Option Investor
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  Jeff Bailey   7/9/2003,  4:36:09 PM
Yahoo! Inc. (YHOO) $35.29 +0.54% ... hit lower at $34.00 with EPS of $0.08 inline with consensus. Link

Revenues rose 42.3% year-over-year to $321.4 million, which was above the $313.3 million consensus. YHOO gives Q3 guidance of $318-$338 million, which surrounds consensus of $325.5 million. For 2003 sees revenues of $1.26-$1.31 billion, with consensus at $1.28 billion.

  Jeff Bailey   7/9/2003,  4:29:21 PM
Genentech (DNA) $77.38 +1.16% ... higher at $77.77 after reporting EPS of $0.31 (excluding non-recurring items) which is 5 cent better than consensus of $0.26.

Fondly remember that spread-triple at $40, but I'm just now noticing the bullish triangle formation, triggered at $77 in recent sessions. Link

  Jeff Bailey   7/9/2003,  4:10:49 PM
Hot Topic (HOTT) $28.83 -0.20% .... "Punk retailer" says June comparable store sales rose 3.5%, which was better than consensus for comp store sales of +2.7%. Link

Stock at $28.29, down $0.54 (-1.87%) from close.

  Linda Piazza   7/9/2003,  4:01:59 PM
That wasn't a pretty end to the day, but today's candle didn't retrace more than half of Tuesday's candle, as I would liked to have happened to have set up a better approximation of an evening-star pattern on the daily chart, and it didn't yet turn the daily RSI below its ascending trendline. Let's see what tomorrow brings.

  Linda Piazza   7/9/2003,  3:44:40 PM
I'm watching daily RSI. It's rolling, but it's got a supporting trendline just below it. Since I tend to trust RSI trendline violations more than I do other oscillators, I might consider a put play on the OEX if that trendline is broken. I won't be doing it this afternoon, however, and I would consider it high risk until the OEX fell through the 21-dma and the bottom of the ascending regression channel on the daily chart. Although the 5(3)3 daily stochastics are flattening in levels indicating overbought conditions, the 21(3)3's remain in full bull run. It may be, then, that those 5(3)3's have one more cycle down and then up before the 21(3)3's get turned down in concert with the 21(3)3's.

  Jeff Bailey   7/9/2003,  3:35:48 PM
03:15 Update posted at this Link

  Linda Piazza   7/9/2003,  3:15:40 PM
The OEX now tests the top of its intraday descending regression channel. Now we have to start asking again if it's a bull flag. Since the channel is descending, an upside breakout would occur sooner than 506 now, but then the OEX would soon face 506, then 508, then the 510-513 zone. Volume patterns have continued to improve throughout the afternoon, but the NYSE adv/dec ratio is still only 15:18.

  Linda Piazza   7/9/2003,  3:04:48 PM
Did anyone notice that the $SOX is above 400, currently at 404.26? The SOX June high was 412.66. The SOX might give us our first look at what happens when those June highs are approached. Hmmm. SOX over 400, Russell 2000 up 2.05 points. Maybe I do wish I had that OEX call back. Don't you hate it when you're disciplined and take your stops and then have to start second-guessing that decision?

  Jeff Bailey   7/9/2003,  3:01:21 PM
Micron Tech (MU) $14.60 +4.28% ... off session best of $14.69. Will note today's trade at $14.50 gets an "X" and helps eliviate some of my concern for "bull trap" with Semiconductor Bullish % (BPSEMI) at "overbought" levels. Support should be firm longer-term now at $13.50-$14.00. Link

Today's action also has MU relative strength chart improving vs. the SPX and giving RS buy signal. Will see if it holds by the close, but gives impression the stock is starting to gain favor relative to broader market. Link

  Jeff Bailey   7/9/2003,  2:52:05 PM
Disk Drive Index (DDX.X) 119.32 +0.97% continues to impress bulls with a a third-consecutive 52-weeker and nearing its January 2002 tippy-top high of 119.86.

I still think SNDK Link and MXO Link have some significant longer-term upside, with building preferance toward MXO's PnF chart. Recent product breakthrough news holds some catalyst longer-term.

  Linda Piazza   7/9/2003,  2:51:23 PM
I still don't see good risk/reward ratios for OEX traders considering either short or long entries just now. Long entries will face strong resistance, we know now, at both 506 and 508. Above that is the 510-513 zone. Short traders should find strong support from 501.80-500.80, and then again at the 21-dma, currently at 500.15, and then at the bottom of the daily regression channel. That doesn't mean that individual traders might not profit picking the right direction, expecially if either the resistance at 508 (in the case of a call) or the clustered support underneath (in the case of a put) does not hold.

  Jeff Bailey   7/9/2003,  2:47:38 PM
Corning (GLW) $8.71 +4.18% .... stock making new 52-week high above June 6th high of $8.49. On June 24th, company said it expects to be profitable for the full-year and will return to profitability in the 3rd quarter, if no sooner, excluding special items.

  Linda Piazza   7/9/2003,  2:46:10 PM
NYSE adv/dec ratios did improve to 14:18, but still show more decliners. Nasdaq advancers/decliners now show a slightly bullish 17:14 ratio.

  Jonathan Levinson   7/9/2003,  2:28:32 PM
August gold futures have slipped below support, last at 342.60. XAU is up .17 and HUI +.57 notwithstanding.

  Linda Piazza   7/9/2003,  2:25:34 PM
I'm still monitoring those NYSE adv/dec ratios and they're still not improving much, so the OEX may be hitting my original target without me. I watched as the OEX moved back into the channel, but I don't feel enough conviction to enter a long here or suggest it for anyone else. As I mentioned in my 13:03 post, however, I'm also having difficulty believing the markets will crater while the Russell 2000 adds to its gains. Most indices have 21-dma's offering their support not far below currently levels, too. In my opinion, we're still in a DMZ without good risk/reward for either a short or a long.

  Jeff Bailey   7/9/2003,  2:21:36 PM
ImClone (IMCLE) $34.90 +3.34% .... regains compliance with NASDAQ listing rules. Should lose the "E" from stock symbol.

  Jonathan Levinson   7/9/2003,  2:15:51 PM
Put to call ratio rises to .69, equity pcr .58 and index pcr 1.33. Volatility indices are all in the red.

  Linda Piazza   7/9/2003,  2:08:39 PM
Where's my call play? I want it back. Maybe. That 1:45 push sent the OEX above resistance, the quick dip stopped at that resistance-turned-support, and then the OEX zoomed right back to the midline of that ascending channel. NYSE adv/dec ratios still don't look great, though, although they're improving. Even if the OEX might be going to climb toward my original 510-512 target, I'm inclined to sit it out this time.

  Jeff Bailey   7/9/2003,  2:03:54 PM
Micron Tech (MU) $14.36 +2.57% .... making way to session highs here and 5-minute volume build on the move higher. I've got my retracement bracket set from $6.60 to $16.69, which has 61.8% at $12.85 and near-term upside 80.9% retracement of $14.77.

  Jeff Bailey   7/9/2003,  2:00:53 PM
Treasuries starting to see some reversal from buying to selling in last 15-minutes. 10-year YIELD ($TNX.X) has moved from 3.68% YIELD to 3.7% here. Not a huge move, but seems to have come with SPX firming right at the 1,000 level. SPX 1,001.54 here.

  Linda Piazza   7/9/2003,  1:51:55 PM
I hate that 1:45 time period, as it seems that it's designed to trick as many people out of as much money as possible. Take a look at the one-minute OEX chart to see what I mean, with prices zooming up and then down. Before I became familiar with trading patterns during this time period, I often was stopped out of trades just about that time of day. It's only because I kept a trading journal that I was able to identify what was happening.

  Jeff Bailey   7/9/2003,  1:50:00 PM
Micron Tech (MU) $14.27 +1.92% ... slight volume pickup in last 30-minutes. Higher price action correlation gives hint the bears may be coming in a little more aggressively with short-covering.

  Jonathan Levinson   7/9/2003,  1:48:19 PM
Put to call ratio at .64, QQV -.40, VXN +.09, VIX +.09.

  Linda Piazza   7/9/2003,  1:45:40 PM
That push arrived on schedule at 1:44, and it's a test of overhead resistance. The outcome of this test often tells something about the direction of afternoon trading, but don't assume you know the outcome too soon.

  Linda Piazza   7/9/2003,  1:34:57 PM
We're approaching the 1:35-1:55 time period when there's often a strong push one direction or another, with 1:45 being the most common time for that push to occur.

  Linda Piazza   7/9/2003,  1:27:27 PM
So far, this looks like a normal and to-be-expected test of broken support. With the adv/dec ratios being what they are (13:18 on NYSE and a more neutral 15:15 on Nasdaq), I'd be included to enter an OEX put position on a rollover, but then there's the 21-dma just underneath and that daily channel support nearby, too. Those 30-minute oscillators hint at a possible, although not certain bounce, too. If the OEX survives this test of the broken support and moves back into the channel, well, there are those NYSE adv/dec figures to consider. We're back in a kind of DMZ again.

  Linda Piazza   7/9/2003,  1:17:24 PM
The OEX currently tests the bottom of the intraday channel from which it broke first to the downside and then to the upside, and then again to the downside. It's also testing one variation of a neckline for an inverse H&S formation. As it's testing these levels, 30-minute oscillators have turned up again. Sixty-minute RSI hooks up, too. Still, there are those adv/dec ratios to be considered.

  Jonathan Levinson   7/9/2003,  1:12:11 PM
TRIN.NQ .56, TICK.NQ +377, QQV -.16- we're seeing another bullish push on the COMPX.

  Jeff Bailey   7/9/2003,  1:11:39 PM
Russell-2000 (RUT.X) 474.39 +0.08% .... inches green here to sesson high.

  Jeff Bailey   7/9/2003,  1:07:09 PM
Dow Industrials (INDU) 9,140.63 -0.89% ... session low so far has been 9,108.24, which is equivalent to a "frog's hair" of 9,100, which would have the INDU PnF chart showing 3-box reversal lower and first look of a lower low (8,900) and lower high (9,250). Not there yet. Link

  Jonathan Levinson   7/9/2003,  1:04:25 PM
I see that the CBOE has removed that print of .88 and replaced it with .63, followed by this past half hour's .65 total put to call ratio. Bears can breathe a sigh of relief.

  Linda Piazza   7/9/2003,  1:03:19 PM
I keep going back to the Russell 2000, noticing how well it's behaving today, up a minimal 0.09. That doesn't seem to fit a scenario in which the markets cave in. Why aren't investors bailing out of those small caps? Something doesn't seem right.

  Jeff Bailey   7/9/2003,  12:58:40 PM
Good observation Linda (12:55:33) ..... SPX tested the base of its upward regression channel last hour and right in a little "zone of support" from WEEKLY R1 of 999.77 and my WEEKLY 19.1% retracement of 1,001.27 higher here. SPX 1,000.89 -0.68%.

  Linda Piazza   7/9/2003,  12:55:33 PM
Here's what I'm watching on the OEX daily chart: Link

  Jeff Bailey   7/9/2003,  12:47:49 PM
Comment from Jane (see 12:15:53) ... Jeff I would like to add a comment to your 9:12 post. I also feel that options and sometimes stocks are manipulated but that is part of the "game" unfortunately. I always use contingent orders so the order stays on the brokers servers and is not "seen" by the market makers until the contingent criteria are met, usually the underlying hitting a certain price. Once the criteria on the order are met the stop or buy is immediately placed at market so no manipulation can take place. So I can't see how this order would have been manipulated if it went in at market.

I agree Jane that it is "part of the game," and I'm not sure if the trader was trading an index option or stock. However, if stock, then a $0.60 move in the course of minutes "smells worse than a sweaty wrestler" toward manipulation, where the stop is seen by the market maker, he/she takes it down to trigger the stop, and then scoops the bid back higher by $0.60 and holds a nice profit.

Not to argue with Jane, but there is a couple floor specialists on the NYSE that were doing some "front running" ahead of their institutional customers with bids/offers, where their customers didn't get fair price fills. They (the specialists) thought it was "part of the game" too, but the SEC seems to think different when trying to provide a fair market.

  Linda Piazza   7/9/2003,  12:43:40 PM
The OEX 21-dma lies at 500.08. If you're in or considering an OEX put play, be careful as the OEX approaches that number, as it could provide a bounce.

  Linda Piazza   7/9/2003,  12:40:41 PM
The OEX currently tests the bottom support of its latest bear flag.

  Jonathan Levinson   7/9/2003,  12:39:18 PM
Yields are hovering just south of unchanged, FVX -0.7 bps, TNX -1.5 and TYX -0.4. The TRIN.NQ remains undisturbed and bullish at .60, TICK.NQ neutral at +56. QQV +.23, FVX +.35, VIX +.47. The put to call ratio has spiked all the way to .88, as hedgers and put speculators step in.

  Jeff Bailey   7/9/2003,  12:35:23 PM
August Fed Funds futures (ff03q) 99.02 (unch) .... haven't mentioned Fed funds futures since recent FOMC meeting, but today's May inventories number having little impact on MARKET's impression of what FOMC will do at August meeting. Current trade shows approximately 8% chance of policy change on interest rates. (100-99.02 = 1%).

  Linda Piazza   7/9/2003,  12:26:56 PM
On the five-minute OEX chart, the current rise looks like a bear flag rising into resistance, like the 10:55-11:30 rise. We can't be sure that's what it is until it breaks to the downside. The first spot to watch for a downside break would anywhere from the current 502.80 level to 503.30.

  Jonathan Levinson   7/9/2003,  12:21:14 PM
12:12 ET Cisco Systems follow-up (CSCO) 18.95 +0.22: --Update-- Reuters reports that Cisco officials on Wednesday said comments attributed to CEO John Chambers about an imminent recovery in the technology sector were misinterpreted by a Dutch newspaper. Dutch daily Het Financieele Dagblad quoted Chambers as saying corporate spending on IT would recover in the next two to four months. According to a Cisco spokeswoman, Chambers actually said companies would start spending on information technology two to four months after their business turns up. "There is nothing new in what John has been saying the last several quarters."

  Jeff Bailey   7/9/2003,  12:15:53 PM
We've seen this before ... I trade at Optionsxpress and had a contingent, market order placed and was stopped out. I was watching the ticker waiting for my order to be filled. The bid was $3.8, ask $4.10. After about 3 minutes the bid dropped for a milisecond to $3.20 and then shot back to $3.8. You guessed it, I was filled at $3.20. Is this common? Thanks for all of your great insight,

I'm not sure what security you were trading (call or put either), but this hints of "manipulation" from the options market maker (not Optionsxpress) where they remove a bid to artifically trigger your stop.

If you can, before today's close (prefer right now) try and get the time/sales with bid/ask in option and make note of time. Then, go to bar chart of stock/security and see if there was indeed a decline in the stock/security to have the bid lower in your option. If not, immediately call your broker and report to them that you think the bid/ask was manipulated and request the trade be busted.

I can't remember when exactly, but a fellow subscriber did similar in a stock, got the trade busted, and it was the very next day the stock he held puts saw a big decline. He said he wasn't going to do anything and just take his fill, but he did call his broker, got the trade busted, and was very happy the following day!

Anyway... it is worth a shot, but this kind of stuff is why I really dislike using stops, especially with options.

  Linda Piazza   7/9/2003,  12:15:46 PM
It looks as if Jane and I both had the same idea--watching for a retest of the broken trendlines. The OEX has been rising toward 502.80-503.30.

  Linda Piazza   7/9/2003,  12:05:55 PM
Those considering an OEX put position should watch next support at 500.80. The OEX could conceivably bounce from that point and retest the broken trendlines near 503. A rollover there might offer a better entry into a put position, if that should happen.

  Jeff Bailey   7/9/2003,  12:04:58 PM
Funny e-mail .... Jeff: I'm surprised you didn't start the 11:00 Update with the title Mad Dog von Altria.

  Linda Piazza   7/9/2003,  12:02:48 PM
The OEX finally put me out of my misery, stopping me out. Here's hoping that the balancing stock put posited I entered performs better. I wasn't comfortable with the OEX difficulty with 508 this morning, but didn't obey my instincts, trying to follow my plan.

  Jeff Bailey   7/9/2003,  12:01:23 PM
HMO Index (HMO.X) 747.07 +1.13% .... continues to trade strong and new all-time high again today. Component Humana (HUM) $16.86 +5.5% Link is sector leader to upside today after fund manager Arne Alsin said he sees Americans more willing to spend discretionary income on healthcare services than any other form of descretionary services and likes Humana (HUM) as his top pic as it is the nation's second-largest Medicare HMO.

I find the supply/demand chart of HUM strikingly similar to my "top pic" in the group and Oxford Health (NYSE:OHP) $43.22 +0.88% and look for a trade at $46 to get things going. Link

  Linda Piazza   7/9/2003,  11:55:43 AM
Even the one-minute candles on the OEX chart are small, indicative of the battle going on as the SPX approaches 1000 again. When that battle is finally won by one side or another, I wouldn't be surprised to see an explosive move. Adv/dec ratios hint that the bears will win, but the battle isn't over just yet. I wish it were, either stopping me out or giving me reason to stay in the OEX long trade. At this point, I suspect that the best I can hope to see is the breakeven level again, but I'm still watching that battle for SPX 1000.

  Jonathan Levinson   7/9/2003,  11:45:51 AM
The total put to call ratio has risen to .57. Yields are creeping up off their lows, FVX -1.1 bps, TNX -1.6 and TYX -0.5.

  Linda Piazza   7/9/2003,  11:39:24 AM
The midline level of the OEX regression channel appears to be holding as resistance. A test of the current day's low is next.

  Jeff Bailey   7/9/2003,  11:33:45 AM
11:00 Update posted at this Link

  Linda Piazza   7/9/2003,  11:30:49 AM
Adv/dec ratios continue to weaken, with the NYSE adv/dec ratio at .65 and the Nasdaq ratio at a less bearish .82. Down volume is 1.5 times up volume on the NYSE, but up volume leads on the Nasdaq. Total volume is 506 million shares on the NYSE and 797 million on the Nasdaq. New highs remain strong, with few new lows.

  Linda Piazza   7/9/2003,  11:26:51 AM
The OEX now trades back to the midline of this week's regression channel. Will that midline now prove to be resistance? The five-minute 100-pma, which provided support late yesterday and this morning, also lies ahead near 505's potential resistance.

  Linda Piazza   7/9/2003,  11:22:59 AM
What do you do about your trades when you're planning a vacation? After turning a wonderful vacation into a less wonderful one when I once left large positions working (in early March 2000--what a time to choose such a tactic), I plan now to be out of as many trades as possible before leaving home. This morning, I closed out a long stock position for an 8% profit. The stock may continue to run, but since my view of further market gains is a skeptical one, I felt comfortable taking that profit. I will leave a conservative covered call position working. I've been selling calls against the stock for several months now, and the basis is low enough that I feel protected on the downside and will gladly be taken out of the position next week, too, if that should happen. That leaves this small OEX call position and a balancing stock put position that I want to close this week. I started planning how I would handle vacation time as the beginning of this opex cycle. If you're planning vacation, start thinking ahead as to how you might best have a relaxing time. We need balance and that includes time away from the markets.

  Jonathan Levinson   7/9/2003,  11:13:35 AM
Put to call ratio is .53, equity pcr .43, index pcr 1.17. QQV +.66, VXN +.1 and VIX +.4.

  Linda Piazza   7/9/2003,  11:05:42 AM
As I was typing that last entry, I noticed again the OEX support at the rising neckline of a potential inverse H&S, and noticed that it was probably going to coincide with 1000 on the SPX. I didn't exit at 504.50 as I had planned earlier, but decided to wait out the test of this trendline and SPX 1000. That may have been a very wrong thing to do, but it made sense at the time. I will most definitely exit at a break of the trendline, still above the exit I had planned yesterday. That break may be about to occur. Link

  Linda Piazza   7/9/2003,  10:53:56 AM
The adv/dec ratio had been slowing improving on the NYSE, too, so I hadn't yet changed my stop to breakeven. The OEX now approaches the midline support of that rising channel/bull flag.

  Jeff Bailey   7/9/2003,  10:52:28 AM
Altria (MO) $43.05 -8% ... continues to get hit lower, and I'm beginning to think that selling is caused more by Illinois bond than potential merger action. 50% retracement from June 2002 high to March lows at $42.75 about to be tested. If broken, then further vulnerable to 38.2% retracement and rising 50-day SMA near $39.25.

On June 23rd, Morgan Stanley raised target on MO with one reason being that MO's legal risks had subsided. Today's news may have put a major kink in that scenario.

  Jonathan Levinson   7/9/2003,  10:51:58 AM
The put to call ratio is down to .48, equity pcr at .37. These show what is most likely bulls lighting their hair on fire and partying in the streets. The question is how long it will last.

  Linda Piazza   7/9/2003,  10:50:17 AM
The OEX tests the top of the channel/bull flag again.

  Linda Piazza   7/9/2003,  10:41:14 AM
There's been a slight improvement in adv/dec ratios, with advancers now pulling slightly ahead on the Nasdaq. Decliners still lead by a healthy (unhealthy?) margin on the NYSE, however.

  Linda Piazza   7/9/2003,  10:40:05 AM
I'm not mentioning the OEX intraday oscillators because their evidence is mixed. Sixty-minute charts show that the ADX is rising and is currently above 20, the level I've used in the past to indicate that oscillator evidence may not be trustworthy anyway. I've been checking out Jane's 30 level lately, and think it's an even more reliable indicator of a strongly trending rather than range-bound market, so the 60-minute 24-something ADX level is at an in-between measurement.

  Jeff Bailey   7/9/2003,  10:36:42 AM
Micron Tech (MU) $14.20 +1.42% ... per yesterday's notes at the close and last night's Index Trader Wrap, I took partial bullish in the Micron Oct. $15 calls (MUJC) at $1.35 as stock moves above $14.07 trigger point. Yesterday's trade at $14.00 gets stock back on a buy signal with triple-top and breaks long-term downward trend/bearish resistance. Vertical count turns bullish with current column of X ($12-$14) building to $19.50. Link

Was hesitant near open, but Intel (INTC) $23.86 +3% looks to be "blowing up" on new 52-week highs and bullish count of $27.50 looks to be in reach. Link

While two very different semiconductor-related stocks, MU may be seeing positive trend for DRAM if things continue to improve for INTC chips/processors.

  Linda Piazza   7/9/2003,  10:34:13 AM
Adv/dec ratios are still not improving. I'm considering exiting at breakeven.

  Linda Piazza   7/9/2003,  10:31:41 AM
On what basis did I decide to target the 510-512 area yesterday? I've already mentioned the bull flag I saw setting up. Another reason involved the OEX behavior in relationship to its daily Bollinger bands. Last week, the OEX pierced the lower Bollinger band and then sprang up. It closed the week above the midline support on the Bollinger bands. Theory says that it should then move up toward the top Bollinger band. Yesterday that top band lay just above 511, with the recent OEX high at 512.67. OEX 510-512 seemed a likely goal, but it requires a sustained move over 508 first, of course.

  Linda Piazza   7/9/2003,  10:27:24 AM
I'm now raising my stop to OEX 504.50, the site of midline support on the bull flag and .51 below the low of the day. If volume patterns don't improve rapidly, I may consider setting my stop at breakeven instead.

  Linda Piazza   7/9/2003,  10:23:16 AM
OEX 508 has been achieved, but now it must be sustained. Although I'm playing the call side, I feel immense skepticism about further rally potential, so I don't really believe anything I'm seeing. I saw the bull flag setting up yesterday. I saw it tested and the support holding this morning. I'm in a call play. I still don't believe it. It just seemed the only possible play at the time.

  Jonathan Levinson   7/9/2003,  10:19:56 AM
The wholesale inventories and sales numbers disappointed against analyst expectations. On that basis, we're seeing a huge spurt of high volume bids following the brief initial selloff, and gold is getting sold. Draw your own conclusions.

  Linda Piazza   7/9/2003,  10:18:10 AM
The OEX now approaches that key 508 level.

  Linda Piazza   7/9/2003,  10:16:20 AM
Early volume patterns show far more decliners than advancers, although down volume barely eclipses up volume on the NYSE and up volume actually pulls ahead on the Nasdaq. Although early volume patterns can be distorted, these patterns are not reassuring for my OEX call play and may play a part in any decision I make about raising my stop. The OEX is now above my entry.

  Jonathan Levinson   7/9/2003,  10:09:50 AM
Opening CBOE total put to call ratio .50, on the low side.

  Jeff Bailey   7/9/2003,  10:09:31 AM
Altria (MO) $44.21 -5.5% ... stock may also be lower on news surrounding Judge Byron had authority to reduce the bond required to stay execution while the company appealed the $101 billion verdict in Illinois.

Smith Barney says two of three possible main outcomes that could be negative is that Appellate Court hands off issue to Illinois Supreme Court, or court reinstates original $12 billion bond.

  Linda Piazza   7/9/2003,  10:09:11 AM
So far, the OEX retests of yesterday's bull flag are showing the flag's upper trendline holding as support. This feels tentative so far, however, and will until the OEX pushes above 508 and sustains that level. My original intention when entering the call play yesterday was for a short-term profit goal of 511-512. I'm still not sure that's possible, but I'm still watching.

  Jeff Bailey   7/9/2003,  10:03:28 AM
May Wholesale Inventories fell 0.3%, compared to consensus for rise of 0.2%.

I need to find the sales component to interpret the inventory number. On first thought, decline in inventories should be positive on economy.

  Linda Piazza   7/9/2003,  10:03:15 AM
The OEX returns to test the top of that channel again. The earlier move down bounced from the intersecting 5-minute 100 and 130-pma's, now near 505. Let's see if it happens again.

  Jonathan Levinson   7/9/2003,  9:57:00 AM
The fed has announced a net addition of 1.75B with an overnight repo in that amount, no expiries today.

  Jeff Bailey   7/9/2003,  9:55:54 AM
Altria (MO) $44.00 -5.92% Link .... Dow component lower on reports that rivals Brown & Williamson, a unit of British American Tobacco (NYSE:BTI) $21.60 -0.64% Link and RJR (NYSE:RJR) $37.35 -2.04% Link are in talks regarding merging their U.S. tobacco operations.

  Jeff Bailey   7/9/2003,  9:47:40 AM
EarthLink (ELNK) $7.95 +1.1% ... Jefferies raises target to $10 from $8.Link

  Linda Piazza   7/9/2003,  9:47:13 AM
If nothing else, we will certainly have had a retest of the regression channel after the OEX broke out of it late yesterday afternoon. So far, the OEX is holding to an ascending trendline that began forming about 2:00 yesterday afternoon, but I'm not counting on that trendline holding. Better support lines between 503-504.

  Linda Piazza   7/9/2003,  9:43:07 AM
On the first pullback, while I was typing my last entry, the OEX fell back, not able to maintain the move above yesterday's high or push above the 508 resistance. It's now falling back toward the top of yesterday's regression channel.

  Jeff Bailey   7/9/2003,  9:42:44 AM
Helen of Troy (HELE) $18.20 +18% .... Link ... maker of personal care products surges after reporting EPS of $0.42 (excluding a $0.08 per share gain from settlement of litigation), which was well above consensus for $0.24 per share. Revenues rose to $106.5 million from $102.5 million in the year-ago period. Company officials weren't available to comment on how the company boosted bottom line results.

  Linda Piazza   7/9/2003,  9:40:57 AM
The OEX had bumped above yesterday's high. It next faces resistance near 508. That resistance consists of some light historical resistance, as 508 was the support level on June 17 and 18. That level could prove tough for the OEX, and with a call position at stake, I'll be watching closely what happens next. Because I'll be on vacation for a week beginning next Wednesday, I want to wind up many of my open positions by the end of this week.

  Linda Piazza   7/9/2003,  9:34:09 AM
After opening down, the OEX is now minimally in the green, but first resistance will be just ahead at yesterday's high of 507.06.

  Jeff Bailey   7/9/2003,  9:30:46 AM
Logitech (LOGI) $28.92 -29% ... Link ... gets whacked at the open. I'm not short/put this one, but would be looking to protect any bearish gains here at the open on the gap lower.

  Linda Piazza   7/9/2003,  9:23:44 AM
European markets mostly hold steady near previous levels as the open of the U.S. markets nears.

  Jonathan Levinson   7/9/2003,  9:19:37 AM
The US Dollar Index has bounced to just below resistance beginning at 95.60. August gold is up 1.50 at 345.90. 343 continues to act as strong support. The buying in treasuries is picking up slightly, FVX -3.8 bps, TNX -3.9 and TYX -2.7.

  Jeff Bailey   7/9/2003,  9:18:59 AM
Pivot Matrix for today posted at this Link

  Jeff Bailey   7/9/2003,  9:16:50 AM
09:00 Update posted at this Link

  Jonathan Levinson   7/9/2003,  8:32:59 AM
Treasuries have opened higher, with FVX -3.7 bps, TNX -3.8 and TYX -2.4 bps. Futures are holding near their session lows, and gold is off its highs, up 1 to 345.40 currently.

  Jonathan Levinson   7/9/2003,  7:41:50 AM
The US Dollar Index has been sold down to 95.49, and August gold is up 1.60 to 346. The futures are down, ES -4 to 1003.50, NQ -6 to 1293, YM -29 to 9178.

  Linda Piazza   7/9/2003,  7:36:57 AM
Good morning. Profit-taking caused the Nikkei to stumble in early trading on Wednesday, but it regained its feet in late trading, closing up 92.23 points or 0.93%, at 9990.95, the high of the day. The Nikkei opened up only four points, ran up almost forty points and then sank until early afternoon, when it hit a low of 9813.29. The Nikkei then began climbing, with the climb growing steeper after it pushed above 9850 again.

Like weary relay racers handing off the baton to fresh racers, techs and financials fell in Japanese trading while retail stocks brought the Nikkei into positive territory again. Japanese bank Mizuho announced that it would raise its long-term prime lending rate by 0.35 percentage points, perhaps accounting for some of the declines. Financial stocks performed better in South Korea, however, where some hope to see the central bank cut interest rates tomorrow. Tech stocks retreated throughout much of Asia. Many of those tech stocks sit on big gains as they approach their earnings release.

In addition, Taiwan Semiconductor (TSM) sold $822 million ADR's (American depository receipts) at a 0.7 percent discount to the closing price, indicating that there was demand for the ADR's. Bloomberg notes that discounts for similar share sales often amount to 4 or 5 percent rather than the modest 0.7 percent of TSM's. The sale of the ADR's had been announced previously, with the government selling the shares to help ease a budget deficit, but TSM nevertheless fell 2.4 percent. Taiwan Weighted fell 0.17%. Other Asian bourses were mixed. South Korea's Kospi lost 0.40%, but Singapore's Straits Times gained 0.28%. Amidst political turmoil, Hong Kong's Hang Seng gained 0.35%.

Most European markets currently trade down. Companies such as insurer Swiss Re and catering group Sodexho Alliance announced that exchange rates had negatively impacted their businesses. Swiss Re noted the impact of the exchange rates on the value of its life and health business. As earnings season approaches, investors worry that more companies might be impacted similarly. In addition, computer-device maker Logitech missed guidance. Ford announced its intention to cut back European production. Ericsson fell after Deutsche Bank reiterated its sell recommendation. Microsoft's after-hours announcement that it would replace option grants with actual stock was also credited with some of the decline.

As of this writing, the FTSE trades down 7.60 points or 0.19%, at 4066.00. The CAC 40 trades down 27.22 points or 0.86%, at 3150.75. The DAX slips 23.19 points or 0.69%, to 3321.27.

  Jim Brown   7/9/2003,  2:46:16 AM
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