Option Investor
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  Jeff Bailey   7/24/200,  5:23:31 PM
Pivot Matrix for tomorrow posted at this Link

  Linda Piazza   7/24/200,  4:28:12 PM
VSEA: Varian Semiconductor reported $0.04 per diluted share, compared to $0.07 per diluted share a year ago, with estimates of $0.03. Gross margins increased to 44 percent from the year-ago 39 percent, affected by cost-cutting measures, it appears, as well as "sale of certain inventory." CFO Halliday mentions spending on R&D. After closing at 35.40, the stock appeared to be dropping fast in afterhours, with current bid/ask at 33 x 34.50.

  Jim Brown   7/24/200,  4:24:03 PM
Material Earnings Tonight
Stock  Estimate  Actual
AFCI est +0.07 = +0.09 beat
ALGN est -0.05 = -0.13
ABTL est +0.03 = +0.02
AV est +0.00 = +0.02 gap basis
BNBN est u/a = -0.06 reaffirming guidance
BSTE est +0.40 = +0.43
BORL est +0.03 = -0.06 miss
CNXT est -0.01 = -0.00
EPNY est -0.11 = -0.09
EBAY est +0.35 = +0.37
2:1 split, raised guidance $1.47 yr
EBAY guided below street estimates
down -$5.40 after hours
FLEX est +0.05 = +0.04 maybe charges
FMKT est -0.06 = -0.04 beat
GTW est -0.28 = -0.22 beat
JDSU est -0.03 = -0.02 beat
KLAC est +0.15 = +0.15
MCK est +0.51 = +0.53 beat
MSCC est +0.04 = +0.05 beat, raised guidance
MRVC est -0.12 = -0.10 beat
NT est +0.00 = +0.00 no guidance given
PCLN est +0.14 = +0.20 beat, raised guidance
SAPE est -0.03 = -0.03
SBUX est +0.16 = +0.17
THQI est -0.11 = -0.09 -$1.00 in after hours
TRID est -0.40 = -0.33 beat
TQNT est -0.11 = -0.11
VSEA est +0.03 = +0.04
VRSN est +0.14 = +0.14
WDC est +0.19 = +0.23 beat
OPWV doing reverse split 1:3 or 1:5

  Jim Brown   7/24/200,  4:23:13 PM
IGEN being bought for $47 cash

  James Brown   7/24/200,  4:19:39 PM
as suspected...EBAY announces a stock split. A 2-for-1.

  James Brown   7/24/200,  4:11:51 PM
As a follow up to Jeff's comments on BBBY, a current OI put play, shares of the stock have built a head-and-shoulders pattern and the move yesterday actually broke the (slanting) neckline. While today's move took it back above the neckline, it appears to have turned out another failed rally at short-term resistance - another entry point for bears. The 200-dma is a level bears will have to contend with but it does look bearish.

  Linda Piazza   7/24/200,  4:01:54 PM
The OEX just bounced from yet-another trendline on yet-another chart. This one is one version of a descending trendline formed off the highs from July 14 to yesterday. Yesterday afternoon, the OEX broke through that trendline to the upside. The OEX has already fallen through one version of this same trendline, one that incorporated all candle shadows. As I said, there are landmines waiting every step of the way, but so far we're doing well.

  Linda Piazza   7/24/200,  3:58:05 PM
The OEX trades a lower low than yesterday's low.

  Linda Piazza   7/24/200,  3:57:02 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Conservative traders might consider exiting or exiting a portion of their positions on an OEX trade near yesterday's low of 493.36. The Swing Trade will officially be holding overnight. On a trade of 493 or below, lower stops to 498.71.

  Linda Piazza   7/24/200,  3:53:58 PM
Swing Trade Signals
The OEX currently tests yesterday's 494.80 entry level, a S/R level and appears to be falling below that level. That's one more goal achieved. (This is how yesterday's trade should have worked, too. Sigh.)

  Jeff Bailey   7/24/200,  3:53:48 PM
S&P 500 Index (SPX.X) 983.00 -0.57% ... per 03:15 Update, triggered short/put the indexes.

  Jeff Bailey   7/24/200,  3:51:44 PM
Dow Industrials (INDU) 9,127 -0.72% ... After morning trade of 9,250, just like that we may have 3-box reversal back lower at 9,100 tomorrow morning. Link

  Linda Piazza   7/24/200,  3:49:51 PM
Swing Trade Signals
The OEX fell below the 495.40 level that marked the lowest version of the ascending trendline formed off the July 21 lows and it's now close to testing yesterday's Swing Trade entry level of 484.80. We can breathe easier now, although I would now expect a retest of 495.40. Traders still must make individual decisions about holding overnight. The Swing Trade model will be holding the position unless stopped out before the close, which seems unlikely.

Here's what I can see that might help you make a decision: The OEX today tested one version of the descending trendline that marks the top of the potential bearish right triangle and fell back. It fell through the 498.65 S/R level. It fell through the short-term ascending trendline since the 21st. It fell back below the 21-dma. It's formed a bearish candle, but it's soon going to hit yesterday's low at 493.36 and then the 491 level that is our first profit goal, with 488 and 485 being the next targets we'll watch. As always, anyone holding over during earnings season risks a surprise earnings announcement that will swamp the trade.

  Jeff Bailey   7/24/200,  3:49:33 PM
SPX 983.95 ... since 03:15 PM EST update, 983.63 has been session low. Willing to get back on the "bearish band wagon" for Index Trader Wrap on trade at 983.00. However, instead of getting "juked out again" on bearish trade, will honor the PnF chart this time. Link which is what I "should have done" this morning. Again... hindsight is always 20/20 .

  Jeff Bailey   7/24/200,  3:42:50 PM
Bed Bath & Beyond (BBBY) $38.42 +3.55% ... Bought the 37.50 puts for 1.00,wold this be aplace to add or just get out,got strong right after i bought thanks david

BBBY has pulled right back into some major support of $37 in recent sessions Link where it gave spead-triple-top buy signal of $38 back in April. The only negative or sign of bearishness is "high pole warning" where stock has retraced more than 50% of its long column of X. I would tend to be very cautious with a bearish trade and while I don't know what expiration the trader bought (I'm thinking August) I would tend to use today's high has a stop and see if any of this afternoon's broader market weakness can help the trade. Link

  Linda Piazza   7/24/200,  3:38:51 PM
Everyone must be waiting for the MOC orders. Even on the one-minute chart, the candles are so small I can barely see them.

  Jonathan Levinson   7/24/200,  3:37:00 PM
The put to call ratio is up to .75, VIX 20.29.

  Linda Piazza   7/24/200,  3:27:54 PM
Swing Trade Signals
I'm short and Jim's suggesting a long. Confused? Wondering about the advisability of our short/put Swing Trade? There may be cause to wonder, as there always is, but remember that entering and exiting futures trades three or four times a day is a far different thing than swing trading index options. We have those spreads to consider, and while we're engaged in a several-day swing trade, futures traders might trade circles around us, both directions. For example, we expected (or at least I warned you to expect) a retest of broken support. A futures trader could trade the upside on that expected test and likely profit. We wouldn't be able to recoup the spread costs. So be resolved to see futures traders sometimes trade with you and sometimes against you, and think it all a normal part of the trading day, with the possibility that all will ultimately harvest gains.

  Linda Piazza   7/24/200,  3:21:07 PM
It looks like we're going to get our retest of that broken support at the 497.50-499.10 levels now.

  Linda Piazza   7/24/200,  3:16:41 PM
Swing Trade Signals
The current OEX bounce is courtesy of another version of the ascending trendline off the 30-minute lows beginning July 21, with this the lowest of the three trendlines. Every half point is littered with landmines both above and below the current position, but a move below 495.40 should get the OEX beyond that latest short-term ascending trendline.

  Linda Piazza   7/24/200,  3:13:46 PM
The TRAN found resistance at the trendline depicted in my 13:48 post and has now fallen beneath 2600, currently trading at 2589.38.

  Linda Piazza   7/24/200,  3:12:08 PM
Volume patterns now show roughly equal advancers and decliners on the Nasdaq, and higher down than up volume. This is a distinct change from the strongly bullish patterns from earlier today. On the NYSE, advancers still lead, but up and down volume are nearly equal. Today sees 19 new lows. Total volume is now 1.2 billion on the NYSE and 1.5 billion on the Nasdaq.

  Jonathan Levinson   7/24/200,  3:05:40 PM
Put to call ratio .73, VIX -.30 at 20.14.

  Linda Piazza   7/24/200,  3:04:27 PM
Swing Trade Signals
We have the move below 496, so we can begin breathing a little easier. Next we want to see a move below yesterday's bearish entry at 494.80.

One note about today's OEX candle: While the current action makes it very possible that the OEX will close the day with a bearish candle, it's going to be doing so from within consolidation and not after a sustained rise. That just means that we're having a bearish day, and while it might be the last candle before a reversal, it wouldn't have the same significance it would have if it occurred after a prolonged rise. I have reasons for believing that this bearish play may work and a bearish-looking candle certainly helps, but I did want to clarify this.

  Linda Piazza   7/24/200,  2:59:16 PM
Swing Trade Signals
Our next wish is to see the OEX driven below 496, the site of one version of a rising trendline that can be drawn from the lows beginning on July 21. OEX 496 is also the site of historical S/R, but that can be said about almost every half point immediately above and below the current OEX position.

  Jeff Bailey   7/24/200,  2:56:43 PM
Dow Industrials (INDU) 9,161 -0.32% Link ... afternoon low of 9,149.14 and now pegged at WEEKLY Pivot. Bond market closes at in 6-minutes.

suspicious to say the least after closing in on 9,300.

  Linda Piazza   7/24/200,  2:55:15 PM
Volume patterns continue to ease back from their previous highs, with up and down volume now roughly equal on the Nasdaq.

  Linda Piazza   7/24/200,  2:51:54 PM
Swing Trade Signals
Expect a retest of 498.60. I would have liked to have waited for that retest before entering, but there's the chance that the retest would not come. Those of you who did not have time to enter might get the opportunity do so at a rollover anywhere under 499.10.

  Jeff Bailey   7/24/200,  2:50:53 PM
May have jumped the gun this morning on bearish stop .... will wait until bond market close to see what initial trade is after 03:00 PM EST. Dow Industrials (INDU) 9,150 -0.48% here and right back at "old" downward trend.

  Jeff Bailey   7/24/200,  2:48:45 PM
Some talk that Soloman Smith Barney was big seller in S&P futures.

  Linda Piazza   7/24/200,  2:47:54 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
OEX 30-minute and 60-minute oscillators now support a bearish entry. Enter short/put OEX 496.50, stop 500.80.

  Jonathan Levinson   7/24/200,  2:46:30 PM
The put to call ratio is up to .73, VIX -.14 at 20.3 currently.

  Jeff Bailey   7/24/200,  2:42:31 PM
"Blanket selling" except for HMO Index (HMO.X) 756.25 +2.47%. Gold/Silver (XAU.X) 82.17 +0.89% gives back some gains.

  Jeff Bailey   7/24/200,  2:36:40 PM
MNSR I didn't think to look for "old" options chain on TMPW for longer-dated expiration call options. Here's subscriber notes.

Thanks for your profile on MNSR. I have found some calls that expire in December and in 2004. Here are the strikes and symbols:

Dec25C BSQLE 4.3 x 4.6 Jan25C BSQAE 4.7 x 5 Jan30C BSQAF 2.6 x 2.85

Dorsey Wright is profiling a breakout in SNDK. I bought SNDK Aug 45 calls when you profiled this stock several weeks ago, and they have done exceptionally well. With a good reward to risk ratio and a BV target of 81.5 which calls would you profile?

Keep up the great work.

Obviously trader is not trading the indexes. (#*$&%)

  Linda Piazza   7/24/200,  2:35:04 PM
The OEX eases just below its 21-dma again.

  Linda Piazza   7/24/200,  2:34:09 PM
Notice that the VIX has popped above 20 again after measuring a 19.63 low. Moving back above 20 so far just brings it back toward the congestion zone in which it's been hovering, but a continued pop could be significant.

  Linda Piazza   7/24/200,  2:30:25 PM
Swing Trade Signals
Is this a news-driven drop? Perhaps, but the OEX dropped quickly toward the 497.50 level that I had contemplated as a new short/put entry. As it did, it now turned down the 60-minute oscillators, but previous to the drop, volume patterns remained strong and daily oscillators still pointed to the possibility of more upside. I can't yet in good conscience recommend a short play, but risk takers out there might look at the 497.50 level to see if they feel differently. It's interesting that the steep drop stopped at the 498.60 level that we'd tagged as resistance yesterday and possible support today. Let's see what happens next, and if the decline can swing those oscillators and volume patterns around to support a short/put entry or if 468.60 is going to hold as support.

  Jeff Bailey   7/24/200,  2:25:30 PM
Sell Program Premium Alert INDU = 9,208, SPX = 992, OEX = 500, NDX = 1,272, QQQ = $31.65.

  Linda Piazza   7/24/200,  2:23:30 PM
Reader Question: Is there an index like the QQQ or SPY which tracks the OEX? Could you also confirm that it's appropriate & efficient to trade the INDEX on your SWING TRADE SIGNAL, rather than the option?

Response: Great question, especially when buying options means you must be right--quickly--about both direction and timing. There is an iShare S&P 100 Index Fund, the OEF. (See www.amex.com for more information.) The problem with the OEF is that it's rather thinly traded as yet, with an average daily volume of less than 200,000 shares. I don't have any experience trading this ETF (Exchange Traded Fund) or any ETF's for that matter, and so can't advise you on the problems or benefits of using the OEF, but you might investigate for yourself. (Perhaps someone else has more experience and will write.) Options are available on the OEF, too, and appear to be much cheaper than OEX options, but they're also much more thinly traded.

  Jeff Bailey   7/24/200,  2:16:35 PM
S&P 500 Index (SPX.X) 996.05 +0.47% .... here's 60-minute chart Link , and similar to that looked at in last night's Index Wrap. SPX has been consolidating since first hour of trade.

Looking for further bullishness into close only because NYSE NH/NL at 160:9 and NASDAQ NH/NL 253:7 showing some daily bullish leadership as session progresses.

A/D at both NYSE and NASDAQ has been softening since 12:00 EST mark.

NYSE 12:00 was A/D 20:10 and 02:00 20:12

NASDAQ 12:00 was A/D 18:10 and 02:00 is 18:12

  Jonathan Levinson   7/24/200,  2:06:46 PM
For those investing in Canuckistan: Bank of Canada releases 2004 schedule of dates for its policy interest rate announcements Link

  Linda Piazza   7/24/200,  2:01:17 PM
My condolences to those of you who live in Memphis, although most of you in Memphis are probably not able to read the newsletter or monitor your trades. My niece works for IP in Memphis and writes of "The Worst Thunderstorm the City Has Ever Seen," a storm that hit yesterday morning and has shut down power over 70% of the city and surrounding areas. She writes of grocery stores serving customers in the dark to try to unload perishable foods. IP, where she works, has its own generators, but two knocked-out city water pumps mean they're without toilets in the three IP buildings. Gasoline stations and groceries have been the sites of fights as desperate people crowd the few stores and stations now opening. Traffic lights are out. The city believes it will be at least a week before power is restored.

  Jim Brown   7/24/200,  1:56:27 PM
Material Earnings Tonight
AFCI est +0.07 
ALGN est -0.05
ABTL est +0.03
AV est +0.00
BNBN est u/a
BSTE est +0.40
BORL est +0.03
CNXT est -0.01
EELN est +0.11
EPNY est -0.11
EBAY est +0.35
FLEX est +0.05
FMKT est -0.06
JDSU est -0.03
KLAC est +0.15
MCK est +0.51
MSCC est +0.04
MRVC est -0.12
NT est +0.00
PCLN est +0.14
SAPE est -0.03
SBUX est +0.16
THQI est -0.11
TRID est -0.40
TQNT est -0.11
VSEA est +0.03
VRSN est +0.14
WDC est +0.19

  Linda Piazza   7/24/200,  1:50:44 PM
Today's 1:45 ET push actually came at 1:44 ET and was a push up toward next resistance. So far, that resistance has held, but it's still too early to be sure of the final outcome.

  Linda Piazza   7/24/200,  1:48:02 PM
The Dow Jones Transportion Index (TRAN) today tests 2600 again, as it did late last week. Today's trades above 2600 have constituted a new interim (and 52-week) high for the TRAN. Its sister index, the Dow Jones Industrials has not yet bested its June high, however. The TRAN often leads the Industrials, but Dow theory says that the Industrials should soon confirm by a new relative high of its own or else there's divergence between the sister indices. That would predict a decline. The TRAN itself faces resistance today from a trendline that I've shown on my charts since last October. Although I began the trendline as it tracked what turned out to be a relatively minor formation last fall, it's certainly played a part in the TRAN's actions over the last year, so I've kept it on my chart. Here's the chart with the trendline: Link

  Linda Piazza   7/24/200,  1:35:29 PM
Of course while I'm typing that entry about the daily OEX oscillators still showing the possibility for more upside, perhaps into tomorrow, the OEX drops half a point in a couple of minutes! The OEX now comes back down to retest the broken descending trendline that formed off today's intraday highs. Remember that within the next twenty minutes, usually around 1:45 ET, we should get the normal push down or up to test support or resistance. Be prepared and watch the way the OEX weathers that test.

  Linda Piazza   7/24/200,  1:31:58 PM
The daily OEX chart still shows oscillators that have more upside, perhaps upside into tomorrow, although that's just guesswork, of course, and would be dependent on many other factors.

  Mark Phillips   7/24/200,  1:18:41 PM
BEAS $13.66 (+0.80) The waiting is over, as BEAS broke above that $13.30 barrier on a burst of volume heading into the lunch hour ande it is continuing to push higher -- watch for resistance and a possible pullback once the $14 level is tested. Based on the strong volume again today, BEAS could charge right on through. If so, we'll know our $16 target is worth pursuing ahead of earnings on 8/14.

  Jonathan Levinson   7/24/200,  1:16:31 PM
Gold is setting new highs, August up 4.60 to 363.30, HUI +5 to 164.33 and XAU +1.93 to 83.39.

  Jeff Bailey   7/24/200,  1:14:48 PM
Gold/Silver Index (XAU.X) 82.90 + .... breaking above its January 24, 2004 relative highs highs here. This gold/bond action is starting to have the look for INFLATION, which at this part of the economic cycle may well be viewed as a positive economic event.

Randgold (GOLD) $19.00 +0.98%.... after giving a spread-triple bottom sell signal at $15.50, stock has now reversed with a spread-triple-top at $19.00.

If anything, MARKET and me (Jeff Bailey), maybe the Fed too, shows some confusion as to just what to make of things recently as it would relate to any type of economic scenarios on "deflation" or "inflation."

  Linda Piazza   7/24/200,  1:10:20 PM
The OEX currently challenges the descending trendine formed from the five-minute highs this morning.

  Linda Piazza   7/24/200,  12:54:17 PM
RSI turns down again on 30-minute and 60-minute OEX charts, again breaking through the former descending trendlines.

  Linda Piazza   7/24/200,  12:51:06 PM
Swing Trade Signals
On 30 and 60-minute OEX charts, RSI is trying to curl back up again after coming down to touch the former descending trendline. MACD has flattened on the 30-minute chart and tries to do so on the 60-minute chart. There are bearish kisses on all the 5(3)3 and 21(3)3 stochastics across these two time intervals, with the 30-minute 5(3)3 stochastics in full bear roll and approaching oversold levels again. There's mixed evidence here, and nothing that persuades me to jump into a short trade at these levels, even if the VIX is low. Volume patterns continue to be strong although they've eased back from this morning's earliest and strongest levels.

Neither am I persuaded to jump into a long trade, even though daily oscillators are turning up and volume patterns are strong. There's that VIX and layered overhead resistance to consider.

I will be issuing a short/put entry signal if the OEX dips below 491. I would also like to issue one on a trade below 497.50 (one point below the 498.50 support--deep enough that we're sure the drop isn't a trap, but not so deep that we couldn't benefit by a fall only to yesterday's 493.36 drop before a bounce), but that would require that some of the corroborating evidence shift the direction of that trade in the interim. I'm not sure that will happen.

  Jonathan Levinson   7/24/200,  12:48:15 PM
Put to call ratio .69 now, VIX down .65 at 19.79. The bulls are partying, selling options cheaper and cheaper. Meanwhile the canary in a coalmine, gold, is up 2.10 to 360.80, HUI up 3.23 to 162.50, XAU +.88 to 82.34. The lag in the "hedged" metals index, XAU, is bullish for gold- the companies with short exposure to the metal are holding back the index, while the relatively unhedged HUI powers upward.

  Jeff Bailey   7/24/200,  12:47:14 PM
Q2 Employment cost index due out July 31 at 08:30 AM EST. Same day as new weekly jobless claims.

  Jeff Bailey   7/24/200,  12:40:51 PM
All the info you could need on weekly jobless claims at this Link

Am trying to find "average hours worked," which I'm not sure is released each week (think this comes in separate data). Some discussion in the Market Monitor on need to hire labor. I thought I saw recently that hourly workweek has been falling.

  Jeff Bailey   7/24/200,  12:36:57 PM
AT&T (T) $20.58 +5.37% ... off its highs of $21.18, which saw test of 200-day SMA ($21.26). Reported EPS of $0.68, which was 15 cents better than consensus. T said revenues fell 8.2% year-over-year to $8.8 billion, which was in line with consensus of $8.78 billion. T raised its quarterly dividend by 27% to $0.2375 per share (increase of 5 cents) and said it will buy back up to $2 billion of debt. (Moodys affirmed its debt rating on T's debt with senior unsecured rating of "Baa2," its second-lowest investment grade, and "Prime-2" short-term rating, with outlook remaining negative.

  Jim Brown   7/24/200,  12:33:05 PM
Editors Play - If you are in the AUG-DJX put play then today might be a good opportunity to add to that position cheaply. I just added some more Aug-88 puts for 35 cents. Very cheap!

  Linda Piazza   7/24/200,  12:28:30 PM
Volume patterns continue to show more advancers than decliners and more up and down volume, but there's been a slow and steady chipping away at the strength. Adv/dec ratios now stand at 1.8 for the NYSE and 1.6 for the Nasdaq, for example. These remain strong numbers, but are far below the highs early this morning. Up volume is now 1.7 times down volume on the NYSE and 1.9 times down volume on the Nasdaq. These also show slight deterioration, although they're still strong figures, of course. Total volume is 701 million shares on the NYSE and 890 million on the Nasdaq.

  Jeff Bailey   7/24/200,  12:23:11 PM
SBC Communications (SBC) $22.95 -1.87% Link ... off its lows of $22.95 after reporting EPS of $0.42 (ex-items), which was a penny better than estimates. SBC said revenues fell 5.9% year-over-year to $10.2 billion.

CEO Edward Whitacre said SBC's long distance business added 2.3 million customers, while DSL broadband internet services added 304,000 subscribers in recent quarter. However, the number of phone line services dropped 4.2% as customers continued to disconnect phone lines in favour of wireless services.

  Linda Piazza   7/24/200,  12:17:01 PM
On both the 30-minute and 60-minute OEX charts, RSI has now turned down. RSI often leads the other indicators, although 5(3)3 stochastics have also begun rolling on the 30-minute chart. This is far from conclusive evidence, but is the first hint of weakness to show up since yesterday afternoon. That doesn't preclude another test of the day's high, of course, but I remain glad that we didn't chase a long entry on the Swing Trade model today.

  Jonathan Levinson   7/24/200,  12:10:52 PM
Put to call ratio rises to .70.

  Jeff Bailey   7/24/200,  12:01:33 PM
Monster Worldwide (MNST) $26.03 +12.8% ... here's how I've set up my bar chart with retracement and regression. Link

MNST changed NASDAQ symbols from TMPW after the April 30th close.

  Linda Piazza   7/24/200,  11:41:15 AM
Swing Trade Signals
Volume patterns continue to be strong. Like Jim and Jonathan, however, I'm noticing the warning offered by the below-20 VIX. It's always possible for historical trends to be broken, but historically a VIX this low signals a market top within a couple of weeks either side of day when the low VIX appears. That means that it's possible that the peak has already been reached. That possibility, coupled with the layered overhead resistance and the possible bearish right triangle, hint that a bearish play might be the next Swing Trade, but it might not be today that the right conditions will appear. Our safest entry will be on a drop through 491, recent support and the bottom of the bearish right triangle. That's an 11-point drop from the current OEX level, of course, a drop that would be a profitable one if it occurs. It's that "if" that causes the problem because until a drop through 491, the OEX will remain mired within its congestion zone, a zone in which it might again find support as it did yesterday. I'm looking at possible trades on a rollover, with one possibility being a move below 498.65 support and another being a move below 495, the site of a rising trendline on the 30-minute chart, a trendline that began forming on Monday. However, an entry at any of those interim levels would be risky and would require other corroborating evidence. I don't yet have that corroborating evidence.

  Jeff Bailey   7/24/200,  11:38:34 AM
11:00 Update posted at this Link

  Alan Knuckman   7/24/200,  11:37:04 AM
Jim, in reference to the missing end of July drop something crossed my mind when I opened the mail this week. It came to my attention that people are now receiving their quarterly financial statements. Those in the markets may have gained nearly 20% since the lows. Psychologically people feel better about the economy. And those who have been out of the market feel they are missing out and may now jump back in. People have very short memories. me.

  Mark Phillips   7/24/200,  11:31:22 AM
SNPS $62.04 (+1.09) It may not have looked like it at the time, but yesterday, our bullish SNPS play delivered just what we were looking for in terms of a lower-risk entry. Dipping to $60.50, the stock found support at the 50-dma and then rebounded slightly in the early afternoon. The real move materialized this morning, with the stock gapping up and now trading back over $62 and apparently working its way higher for a test of the first significant resistance near $63. Whether dip-buyers or momentum players, traders interested in the play have gotten their shot at the entry setup we laid out on Tuesday and now it's time to wait for the stock to deliver on its bullish promises.

  Linda Piazza   7/24/200,  11:20:38 AM
The OEX just broke above 501.75, meaning that the formation showing up on the five-minute chart is likely not a bear flag, although perhaps we should give the formation a little leeway. These potential flag formations--both bullish and bearish--keep setting up this morning and then not fulfilling their potential. This is not a great way to trade, and I'm glad we're not in a Swing Trade with our profit potential swinging back and forth this erratically, too.

  Jonathan Levinson   7/24/200,  11:13:24 AM
Put to call ratio .65, equity component .52. VIX 19.91.

  Linda Piazza   7/24/200,  11:11:16 AM
Now the current OEX five-minute pattern looks like a bear flag, rising after the drop from today's highs. You know the drill: if it is, it needs to break to the downside before the OEX retraces more than 50% of the previous drop. That means that it should break to the downside at or before the time it reaches 501.75.

  Jeff Bailey   7/24/200,  11:08:01 AM
U.S. Dollar Index (dx00y) 95.31 -0.12% ... choppy trade in the dollar and now back lower. May have SPX hoveringing around WEEKLY pivot of 995.50 here. Treasuries still at/near lows of their session.

  Linda Piazza   7/24/200,  11:06:29 AM
As Jonathan has noted several times, the VIX is now the lowest it's been all year. In fact, it's now at its lowest level since March, 2002, when it reached an intraday low of 18.87 and a closing low of 19.03. This low was reached about a week to two weeks after the indices had reached their March peaks and began falling toward their July lows. Have our indices currently already reached their peaks, too?

  Jonathan Levinson   7/24/200,  11:04:46 AM
The weakness in August gold didn't last long, and it's now back at the 360 level. HUI is up 2.09 to 161.38 and XAU +.27 to 81.73.

  Linda Piazza   7/24/200,  10:57:09 AM
Volume patterns continue to be strong today, with up volume double the down volume. On the NYSE, advancers are more than double decliners, and they're nearly double decliners on the Nasdaq, too. New highs jumped up again today, with 326 showing up on the NYSE and Nasdaq, with 10 new lows. As of a few minutes ago, total volume was 382 million on the NYSE and 530 million on the Nasdaq.

  Linda Piazza   7/24/200,  10:53:27 AM
I no sooner got my 10:47 post typed, suggesting that the OEX needed to break to the upside before 501.25 if that formation was going to fulfill its potential as a bull flag, when the OEX promptly dropped below that level. That's not a bull flag, then, and we're seeing a continued pullback from the old trendline I showed in my 10:10 post. The day is early yet, but the potential for one of these depicted levels of resistance to stop the OEX cold is the reason I was reluctant to chase with a long entry today.

  Jeff Bailey   7/24/200,  10:51:20 AM
Sell Program Premium Alert SPX = 994, OEX = 500, INDU = 9,240, NDX = 1,279, QQQ = $31.77.

  Jeff Bailey   7/24/200,  10:48:26 AM
Monster Worldwide (MNST) $26.37 +14% ... profiling bullish speculative play here. Several weeks ago we had noted short-squeeze potential in the stock. I don't have July short-interest at this point, but June 13th showed 13.6 million shares short, with had days to cover at 6.5. Compares to May 15th short interest of 13.8 million and 4.84 days to cover.

Took 1 BSQIE Sep. $25 call for $3.50.

While it is true that one week of better jobs data does not make a trend. Put yourself short 500,000 shares of MNST below $24 and make a decision. Link

Today's trade at $24 is reversing "buy signal" and current column of X is bullish to.... $45.50. Have to calculate bullish count in two parts. 1 for $0.50 box and 1 for $1 box.

  Linda Piazza   7/24/200,  10:47:26 AM
So far, the current drop in the OEX looks like either a bull flag or a descending wedge on the five-minute chart, both of which have bullish connotations. However, if this is a bull flag, it needs to break to the upside soon, preferably before the OEX retraces any further than 501.25 or so.

  Mark Phillips   7/24/200,  10:47:06 AM
Just the picture we want to see! With the broad market rebounding again today, our Home Improvement duo is continuing to deliver the relative performance we've been looking for.

LOW $47.96 (+0.46) Clearly the strongest of the two, LOW is back to testing the $48 resistance level and looking ready to break out. In fact, a trade over $48.05 (the 7/15 intraday high) looks acceptable for momentum entries targeting a move to $50 near-term.

HD $32.15 (+0.03) On the bearish side of the ledger, we have HD, continuing to find itself under pressure. After breaking the 50-dma on Monday, we're seeing the stock build a nice bear-flag pattern as it finds resistance just below the 50-dma (now at $32.37). If this really is a bear flag pattern, then we ought to see the rollover and breakdown from the vicinity of the 50% retracement of the flagpole -- that's just about $32.50. The 50-dma certainly seems close enough, so rollovers in that area look like the best bet for new entries.

  Jonathan Levinson   7/24/200,  10:46:54 AM
The put to call ratio is down to .63 for the past half hour, VIX in the teens, QQV -.33 at 25.96 and VXN -.45.

  Jeff Bailey   7/24/200,  10:38:23 AM
Monster Worldwide (MNST) $26.70 +15.7% ... on-line job search provider and NASDAQ-100 Index component "surging" on the employment data. Link

  Linda Piazza   7/24/200,  10:36:56 AM
I'm having better luck with individual stocks, too, Jeff. (See Jeff's 10:26 post.) That brings up an important point. As Jeff already knows and certainly doesn't need me to remind him, each of us should have various tools in our arsenals and be prepared to switch tactics as appropriate. Just as there are times when hedged plays make more sense than pure directional plays, there are also times when index trades make the best sense and times when being a stock picker may be more beneficial to your account. Perhaps when the indices are mired in congestion zones is one of those times when it's best to be a stock picker. That's the reason I'm watching that potential bearish right triangle on the OEX for either a significant upside breakout or a downside breakdown before committing new funds to OEX trades or suggesting other people do so.

  Jeff Bailey   7/24/200,  10:31:06 AM
Avaya (AV) $8.47 +6.16% .... stock on the move again today for third straight session.

I sold part of my bullish position in the AV Sep. $7.50 (AVIU) from 07/22 entry this morning at $1.15 from bullish entry of $0.55. Didn't sell them all as I can't leg out any further than September at this point. No expiration past September at this point. This "stinks" in my opinion.

  Linda Piazza   7/24/200,  10:28:42 AM
I wanted to offer a clarification of my 10:19 post. I'm not suggesting a Swing Trade long entry at this time because of the layers of resistance just overhead and because intraday oscillators are beginning to get a little toppy. They can continue that way for a while, though, and the OEX might cut through each and every layer of resistance. I'm not bearish but instead am trying to maintain a neutral stance on the markets. My view is that it's possible that we'll spend the summer bumping around in a trading range, perhaps in a choppy fashion, and that we may not know until October how strong or weak the markets actually are. I'm more than happy to go long on a breakout above that potential bearish right triangle if oscillator and other evidence are cooperating at the time, just as I'm more than happy to go short on a breakdown below it with cooperating indicators.

  Jeff Bailey   7/24/200,  10:26:14 AM
Yes Linda. I'm having rough spot with indexes of late. I seem to be having better success with individual stocks from the long side and technical interpretation there. I'm tempted to start a "stock trader wrap" instead.

  Linda Piazza   7/24/200,  10:22:29 AM
Well, Jeff, I'm glad to know I'm in good company, at least, with both of us getting stopped on bearish trades this morning. (See Jeff's 10:19 post.)

  Linda Piazza   7/24/200,  10:19:50 AM
I agree with Jonathan's post about waiting for an irresistible entry. Although the OEX did retrace more than half its first five-minute range, it did hold above gap support. Volume patterns are strong. Daily oscillators have been turned up into full bullish mode. It looks like the kind of day in which gains can continue all day, but there's strong resistance at the current level, relatively strong resistance near 504 and 506, and even stronger resistance near 511 and 513. The OEX can break through any and all of those layers of resistance, but will it? It's more than possible that nimble daytraders have already begun profiting on the OEX's climb and could continue to do so, but I can't responsibly suggest a long entry with those resistance levels just ahead.

  Jeff Bailey   7/24/200,  10:19:40 AM
SPX 988.61 +1.01% ... Stopped per yesterday's bearish profile on this move above 998. (son of a ...)

Psychological 1,000 resistance, but looking 1,004-ish.

Today's trade at SPX 995 is 3-box reversal higher.Link

Dow Industrials (INDU) 9,260 +0.7% saw 3-box reversal up with yesterday's trade, adds an X at 9,250. Link

  Jeff Bailey   7/24/200,  10:17:48 AM
EMCOR Group (EME) $42.09 -12% ... had alert set at $47 on EME, and I think this dates back to "reconstruction of Iraq" potential. Stock gets hammered after morning trading halt as earnings come in below consensus. Link

  Jonathan Levinson   7/24/200,  10:14:25 AM
Put to call ratio .66. VIX lower, to 20.18, as fear evaporates, VXN -.27, QQV -.48.

  Linda Piazza   7/24/200,  10:10:25 AM
Remember those old charts I keep hanging around, cluttering up my desktop? Here's one, a daily chart that once depicted two versions (green lines and lavender lines) of that old "bearish" rising wedge that began forming in March. It's uncanny how the OEX has traded along the extended trendlines (both my version and a reader's suggested version in lavender) ever since. Right now, the OEX is challenging one of those trendlines. Link

  Mark Phillips   7/24/200,  10:07:57 AM
BEAS $13.26 (+0.40) The strong start to the day (especially on the NASDAQ) has our bullish PremierInvestor play on BEAS right on the cusp of a breakout to new recent highs. The stock has traded an intraday high of $13.30, just above the 7/16 high of $13.27, so technically we already have the breakout. But now we need to see some followthrough after the initial opening excitement. A trade over $13.30 would both do that and provide a viable momentum entry trigger. BEAS is likely to find some resistance near $14 as well, so make no mistake about it, a momentum entry is the more aggressive approach vs. buying the dips that we've been talking about in recent updates.

  Linda Piazza   7/24/200,  10:05:30 AM
While the daily OEX chart shows a pattern that looks a lot like a bearish right triangle (horizontal base with a descending trendline that forms the top, the 30- and 60-minute charts yesterday showed a potential bullish right triangle, beginning on the 21st, with a horizontal top at 498.65 and an ascending trendline that formed the bottom of the triangle. I mentioned this potential formation yesterday. This morning's climb above the 498.60 horizontal top predicts a rise near 506, althougth the OEX must fight through several layers of important resistance to get there. It sure looks as if it's going to plough up to that level right away, doesn't it?

  Jeff Bailey   7/24/200,  10:05:17 AM
QQQ $31.99 +1.2% .... Profiling QQQ long here at session high. Stop to begin is $31.56, target $32.40 and MONTHLY R2.

  Jonathan Levinson   7/24/200,  10:04:58 AM
An 8B overnight repo brings us to a net 9B drain so far from the Fed.

  Jeff Bailey   7/24/200,  10:04:25 AM
Dow Industrials (INDU) 9,265 +0.77% .... INDU "pulled back" to 9,213 and has ramped back higher to session high here. Early action should have Indexes closing at session highs.

  Linda Piazza   7/24/200,  9:57:46 AM
Swing Trade Signals
The OEX has now retraced more than 50% of the first five-minute larger-than-normal range, with that 50% retracement coming right at 500. This is normally a bearish sign, and normally predicts a move down to test the low of the day, which will be the level of this morning's gap up (and, incidentally, the level at which we were stopped out of our Swing Trade).

Today's trade turned up oscillators from the 30-minute to the daily level. Although some look a bit toppy, we can't presume they'll roll before they start, so that precludes a bearish play as yet, as it should. What if the 498.65 support holds? Do we enter long? Early volume patterns certainly support the idea of a long entry, although early volume patterns can be distorted. Unfortunately, there are those toppy oscillators again, coupled with layered resistance at 501, 502, 504, 506, etc. The daily pattern looks more like a bearish right triangle than it does like anything else. So, although the holding of 498.65 support and a continuation of the early strong volume patterns might result in good gains on long positions, those positions wouldn't be safe ones until key resistance is broken. I think we have to let it run without us.

  Jonathan Levinson   7/24/200,  9:48:11 AM
The fed has 19B in repos of varying maturities expiring today. 2B in 28 day repos has just been announced, 17B to go.

  Jeff Bailey   7/24/200,  9:46:17 AM
Dow Industrials (INDU) 9,232.40 +0.4% .... above our WEEKLY 38.2% retracement of 9,222 and back in our bullish channel. As a bear in the INDU from yesterday, I was looking for this 9,222 level to hold resistance on any bullishness, and near-term observation is INDU stronger than I wanted to see. Right now, want to see INDU back below the 9,222 level.

  Linda Piazza   7/24/200,  9:45:00 AM
Swing Trade Signals
The link to the first chart on my 9:38 post was incorrect. It has now been corrected to show the right chart. Here it is, too: Link

  Jeff Bailey   7/24/200,  9:43:51 AM
QQQ $31.83 +0.79% ... morning high came in first 5-minutes and came right at our mid-point of regression at $31.96. Potential for a lower gap fill back to WEEKLY Pivot of $31.65 with SOX.X a little lagging early.

  Jeff Bailey   7/24/200,  9:41:35 AM
Sector Action broadly positive, but not overly large gains early.

Weakness Gold/Silver Index (XAU.X) 80.74 -0.88%, Semiconductor (SOX.X) 393.99 +0.05%.

Strength Software (GSO.X) 126.89 +1.3%, Airline (XAL.X) 53.88 +1.38%, Networking (NWX.X) 186.87 +1.4%, Disk Drive (DDX.X) 115.69 +1.2%, Insurance (IUX.X) 272 +1.13%

  Linda Piazza   7/24/200,  9:38:00 AM
Swing Trade Signals
Two Swing Trade entries have resulted in losses now although the unofficial suggestions have performed better than the official ones. It's time now to examine what went wrong. Here are the reasons I used to enter yesterday's trade: Link

Here's the chart I posted yesterday, detailing my thinking about possible trades. Link Although I thought the safest trades would be a long on a breakout over 506 or a short on a breakdown under 591, both the horizontal red line and the most sharply descending of the two descending trendlines crossed near 498, showing that a drop below that level would also be pivotal. We entered when we were sure of a rollover from that level. As of yesterday's close, RSI was turning down along its descending trendline, too, and the OEX once again closed below its 21-dma. Although this wasn't the safest of the suggested trades, it still appears to be a reasonable trade. Would I do it again? Of course not, now that I know it lost money, but I still believe it had enough points in its favor to merit consideration.

What next? The OEX soon faces strong resistance, so I'm not sure about chasing a long at this point. Both 30-minute and 60-minute stochastics and RSI near overbought levels, although they can stay there for days, of course. I'll be watching for an opportunity to jump in again, but I want to make sure the next trade is one of those safe ones.

  Jeff Bailey   7/24/200,  9:35:13 AM
Dow Industrials (INDU) 9,238 +0.47% ... all Dow components now trading here. Took a few minutes to get them all open.

  Jonathan Levinson   7/24/200,  9:35:12 AM
August gold is lower on the stronger dollar as Jeff notes, down 1.20 to 357.50 and below its pre-data bid at 361.HUI -.94 and XAU -.97 so far.

  Jeff Bailey   7/24/200,  9:32:51 AM
Dow Diamonds (DIA) $92.63 ... opening tick was $92.68. Fractional "sell the open" type of action here. Will sett alert just above opening high of $92.75 for further sign of strength.

  Linda Piazza   7/24/200,  9:32:41 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
The OEX short/put trade was stopped out at the open.

  Jeff Bailey   7/24/200,  9:30:40 AM
U.S. Dollar Index (dx00y) 95.56 +0.12% ... dollar continues to rebound after this morning's jobless claims data. Current trade is right back at the trending higher 21-day SMA of 95.56. Yesterday's trade saw a break back below.

I feel my bearish profiled trades right now at least need a weakening dollar from here.

  Jeff Bailey   7/24/200,  9:23:37 AM
09:00 Update posted at this Link

Updates to yesterday's bearish profile in INDU/DIA and SPX/SPY

  Linda Piazza   7/24/200,  9:12:37 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Futures have surged this morning after the release of the employment data. As I feared, it looks as if the Swing Trade will be stopped out at the open with our puts worth less than they would have been if we'd closed the trade for a loss yesterday afternoon. I hope some of you took the opportunity to close out at yesterday's smaller loss. Our stop is 498.71.

  Jonathan Levinson   7/24/200,  8:33:29 AM
Initial claims in the most recent week dropped by 29,000 to 386,000, well below expectations. Great news!

  Jonathan Levinson   7/24/200,  8:32:47 AM

  Linda Piazza   7/24/200,  7:30:13 AM
Good morning. The Nikkei opened flat in Thursday's session, but pushed above 9700 before the morning session ended. The Nikkei could not sustain levels above 9700, however, although it tried twice more during the day to push above that level. It did close up 55.66 points or 0.58%, at 9671, closing roughly in the middle of its day's range. Early in the day, investors learned that June exports rose 1 percent and imports rose 2 percent, with some claiming that the higher imports was a sign that Japan's economy may not contract as had been feared. Some concluded that the rise in imports implied a gearing up for the expected increased demand from the U.S. Exports did not rise from the year-ago levels, but imports rose 11.6 percent from the year-ago level. The trade surplus fell for the first time in three months, also falling from year-ago levels.

Gains were seen in brokerages on hopes that the quarter will show a profit and in mobile phone-related companies after a report indicated that Japanese domestic handset sales increased. Sony traded down ahead of its after-the-bell earnings release. Investors feared that earnings would be dismal, and they were, with the consumer electronics firm reporting profits that dropped 98% in the first quarter.

Another Asian bellwether reporting earnings after the bell surprised to the upside. Taiwan Semiconductor reported a 26% rise in profits, citing rising demand for its made-to-order chips, according to a Marketwatch.com report. Shares had been flat ahead of the announcement, but the Taiwan Weighted still gained 2.17%. Trading was mixed across the other Asian bourses. South Korea's Kospi gained 1.03% and Hong Kong's Hang Seng gained 0.23%, but Singapore's Straits Times slid 0.49%.

Most European bourses currently trade higher. Earnings have begun pouring in across Europe, too. A scan of Bloomberg.com headlines alone finds articles announcing that AstraZeneca reported falling profits but raised its annual forecast, Siemens and Peugeot reported lower earnings and cited the strengthening euro, and Shell announced rising profits based on higher oil and gas prices among other causes. Shell's CEO has been on CNBC this morning, being quizzed because of his company's decision not to devote some of those 28% higher (than year-ago levels) profits to a share buy-back program. The company said it will spend on investments instead, but its decision may disappoint investors. STMicroelectronics reported net income that dropped 25% although revenue rose 11%, also blaming the strengthening euro as well as pricing pressures. KLM Royal Dutch Airlines reported a net loss of 54 million euros against a profit of 11 million in the year-ago period, but did mention that traffic had begun to increase at the end of June, and was gaining in the early European session. DaimlerChrysler and Renault are also due to report today.

As of this writing, the FTSE 100 trades up 45.90 points or 1.12%, to 4132.40, down only a little from the day's high, but looking as if it has pulled back in a possible bull flag in preparation for another move higher. The CAC 40 trades up 36.67 points or 1.19%, at 3126.08, finding support at 3120 since midmorning. The DAX trades in a similar pattern, having risen to 3340 by midmorning and then trading just above and below that level the rest of the morning. It currently trades up 38.66 points or 1.17%, at 3343.14.

  Jeff Bailey   7/23/200,  9:48:31 PM
Pivot Matrix for tomorrow posted at this Link

  Jim Brown   7/23/200,  9:48:21 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

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