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  James Brown   7/1/2003,  4:38:57 PM
In keeping with Linda's analysis on the SOX, I noticed several chip stocks that looked somewhat bullish. I'm not suggesting any plays but they're worth putting on your own personal watch list.

INTC - The mother of all chip stocks, INTC is four days into a bounce from its rising 50-dma and support at $20.00. Oscillators like stochastics, RSI and momentum are all curling higher and MACD is about to produce a bullish buy signal. Caveat, it moves kind of slow for option traders these days.

XLNX - Xilinx has been lagging the semiconductor group but today's bounce looks encouraging. MACD is about to produce a buy signal but there is plenty of overhead resistance.

KLAC - KLA-Tencor Corp has been consolidating its late-May to early June gains for the last three weeks. Support at $45.00 has held but trend of lower highs is still in place.

ALTR - Altera Corp. this one is a bit cheap to trade options on but has retraced a significant portion of its 2003 gains. It appears to be in prolonged (somewhat sharp) bull flag. A break above the simple 50-dma might be a decent trigger. MACD about to curl into a bullish signal.

QLGC - QLogic Corp has been one of the stronger chip stocks in the sector. Its consolidation has been more sideways than down. A move back over $50.00 or $50.50 might be a decent trigger to evaluate new long plays.

  Linda Piazza   7/1/2003,  4:04:50 PM
I've been looking at the SOX. On the SOX, I see that same pullback in the pattern of a regression channel formed from lower highs and lower lows. This could be a bull flag pattern although that's far from proven at the current time. At the SOX low of the day, that channel had carried the SOX within 8 points today of its 200-ema, an average I find that's sometimes more important than the 200-sma for the SOX. I'm still trying to keep an open mind, seeing both bullish and bearish possibilities. On the bullish side, there's the spring up from the low of the day, a spring that carried the SOX back over its 50-dma. I see the SOX above both its 200-ema and its 200-sma, and also above a trendline ascending from the October low to the current period. I see stochastics and RSI turning up. I see the SOX perhaps trading in a bull flag pattern. On the bearish side, I see the potential that the SOX regression channel will break to the downside instead of the upside. I see the SOX trading beneath its 21-dma.

  Jim Brown   7/1/2003,  3:59:08 PM
Editors Play - First segment of the August DJX-88 puts triggered at 90.50. Filled at $1.50. Next trigger level 9100.

  Jeff Bailey   7/1/2003,  3:54:48 PM
eBay (EBAY) $1-6.73 +2.64% .... strong move into the close and 52-week high.

  Linda Piazza   7/1/2003,  3:32:33 PM
For reference, the European markets we usually track closed as follows: The FTSE 100 closed down 67.30 points or 1.67%, at 3963.90, closing beneath 4000 for the first time since May 27. The CAC 40 closed down 71.10 points or 2.31%, at 3013. The DAX closed down 74.03 points or 2.30%, at 3146.55.

  Linda Piazza   7/1/2003,  3:26:30 PM
On the Futures Monitor, Jim often talks about the 30-minute 100-pma and 130 pma. The 30-minute OEX 100-pma is currently at 495.88. I'm not sure yet that the correlation of the OEX's behavior with those averages is as strong as it is with the ES, but it appeared to be when the OEX fell through the 130, then at 501.81, early on the 23rd, and then fell to this morning's low.

  Jeff Bailey   7/1/2003,  3:25:23 PM
03:15 Update posted at this Link

  Linda Piazza   7/1/2003,  3:15:32 PM
The OEX 21-dma has played an important role in trading over the last week or so as it first supported the OEX and then served as resistance. That average is currently at 497.90.

  Jane Fox   7/1/2003,  3:02:31 PM
By the way Jonathan HAPPY CANADA DAY from a fellow Canadian.

  James Brown   7/1/2003,  2:59:41 PM
Merck Co - MRK - Shares of this drug company, a current OI call play, are bouncing strongly from the $60.00 level of support (previous resistance). This looks like an entry to go long, although chart readers will notice the last two weeks looks like a bull flag pattern and it may be prudent to wait for the upside breakout from this pattern. A move over $61.50 might qualify as an upside breakout!

Keep in mind that the DRG drug index was pretty weak this morning but has bounced strongly off its rising 50-dma. This represents rising support for the current three-month up trend. The short-term trend (from June 18) remains down for the DRG.

  Linda Piazza   7/1/2003,  2:55:28 PM
I've been studying a lot of charts for individual stocks lately, and as I do so, I've been noticing a lot of bull flags either setting up or just being confirmed with breakouts over the last week. Here's an example: Link (Note: I'm not suggesting a play in this stock, as I have not researched it. I'm using the chart only to demonstrate the typical charts I'm seeing lately.)

Although I know markets are overbought and way overdue for a real correction, and although I know that we're approaching the summer doldrums, these charts have kept me from too bearish an interpretation of likely immediate market action. I wouldn't call myself exactly bullish, either, but the preponderance of charts such as this one is one reason I wanted confirmation by an OEX movement below that 484.50 support before I bought puts. After the immediate term, what's next? I don't know. For one clue, I'll be watching charts such as the linked one, to see if previous highs are exceeded or if there's a rollover at a lower high.

  James Brown   7/1/2003,  2:52:39 PM
Intl Game Technology - IGT - Current call option play, IGT, remains in the green after bouncing from the $101 level this morning. OptionInvestor.com listed the play at $91.87 and shares have surpassed our short-term target of $100.00. The stock is due to split 4-for-1 tomorrow. OIN will be closing the play this evening. Traditionally, stocks that have a strong ramp up into their splits suffer from post-split depression as momentum traders move on to their next play. However, this time I have a sneaking suspicion that IGT may not suffer that much when it begins trading tomorrow near $25.50. It may have something to do with the stock's late July dividend.

  Jeff Bailey   7/1/2003,  2:49:53 PM
S&P 500 Index (SPX.X) 979.51 +0.51% ... For Index Trader Wrap, will profile BEARISH position here, just shy of 980, which would be 3-box reversal from today's lows of 965 on conventional 5-point SPX PnF chart. Link

  James Brown   7/1/2003,  2:47:16 PM
EBAY - Current call option play, EBAY, is trading higher today and above four-week old resistance of $104.00. A recent news article highlighted comments from a First Albany analyst who believes that EBAY will surpass current estimates of 35 cents a share. The company reports on July 22nd. OptionInvestor.com's short-term target is $110.

  Jonathan Levinson   7/1/2003,  2:44:43 PM
I can't believe this mess I find myself in... out of nowhere rallies bother me because there is nothing that gives you a clue that it is about to occur unless you know who is about to drive the market up. This looks like intervention now that you mention it but it does piss me off that I am caught unawares especially since I was looking for a break lower on the bad auto sales numbers as well. I should know by now that bad data means "buy em".

Bear huddle all around: I've learned the hard way that the tape will go wherever it pleases. Imagine being a bear in the early thirties and watching those awesome rallies following the Great Crash. They had great fundamental arguments. They were correct. And they got croaked trying to short those rallies. If you're buying puts or shorting stocks or futures, and this applies equally to bullish positions too, USE STOP LOSSES. Enter them and activate them. ALWAYS USE STOPS. They will keep you from losing money. When feeling convinced, allow yourself a wider stop. But no stop at all a lesson for which I've paid dearly. I always limited my positions by size, and I still do, but right now I can breathe because I've learned to use stops.

  Linda Piazza   7/1/2003,  2:38:41 PM
At about 493, the OEX hits the descending trendline drawn from the June 18 peak, touching the June 27 peak and descending to the current 493 level. This is an approximate level since it's possible to draw the trendline including shadows and not including shadows. A sustained move above this trendline might mean a move toward the midline or top of the ascending regression channel as seen on the daily chart.

  Jeff Bailey   7/1/2003,  2:38:28 PM
Disk Drive Index (DDX.X) 106.69 +2.01% ... best levels of the session. Maxtor (MXO) $8.32 +10.78%, Iomega (IOM) $10.96 +3.39%, SanDisk (SNDK) $40.69 +0.29%.

  Jonathan Levinson   7/1/2003,  2:33:08 PM
Can you believe that the indices are green? Or that yields are green? Incredible action today. Perhaps most incredible is that gold and the miners are holding most of their gains. Last item is that the US Dollar Index is holding most of its losses. This would appear to be pure intervention, with a massive injection this AM from the fed, the dollar dumping, gold rallying, equities rallying (albeit off their lows), but for treasuries, which are selling off here.

  Jeff Bailey   7/1/2003,  2:31:17 PM
Securities Broker/Dealer (XBD.X) 519.81 +0.99% ... best levels of session. Merrill Lynch (NYSE:MER) $47.39 +1.58% Link higher after judge dismisses investor suit against MER.

  Jeff Bailey   7/1/2003,  2:28:00 PM
General Motors (GM) $35.42 -1.6% ... reports June total U.S. sales up 1.5%. Link

  Jeff Bailey   7/1/2003,  2:26:43 PM
DaimlerChrysler (DCX) $34.47 -0.72% .... reports June total U.S. sales up 6%. Link

  Jeff Bailey   7/1/2003,  2:22:44 PM
Bull's revenge? yesterday, bears seemed determined to "make sure" Stock Trader's Almanac and history of Monday being lower would prove "correct." According to Stock Trader's Alamanac, today (First trading day of July) has had Dow up 12 of last 13.

Dow Industrials (INDU) 8,971 -0.14% off just 13 points here.

  Linda Piazza   7/1/2003,  2:17:17 PM
The OEX is now back inside that regression channel. It has now slightly violated the channel to the downside and slightly violated it to the upside. Whether we call this the DMZ, as Jonathan suggested, or the Bermuda Triangle, as a reader suggested, I haven't been able to bring myself to pull the trigger on an OEX trade today. I had a put play staged this morning, but just couldn't bring myself to do it ahead of 484.50. When I look at 30-minute and 60-minute charts, this formation still looks like a bear flag off today's low, but if it is, I don't know that it's expended all its energy just yet. Although the 30-minute 5(3)3 stochastics have made a bearish kiss, some other oscillators still indicate that more upside is possible. Thirty-minute and 60-minute ADX had been increasing this morning, showing the downtrend to be strengthening, but they're turning down again. Daily indicators still look bearish, but are nearing levels indicating oversold levels. Volume patterns are bearish, but improving.

  Linda Piazza   7/1/2003,  2:06:21 PM
Here's a reader's suggestion for a substitute for "no man's land," one I think is apropos given the possibility that the OEX could surge upward from here or plummet from here: the Bermuda Triangle. Thanks, D.M.

  Linda Piazza   7/1/2003,  1:58:14 PM
Does anyone know a gender-inclusive term for "no man's land"? The OEX has been wandering around in "no person's land" for much of the day, above that late May and early June 484.50-485 S/R zone and below levels that would indicate a breakout zone.

  Jeff Bailey   7/1/2003,  1:54:37 PM
CKE Resteraunts (CKR) $5.63 +0.71% .... reports Q1 (April) loss of $0.06 per share, which is $0.11 worse than consensus of $+0.05. Company said revenues rell 1.1% year-over-year to $419.6 million, which was above consensus' $418.1 million.Link

  Linda Piazza   7/1/2003,  1:46:32 PM
Here comes the 1:45 time period. We may already have seen the push that usually occurs now when the OEX began moving up, but as always, remain aware of how resistance or support is being tested in this time period.

  Linda Piazza   7/1/2003,  1:44:00 PM
I had cable modem problems earlier today and was offline for a while, too. Checking volume patterns again, I see that adv/dec ratios are now .76 for the NYSE and .62 for the Nasdaq. These ratios still remain bearish, but less so than the ratios seen earlier today. Down volume is now 2.3 times up volume on the NYSE and 2 times up volume on the Nasdaq. Total volume is 776 million on the NYSE and 960 million on the Nasdaq.

  Linda Piazza   7/1/2003,  1:34:26 PM
While I was posting that chart on my 13:26 post, the OEX pushed up out of the potential bear flag and above the violated H&S neckline. This comes close enough to the 1:45 ET push that I'm somewhat leery and waiting for more than a five-minute close above these formations, but at least we're now getting a solid test of these levels and will have more information to guide trades. I didn't want to enter a put trade this morning ahead of OEX 488 and 485, but neither did I want to enter a call trade when the OEX was having so much trouble even retesting broken support, much less moving above it. As I've been typing this entry, the OEX now comes back down to test the H&S neckline and top line of the regression channel.

  Linda Piazza   7/1/2003,  1:26:59 PM
For perspective, here's the OEX 15-minute chart I showed earlier today, depicting the H&S neckline and the possible bear flag. This update shows how the OEX is performing in relationship to those two formations. Link

  Linda Piazza   7/1/2003,  1:15:30 PM
This OEX move over the last twenty minutes has bumped the OEX back into the ascending channel--a possible bear flag--again after a minimal downside violation of that channel. It's brought the OEX right back up to test the violated neckline of the lowermost of the possible H&S necklines. It's this test that I've been waiting to see. A morning's violation of the neckline with an afternoon move above it and a daily close above it might negate the importance of that violation. A test of the neckline and a move down from that test, especially if the move is sharp and drives the OEX below 484.50, would be more significant.

  Jeff Bailey   7/1/2003,  12:58:14 PM
Disk Drive Index (DDX.X) 104.63 +0.04% .... bids into positive territory. Maxtor (MXO) $8.15 +8.5% Link is index component gainer. Iomega (IOM) $10.70 +0.94% Link second-biggest gainer. SanDisk (SNDK) $40.01 -1.38% Link is stock we've noted as bullish in sector, which is off of yesterday's 52-week high

  Jeff Bailey   7/1/2003,  12:55:28 PM
Maxim Integrated (MXIM) $33.36 -2.17% .... was "early" identified stock among semiconductor sector that exhibited technical weakness at $35.00 and triple-bottom sell signal. Should stock trade $33.00, the PnF chartist begins a "bearish resitance" trend at $43, just above the May high of $42.00. We did this in prior chart of MXIM. Still looks to be a "leader to the downside" among semiconductor segment. Link

  Jonathan Levinson   7/1/2003,  12:52:25 PM

Seems to me from listening to CNBC that the mood has changed there. They are talking about analyst having to revise their forward looking statements and revise earnings to the downside. I suspect they will get a load of it from the companies so they are not going to have to say a word. If the market is forward looking 6 to 9 months then prices should begin to reflect the Jan to Mar timeframe. Yes I expect the market to move down over the next two months so all those puts that I was buying for the long term should begin are beginning to really pay off now having averaged in over time. Hopefully I will get a whoosh down over a 2 week period to help them along.

Alert! Hugely bearish commentary to follow:

I believe that, as a rule, one makes money by fading sentiment. For instance, I look to sell on spike low TRIN.NQ readings, buy on spike low TICK.NQ readings, buy on high put to call readings, sell on very low ones, etc. Remember when Dan Niles upped INTC in December, catching the multimonth high to within hours?

CNBC is a property of GE. I have no doubt that the whole crew owns stock options, and even if they feel bearish, there's an editorial bias that would be bullish stocks. When they begin high fiving on TV, it's a sign of a top. When Maria began to discuss shorting last July, it was a low. There's only one spot where I wouldn't seek to fade CNBC, and that's the Point of Recognition.

I believe that the fed's liquidity ops can only go so far, and that the 3rd year of failed second half recovery predictions is upon us. 9.99 times out of 10, bad news is a buying op. But that .01 time, the pundits and cheerleaders and "Joe Sixpacks" will be screaming sell, and it will indeed be a time to sell, and stay sold. I have no idea if we're seeing the beginning of one such low probability event, but when it occurs, I expect the p/c ratio to go to the moon, along with the TRIN.NQ, along with the QQV and VIX, and the TICK will get torpedoed. Again, we're speaking hypothetically, very low probability, and very bearishly. A "perfect storm" setup.

  Jim Brown   7/1/2003,  12:50:15 PM
Editors Play

Jim, With the drop below 8900 is your Editors Play still alive or did you stop out on it? If still alive, what is your criteria for exiting the DJX calls for a loss and calling the play dead?
I entered the DJX call at $.60 (about 89.1 on DJX) this morning. Still holding. Thank you. LF

The play is still alive. I did not close the calls under 8900 and I still have the put orders active. If we violate the morning lows today I will close the calls and not reinstate until we bounce back over 8900. The 8900 level is strong support and a line in the sand for the bulls. If they cannot hold it here then we could have serious problems ahead.

  Jeff Bailey   7/1/2003,  12:36:41 PM
401k / IRA investor may begin considering some allocation to "bear funds".... On April 27th, in our "Ask the Analyst" column, we questioned "Is now the time to be bearish?" Link

For first time since that column was published, the Rydex URSA Fund (RYURX) shows a 3-box reversal higher using our unconventional technique of 1% box size. Link

Should the S&P 500 Index (SPX.X) 964.94 -0.98% slip another 1% today, then might look for RYURX 1% box chart to see another X by today's closing net asset value (NAV).

SPX indexed type of mutual fund trader can perhaps benchmark the April 27th "Ask the Analyst" column with a "red 5" (early May) on the S&P 500 Bullish % ($BPSPX) chart Link to get a timeline and better understand how RISK has shifted toward the bulls in the past couple of months.

  Jonathan Levinson   7/1/2003,  12:36:33 PM
Not a spot of weakness from gold, still holding its substantial gains, currently +6.20 to 352.40, HUI +3.32 to 152.77, XAU +1.54 to 80.19.

  Linda Piazza   7/1/2003,  12:24:21 PM
Having attempted a move over 488 but failing to achieve that level, the OEX has now had one five-minute close beneath the possible bear flag. This signals weakness, but the OEX so far refuses to fall below the current day's low. One benchmark for bearish traders to watch is the 484.50 level, a level of S/R from May 29-June 3.

  Jeff Bailey   7/1/2003,  12:22:03 PM
S&P Banks Index (BIX.X) 299.79 -0.4% ... after recovering back to unchanged level, sees some selling back below the 300.00 level.

Bank of America (BAC) $78.95 -0.10% fractionally lower, but continues to find sellers just below $80.00

  Jeff Bailey   7/1/2003,  12:15:00 PM
Marvell Technology (MRVL) $34.96 +1.74% .... just got upside alert at $35.00, which is triple-top buy signal Link

Bulls will play, but partials only to mitigate potential "bull trap" with bullish % high. June 18th upgrade from CIBC and yesterday by GKM. Short interest fell from 10.6 million in May to 5.6 million in June. Link

  Jeff Bailey   7/1/2003,  12:08:18 PM
Ford (F) $10.65 -3% Link ... June total sales decline 7.7%.

  Jeff Bailey   7/1/2003,  11:59:57 AM
Sector Bullish % no status changes in the sector bullish % with regard to this weekend's "Ask the Analyst" column. However, I've "flipped through" the various bullish % charts and those sectors close to reversing back lower are...

Finance (BPFINA) with current reading of 76.28, where a reading of 74% would be "bull correction".... group largely comprised of lenders.

Healthcare (BPHEAL) current reading of 64.8% would reverse to "bull correction" at 62% reading. This may go hand in hand with biotech and recent "bull correction" reading for Pharmaceuticals.

Semiconductor (BPSEMI) current reading of 73.98% would turn "bull correction" at 72%. That then becomes close to "bear alert" on further decline to 68%.

  Linda Piazza   7/1/2003,  11:50:53 AM
Here's what I'm watching on the OEX fifteen-minute chart: Link

  Jeff Bailey   7/1/2003,  11:45:00 AM
Treasuries .... starting to see selling in the longer-dated 10-year and 30-year maturities. 10-year YIELD ($TNX.X) now up 0.7 basis point at 3.535%, 30-year YIELD ($TYX.X) higher by 2.2 basis at 4.588%.

Not "all that defensive" considering the economic data.

  Jonathan Levinson   7/1/2003,  11:42:24 AM
Put to call ratio .92, with an equity pcr of .86 and index pcr 1.03.

  Jeff Bailey   7/1/2003,  11:38:59 AM
S&P Banks (BIX.X) 301.00 (unch) ... first sector to get back near unchanged. May have SPX/OEX firming intra-day basis.

  Jeff Bailey   7/1/2003,  11:31:42 AM
PnF Sector notes morning technical report from Dorsey/Wright and associates shows both Waste Management and Restaurants seeing relative strength reversals vs. Dow Industrials.

YUM! Brands (NYSE:YUM) $29.69 +0.43% is "restaurant" stock noted as bullish several weeks ago and stock continues to trade strong despite some broader market weakness of recent sessions. Link . Quick check of relative strength versus SPX improving, but still longer-term weak so 1/2 positions advised. Link

  Linda Piazza   7/1/2003,  11:29:11 AM
At the time the ISM numbers were released, the OEX gapped down from 487.66 to 487.04. The OEX advances have been stopped at the 487.04 bottom of the gap so far today. That's what's been creating that formation that looks a bit like a bullish right triangle on the fifteen-minute chart. The OEX keeps stopping at that level, creating a flat top, but its been forming higher lows as it retreats, forming the ascending bottom line. It's currently testing that level again. If, however, it breaks to the upside but stops short of the top of that gap down this morning and retreats again, the formation will morph into a possible bear flag.

  Jeff Bailey   7/1/2003,  11:25:59 AM
Centex (CTX) $75.29 -3.21% ... #2 loser in the PHLX Housing Index ($HGX.X) and was perhaps the 1st homebuilder identified to give a double-bottom sell signal at $82. Today's trade at $77 is third-consecutive sell signal with bearish vertical count of $70.00. Link

Today's action has stock giving a relative strength "sell signal" vs. the SPX. Link

  Jeff Bailey   7/1/2003,  11:21:36 AM
11:00 Update posted at this Link

  Linda Piazza   7/1/2003,  11:19:41 AM
Is that a bear flag building on the OEX fifteen-minute chart? Is it a bullish right triangle? Is it a "b" distribution pattern? I'm not sure. Depending on my bias at the moment, I could defend a case for any of those possibilities. A test of that broken overhead support is going to give me a sounder answer than any of these possible intraday formations. Will we get that test?

  Jonathan Levinson   7/1/2003,  11:14:44 AM
Put to call ratio .97, equity pcr .90 and index pcr 1.14.

  Linda Piazza   7/1/2003,  11:08:39 AM
Perhaps we'll get the test of OEX 487.50-489 now.

  Linda Piazza   7/1/2003,  11:05:42 AM
Volume patterns continue to show decliners outnumbering advancers, with adv/dec ratios of .51 on the NYSE and .42 on the Nasdaq. Down volume is more than four times up volume on the NYSE and 6 times up volume on the Nasdaq. Total volume is 358 million shares on the NYSE and 518 million on the Nasdaq.

  Linda Piazza   7/1/2003,  10:53:40 AM
Looks as if the OEX might be determined to retest the low of the day, although the one-minute formation looks a bit like a falling wedge--a formation that usually breaks to the upside. I don't give much credence to formations on one-minute charts, but I mention it as a possibility.

  Jonathan Levinson   7/1/2003,  10:41:07 AM
The put to call ratio is up to .91, with an equity pcr of .75 and index pcr of 1.25.

  Linda Piazza   7/1/2003,  10:30:10 AM
Volume patterns show decliners almost twice advancers as of a few minutes ago. Down volume swamped up volume. Total volume was 211 million shares on the NYSE and 366 on the Nasdaq.

  Jeff Bailey   7/1/2003,  10:28:34 AM
Gold/Silver Index (XAU.X) 80.28 +2.07% ... index jumps above my "old downward trend" and only sector I show trading in the green.

Sector weakness has Airline Index (XAL.X) 53.43 -2.73%, Biotech (BTK.X) 420.64 -2.5%, Cyclical (CYC.X) 486.42 -1.82% and Home Construction (DJUSHB) 426.15 -1.73% leading sector losers.

  Jonathan Levinson   7/1/2003,  10:27:45 AM
August gold took a nice lurch higher on the ISM data, currently up 6.20 on the day to 352.50. HUI is now up 3.44 and XAU +1.61. 344 held on the downside as support when things were looking much bleaker, and should provide formidable support on any retest.

  Linda Piazza   7/1/2003,  10:23:04 AM
I would love to see a retest of OEX 487.50-488 or even 489. If the OEX gets knocked back from a retest of that zone, traders would have more information. If it easily slips above that level, traders would have different information. I'm not sure whether we'll get that retest, however.

  Jeff Bailey   7/1/2003,  10:21:56 AM
New Trading curb level for 3rd quarter! Each quarter the NYSE established new trading curbs. Recent quarterly rise in the Dow Industrials now has trading curbs for Dow Industrials set at 180-point decline/gain from prior day's close, whith curbs lifted if Dow Industrials come back to within 90 points of prior day close.

At lows of session, Dow fell to 8,871.20 and down 114.24 from yesteday's close, so trading curbs NOT in place for index-arbitrage sell orders of the S&P 500 at this point.

  Jeff Bailey   7/1/2003,  10:13:42 AM
ISM Index for June came in at 49.8, which was below consensus of 51.0 and June's 49.8 still not showing expansionary level of above 50.0.

A bit of a "double hit lower" from construction spending and ISM Index for bulls.

  Jonathan Levinson   7/1/2003,  10:11:46 AM
Put to call ratio .88.

  Linda Piazza   7/1/2003,  10:10:55 AM
Although I trade the OEX, I'm certainly watching that COMPX test of 1600 and the DJI test of 8900, if that should occur.

  Jonathan Levinson   7/1/2003,  10:10:48 AM
Looks like Al Green jolted on the data, with an 8.75B overnight repo just announced. That's a 4B addition given the expiry of 4.75B from yesterday.

  Jeff Bailey   7/1/2003,  10:09:17 AM
QQQ $29.40 -1.83% .... trades "finite bull's" stop of $29.40 here based on our unconventional $0.35 box scale. Link

  Jeff Bailey   7/1/2003,  10:05:54 AM
S&P 500 Index (SPX) 964.30 -1.04% ... breaks correlative support of 968 from WEEKLY retracement and 80.9% retracement along with WEEKLY S1. Downside here to "zone of support" of 958-960, but looks defensive.

  Jeff Bailey   7/1/2003,  10:04:20 AM
S&P 100 Index (OEX.X) 486 -0.9% ... now falling an additional box from a bulls "finite stop" of 489 on our unconventional 3-point box scale. Link

  Linda Piazza   7/1/2003,  10:02:51 AM
It appears that the potential bear flag was in fact a bear flag. The OEX has broken the 487.50-488 support. Will it break 485?

  Jeff Bailey   7/1/2003,  10:00:41 AM
Construction Spending -1.7% in May, is well below economists' forecast for 0.3% gain.

  Jeff Bailey   7/1/2003,  9:59:31 AM
ISM Index for June and Construction Spending due out at 10:00 AM EST.

ISM consensus is 51.0 and would mark the first move back above 50.00 in three months

Construction Spending for May is seen at +0.3% vs. -0.3% in April with residential construction to rebound after weather related declines in April.

DJUSHB 430.90 -0.64%, $HGX.X 279.05 -0.63%.

  Jonathan Levinson   7/1/2003,  9:57:29 AM
ISM due now, prior 49.4, expectation of 51.

  Linda Piazza   7/1/2003,  9:54:17 AM
The OEX five-minute chart shows a plunge, then a tight pattern of higher highs and higher lows. You know the drill by now. Start considering the possibility that this is a bear flag building. As I cautioned earlier, though, I'm not convinced that anything we see developing right now will overcome the effect of the ISM number when it's released. In any case, bear flags can break either direction, but the greater likelihood is that they break to the downside.

  Jonathan Levinson   7/1/2003,  9:54:11 AM
Gold and the miners are so far having a very good day, August gold +3.70 now at 350, HUI +2.61 at 152.06 and XAU +1.38 at 80.03.

  Jeff Bailey   7/1/2003,  9:52:37 AM
S&P 500 Index (SPX.X) with WEEKLY and MONTHLY pivot analysis retracement overlaid. Link

Note... the regression channel shown is one I've had in place for several weeks and not the one shown in last night's Index Trader Wrap, where we placed it from the March lows to recent highs.

  Linda Piazza   7/1/2003,  9:48:56 AM
There's been only a tepid bounce so far from OEX 487.50-488, but the support has held so far, too. Is the lack of a strong bounce telegraphing the expectations for the 10 ET numbers? Whether we bounce or violate 485, do we act on that market movement ahead of the release of those numbers? That's a question for traders to answer for themselves according to their individual trading styles. While I tend to wait, others act on what the charts show them happening at the moment.

  Jonathan Levinson   7/1/2003,  9:47:45 AM
Volume is dropping on the climb on ES for the past 10 minutes, but the short cycle stoch and macd are still headed north. Tough time here, but the real test will be at 972, and the oscillators should be in rollover territory by then. Chart to follow.

  Jonathan Levinson   7/1/2003,  9:41:28 AM
Gold is holding its gains, up 3.30 to 349.60 on the August paper, with HUI +1.45 to 150.90 and XAU +.94 to 79.59.

  Jeff Bailey   7/1/2003,  9:41:13 AM
Celgene (CELG) $30.00 ... downside alert here on this biotech discussed as potential short/put candidate last week. Would look to establish 1/2 bearish here, see where it goes. Has been a "slow mover" over the years, but breaking longer-term trend here with bearish count now growing to $24.00. Link

  Jeff Bailey   7/1/2003,  9:38:33 AM
S&P 500 (SPX.X) 970.50 -0.41% .... downside alert here at 972.00, which was a "finite" stopping point for longer term bulls based on "unconventional" 6-point box scale on PnF chart. Link

Bulls should at least get back down to 1/2 bullish, bears will begin initiating some 2 to 3-month expiration puts.

  Linda Piazza   7/1/2003,  9:38:28 AM
The OEX now approaches the 487.50-488 level that topped rallies for almost a year. This level or 485 should be strong support, with emphasis on should. If it's not, that tells us something important about the markets.

  Jim Brown   7/1/2003,  9:37:10 AM
Editors Play - I filled on the DJX July-91-calls at 89.50 for 75 cents exactly according to plan this morning. The play has been launched. Now where is that bounce at 8950?

  Linda Piazza   7/1/2003,  9:36:51 AM
The first five-minute OEX candle spanned a larger-than-normal range, and so gives us that midpoint benchmark to watch in early trading. The 50% retracement of that range lies at 489.25. Bulls want to see the OEX move up and sustain levels above that number. As usual, bears want the opposite. I caution today that this benchmark may be less useful than usual in light of the economic numbers to be released at 10 ET.

  Jeff Bailey   7/1/2003,  9:27:47 AM
Teva Pharmaceutical (TEVA) $56.90 Link ... stock higher at $58.00 after the company said it has received the entire product rights for Purinethol for the U.S., including Puerto Rico and Canada from GlaxoSmithKline. The announcement brings to conclusion the previously announced settlement of litigation between the two companies. Purinethol is indicated as a treatment for leukemia with North American sales forecasted at approximately $87 million for the 12-month period ending March 2003.

  Jeff Bailey   7/1/2003,  9:21:19 AM
09:00 Update posted at this Link

  Linda Piazza   7/1/2003,  9:21:15 AM
European markets have deepened their declines since my earlier post. Currently, the FTSE 100 is down 46.80 points or 1.16%, at 3984.40, having dropped below 4000 for the first time since May 28. That was an intraday move below 4000, though, with the FTSE closing at 4071.90 that day, so a close below 4000 would be even more significant. Currently, the CAC 40 is down 49.06 points or 1.59%, to 3035.04. The 3000 level is strong psychological support, so could provide a logical bounce point. A violation of that level would damage investor psychology. The CAC last had an intraday low below 3000 on June 2, but it closed above 3000 that day. The DAX finally lost the 3180 support this morning, and trades down 59.82 points or 1.86%, at 3160.76.

  Jonathan Levinson   7/1/2003,  8:43:32 AM
Futures are breaking down here, and treasuries are moving higher. Unless it reverses, we're looking at a gap down open.

  Jonathan Levinson   7/1/2003,  8:37:45 AM
Bonds are being bought again at the open, FVX -2.2 bps, TNX -2 bps and TYX -1. Futures are lower still, ES below 971 and NQ below 1200.

  Jonathan Levinson   7/1/2003,  8:21:18 AM
The US Dollar Index got taken down to 94.35, and August gold is up 3.20 to 349.50. Futures are down, ES -2 to 971.25 and NQ -4.50 to 1200. We're looking at a potential neckline break at any time now, but I've been watching price hover at current levels for much of the night with no followthrough so far. Of course, the short cycle oscillators are trying to bottom, and so there's no easy decision. I'm using my new-found patience and will only move when it looks clearer to me.

  Linda Piazza   7/1/2003,  7:07:59 AM
Good morning. The Nikkei opened near breakeven and then zoomed up through the morning session, closing the morning session above 9200. In the afternoon session, the Nikkei added to the morning's gains and closed just 7 points off the high of the day, up 195.38 points or 2.15%, at 9278.49. This nine-month closing high most likely was produced as a result of the Tankan survey's results. The Tankan survey of business confidence for manufacturers rose to -5, an upside surprise from the predicted -10 number. The negative number still indicates more executives are pessimistic than optimistic, but shows an improvement from March's -10 number. Executives noted plans to increase spending by 4.9%. For non-manufacturers, sentiment rose, too, but to -13 from the previous -14.

Exporters gained, including NEC Electronics (NIPNY). The company announced a plan for an IPO that will start trading on July 24. Chip-related companies and banks also gained.

South Korea released its own survey of sentiment among business. There, the July business survey index fell to 90.3, down from June's 96.4. South Korea's Kospi still managed a 0.72% gain. Taiwan Weighted gained 2.99%, and Singapore's Straits Times gained 0.64%. Hong Kong's Hang Seng lost 0.83%, however.

Although most Asian bourses saw gains, most European markets currently trade down. In stock-specific news, SAP (SAP) trades down. Although when Oracle's takeover bid of PeopleSoft was first revealed, many analysts commented that SAP would be the likely beneficiary, JPMorgan doesn't agree. Saying that the consolidations within its sector would be unlikely to help SAP and mentioning modest H2 spending by corporations, the firm cut SAP's rating to neutral. Volkswagen fell on news that it would lay off 2,000 workers and cut production at plants in Mexico. French steel producer Arcelor will also cut production as its CEO pushes back to 2004 any expectations of a recovery in the steel market.

As of the current writing, the FTSE 100 trades down 18.10 points or 0.45%, at 4013.10. This is near the day's low, with the FTSE having dipped to 4004 before rising slightly. The CAC is also near its day's low, trading down 27.42 points or 0.89%, at 3056.68. The DAX has been bumping along just above 3180 support and currently trades down 36.16 points or 1.12%, at 3184.42.

  Jeff Bailey   6/30/200,  10:55:02 PM
The Index Trader Wrap has been posted: Link

  Jonathan Levinson   6/30/200,  10:54:56 PM
The Futures Trader Wrap has been posted: Link

  James Brown   6/30/200,  10:54:47 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

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