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  Jonathan Levinson   7/23/200,  5:15:43 PM
Very good analogy from a very good trader:

Al (Green) and Benny (Bernanke) are a good cop / bad cop show.

Al is the careful bartender, measuring each shot in a jigger cup. Benny whispers that after Al leaves at 11 pm, he'll pour a round of double shots for all ... on the house! Then we'll party till the purple dawn.

  Jeff Bailey   7/23/200,  5:09:57 PM
Pivot Matrix for tomorrow posted at this Link

  Jeff Bailey   7/23/200,  4:24:52 PM
Symantec (SYMC) $42.60 -0.93% (NDX component) .... higher at $44.25 after reporting Q1 EPS of $0.45 per share, which was 6 cents better than forecast. SYMC said revenues rose 23.8% year-over-year to $391 million, which was better than forecast of $382.4 million. Guidance on non-GAAP EPS is $0.41. For fiscal 2004, non-GAAP guidance EPS of $1.96 per share and revenues of $1.665 billion.

  Jeff Bailey   7/23/200,  4:20:46 PM
Qualcomm (QCOM) $36.25 +0.02% (NDX component) ... lower in after-hours at $35.50 after reporting Q3 (June) of $0.33, which was 3 cents better than forecast. Revenues were unchanged vs. year ago $891.3 million. Early guidance is EPS of $0.27-$0.29, which compares to consensus of $0.29.

  Jeff Bailey   7/23/200,  3:57:10 PM
Qualcomm (QCOM) $26.24 (unch) ... reports earnings after the bell. Consensus is $0.30 per share and $901.5 million in sales. Merrill Lynch believes company reports in line but sees risk in guidance after recent earnigns from NOK and MOT regarding handset sales. Stock has been an underperformer to the NASDAQ-100 this quarter, but still carries a 3.5% weighting in the NDX/QQQ and 5th most heavily weighted component.

  Jonathan Levinson   7/23/200,  3:50:04 PM

  Linda Piazza   7/23/200,  3:42:27 PM
Swing Trade Signals
If we're not stopped out of our OEX play, I will be carrying it overnight, but each trader should be making an individual decision as to whether to stop out and take the loss on the day or continue the play overnight. To help you make the decision, here's what I see. On the daily chart, the daily candle is likely to be one in which the OEX springs up from support, but since this candle comes in the midst of consolidation, it doesn't have as bullish a connotation as it would have if it came after a steep decline. Today was an inside day within an inside day. The OEX remains below the 21-dma at 498.50, at least as of this writing. While RSI kind of squiggles around, it's generally casting downward and looks to be flattening now beneath its descending trendline. MACD generally slants downward, as do the 21(3)3 stochastics. However, the 5(3)3 stochastics have made a bullish kiss, although the slow line is flat rather than turning up. On the ADX, the selling pressure line remains above the buying pressure line.

What are the dangers? There's the danger of being stopped out on the opening tomorrow morning, of course, and being stopped out at a considerably higher number than our 498.71 stop. On the hourly chart, there's also a potential formation known as a bullish right triangle--a flat top at 498.65 and a series of rising lows. Hourly stochastics still look bullish. Also, our original reasons for entering the play--a move below the 494.80 entry on bearish volume patterns--no longer exist. The OEX is still caught in the daily bearish right triangle (opposing the possible hourly bullish one) between 504 and 491, and it's possible the OEX could rise all the way to 504 to test that descending trendline again rather than head down toward 491 first.

  Jonathan Levinson   7/23/200,  3:40:23 PM
Put to call ratio rises to .87.

  Jeff Bailey   7/23/200,  3:37:26 PM
After the bell earnings will be plentiful...

AFFX Link.

AFL Link (+$0.45) (PnF rather neutral into earnings.) Driver for Insurance Index (IUX.X) 269.58 -0.97%.

AWE (+$0.04) Link (Pnf looking longer-term bullish after recent spread-triple top buy at $8.50 and break above longer-term bearish trend.)

CTXS (+$0.17) Link (PnF has been strong with bullish vertical count of $24.50 having recently been met). Bull with big gains might look to take some gains off the table ahead of tonights report.

  Jonathan Levinson   7/23/200,  3:36:24 PM
How do you interpret the VIX hitting a yearly low at 20.42

Complacency reigns. I personally view it in a contrarian fashion- but you need to read it with the high put to call ratio, which could be institutional dumping of puts, which would presumably be bullish. But then, compacency is higher with the SPX at lower highs below the broken ascending daily trendline- looks bearish to me. Either interpretation fits, unfortunately.

  Jeff Bailey   7/23/200,  3:25:28 PM
03:15 Update posted at this Link

  Jonathan Levinson   7/23/200,  3:17:10 PM

  Jonathan Levinson   7/23/200,  3:16:52 PM
The put to call ratio creeps down to .83.

  Linda Piazza   7/23/200,  3:15:51 PM
Swing Trade Signals
We're still not out of the woods, but there are now bearish kisses on the 30-minute OEX stochastics and RSI hit its descending trendline and turned down. The 60-minute RSI also hits its descending trendline and turned down, although other 60-minute oscillators still turn up. The OEX has dipped below 497 and looks to be headed down to test the 496.20 level that we want to see it move below next. All traders should consider whether they want to hold this position overnight, especially as the position is underwater and especially as today's after-the-close earnings sessions is so heavy.

  Jonathan Levinson   7/23/200,  3:00:01 PM

  Linda Piazza   7/23/200,  2:49:35 PM
Swing Trade Signals
Whew! That came close, with the OEX hitting the original 498.50 stop but not the revised 498.71 stop. Oddly enough, I would consider a rollover here, just below the most recent daily highs, as a good short/put entry. Wish we'd waited for that one, and I certainly would have done so if volume patterns and 30-minute and 60-minute oscillators hadn't looked supportive of the entry we made this morning. We're not yet out of the woods, of course, as we haven't yet seen what I would classify as a rollover. First, we absolutely need to see a decline below 497 to even begin thinking rollover. To attain any comfort level with the play, we need to see the OEX decline below the 496.20 level that marked the two middle-of-the-day peaks.

  Jeff Bailey   7/23/200,  2:42:22 PM
Dow Industrials (INDU) 9,186 +0.3% Link ... Profiling bearish trade in the DIA $91.93 here per Index Trader Wrap comments.

Bearish the SPX 987.79 Link too . Rather not the OEX/NDX/QQQ at this point.

  Jonathan Levinson   7/23/200,  2:39:41 PM

  Jonathan Levinson   7/23/200,  2:36:04 PM
CBOE put to call ratio falls to .84 for this past half hour. HUI +9.34 currently, XAU +3.47.

  Linda Piazza   7/23/200,  2:32:39 PM
Swing Trade Signals
Volume patterns continue to improve. It appears likely that our OEX stop at 498.71 will be hit shortly.

  Jeff Bailey   7/23/200,  2:30:01 PM
QQQ $31.50 +0.51% .... 60-minute chart shows potential "reverse head/shoulder" pattern, with neckline developed right at WEEKLY Pivot of $31.65. This may be the level where bears need to defend right now.. today. If broken above $31.65 then bullish objective becomes $32.40, which is right back at MONTHLY R2.

  Linda Piazza   7/23/200,  2:24:20 PM
As of a few minutes ago, adv/dec ratios now measure a neutral to slightly bearish .89 on the NYSE and .87 on the Nasdaq. Down volume was still 1.3 times up volume on the NYSE and a neutral 1.09 times up volume on the Nasdaq. These are much improved numbers from my last report on volume patterns. There were 19 new lows and 199 new highs. Total volume was 841 million on the NYSE and 1.2 billion on the Nasdaq.

  Jonathan Levinson   7/23/200,  2:17:43 PM
These markets don't seem to stay down long... no matter what... gold up, bonds up, stocks up, what is wrong with this picture?

The US Dollar is getting creamed and gold and silver are way up. I'll be all over this in tonight's market wrap. They can inflate the money supply and you'll have the Dow at 10,000, but a loaf of bread will cost as much as a share of GE, theoretically.

  Linda Piazza   7/23/200,  2:15:04 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
The OEX climbs straight toward the day's high, but it should find resistance there. I've just noticed that I misread the day's high, with that day's high being 498.61, just below yesterday's 498.64 high. Let's raise the official exit to 498.71 to give the OEX a dime above the previous day's high before turning around. As I've suggested several times today, those uncomfortable with this wide stop should set stops appropriate to your trading style.

  Jeff Bailey   7/23/200,  2:13:43 PM
Dow Industrials (INDU) 9,183 +0.28% ... gaining 25 points here and rather strong move in last 10-minutes back above WEEKLY piviot.

  Linda Piazza   7/23/200,  2:11:19 PM
Reader Question: When you trade the OEX what is your preference? That is, in/at/out of the money current month/forward month strikes??? I usually use slightly out of the money for the current month.

Response: That's another great question, but it's one that's difficult for me to answer because it varies so much depending on the expected move, the date in relationship to the expiration cycle, and other such matters. For example, unless I'm in a gambling mood and am throwing away risk-only money, I absolutely do not trade current-month options during the last week of the options-expiration cycle, and I usually don't trade them the last two weeks of the cycle. That way, if the OEX moves slightly against me on news or some other fluke, I have time to let the trade settle down again.

The strike I use also varies. If I expect a small move only, I usually choose an ITM option so that I can capitalize on the move. If I'm buying a put position, but worried that the OEX might bounce, I'll usually choose a slightly OTM position, as it will hold its value better on a bounce against me.

  Jeff Bailey   7/23/200,  2:10:15 PM
Taiwan Semi (TSM) $10.00 +1.2% .... got stopped for bullish loss on Monday morning after profile late Friday for weekend bullish trade after Micron (MU) gained 7% that day. TSM reports earnings tomorrow morning and I would think MU bulls will want to monitor results.

  Jonathan Levinson   7/23/200,  2:07:34 PM
The put to call ratio is up to .85. The HUI is up 9.08 now, XAU +3.38. QQV -1.33, VXN flat and VIX +0.02 currently. The S&P futures are weaker than the Nasdaq, but both are almost flat on the day as the market tries to decide whether Bernanke's printing press will be bullish or bearish for the markets. Indeed, I believe that this was the force behind the spring rally, and traders are trying to decide whether equities have it in them again.

  Jeff Bailey   7/23/200,  2:05:12 PM
02:00 Internals ... will benchmark from 12:00 PM , which was an hour after Fed Gov. Bernanke comments.

NYSE: 5,528 A/D 13:17 NH/NL 59:9

(12:00 NYSE= 5,513 A/D 12:17 NH/NL 45:6)

NASDAQ: 1,708 A/D 13:16 NH/NL 134:10

(12:00 NASDAQ= 1,700 A/D 12:16 NH/NL 116:7)

  Linda Piazza   7/23/200,  2:01:14 PM
Swing Trade Signals
This latest push has turned up the OEX 30-minute oscillators and is trying to do the same on the hourly oscillators. Volume patterns continue to improve, although they still show more selling than buying. We may be looking at a test of the day's high. Those who don't want to risk that possibility should set stops appropriate for them.

  Linda Piazza   7/23/200,  1:51:34 PM
The 1:45 push has come right on time and is a push to the upside.

  Linda Piazza   7/23/200,  1:47:03 PM
Although still showing weakness, volume patterns are improving.

  Linda Piazza   7/23/200,  1:41:14 PM
Reader Question: Welcome back from vacationing. We OEX traders have missed your commentary. Question. What are your thoughts, when trading OEX options and on days when market direction is so uncertain, on buying straddle positions? Do straddles make economic sense?

Response: Great question, although I'm probably not the best person to ask about straddles. As I've confessed on the Monitor many times, I try to trade those straddles and strangles back and forth, lowering my basis, although I'm extremely patient with other types of trades, even today's trade that has us mired in a consolidation pattern. It makes no sense, but it's happened to me frequently enough that I don't tend to trade either straddles or strangles. I'm not sure that I would have recommended a straddle today, however. As I mentioned this morning, it was possible that the move wouldn't be a big one, and that likely would have meant that those buying straddles wouldn't see a big enough move to profit. If the OEX had instead been perched right at specially significant resistance or support, where a breakout either direction might have predicted a big move, a straddle might have been a great idea, but that's not what we had today.

  Jeff Bailey   7/23/200,  1:34:50 PM
01:00 Update posted at this Link

  Jonathan Levinson   7/23/200,  1:34:36 PM
HUI is up 8.41 and XAU up 3.25, feeling like it's entered the "buy at any price" airball zone. August gold is up 7.80 to 358.50.

  Linda Piazza   7/23/200,  1:30:38 PM
We're getting close to the 1:35-1:45 push. Will it be a push toward next resistance or next support? With the indices stuck in consolidation patterns now, it's difficult to predict, but be watchful. It's watching how the indices respond to the push that will give us information about strength or weakness.

  Linda Piazza   7/23/200,  1:24:02 PM
Swing Trade Signals
Although there was a false breakdown out of the latest five-minute OEX potential bear flag, the OEX has now climbed back inside the channel, making it likely that we're seeing a run-of-the-mill ascending regression channel rather than a bear flag, as the others have turned out to be. Those weary of getting caught up in the chop might lower their stops to 496.50, just above the last two five-minute highs or to 497.50, just above the lower edge of an overhead consolidation band. For now, the official stop will remain 498.50.

  Jonathan Levinson   7/23/200,  1:23:17 PM
A stunning move in the precious metals indices, HUI +8.12 and XAU +3.1, August gold up 7.30 to 358 and Sept silver up 29 cents to 5.08.

  Linda Piazza   7/23/200,  1:07:40 PM
Swing Trade Signals
The put-to-call ratio Jonathan mentions should keep us on our toes with the current OEX short/put play, as it's a danger sign. So far, though, everything from volume patterns to hourly and daily oscillators support the play. That given, it's certainly not working as we'd hoped.

  Jonathan Levinson   7/23/200,  1:04:30 PM
Put to call ratio rises to .82.

  Jonathan Levinson   7/23/200,  1:01:13 PM
HUI now up 7.6 at 157.24, XAU +3.01 at 80.33. FVX is down 10.9 bps, TNX -9.2 and TYX -5.1. They're buying gold and gold mining stocks, and treasuries very heavily today as equities continue to get sold.

  Linda Piazza   7/23/200,  12:57:05 PM
The latest potential five-minute OEX bear flag is rising toward a 50% retracement of the preceding drop, which it will hit somewhere around 494.75. Ideally, a bear flag should break to the downside at or before the time it reaches that 50% retracement, but let's give this one a little leeway since we're in the lunchtime lull when low-volume moves can make for volatile action.

  Linda Piazza   7/23/200,  12:51:39 PM
Volume patterns have shown increasing weakness, with adv/dec ratios of .66 (NYSE) and .61 (Nasdaq) as of a few minutes ago, and with down volume almost twice up volume on the NYSE and 1.8 times up volume on the Nasdaq. Total volume was 634 million on the NYSE and 967 million on the Nasdaq.

  Jonathan Levinson   7/23/200,  12:44:16 PM
The put to call ratio is up to .79 for the past half hour.

  Jonathan Levinson   7/23/200,  12:43:17 PM
HUI is up 7.22 currently at 156.86, XAU +2.89 and gold up 5.70 on the August contract, all holding their substantial gains.

  Ray Cummins   7/23/200,  12:34:37 PM
Spreads/Combos & Premium-Selling -- E-mail Replies Part III

At first glance, the "speculative" version of the synthetic position may appear far too aggressive to be viable for conservative traders but in truth, it works very well with trending issues that have large upside potential and the risk is little more than if you sold the identical cash-secured put to collect premium on a bullish stock.

You asked about the selection process for newsletter plays and in most cases, the synthetic positions are weighted more towards technical indications with slightly less consideration given to premium levels and disparities. It is important, however, to maintain the proper perspective when utilizing this strategy and that means buying and selling options that are priced "reasonably" with regard to fair value and only when you can comfortably afford to cover the underlying issue at the (short) strike price. As with any speculative technique, be sure to thoroughly explore the various outcomes and potential capital risk, so you can execute the strategy to its fullest potential. Good Luck!

  Linda Piazza   7/23/200,  12:32:59 PM
As Jim just mentioned on the Futures screen, there's not much happening. The OEX short/put position isn't exciting, but the OEX is gradually working itself down, with the OEX falling, rising in bear flag patterns to test broken support, and then falling again. Let's hope it keeps up that way.

  Jeff Bailey   7/23/200,  12:32:40 PM
Micron Tech (MU) $14.95 +4.5% .... here's a daily interval chart of MU with retracement we've looked at. Some tests for today.Link

Have new short-interest data on MU as of July 15th. Down about 9 million shares, but still pretty good days to cover ratio of 5.00 from June observation of 5.11.

  Linda Piazza   7/23/200,  12:26:50 PM
Currently, the Russell 2000 trades at 461.15, just below its 21-dma at 461.51. It trades within a consolidation band that looks a lot like a "b" distribution pattern. Daily RSI, 21(3)3 stochastics, and MACD look bearish, also indicating that the "b" distribution pattern is likely to break to the downside. That would occur with a break below 456-457, predicting a fall toward 446-447 and possibly 440, although it's always possible that the Russell will continue its consolidation while the oscillators complete their downward cycle and turn up again.

  Linda Piazza   7/23/200,  12:19:19 PM
Since OEX 494.50 was so tough to break, proving itself to be an important level to watch, I now wouldn't be surprised to see a retest of that level. OEX 494.50-496 should now hold as resistance.

  Ray Cummins   7/23/200,  12:17:39 PM
Spreads/Combos & Premium-Selling -- E-mail Replies Part II

The advantages to this unique strategy are numerous but the major incentive for this type of approach is that its pay-off structure is very similar to holding a long stock position and yet traders are not required to take physical delivery of the issue to benefit from its activity. Second, the initial capital requirements for a synthetic position are much lower than being long in the stock, even when using maximum margin for the purchase. Finally, since the synthetic delivers the same performance as a long position in the underlying issue, there is no additional risk in using derivatives to duplicate basic stock ownership.

There is a popular variation of the synthetic position that uses "out-of-the-money" options to construct a more speculative outlook with lower probability of profit and reduced risk. In this case, you buy an out-of-the-money call to take advantage of any extreme or rapid upward movement in the underlying issue, and you sell an out-of-the-money put to pay for the call. Buying an OTM call costs less, at the expense of position Delta, but the drawback is offset by the sale of an OTM put, which provides a greater margin of downside risk. As with any uncovered (put) position, you must be willing to own the underlying stock in the event of an unexpected downturn but, by using OTM options, you will have a larger cushion to absorb additional volatility in the issue.

  Jeff Bailey   7/23/200,  12:13:56 PM
Avaya (AV) $7.81 +2.7% .... lower at the open, but building some gains here. Looks to test its June 6th high of $8.06 for resistance, but I think break above as we get MACD cross above signal today. Link

Also monitoring SLNK Link , which was stock that turned us onto AV. Looking for SLNK to find support at $15.00, then get a kick higher for "pair" to make their moves higher.

Disclosure: I currently hold bullish position in AV

  Linda Piazza   7/23/200,  12:12:11 PM
Swing Trade Signals
We now have the break below the last five-minute low at 494.50, and are about to see a test of the day's low of 493.89. We want to see a break below that day's low and then below 493. Volume patterns still support the short/put play. So far, so good.

  Linda Piazza   7/23/200,  12:10:01 PM
Volume patterns still show more decliners than advancers and higher down than up volume, with those patterns showing a slight but probably as yet insignificant shift toward more bearish numbers. Total volume as of a few minutes ago was 530 million on the NYSE and 826 million on the Nasdaq.

  Ray Cummins   7/23/200,  12:08:47 PM
Spreads/Combos & Premium-Selling -- Email Replies

Hello Ray, I always enjoyed reading your column on the spreads, combos and straddles. I have a question. When looking at a synthetic position, is it based on technical chart formations or options being inexpensive compared to historical volatilities? Ex: Recent trades on QCOM, ESI and SGR. Thanks again and appreciate your help. Cheers! PH

Hello PH, Synthetic positions are definitely a good way to speculate on directional movement in an issue without actually buying the stock. The term "synthetic" is an appropriate description for the strategy because a unit of the underlying issue is simply being synthesized. Futures traders often use combinations of various derivatives to produce similar profit/loss characteristics with commodities and fund managers utilize many of the same techniques to reduce the risk of adverse market movements in large equity portfolios. Retail traders can also benefit from those strategies by creating positions that mirror the activity of specific stocks and indexes.

With the purchase of a call and the sale of a put of the same strike and duration, traders can capitalize on anticipated stock movement without investing as much capital as they would when buying the underlying issue on the open market. In the "synthetic" position, the leverage of options magnifies any gain in the stock, thus offering the potential for exponential returns on its upside activity.

  Jonathan Levinson   7/23/200,  12:06:05 PM
The lower ascending trendline has held, but the volume is pathetic either way. Long at 980, short below 979.50 is how it looks to me from here.

  Jonathan Levinson   7/23/200,  12:02:37 PM
The put to call ratio is .75 for this past half hour. VIX +.19, VXN -.56, QQV -.93.

  Linda Piazza   7/23/200,  11:59:05 AM
Swing Trade Signals
Having broken below its bear flag, the OEX now tests the last five-minute low at 494.50. We want to see the OEX push below this level, then below 494 and 493.

  Jeff Bailey   7/23/200,  11:57:40 AM
S&P 500 Index (SPX.X) 982.21 -0.59% ... 20-minutes into today's trade, SPX came right down to MONTHLY Pivot of 984.5, then saw little "gap" lower on next 5-minute bar, and we've seen two moves higher find sellers at the 985.5 level.

With dollar selling and Treasury buying, I'm thinking WEEKLY S1 test again of 976.14.

Will also note that current SPX level of trade is just when we heard first report yesterday that Saddam's sons had been killed.

  Ray Cummins   7/23/200,  11:57:27 AM
Spreads/Combos & Premium-Selling -- Portfolio Activity

As we approach the mid-point of the session, stocks have recovered slightly from the day's lows. Although the buying pressure is limited, a few select issues are enjoying favorable activity with most of the upside momentum seen in technology stocks such as: InterActive (NASDAQ:IACI), eBay (NASDAQ:EBAY), j2 Global (NASDAQ:JCOM), Netflix (NASDAQ:NFLX), Sandisk (NASDAQ:SNDK), and UTStarcom (NASDAQ:UTSI). There are fewer winners among industrial companies, however major drug stocks are seeing some limited interest. Allergan (NYSE:AGN) bounced higher after reporting adjusted second quarter earnings of $0.53 per share, which was $0.01 better than consensus estimates on revenues that rose 30% year over year. Our bullish (put credit) spread at $75 appears safe for the moment. Aventis (NYSE:AVE) moved above $53 in conjunction with the news from AGN, but that's not good for our bearish position in the issue as the sold (call) strike is at $55. The current resistance level for the stock is near $54, so a close above that price range would signal a potential early exit in the spread. Another segment that is performing well is managed healthcare stocks and the critical issue in that group is Anthem (NYSE:ATH). Anthem is set to report earnings next week and the company's share value is rising on speculation of a bullish report. Today's move to the $79 range places the issue at recent highs and any further upside activity would suggest an "early-exit" in the bearish (call credit) position.

  Linda Piazza   7/23/200,  11:36:42 AM
As expected, the OEX has been rising to test the violated bear flag, as seen on the five-minute chart, and as expected it's been finding resistance at the lower line of the channel that describes the bear flag. However, it hasn't yet begun a precipitous fall away from that channel, as we would like to see on an unsuccessful attempt to move above it again. It's possible then that the OEX will try to climb the outside of that channel until hitting stronger resistance. On the fifteen-minute chart, it's possible to draw a larger potential bear flag, with the OEX still trading within that larger bear flag. What we hope to see instead of a climb toward next resistance is a fall below the last five-minute low near 494.50.

  Jeff Bailey   7/23/200,  11:36:22 AM
11:00 Update posted at this Link

  Jonathan Levinson   7/23/200,  11:35:13 AM
HUI now up 7 at 156.64, XAU +2.96 at 80.28, August gold up 5.80 to 356.50.

  Jonathan Levinson   7/23/200,  11:18:50 AM
Treasuries are rallying now on the concept of a zero fed funds rate, FVX -12.2 bps, TNX -9.8 and TYX -5.8 bps.

  Linda Piazza   7/23/200,  11:17:27 AM
As of a few minutes ago, total volume stood at 373 million shares on the NYSE and 648 million on the Nasdaq, with adv/dec ratios a slightly bearish .71 on the NYSE and .77 on the Nasdaq. Down volume was 1.5 times up volume on the NYSE and a neutral 1.2 times up volume on the Nasdaq.

  Linda Piazza   7/23/200,  11:08:37 AM
On the five-minute OEX chart, today's action appears to be a sharp drop followed by a bear flag, and a drop out of that bear flag a little more than ten minutes ago. If that's a valid pattern, we can likely expect a retest of the violated bear flag, but the sharply rising bottom channel line should hold as resistance between 496-497, depending on how quickly the OEX rose to test that level.

  Jonathan Levinson   7/23/200,  11:04:52 AM
Dr. Defration says that "The fed should be willing to cut rates to zero". I suppose the next step would be for banks to pay us to borrow money with which to speculate. Surprisingly, treasuries are not rallying on the news.

  Jonathan Levinson   7/23/200,  11:00:21 AM
August gold now up 5.30 to 356/oz, HUI up a whopping 5.83 and XAU +2.36.

  Jeff Bailey   7/23/200,  10:54:54 AM
UTStarcom (UTSI) $43.38 +3.6% .... wins $40 million China Telecom contract. Link

  Linda Piazza   7/23/200,  10:48:35 AM
Swing Trade Signals
Hourly RSI may be indicating that we're in for another test of 497.50-498.50 or a period of consolidation at the current level, although other oscillators are not indicating strength as yet. RSI tends to be early at times. Volume patterns still favor the short/put play and still indicate that overhead resistance should hold, but anyone uncomfortable with the wide stop on this play should set whatever stop feels comfortable for a particular trading style. Here's what I see on the hourly chart: Link

  Jeff Bailey   7/23/200,  10:46:05 AM
Energy data API (American Petroleum Institute) reports that crude oil inventories fell by 655,000 barrels, gasoline inventories fell 1.1 million barrels, while distillate inventories rose by 372,000 barrels.

DOE (Department of Energy) said crued inventories fell 2.3 million barrels, gasoline inventories fell 1.6 million barrels, while distillates rose by 500,000 barrels.

CBOE Oil Index (OIX.X) 269.39 -0.05% of 0.16 points. Link

  Jonathan Levinson   7/23/200,  10:46:03 AM
A large 7B overnight repo has been announced, the Fed adding that sum net with nothing expiring today.

  Jonathan Levinson   7/23/200,  10:45:14 AM
Put to call ratio dropped to .68 for the 2nd half hour, good news for bears.

  Mark Phillips   7/23/200,  10:38:44 AM
BBBY $37.19 (-0.52) Weak right from the open, our BBBY play is certainly getting off on the right foot. With the initial plunge below $37, the stock broke both horizontal support and the H&S neckline at $37.50. This initial reflexive bounce off the $36.80 low is likely providing a solid entry opportunity on the failure later today. While it would have been nice to get an entry in the $38-39 area, with the early break of support, our attention now turns to entry on a failure to get back over what should now be strong resistance in the $37.50-38.00 area.

  Linda Piazza   7/23/200,  10:34:02 AM
Swing Trade Signals
As the OEX undergoes another test of 495, volume patterns show more decliners than advancers and bigger down than up volume. As of a few moments ago, adv/dec ratios were 12:16 on the NYSE and 10:15 on the Nasdaq, with down volume about 1.8 times up volume on the NYSE and about twice up volume on the Nasdaq. Volume was still light, however. Thirty and sixty-minute oscillators still favor the short/put play, but price is the final arbiter, and we need a fall beneath 494 and then 493 before we breath too easily.

  Mark Phillips   7/23/200,  10:31:10 AM
XL $79.06 (-1.64) Now that's better! After rebounding above $81 early yesterday, it's good to see XL getting with the program this morning and feel some concerted selling pressure. The break below $79.40 shortly after the open was the momentum entry and now attention turns to the 200-dma at $78.58 to see whether it will provide support or get sliced through on the first attempt. If we get a bounce, then that will set up the next entry on the failed rebound. On the other hand, a break below the 200-dma without a bounce would be very bearish and have our $73-74 target looking more reasonable prior to earnings next Thursday.

  Jonathan Levinson   7/23/200,  10:29:37 AM
HUI is up 5.76 now to 155.40, XAU +2.46 to 79.78, with August gold up 4.20 and Sept silver +14.5 at 4.93.

  Jonathan Levinson   7/23/200,  10:26:52 AM
Still no word from the fed as to the quantum of its overnight repo.

  Linda Piazza   7/23/200,  10:25:04 AM
For those at work, President Bush has concluded his press address on the Iraqi situation, having noted that Saddam Hussein's regime is gone.

  Linda Piazza   7/23/200,  10:19:08 AM
For those at work, President Bush speaks now.

  Linda Piazza   7/23/200,  10:18:10 AM
Swing Trade Signals
After our entry on a fall through 484.80, the OEX rose to retest the 485 level, then dropped again. Next we need to see a drop through the day's low of 493.95 and then below 493. A drop below 493 will mean a move below the ascending trendline that began forming on the five-minute chart on the 15th. If the OEX drops below 493, we will be lowering our stop to 497.25.

  Jonathan Levinson   7/23/200,  10:05:53 AM
Put to call ratio .78 for the 1st half hour, VIX +.55, VXN +.55, QQV -.02. TRIN.NQ 1.22, TICK.NQ +15.

  Jeff Bailey   7/23/200,  10:05:33 AM
Sun Microsystems (SUNW) $3.82 -20% ... most actively traded in early going. Session low of $3.71 did find early support and rounding higher 200-day SMA. I also have upward trend from 10/07/02 low to 03/10/03 pullback low serving support with 200-day SMA.Link

If short, would use these two technicals to cover into, but hesitant for new bullish plays.

  Linda Piazza   7/23/200,  10:02:07 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Our short/put entry was just triggered on a trade below OEX 494.80. The stop will be 498.50, but I will be lowering it during the day. Decide now how you'll handle a potential bounce at 491. Will you exit just ahead of that level or will you remain in, planning to weather a possible bounce?

  Jeff Bailey   7/23/200,  9:59:20 AM
10-year YIELD ($TNX.X) "sharp" move lower here, falling 8.4 basis points to 4.066%. Per Monday's Index Trader Wrap, might look for YIELD decline here to 4.01% with YIELD support zone from 3.89%-3.92%.

I noticed ex-floor trader Alexis Glick on CNBC discussing the Lehman longer-term Treasury ishares (tlt) $86.99 +0.84% Link this morning as a security she will follow for Treasuries.

PnF does look like attractive risk/reward bullish trade.

  Jonathan Levinson   7/23/200,  9:56:44 AM
There are no fed expiries today and no open market ops yet announced, except for a press release stating that a repo will be issued today. Awaiting the details.

  Linda Piazza   7/23/200,  9:56:12 AM
The OEX bounced just above 495 and just above the double-top confirmation level at 494.80, but the bounce was weak so far.

  Jeff Bailey   7/23/200,  9:53:13 AM
Maxtor (MXO) $10.07 +8.47% Link .... higher after earings along with upgrade from Hoefer & Arnett to "strong buy" from "buy" .

I took bullish position on Monday's mentioning as bullish and will snug a stop just under today's lows on 1/2 of this position. Target remains $12.24, but a little "worried" broader market negativity will weigh.

  Jonathan Levinson   7/23/200,  9:44:03 AM
August gold is up 4.20, and CEF is up .06 to 4.50, levels not seen in months. XAU is up 1.53 to 78.85, amd HUI is up 4.05 to 153.69. The "lunatic fringe" of goldbugs is enjoying the Bernanke Put this morning.

  Linda Piazza   7/23/200,  9:42:19 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
OEX 494.80 will be the confirmation level of a double-top on the OEX five-minute charts, predicting a fall down toward 491. For aggressive traders only: Go short/put on an OEX move below 494.80, but only if you're prepared for a possible bounce at 491, although our target will be 485. The stop will be a rather wide 498.50, so these are not optimum risk/reward parameters, and traders should be aware of that before entering the trade.

  Jeff Bailey   7/23/200,  9:37:49 AM
Flat open for major indexes with Dow off 13 points, SPX down 1 point and NDX.X gaining 2 points.

Dollar is seeing weakness with Dollar Index (dx00y) 95.82 -0.58% lower by 0.56 and Treasuries find buyers with 10-year YIELD ($TNX.X) down 7 basis points at 4.08%.

Per this weekend's ask the analyst column, bond/dollar trade is negative in my view for major indexes.

  Linda Piazza   7/23/200,  9:34:07 AM
Good, we're getting our test now of the OEX 21-dma at 498.55. We're also seeing a test of yesterday's high of 498.64, with yesterday being an inside day. That means that we should be considering a long play on a break above that high, but I won't be doing that since we've had some false breakouts lately and since there's so much resistance layered overhead. We'll instead be looking for a rollover.

  Jeff Bailey   7/23/200,  9:31:03 AM
Micron Technologies (MU) $15.00 +4.89% .... upgraded at Soundview to "outperform" from "neutral" on thought that seasonal inventory build in consumer should lead to 6-8 week window where DRAM pricing will likely continue to rise. Soundview also thinks analysts appear to be late in accounting for Micron's flirtation with profitability in the current quarter. Soundview raises target to $21.

  Jeff Bailey   7/23/200,  9:29:07 AM
Eastman Kodak (EK) $24.59 ... gaining at $26.20 after reporting EPS of $0.60, which was 33 cents better than forecast of $0.27. On June 18th, EK guided lower from $0.60-$0.80 per share to $0.25-$0.35 per share range so I'm not sure what is taking place here this morning (company doesn't have a handle on things? Another Advanced Micro Devices which can't give accurate guidance either?)

  Jonathan Levinson   7/23/200,  9:25:07 AM
I'm hearing that the President is scheduled to speak as well. Perhaps they're in a huddle right now, hopefully so, trying to get their stories straight.

  Jonathan Levinson   7/23/200,  9:21:59 AM
The Rookie, Ben Bernanke, lays out his egyptian cotton shirt, heavily starched french cuffs and understated palladium cufflinks. He locates his over-the-calf sock suspenders and other accoutrements, readying himself for his 11AM appearance. Will he wear Air Jordan hightops behind the cover of the podium? Will he be bustin' rhymes about his mackin' printing press? These are the questions the world's leveraged speculators are asking as bonds find a huge bid straight out of the gate.

  Linda Piazza   7/23/200,  9:19:41 AM
Swing Trade Signals
Just before leaving for vacation, I posted a graph noting what I'd have been watching if I'd been in town. On a break below OEX 497, I'd expected a drop to 491 and then perhaps 485. We got the drop to 491 and the OEX subsequently bounced back into a zone it's now established as congestion. Congestion plus inconclusive daily oscillators sometimes means choppy trading, so we'll need to exercise care when choosing trades. I'll be watching for a breakout over 506 for a long play or a break below 491 for a short play. What about between those levels? We'll watch for a rollover to short/put, perhaps below 498.50, near the 21-dma, or perhaps below 501-503, the locations of two trendlines seen on the linked graph. Before playing a rollover, however, I will want to see volume patterns that indicate weakness and would warn any participants in such a play that 491 would again be the site of a possible bounce. If we get the rollover without those cooperating volume patterns, it's likely that we're going to let the possible play pass until a break of 491. Link

  Jeff Bailey   7/23/200,  9:18:51 AM
09:00 Update posted at this Link

  Jonathan Levinson   7/23/200,  9:03:11 AM
Gold is now up 4.20 on the August contract and Silver 17 cents. We see equities, treasuries and commodities up together, and the dollar down. Smells like Al Green and Ben "Dr. Defration" Bernanke are back in town.

  Jonathan Levinson   7/23/200,  8:49:53 AM
Treasuries are seeing heavy buying so far, FVX -5.6 bps, TNX -4.9 and TYX -2.1 bps. The US Dollar Index is holding the 95.90 level. Futures have drifted up slightly higher, ES +2.50 and NQ +4.00. With treasuries rallying, I'd expect to see equities participate two, as we've been seeing bonds and stocks trade in lockstep. The bullish triangle on the indices supports this, and I'd be more bullish about a possible breakout if I could only believe that the move on yesterday's news is going to stick. Europe didn't buy it, and my gut doesn't either, but the technicals tell a different story so far.

  Linda Piazza   7/23/200,  7:08:24 AM
Good morning. Buoyed by the performance of the techs in the U.S. market and by a Lehman recommendation to buy semiconductors, Japan's techs led the Nikkei to a higher open Wednesday morning. Soon after, the Nikkei climbed to the high of the day, but eased back before rising into the close. The Nikkei could not achieve a new high of the day or even equal its previous high, but did close up 129 points or 1.36%, at 9615.34. This occurred despite a 0.01% decrease in demand for services from April till May, according to a number released early in the trading day by the Japanese Ministry of Economy, Trade, and Industry. This fall surprised to the downside since a rise of 0.2% had been expected. Economists blamed a SARS-related decline in tourism and fewer holidays for the slumping services number. Late Wednesday, Japanese investors got better news with the release of a number showing consumer sentiment for the quarter ending June 15 rose 1.2 points from the previous quarter's number.

Many Japanese tech companies report soon, with Sony being one of the first. Sony reports tomorrow. Many analysts express more concern about its earnings than those of other tech stocks. Sony still managed a 1% gain in Wednesday's trading. Today's weaker yen also helped exporters such as car manufacturers, although the gain was termed broad based. Trading was mixed in other Asian bourses. South Korea's Kospi fell 0.57%, but Singapore's Straits Times gained 0.41%. The Taiwan Weighted climbed 0.51%, but Hong Kong's Hang Seng lost 1.08%.

Most European bourses trade up currently, with tech stocks leading the gains as they did in Japan. In what must be a case of we're-glad-it-wasn't-worse, electronics maker Thomson gained almost 4% after it reported Q2 sales down 23.2% from the previous quarter and H2 operating profits that dropped 42.2%. The company cited a difficult U.S. market and currency issues, but reaffirmed its full-year targets. Perhaps operating on the same we're-glad-it-wasn't-worse principle, Swiss pharmaceutical company Roche Group climbed more than 4% after reporting first half income that dropped 24% on sales that rose 6%. This company also reaffirmed its full-year guidance.

As of this writing, the FTSE 100 was up 17.10 points or 0.42%, to 4096.80. The CAC traded up 8.72 points or 0.28%, to 3101.34. The DAX climbed only 1.07 points or 0.03%, to 3319.22, trading just under 3325 resistance.

  Jeff Bailey   7/22/200,  5:31:15 PM
Pivot Matrix for tomorrow posted at this Link

  Jim Brown   7/22/200,  5:31:00 PM
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