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  Linda Piazza   6/18/200,  4:08:32 PM
Jeff, the pattern you're noticing on AU is a harami, almost a harami cross, which it would have been if today's candle had turned out to be a doji. It very nearly was but changed shape a bit with the end-of-day trading so that it now has a real body. A harami is like an inside day in regular nomenclature--the candle is entirely contained within the previous day's candle. The bigger the previous day's candle in relationship to the harami, the more significant that harami is considered. A harami that comes at the end of an uptrend is a sign that the movement could be losing momentum, but that loss of momentum would need confirmation from two sources: one would be lower-than-average volume on the day that the harami was produced. I noticed that today's volume was much lower than the usual volume, so that parameter has been met. The other would be confirmation from the next day's trading, with lower prices ensuing. Basically, then, it works as an inside day would. There's also a three-inside day pattern, and the harami can be the first of those three inside days.

  Jonathan Levinson   6/18/200,  4:03:28 PM
Hey Jeff, it looks like your daily allocation of Shirley Temples might be getting a little overbought today :) Going to checkout AU for you. Today's perfect inside print reflects perfect indecision, but seems to fit with a harami cross setup, a bearish pattern. There appears to be a decent base at the 31 level, but I counsel caution here.

  Jeff Bailey   6/18/200,  4:00:18 PM
Altria (MO) $44.13 +2.46% ... pretty good sized trade in the July $45 calls at $1.25 with 454 contracts. Big bet for and against $46.25 by July expiration. Trade was matched at the offer of $1.25, so would be interpreted as "buy induced."

  Jeff Bailey   6/18/200,  3:48:00 PM
Hey Jonathan or Linda .... I see you both make some comments regarding the candle stick charts. I mention a trade setup for "inside day" on Anglogold (AU) $32.56, and while I'm not a candle sticker, I'm interested in trading an "inside day" move tomorrow. Anything on your candle stick screen as far as a "doji" or "3 calling crows" or "shooting star galaxy" type of pattern? (Grinning.... I have no clue as to candle stick pattern names)

  Jonathan Levinson   6/18/200,  3:30:51 PM
Canary in a coal mine? Why won't HUI or XAU sell off? HUI is down just .22 at 156.18, XAU -.54 despite the tankage in August gold. Are some hedgehogs shorting the metal and going long the miners?

  Linda Piazza   6/18/200,  3:23:36 PM
Watching that consolidation pattern on the OEX, I'm imagining market participants just sitting around, treading water, waiting for a glimpse of the late-day orders in a few minutes.

  Linda Piazza   6/18/200,  3:20:44 PM
The OEX one-minute chart shows the OEX trading in a tight range roughly from 508 to 507.50, resisting that plunge below the day's low. Since this consolidation pattern was entered as the OEX fell, it has the appearance of a "b" distribution pattern, with the expectation being that the OEX would break out of it to the downside, but you never know as this would go against the usual late-day trading pattern. Of course, red on the OEX goes against the whole-day trading pattern lately!

  Jonathan Levinson   6/18/200,  3:16:45 PM
The vertical blastoff to the upside is now 2 minutes late.

  Jonathan Levinson   6/18/200,  3:15:01 PM
Another fresh low of the day for GE at 30.80, down 1.28% and leading the ES and YM to the downside.

  Jonathan Levinson   6/18/200,  3:11:35 PM
Strange: the put toc all ratio is up to .61 here, led by a jump in the equity pcr to all of .46, index pcr is down a touch to 1.19. I say strange because all week we've been getting predictable ramp jobs commencing at 3:15 EST, and by now one would think that traders had been conditioned to salivate for calls at that cue. We'll see if the pattern holds again today. T minus 3 minutes to launch.

  Linda Piazza   6/18/200,  3:04:25 PM
Jeff, I agree. Although I'm trading the OEX bearish today on a play entered yesterday, I see the possibility for lots of volatility headed into the end of this week and the beginning of next week. Although I have July rather than June options, I plan to take profits rather quickly, probably this afternoon unless there's a huge drop this last hour that gives me a big cushion. I think the markets need a deeper pullback, but I'm not sure whether this week is the week it's going to happen. It may, but there are just too many factors working to create uncertainty and in this environment, I'd rather pocket a little change than risk it on the chance of a big loss.

  Jeff Bailey   6/18/200,  3:01:24 PM
IBM (IBM) $84.50 +0.23% .... I'm still monitoring this stock and tempted bear here here after our mentioning of stock in "Ask the Analyst" column a couple of weekends ago. Link

The very next day, IBM was upgraded and while bear at $82.60 may indeed have gotten stopped out at $83.81, stock has been finding resistance for 4-days now just below $85, which is right where IBM gave the reversing lower "sell signal" on its PnF chart. Link

  Jeff Bailey   6/18/200,  2:55:03 PM
Growing some fur behind my ears today. I'm very hesitant at this point to try and swing-trade or longer-term trade the major indexes bearish. However, one thing I think a BEAR begins to think about is major indexes trading sideways into expiration, and then next week, look for some type of unraveling to the downside after expiration and Triple Witch taken care of.

I am comfortable still with past bullish profiles of some more "boring" stocks like PFE, MRK, OHP, YUM, but today's "bite" from HGSI and noted weakness from MXIM gives me the feel that "high beta" may be running its course from the long side.

  Jonathan Levinson   6/18/200,  2:54:58 PM
The precious metals indices are outperforming the August gold contract today, with XAU down just .83 at 81.41, HUI -.83 at 155.57, while GC3Q sits at 358.10, down 5.70. The metals indices broke above trendline resistance yesterday, and I'm thinking that this is where the support is coming from. The gold contract did not, and unlike the miners, is well off its year high.

  Jonathan Levinson   6/18/200,  2:50:36 PM
Support is holding so far on ES, NQ and QQQ, even as GE prints its low of the day here.

  Jeff Bailey   6/18/200,  2:49:43 PM
Biotech HOLDRs (AMEX:BBH) $128.14 -2.4% ... was looking at some BBH puts and see 1,200 contracts traded for $1.50. That far out the money is most likely a "speculator" type trade, or institutional type hedge to buy some protection on a group that may not be looking so good right now. I'm taking note at 2,501 contracts traded there today, which is more than 1,842 open interest. I am/was more interested in a August/September expiration and only see July/October offered here. The October $130's seem expensive at $11.10.

  Linda Piazza   6/18/200,  2:49:08 PM
The OEX 60-minute formation definitely has a rounding-over appearance, one that typically eventually topples over, but to do that the OEX has first to move through today's low of 507.25. On the hourly chart, CCI has moved below the center line, into the red, and ADX has been rounding over all day, although it's still at 31.91. Oscillators all turn down, of course, but with that high of an ADX (default Q-chart setting) reading, we may not be able to trust the evidence of the oscillators as they may be signaling consolidation rather than more downturn. The outcome of this contest with the day's low may not depend on the OEX but on they key performances of other indices, such as the SPX.

  Jonathan Levinson   6/18/200,  2:43:40 PM
ES is approaching first support at 1005.50, QQQ equivalent at 30.79, NQ 1244.

  Jonathan Levinson   6/18/200,  2:42:23 PM
The TRIN.NQ has pulled out of extreme territory and is now at .54, while the TICK.NQ has sunk to -123 and QQV has risen to .50 at 29.13. The most recent put to call ratio is up to .58 as traders continue to buy calls for the widely expected run higher. ES is now down 3.75 and NQ is up 4, well off their highs.

  Linda Piazza   6/18/200,  2:33:11 PM
OEX has now moved below the bottom of the gap from Monday to Tuesday. The next task bears want to see is a new low of the day.

  Jonathan Levinson   6/18/200,  2:33:00 PM
You show em, Alan! 1008 busted. We can relax about that reverse head and shoulders setup. Next support is at 1005.50, followed by 1002 ES.

  Linda Piazza   6/18/200,  2:23:34 PM
One reason the OEX keeps pausing in the 508.84 to 509.72 range is because that was the gap from Monday's close to Tuesday's open. Bears want to see 508.84 firmly broken first and then a move below today's low of 507.25.

  Jeff Bailey   6/18/200,  2:18:17 PM
Altria (MO) $44.12 +2.43% .... here is a "historical" chart, which I think lends to bullishness for MO. What do you think?Link

  Ray Cummins   6/18/200,  2:12:57 PM
Spread/Combos & Premium-Selling -- E-mail Replies Part III

(Condensed) I hope that these questions are not getting too strange as the plays from your section of the newsletter have become about the only ones that I use consistently. I am now at the stage of trying to decide if I would be better off concentrating on the credit spreads or the naked puts. There seem to be many considerations such as risk [and probability of profit], frequency of having to close a play and margin etc. and no articles that I have seen compare the two strategies.

Regarding the differences in profit potential or return on investment: The plays offered in my sections of the newsletter are based on a monthly (annualized) target gain of 6-12 percent. The lower end of this range generally coincides with the 2nd standard deviation of a normal distribution, where the majority of stocks rarely trade. That may be somewhat difficult to understand if you haven't studied probability but suffice it to say that if you want to achieve a very high rate of success (with a corresponding low return), you should construct positions that achieve profitability when the underlying issue remains within the 2nd standard deviation of a normal distribution. This is a common approach among professional "premium-sellers" but it is less prevalent among retail players because achieving consistent profitability (with these types of strategies) is based almost entirely on position management as opposed to position selection. There are no easy answers my friend -- success comes with lots of hard work and many hours of study followed by extensive experience. By then, if you have any money left, you will likely have figured out how to play this vicious game. Good Luck!

  Jonathan Levinson   6/18/200,  2:07:22 PM
Zero action. The US Dollar Index is back to its day highs in the 93.30 area, while gold is near its lows at 358.30. The put to call ratio printed .56 again. TNX is higher than the other treasury yields, all off their highs of the day, while the NQ and QQQ are just below their highs, in a ridiculously narrow range, as is the ES, all fluttering just below the tops of their flag pole highs.

  Linda Piazza   6/18/200,  2:03:51 PM
The OEX is again testing its five-minute 21-pma. In the last five-minute period, it closed above this pma for the first time since falling beneath it at 12:25 ET today. The close was only a few cents above the pma, and the current price just at that pma, currently at 510.10.

  Jonathan Levinson   6/18/200,  1:54:16 PM
Brazil's central bank cuts interest rate to 26 percent Associated Press - Link

  Ray Cummins   6/18/200,  1:52:22 PM
Spread/Combos & Premium-Selling -- E-mail Replies (Continued)

In any case, Ray, do you think that the success rate of your Naked Put section is higher than the Credit Spread section over the long term because of the sold strike prices being further away from the stock price when the plays have been initiated? I assume that the reason sold strike prices in the credit spreads are closer to the stock price when the play is initiated is because it is necessary in order to produce a sufficient credit premium after the cost of the protective (put) option is deducted.

As for a comparison between (selling) naked-puts and credit spreads, it would seem that the former would be far more successful on a long-term basis. However, the actual results are based more on the way each individual position is managed as opposed to the differences in probability of profit for each strategy. The reason is obvious: a losing credit spread has a relatively small (maximum) capital drawdown, but the same cannot be said of a naked put. Of course, this is less of a problem for traders who are skilled at position management and portfolio diversity, so the key is to decide which technique plays to your individual strengths.

  Jonathan Levinson   6/18/200,  1:49:24 PM
A break below 1008 will invalidate the reverse h&s on the ES 6 minute candles.

  Linda Piazza   6/18/200,  1:45:34 PM
The 1:45 ET push has been coming a bit early lately, and began at 1:41 ET today. Of course, that's just an approximate time, but I keep pointing it out so that everyone can be aware of what's occurring. Support or resistance is being tested, but it's really the response to that test rather than the test itself that gives us the most information. If the OEX were to pop right up in a minute or two, that might mean a retest of the day's high was next. If bulls try to move the OEX back up, but it can't progress beyond the 510.60 level that was stopping it over the last thirty minutes, then it's likely to head down again. If it never pops us, . . . well, you know how to interpret that.

  Ray Cummins   6/18/200,  1:42:27 PM
Spread/Combos & Premium-Selling -- E-mail Replies

(Condensed) Ray, Thank you very much for your reply to my e-mail. The information you included looks to be very useful and I expect it will help me to arrive at the figures I require...Andrew (option principle) did reply to my question as you suggested he might and I have pasted below a copy of his e-mail. He seems to say that he usually lets his credit spreads go to expiration and evaluates them at that time. I would have thought that this method would cause greater loss than closing the play earlier when it is moving against you, unless if by some law of averages you would then not be closing plays that wind up going into the money and back out by expiration day. Do you have any thoughts on this strategy?

I'm glad you found the information useful. In this unique endeavor you can never be too knowledgeable about option pricing. Regarding your question about closing credits spreads early: The choice you make will depend on a number of different variables including your trading style, experience level, and risk/reward outlook. Some traders are comfortable with the stock price beyond the sold strike price in a credit spread. They depend more on probability analysis than trend or technical analysis. Others choose to monitor the price activity in the underlying issue and make decisions based on its character and proximity to trend-lines, moving averages and support (or resistance) areas. Since both of these methods are valid, it would seem that you need a balance between the two approaches to achieve the highest rate of success in all market conditions.

  Jonathan Levinson   6/18/200,  1:35:07 PM
August gold is still getting dumped, -6.10 currently at 357.70. XAU is down 1.28 to 80.96 and HUI is down 1.83 to 154.57.

  Jonathan Levinson   6/18/200,  1:33:28 PM
It looks like the rate cut trade continues to get pulled off, with TNX leading its peers, up 9.6 bps, with FVX up 7.7 bps and TYX up 9. The buying orgy on the QQQ and NQ continues, and the TRIN.NQ is still overdone at .36, TICK.NQ -10 and QQV -.13. The TRIN.NQ number is way low compared with the QQV and TICK.NQ readings, and it continues to reflect manic buying in too few issues. That said, the price is the price- the breadth indicators are saying that it could be on better footing than at present.

  Linda Piazza   6/18/200,  1:25:03 PM
Decliners have now outnumbered advancers again on the Nasdaq, as they have done all day on the NYSE. However, up volume still remains ahead on the Nasdaq. Total volume is 810 million on the NYSE and 1.3 billion on the Nasdaq.

  Jonathan Levinson   6/18/200,  1:07:58 PM
As well, the head and shoulders is a topping pattern, and the reverse h&s would be a bottoming pattern. Given that the pattern is starting near the top of its range, we have another condition not met. That said, it's almost picture perfect in all other respects. Nothing to do but watch the 1015 level.

  Jonathan Levinson   6/18/200,  1:04:31 PM
The put to call ratio is up to .58 for the past half hour. QQV -.09, VXN -.31 and VIX +.24.

  Jonathan Levinson   6/18/200,  1:03:31 PM
On the other hand, volume is dropping on this ES bounce so far, making it look like a small corrective blip.

  James Brown   6/18/200,  1:02:36 PM
Sector Winners this afternoon are:
SOX semiconductor index +2.1%
XAL airlines index +1.94%
GHA hardware index +1.86%

Sector Losers thus far are:
BTK biotech index -2.42%
XBD Securites/Brokers -1.5%
DJUSHB home builders -1.69%
XAU gold & silver index -1.27%

  Jonathan Levinson   6/18/200,  1:00:53 PM
The reverse head and shoulders is still in play, and the bounce from 1008 ES fits well for a right shoulder. A break above 1015 suggests a target of approximately 1027 ES if it fulfills to the upside.

  Jeff Bailey   6/18/200,  12:47:56 PM
Sell Program Dow= 9,278, SPX= 1,010 , OEX = 509.5, NDX = 1,247, QQQ = $31.02

  Jeff Bailey   6/18/200,  12:41:15 PM
Altria Group (MO) $43.94 +2% .... I think an attractive play on the underlying stock for dividend/equity investor/trader. Today's trade at $44.00 gets PnF back in column of X, gives nice tight stop to measure risk against at $40, with NICE BIG bullish vertical count of $77. Stock recently gave "spread tiple top" at $43, and threatens another with a trade at $45.00. Link

  Jonathan Levinson   6/18/200,  12:36:34 PM
Potential reverse head and shoulders on the 6 min ES candles, neckline at 1014.

  Linda Piazza   6/18/200,  12:35:16 PM
The OEX has moved just below to the 50% retracement of the move from yesterday's high to today's low, right near 510. This isn't a bullish development and takes the OEX right back to the point at which it was trading when the Iraqi news hit the wires. With the craziness of today's trading, I can't yet say it's a particularly bearish development yet, either. I think we're sort of starting over and seeing what happens.

  Jonathan Levinson   6/18/200,  12:34:00 PM
Nice reversal on ES, while the NQ and QQQ, no doubt buoyed by the potential celphone opportunities of this morning's latest Iraqi capture, is proving very resilient :)

  Jonathan Levinson   6/18/200,  12:29:59 PM
Watch those support lines profiled below.

  Jonathan Levinson   6/18/200,  12:27:18 PM
We have bearish kisses in progress on the 6 minute ES, NQ and QQQ candles.

  Jonathan Levinson   6/18/200,  12:23:17 PM
FTSE closes above 4,200 for first time in 9 months

  Jonathan Levinson   6/18/200,  12:17:40 PM
Classic flagpole rally action, ramped straight to the top then zero pullback. The volume surge on the ES and was the same as we saw a few days ago on the Monday flagpole rally- 30K ES contracts in 5 minutes and 15K NQ contracts. I wonder if Al Green has a hotkey programmed into his celphone?

  Jeff Bailey   6/18/200,  12:13:54 PM
S&P 100 (OEX.X) 511.30 +0.14% ... just off session high of 512.40, that came within "frogs hair" of trading WEEKLY R2 of 512.4.

I'm thinking here that I will raise stop aggressive in SPX bullish trade from Friday's 988, to just under the recent intra-day low of OEX 510.94 (say stop 510) and SPX 11:55 AM EST low of 1,012.49 (say 1,012). This allows for nice profit from 988.

Just don't like the financials weakness today.

  Jonathan Levinson   6/18/200,  12:12:10 PM
The put to call ratio is back down to .55, equity pcr .40 and index pcr 1.25.

  Jonathan Levinson   6/18/200,  12:04:24 PM
The TRIN.NQ shows extreme buying pressure on the Naz, TICK.NQ -7 tells us that its focused in few stocks. QQV +.11. This ramp job should be good for a reversal as it currently looks weak, but above the support levels below, it's just hot air on my part.

  Jonathan Levinson   6/18/200,  12:01:29 PM
Those sell signals have yet to print. NQ has support at 1249, ES at 1010 and QQQ at 31.

  James Brown   6/18/200,  11:58:34 AM
We almost considered adding YHOO to the call list last night (actually on Monday too) but just couldn't bring ourselves to do it. With the markets this overbought I cringe to think how fast the internet stocks might deflate when we do get a significant correction.

For those traders braver than I, shares of AMZN and EBAY look tempting and could be ready to follow YHOO's rally this week. Actually, AMZN is already trading above the early June high, making today a new 52-week high. I wouldn't be surprised to see it trade near $40. Meanwhile, shares of EBAY are trading near their highs for the year and a move above $104 might be a trade-worthy breakout. Remember that EBAY has its annual shareholder meeting on June 26th.

  Jonathan Levinson   6/18/200,  11:52:58 AM
The intraday oscillators appear to have topped out and we await a bearish cross for QQQ, NQ and ES.

  Linda Piazza   6/18/200,  11:50:46 AM
It doesn't pay to step away from the trading screen to get yogurt. While getting that yogurt, I had been debating lowering my stop on my OEX put position to the 61.8% retracement of the descent from yesterday's highs to this morning's low, but that two-minute trip was two minutes too long. The OEX had moved above that 61.8% retracement at 510.65 before I got back from the kitchen. My original stop from yesterday, at 412.72 is in place and may get triggered soon. As Alan H. on the Futures side said, unexpected news always wins out. I notice, however, that Nasdaq volume patterns have been improving through the morning, with Nasdaq advancers now slightly ahead of decliners, and Nasdaq up volume more than twice down volume.

  Jeff Bailey   6/18/200,  11:48:47 AM
QQQ $31.15 +1.2% .... quick update to unconventional $0.35 box size PnF chart. Link

Not that this morning's low trade of $30.45 was a "buy point," but today's trade here and session high of $31.22 lends itself to bullish thoughts still, with stop at $29.40.

  Jonathan Levinson   6/18/200,  11:46:20 AM
Treasuries aren't really responding to the "news", with FVX up 6.9 bps, TNX up 8.4 and TYX up 7.5 bps. In fact, with the slight drop on TYX, it looks more like a pile of money hit the tape, driving down the TYX and driving up the equity indices, but there's no way to know. Too bad the PPT isn't required to publish its open market ops the way the Fed is.

  James Brown   6/18/200,  11:45:31 AM
Nextel Communications - NXTL - Shares of NXTL continue to power higher today. The follow through on the breakout above the $16.00 level looks convincing as volume has been over 35 million both Monday and Tuesday compared to average daily volume of just 22 million. Today's volume is already approaching 20 million and it's not even noon. We'd be hesitant to chase it but it might be worth considering on a pull back.

  Jonathan Levinson   6/18/200,  11:38:51 AM
The put to call ratio is up to .57, with the equity pcr .42 and the index pcr 1.25. QQV is flat, VXN -.82 and VIX .13, the discrepancy owing (I assume) to the EK, CLX and financials warnings today.

  Linda Piazza   6/18/200,  11:34:18 AM
And we thought TV trading was over!

  Jonathan Levinson   6/18/200,  11:32:31 AM
I was going to say that it must have been a bull flag after all, but the upside breakout on the indices doesn't show the explosive volume pattern and timing that would accompany it. Gold is down 6.40 at 357.40, HUI -1.82... this must have been one very important dude they've just apprehended.

  Jonathan Levinson   6/18/200,  11:22:19 AM
Iraqi capture: Link

  James Brown   6/18/200,  11:21:48 AM
The OI Play list is weathering the current weakness pretty well. Shares of our call plays: LH, LXK, IGT, MERQ, and MRK are all trading higher while PGR just fractionally lower on the session. GENZ is pulling back with the dip in the biotechs. Meanwhile our put plays in KSS and WFMI are both hitting new relative lows.

  Jonathan Levinson   6/18/200,  11:21:03 AM
There's a dumpathon in the ten and thirty year treasuries, TYX and TNX +8.7 bps while FVX is up only 5.5 bps. All the talk of neither deflation nor inflation being a risk, the economy strengthening, and even Treasury Secretary John Snow, of "US Dollar resistant to counterfeiting" fame, was saying that employment prospects are looking up, though I continue to wonder on what he's basing himself... guessing that all these could be trying to prepare the market for the prospect the fed not doing anything next week.

  Linda Piazza   6/18/200,  11:08:51 AM
Here's the regression channel I mentioned in my 11:06 post. Link

  Linda Piazza   6/18/200,  11:06:48 AM
Obviously, that's no H&S formation we're seeing now on the OEX one and five-minute charts. The OEX has now settled into an ascending channel of higher lows and higher highs. Usually when that happens after a fall, we start considering the possibility of a bear flag forming, but I'm not sure I'd consider this a potential bear flag. This isn't a tight range in comparison to the previous fall, but instead a rather wide range. It shouldn't be retracing much more than the current 510.20-ish level if it is a bear flag.

  Jonathan Levinson   6/18/200,  11:06:08 AM
Bulls are getting more enthusiastic, with the put to call ratio down to .54 for this past half hour. Note the relative strength in the Naz indices vs. the SPX, no doubt held back by the bad news out of the financials, EK and CLX.

  Jeff Bailey   6/18/200,  10:58:43 AM
NASDAQ-100 Index (NDX.X) 1,242 +0.2% ... strong move intra-day back above the 1,237 and looks to fuel a rebound attempt for major indexes.

SPX 1,008 and OEX 509 just sitting here as financials still holding red. BIX.X 311.00 trying to bid here

  Jeff Bailey   6/18/200,  10:55:06 AM
Pfizer (PFE) $36.45 +1.05% ... holding tough after what I think was "break away gap" yesterday. Link

  Jonathan Levinson   6/18/200,  10:51:26 AM
The US Dollar Index reversed from a high of 93.30 but bounced off 93.00. ES, NQ and QQQ are into the resistance zone mentioned earlier. In particular, there's fib resistance at 1244 NQ, 30.88 QQQ and 1010 ES.

  Linda Piazza   6/18/200,  10:50:54 AM
A small and slightly lopsided H&S pattern may be forming on the OEX one- and five-minute charts. If so, and if it's confirmed, the minimum downside target would be just under 506. Although H&S's are usually formed at market tops and not after a descent, they sometimes do form as continuation patterns. Technically, the H&S would be confirmed by a move below OEX 408.75, but I would wait until a move below the day's low of 507.25 before considering it confirmed. Of course, a move below the current day's lows would be bearish anyway, without watching this potential pattern.

  Jeff Bailey   6/18/200,  10:47:38 AM
QQQ $30.77 +0.01% ... bids back into positive territory here. PSFT +6%, RFMD +4.7%, AAPL +3.19%, YHOO +2.36%

  Jonathan Levinson   6/18/200,  10:45:22 AM
The CBOE put to call ratio is down to .58 now, with the QQV -.17, VXN +.72 and VIX +.55. These high call volume drops are bad news for bulls, but equities are so far moving sideways more than anything else.

  Jeff Bailey   6/18/200,  10:40:54 AM
S&P Banks (BIX.X) 310.67 -0.65% .... morning low has been 309.91 and this might correlate with MONTHLY R1 (308.9) and DAILY S2 (310.21) type of "zone of support" for today. I'm getting the sense that major indexes trade sideways at their lows rest of session. We will see.

  Jeff Bailey   6/18/200,  10:37:55 AM
NASDAQ-100 (NDX.X) 1,234 -0.42% .... have seen 5-minute bar closes around our WEEKLY R1 of 1,230 last 30-minutes. If NDX.X can bid back above 1,237, then could see an attempt at rally for major indexes.

It is going to be tough with financials showing weakness with BIX.X -0.69%, BKX.X -1.1%, XBD.X -2.13%, IUX.X -0.92% (this is about 20% of SPX)

  Jonathan Levinson   6/18/200,  10:37:42 AM
August gold is currently down 2.50 to 361.30, HUI -.80 and XAU -.83. This is a far shallower selloff than I expected from the premarket action in gold and the US Dollar.

  Linda Piazza   6/18/200,  10:35:49 AM
The OEX downside target to which I referred in my 10:26 post was not only met but exceeded. This differs somewhat from previous days when upside targets were exceeded but downside targets often not met. Today we've seen an upside target barely met and a downside target exceeded, so that's more information to tuck away. Disclosure: I have an OEX put position entered yesterday. I came within 5 cents of being stopped out yesterday afternoon. So far, I'm glad I wasn't stopped out, but I'm not feeling secure just yet.

  Jonathan Levinson   6/18/200,  10:35:06 AM
The intraday oscillators are rolling over from below the 50% line on the NQ, ES and QQQ- not bullish, but we'll watch the lows of the day for a possible bounce. The descending lower trendline projects to 1000 ES, 1220 NQ and 30.30 QQQ.

  Jonathan Levinson   6/18/200,  10:29:22 AM
Yields are rising off their intraday lows, with FVX up 3.3 and TNX +5.4, well into its resistance zone after filling the gap yesterday. Al Green's 2.25B reverse repo drain today is certain assisting the move, and as Jeff Gil notes, this certain fits with a fed intent on loosening less than was previously expected.

  Linda Piazza   6/18/200,  10:26:45 AM
There's now a confirmed double-top formation on the OEX one-minute chart with a minimum downside target just above 508. Now we can watch to see if downside targets are being met.

  Jonathan Levinson   6/18/200,  10:25:57 AM
RDRT filing for Chapter 7 bankruptcy protection.

  Jeff Bailey   6/18/200,  10:16:41 AM
Human Genome (HGSI) $13.87 -4.6% ... would move to the sidelines here in bullish positions. Will see at least 1 stock in NASDAQ-100 Bullish % give sell signal here. Link

  Jonathan Levinson   6/18/200,  10:16:14 AM
The opening put to call ratio was .65.

  Linda Piazza   6/18/200,  10:16:12 AM
Other than new highs/new lows ratios, all other volume patterns showed weakness in the earliest trading today.

  Jonathan Levinson   6/18/200,  10:15:56 AM
The 6 minute candle descending channel is history for NQ, ES and QQQ. I see resistance at 30.80 QQQ, 1242 NQ and 1011 ES from here. FVX +2 bps, TRIN.NQ .65, TICK.NQ -46 and QQV +.72.

  Jeff Bailey   6/18/200,  10:14:23 AM
Merck (MRK) $63.02 +1% Link

(I took some MRK OCT $65 calls yesterday)

  Linda Piazza   6/18/200,  10:14:05 AM
The minimum OEX upside target predicted by the double-bottom formation on the one-minute chart was fulfilled, so we'll tuck that information away. The OEX is still meeting upside targets. However, the OEX didn't push much higher than that target. We should next watch to see whether it first tests the target and the 50% retracement from yesterday's high to yesterday's low near 510 or whether it first moves down to retest the day's low. The first might be considered another sign of strength while the second might be considered a sign of less strength.

  Jeff Bailey   6/18/200,  10:10:54 AM
Human Genome (HGSI) hmmmm.... there's that low print of $14.01 again today (saw this on 06/10/03 and CFSB raised price target on stock the following day, Merrill remained positive on sector)

  Jeff Bailey   6/18/200,  10:07:35 AM
SPX 1,008 -0.35% .... OK... SPX did bid back from our "zone of support," I'm not overly eager at this point to chase. What I'd look for on new bullish entry is to mark the comeback high (thinking 1,010) and then look for a "kiss" back at 1,006 to firm. THEN I'd look for a bullish entry if not already holding a long from 988.

  Linda Piazza   6/18/200,  10:05:29 AM
Although the one-minute OEX chart shows a double bottom formation just having been confirmed with a minimum target up near 509.35-509.40, the OEX turned around and headed back down again but seems now to have recovered. As I mentioned yesterday with respect to another upside target, they're not tradable with the wide OEX spreads, but watching how the OEX performs with respect to upside or downside targets gives us an idea of the strength or weakness in the index and alerts to us possible trend changes.

  Jonathan Levinson   6/18/200,  10:04:44 AM
Overnight reverse repo from the fed, drains 2.25B with no expiries today.

  Jeff Bailey   6/18/200,  10:04:11 AM
Human Genome (HGSI) $14.03 -3.4% ... still holding bullish position in previous profile, but will honor stop at $13.95 if traded. Link

  Jeff Bailey   6/18/200,  10:01:47 AM
One thing I'm really starting to sense is a bit of rotation out of biotech and into drugs. My thinking here is that "health/drug-related" type of institutional trade may be having some profit taking out of higher beta biotech and moving toward lower beta drug, which as of late has also started getting some favorable news catalyst.

  Linda Piazza   6/18/200,  9:59:48 AM
I wouldn't be surprised to see a series of bear flag patterns on the OEX this morning, any one of which could break to the upside rather than the downside. A bear flag should not retrace more than 50% of the previous drop before breaking to the downside again. From yesterday afternoon's high of 512.67 to the bottom of this morning's current drop, that 50% retracement would come just at 510. Whether the OEX retests in a bear-flag pattern or some other pattern, bulls want to see a move over 510 while bears do not.

  Jeff Bailey   6/18/200,  9:59:21 AM
Sector Weakness Biotechnology (BTK.X) 471.94 -2.3%, Broker/Dealer (XBD.X) 545 -2%, Semiconductor (SOX.X) 367 -1.3%, KBW Bank (BKX.X) 885 -1.16%, Insurance (IUX.X) 274 -1.03%.

  Jeff Bailey   6/18/200,  9:57:02 AM
Sector Strength is limited with Drug (DRG.X) 347.97 +0.26% and Airline (XAL.X) 52.64 +0.28%.

  Linda Piazza   6/18/200,  9:56:16 AM
The one-minute OEX chart shows the OEX rising in the expected bear-flag pattern after the precipitous fall and just now breaking down out of that bear flag and headed for a retest of the day's low.

  Linda Piazza   6/18/200,  9:54:24 AM
European markets disliked our open. The FTSE 100, CAC 40, and DAX struggle to hold onto positive levels, with the DAX currently losing that battle and the FTSE and CAC essentially trading at the flatline.

  Jeff Bailey   6/18/200,  9:49:59 AM
SPX 1,005.31 -0.62% .... had come back into our "zone of support" from Index Trader Wraps of WEEKLY R1 1003 to MONTHLY R2 1,006.5. I'm going to strongly suggest that traders long from Friday's 988 raise a profit stop to 994 here.

New bull positions looking for the pullback entry of 9,003 at correlative DAILY S2 and WEEKLY R1 of 1,003 for today, give 60-minute chart at this point a little time and see if we can't get some sideways action, maybe bring in some shorts, and then will look for move back above MONTHLY R2 of 1,006.5 as sign of firming.

  Jonathan Levinson   6/18/200,  9:49:39 AM
Yields are lower, FVX now up 1.5 bps. The bounce off the lows is giving us that buy signal on the NQ and QQQ, but the ES is lagging a bit. The descending channel upper trendline is being challenged here- the suddenness of the spike has us still within descending resistance- it will take a print above 1235 NQ to violated the channel.

  Linda Piazza   6/18/200,  9:46:06 AM
We're approaching that 8:50 time when the first move is often retraced. The retracement of that move can tell us a lot about the tenor of the market. Although the depth of the declines so far don't look good for the OEX today, this first retracement comes just as the OEX reaches the 507-508 support zone from Monday's trading. Disclosure: I have an OEX put position entered yesterday.

  Jonathan Levinson   6/18/200,  9:43:29 AM
Investors Intelligence out today- 60.2% bullish & 16.1% bearish!!! $BPOEX 81 & $BPNDX @ 87 after hitting 91!!! High Summation Index, low VIX...doesn't paint a pretty picture.

I agree, Tab- thanks for reeling in the updated II numbers from today.

  Jeff Bailey   6/18/200,  9:42:56 AM
Sell Program ... Dow = 9,241, SPX = 1,005, OEX= 507, NDX = 1,227.5, QQQ = $30.50.

  Jonathan Levinson   6/18/200,  9:42:38 AM
August gold up another buck to 361.

  Jonathan Levinson   6/18/200,  9:41:25 AM
Wow! A blast of selling bring NQ to 1229 support with a spike to 1227.50.

  Jeff Bailey   6/18/200,  9:40:05 AM
S&P Banks Index (BIX.X) 311.14 -0.5% .... no help here for SPX/OEX

  Jonathan Levinson   6/18/200,  9:39:48 AM
The descending channel on NQ has trendline resistance at 1234 and support at 1230. The bottomy oscillator implies that it could be a bullflag, but so far, no buy signal.

  Jonathan Levinson   6/18/200,  9:38:41 AM
Selling in bonds has slowed, with FVX up 2.2 bps, TNX +3.3 and TYX +4.

  Jeff Bailey   6/18/200,  9:37:37 AM
Sell Program Dow= 9,264, SPX= 1,008, OEX= 509, NDX = 1,230, QQQ= $30.58

Comes at NDX/QQQ WEEKLY R1's discussed in last night's Index Wrap. Looking lower here.

  Linda Piazza   6/18/200,  9:37:16 AM
Today's first five-minute OEX candle spanned a big range, so the 50% retracement of that range should be useful in guiding early trades. That 50% retracement of the first five-minute range is at 509.61. Bulls want to see the OEX pushed back over that level as a first order of business today.

  Jonathan Levinson   6/18/200,  9:36:18 AM
August gold is off its lows, now down 3.80 at 360 even. XAU is down .98 and HUI -1.62.

  Jonathan Levinson   6/18/200,  9:33:09 AM
That little premarket dip was enough to bury my short cycle 26-3-18 oscillators on the 6 minute candles for ES and NQ and QQQ, and a buy signal looks imminent.

  Jeff Bailey   6/18/200,  9:31:47 AM
Sell Program Premium Alert at the open as cash adjusts to futures. Will let this one clear, but futures had been slipping steadily as we approached the open.

  Jonathan Levinson   6/18/200,  9:27:40 AM
Spot on, Jane. That is the theme of tonight's market wrap.

  Jeff Bailey   6/18/200,  9:14:57 AM
09:00 Update has been e-mailed. Not able to upload to site.

  Jonathan Levinson   6/18/200,  8:57:40 AM
Now THIS is funny:

China May Float Currency, Snow Says - Wash. Post (6/18/2003 5:16 AM)

China says it has no plans to lift curbs on yuan - IHT (6/18/2003 5:29 AM)

  Jonathan Levinson   6/18/200,  8:48:02 AM
Bad news from EDS and MWD has the futures very slightly negative, but gold is getting slammed, August gold down 5 to 358.80, and bonds are selling, FVX +4.3 bps, TNX +4 bps and TYX +2.9.

  Linda Piazza   6/18/200,  8:25:24 AM
The FTSE 100 has held onto its gains mentioned in my earlier post, and the CAC 40 and DAX have added to theirs. The FTSE is currently up 16.80 points to 4207.20, the CAC 40 is up 14.97 points to 3215.72, and the DAX is up 13.99 points to 3300.47.

  Jonathan Levinson   6/18/200,  8:14:10 AM
Mortgage data:

Market Index: 1701, +1.0%

Purchase Index: 419, unch

Refi Index: 9162, +1.3%

I would have expected this data to be more impressive given the record low interest rates. If my thesis of debt fueling the money supply which is fueling the rally is correct, I'd expect to see the market move sideways for the next week.

  Jonathan Levinson   6/18/200,  8:10:09 AM
The US Dollar Index has cruised to new highs, 93.17 currently, and for a change it's not a BOJ vertical open market op, but rather has the multiple-candled look of actual real buying. August gold is down 2.80 to 361/oz. NQ futures are up 1, ES down .50, YM -17, and QQQ trading 30.78.

  Linda Piazza   6/18/200,  7:28:27 AM
Good morning. The Nikkei opened up by more than 55 points in Wednesday's trading, climbed as high as 9188.95 during the day, but fell all afternoon after reaching that high, to close just above the opening level. The Nikkei still managed a 59.97 point or 0.66% gain, closing at 9092.97, almost 100 points under the day's high. The closing level is another six-month high for the Nikkei.

Other Asian markets were mixed. South Korea's Kospi gained 1.09 points or 0.16%, and Taiwan Weighted gained 25.88 points or 0.52%. However, Hong Kong's Hang Seng lost 0.60%, and Singapore's Straits Times lost 0.47%.

Exporters gained in Japan. Nissan Motors benefited not only from the gain in the Nikkei but also from a CSFB analyst's decision that the target share price should be raised. The analyst, Koji Endo, believes that the opening of Nissan's new plant in Mississippi would add 15 to 20 percent to operating profit in 2003. One Asian exporter not gaining was South Korean chipmaker Hynix Semiconductor. Rumors were that the U.S. would impose a final import duty of almost 45% on the company's products. Samsung also declined.

Although the FTSE 100 is firmly in the black as of this writing, the CAC 40 and DAX are positive by smaller percentages. All three markets have traded in the red at one point this morning, but have climbed off their lows. As of this writing, the FTSE 100 trades up 16.70 points or 0.40%, to 4207.10; the CAC 40 trades up 6.13 points or 0.19%, to 3206.88; and the DAX trades up 4.16 points or 0.13%, to 3290.64.

Swiss Bank UBS announced today that it would cut about 3% of its global workforce. UBS also downgraded Vivendi Universal (V) today, noting that the sale of its entertainment assets may be less lucrative than expected and may take more time. German software company SAP (SAP) has been gaining of late on the Oracle(ORCL)-PeopleSoft(PSFT) squabble, but after its industry presentation on its Sapphire program, several brokers issued notes on the company and the shares are declining today. Cazenove downgraded the stock to reduce, mentioning the effect of the weak dollar on the company's revenues and demand from its likely European customers. It's not clear from the news sources I could access the identity of the other firms issuing notes on the company or the content of those notes. Drug companies Sanofi-Synthelabo (SYN) and Akzo Nobel (AKZOY) received U.S. Food and Drug Administration approval for a drug used to treat deep vein thrombosis. SNY gained, but AKZOY traded lower. Although reiterating the full-year outlook, French Industrial conglomerate Bouygues reported sales down 5.7% and net earnings down 54%, blaming seasonal patterns for its cola and construction businesses.

  Jeff Bailey   6/17/200,  9:47:22 PM
Pivot Analysis Matrix for tomorrow at this Link

  Jonathan Levinson   6/17/200,  8:48:00 PM
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