Option Investor
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  Linda Piazza   6/17/200,  3:59:00 PM
Today's OEX candle will print a doji, it appears, right at the top of the ascending regression channel. This possible reversal signal needs confirmation tomorrow, but lately we haven't been getting that confirmation, so traders should be cautious about drawing too many conclusions.

  Linda Piazza   6/17/200,  3:46:41 PM
I came within a nickel of being stopped out of my OEX put position near 3:35 ET. The rest of today's trade and tomorrow's open will tell me whether it was a good thing or a bad thing that I didn't get stopped out. Tonight, I'll look at charts again and decide about tomorrow's stop. I based this trade on the internals this morning as well as the OEX violation of the opening gap, but the daily chart also showed the OEX jammed up against the top of its regression channel. I thought it might be time for a shallow pullback to midline support. I would have saved myself a lot of boredom and frustration if I'd waited until 507-508 was violated to the downside.

  Jeff Bailey   6/17/200,  3:41:20 PM
Internet Initiative Japan (IIJI) $5.09 +73.7% .... other than a weekend news item Link today's surge and break of bearish resistance trend Link and gains which have this stock as being today's biggest winner, seems to come from Nikkei 225 closing above the 9,000 level?

  Jonathan Levinson   6/17/200,  3:38:28 PM
HUI has gone vertical, up 5.21 to 156.34 and XAU is up 3.12 to 82.49.

  Jonathan Levinson   6/17/200,  3:25:42 PM
Linda, it's either distribution or consolidation. Equity indices have gone virtually nowhere today.

  Linda Piazza   6/17/200,  3:18:51 PM
Today confuses me. On the NYSE, decliners have outnumbered advancers most of the day, although the Nasdaq internals have gradually strengthened during the day. A big portion of the Dow stocks have been down today. The internals tell me that there's some softness underneath the higher numbers on the indices, but those higher numbers keep getting printed. I'm a position trader usually and not a daytrader, and I intended this trade to be a position trade. I came within $.50 of being stopped out of this OEX put play a little earlier and may wish I had been.

  Jonathan Levinson   6/17/200,  3:13:35 PM
NEW YORK -(Dow Jones)- Led by record gasoline consumption, U.S. oil demand rose fractionally - but by more than expected - in 2002 to a record 19.761 million barrels a day, final government figures show.

  Jonathan Levinson   6/17/200,  3:06:33 PM
Treasuries close at their lows of the day, yields at their highs.

  Jeff Bailey   6/17/200,  2:56:30 PM
Drug Index (DRG.X) 349.73 +3% ...session highs here and just keeps a chug'n.

Helping lift the SPX/OEX to session highs at 1,014/512

  Jonathan Levinson   6/17/200,  2:54:05 PM
The US Dollar is flatlining at 92.50, while August gold holds 364, up 4.30. XAU is showing good strength above 80, currently 81.74 +2.37, and HUI above 150, currently 155. up 3.87. Meanwhile, the selloff in treasuries is deepening, FVX up 9.5 bps and TNX +9 to 3.26%.

  Linda Piazza   6/17/200,  2:52:54 PM
It took a while, but the minimum 411.50 upside target from the one-minute OEX reverse H&S was hit. This tells us that upside targets are still being realized. The next bullish task for the OEX is a move above the day's high.

  Jeff Bailey   6/17/200,  2:50:22 PM
Biotech and gold stock moves .... many traders have e-mailed me in recent weeks regarding the bullishness that unfolded in the biotechs in recent weeks. We saw the BIG guys move higher, then traders saw the smaller and more speculative biotechs make the move higher.

Right now, I've got to stick with thinking that the move in gold sectors is substantial short-covering and most likely brought on by the failed "head shoulder top" pattern in XAU.X that then sees downward trend taken out and shot.

Traders that have been with us more than a year will remember a micro-cap gold stock that we've traded from the long side after a move gets underway in gold. Bema Gold (AMEX:BGO) $1.15 +1.76% just sitting here below its 200-day SMA. For me to think the move in gold right now is anything more than short covering, I would think this stock has got to be getting a move on pretty soon.

Newmont (NEM) had a nice high short interest building, which came unglued. Link

Bema Gold (BGO) not nearly the build on short interest is there? Link

  Jonathan Levinson   6/17/200,  2:49:25 PM
At last, buy signals confirmed, ES lagging the NQ and QQQ.

  Jonathan Levinson   6/17/200,  2:41:37 PM
Those "imminent" buy signals are struggling to cross- never anticipate technical signals! Still more sideways chop.

  Jeff Bailey   6/17/200,  2:38:18 PM
CNBC Rick Santelli from the bond pits seemed to "echo" some of my thinking from 14:18:13 and he too discussed rather significant move from Fed Funds futures with regard to future bond YIELD trade.

His take was that bond market is really counting on a 25 basis point cut next week and if it doesn't get it, or Fed changes tone about "deflation" then YIELD move may be higher an not to any new lows.

  Jonathan Levinson   6/17/200,  2:36:43 PM
There's still no buy signal, but we're seconds away on QQQ, followed by NQ and ES trailing here. FVX is up 8.7 bps on the day, near its highs of the day. TRIN.NQ shows strong but not extreme buying at .60, TICK.NQ +267 and QQV up .16. The put to call ratio is up to its high of the day at .55.

  Linda Piazza   6/17/200,  2:34:14 PM
For reference, the European markets closed as follows: The FTSE 100 closed up 37.50 points or 0.90%, at 4190.40. Trading became more volatile in the afternoon with the FTSE testing 4200, but not quite able to reach that level and then swinging down to its low of the day before climbing back at the close. The CAC 40 closed up 26.26 points or 0.83%, at 3200.75. The CAC reached a high of 3224.32 soon after the open, but was never able to achieve that high again. Late in the day, it fell almost to the flatline area before recovering into the close. The DAX closed up 21.98 points or 0.67%, at 3286.48. The DAX actually dipped .40 into the red in the afternoon, but then recovered and then traded in a downward slope into the close.

  Jeff Bailey   6/17/200,  2:29:27 PM
QQQ .... Traders that have their WEEKLY pivot analysis retracement in place may note something today as it relates to VOLUME on the intra-day moves above $30.83 and 19.1% retracement, which in recent weeks would have brought in some buyers on the break higher and spikes in 5-minute volume.

Today we haven't see it have we? One reason I think is that most of the June option traders are now gone and CBOE option traders aren't having to "rush" to the QQQ to get a hedge. The only real 5-minute volume spike I've seen came right at WEEKLY R1 of $30.63 and MONTHLY 19.1% retracement of $30.60, which is little "zone of support." DAILY Pivot at $30.59 right there too.

If I had seen some type of volume spikes on moves above $30.83, then I'd get more of a feel that bears are jittery and look to try and take advantage of that on any dip back into $30.60-$30.63 level, but don't really see it from the volume.

  Jonathan Levinson   6/17/200,  2:24:13 PM
That downphase on ES, NQ and QQQ is still in progress, but is in the process of truncating early with this uptick. A buy signal appears imminent, but has yet to issue. Just sideways chop so far.

  Linda Piazza   6/17/200,  2:23:42 PM
OEX one-minute chart shows a reverse H&S with neckline now confirmed and upside target near 511.50. This isn't a tradable move, but now we see if upside targets tend to be met. This gives an idea of strength or weakness, too.

  Jeff Bailey   6/17/200,  2:18:13 PM
Bond YIELD move a bit frustrating to me today. Last night was thinking to myself about setting up a 5-year YIELD call trade early next week, in hopes/thoughts, 5-year YIELD ($FVX.X) would stay pegged at 2%, then look for 50 basis point rate cut, see 5-year YIELD dip to about 1.85, maybe 1.75%, then come in with a 2% YIELD call on thoughts bond market would "flush" its shorter-term 5-year bonds and send YIELD back higher. Today's CPI data put a bit of a "hole" in that plan/trade setup as deflation fears may no only have Fed willing to cut 25 basis.

  Linda Piazza   6/17/200,  2:17:48 PM
A descending trendline off the OEX intraday highs has now been established with three touches. I'm not able to post a chart currently, but that descending trendline cuts off the candle shadow for the last intraday high. While today's trading hasn't seemed particularly healthy to me, with internals often showing more decliners than advancers and showing such a high proportion of DJI stocks down (many by about 1% or more), I still wouldn't be at all surprised to be stopped out of my current OEX put position this afternoon. As I mentioned yesterday, OEX 418-420 is the next strong resistance and although I have July puts, I don't particularly want to ride this position that high before watching for the next possible turnaround point. My first target had been a move down to the midpoint of the daily rising regression channel, currently at about 500, but if the OEX breaks out much above the daily high, it's going to be breaking out of that rising channel anyway and that midpoint level of a violated regression channel might no longer be valid.

  Jonathan Levinson   6/17/200,  2:15:56 PM
Microsoft files 15 lawsuits against alleged "spammers" in U.S., UK.

Go get em, Steve!

  Jeff Bailey   6/17/200,  2:12:58 PM
02:00 Internals ....

NYSE 5,716.88 +0.04% ... Vol. 902m A/D 14:17 NH/NL 341:4

NASDAQ 1,236 -0.07% ... Vol. 1.27b A/D 157:154 NH/NL 231:2

NASDAQ has built A/D to ever so positive for first time in today's session and this hints of bullish thoughts into the close. NH/NL both quite strong compared to yesterday at this hour.

  Jonathan Levinson   6/17/200,  2:11:14 PM
Put to call ratio .52, with an equity pcr of .38 and an index pcr .99.

  Jonathan Levinson   6/17/200,  2:08:10 PM
GE is losing ground here, in the red by 8 cents for the first time today. MSFT is still green by 2.21%. FVX is up 7.2 bps, still steady near the middle of its range. Still little downside followthrough for the indices, making the move appear corrective so far.

  Jeff Bailey   6/17/200,  2:03:20 PM
Whilst taking my morning shower began thinking about earlier MXIM comments and June option expiration.

Thought it might be worth a look to see what was taking place for July. Since I'm more bearish the stock, was thinking.... what would I do if loaded to the gills from the long side and a fund manager ahead of June quarter. Would I be doing anything on June expiration? Probably not from the put side. With stock at $34.75, if I wanted out at $35, I can do that here, unless I've got so much of the stock that I'd crush it if I unloaded. Still... if I'm going to dump the batch at $35 after triple-bottom sell signal, then could sell the June $35 calls (XIQFG) and just sit an offer until expiration (need a big position and must be discrete).

  Jonathan Levinson   6/17/200,  1:55:22 PM
XAU is now up 2.19 to 81.56, transporting my spirits atop a cloud of good cheer and optiminism. So far on the NQ, QQQ and ES contracts, we're getting a sideways downphase. If selling doesn't pick up soon, the bulls will have something about which to cheer.

  Jeff Bailey   6/17/200,  1:53:04 PM
YUM! Brands (YUM) $28.78 +0.84% .... from prior bullish comments weeks ago, still following the stock. One thing that has me quite bullish again near-term is that I've had retracement set from $20.35 to $33.17, which has 61.8% at $28.27. Despite intra-day weakness below this $28.27 level, stock "refuses" to close below that level as if big bull is building position and chart. Won't be surprise on some type of move higher to $30.72 and 80.9% retracement soon.

  Jonathan Levinson   6/17/200,  1:48:33 PM
So far, there's been no significant downside followthrough on this bearish stochastic cross. If the price continues to move sideways, it will look like a bullish consolidation to me. FVX is up 8.2 bps, TRIN.NQ .61, TICK.NQ +47, QQV -.22 at 29.08.

  Jonathan Levinson   6/17/200,  1:45:19 PM
We have our bearish crosses on ES, NQ and QQQ- they could "undraw" themselves, but so far the signals look solid.

  Linda Piazza   6/17/200,  1:41:19 PM
OEX 511.17 support was broken, with the OEX currently headed up to test that broken support again.

  Jeff Bailey   6/17/200,  1:36:36 PM
01:00 Update posted at this Link

  Linda Piazza   6/17/200,  1:35:17 PM
Decisions, decisions. It may very well be that the test of the day's high will come at that time of day I most dislike, and most dislike because I've often had stops run as support or resistance is tested near 1:45 ET, only to see the market turn around after the stop is run. Do I honor that stop? Do I widen it to accommodate this action that I've seen happen so often? Since I don't stop out exactly on a known S/R level or a nice round level, but instead typically give an OEX trade about $0.25-.50 leeway, that's what I'll do here, too. Then I'll honor the stop if the OEX trades more than $0.50 above the current day's high, even if that happens at 1:45 ET. The morning's trade on the OEX looks very much like a bullish right triangle setting up, so I don't want to give it more than that $0.50 leeway.

  Jonathan Levinson   6/17/200,  1:34:31 PM
The intraday oscilators are pointed south from overbought territory, and it looks like a print at 30.65 QQQ, 1237 NQ and 1008 ES should be enough to get those elusive sell signals. But until they occur, we're still on a buy signal, within up-phases.

  James Brown   6/17/200,  1:22:56 PM
Jon, yes, I certainly feel for anyone who's been trying to short this rally since March (or at least since April). I'm sure it's been painful.

  Linda Piazza   6/17/200,  1:16:52 PM
Although the Dow remains positive, I notice that components AXP, BA, IP, DD, HON, MMM, IBM, INTC, KO, PG, SBC, T, UTX, WMT, and XOM all trade negative as of this writing. That's 15 of its components.

  Jonathan Levinson   6/17/200,  1:15:23 PM
James, your CC post just now would make an excellent epitaph for some very fine traders who got smoked this year.

  Jeff Bailey   6/17/200,  1:10:18 PM
AMEX Gold Bugs Index ($HUI.X) 155.01 +2.56% ... getting upside alert here at 52-week high.

  James Brown   6/17/200,  1:07:43 PM
Circuit City Stores Inc. ( CC ), The company announced its earnings before the bell this morning. Estimates were for a loss of 24 cents a share, the company turned in a loss of 21 cents a share. So they beat the estimates, but the company lost $44 million for the quarter compared to just $1.3 million a year ago. Profit margins slipped, store remodeling costs are higher and their credit card business stinks so bad they're considering a sale. This doesn't look like a winning combination to me yet shares are up nearly 10% to $7.60 this afternoon thanks to Raymond James who reaffirmed their "strong buy" and $10 target.

Go figure.

  Jonathan Levinson   6/17/200,  1:07:09 PM
Jane, those intraday oscillators are toppy, and I don't think that the highs of the day will get taken out, but that's a guess. I still see intraday head and shoulders patterns that have yet to be negated decisively. Alas, this could well be my bear goggles at work.

  Linda Piazza   6/17/200,  12:59:50 PM
If you study a one-minute OEX chart, you notice that the OEX has spent quite a bit of time establishing 511.15-511.17 as a S/R zone today. Why is that level important? I'm not sure. I looked at the pivot matrix Jeff provides for us each day and I didn't find it there. The five-minute 21-pma is just below that level currently, but it wasn't earlier today. The OEX did just violate that level on a one-minute basis, but popped back above it. We'll see, but for now I'll first watch that level.

  Jonathan Levinson   6/17/200,  12:58:39 PM
All of my 26-3-18 intraday stochastics have been on "buy" signals for ES, NQ and QQQ since just past 11AM today. This continued sideways action is within the context of an up-phase.

  Jonathan Levinson   6/17/200,  12:56:43 PM
The put to call ratio is down to .47 for this past half hour. August gold last traded 365. XAU is up 1.94 to 81.31, HUI +3.65.

  James Brown   6/17/200,  12:55:04 PM
NXTL, Nextel Communications is up another 4.3 percent today. We put NXTL on the OI watch list last night. Shares had charged higher in Monday's rally but stalled just under the $16.00 level. Now we're witnessing a breakout and it looks tempting on its daily, weekly and P&F charts.

  Jonathan Levinson   6/17/200,  12:45:03 PM
The CBOE put to call data is tardy.

  Linda Piazza   6/17/200,  12:44:43 PM
If small and mid caps are important to the sustainability of any rally, how is the Russell 2000 doing? A glance at the daily chart shows that, unlike the S&P's which still climb along their upper Bollinger bands, the Russell 2000 has begun to pull away from that upper BB after piercing it. Technical analysis suggests that it will now touch the midpoint average, and a study of the Russell's chart shows that's what it usually does after pulling away from the upper BB. However, that doesn't mean it can't rise first inside the BB's, as it did in May. That midpoint average is now at 437.87, but rising.

  Jeff Bailey   6/17/200,  12:43:43 PM
August Fed Funds Futures (ff03q) 99.12 .... falls to 50% chance of 50 basis point cut by the Fed between now and August meeting after Friday's high trade for 78% chance.

July Fed Funds (ff03n) Futures (ff03n) 99.10 now gives 40% chance of 50 basis by June, but still 100% of 25 basis point at June meeting. I'm using July Fed Funds as this will be the only futures contract that covers the FOMC into next weeks meeting.

  James Brown   6/17/200,  12:40:04 PM
For anyone looking for a cheap, speculative trade, check out shares of Sirius Satellite Radio (SIRI). The stock took off a couple of weeks ago on big volume and has since faded back to bounce at previous resistance. The P&F chart looks bullish and puts overhead resistance around $3.75. I suggest doing a little digging before considering a position.

  James Brown   6/17/200,  12:34:52 PM
I noticed some chatter on MSFT today. Shares are certainly stronger, trading above its simple 200-dma. There is some short-term price resistance around $26.50 but check out the weekly chart. MSFT has a long-term trendline that should come into play very soon. chart: Link

  Jeff Bailey   6/17/200,  12:32:46 PM
August Gold Futures (gc03q) 365.80 +1.6% ... getting upside alert at 365.0 which I had set on this contract today for move back above the shorter-term 21-day SMA of 365.0. Did this after previous note that Dorsey/Wrights precious metals bullish % (BPPREC) reversed back lower into "bear alert" status, and thought bulls might need to see some upside action from the futures markets to still hold some bullish thoughts. Getting it here today.

As if the action in the Gold/Silver Index (XAU.X) 81.23 +2.35% and AMEX Gold/Bugs Index ($HUI.X) 154.73 +2.38% wasn't some sign of further strength.

  Jonathan Levinson   6/17/200,  12:31:52 PM
ES was leading the way down, got a bearish kiss, and then bounced back up, rejecting the sell signal. It will take a print at 1008 to get it going to the downside.

  Jonathan Levinson   6/17/200,  12:23:40 PM
Still no sell signal on ES, NQ and QQQ intraday.

  Jonathan Levinson   6/17/200,  12:16:45 PM
The selloff is sharper on ES than it is on NQ for a change.

  Jonathan Levinson   6/17/200,  12:15:29 PM
The stochastic up phase is just beginning to roll over, but no sell signals yet for ES, NQ or QQQ.

  Jonathan Levinson   6/17/200,  12:11:15 PM
Treasuries aren't reversing their losses- FVX +8.2 bps, TNX +7.4 and TYX +7.6 bps.

  Jonathan Levinson   6/17/200,  12:07:58 PM
Another one of those .48 put to call readings. The QQV is +.09, VXN +.46 and VIX +.09. In my opinion, the volatility indices are too flat to offer any guidance- market makers are either selling lots of calls here, or they're buying them back.

  Jonathan Levinson   6/17/200,  11:58:43 AM
August gold is rocking and rolling, up 5.80 to 365.50. HUI is up 3.3 to 154.33, XAU +1.63 to 80.99.

  Linda Piazza   6/17/200,  11:57:56 AM
It looks as if there will now be a try for the day's high. A move above that, and I'm out of my OEX put play.

  Linda Piazza   6/17/200,  11:56:36 AM
As of a few moments ago, adv/dec ratios were .83 for NYSE-traded issues and .90 for Nasdaq-traded issues: neutral to slightly bearish figures. Up volume was ahead on both the NYSE and Nasdaq, but not by huge proportions. Up/down volume may be affected by MSFT's strong trading today. Total volume was 574 million shares on the NYSE and 855 million on the Nasdaq.

  Jonathan Levinson   6/17/200,  11:54:35 AM
My intraday 26-3-18 stochastics have been in a weak upphase since 10:45AM for ES, NQ and QQQ. The price action has been sideways-up so far, not nearly the fiesta that bulls expected and bears feared. I believe we're seeing the extreme-bullish put to call ratio drag that we've seen inverted with very high put to call ratios and the market refuses to go down. It could be that for the moment, all the bulls are committed.

  Jeff Bailey   6/17/200,  11:40:00 AM
NASDAQ-100 Index (NDX.X) 1,239 -0.18% .... haven't seen anyone mention the "potential" head/should top pattern on 5-minute bar chart with "left shoulder" at 1,238. Move above 1,240 could bring in short-covering from short-term bears and challenge morning high of 1,247 if not higher.

I don't see this "pattern" on any of the INDU/SPX/OEX 5-minute bar charts. NDX action from here could then dictate today's trade.

  Jonathan Levinson   6/17/200,  11:38:31 AM
The put to call ratio is .48 for this past half hour, equity pcr .36 and index pcr .91.

  Jeff Bailey   6/17/200,  11:35:42 AM
11:00 Update posted at this Link

  Jonathan Levinson   6/17/200,  11:34:10 AM

  Linda Piazza   6/17/200,  11:26:30 AM
The OEX is now above its morning gap and above the neckline of the five-minute H&S formation. I may soon be out for a small loss on my OEX put position this morning. So far, decliners continue to lead advancers, but that's not stopping the bounce so far.

  Jonathan Levinson   6/17/200,  11:15:26 AM
Agreed, Alan.

  Jonathan Levinson   6/17/200,  11:13:01 AM
The put to call ratio is down to .47 now, with the equity pcr .34 and the index pcr .94. There is zero bearish sentiment in this number- it shows allout bullishness, which contrarians love to fade.

  Jonathan Levinson   6/17/200,  11:09:47 AM
Do you think that MSFT is being used as a hedge to protect against the downside because of its shares outstanding similiar to the way T used to be used and currently GE is used.

I listened to an excellent interview with Bill Fleckenstein, and Fleck's theory was that many fund managers who missed the "bottom" were chasing performance by piling into the high beta "screamers", driving the markets up. This explains why so many "trash" stocks have been rallying. A logical place for them to park gains would be in the higher liquidity blue chips such as GE and MSFT. These would also benefit from an increase in foreign buying. Foreigners might not know SIRI or SINA or XMSR, but they'll plough into GE or MSFT.

  Linda Piazza   6/17/200,  11:00:10 AM
The neckline on the violated one-minute and five-minute (thanks, Jane) OEX H&S formation is currently being tested, with that neckline between 509.40 and 509.70, depending on how you draw it. This test will give us one more bit of information about strength or weakness in this index.

  Jonathan Levinson   6/17/200,  10:57:13 AM
XAU is above 80 and HUI is above 153- this could be a breakout in the miners. August gold is up 3.80 to 363.50.

  Jonathan Levinson   6/17/200,  10:55:29 AM
MSFT and GE are still in the green. The .49 put to call ratio has me smelling blood, but until the bellwethers confirm it, I'm still very nervous about downside followthrough.

  Jeff Bailey   6/17/200,  10:54:11 AM
Maxim Integrated (MXIM) $34.67 -3.29% .... stock gives back yesterday's gains after yesterday's morning trade at $34.00 reversed higher to $36 by session's end. I received an e-mail from bear holding profitable June put expiration prior to my bearish comments from Friday on this stock's technicals.

Not sure what June put contract trader holds, but I would tend to "close out" positions in here for June expiration with Triple Witching on Friday. Thinking is.... why risk June profits on chance of option expiration type volatility? Best to "roll out" bearish exposure I think this stock looks to deserve to August. Link

  Linda Piazza   6/17/200,  10:52:02 AM
My OEX put entry was risky ahead of the 507-508 levels, as those could be bounce points for the OEX, so I'm not suggesting that others follow me into the trade, but only disclosing my position. Volume patterns continue to slant slightly to the weak side, but I'm prepared for a quick exit for a small loss if I need to take one.

  Linda Piazza   6/17/200,  10:45:36 AM
The OEX moved below the bottom of this morning's gap--not a bullish action, but now tries to steady and move up. Disclosure: I have a put position on the OEX, bought when it closed that gap.

  Jeff Bailey   6/17/200,  10:45:13 AM
Gold/Silver Index (XAU.X) 80.34 +1.17% ... trying to make its move above the 80.00 level here. Slight weakness at the open may have been bought by sector bears as support came right at the "old" downward trend from the June 2002 highs, which was broken to the upside yesterday. "Resistance broken, becomes support."

  Linda Piazza   6/17/200,  10:38:44 AM
The top of the OEX gap is being tested once again, with the one-minute chart now showing a rough H&S formation.

  Jonathan Levinson   6/17/200,  10:32:19 AM
A break below 1233 NQ would have no support until 1220.

  Linda Piazza   6/17/200,  10:29:58 AM
The OEX now tests this morning's gap again. This doesn't appear bullish action, but dip buyers could still be waiting at or underneath current levels.

  Jonathan Levinson   6/17/200,  10:26:16 AM
The pivots I calculate employ the daily high, low and closing numbers for the ES3U, NQ3U and YM3U. They are calculated mechanically, using a pivot calculator.

  Linda Piazza   6/17/200,  10:25:32 AM
While up volume still remains ahead of down volume, adv/dec ratios as of a few minutes ago were .83 on the NYSE-traded issues and .91 on Nasdaq-traded issues. These are neutral to slightly bearish numbers, but they're not the strongly bullish figures we've been seeing. These numbers don't strongly indicate the direction of the markets as yet, but they do put us on alert that something may be changing.

  Jonathan Levinson   6/17/200,  10:25:06 AM
A move above the descending upper trendline at XAU 80 should see some fireworks for the Precious Metals Index.

  Jonathan Levinson   6/17/200,  10:23:23 AM
The opening put to call ratio was .49, equity pcr .34 and index pcr 1.04. We trade what we see, but the bulls are getting awfully cocky. There's been relatively little noise made about the Investors Intelligence data with only 16% of advisors still bearish, the lowest level since 1987.

  Jonathan Levinson   6/17/200,  10:19:54 AM
We have trendline support at 1010 ES.

  Jonathan Levinson   6/17/200,  10:19:11 AM
You implied in MM this morning that the 6.25B would be a drop in the bucket for the bond market but a meaningful portion of the pail if in the equity market. Can you give a top level overview of the "size" of the equity vs the bond markets? I have never seen this discussed.

Question on FED meeting: If there has been so much buying of treasuries in anticipation of a rate cut what kind of unwinding will take place if the PPT leaves rates alone, or does drop only a 1/4 basis point? It would seem that unless they cut a full 1/2 point that there will be substantial bond selling.

Good questions. I do not know the actual size of the treasury and equity markets- only that the equity market is reputedly orders of magnitude smaller than the treasury market, which is orders of magnitude smaller than the forex markets. I've seen forex estimates at over $1T per day. If anyone has any details for us, I'll be grateful to post them here.

The Fed is not the Plunge Protection Team. The PPT is a colloquial name for the Working Group on Capital Markets, and while Al Green, I believe, is on that team, it is not the same entity as the Fed. A small point only. If the fed leaves rates unchanged, we guess that speculative purchases of treasuries made in anticipation of the rate cut will get liquidated. I'd guess that stocks will get sold, particularly those with the highest debt exposure. Then again, perhaps the whole lot of them will get dumped- it's difficult to gauge the motivations behind the buying in the current stock rally. I would expect gold to sell off as well, and the US Dollar to rally.

  Jeff Bailey   6/17/200,  10:16:32 AM
Frontier Airlines (FRNT) $8.96 +5.16% .... gaining again today after yesterday's triple-top at $8.50. I tried bidding between offer/ask for some Nov. $7.50 calls at $1.90, but no go. Current bid/offer $2.05x$2.40 and not willing to chase'm here. May regret it later. Link

  Jonathan Levinson   6/17/200,  10:12:44 AM
The NQ 1246 resistance level seemed to stop the bounce for NQ and ES, but once again ES is the stronger of the two. With FVX reapproacing its highs of the day, fuel could be building for another push higher. Note, however, that there's fed money possibly being returned from short term treasury investments from yesterday- this could be contibuting to the selling in bonds.

  Linda Piazza   6/17/200,  10:10:57 AM
Those volume patterns appear to be weakening still. It's still too early to be sure this is indicative of later trading patterns, but it may be important to watch.

  Jeff Bailey   6/17/200,  10:10:26 AM
Oxford Health (OHP) $43.91 +1.29% .... continues its climb Link . UnitedHealth (NYSE:UNH) $104.39 +1.34% also strong at all-time highs with bullish vertical count of $117 Link .

  Linda Piazza   6/17/200,  10:07:49 AM
As of a few minutes ago, volume patterns had shifted a little, with decliners then outnumbering advancers, but with up volume still slightly ahead of down volume. This may have reflected the small dip we saw or it may be a harbinger of things to come. It's too early to tell as yet.

  Jeff Bailey   6/17/200,  10:07:40 AM
Drug Index (DRG.X) 346.79 +2.17% .... "on fire" this morning. Merck (MRK) $62.65 +3%....

  Jonathan Levinson   6/17/200,  10:07:15 AM
Next stop looks like 1016 ES3U.

  Jeff Bailey   6/17/200,  10:05:17 AM
SPX 1,013.52 +0.27% .... here's 5-minute bar chart with DAILY/WEEKLY/MONTHLY pivot analysis retracement overlaid.Link

  Jonathan Levinson   6/17/200,  10:04:29 AM
Despite the opening weakness, we have MSFT and GE making simultaneous highs of the day. This does not portend continued weakness.

  Linda Piazza   6/17/200,  10:00:32 AM
The top of the OEX gap held again. Now bulls need an OEX move over 510.68, the last one-minute high, and then over the day's high.

  Jeff Bailey   6/17/200,  9:59:07 AM
SPX 1,009.57 -0.11% .... really in "no man's land" when looking at DAILY/WEEKLY/MONTHLY pivot retracement overlays. Will show 5-minute bar chart in a second, but right now just looks like it may pull into 1,006 level, with good upside target into 1,017-1,018.

  Linda Piazza   6/17/200,  9:58:45 AM
The earliest volume patterns show advancers slightly ahead of decliners, but up volume about twice down volume. As I repeat every morning and you're probably tired of hearing me say, these early patterns can be distorted as early-morning orders are settled.

  Jonathan Levinson   6/17/200,  9:55:48 AM
Next major support for ES3U is in the 1002 area, + or - one point.

  Linda Piazza   6/17/200,  9:55:11 AM
The one-minute chart shows a lower high, with the OEX perhaps headed back for another test of the gap.

  Jonathan Levinson   6/17/200,  9:53:47 AM
The fed has announced No Action, for a net 6.25B drain. Perhaps Al Green objected to my calling it "intervention money". We'll now see where the money from yesterday's infusion was stashed- selling in bonds will be easy to miss because those markets are so big, but if the 6.25B was in equities, we should feel that in the tape quite easily as it's liquidated and returned to the fed.

  Jeff Bailey   6/17/200,  9:52:01 AM
Sector Strength Drug (DRG.X) +1.3% ... Merck (MRK) $62.15 +2.05% after yesterday's spread triple-top buy signal at $61.00 Link

Sector Weakness Semiconductor (SOX.X) -1%, Oil (OIX.X) -1%, Dow Jone Home Construction (DJUSHB) -1.27%

  Jonathan Levinson   6/17/200,  9:51:43 AM
August gold is up to 361.80 now, a 2.10 gain. HUI is up .43 to 151.56m XAU .16 to 79.53, getting in range to challenge their year highs.

  Linda Piazza   6/17/200,  9:51:25 AM
So far, the OEX stopped one penny short of the top of that gap, but I'm still watching to see if that gap test is successful. It requires a move over the day's high now.

  Jeff Bailey   6/17/200,  9:47:11 AM
S&P Banks (BIX.X) 313.38 -0.37% .... now session low after fractional gains early. Tought for SPX/OEX or major indexes to make much of a move higher with this trade going on right now.

  Jonathan Levinson   6/17/200,  9:46:35 AM

  Jonathan Levinson   6/17/200,  9:43:55 AM
This is an open that must have a lot of novice traders (if there are any of those left) shaking their heads. INTC is 46 cents off its premarket high, NQ is down 2 points and ES up 2. The premarket was shaping up for a rocket launch.

  Linda Piazza   6/17/200,  9:43:14 AM
That first five-minute range in the OEX was a small range, so the 50% retracement would probably not be useful to watch. Since there was a gap up, it's probably far more useful to watch that gap. Yesterday's close was 508.84 and today's open was 509.72. While it's natural to see a gap retested, bulls would prefer that the test stop at the top of that gap, today's open of 509.72, or at least before 50% of the gap is retraced, at 509.28, and certainly before or at the bottom of the gap, at 508.84. The first pullback usually begins within the next ten minutes.

  Jonathan Levinson   6/17/200,  9:42:10 AM
I see trendline support at 1010 ES and 1044 NQ, 30.80 QQQ.

  Jeff Bailey   6/17/200,  9:39:23 AM
S&P Banks (BIX.X) 315.13 +0.18% ... fractional gains here, but session high. SPX/OEX bulls most likely need a move above BIX.X 317 to then hint of further upside to morning gains for SPX/OEX

  Jeff Bailey   6/17/200,  9:36:39 AM
Buy program premium alert SPX 1,012 ,

  Jonathan Levinson   6/17/200,  9:35:00 AM
So far volume is weighted to the sell side, with ES up 2.50 and NQ flat, QQQ 30.92. TRIN.NQ .52, TICK.NQ -264, QQV +.47.

  Jonathan Levinson   6/17/200,  9:30:34 AM
MSFT is up .21 25.59, well off its premarket high of 25.85.

  Jeff Bailey   6/17/200,  9:29:01 AM
Buy/sell Programs at the open .... should get a "buy program premium alert" at the open, as cash adjusts to higher futures trade. When I looked at Jonathan's Futures Wrap, it looks like cash SPX should open up just below DAILY R1/WEEKLY R2 correlation of 1,018.

  Jonathan Levinson   6/17/200,  9:28:31 AM
The short cycle oscillators are still trending, but they are on a sell signal from 9AM, when the price stopped just below the 127% fib retracement off Monday's opening low.

  Jonathan Levinson   6/17/200,  9:23:02 AM
The Cap utilization number shows that just over 25% of the country's factory capacity remains idle.

  Jonathan Levinson   6/17/200,  9:19:32 AM
Fresh surge in the US Dollar Index to 92.82. August gold is up .60 to 360.30, working on that fib resistance level.

  Jonathan Levinson   6/17/200,  9:16:21 AM
The bond selloff has eased somewhat, with FVX up 6.4 bps, TNX up 4.4 to 3.212% and TYX +3.8 bps. The equities rally has eased too, QQQ now 31.07, ES 1014.75 and NQ 1252.50. This morning, equity prices appear to be following the yield, which could be signalling the bond-to-equity reallocation that would potentially fuel a stock rally to the moon. We'll keep following it, as well as the Fed's interventions to be announced at 10AM. There is 6.25B in overnight repos expiring today.

  Jeff Bailey   6/17/200,  9:07:27 AM
09:00 Update posted at this Link

  Linda Piazza   6/17/200,  8:56:08 AM
Good morning. The Nikkei opened up in Tuesday's trading and soon bounded above 9000. The Nikkei held onto the 9000 mark into the close, too, closing up 193.17 points or 2.19%, at 9033.00. Other Asian markets gained, too, with exporters and banks benefiting. Banks benefit because rising stock markets increase the value of their holdings, easing fears about that the banks' assets would fall below allowable levels. Most other Asian markets traded up, too. Taiwan's Weighted moved up 1.65%, South Korea's Kospi gained 2.56%, Singapore's Straits Times gained 1.95%, and Hong Kong's Hang Seng climbed 1.70%.

Most European markets currently trade up. In Europe, insurers were gaining, probably for much the same reason that banks were climbing in Asia: rising stock markets increase the value of their holdings. Much talk on CNBC Europe and much press in the printed media focused on the June ZEW economic survey of German sentiment that surprised to the upside, rising to 21.3, above the 19 consensus. Vivendi Universal's earnings report also drew scrutiny. Vivendi reports pro forma, but said pro forma operating income, excluding certain items, increased 39%. Losses were trimmed from 815 million euros in Q1 of last year to 319 million euros now. It confirmed its 2003 operating guidance, mentioning growth in operating income and improved cash flow. Of course, that return to profitability excludes goodwill and non-recurring items, such as its sale of publishing assets and Veolia Environment. Those assets for sale were weaker than expected, a Morgan Stanley spokesperson noted, while saying that the business was seasonal.

As of this writing, the FTSE 100 trades up 49.90 points or 0.98%, to 4193.80; the CAC 40 trades up 34.88 points or 1.10%, to 3209.37; and the DAX trades up 50.12 points or 1.54%, to 3314.62.

  Jonathan Levinson   6/17/200,  8:41:01 AM
Treasuries continue to sell off, with FVX up 5.2 bps, TNX up 4.2 bps and TYX up 3 bps. NQ is now up 7.50, ES +5 and QQQ is trading 31.09 on Island ECN.

  Jonathan Levinson   6/17/200,  8:39:59 AM
The 35% jump in multi-family housing starts was the largest one month increase since Dec 1998.

  Jonathan Levinson   6/17/200,  8:38:43 AM
Housing units started rose 6.1% to a 1.732 million-unit annualized rate in May.

  Jonathan Levinson   6/17/200,  8:38:19 AM
US consumer prices were unchanged in May, while the core rate, excluding the volatile food and energy costs rose 0.3%, its largest gain since Aug 2002.

  Jonathan Levinson   6/17/200,  8:02:13 AM
Thanks to all who noticed that my Word template was not updated from June to September contracts. Please note that all of the data used for the pivots and the charts (with the exception of GC as noted in the article) is based on the Septembers. The Word template has now been updated.

The US Dollar Index has printed an overnight fakeout head and shoulders failure, and is now rising, currently at its session highs at 92.63. August gold is up .70 to 360.40. Futures are up, ES +2 at 1011.50, NQ +2 at 1248, YM +18 at 9318, with QQQ trading 30.95.

  Jeff Bailey   6/16/200,  11:42:35 PM
The Index Trader Wrap has been posted: Link

  Jonathan Levinson   6/16/200,  11:42:17 PM
The Futures Trader Wrap has been posted: Link

  James Brown   6/16/200,  11:42:07 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

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