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  Jim Brown   7/2/2003,  4:02:44 PM
Editors Play - I cheated on the next batch of August DJX-$88 puts which was scheduled to trigger at Dow 9150 and jumped the gun at Dow 9147 when it appeared it might roll over. I filled at $1.20. 3 Dow points below the trigger but just in case this bullish day was over done I did not want to miss it.

Remember the Jobs Report and Jobless Claims are going to be reported at the open on Thursday. Better safe than sorry.

 
 
  Linda Piazza   7/2/2003,  3:52:23 PM
I guess I'm not so smug about having sold my single call for a $30.00 loss, paying for the spread, when I could have sold it now and paid for that spread and eked in a few extra dollars, too. Not much, though, and sometimes it's worth $30.00 to pull out of a trade that's causing too much anxiety. Balance is necessary in our lives, too, and I did not want to be caught in an iffy trade ahead of a holiday and the premium loss that would accrue, so I knew I would be closing out at the end of the day, whatever that would bring.

 
 
  Linda Piazza   7/2/2003,  3:43:00 PM
As the close approaches today and you're planning your exits, remember that tomorrow will be a holiday-shortened trading day.

I keep studying the OEX daily chart and seeing what looks like a breakout of a bull flag pattern. I see the OEX moving back up to its 21-dma, and perhaps closing over that level if it manages a close over 498.41. I see positive indices and the DJI over 9100 again. I see bullish-looking daily oscillators. All of that looks bullish and I can't really make a bearish case for it. We're all so attuned to the need for a stronger retracement and for expectations that markets go down in July that it doesn't feel bullish, though, and I still can't quite bring myself to believe what I'm seeing. Today's trading didn't feel bullish, in particular, which is was I sold my call for that small loss rather than taking the chance on tomorrow.

 
 
  Jeff Bailey   7/2/2003,  3:29:28 PM
03:15 Update posted at this Link

 
 
  Linda Piazza   7/2/2003,  3:25:42 PM
No sooner did I type that last post until the OEX starting dropping fast. I guess I'm not sorry now.

 
 
  Linda Piazza   7/2/2003,  3:25:06 PM
I'm out of my OEX call play for a $30.00 loss paying for the spread. I may be sorry, but I just haven't liked the way the OEX has been acting.

 
 
  Linda Piazza   7/2/2003,  3:13:09 PM
The OEX successfully climbed back into the regression channel and reached a new day's high, which it currently challenges. I'm still uncomfortable with the play, but felt that bullish volume patterns, the move over the 21-dma, the bullish daily chart, and other factors made it a viable, if risky, play. Because I wasn't comfortable, I risked only one call position. Now comes the hard part. Those daily chart characteristics still look bullish. Now that I'm profitable, do I risk holding overnight? I don't think so. Not for a holiday-shortened thinly traded day.

 
 
  Jonathan Levinson   7/2/2003,  3:04:18 PM
The put to call ratio is .73 for the past half hour, telling us as little as the VIX, VXN and QQV, all pennies in the green. TRIN.NQ .42 and TICK.NQ +318 show strong, sustainable buying pressure. Treasuries have closed lower, FVX -2.6 bps, TNX -1.3 and TYX -1.8 bps.

 
 
  Jonathan Levinson   7/2/2003,  2:52:01 PM
Yields are stalling on the move off their lows here, still negative across the curve. Gold is back to positive territory, up a dime, HUI +.93 to 155.15 and XAU -.28 to 80.79.

 
 
  Jeff Bailey   7/2/2003,  2:47:38 PM
Avid Technology (AVID) $39.64 +8.87% ... stock up on trader talk that hedge funds may be stepping up short covering ahead of July 17 earnings. I pulled up PnF chart and see the "bullish triangle" formation triggered at $38. Link

Quick check at NASDAQ does show higher short interest of 5.3 million shares short as of June 13, wih average daily volume of just 875,000, that had Days to cover at 6.14. Link

Technicals unfolding along with today's volume of 1.2 million shares seem to back the talk of short-squeeze.

 
 
  Linda Piazza   7/2/2003,  2:37:45 PM
As Jane has mentioned with regard to the ES contract, the OEX comes up now to test the bottom of its violated regression channel. A failure here, with an attendant failure of DJI 9100, would have me exiting my play sooner than 496. However, with the DJI mostly holding 9100 and the OEX mostly holding to its 21-dma, it seems foolish to exit now, even though the play is not a comfortable one. I'm sticking to my plan, or rather altering it as is needed, but not bailing out of nervousness, either, which is what I would like to do.

 
 
  Jeff Bailey   7/2/2003,  2:17:56 PM
QQQ 30.75 +1.28% .... becoming a very "complex" trade with MSFT starting to bid and Biotechs recovering a bit. Will note here that BTK.X 442.93 +3.69% just off its session highs of 447.50, which had the BTK.X testing its downward trend from the June 6th high of 514.11.

QQQ bear "at least" wants to see the biotechs, which have been weak of late stay that way.

 
 
  Linda Piazza   7/2/2003,  2:08:35 PM
Whether that was a rising wedge or an ascending channel, the OEX is falling out of it now. I'm about back to my entry on the call, and considering closing it for the cost of the spread between bid and ask and the commission. However, there's the 21-dma just under the current level, so I think I'll just stick it out as I had planned.

 
 
  Jonathan Levinson   7/2/2003,  2:08:30 PM
Yields have dived to their lows of the day as money floods into treasuries, FVX -4 bps, TNX -2.6 and TYX -3.3.

 
 
  Jeff Bailey   7/2/2003,  2:08:23 PM
Frontier Airlines (FRNT) $9.75 +4.83% ... notably stronger that the broader Airline Index (XAL.X) 53.71 -1.26% today.

I took some longer-term Feb $10 calls (FUOBB) (1/4 position) right near the close on 06/26/03 when stock printed session high. There did appear to be a pretty good seller at $9.75 that day, but I thought he/she was gone as the stock moved higher. FRNT right back at those levels and near-term, would like to see stock make the move above $10.00 and June 19th highs. Link

 
 
  Mark Phillips   7/2/2003,  2:03:51 PM
GS $85.25 (-0.60) After adding GS to the call list yesterday, I got an email from a subscriber this morning inquiring about the cause behind the stock's poor price action today.

In all honesty, I don't think it has been all that bad after yesterday's strong rally. I was actually expecting a bit of a pullback, possibly to the $84 area to confirm higher support. Instead, the bulls stepped in just above $84.50 and started buying right around 1;15pm ET. What I find interesting about today's trade is the way the stock formed a minor bullish wedge up until 1pm, a smaller version of the 2-week wedge it broke from yesterday. I still favor entries on rebounds above $84, while those looking for confirmation before playing may want to wait for the stock to clear $86.25 (just over this morning's intraday high).

 
 
  Jeff Bailey   7/2/2003,  2:02:07 PM
Treasuries reversing gains and now sees price at session highs. Move comes suspiciously close to the pre-FOMC levels in OEX of 500.00 and SPX 991.

Can't make a lot of this action presently, but notable here.

 
 
  Jeff Bailey   7/2/2003,  1:58:06 PM
HMO Index (HMO.X) 723.46 +2.21% ... sector traded very strong after pullback test of rising shorter-term 21-day SMA and now looks to test its all-time high of 735.15 set on June 18th.

Oxford Health (OHP) $43.44 +1.85% also traded strong on the pullback, not quite testing its rising 21-day SMA. Recent 3-box reversal helped complete the longer-term bullish vertical count column (X's 28-44) to $79. From here, bulls would like to see OHP trade the $46.00 level and get a spread-triple-top to then leave limited overhead supply. Link

 
 
  Jeff Bailey   7/2/2003,  1:52:11 PM
SPX and OEX 991.83 +0.96% and 499.82 +0.99% now approaching pre-FOMC announcement levels. I'm impressed by today's gains and bears are going to be pressed to defend here.

NASDAQ-100 Index (NDX.X) 1,242 +2.06% easily above its pre-FOMC levels and looks to provide major index leadership yet again. Downward trend from the June 6th high to June 19th high just above at 1,245.

Computer Technology Index (XCI.X) 605.76 +2.28% now nearing its "left shoulder" level of 606.28, and bears are going to be VERY jittery here.

 
 
  Linda Piazza   7/2/2003,  1:49:16 PM
Volume patterns show adv/dec ratios of 2.6 for the NYSE and 2.4 for the Nasdaq, showing a strengthening as the day progresses. Up volume is 2.9 times down volume on the NYSE and 4.9 times down volume on the Nasdaq. This can change at any moment, but so far, this supports a bullish thesis. Total volume is 803 million on the NYSE and 1.1 billion on the Nasdaq.

 
 
  Linda Piazza   7/2/2003,  1:40:13 PM
I'm not feeling particularly comfortable with the OEX call play I entered, even if it is just one contract--a toe-in-the-water kind of play. We're entering the time period when support or resistance is often tested, sometimes with a push that soon gets reversed. My stop is 496, just below this morning's consolidation, but I'd like to see the 1:35-1:45 ET push take the OEX high enough that I can start feeling some comfort with this position and then I'd like to see that higher level maintained. Ideally, I'd like to see a move over 501 but a move over 500 will help.

 
 
  Jonathan Levinson   7/2/2003,  1:30:35 PM
Standard and Poors places California on negative credit watch.

 
 
  Jonathan Levinson   7/2/2003,  1:21:24 PM
Call me paranoid, but the put to call ratio has been pretty moderate all day, and the blast higher in equities was timed to coincide to the minute with a blast higher in treasuries and a whack at gold. I've lost money fighting the powers that be, whoever it is that can move 3 markets within 60 seconds of each other. The rising trendline on my SPX futures chart is just above 986, and I'm thinking that the bounce is more likely to succeed than fail at that level.

 
 
  Linda Piazza   7/2/2003,  1:18:43 PM
The DJI may be losing its battle with 9100. The DJI is still above its 21-dma, and these kinds of tests of former resistance are expected, but I'm watching closely and not liking this action at all since I'm in a call play. Volume patterns still support a bullish thesis. So far.

 
 
  Linda Piazza   7/2/2003,  1:06:58 PM
The OEX now comes back down to test the 21-dma again. Although this test is natural and expected, it doesn't feel good to endure since I'm already iffy about this trade. I may be exiting soon, depending also on how the DJI survives the test of 9100.

 
 
  Jeff Bailey   7/2/2003,  12:57:52 PM
Gilead Sciences (GILD $56.39 +2.52% Link .... halted. PDUFA date for company's Coviracil HIV treatment is/was scheduled for tomorrow, but may be coming out today. Analysts have been expecting approval for the drug, with sales seen around $500 million.

 
 
  Linda Piazza   7/2/2003,  12:43:47 PM
Volume patterns still show more buying than selling, with advancers about double the number of decliners. Up volume continues to be strong, too. Despite my misgivings, I bought a single OEX call contract when the OEX had two five-minute closes over 499. I may be selling it rather soon if those 30-minute and 60-minute overbought levels turn out to be more important than the daily oversold ones or the current volume patterns. I think this is a high-risk play and would not necessarily counsel anyone to follow me into the play.

 
 
  Jeff Bailey   7/2/2003,  12:36:52 PM
Computer Technology Index (XCI.X) 603.63 +1.99% .... looks to challenge its June highs here and I'm going to venture a guess that there may be some bears monitoring the June 6th relative high of 606.28 for current "right shoulder" in daily bar chart, with "head" at 610-613, and "neckline" at 575.

Biggest concern in QQQ that I touched on last night is that BEARS are going to be their own worst enemy at this point.Link

A break in the XCI.X much abov the 607 level could spur short-covering with thought that another high is going to be taken out to the upside.

 
 
  Jonathan Levinson   7/2/2003,  12:30:11 PM
After seeing the uniformity of the 10:15AM reversals yesterday, I've begun to watch charts of my indicators instead of just the raw data. I'm currently seeing that the TNX bottomed at 11:50AM and is headed back higher, currently at the 61.8% retracement off its opening high, up 1.6 bps. At the same time, gold began to get sold, but it's still still up 40 cents. Equity futures are hovering around their highs of the day. TRIN.NQ .48, TICK.NQ up a whopping 700.

 
 
  Linda Piazza   7/2/2003,  12:27:12 PM
As yet, there's been no OEX sustained move over the 21-dma at 498.41, much less over 499. If that move over 499 should come during the lunchtime lull or during the 1:45 push zone, I'll be in a quandary about whether to act, because I don't trust trading during that time period. I don't have a rule against trading it, as Jane once did, but I'm wary about developments that occur during that time period.

 
 
  Jeff Bailey   7/2/2003,  12:26:19 PM
Ryland (RYL) $73.01 +4.27% ... big move higher since earlier notes of 10:12:47.

Trade at $73 is near-term troubling for bear like me (still holding Oct expiration) as trade at $73 now has stock's PNF chart back on "buy signal." Link

With October expiration, I'm still looking for some resistance at $75, which would be upper end of potential bearish channel if taking 45-degree angle lower from recent top of PnF chart. Link

Still, action here will have at least 1 stock giving buy signal in building bullish percent at Dorsey/Wright.

Relative strength chart of RYL vs. SPX now reverses back up on intra-day basis, and I won't be short/put if RYL relative strength gives another "buy signal" at RS 77.00. Link

 
 
  Linda Piazza   7/2/2003,  12:13:40 PM
The OEX now achieves a new high of the day, moving above the 21-dma. Although I consider the move risky, I may try a single call contract if the OEX sustains a move above 499. Reason: positive volume patterns, the daily chart showing a potential upside breakout of a bull flag, the move above the 21-dma, and bullish daily oscillators. The reason it's risky: 30-minute and 60-minute oscillators show a need for a near-term pullback, and layers of resistance looming overhead. I may talk myself out of this, too.

 
 
  Jeff Bailey   7/2/2003,  12:10:51 PM
QQQ $30.71 +1.18% .... QQQ has entered "zone of resistance" from $30.64-$30.71 today and while I would be tempted short/put in here, I do not like the bid that Microsoft (MSFT) $26.83 +2.6% has been finding recently, and MSFT looks like it could "blow up" to the upside.

If short/put the QQQ, I would certainly have to consider a MSFT long right now.

I would think with MSFT having lagged the QQQ bullish move, but MSFT's PnF chart still longer-term bullish Link we could well see profits taken from other technology names rotate to MSFT.

MSFT has 10.1% weighting in QQQ/NDX, while INTC is number 2 at 5.17% Link

 
 
  Jeff Bailey   7/2/2003,  12:07:37 PM
Merck (MRK) $62.18 +1.15% .... "bad tick" this morning (have seen a lot of bad ticks on stocks this morning), but nice little bounce from shorter-term 21-day SMA.

In recent weeks, I've seen some decent little moves come from this type of bar chart formation, which in a way is a shorter-term type of point and figure pattern called "bearish signal reversed" where you see a systematic pattern of lower lows and lower highs become "reversed" to the upside. Can creat a decent shift in supply/demand where demand quickly takes control.Link

 
 
  Linda Piazza   7/2/2003,  12:01:18 PM
Here comes the OEX test of the 21-dma again, at 498.41, with the OEX currently at 498.24. For reference, the OEX high of the day has been 498.72.

 
 
  Jeff Bailey   7/2/2003,  11:55:13 AM
11:43:22 post laughing at myself for having placed a comma between the 2 and 0 in 2010 winter games. Habits are hard to break when you're typing commas in index numbers all day.

 
 
  Linda Piazza   7/2/2003,  11:51:44 AM
On the thirty-minute OEX chart, the 5(3)3 stochastics have finally turned down out of overbought levels, but they're doing it at just the kind of shallow angle that I distrust--the stochs often turn right back up from that angle. RSI hinges up, hinges down, or flattens from moment-to-moment. ADX shows +DI declining, but -DI, depicting selling pressure, drops even faster. Since they started declining and since the OEX started battling the 30-minute 130-pma (and the 21-dma), ADX level has begun to slant up as if the trend is increasing in strength. What trend?

Volume patterns are bullish, but the OEX can't make any headway. The VIX is up. We're in the DMZ or the Bermuda Triangle once again.

 
 
  Jeff Bailey   7/2/2003,  11:43:22 AM
IOC announces 2010 winter games to be held in Vancouver, British Columbia.

iShare MSCI Canada (AMEX:EWC) $11.92 +2.84% Link moves to session highs here.

Relative strength vs. SPX strong Link

 
 
  Jeff Bailey   7/2/2003,  11:40:45 AM
11:00 Internals ... strong!

NYSE 5,556 +0.53% ... Vol. 320m A/D 20:9 NH/NL 99:1 (yesterday total NH/NL 110:6)

NASDAQ 1,659 +1.17% ... Vol. 521m A/D 17:9 NH/NL 105:6 (yesterday total NH/NL 120:12)

 
 
  Linda Piazza   7/2/2003,  11:30:09 AM
Volume patterns continue to more buying than selling. Adv/dec ratios are 2.04 for the NYSE and 1.8 for the Nasdaq. Up volume is 2.4 times down volume on the NYSE and 3.4 times down volume on the Nasdaq. Total volume is 417 million on the NYSE and 646 million on the Nasdaq.

 
 
  Linda Piazza   7/2/2003,  11:23:18 AM
I can't find information on the Nasdaq site about an early close tomorrow.

 
 
  Linda Piazza   7/2/2003,  11:20:01 AM
Now I'm confused. The Bond Market Association confirms its recommendation of an early market close at 2:00 ET tomorrow, so it will apparently be open an hour after the NYSE closes.

 
 
  Linda Piazza   7/2/2003,  11:16:36 AM
A reminder: I note on the NYSE site that the NYSE will close at 1:00 p.m. ET on Thursday, July 3. I assume the same is true for the Nasdaq.

 
 
  Linda Piazza   7/2/2003,  11:11:39 AM
I note that the SOX and DJI also currently challenge their 21-dma's, at 372.23 and 9060 respectively.

 
 
  Linda Piazza   7/2/2003,  11:08:52 AM
The 21-dma repelled the OEX once again, at least temporarily. The OEX five-minute chart shows a rough potential double top (one top is slightly lower than the other), with a confirmation level at the trough between the two peaks: 496.36. A fall below that confirmation level would then predict a minimal downside target of about 494.25. That's not a tradable move on the OEX, but watching whether these downside targets get met tells us something about the strength or weakness of trading. First, the confirmation level has to be breached, however, before we can start talking about downside targets for a double top.

 
 
  Linda Piazza   7/2/2003,  11:02:13 AM
The OEX tests that 21-dma again, with the average currently at 498.41. It has already climbed above the 30-minute 130-pma, currently at 498.09.

 
 
  Linda Piazza   7/2/2003,  10:59:46 AM
Volume patterns say this should be an up day. Trading on Asian and European markets predict this should be an up day. So why can't the OEX climb over that 21-dma? As I examine the various charts across various time frames, I see on the 15-minute chart the possibility that the OEX might be trading in a bull flag pattern, but the 30-minute and 60-minute oscillators show that it's expending a lot of energy while it's doing so. There's now a bearish kiss on the 60-minute 5(3)3 stochastics to add to those on the 30-minute stochastics. Still, those bearish kisses show tentative bearishness only as yet. I'm not getting the kind of "all the ducks in a row" confirmation I like to have on a move either direction today.

 
 
  Jonathan Levinson   7/2/2003,  10:58:05 AM
Put to call ratio has dropped to .61, equity pcr .45 and index pcr 1.33.

 
 
  Mark Phillips   7/2/2003,  10:54:10 AM
AGN $78.99 (+1.46) Last night we talked about the bullish descending wedge AGN had been trading in and today's sharp bounce appears to be confirming that pattern with a breakout above the top of that wedge at $78.30. Yesterday's rebound from $76 was the aggressive entry into the play and this morning's surge through that upper resistance line was the momentum entry. Our near-term target is for a return to the $81-82 resistance level from last month, and then a possible continuation up to the $85-86 area.

 
 
  Mark Phillips   7/2/2003,  10:48:38 AM
ABC $70.65 (+0.52) Inching above the $70.25 level this morning, our bullish play on AmerisourceBergen is looking strong, and a close here would be the best close for the stock since early November. Traders that were looking for an entry on strength should be in the play now, with stops set either at $68.50 (just below the 20-dma) or $67.50 (our official stop), depending on individual risk tolerance.

 
 
  Jeff Bailey   7/2/2003,  10:46:39 AM
Vital Signs (VITL) $24.18 Link ..... halted for news. Company says it sees Q3 EPS of $0.38-$0.40, which is well below company's prior guidance of "closer to $0.51 than $0.43" given in early May. VITL says results were hurt by accounting and legal expenses from May 7 compaint filed against 2 of its officers, additional tax refiling expenses, and an inventory write-off.

 
 
  Linda Piazza   7/2/2003,  10:46:10 AM
Nothing much has changed since the last post, with the OEX not yet over its 21-dma or the 30-minute 130-pma. I decided to look at a fresh daily chart of the OEX, without the channels and trendlines and other things I've done to mark up the chart. What do I see? A possible upside breakout from a bull flag. However, this chart does not show the 21-dma, which has so far been retarding upside moves. The OEX currently rises to test it again. Link

 
 
  Mark Phillips   7/2/2003,  10:44:49 AM
AMGN $67.24 (+1.39) Another strong upward push from the BTK index, has our 'Steady Eddie" AMGN play surging through $67 again today and it looks like new highs could be in store before the session is out. Remember, we are NOT advocating new entries on a breakout. If the breakout occurs, then we want to consider harvesting gains when the strength begins to fade, looking for new entries on the next dip to support.

 
 
  Jonathan Levinson   7/2/2003,  10:43:41 AM
August gold is up 1.10 to 352.80, but HUI has cleared 155, up 2.02 to 156.24, XAU +.26 to 81.33.

 
 
  Jeff Bailey   7/2/2003,  10:31:29 AM
S&P 500 Index (SPX.X) 985.34 +0.3% ... session high of 989.05 came right at WEEKLY S1 of 990.01, but also the extension of lower end of upward trending regression we discussed in last night's Index Trader Wrap. Similar to Dow, coming back into MONTHLY Pivot of 984.50 here.

Here's our unconventional 6-point PnF chart, which now shows 3-box reversal. From here, bears look for trade at 960 to begin a pattern of lower lows.Link

Here's QQQ chart with $0.35 box size. Link

And Dow Industrials with conventional 50-point box size Link

 
 
  Linda Piazza   7/2/2003,  10:29:38 AM
Early volume patterns show advancers about twice decliners on both the NYSE and the Nasdaq. Up volume is more than three times down volume on both. Total volume as of a few minutes ago was 196 million on the NYSE and 376 million on the Nasdaq.

 
 
  Jeff Bailey   7/2/2003,  10:28:59 AM
Dow Industrials (INDU) 9,070 +0.32% ... morning pullback here comes right to the MONTHLY Pivot of 9,063. This was "upper part" of our zone of resistance today. Should Dow slip 10-points below the WEEKLY pivot of 9,053.00, then look for weakness toward the close. 5-minute chart shows 21-period SMA right here as moving average support.

 
 
  Linda Piazza   7/2/2003,  10:20:07 AM
The OEX pulls back from both the 21-dma and the 30-minute 130-pma. If the OEX continues to fall, below lies the 30-minute 100-pma at 495.67. Thirty-minute RSI, CCI, and 5(3)3 and 21(3)3 stochastics all are trying to hook over in unison, but the moves are tentative as yet and can be redrawn. MACD is still pushing up through 0, although that move also looks tentative.

 
 
  Jonathan Levinson   7/2/2003,  10:20:05 AM
I'm scouring the fed's page, but it appears that 7B is the only money forthcoming for this morning. The 1.75B drain from the expiring overnight repo is compounded by another 8B in 5 day repos expiring, so far unrefunded, for a total of 9.75B draining.

 
 
  Jeff Bailey   7/2/2003,  10:18:54 AM
KBW Bank Index (BKX.X) 870.38 +0.21% .... After seeing what took place in Japan, I thought this group of more "multi-national" banks might be more bullish than they are here. For now, must think that Japan's banking action today was based more on investor optimism in that region than global scale.

Bank of America (BAC) $80.07 +0.08% did trade above the $80.00 level after two trades at $80.00 in recent weeks couldn't get the breakthrough. Here too, thought BAC might see some type of aggressive short covering "pop", but not all that much.

 
 
  Jonathan Levinson   7/2/2003,  10:16:50 AM
The put to call ratio is .62, equity pcr .52, index pcr 1.09. Treasury yields are almost 50% down from their intraday highs, with TNX +3.3 bps.

 
 
  Jeff Bailey   7/2/2003,  10:12:47 AM
Dow Jones Home Construction (DJUSHB) 436.69 -0.84% .... after higher open, seeing some selling into early strength. CTX -1.12%, BZH -1.05%, RYL +0.77%

 
 
  Linda Piazza   7/2/2003,  10:11:51 AM
I'm still watching the OEX levels in relationship to the 21-dma and 30-minute 130-pma, with both near 498.40. As the OEX struggles to move over these averages, I note 30-minute and 60-minute indicators showing that the OEX is approaching overbought levels while daily indicators are just now turning up again. For more information, I'm waiting for early morning orders to sort themselves out to see which direction volume patterns are leaning. Those overbought oscillators can stay pinned at overbought levels for quite a while as indices climb, as we all know, but that requires getting over those averages first. Without the late bullish tenor factored in, I'd guess that the oscillators were showing a need to pull back to next support before launching another assault at those averages, but we have had that bullish tenor lately.

 
 
  Jeff Bailey   7/2/2003,  10:08:50 AM
Disk Drive Index (DDX.X) 112.65 +4.21% ... bold move above the June 6th relative high. Looks set to test the January 2002 highs of 120.

MXO $9.61 +13%

 
 
  Linda Piazza   7/2/2003,  10:05:11 AM
The VIX did quite a bit of jumping around at first, going from that 115.73 down to the 16.38 Jim noted and then to current levels as noted by Jonathan. It's currently 21.32 on Q-charts, which seems a reasonable number, but now I'm wary of trusting that number, too.

 
 
  Jonathan Levinson   7/2/2003,  10:03:21 AM
VIX 21.37 +.08.

 
 
  Jeff Bailey   7/2/2003,  10:02:28 AM
May Factory Orders were up 0.4%, which is above economists' forecast of unchanged.

 
 
  Jim Brown   7/2/2003,  10:01:10 AM
Editors Play - Filled on the second level of August-DJX-88 puts at $1.30 when the Dow hit 9100.

 
 
  Jim Brown   7/2/2003,  10:00:43 AM
I am showing the VIX at 16.38 on my Qcharts and I think that is as wrong as the 115.74.

 
 
  Linda Piazza   7/2/2003,  9:59:25 AM
VIX at 115.73? I think we're getting some bad data here on Q-charts.

 
 
  Jonathan Levinson   7/2/2003,  9:59:08 AM
The fed has just drained 1.75B by adding 7B in overnight repos against 8.75B expiring.

 
 
  Jeff Bailey   7/2/2003,  9:55:35 AM
Maxtor (MXO) $9.20 +8.23% .... Disk Drive (DDX.X) 111.15 +2.83% on the move again today.

 
 
  Linda Piazza   7/2/2003,  9:51:54 AM
I transposed two numbers in my previous post, which has now been corrected. The OEX 21-dma is 498.40, not 489.40. In addition to facing the 21-dma at that level, the 30-minute 130-pma is also at 498.37. For those of you not choosing the "both" option on the Monitor, Jim has been watching how the ES contract reacts in relationship to the 100-pma and the 130-pma. I've been watching those averages, too, but with relationship to the OEX. The OEX is currently above the 30-minute 100-pma, but challenging that 130-pma. If it sustains levels above the 130-pma, that would be considered a buy signal, according to Jim's explanation if I understand it correctly, but if it falls back beneath the 100-pma now after unsuccessfully challenging the 100-pma, that would be a sell signal. However, I'm not acting on this information alone as I haven't backtested this system with regard to the OEX, and neither has Jim to my knowledge. It's just something I'm watching and thought you might be interested in watching, too.

 
 
  Linda Piazza   7/2/2003,  9:44:57 AM
The OEX currently challenges its 21-dma at 498.40. The OEX managed only one close above the 21-dma in the last six trading days, and that close was only minimally above the 21-dma. We're far from a close yet, though, and the OEX has had daily shadows that pierced the 21-dma. Still, this is a benchmark for us to watch this morning.

 
 
  Jonathan Levinson   7/2/2003,  9:43:57 AM
August gold +1.10 to 352.80, XAU flat and HUI +1.15. Treasury yields are struggling to hold their highs.

 
 
  Jonathan Levinson   7/2/2003,  9:40:45 AM
Strong buying on the COMPX, with TRIN.NQ at .41, TICK.NQ +356, QQV +.34 to 26.51.

 
 
  Linda Piazza   7/2/2003,  9:40:15 AM
The first five-minute OEX candle did not span a particularly large range, so the midpoint support might not be important today. Instead, watch the day's low as it represents the top of this morning's slight gap up from yesterday's close. That gap may also not be large enough to be important, even on the five-minute chart.

 
 
  Jeff Bailey   7/2/2003,  9:26:43 AM
Banks may be a sector to look for bullishness in today's session after many banks in Japan surged in today's session. Citigroup (C) and JP Morgan (JPM) are "top of mind" with exposure in the region.

 
 
  Jeff Bailey   7/2/2003,  9:22:45 AM
09:00 Update posted at this Link

 
 
  Jonathan Levinson   7/2/2003,  8:48:02 AM
Mortgage apps rose 5.2% last week despite higher rates- looks like some late-comers to the mortgage and refi party, with refinancing apps up 4.8%.

 
 
  Jonathan Levinson   7/2/2003,  8:42:04 AM
Treasuries are getting dumped, yields up strongly, FVX +7.6, TNX +6.2 and TYX +3.9. I continue to find this action absolutely puzzling, but there it is. ES futures now +3.25 at 984.50, NQ +4.50 at 1227.50.

 
 
  Jonathan Levinson   7/2/2003,  8:13:17 AM
The US Dollar Index is up to 94.38, and August gold is down .60 to 351.10. Futures are in the green, ES +3.25 to 984.50 and NQ +4 to 1227.

 
 
  Linda Piazza   7/2/2003,  7:15:42 AM
Good morning. The Nikkei climbed through its morning session, ending that session above 9400, and then added to its gains after the midday break. The Nikkei closed up an astounding 313.75 points or 3.38%, at 9592.24. Japanese big caps gained. Financials gained with worries about their assets being eased by the rising markets. A Bloomberg.com article also mentions a decrease in bad bank loans, although I haven't seen the release of a specific number quantifying that decrease. Across Asia, chip-related stocks climbed as the price of the most used chip rose, but tech stocks of all kinds were rising. With the Nikkei gaining more than 3%, most stocks were rising.

Of special interest was the news that Canon plans to build four new research and development centers in Japan. Increased spending on research and development, IPO's, and M&A's: these encouraging signs are beginning to appear in the news more often although it hasn't been so very long since the news was filled with Japan's urgent need to rescue the financials. Canon's new plants will focus on promising new technologies such as nanotechnology.

Other Asian bourses gained, too. Taiwan's Weighted was up 1.45%. South Korea's Kospi was up 1.65%, and Singapore's Straits Times traded up 1.37%. Hong Kong's Hang Seng climbed only 0.27%, however.

Most European bourses trade up, too. European auto manufacturers gained after yesterday's U.S. auto sales figures, but as with Asian bourses, the gains are broad. As Jim mentioned in last night's wrap, yesterday's court decision to dismiss the lawsuit against Merrill Lynch's analyst coverage is credited with triggering the gains. As of this writing, the FTSE 100 trades up 46.60 points or 1.18%, at 4010.50, having opened above 4000 again today and stayed above that level. The CAC 40 trades up 66.57 points or 2.21%, at 3079.57; and the DAX trades up 71 points or 2.26%, at 3217.57.

 
 
  Jeff Bailey   7/1/2003,  9:50:48 PM
Sector bullish % changes were not seen today. Sectors put on the "watch list" that are closer than others to reversal have Finance slipping 0.64% to 75.64% (74% would be bull correction), Healthcare down 1.02% to 63.78% (62% would be bull correction), and Semiconductor -0.81% to 73.17% (72% would be bull correction).

 
 
  Jeff Bailey   7/1/2003,  9:29:45 PM
Pivot Analysis Matrix for tomorrow posted at this Link

 
 
  James Brown   7/1/2003,  8:24:26 PM
Yesterday's Market Monitor has been archived. You may view it and any previous days here: Link

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