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  Jeff Bailey   6/20/200,  7:10:37 PM
Pivot Analysis Matrix for next week at this Link

  Jonathan Levinson   6/20/200,  4:06:17 PM
GE parked at 30 just as slick as you please.

  Jonathan Levinson   6/20/200,  3:48:09 PM
NQ has broken back into the bear wedge channel, while ES continues to struggle at the lower trendline.

  Linda Piazza   6/20/200,  3:43:46 PM
Just a note: If you've got multiple equity option positions, check to see if your options are ITM or not, and take appropriate steps. As someone mentioned earlier, different brokers handle the exercising of options differently, so be sure you know how your broker does it.

  Jonathan Levinson   6/20/200,  3:41:37 PM
This looks like a "return to the scene of the crime" on the ES 6 minute candles, back at the lower trendline on the bearflag from beneath.

  Linda Piazza   6/20/200,  3:38:21 PM
Maybe that SIA conference isn't going too well today, with the SOX down .98%, the SMH down 1.84%, and the DJ US Semiconductor Index down 1.75%. I haven't heard any news out of the conference, but only saw a notation that one was being held.

  Jeff Bailey   6/20/200,  3:37:46 PM
Ryland Group (RYL) ... here is chart for 03:15 update that I couldn't upload. Link

  Jonathan Levinson   6/20/200,  3:36:12 PM
It looks like a gravestone doji for the COMPX and INDU on the weekly candle print- not bullish.

  Jonathan Levinson   6/20/200,  3:33:31 PM
There's support on yesterday's spike low at 991 ES, which appears to want to hold for the moment.

  Linda Piazza   6/20/200,  3:24:53 PM
As Jonathan mentioned with respect to the indices he watches, we're seeing a downside break of the OEX now-known-to-be bear flag. The break isn't precipitous, however, and I'm not sure how much downside there will be on this opex Friday. At 14:24, when the OEX was trading near 502.70, I speculated that I wouldn't be surprised to see the OEX end the day very near the level it was currently trading and here we are very near that level. We're also not so far off the low of the day, either, though, and a whoosh down could quickly send the indices down further.

  Jonathan Levinson   6/20/200,  3:19:49 PM
The bear wedges are breaking to the downside here.

  Jonathan Levinson   6/20/200,  3:13:30 PM
The TRIN.NQ is up to 1.61, TICK.NQ -44, and the lower trendlines cracked but have not broken on the 6 minute bear wedges. Resistance is now at the upper line just below 997 ES and 1229 NQ.

  Jonathan Levinson   6/20/200,  3:07:53 PM
Lower bear wedge trendlines getting tested here.

  Linda Piazza   6/20/200,  2:59:35 PM
There's been no clear resolution to the "is it a bullish right triangle or is it a bear flag" question on the short-term intraday OEX charts. If I squint just right, I can see a rising wedge, too. Currently, the OEX either breaks out of the bullish right triangle (with a top just above 402.80 or else it's forming another jot up inside the bear flag. More likely, this is just static opex-Friday-afternoon trading, and it's dangerous to try to see too much in the charts.

  Jonathan Levinson   6/20/200,  2:57:42 PM
That bear flag on ES and on QQQ and NQ, for that matter, is still in effect, with price just hovering here. Yields are looking to close off their highs of the day, FVX +5.3 bps, TNX +5.5 and TYX +4.1 bps.

  Jeff Bailey   6/20/200,  2:52:23 PM
SBC, BLS, VZ was looking at some volume patterns and saw BIG volume at the opening hour of 5 million shares in SBC (Avg. daily has been 9.4 m).

Then noticed Wall Street Journal report that SBC, BLS and VZ are planning to string high-performance fiber-optics directly from central telecom hubs to homes and business as early as this week. The three (SBC, BLS and VZ) are exptected to issue a combined request for proposals to start buying and testing equipment for large-scale fiber deployments, with final contracts derived from proposal potentially valued at $500-$1 billion.

  Jonathan Levinson   6/20/200,  2:39:15 PM
Lower trendline on the ES bearflag being test here, a break below 993 on a 6 minute closing basis would be a breakdown, and should happen fast with a volume spike.

  Jonathan Levinson   6/20/200,  2:26:26 PM
Looks like the upper trendline of a bearflag on the 6 minute ES candles being tested here. A 6 minute closing print at 997 invalidates it.

  Linda Piazza   6/20/200,  2:24:58 PM
Depending on the time interval of the chart you study, the OEX's consolidation over the last 50 minutes could look like a potential bear flag (one and two-minute charts) or a bullish right triangle (five-minute chart). One has bearish implications and the other bullish, of course. We'll just have to wait through a few more bars until we see which has validity. However, as I think about opex and study the charts, I wouldn't be surprised to end the day somewhere very near this current level. That would fit typical opex Friday market behavior.

  Jonathan Levinson   6/20/200,  2:21:43 PM
It looks like some buy signals are trying to shape ip on the ES, NQ and QQQ, but the downphase is still intact for the time being.

  Linda Piazza   6/20/200,  2:09:06 PM
Reader Question: Hi Linda, A few months back you directed me to some articles on the website. In reviewing those articles I saw one writer at OI describe the MOCO (Mother of all Call Plays) and that was to start buying calls as the VIX hit 40 then 45 then 50. On the contrary they dictated the Mother of all Put plays which states to buy Puts as the VIX hits 23, 20, 18. Do you think we are in a precision of overbought to justify beginning this strategy?

Response: Great question. Those were Mark Phillip's articles and here's a link to his latest on the subject: Link

I'm not convinced that we're at the MOPO, although I don't rule it out. (For those readers unfamiliar with MOPO, Mark's article links you to his previous ones on the topic.) As Mark mentions in his article, we've actually had some bullish developments occur over the course of this rally and I don't believe Mark would characterize this as MOPO yet. This linked chart is one I posted in an article this weekend. Link As you can see from that chart, nothing yet has happened to damage the bullish sentiment. Much as we all believe the markets need a sustained pullback, you can see that this week's declines have merely tested the midline support of the ascending channel, and haven't even come close yet to testing the bottom of that channel. Until it does so, our first assumption would be that the OEX will still trade within the channel. If the OEX breaks through midline support and heads down to test the bottom of the channel, we can still benefit from put plays even if it isn't yet MOPO. If it finds support at the midline and heads up again, we can still benefit from calls plays (although very, very carefully in this overbought market) while it heads up to the top of the channel again.

  Jonathan Levinson   6/20/200,  1:57:53 PM
The TNX continues to lead to the upside, but selling in treasuries appears to have levelled off for the time being, as does the buying in the US Dollar Index and the selling in gold. The volatility indices remain buried near their lows, and with the put to call ratios still in the cellar, I'm becoming increasingly convinced that we're watching not just opex antics, but the setup for the next drop as market makers sell calls at "bargain basement" prices, dopping the VIX VXN and QQV in the process.

  Linda Piazza   6/20/200,  1:48:58 PM
Decliners now pull ahead on the Nasdaq, with advancers still slightly ahead on the NYSE. Down volume definitely leads on the Nasdaq, and up and down volume are roughly equal on the NYSE. Total volume is 1 billion on the NYSE and 1.1 billion on the Nasdaq.

  Linda Piazza   6/20/200,  1:39:39 PM
I'm going to have to move my most-hated time period from 1:45 ET to 1:35 ET. I've been noticing lately that the push seems to begin a little earlier. The OEX was pushed down and now everyone will wait to see if it immediately bounces back up above next resistance (402.80, then 403.60) or if it can manage only a weak bounce before turning down again.

  Linda Piazza   6/20/200,  1:37:00 PM
This bounce comes as the OEX touches its 30-minute 130-pma at 501.62, with the OEX low being 501.63.

  Linda Piazza   6/20/200,  1:33:09 PM
There went the potential reverse H&S, along with the 502.80 support. The OEX now trades at the low of the day and inside this morning's gap. The OEX looks to be headed down to test yesterday's low of 500.81, plumping up my OTM 500 put nicely. If I were to sell the put now, the original position OTM 505 call/500 put would have shown a $15.00/contract profit, but I'm risking that profit to watch what's happening next.

  Jonathan Levinson   6/20/200,  1:32:38 PM
Yields are rising higher with the US Dollar. Gold down, dollar up, bonds down, equities down.

  Jonathan Levinson   6/20/200,  1:32:04 PM
ES prints LOD at 992.50.

  Jonathan Levinson   6/20/200,  1:24:57 PM
The US Dollar Index blasted through 94 to 94.15, spiked to 94.20. August gold is down 5.20 to 356.10, XAU -1.07 and HUI -2.33.

  Linda Piazza   6/20/200,  1:22:28 PM
I'm watching a potential reverse H&S form on the OEX five-minute and fifteen-minute charts. It's probably too early to even call it a potential formation. Perhaps a pre-potential H&S? It has shoulders at about 402.80 (if the right one does indeed form there) and a head at 500.80. This is opex Friday, though, and anything can happen, but I just note the potential formation. Confirmation at the 505.75 neckline would predict an upside target of about 510 (add the five points' difference between the head and the neckline to the neckline value), which seems a ridiculously high number from way down here. The pattern has been forming over a couple of days, and so wouldn't necessarily be completed today, and its target wouldn't necessarily be reached today, either. A fall much below 502.80 would negate the potential of the formation.

  Jonathan Levinson   6/20/200,  1:21:17 PM
The indices are now parked below their trigger levels of 1000 ES, 1230 NQ and 30.50 QQQ, but there's no velocity so far. TRINQ 1.49 and TICK.NQ -165 shows moderate selling pressure, but the QQV is down 1.74, VXN -1.2 and VIX -.93. Again, I don't see this as a bullish setup on opex day, but it's pure guesswork.

  Linda Piazza   6/20/200,  1:07:33 PM
Total volume as of a few moments ago was 915 million shares on the NYSE and 982 million on the Nasdaq. Advancers lead on both the NYSE and Nasdaq, by 17:14 and 16:14 ratios, respectively. Up volume is soundly ahead on the NYSE, but down volume leads slightly on the Nasdaq.

  Ray Cummins   6/20/200,  12:48:20 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity

Among the highlights for the week (even though I was "gone fishin" for most of it), I can't help but mention the successes in the straddle portfolio. The speculative position in Expedia (NASDAQ:EXPE) almost doubled in value -- in only one session -- while plays in Tyco (NYSE:TYC) and R.J. Reynolds (NYSE:RJR) also enjoyed favorable short-term gains. Dollar General (NYSE:DG) is the newest candidate in that category and it has been volatile as well, although not to the point of achieving a profit. The converse to the debit straddle is the credit strangle and we had two issues in that section for the June expiration period. Both Multimedia Games (NASDAQ:MGAM) and Nextel (NASDAQ:NXTL) offered excellent gains through last Friday, when we suggested taking profits in the neutral-outlook positions. That proposition was all too timely as NXTL shares soared with the technology rally during Monday's session and traders were forced to close the play for a small loss. Closing positions early for small gains is a necessary tactic with any type of investing, but it becomes even more important with limited-profit strategies (such as selling OTM options), which have the potential for large losses.

  Jonathan Levinson   6/20/200,  12:47:13 PM
Any comment on the low VIX today? Please comment,also, should I be shorting the QQQs at about 30.85?

The low VIX is either a bullish divergence, or, more likely, opex related. On this latter thought, I'll go further and note that the extremely, ridiculously low equity pc ratios with the low Vix makes it look like heavy institutional dumping of calls on hapless bulls, but it's just my own guess. As for the Qubes, 30.80 is a good s/r congestion zone, so a short in that area would not be unreasonable. However, in this market, I wouldn't be doing anything without an active stoploss.

  Mark Phillips   6/20/200,  12:45:38 PM
Apparently the "dividend trade" is still alive and well. I just took a look at the Utility indices ($DJU and UTY.X) and they are both moving to new highs for the year. The UTY looks to be the stronger of the two as today's push higher has the index moving above its August highs.

  Jonathan Levinson   6/20/200,  12:32:19 PM
The indices continue float sideways just above the sell triggers I mentioned 45 mins ago. Selling has deepened a touch in treasuries, and the US Dollar continues higher, trying for the 94 level.

  Jonathan Levinson   6/20/200,  12:24:27 PM
U.S. mortgages in foreclosure climbed to a record high in the first three months of 2003 as job losses and personal bankruptcies forced more people out of their homes, a mortgage industry group said on Friday.

Home loans in the process of foreclosure climbed to 1.2 percent of all mortgages in the first quarter, beating the previous high of 1.18 percent set in the fourth quarter of 2002, the Mortgage Bankers Association of America said.


  Linda Piazza   6/20/200,  12:21:45 PM
I had an opportunity to sell the call portion of my June OTM 500 put/505 call position earlier today for an amount that would have resulted in a profit for the whole position, but didn't take it. At the time the 30 and 60-minute oscillators still pointed straight up, and the OEX was still above the ascending line that had been supporting prices. In retrospect, that would have been the best tactic to take this morning, however, as that 5-point OTM put position is going to lose what little time value it has left rather quickly from this point on. I've minimized my possible loss, but I very likely will be taking that loss unless the OEX drops quickly. That may be unlikely, giving that prices tend to steady about this time of day on opex Friday.

  Jeff Bailey   6/20/200,  12:18:04 PM
12:00 Internals

NYSE 5,654 +0.47% ... Vol. 756m , A/D 16:13, NH/NL 63:2

NASDAQ 1,650 +0.12$ ... Vol. 809m, A/D 14:14, NH/NL 78:5

Good volume today, but not unusual consider expiration. NH/NL gives looks of "positioning" around expiration, and not really any type of strategy trade.

  Jonathan Levinson   6/20/200,  12:07:28 PM
Remember Stuart the Photocopy Boy from the Ameritrade commercial? Well, his boss lost every cent on that trade, as the KM stock is official wiped out. Shoeshine boy, photocopy boy... old man JPM would have been selling on that commercial.

  Jonathan Levinson   6/20/200,  11:58:12 AM
No sell signals yet, but they're imminent. However, the resilience at 1230 NQ, 998 ES and 30.50 QQQ is a problem for now. A move below those levels should be a good sell trigger.

  Linda Piazza   6/20/200,  11:57:27 AM
I'm out the call portion of my June OTM 500 put/505 call position with the call portion paying for most of the position. My maximum loss now is $40.00/contract. Now the OEX is free to soar since all I've got is an OTM put position!

  Jonathan Levinson   6/20/200,  11:57:01 AM

  Ray Cummins   6/20/200,  11:56:58 AM
Spreads/Combos & Premium-Selling -- Portfolio Activity

As we move towards the end of another options expiration, it's nice to see a few issues cooperating with our outlook. Biotech stocks are among the stronger shares today and that bodes well for positions in Biogen (NASDAQ:BGEN), Chiron (NASDAQ:CHIR), Gilead Sciences (NASDAQ:GILD) and Medimmune (NASDAQ:MEDI). In the high-tech group, it appears that Cymer (NASDAQ:CYMI) and Linear Technology (NASDAQ:LLTC) have stabilized and both (bullish) plays should expire profitably. Despite the recent volatile activity, International Business Machines (NYSE:IBM) and Wal-Mart (NYSE:WMT) seem destined to "peg the strike" and that outcome may also befall L3 Communications (NYSE:LLL); a position that has previously been closed to limit losses. On the subject of losing plays, 3M Corp (NYSE:MMM) is a disappointment as the issue is trading just above the break-even point near $131, and yet it will likely consolidate in the coming week. Aggressive traders might consider a rescue attempt by rolling the position up and forward to the JUL-$135C, or into a new bearish spread (JUL-$140C/JUL-$135C) for a small debit.

  Linda Piazza   6/20/200,  11:45:59 AM
The OEX currently retests that violated ascending trendline from yesterday afternoon and appears to be failing that test, but the outcome is preliminary as yet. I would wait for a fall below the 504.50 support before considering the retest a failure.

  Jonathan Levinson   6/20/200,  11:41:17 AM
The put to call ratio is down to .49, and the oscillators are rolling over on the intraday ES, NQ and QQQ, no crosses yet.

  Linda Piazza   6/20/200,  11:36:30 AM
The OEX now challenges the ascending trendline that has been supporting its prices since about 3:30 yesterday afternoon. This trendline can be seen on the five-minute chart. The OEX currently appears to be falling through that trendline, but that's tentative as yet.

  Jonathan Levinson   6/20/200,  11:27:02 AM
Selling is again heaviest in the ten year t-bill, with the yield up 4.4 bps. The US Dollar Index has launced to 93.76, which follows on the tightening from the fed this morning via reverse repo. If a large rate cut is less likely, you'd expect to see dollars being bought, bonds being sold, and gold suffering in consequence, all of which are occurring now. Equities being higher doesn't seem to fit the profile, however, but that's where they are, with ES hugging the 1000 line and NQ just above 1230.

  Linda Piazza   6/20/200,  11:20:47 AM
OEX 506 continues to be a struggle, but the OEX is above the 505.17 June 6 high and also above the 505.30 level that was resistance for several hours on June 16. It's just barely above that level, but 30-minute and 60-minute oscillators look bullish. I still think opex machinations will outweigh anything seen on those oscillators, however, so be careful.

  Jonathan Levinson   6/20/200,  11:08:54 AM
The put to call ratio is up to .50 for this past half hour, equity pcr .38.

  Jonathan Levinson   6/20/200,  11:03:43 AM
I'm inclined to take the put to call data with a grain of salt today, as the equity pcr remains below .33 and yet prices are being pinned, ES 1000 and NQ 1230, QQQ 30.50. It's being opex day, sideways is the most likely outcome.

  Jonathan Levinson   6/20/200,  10:58:36 AM
Well, now you all can get with the program! :)


  Linda Piazza   6/20/200,  10:54:25 AM
Early volume patterns showed more advancers than decliners, although the lead was only by 10 issues on the Nasdaq. Up volume led on the NYSE and down volume led by about the same amount on the Nasdaq. Total volume was 539 million on the NYSE and 546 million on the Nasdaq. There were few new lows, as is usual, but the number of new highs appeared markedly lower, at 114 on the NYSE and Nasdaq combined.

  Jeff Bailey   6/20/200,  10:46:22 AM
Anglogold (AU) $32.35 -2% ... out here from "inside day". Got gapped this morning below yesterday's low so couldn't do too much. Put stop under first 5-minute bar of $32.49 and gone.

  Jeff Bailey   6/20/200,  10:44:40 AM
S&P Banks Index (BIX.X) 308.92 +0.83% ... trying to makes its move at the intra-day reverse head/shoulder neckline here. SPX trades 1,000.

  Jonathan Levinson   6/20/200,  10:42:50 AM
Buy signals on QQQ and NQ, ES trailing slightly but appears imminent. The put to call ratio is up to .43 now.

  Jeff Bailey   6/20/200,  10:42:11 AM
Dow Industrials (INDU) 9,253 +0.8% ... back at WEEKLY R1 of 9,253 and traded morning high of 9,262.59. Move much above morning high could bring in broader market bullishness. Past observations is that Dow tends to see 10-points either side of a DAILY/WEEKLY/MONTHLY level and makes sense as price larger than many other indexes.

  Linda Piazza   6/20/200,  10:36:26 AM
The OEX has had a first five-minute candle close outside the five-minute wedge, with an upside breakout of that wedge. The next test is the day's high, with that day's high at 505.31.

  Jonathan Levinson   6/20/200,  10:36:20 AM
August gold is back to its low of the day, down 4 at 357.80, with XAU -.83 and HUI -1.28.

  Jeff Bailey   6/20/200,  10:35:35 AM
August Fed Funds Futures 99.15 .... gapped lower today from 75% chance of 50 basis to 60% chance this morning.

Jonathan makes some notes of reverse repos that Fed might not move 50 and I tend to agree as noted in last night's Index Wrap.

Wednesday could be fast action trade. I'd be monitoring for some type of downside equity action after FOMC announcement. Gut feel is traders will sell the decision regardless. Time will tell.

  Jonathan Levinson   6/20/200,  10:33:53 AM
Still no buy signals, and still below 998 ES, 30.50 QQQ and 1230 NQ. Opex jollies today.

  Jeff Bailey   6/20/200,  10:30:45 AM
Dow Industrials (INDU) 9,239 +0.65% higher, SPX/OEX up fractional, NDX/QQ mired in red.

Not really sure of this other than the "dividend play" on some end of quarter buying.

Sector action really mixed with Home Construction -2.85 leading decliner, broad technology weakness, and Forest/Paper (FPP.X) +0.9% leading sector winner.

  Linda Piazza   6/20/200,  10:28:55 AM
I see a note that the SIA (Semiconductor Industry Association) is having a Tech Management conference today, but I can't find mention of that on the SIA's site. However, you might note that a conference might be going on today, and be alert to any volatility in semi stocks that might result. I do note on the site that the 10th Annual Semiconductor EHS conference will be held from June 29-July 3.

  Linda Piazza   6/20/200,  10:22:50 AM
The OEX heads back down for another test of the day's low at 502.31. Below that is the lower end of the gap at yesterday's close at 501.70, and then yesterday's low at 500.81. Instead of testing these levels immediately, however, the OEX may be setting up into a wedge formation on the five-minute chart. If so, that may give us more information as we can then watch for either an upside or downside break out of that wedge. I say "may" because late morning on opex Friday, prices sometimes tend to stabilize, so that prices could just issue out the apex of that wedge and not go much of anywhere all afternoon. I hope not, because that's going to leak premium out of my OTM positions rather quickly, but that's a risk I knowingly took this morning.

  Jeff Bailey   6/20/200,  10:20:19 AM
Centex (CTX) $79.46 -3% ... "circle gets the square" again today. Link

KB Home (KBH) $66.40 -4.9% Link reported earnings per share of $1.94 that beat consensus by $0.30 and raised guidance for 2003 to $8.20, which was above consensus of $8.09.

Dow Jones Home Construction (DJUSHB) 451 -3%

  Jeff Bailey   6/20/200,  10:16:15 AM
S&P Banks (BIX.X) 307.81 +0.47% .... don't usually look at the BIX.X on intra-day bar chart (5-minute intervals) but did after QQQ trade. I see a POTENTIAL reverse head/shoulder pattern developing with neckline at 308.50, head 306.25 (shoulders 307). Might bring a bid back to 311 and provide a bit of boost to SPX/OEX on move much above 308.50. Might equate to an SPX 1,005.

SPX has been finding some resistance selling early at round-number 1,000.

  Jonathan Levinson   6/20/200,  10:10:04 AM
The selling in bonds fits with the fed's reverse repos- the fed has been tightening this week, and not loosening. Looking at this indicator alone, I'd guess that the 50 bp cut isn't going to happen.

  Linda Piazza   6/20/200,  10:09:17 AM
The OEX did test the opening low, and now rises to test the 50% retracement of the first five-minute range at 503.71. I hesitate to attach normal trading behaviors to expectations on an opex Friday, but that would usually signify a test of the day's high again. If it doesn't, and the OEX falls back toward the day's low again, that would indicate a bearish tenor to the early trading. Disclosure: I have a June OTM 500/505 position (500 put, 505 call) purchased this morning, hoping to benefit if the OEX craters or if it climbs back toward 507.50-508. It's a lottery play, purchased cheaply. I'm not suggesting this play for others, as it is a lottery play, but only disclosing my position.

  Jonathan Levinson   6/20/200,  10:08:09 AM
Put to call ratio of .42, with the index pcr 1.23 and the equity pcr in blowoff territory at .29, which may be the lowest I've seen. Bulls beware.

  Jonathan Levinson   6/20/200,  10:06:55 AM
Bounces but no buy signals, targeting fib resistance at 998 ES and 1230 NQ, 30.50 QQQ.

  Jeff Bailey   6/20/200,  10:06:51 AM
QQQ $30.50 +0.17% ... here's my intra-day chart of QQQ, I think stop just too tite, but liked a long trade with Dow finding bid. Link

  Jonathan Levinson   6/20/200,  10:01:17 AM
Another reverse repo! I've never seen 3 in a row. This is for 3.5B, which is a 2.25B net drain.

  Jonathan Levinson   6/20/200,  9:58:51 AM
Not like you need my confirmation on it, but the 26-3-18 stochastics on the 6 minute bars are all on sell signals for the indices and GE, quite early in their runs. If it doesn't just move sideways from here, there's solid downside potential, at least according to the oscillators.

  Jonathan Levinson   6/20/200,  9:54:34 AM
August gold was down 4 points and is now down 3.10, reversing some of its losses. XAU -.33 and HUI -.47. The gold lease rates have spiked during this past week, early doubling. I don't follow this closely, but it could be indicating some constriction in either supply or perceived risk on the short side.

  Jeff Bailey   6/20/200,  9:54:19 AM
QQQ $30.34 -0.23% .... stopped from day trade long $30.44. (didn't see a 5-minute close below $30.37, but will honor stop as profiled). Most likely look for QQQ decline back lower to $30.08-$30.14 here.

  Linda Piazza   6/20/200,  9:54:06 AM
The OEX has dropped below the 503.71 level that marks a 50% retracement of the first five-minute range. This suggests that a test of the day's low might come next.

  Jonathan Levinson   6/20/200,  9:52:21 AM
The TRIN.NQ has reversed strongly, now up at 2.29, which shows strong selling but not unsustainable, ditto the TICK.NQ -238. QQV is up .41.

  Linda Piazza   6/20/200,  9:49:16 AM
Although there's some interim light resistance between the current OEX level and 507.50-508, that 507.50-508 zone is the next strong resistance if the OEX should continue to rise.

  Jonathan Levinson   6/20/200,  9:45:24 AM
Sell signals here on the intraday oscillators for GE, ES is imminent but not confirmed.

  Jeff Bailey   6/20/200,  9:45:21 AM
QQQ $30.44 +0.06% .... Going to come in here with a day trade long. Stop $30.34 target $30.82

  Linda Piazza   6/20/200,  9:44:55 AM
The OEX hit the 505.20-505.50 resistance and turned down. I'm now watching the 503.71 50% retracement of the first five-minute range.

  Mark Phillips   6/20/200,  9:41:42 AM
How very appropriate, Jonathan! This move does strike me as similar to the last desperate actions of a cornered animal -- this comes just before Marlin Perkins has his assistant "Jim" take the beast down.

  Linda Piazza   6/20/200,  9:38:00 AM
Whew! Glad I closed that OEX put position yesterday afternoon and took my profit. Opex Friday machinations scare me and the OEX had approached that midline support on the ascending channel on the daily chart, which were my reasons for exiting. Now which direction for the rest of the day? That's not likely to be discerned in oscillators, because of opex and Fed watch volatility. However, today's first five-minute OEX candle is much larger than usual, and so gives us some benchmarks to watch. The 50% retracement of that first five-minute range is 503.71. Bulls are going to want to see that level maintained when we get our first morning retracement in about ten or fifteen minutes. Bears want to see it violated.

  Jonathan Levinson   6/20/200,  9:37:45 AM
Bears are referring to the GM action today as "the wild cornered animal" stage, Mark.

  Jonathan Levinson   6/20/200,  9:34:50 AM
The TRIN.NQ is .34, TICK.NQ +95- there's very focused "panic buying" on the Naz at the open.

  Mark Phillips   6/20/200,  9:33:31 AM
I just finished picking myself off the floor after falling backwards out of my chair. What sent me reeling this morning was the GM news. Seems the company has decided to "shore up" their balance sheet by issuing $10 billion worth of debt and convertible securities and will use all the proceeds to reduce their huge pension underfunding problem. That wasn't the part that floored me though -- Prudential thought adding debt and diluting the stock to mitigate the near-term pension problems was such a brilliant move that they moved their rating on the stock all the way from Sell to Buy! Talk about abrupt reversals! The firm stated their belief that any short-term negative news flow should be overwhelmed by the positive impact of the coming economic recovery. Really? Here's the part that I think is really lost on people. GM may have a low P/E ratio due to the significant earnings stream, but it's one of those old-line companies that is addicted to the pro-forma earnings game. To me the real kicker is the company's debt-equity ratio. To me, the real cutoff between a healthy/unhealthy balance sheet is the 1.0 threshold. Lower is better and higher is worrisome, with other factors playing a role as well. GM's debt-equity ratio BEFORE the new issuance is 22.7! Just shaking my head...

  Jonathan Levinson   6/20/200,  9:32:29 AM
The short cycle oscillators are topping on the indices, and it looks like Jim's gut might well have been right.

  Jonathan Levinson   6/20/200,  9:27:11 AM
August gold is down 3.20 to 358.60. FVX +3.7 bps, TNX +3.4 and TYX +1 bp.

  Jonathan Levinson   6/20/200,  9:24:44 AM
Trimtabs reports inflows of 4.8B to US equity stock funds for the week ending Wednesday.

  Jeff Bailey   6/20/200,  9:23:35 AM
QQQ went out at $30.42 and ticking higher at $30.66. Yesterday afternoon was watching time/sales and it sure looked to me like some shorts were hitting the QQQ from $30.48-$30.46 as there were big offers in that zone and got "aggressive" lower. Might look at a day trader long after the open if I see a dip in the first hour back to $30.50.

  Jonathan Levinson   6/20/200,  9:22:10 AM
The strength this morning in GE should help firm the ES and YM contracts today, just as its weakness helped them underperform yesterday. GE and the indices are all on intraday buy signals so far, and are toppy but showing no sign of reversal just yet.

  Jeff Bailey   6/20/200,  9:21:00 AM
YIELD curve flattening in early part of bond trade should benefit stocks with 5-year YIELD ($FVX.X) rising 3.8 basis points to 2.28% and 30-year ($TYX.X) up 1.1 basis point to 4.428%.

  Jeff Bailey   6/20/200,  9:18:39 AM
09:00 Update posted at this Link

  Jonathan Levinson   6/20/200,  9:04:59 AM
GE has reaffirmed its full-year guidance, and the stock is higher by 34 cents or 1.14% in premarket trading.

  Jonathan Levinson   6/20/200,  8:11:52 AM
Futures are off their overnight highs, with ES currently up 3.50 at 997.25, NQ +8 at 1233.50. August gold is down 1.80 to 360, and the US Dollar Index is up to 93.4.

  Linda Piazza   6/20/200,  7:28:56 AM
Good morning. The Nikkei closed up 9.88 points or 0.11%, at 9120.39, a new six-month closing high. When trading first began, that higher close did not seem in the making. An index measuring demand for services in Japan showed an unexpected rise of 0.3% in April. Despite that good news, the Nikkei turned down in the morning's trading. The Nikkei opened deep in the red, by almost 80 points. Exporters such as Honda, Toyota, and Tokyo Electron lost ground. By the morning break, however, the Nikkei had moved up within 12.70 points of the breakeven level. After the break, the Nikkei dipped about 50 points into the red again, climbed back to breakeven level, and then climbed the last hour of trading to close positive. Financials rose, helping the Nikkei achieve that positive close.

Other Asian markets were mixed. Taiwan's Weighted closed down 0.92%. Singapore's Straits Times and South Korea's Kospi both closed down, too, by 0.13% and 0.62%, respectively. Hong Kong's Hang Seng also closed down, by 0.50%, but many other Asian bourses closed up. South Korean chipmaker Hynix Semiconductor (HXSEY) continued its after the South Korean government stated its intention to file a complaint with the World Trade Organization against the U.S. and E.U, after the two entities set high tariffs on Hynix as a punitive action because the South Korean government allegedly paid subsidies to the company.

Most European markets currently trade up. Exporters such as Unilever and Diageo gained while software makers and some financials struggled. Two European financials, Dutch-Belgian financial group Fortis and Swiss banking group UBS (UBS), this week reported planned job cuts. Software companies fell after Canadian software company Cognos (COGN) reported a disappointing forecast of 15 to 18 cents for Q2 on revenue of $155 to $159 million. Merrill Lynch also downgraded COGN's main rival, Business Objects (BOBJ).

Also of note was the May German producer price index, which fell 0.3% from April's number, but was up 1.3% from the previous year. Germany's Federal Statistics Office said the drop in oil prices contributed to the year-over-year decline. As of this writing, the FTSE 100 is up 30.20 points or 0.73%, to 4161.70. The CAC 40 is up 21 points or 0.66%, to 3185.91; and the DAX is up 14.66 points or 0.45%, to 3261.77.

  Jeff Bailey   6/19/200,  12:25:22 AM
The Index Trader Wrap has been posted: Link

  Jonathan Levinson   6/19/200,  12:25:16 AM
The Futures Trader Wrap has been posted: Link

  Jim Brown   6/19/200,  12:24:44 AM
The Market Monitor has been archived. You may view it and any previous days here: Link

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