Option Investor
Printer friendly version
  Jeff Bailey   7/15/200,  5:03:51 PM
Cisco Systems (CSCO) $18.51 -0.53% .... inching higher at $18.69 after AMCC (see Linda's 16:48:05 post) earnings.

  Jeff Bailey   7/15/200,  4:53:15 PM
Intel (INTC) $25.11 in after-hours (+4% from close) and building gains.

  Linda Piazza   7/15/200,  4:48:05 PM
Applied Micro Circuits Corporation (AMCC) 6.67 + 0.02 reported revenue that fell to $20.5 million from last year's $30.2 million, with a Q1 loss of 18 cents a share as compared with a net loss of $1.35 per share last year. The communications chip maker took charges of $23.5 million due to a realignment and work force reduction and mentioned a hard market. Expectations had been for a loss of four cents per share on revenue of $20 million according to the information I had at hand. The bid/ask spread on AMCC is currently 6.57 vs. 6.65.

  Jeff Bailey   7/15/200,  4:45:37 PM
Washington Mutual (WM) $42.14 -1.42% ... reports Q2 EPS of $1.10, which is penny better than consensus and 9% above year-ago EPS of $1.01. Company also said it was boosting dividend by 33%. Thin after-hours trade and higher at $43.50. Link

  Linda Piazza   7/15/200,  4:32:11 PM
Photon Dynamics (PHTN) reported Q3 loss of $0.21 per diluted share against estimates of a $.19/share loss, if I'm reading the information correctly. The company also said that it would be reclassifying comparable periods of fiscal 2002 to account for discontinued operations. Last year's earnings showed a profit of $0.16 per diluted share for the continuing operations, and a loss of $0.01 per diluted share for discontinued operations. The company mentions uneven buying patterns which resulted in fluctuating bookings and revenue. According to the company's press release, it is a "leading global supplier of yield management solutions for the flat panel display market." The stock closed at 28.79, and currently shows a bid/ask of 26.70 by 27.25.

  Jeff Bailey   7/15/200,  4:28:51 PM
QQQ $32.35 +0.09% .... gaining to $32.45 in after-hours trade.

  Jeff Bailey   7/15/200,  4:27:47 PM
Intel (INTC) $24.10 +0.33% .... reported Q2 EPS of $0.14, which was a penny better than consensus. Revenues rose 7.9% year-over-year to $6.82 versus $6.72 billion consensus. Forward guidance for Q3 is revenues of $6.9-$7.5 billion which surrounds consensus of $7.17 billion. INTC adds that Q3 gross margins are estimated at 54% (impressive and should grab attention), up from 50.9% in Q2. Stock higher at $24.77 Link

  Jeff Bailey   7/15/200,  4:22:46 PM
YUM! Brands (YUM) $29.65 -2.4% ... Reports Q2 earnings of $0.48, which was 2 cents better than consensus. Revenues were unchanged from year-ago $1.94 billion. YUM reaffirmed 2003 EPS of $2.00 per share. Stock steady at $29.65 in after-hours. Link

  Jeff Bailey   7/15/200,  4:19:20 PM
Motorola (MOT) $9.78 +2.94% .... Reports Q2 of $0.01 (ex items), which is penny better than consensus. Revenues fell 10.3% year-over-year to $6.16 billion (consensus $6.06 billion. Guidance given for Q3 (pro forma) EPS is $0.02-$0.04 which is below consensus of $0.05 on revenues of between $6.3-$6.5 billion (consensus $6.5 billion). Stock lower at $9.64.Link

  Jeff Bailey   7/15/200,  4:15:38 PM
RF Micro (RFMD) $6.85 -1.58% ... lower at $6.59 after company reports Q1 loss of $0.04 per share, which was 2-cents better than consensus for loss of $0.06. RFMD said revs rose 26.5% year-over-year to $131.5 million (consensus $131.8 million). Guidance for Q2 is for gain of $0.03-$0.04 versus consensus of $0.03. Link

  Jim Brown   7/15/200,  4:15:16 PM
Intel earnings are 14 cents compared to estimates of +13 cents.

  Jeff Bailey   7/15/200,  4:03:22 PM
Sears (S) $34.98 +1.39% ... sells its credit card business to Citigroup (C) $46.83 -0.61% for $6 billion.

Sears (S) jumps to $36.26 in after-hours trade, Citigroup (C) slips to $46.50 in after-hours.

  Linda Piazza   7/15/200,  3:55:14 PM
Swing Trade Signals
I'll be gone for a week's vacation beginning tomorrow. Here are the two keys levels I would be watching on the OEX for possible swing trade signals if I were here: Link

  Linda Piazza   7/15/200,  3:42:32 PM
Volume patterns have grown worse as the day progresses. Sure wish we'd had patterns this bearish this morning when the OEX was testing 508 again, but that still was ahead of Greenspan's testimony and it would still have been a bit too much like gambling to issue an official Swing Trade Signal ahead of that testimony.

  Linda Piazza   7/15/200,  3:38:53 PM
Perhaps we'll have to make "bunching" an official technical analysis term and perhaps those bullish divergences that were beginning to show up on the OEX five-minute charts meant something after all. The OEX is reaching for next resistance.

  Jeff Bailey   7/15/200,  3:34:47 PM
Chapter 11 Bankruptcies Mirant (MIR) and Loral (LOR) have been halted for trade the entire session. Earlier price quotes were pre-market trade over ECN after bankruptcy news was released. I'm thinking NYSE will move these two securities to the bulletin board.

I'm seeing a note out of Stifel Nicolaus that they upgraded EPIQ Systems (EPIQ) $19.51 +9.6% on thought that EPIQ may have signed on two new clients (MIR and LOR). Stifel Nicolaus adds that intra-quarter data suggests personal bankruptcy filings will increase about 10% in Q2, more than their original expectations of 6-8%. Price target given was $20-$22.

  Linda Piazza   7/15/200,  3:32:53 PM
Swing Trade Signals
Anyone still in yesterday's unofficial play should be looking at almost 5 OEX points since entry, and should be making a decision about whether to risk those points overnight. It's a tough decision to make ahead of INTC's numbers and tomorrow's CPI, but that's the way we have to make our decisions.

  Linda Piazza   7/15/200,  3:23:36 PM
The OEX seems to be bunching near 502.60. This is not a technical term but maybe I can add a new term to reader Gumby's lexicon, to go with my "sticking points" terminology. Dips do not seem to carry the OEX far, and it keeps rising back to test 502.60 and levels just above that, so that the zigs and zags seem bunched up together. This is behaving like a market that is trying to steady and move up again. Shall we have short-covering into the close, then? That's a possibility, although it depends on what the closing orders look like when traders glimpse them in a few minutes.

  Jeff Bailey   7/15/200,  3:19:06 PM
03:15 PM EST Update posted at this Link

  Linda Piazza   7/15/200,  3:11:42 PM
For reference tomorrow, European markets closed as follows: The FTSE 100 closed down 25.10 points or .61%, at 4102.50. The CAC 40 closed down 10.90 points or 0.34%, at 3179.33; and the DAX closed down 11.38 points or 0.34%, at 3384.69.

  Jonathan Levinson   7/15/200,  3:05:55 PM
The put to call ratio is back to .50, with the QQV up 4.08 to 31.52, a monster move. VIX +.84 to 22.25.

  Linda Piazza   7/15/200,  3:05:30 PM
Just as the short-term buy signal Jonathan mentioned came to nothing, as he also mentioned, that bullish divergence on the five-minute OEX chart has come to nothing, too. Those in any OEX put play should now begin watching for the next possible bounce point, with those points now layered in one-point increments, with 500 and 498 having the strongest potential.

  Linda Piazza   7/15/200,  2:48:08 PM
Swing Trade Signals
On the OEX five-minute chart, bullish divergence shows up between the 5(3)3 stochastics and the price, with the stochastics achieving a higher low while price touched a lower low. The same thing shows up with five-minute RSI. These are five-minute patterns only, but warn us to be watchful. Bears now do not want the OEX to move above 504.80, the last five-minute high. If you're in the unofficial play carried over from yesterday, consider lowering your stop if you haven't done so already.

  Linda Piazza   7/15/200,  2:36:53 PM
Volume patterns continue to worsen. Currently adv/dec ratios are 11:21 on the NYSE and 12:19 on the Nasdaq. Today sees 13 new lows, a distinct pickup in new lows from yesterday's 2. There are 477 new highs, so far a lower number than yesterday's. On the Nasdaq, down volume is more than double up volume. Total volume is 1 billion on the NYSE and 1.4 billion on the Nasdaq.

  Jonathan Levinson   7/15/200,  2:35:45 PM
The put to call ratio is down to .49. Why not? Twice in as many months, huge selloffs have been busted, and so it appears that leveraged buying of every dip is the game plan. This persistent optimism on the way down has been lacking all through the rally this year, and is one of the conditions for a deeper selloff.

  Linda Piazza   7/15/200,  2:26:27 PM
Swing Trade Signals
An OEX move below 502 might quickly see 500 and perhaps even 498. Those who elected to remain in the unofficial play from yesterday can begin targeting 500 if the OEX moves below 502. Those risk takers who want a new entry might consider an entry on a move below 502, with the realization that the decline might be stopped at 500 and the 498 next target might not be reached. Anyone considering any entry or managing a current entry should remember INTC's earnings, continued Greenspan testimony, CPI tomorrow morning, and a myriad of earnings releases to come, and should give strong consideration to whether a position might need to be closed at the end of trading today. Volume patterns continue to be bearish.

  Linda Piazza   7/15/200,  2:19:40 PM
The OEX now tests 502.60 again.

  Jonathan Levinson   7/15/200,  2:12:56 PM
Jeff, if you could comment next on S&P futures, that lower descending trendline has been causing me some grief this afternoon :)

  Jeff Bailey   7/15/200,  2:09:11 PM
All I had to do is express some concern for bears earlier this morning as it relates to homebuilders. Today's YIELD action and selling in Treasuries has the Dow Jone Home Construction Index (DJUSHB) 443.23 -2.6% getting hit lower and now sector loser on the session.

After upgrade this morning, Centex (CTX) $78.11 -2.84% gives back gains and then some.

  Jonathan Levinson   7/15/200,  2:02:52 PM
That .60 reading from the CBOE was revised down to .51. Latest reading for this past half hour is .50.

  Linda Piazza   7/15/200,  1:59:41 PM
The OEX tests resistance again, with this time period's push definitely being to the upside. Despite low ADX numbers and flattened MACD (on the daily), other oscillator evidence is mixed across the time intervals. Supposedly, in this range-bound market, we should be able to trust oscillators, but on the daily chart, do we trust the RSI which is finally beginning to roll down or the stochastics which are trying to turn back up? On the 60-minute chart, do we trust the slight kick up on the RSI or the downturn in CCI and stochs? It's this kind of mixed evidence all day that has presented difficulties in suggesting even an unofficial play.

Those difficulties add to those presented by nearby possible bounce points. We experienced a bounce from one of those point--502.60--as I feared we might. If you stayed in the unofficial play from yesterday or leaped in on your own at some point today, watch this current test of 504.50 and then 506. Bears want to see one of these levels hold. Volume patterns now are bearish.

  Jeff Bailey   7/15/200,  1:50:10 PM
Western Digital (WDC) $13.20 +1.69% .... Set a 52-week high today Link , however stock well above its bullish vertical count of $9.25.

I think a Micron Technolog (MU) $14.33 +0.2% Link keeps eye on a PC disk drive maker as disk drives have become somewhat of a "commodity" item for PC's in recent years, not unline DRAM.

  Jeff Bailey   7/15/200,  1:31:43 PM
S&P 500 Index (SPX.X) 999.20 -0.46% ... just tested WEEKLY Pivot of 998.09, but quick little bounce there and not even close to a 5-minute close below that level.

  Linda Piazza   7/15/200,  1:31:02 PM
The OEX low has been 502.28, just below the 502.60 bottom of yesterday's gap at which I warned we might see a bounce. A bounce attempt begins and may push harder in a few minutes as the 1:35-1:45 push begins. Bears want that push to stop short of 504.50 or 506. Those who elected to enter short/put at 504 or who are in a trade carried over from our unofficial play yesterday might consider a stop set just over 506, perhaps at the 506.40 level I mentioned earlier.

  Jeff Bailey   7/15/200,  1:29:56 PM
QQQ $32.13 -0.27% ... "bad tick" at $31.15, but an area I'm looking for bullish entry, perhas tomorrow?

  Jeff Bailey   7/15/200,  1:22:47 PM
S&P 500 (SPX.X) 997.85 -0.59% ... moving into first "zone of support" from 997.82 - 998.08 here. I'm thinking that tomorrow is second-half of Mr. Greenspan's testimony, this time to Senate panel and may have 985 level by then.

We shall see, but I think bulk of any type of "Greenspan" surprise or any new revelations that may be seen tomorrow, now taken away.

  Jeff Bailey   7/15/200,  1:19:35 PM
01:00 Update has been posted.

  Jonathan Levinson   7/15/200,  1:14:57 PM
The put to call ratio is .51 for the past half hour. Previous reading was .60.

  Linda Piazza   7/15/200,  12:54:34 PM
Swing Trade Signals
Unfortunately, the OEX break of 504 occurred before the test of SPX 1000, so even the unofficial signal is not unofficially (officially?) triggered. Since there's support underneath at 502.60, I would not suggest a lower entry when (if) the SPX finally breaks 1000. We can't get all the parameters to come together at once today. When volume patterns finally cooperate, something else goes wrong. As I mentioned earlier, that's the way it works sometimes. However, I will follow the OEX behavior in case some entered anyway, but since it's not even an unofficial signal I'm not going to be doing it under the blue Swing Trade Signal banner after this. You'll need to watch regular comments. We'll next watch for a bounce from 504, with that bounce hopefully stopping at 504.50 or 505.40. If the OEX drops instead, we'll next watch for support just above the 502.60 bottom of yesterday's morning gap.

  Jonathan Levinson   7/15/200,  12:44:04 PM
Jeff, I picture Bernanke decked out like Robin, facemask and spray-on suit and all. Definitely wearing a cape.

  Jonathan Levinson   7/15/200,  12:42:18 PM
The ten year note yield is now up 18 basis points. Did The Rookie have the Batphone speed-dial set to "1-800-DATE-NOW"? The TNX is above its 200 dma here. The credit bubble is the issue. The Fed added 9B today via overnight repo- where is it going?

  Jeff Bailey   7/15/200,  12:37:04 PM
Greenspan testimony resumes INDU = 9,161, SPX = 1,004.5, OEX = 505.7, NDX = 1,303, QQQ = $32.39, $TNX.X 3.889%.

No change since recess, hints traders aren't willing to move much and glued to Mr. Greenspan.

"Batmobile" or Cadillac cruizer?

  Jonathan Levinson   7/15/200,  12:35:45 PM
For reader "TT":

Upon leaving the Congressional chamber, Al Green's eyes squint toward the designated spot, his ears already detecting the throaty hum of the Batmobile, Ben "The Rookie" Bernanke at the wheel. Bernanke looks up at him, and says simply, "More than 16 bips." Tossing his briefcase into the back, Al falls nimbly into the seat, his fingers deploying the cellular batphone. "Buy em, buy em big," he grumbles, targeting the TNX for instant oblivion. The dashboard opens and he retrieves a spill-proof pure gold flask of the finest port, and, fishing a Cohiba torpedo from the lining his sweaty Zegna jacket, he says to Bernanke simply, "Sanders. Paul." The Rookie nods his head heavily and continues to lay rubber for the Marriner S. Eccles building, more hospitable climes.

  Linda Piazza   7/15/200,  12:21:17 PM
I'm not yet sure how I'd characterize the current test of that violated neutral triangle on the OEX. The OEX has not yet been able to break back above the point at which the violation occurred, but it's nevertheless been holding steady just underneath. Link

  Jeff Bailey   7/15/200,  12:07:51 PM
August/Sept Fed Funds Futures both relatively unchanged during Mr. Greenspan's testimony and pegged at/near 99.00, giving little thought to any Fed action on interest rates (up or down) next couple of months.

  Jonathan Levinson   7/15/200,  12:06:09 PM
The put to call ratio is up to all of .48, with an equity pcr of .34. The options volatility indices are off their highs.

  Jeff Bailey   7/15/200,  12:04:01 PM
Greenspan testimony in recess pending two votes by the House.

INDU = 9,159 , SPX = 1,004.5, OEX = 505.6, NDX = 1,303, QQQ = $32.40, $TNX.X = 3.875%

  Linda Piazza   7/15/200,  12:03:35 PM
The OEX has now risen to test the bottom of that triangle from which it broke earlier today. It's usually on the retest of a violated level that we learn the most about market strength or weakness.

  Linda Piazza   7/15/200,  11:59:48 AM
Swing Trade Signals
In addition to the other parameters listed in the unofficial signal for the OEX, remember INTC reports after the close and CPI comes out tomorrow morning. Those aggressive risk takers interested in this unofficial play should consider the prudence of closing out positions at the end of the day, winning or losing.

  Linda Piazza   7/15/200,  11:53:09 AM
Swing Trade Signals
Volume patterns are now growing weaker and more bearish. Here's an unofficial signal for the OEX, appropriate only for aggressive risk takers. Go short/put the OEX on a move below 504 if the SPX is also below 1000 and the NDX below 1300. The stop would be a close 506.40 or a wider 507.30--your choice. Goal would be 500, first target, and 498, second target. Be aware of the very real possibility of a bounce at 502.60.

  Linda Piazza   7/15/200,  11:43:59 AM
Volume patterns could now be classified as neutral to slightly bearish, with adv/dec ratios at 14:16 for the NYSE and 13:15 for the Nasdaq. Up and down volume are roughly equal on both the NYSE and the Nasdaq. Total volume is 516 million on the NYSE and 781 million on the Nasdaq.

  Jeff Bailey   7/15/200,  11:41:13 AM
Mr. Greenspan sets Sanders straight ... Greenspan says (with a grin) that while it is true eastern countries have excellent higher education for their citizens, those higher educated individuals flock to the U.S. (see immigration numbers) because of the perceived higher number of opportunities in the U.S. than any other place in the world to apply their knowledge.

  Linda Piazza   7/15/200,  11:40:49 AM
An alternative to respectful disagreement, of course, is Jonathan's hilarious takes on Greenspan and company. Maybe Sanders should have hired Jonathan as a researcher.

  Linda Piazza   7/15/200,  11:39:43 AM
The OEX now rises to test broken support at the bottom of the neutral triangle that contained it since yesterday afternoon. The bottom of that triangle has been rising, and currently crosses near 506.

  Linda Piazza   7/15/200,  11:37:57 AM
I guess I'm too Southern, but when did it become okay to shout at an old man that way? Disagree with Greenspan--I sure do--but do it in a respectful manner.

  Jeff Bailey   7/15/200,  11:34:54 AM
Representative Bernard Sanders (I) Vermont blowing a gasket when addressing Mr. Greenspan. Saying Mr. Greenspan out of touch with reality. Sanders added that Scandinavia has a much higher standard of living than U.S.

Benchmark Mr. Sanders .... DOW = 9,141, SPX = 1,003, OEX = 505, NDX = 1,300, QQQ = $32.31.

  Jonathan Levinson   7/15/200,  11:33:51 AM
The put to call ratio is down to .45. This is getting very overdone on the call side. QQV is up 2.41 to 29.85, a very big move. VIX +.50 to 22, VXN -.2 to 33.69.

  Jeff Bailey   7/15/200,  11:31:34 AM
Treasuries continue to see selling, and rather sharp sell-off early. 10-year YIELD ($TNX.X) up a sharp 14.7 basis points to 3.861%, while longer-dated 30-year YIELD ($TYX.X) higher by 11.8 basis points to 4.879%.

This action is finding some selling come into the Dow Jones Home Construction Index (DJUSHB) 457.67 +0.14%, which had seen a session high of 462.76 earlier this morning.

  Linda Piazza   7/15/200,  11:23:28 AM
Swing Trade Signals
A fall below OEX 505.30 would bring the OEX out of the neutral triangle in which it's been trading since yesterday afternoon. The way the OEX bounces off each of the triangle's converging lines shows me that it's a valid formation to watch. 504 remains support, as does the lower end of the gap at 502.60, but strongest support is between 498-500. Volume patterns are unfortunately still neutral rather than the bearish numbers I need to feel that I could make a responsible suggestion to short/put the OEX, but the patterns show less bullishness than earlier today. I suspect we're going to miss an opportunity to trade here, but that's the way it happens sometimes and I must be responsible when making suggestions, rather than trade on my instincts. RSI on 30-minute and 60-minute charts now hinges back down and it appears to be flattening on the daily chart.

  Jonathan Levinson   7/15/200,  11:15:29 AM
The put to call ratio is down to .50, with an equity put to call ratio of .38. The bulls are running in the options market. QQV +1.50, VIX +.47, VXN +.27.

  Linda Piazza   7/15/200,  11:01:19 AM
The OEX five-to-thirty-minute charts show that prices have settled into a neutral triangle that has a bit of the classic "b" distribution shape to it. The likely break then, would come to the downside, but that's not certain, of course, especially with a relatively neutral formation and relatively neutral volume patterns behind it. ADX level is low across many time frames, predicting that the OEX is not strongly trending. (We knew that, right, but it's good to have empirical evidence.) We would be able to trust oscillator evidence, then, but it's all chopped up, with some evidence indicating that markets should rise while others indicating that markets should fall. There's nothing clear-cut to watch here except for price.

  Linda Piazza   7/15/200,  10:46:05 AM
Swing Trade Signals
Now volume patterns have turned slightly negative, but RSI has turned up on 30-minute, 60-minute, and daily charts. I've learned to trust RSI more than other oscillators, and it's predicting more strength than I want to see. There's still not even an opportunity for an unofficial signal.

  Jeff Bailey   7/15/200,  10:36:21 AM
Centex (CTX) $82.57 +2.69% .... upgraded by BB&T Capital to "strong buy" from "buy" based on valuation. Firm also sees upside surprises from CTX over next several quarters given recent strength of demand for homebuilding and mortgage services. Target is $105.

Based on recent week's observation, and action from Ryland (RYL) $78.30 +2.82% and new 52-week high today, I'm "forced" to curtail recent bearish veiws of sector.

Today's trade from CTX negates prior bearish count of $70 and gets stock back on a PnF buy signal. Link

After seeing what RYL Link has done after giving double top at $73, would look to move to sidelines in bearish position in sector for now, and consider partial longs. Traders that do hold a put on a homebuilder that now sees a reversing "buy signal" could initiate a straddle type position if more comfortable, but sector looks to improve.

  Jonathan Levinson   7/15/200,  10:36:11 AM
Put to call ratio .55.

  Jonathan Levinson   7/15/200,  10:32:13 AM
I'm really looking forward to seeing the Mortgage Bankers Association data tomorrow in light of the yield rally over the past week. We should see an impressive drop. Today's spike above resistance spells a new chapter in the saga. TNX currently +9.8 bps to 3.812%.

  Linda Piazza   7/15/200,  10:29:56 AM
Swing Trade Signals
Volume patterns remain neutral to slightly bullish, preventing me from issuing even an unofficial short/put signal, but they've been disintegrating as the morning progresses. Let's see what happens as 507.66-508 is tested again. Those volume patterns are likely to change quickly if the markets violate next support. For the OEX, that's a trade below 504. For those risk takers who decide to take that entry or for those who are still in yesterday's unofficial trade, a push below 504 might offer a short/put entry with a first target of 500 and a second of 498, but those risk takers should watch carefully as yesterday's gap bottom at 502.60 is tested. The risk/reward might not be good if that's going to be strong support, too. For those still in a short/put trade, first watch 504 carefully, as that remains a likely place for a bounce. Be aware that you're battling headlines such as the one that trumpeted Merrill's release of Q2 earnings that jumped 61%.

  Linda Piazza   7/15/200,  10:23:28 AM
The White House announced that the budget deficit is still a concern, and should shrink by half (?) in the next few years.

  Jeff Bailey   7/15/200,  10:23:14 AM
Autozone (AZO) $79.90 +1.3% .... strong in early going and most likely on today's release of June retail sales data. Link

  Linda Piazza   7/15/200,  10:16:46 AM
Volume patterns are beginning to shift and are not now quite so bullish as they were earlier. Adv/dec ratios stand at 14:13 for the NYSE and 13:12 for the Nasdaq. Up volume is 1.4 times down volume on the NYSE and 1.5 times down volume on the Nasdaq. Total volume was light ahead of Greenspan's testimony, however, standing at 139 million on the NYSE as of a few minutes ago, and 314 million on the Nasdaq.

  Jeff Bailey   7/15/200,  10:16:28 AM
Altria (MO) $39.00 -7.24% ... extending losses here. Getting downside alert at 38.2% retracement (retracement from $57.79 to $27.70) and now looks to test a rounding flat 200-day SMA of $38.39.Link Today's trade at $40 a double-bottom sell singal and will have 1 stock in Dow back on PnF sell signal. Vertical count turns bearish to $32.

Continues to weigh on Dow Industrials (INDU) 9,154 -0.21% and comprises bulk of Dow's losses.

Boeing (BA) $33.15 -4.13% also weak Link

  Jeff Bailey   7/15/200,  10:14:09 AM
Treasuries seeing pickup in selling on Fed Chairman Greenspan comments regarding economy poised to accelerate with GDP at 2-2.5% in 2003 and 4-4.5% for 2004. 30-year YIELD ($TYX.X) higher by 5.2 basis points to 4.813% and now above its 200-day SMA for first time since brief visit above in April.

Action here from the long-bond at this moment looks to be that of a bond market believing in economic growth longer-term and eventually, some type of Fed tightening.

  Jonathan Levinson   7/15/200,  10:04:58 AM
Put to call ratio .56. QQV +1.53, VIX +.4, VXN -.02.

  Linda Piazza   7/15/200,  10:04:05 AM
Swing Trade Signals
If you're still in yesterday's unofficial short/put trade or if you jumped in on your own this morning when the OEX fell below 508 again, you're doing fine, but I've been waiting for the early volatility to subside before issuing even an unofficial suggestion to short/put the OEX. Be forewarned, though, that the earliest and sometimes distorted volume patterns are leaning toward the buy side. I wanted them to be on the sell side before suggesting even an unofficial short/put trade.

As I mentioned earlier, that may unfortunately mean that we will miss a good opportunity. I'm watching as the OEX again tests the 507.66 midpoint of the first five-minute range, this time from the underside. A failure here sure looks like an entry on the short/put side, but I can't in good conscious issue even an unofficial suggestion without cooperating volume patterns. Here's what I see, though, for those who want to make their own decisions. Below the known likely support at 504 is that at the bottom of yesterday's gap, at 502.60, with 500 and 498 being targets predicted by the daily chart (rising regression channel and 21-dma). Based on the daily chart, I would think it likely that if the OEX moved below 504, it would trade down to the bottom of the current consolidation range, near 498-500, but then there's the bottom of that gap from yesterday.

  Jeff Bailey   7/15/200,  9:57:33 AM
Loral Space (LOR) $0.77 -74% .... Files for Chapter 11 Bankruptcy protection. Link

  Jonathan Levinson   7/15/200,  9:55:41 AM
An impressive 9B overnight repo from the Fed, which is a 3B net addition on the expiring 6B from yesterday.

  Jeff Bailey   7/15/200,  9:55:35 AM
Mirant (MIR) $0.46 -77% ... Files for Chapter 11 Bankruptcy protection. Link

  Jeff Bailey   7/15/200,  9:47:01 AM
Dow Industrials (INDU) 9,211 +0.36% .... breadth positive out of the gait at 25:5, but Altria (MO) $39.50 -5.8% weighs on Dow's performance.

  Jonathan Levinson   7/15/200,  9:45:33 AM
The Bank of Canada has just made a surprise quarter point rate cut.

  Linda Piazza   7/15/200,  9:44:11 AM
Swing Trade Signals
I agree with Jim's assessment that we ought to wait for initial volatility to ease and for Greenspan's speech text to be released, even for an unofficial signal in this case. That means that we may miss a trade. I'm watching for a rollover under 508-509, but I would like to see how early volume patterns shake out, too. The OEX currently tests that midpoint retracement level of 507.66, falling under it. We may already be getting our rollover, sooner than I would like.

As a reminder, today is my last pre-vacation day on the Monitor--another reason I'm reluctant to post an official Swing Trade. Even if I weren't leaving for vacation, I would be unlikely to post one in this environment, however, as there are just too many factors that might change the complexion of the markets.

  Jeff Bailey   7/15/200,  9:40:54 AM
S&P Banks (BIX.X) 314.57 -0.13% .... slight weakness early. Well Fargo (WFC) $52.50 -1%.

S&P 500 Index (SPX.X) 1,008.23 +0.43% .... back at short-term downward trend here and just under WEEKLY R1 of 1,010.48.

  Linda Piazza   7/15/200,  9:36:03 AM
Today's first five-minute OEX candle spanned a large-enough distance that we can use that 50% retracement level as a benchmark. The midpoint of that first five-minute range is 507.66. Bears want to drive the OEX below that level and bulls want to sustain numbers above that level.

  Linda Piazza   7/15/200,  9:33:55 AM
OEX 509 was support though most of yesterday, after the first big zoom up the charts. Let's see if it's resistance this morning. For those of you who did not elect to exit the unofficial OEX put play yesterday afternoon, OEX 509.30-509.75 might make an appropriate stop.

  Jeff Bailey   7/15/200,  9:27:50 AM
09:00 Update posted at this Link

  Linda Piazza   7/15/200,  9:27:08 AM
Swing Trade Signals
The Swing Trade model is officially flat. Yesterday, we followed an unofficial short/put play from OEX 508 to just above OEX 504. Will we have an opportunity to do it again today? Futures are moving up to their pre-sell-off levels. As the linked chart shows, most times that the OEX produces candles like yesterday's, it trades down over the next day to two days, but that isn't always true. Link This morning, we'll look for a rollover under 508-510 with volume patterns showing more selling than buying. With Greenspan's speech about to get underway at 10:00 am, I am not going to give an official signal. Any suggestions I might make would be only for those aggressive traders who are used to trading through option expiration week and Greenspan speeches and understand the volatility that can occur. If the OEX does not roll over but instead pushes up through 510, it's a tougher decision to make, as there's so much layered resistance overhead.

  Jonathan Levinson   7/15/200,  8:33:54 AM
June retail sales ex autos .7% vs. .3% exp. Empire State Manufacturing Index 22.56 vs. 20 exp.

  Jonathan Levinson   7/15/200,  8:05:03 AM
Weekly chain store sales +0.9% from one week ago. June industry same store sales +2.4% vs. expectations of 3%. This is is per the joint report from the Bank of Tokyo-Mitsubishi and UBS Warburg, while the Commerce Dept is due to report at 8:30.

  Jonathan Levinson   7/15/200,  8:02:52 AM
NEW YORK (Reuters) - Fannie Mae (NYSE:FNM - news), the biggest buyer of U.S. mortgages, on Tuesday said its quarterly earnings fell nearly 25 percent, missing analyst estimate, as derivatives it uses to protect itself against swings in interest rates lost value. Excluding changes in the market values of derivative positions, Fannie Mae's earnings rose 18 percent to $1.86 billion, or $1.86 per share, from $1.573 billion, or $1.55 a share a year earlier.

  Jonathan Levinson   7/15/200,  7:52:18 AM
Looking forward to hearing Al Green's testimony before Congress today. Anyone want to bet on whether Ron Paul will have fire or ice shooting from his nostrils? :)

  Linda Piazza   7/15/200,  7:35:16 AM
Good morning. During the Nikkei's morning session, the index mostly vacillated between 9850 and 9900, with a brief dip lower and a brief rise higher, but the Nikkei fell out of that range in afternoon trading. The Nikkei tumbled throughout the afternoon session, closing near the low of the day, down 4.63 points or 0.05%, at 9751.00. Techs and banks proved to be the stars of the session. News out of the CA World 2003 Semicon West conference this week suggests that semiconductor equipment companies can expect 4% higher sales this year with double digit gains expected the following two years. Semiconductor-related companies rose in Japanese trading.

Banks rose, too, as reports circulated that banks would be required to improve their earnings. The Financial Services Agency, with regulatory controls over banks, currently considers the orders they will issue to require banks receiving public funds to improve earnings. In other news, the central bank of Japan concluded its two-day meeting without issuing any policy changes. That decision had been widely expected due to the recent performance of the Japanese stock market, and the central bank did mention the stability of the market as the prime factor behind the decision.

While semiconductors gained in Japan, their performance was mixed across Asia and so was the performance of Asian bourses. The Taiwan Weighted fell 0.26% and South Korea's Kospi fell 0.92%. However, Singapore's Straits Times climbed 0.90% and Hong Kong's Hang Seng climbed 0.13%. Nervousness ahead of Greenspan's testimony and Intel's earnings led to the mixed performances of the bourses.

That nervousness may be contributing to the mixed performances of the European markets, too, but at least German investors have something to cheer. The ZEW Center for European Economic Research reported a much greater than expected jump in consumer confidence among German investors. Although I could not verify the number through print sources this morning, CNBC Europe last night reported that the number was expected to come in at 26, but the release instead showed a surprisingly high 41. Still, high unemployment has led to lower spending in Germany, reportedly one prime reason for the lower-than-expected June sales growth reported by Hennes & Mauritz, the Swedish company that is the Eurozone's largest closing retailer.

As of this writing, the DAX remained nominally in positive territory, up 7.37 points or 0.22%, at 3404.44. The FTSE 100 had fallen 15.80 points or 0.38%, to 4111.80; and the CAC 40 had eased 14.41 points or 0.45%, to 3175.82.

I leave for vacation before the market opens tomorrow morning, so this will be my last early-morning update for a week. Over the last month or so, Jeff has also been covering the foreign markets in his first intraday update, so until I return you can check those updates for information on overnight developments in Asia and Europe.

  Jeff Bailey   7/14/200,  12:17:14 AM
Pivot Analysis Matrix for Tuesday posted at this Link

  Jim Brown   7/14/200,  10:43:38 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.


Market Monitor Archives