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  Jeff Bailey   7/28/200,  4:52:46 PM
Pivot Analysis Matrix posted at this Link

  Jeff Bailey   7/28/200,  4:37:21 PM
Netease.com (NTES) $44.10 +5.5% .... Link higher at $46.75 after reporting Q2 earnings of $0.28 per share, which was 4 cents better than consensus of $0.24. Company said revenues rose 258.7% year-over-year to $16.5 million, which was above consensus of $15.1 million.

CHINA $12.68 +0.88% at $13.10 Link , SINA $36.28 +5.52% at $37.35 Link , SOHU $39.72 +0.05% at $40.40 Link in sympathy trade.

  Jim Brown   7/28/200,  4:14:34 PM
In 30 minutes, at 4:45 PM ET we will be shutting down the current Market Monitor and making the switch to the new system. I will post the new download link in a moment. If you do not download the new software you will not be able to read the monitor tomorrow.

  Jim Brown   7/28/200,  4:14:18 PM
After the close tonight we will be upgrading the Market Monitor to a much faster more reliable version that includes the audible alerts.


The server changes are not compatible with the old software. We will make an announcement in the Monitor after the close with a link for the new download. If you do not download it tonight you will not be able to read the monitor tomorrow.

  Linda Piazza   7/28/200,  3:48:50 PM
The Dow Jones Transportation Index, TRAN, appears headed for its highest close since July, 2002. July 8, 2002, it closed at 2615.79, the last time it closed over 2600. As I type, the TRAN is at 2615.79. Is this a coincidence? Not likely.

  Linda Piazza   7/28/200,  3:43:29 PM
That test of OEX 500.80 occurred quickly, with the OEX now testing its low of the day.

  Linda Piazza   7/28/200,  3:37:33 PM
With the OEX dropping below 501.85, we may get yet-another test of 500.80. This is based on a double-top pattern on the one-minute chart.

  Jonathan Levinson   7/28/200,  3:35:15 PM
Put to call ratio .61 again, VIX down .07 to 19.87.

  Linda Piazza   7/28/200,  3:08:12 PM
I, too, am trying to stay unbiased as Jim mentioned doing. In my case, it's not actually too difficult to do so, because I can easily draw different formations to support different scenarios. That leaves me with what the markets should do this time of year, but without concrete evidence that's what it will do.

  Jonathan Levinson   7/28/200,  3:07:05 PM
Put to call ratio .61, VIX 19.93.

  Linda Piazza   7/28/200,  2:53:09 PM
Well, at least we're getting confirmation that OEX 500.80 is an important number today, as it has been in the past. We're not getting confirmation of much else, and so far I'm pretty happy not to have dragged readers into another range-bound trade today.

  Jeff Bailey   7/28/200,  2:47:33 PM
SpectraLink (SLNK) $16.24 +5.45% .... after some consolidation just above $15.00, stock back on the move again. Avaya (AV) $9.17 -3.16% takes a rest after recent jump from $7.00. Looks to me like bulls are perhaps working both stocks in somewhat rotational fashion.

  Linda Piazza   7/28/200,  2:47:28 PM
NYSE volume patterns show another slight shift, this time with decliners gaining ground again slightly, but with up volume remaining ahead of down volume. There's no "aha" moment here. Nasdaq adv:dec ratios have remained about 18:12 or 19:13 most of the day.

  Linda Piazza   7/28/200,  2:45:00 PM
There was OEX 500.80 again, with the current OEX five-minute bar showing a low of 500.82 before bouncing.

  Linda Piazza   7/28/200,  2:31:39 PM
The OEX 21-dma lies at 499.10, about a point below today's 500.21 low of the day. That average may be helping to provide support beneath the current OEX prices.

  Jeff Bailey   7/28/200,  2:28:11 PM
Oxford Health (OHP) $46.00 +2.95% ... little "bump" to $46.17 after trade at $46.00, which has PnF chart Link triggering spread-triple top buy signal.

Should have overhead supply now more limited and support building from $44.

  Linda Piazza   7/28/200,  2:24:13 PM
The NYSE adv:dec ratio has steadily improved with advancers now pulling slightly ahead of decliners, and with up volume about 1.4 times down volume. Nasdaq adv:dec figures stand at 19:12, with up volume about 1.7 times down volume. Total volume as of a few moments ago was 807 million on the NYSE and 1 billion on the Nasdaq. Today sees 35 new lows, however, a slightly higher number than we've been accustomed to seeing.

  Jonathan Levinson   7/28/200,  2:18:21 PM
Put to call ratio .62, VIX 19.95.

  Jim Brown   7/28/200,  2:16:14 PM
After the close tonight we will be upgrading the Market Monitor to a much faster more reliable version that includes the audible alerts.


The server changes are not compatible with the old software. We will make an announcement in the Monitor after the close with a link for the new download. If you do not download it tonight you will not be able to read the monitor tomorrow.

  Linda Piazza   7/28/200,  2:09:43 PM
Swing Trade Signals
It's possible to imagine this formation seen on the OEX 15-minute chart might be a bull flag. Link If so, it should break to the upside by or before the time the OEX retraces half the flagpole, at or before 497.75 or so. Those aggressive traders who are considering entering short/put on a break of 498 might take this consideration into effect, because the OEX could trade as low as 497.75 or perhaps 497.50 and still maintain this possible bull flag. Of course, I could probably turn to another chart and draw an entirely different formation with an entirely different outlook. It's that kind of day.

  Linda Piazza   7/28/200,  1:56:55 PM
Remember this OEX daily chart? Look where we are again. Link

  Jeff Bailey   7/28/200,  1:54:36 PM
American Express (AXP) $45.84 +0.52% ... just reporting quarterly (Q2/June) EPS of $0.59, which was 2 cents better than forecast. AXP said revenues rose 6.9% year-over-year to $6.36 billion, which was above consensus of $5.98 billion.

Going forward, AXP said it expects diluted EPS before accounting changes to "exceed current 2003 consensus of $2.26," but earnings, due to increased investment spending, "are not likely to exceed $2.29 for the year."

  Linda Piazza   7/28/200,  1:41:02 PM
Just as I was about to make my usual post warning of the 1:35-1:55 push, the OEX pushed up. We're getting a test of resistance during this push.

  Jeff Bailey   7/28/200,  1:38:31 PM
Genentech (DNA) $80.71 +3.32% .... making its way above $80.00 consolidation resistance from bar chart here. PnF remains bullish after "bullish triangle" from $76.Link

  Linda Piazza   7/28/200,  1:37:40 PM
Today is another of those days when I keep scanning charts, looking for the definitive something that's going to show us future direction. It's not there, or I can't find it if it is. I could pose both bullish (support holding) and bearish (resistance holding) cases as I watch various developments on the 5-, 30-, and 60-minute charts. The 60-minute stochastics have made bearish kisses, but while the OEX idled, the 30-minute 5(3)3 stochastics cycled all the way down toward oversold levels again and made a bullish kiss. Today is not a day to rely on oscillator evidence alone when making decisions. Today is a day when it's dangerous to think you see the definitive chart formation, as it may be only boredom or a preset bias making you think you see it.

  Jeff Bailey   7/28/200,  1:35:07 PM
01:00 Update posted at this Link

  Linda Piazza   7/28/200,  1:09:36 PM
As Jim thankfully pointed out, I was a bit off when quoting a trading range that might be tried in my 12:12 post today. I really don't have expectations that we'll be trading OEX 598-593 today! Unfortunately, my cable service shut down momentarily today and when I signed back on, I didn't realize that I hadn't pulled my email service back up, so it took a while for Jim's message to get to me. I've now corrected the original post.

  Linda Piazza   7/28/200,  12:59:57 PM
Advancers now lead decliners on the NYSE with adv:dec ratio of 15:17, but advancers still lead on the Nasdaq with the ratio there being 18:13. Down volume leads on the NYSE and up volume leads on the Nasdaq. Total volume is 629 million on the NYSE and 797 million on the Nasdaq. New highs still number over 300, but new lows appear to be picking up a little on the NYSE, at 22 today.

  Jonathan Levinson   7/28/200,  12:45:02 PM
Put to call ratio drops to .69, VIX +.27 to 20.21.

  Jeff Bailey   7/28/200,  12:33:45 PM
InClone (IMCL) $43.40 +8.7% .... stock was on the move higher Friday on some speculation that company might be takeover candidate by Bristol Myer Squibb (BMY) and extending Friday's gains again today.

  Linda Piazza   7/28/200,  12:26:32 PM
We've seen a definitive downside break of the neutral triangle at the top of the OEX five-minute range as well as a definitive break of the ascending trendline that began forming Friday morning. Now the 500.70-500.80 support is being tested. The previous breaks of support haven't resulted in a quick plunge, and they're breaks of five-minute formations only, although the OEX is also perhaps turning back from the 30-minute trendline I showed in my 10:47 post and perhaps also from one version of the descending trendline shown on the daily chart. Those pullbacks aren't yet as definitive, however. Nothing much else definitive, but that's been true a lot lately!

  Linda Piazza   7/28/200,  12:12:50 PM
Swing Trade Signals
So far, OEX 500.80 holds. Hardy souls who don't mind more risk than normal could try the 498-493 (and possibly 591) range again should the OEX dip below 498.65, but I would wait until a push through 498 to be sure there wasn't a fake dip below 498.50. To hit 498, the OEX would have to violate 500.80 and the 498.65 support, so it might mean at least a temporary change in direction. Unless conditions change radically, I won't be initiating an official signal for this range, however, as neither volume patterns nor daily charts yet support this action. Of course, this guarantees that this downward movement will be the one that continues.

  Jonathan Levinson   7/28/200,  12:11:58 PM
Put to call ratio drops to .73, VIX up to 20.21.

  Linda Piazza   7/28/200,  11:59:10 AM
The OEX tried an upside breakout of the five-minute neutral triangle, but couldn't make the breakout last. Now it tries a downside breakdown. We'll see if that lasts, either.

  Linda Piazza   7/28/200,  11:48:41 AM
We saw one OEX five-minute upside breakout of the neutral triangle but subsequent candles fell back inside the neutral formation. The upper trendline is currently being tested again as the SPX again approaches 1000.

  Jonathan Levinson   7/28/200,  11:47:38 AM
Put to call ratio .77, VIX down to 20.14.

  Jeff Bailey   7/28/200,  11:39:08 AM
11:00 Update posted at this Link

  Linda Piazza   7/28/200,  11:17:49 AM
The OEX five-minute chart shows a neutral triangle (higher lows and lower highs) setting up on the five-minute chart. Since the OEX entered this neutral triangle as it was rising, the presumption is that it will exit it to the upside, too, but that's far from a given with this neutral triangle forming right under resistance. We just have to wait to see what happens.

  Jonathan Levinson   7/28/200,  11:11:44 AM
The put to call ratio is up to .80 after printing .67 for the first hour. VIX is up .35 to 20.29, TRIN.NQ .89, TICK.NQ +78, QQV +1.19 to 25.74.

  Linda Piazza   7/28/200,  11:01:07 AM
Volume patterns now show more advancers than decliners and stronger up than down volume on both the NYSE and the Nasdaq.

  Jim Brown   7/28/200,  10:55:35 AM
After the close tonight we will be upgrading the Market Monitor to a much faster more reliable version that includes the audible alerts.


The server changes are not compatible with the old software. We will make an announcement in the Monitor after the close with a link for the new download. If you do not download it tonight you will not be able to read the monitor tomorrow.

  Jeff Bailey   7/28/200,  10:49:26 AM
Maxtor (MXO) $10.28 +5.2% .... DiskDrive Index (DDX.X) 115.11 +1.17% Link component we've discussed as bullish in recent weeks. I've had retracement set from $1.77 to $12.24, which has 80.9% at $10.24 serving resistance on closing basis. Stock shows early session relative strength here and continue to look bullish after the spread triple top at $8.00. Link

  Linda Piazza   7/28/200,  10:47:34 AM
Here's the OEX action in relationship to yet-another trendline, on yet-another chart, showing today's trading in relationship to that trendline. Although the formation on this 30-minute chart is not a true reverse H&S, its shape approximates it closely enough that the psychology behind it may be similar. Perhaps this trendline is somewhat significant then, with either a burst through it being meaningful or a rolling over beneath it being so. Link

  Linda Piazza   7/28/200,  10:35:34 AM
OEX 30- and 60-minute oscillators begin to look a little toppy now, with the exception of MACD, just now slanting up from the flatline on both charts. ADX also now turns up on both charts and shows a growing trend strength, at least on the 30-minute chart. On neither chart is the ADX yet strong enough to allow us to name this a trending market just yet, but this bears watching. If ADX continues to strengthen, we may not be able to depend on those toppy oscillators as giving good signals. On the daily chart, RSI flattens again while MACD does not yet look bullish, but CCI and stochastics look as if the upward momentum, slight as it appears so far, could continue. This evidence is again mixed, but perhaps slanted slightly toward the long side.

  Jeff Bailey   7/28/200,  10:27:55 AM
BIO Rad Labs (AMEX:BIO) $53.35 -14% ... lower after reporting Q2 June earnings of $0.80, which was penny below consensus. Revenue rose 13.4% year over year to $243.5 million, which was above consensus. Link

  Jeff Bailey   7/28/200,  10:20:20 AM
Autozone (AZO) $81.55 +1.72% .... strong move this morning back above 50-day SMA. Stock closed above 50-day SMA on Friday, but finds extended buying this morning. Stock continues to trade well after test of bullish support earlier this month. Bullish count is $90. Link

  Linda Piazza   7/28/200,  10:17:39 AM
Volume patterns are still showing NYSE up/down volume roughly equal, although decliners pull slightly ahead of advancers. On the NYSE, both advancers and up volume remain ahead. As of a few minutes ago, volume was still light at 124 million on the NYSE and 218 million on the Nasdaq. There's still not a lot of information to be gleaned here.

  Jonathan Levinson   7/28/200,  10:15:50 AM
Opening put to call ratio was .67- VIX +.41 to 20.35, QQV +.90 to 25.45, VXN +.49 to 30.53.

  Linda Piazza   7/28/200,  10:15:02 AM
This five-minute chart shows three of the many trendlines I'm watching today, including the ascending one that the OEX violated this morning, but still climbs. The other two mark a possible version of a five-minute OEX reverse H&S formation (target fulfilled already) and the horizontal support near 498.65. The last two now converge near that 498.65 level. Link

  Jeff Bailey   7/28/200,  10:11:02 AM
Oil/Banks ... Leahman Bros. making some adjustments this morning. It is recommending investors increase weighting in global oil sector to 7% (from 4%) and reducing its financials weighting to 28% (from 31%). Lehman says given the 15% underperformance of global oils to global banks since March, firm feels an increase in exposure to oils relative to banks is warranted. In valuation terms, Lehman notes oils now sell on a forward P/E of just 11%, where the normal premium has been 44%.

New finds Oil Index (OIX.X) 268.74 -0.3%, with more regional S&P Banks Index (BIX.X) 897 -0.8% and larger KBW Bank Index (BKX.X) 896.77 +0.9%.

  Jeff Bailey   7/28/200,  10:03:36 AM
Sector Action mixed in early going with fractional gains/losses.

Sector Strength has Health Provider (RXH.X) 303.66 +2.6%, HMO Index (HMO.X) 774 +1.38% only sectors up 1% or more.

Sector Weakness Has Dow Jones Home Construction (DJUSHB) 421.65 -1.24%, Oil Service (OSX.X) 84.56 -1.14% only sectors down 1% or more.

Treasuries under sell pressure with 10-year YIELD ($TNX.X) rising 6.5 basis points to 4.243%.

  Linda Piazza   7/28/200,  9:58:55 AM
That 500.80 level at which the OEX found support (at least temporarily) this morning is one I've had marked on my intraday charts since the middle of June, as that level often provided S/R. It was the level of a reverse malformed H&S that formed at the end of June and beginning of July, for example.

  Linda Piazza   7/28/200,  9:56:46 AM
The earliest volume patterns, often distorted, show more advancers than decliners and higher up than down volume on the Nasdaq, but roughly equal numbers on both measures for the NYSE.

  Linda Piazza   7/28/200,  9:54:13 AM
When futures didn't react strongly to the strong performances of the Asian and European markets, I wondered if we would be seeing weakness this morning. It looks as if we are.

  Linda Piazza   7/28/200,  9:52:47 AM
The current OEX drop stopped right at the ascending trendline that formed off the five-minute lows since 10:50 Friday morning, but that trendline is now being challenged. (Note: As I typed, the OEX was dropping below that trendline.)

  Linda Piazza   7/28/200,  9:49:25 AM
Swing Trade Signals
With the SPX challenging 1000, but not able to move above that level (yet), it's so tempting to say let's go short/put the OEX, but we just don't have the information we OEX traders need as yet. We need to get past the initial volatility, see VIX levels, and see how volume patterns are lined up this morning.

  Jeff Bailey   7/28/200,  9:47:30 AM
Sell Program Premium Alert INDU= 9,260, SPX = 999, OEX =502 , NDX = 1,276, QQQ = $31.70.

  Linda Piazza   7/28/200,  9:41:02 AM
The OEX first five-minute candle was a doji, so did not provide retracement values that might be of benefit to us. The OEX now heads up to the 504-506 (depending on the version) level that marks the descending trendline off the OEX highs from June.

  Jonathan Levinson   7/28/200,  9:37:33 AM
July 28 (Bloomberg) -- The European Central Bank is selling all the bonds it owns in Freddie Mac and Fannie Mae, the two biggest U.S. providers of mortgage financing, and recommended that its national central banks do the same, according to a person who has seen the ECB's recommendation.

  Jeff Bailey   7/28/200,  9:36:48 AM
Oxford Health (OHP) $45.46 +1.74% .... upside alert here at 52-week high. Link

  Linda Piazza   7/28/200,  9:35:38 AM
On the OEX 30-minute chart, it's possible to draw an ascending trendline off the highs since the 18th. The OEX currently challenges that ascending trendline and falls back slightly from it.

  Jeff Bailey   7/28/200,  9:30:43 AM
Humana (HUM) $16.83 Link ... gaining to $19 (+13%) after reporting earnings before the bell of $0.37, which was 8 cents better than consensus. The HMO said revenues rose 6.5% year-over-year to $3.01 billion, above consensus of $2.98 billion.

HUM gave Q3 GAAP EPS guidance of $0.37-$0.38 per share (consensus $0.38) and full year 2003 EPS of $1.44 to $1.47 (consensus $1.40)

  Jeff Bailey   7/28/200,  9:19:32 AM
09:00 Update posted at this Link

  Linda Piazza   7/28/200,  9:19:27 AM
Swing Trade Signals
The Swing Trade Model is flat this morning. Since mid June, the only workable trades were trades between the pattern described by a flat bottom near OEX 491 and a descending top formed from the descending highs beginning in mid June. Over the last week, the narrowing of the pattern has made even those trades difficult. I spent all weekend confirming that entering after the OEX crossed 498 to the downside and exiting at 493 would have been workable trades, but they would have required leaping into the markets on faith alone, as other indicators sometimes did not yet favor the trade as those markers were passed. We had to wait last week, for example, until the OEX passed 496.50 to enter to the downside. I'm not in favor of continuing to pull readers into that chop, especially as this week will see an even further narrowing of that trading band.

Indicators on 30 and 60-minute charts have all rolled up in full bull mode, although many are nearing levels indicating overbought conditions. Daily indicators also point to the possibility of more upside, although none of these oscillators promise that upside, of course. This occurs as the OEX approaches the top boundary of the formation it's settled into over the last month. That descending trendline may be challenged this morning with the oscillators this time hinting at more upside, although futures didn't react as strongly as I would have expected to the performance of foreign bourses. One version of the descending trendline now crosses at about 506, but a breakout over 506 faces layered resistance levels close overhead. Any breakout, should it occur, also comes at a time when the VIX had dipped to levels that historically indicate that the markets either have or will reached their highs within a two-week period of those levels. As I mentioned on Friday and other writers mentioned this weekend, it's possible for the VIX to continue declining after the markets have already reached their peaks, as happened last year. Pulling readers into a bullish trade right now may mean trapping them into another choppy trade, and I'm also unwilling to do that.

It's likely then that we're going to sit tight on any official trades until and unless the OEX moves above the June highs with oscillators and other market conditions supporting a bullish trade or until and unless the OEX drops below 491 with cooperating factors. It's possible that we'll consider a rollover play, too, but not without strong evidence that it's the right thing to do. That means that we may not be participating in many official trades this week, but I'll still let aggressive traders know about any setups I might see developing.

  Linda Piazza   7/28/200,  6:58:19 AM
Good morning. With the exception of Sony and perhaps a few other techs, earnings expectations have been high in Asia for domestic tech stocks, and Advantest fulfilled expectations in its earnings report on Friday. Many other tech stocks are set to report this week. Advantest's performance and the Friday afternoon rally in the U.S. boosted optimism for tech stocks. The Nikkei opened up almost 100 points and then climbed above 9800 early in trading. Although the index drifted down as the morning session closed, it moved back above 9800 in the afternoon and closed at the high of the day, up 191.90 points or 1.99%, at 9839.91. Other Asian bourses closed up, too, with the Taiwan Weighted closing up 1.06%, South Korea's Kospi closing up 1.80%, Singapore's Straits Times moving up 1.29%, and Hong Kong's Hang Seng closing up 1.97%. Although I do not usually report on Manila's markets, notice should perhaps be made that a failed coup attempt in which soldiers took over the financial district resulted in a 2.1% loss in that market.

Most European bourses currently trade in the green, too, buoyed by the performance of U.S. and Asian bourses and by the third straight month in gains in the Ifo business climate indicator, to 89.2 from June's 88.8. Earnings releases continue pouring in across Europe, too, with many of those earnings reports being characterized as in line with expectations. Lehman did cut its European bank exposure, noting that their PE ratios had moved toward their historical highs, but Deutsche Bank still rose on news that it would cut costs by moving IT jobs out of Germany, a growing trend in the U.S., too. As of this writing, the FTSE 100 trades up 26.20 points or 0.63%, to 4157.40. The CAC 40 trades up 63.36 points or 2.04%, to 3172.68; and the DAX trades up 55.21 points or 1.64%, to 3412.10.

  Jeff Bailey   7/27/200,  1:10:42 AM
Pivot Analysis Matrix for Monday and next week is posted at this Link

  Jim Brown   7/27/200,  1:10:32 AM
The Market Monitor has been archived. You may view it and any previous days here: Link

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