

the NY manufacturing came out stronger than expected on the headline number but if you look deeper there is a big problem in it. The prices paid component is down... selling at cheaper prices... that tells me demand is not strong and sales are being going at discounted prices to show movement. I wonder what the Book to Bill ratio will be tomorrow with the press release you came across... I have yet to see it in any of the news sites I go to...I wonder why.

  Jonathan Levinson   6/16/200,  8:39:15 AM
Here's the likely "why" on this morning strength:

The Federal Reserve Bank of New York said its Empire State Manufacturing Survey soared to 26.8, the highest level in its brief two-year history, from 10.6 in May. Investors look to the survey for an early snapshot of factory activity during the month. Its sharp gains could prompt economists to boost forecasts for other regional industrial measures. Many of the Empire State survey's components showed solid improvement. New orders and shipments rose to 16.1 and 15.3 respectively, a potential harbinger of output hikes.

  Jonathan Levinson   6/16/200,  8:37:40 AM
Selling in shorter maturity bonds this AM, FVX +2.3 bps, TNX +.6 bps and TYX -1 bp.

  Jonathan Levinson   6/16/200,  8:30:24 AM
TOKYO, June 16 (Reuters) - Global sales of chipmaking equipment fell 37.1 percent in April from the month before to $1.5 billion, hurt by weak sales in Japan, South Korea and the United States, an industry group said on Monday. The April figure was down 11.7 percent from the same month a year earlier, snapping a streak of seven consecutive months of year-on-year gains, the Semiconductor Equipment and Materials International (SEMI) said.

  Jonathan Levinson   6/16/200,  8:13:28 AM
The futures are presumably rallying because the financial world did not implode last night, as the US Dollar Index made it to a new bear market low of 91.90, currently rebounding slowly to its current 92.12. Spot gold is up 2.20/oz at kitco.com to above 358/oz. QQQ is trading 30.05, ES3U +1.75 at 990.25, NQ +1.50 at 1211.50. Note that this is opex week, affectionately known to some traders as "scam week", during which the derivatives tail often wags the dog as strike prices begin to exert gravitational pull on their underlying securities. Trade carefully.

  Linda Piazza   6/16/200,  7:20:27 AM
Good morning. As might have been expected after Friday's performance on U.S. indices, the Nikkei opened down. As also might be expected, Japanese exporters, and computer-related exporters in particular, led the decline. At the end of the trading day, the Nikkei's 1.57% decline of 140.80 points, to 8839.83, was roughly in line with the COMPX's 1.64% decline on Friday.

Another sector under pressure in Japan were the automakers after a report circulated that Japan's leading steelmakers will hike prices for the types of steel used in the manufacturing of autos. Tokyo's governor abandoned plans to build a casino center in Tokyo, driving game-related stocks lower.

Other Asian markets were mixed, with South Korea's Kospi and Singapore's Straits Times falling, 1.12% and 0.96 respectively, but Taiwan's Weighted and Hong Kong's Hang Seng gaining, 0.21% and 0.07% respectively. Oil refiner SK Corp, a South Korean company, tumbled after it furthered plans to bail out one of its affiliates, SK Global.

European markets currently trade near the flatline, having struggled up from early morning weakness. Today, Goldman Sachs upgraded its rating on European banks to attractive, saying it sees 10% upside. News out of the Paris Air Show confirms a Dubai-based Emirates order of 41 new planes from Airbus. Boeing confirmed an Emirates order for 26 of its wide-body 777-300ER jets, but noted that only four out of that 26 represented a new order. This group of orders marks the first time that Airbus received more orders for new planes than did Boeing, and may mean that Airbus will surpass Boeing this year as the world's largest planemaker. Other news coming out of the Paris Air show hints that airlines are showing more interest in ordering new planes as passenger traffic picks up again. In mergers-and-acquisition news, Vivendi was gaining on rumors that Liberty Media would acquire Vivendi Universal's entertainment assets. Also, American Express will buy U.K. fund manager Threadneedle from Zurich Financial Services.

As of this writing, the FTSE 100 was up 6.50 points or 0.16%, to 4140.60; the CAC 40 was up 4.62 points or 0.15%, to 3113.56; and the DAX was down 0.25 points or 0.01%, to 3168.46. All had traded significantly lower earlier in the day.

  Jeff Bailey   6/15/200,  4:00:32 PM
Sector Bell Curve as of Friday's close at this Link

I've been more bullish on the Gold/Silver sector the last several weeks, but I don't like the "bear confirmed" reversal this week. While sector bullish % is rather narrow and only takes 2 stocks to get a 6% reversal, Tuesday's trade at $16.50 in Randgold (NASDAQ:GOLD) $17.73 +6.29% Link was the stock to have sector reversing. Strong rebound on Friday gives hint sector still holds some bullish trade, but I'm taking reversal in bullish % as sign of caution! Note: Shares of GOLD are NOT a component of either the unweighted $HUI or weighted $XAU.X

The reversal in the sector bullish % comes when AMEX Gold Bugs Index ($HUI) Link exceeded its bullish vertical count (column of X from $118-$126) of $148.

Gold/Silver Index (XAU.X) 78.29 +2.09% on Friday closes juuuuust below bar chart's downward trend from the June 4, 2002 high (89.11) to January 24, 2003 rebound high of 82.89, with extension of that trend at about 79.00.Link

  Jeff Bailey   6/15/200,  2:36:13 PM
Pivot Analysis Matrix posted at this Link

  James Brown   6/13/200,  9:42:49 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.


Market Monitor Archives