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  Jeff Bailey   8/1/2003,  7:14:40 PM
I'm done here but have added a few things to the 18:33:12 post as I've been writing. Last thing posted there was S&P futures chart from prior "Ask the Analyst" column. Have a great weekend and see everyone here on Monday!

 
 
  Jeff Bailey   8/1/2003,  6:33:12 PM
Pivot Matrix with updated WEEKLY levels at this Link

In pink, I've highlighted the SPX's DAILY S1 of 975.90 as this was where we had overlapping support from prior WEEKLY/MONTHLY pivot retracement levels. Today, we didn't guite get the test of that level.

Would definately have to look for support on Monday at the WEEKLY S1's and DAILY S1's, and this might well be the low end of a weekly range.

Dashed red at WEEKLY Pivot and correlative DAILY R1's are tentative points of resistance for Monday as they were all traded through to the downside today.

More formidable resistance for Monday looks to be depicted by SPY/OEX/BIX WEEKLY R1 and DAILY R2.

I've added the U.S. Dollar Index (dx00y) to the matrix. I think it necessary with some of the Treasury YIELD/BIX.X action that we're picking up on.

The dollar will serve to measure cash flows in and out of the U.S.. Will make note today that Dollar ended weak, Treasury YIELD lower, BIX.X lower and indices lower.

Here is updated SPX chart on daily interval. Link

Here is the S&P futures (sp03u) daily interval chart, which was derived from prior "Ask the Analyst" column. Link

 
 
  Jeff Bailey   8/1/2003,  4:53:38 PM
Wild Turkey Federation I will go on record as saying I have no problem with the government spending/giving $250,000 to the National Wild Turkey Federation.

Let us remember, the Wild Turkey was runner up to the Bald Eagle for our national symbol. Not unlike the Bald Eagle, the wild turkey is armed with a very sharp sense of eyesight and hearing. The turkey just looks a little goofy, while the Bald Eagle is more majestic looking.

 
 
  Jeff Bailey   8/1/2003,  4:37:21 PM
Here's an article I'm trying to read that might be of interest to traders. Link

I've got an alert set on Palm (NASDAQ:PALM) $16.12 -0.68% just in case. Its PnF chart has one heck of a "low pole reversal" formation on it (may indicate a longer-term reversal in sentiment toward the stock). Link and a decent amount of short interest, where a slight drying up in volume has the days to cover building to 5.7%. Link

Right now PALM makes for a rather nice spread/straddle type of trade.

 
 
  Jeff Bailey   8/1/2003,  4:20:10 PM
Russell 2000 Index (RUT.X) 468.08 -1.66% ... I didn't see it getting "killed," but it did edge below its 21-day SMA and right at upward trend from the March lows if attached to the April 11th pullback low and test of the then rounding higher 21-day SMA.Link

I do see some bearish divergence from MACD though, which has been present in the other indexes where the July RUT.X highs didn't find a new high in MACD. See how MACD from the March lows always made a new high as the RUT.X made a new high? MACD Oscillator followers will describe this as bearish divergence, which can indicate a near-term top.

Gosh... remember Stratasys at $13 and then $19? I can't remember the exact dates, but I know James Brown and I had talked about this one as a "leader" in the smaller caps. Doesn't have options, but it may have been profiled at premierinvestor.net. It is softening up a bit isn't it? Link

 
 
  Jeff Bailey   8/1/2003,  4:16:13 PM
Huh? Wha, what? ... today's my b-day? Oh yeh! Wow, with all the economic news the past two days, I'm in a daze. The weekend couldn't come at a better time. Thanks Mark!

 
 
  Mark Wnetrzak   8/1/2003,  4:08:59 PM
Happy Birthday Jeff

Belatedly, of course!

 
 
  Linda Piazza   8/1/2003,  3:59:39 PM
I'm trying to decide what might happen Monday morning. Because OEX 30 and 60-minute oscillators are in territory indicating short-term oversold conditions, perhaps we'll see at least a tepid attempt at a bounce. Now 496.50-497 should be strong resistance. That level marks the bottom of the 60-minute regression channel on which we based our end-of-week Swing Trade. Also, it marks the green line on this chart: Link Note that this is the first time the OEX has closed below that line since May's dip.

 
 
  Linda Piazza   8/1/2003,  3:52:26 PM
Jeff, I don't know when your actual birthday might be, but I can guarantee you that for the last two years at least you've been celebrating your birthday on March 26, because I've noticed that it's the same day as my youngest daughter's.

 
 
  Jeff Bailey   8/1/2003,  3:51:54 PM
Campbell Soup (CPB) $23.88 -1.11% .... its getting to be that time of year again isn't it? I've got an alert set at $23, but would rather get an entry at $22. Unlike last fall, CPB has a "buy signal" and bullish vertical count this year. Link

 
 
  Jeff Bailey   8/1/2003,  3:45:53 PM
Linda I just saw your 11:43:09 post. As of late, I need more than a yearly reminder, but once a month might be good. Lord knows if I have a true identity anymore as I may have filled out some type of application with the wrong birthdate on it. I could have sworn I was born on March 25th.

 
 
  Linda Piazza   8/1/2003,  3:41:35 PM
For reference Monday morning, the FTSE 100 closed down 58.60 points or 1.41%, at 4098.40. The AD 40 dropped 40.64 points or 1.27%, to 3169.63. The DAX dropped 48.97 points or 1.40%, to 3438.89.

 
 
  Jeff Bailey   8/1/2003,  3:39:10 PM
03:15 Update posted at this Link

 
 
  Linda Piazza   8/1/2003,  3:20:10 PM
So, if the OEX closes above 491 horizontal support today, is that bullish or bearish? The OEX will have remained within the chart pattern profiled here, but I don't know that I'd call that bullish action. Link Note how the oscillators are turning down again at their descending lines. That's not bullish, either. Neither is today's candle. Still, until the OEX breaks out of this formation in a definitive manner, we can't rule out another run at the top descending trendline again, either.

 
 
  Linda Piazza   8/1/2003,  2:59:34 PM
I keep trying to determine if we're more likely to get a bounce this afternoon or a drive lower. The OEX has settled into a narrow rectangular consolidation band and until it breaks out of that band, we really don't know. Hourly oscillators try to turn up, but daily ones still look bearish. Which ever direction it's going to be, we should find out soon with the bond market closing.

 
 
  Jeff Bailey   8/1/2003,  2:57:53 PM
Semiconductor Index (SOX.X) 393.70 +1.04% .... sector winner and first to show a 1% gain today. Micron (MU) $15.10 +3.14% perking up a bit.

Hey Jim... Rumor is Saddam cashed in insurance policy on the kids (or looks to collect a bounty), moving to Saudi Arabia, and starting an investment fund. Top picks are MU, OHP, MNST, MRK, and GM. Since this is just rumor, it is uncertain as to insurance/reward bounty at this time.

 
 
  Jeff Bailey   8/1/2003,  2:53:36 PM
Beazer Homes (BZH) ... per 14:47:23 .... Was just thinking.... if short the underlying and 100 shares or more, might think about selling an Aug. $75 put (BZHTO) that are bid/ask $1.35 x $1.50? Just depends on what you want to do.

 
 
  Jeff Bailey   8/1/2003,  2:47:23 PM
Beazer Homes (BZH) $76.42 -0.95% ... Jeff I have been short BZH since about $81. I saw the P&F triple bottom break and went short.

I am trying to calc the downside vert count. I *THINK* I have to calculate it from the first sell signal and then * 2.

So it would be the break from 93 with 9 o boxes.

Then 9*2 = 18

92- 18 = 74.

So I should be looking at $74..

is that right?

Fantastic! You've got most everything correct, but lets clean up the language a bit (who am I to talk.. right?). The "triple bottom" you are talking about, is really the third, in a series of three consecutive DOUBLE BOTTOM SELL SIGNALS. Stockcharts calls it a descending triple bottom (three double bottom sell signals). I would simply hate for you to be attending a black tie dinner and mistakenly call it a triple bottom sell signal. (Grin)

Now, you've got the 9 O's from $93 to $85 correct, and the 9*2 correct. But you want to subtract the 18, from the first column of O in the vertical count column, which is $93.00. So... 93-18 = $75.

I also thought it was $92, but my eyes aren't as good as they used to be either. Link

 
 
  Linda Piazza   8/1/2003,  2:28:01 PM
The OEX is just hanging there, isn't it, just above the low of the day.

 
 
  Jeff Bailey   8/1/2003,  2:26:03 PM
S&P Banks Index (BIX.X) 300.81 -1.78% .... while 2 points below DAILY S2 and WEEKLY S2 isn't all that much, I'm a little surprised it has inched more than a point below this correlation, but round number 300 may simply be the near-term destiny.

 
 
  Linda Piazza   8/1/2003,  2:22:00 PM
A move below the OEX 493.57 low of the day will look very bearish, but we're nearly to the closing of the bond markets, when anything can happen. As Jim said earlier today, a failure of shorts to cover on this weakness, ahead of a possible Saddam event this weekend, would also look bearish.

 
 
  Jeff Bailey   8/1/2003,  2:21:51 PM
On Friday of last week, there was little economic data to focus on, and stocks were thought to have rallied into their close as U.S. troops had been finding some "evil doers" in Iraq.

 
 
  Jeff Bailey   8/1/2003,  2:20:22 PM
Can't find a bid .... thought that little move higher in MNST might get some volume, but not unlike the major indexes at this point, some little intra-day moves that might find a little short-covering, just can't seem to get a move going.

 
 
  Linda Piazza   8/1/2003,  2:19:51 PM
Decliners still outnumber advancers by more than two to one and down volume is beginning to pull ahead again. Total volume is 897 million shares on the NYSE and 1 billion on the Nasdaq. New lows now outnumber new highs on the NYSE, but new highs/new lows figures remain strong on the Nasdaq.

 
 
  Jeff Bailey   8/1/2003,  2:00:32 PM
Monster Worldwide (MNST) $26.75 +0.7% ... moving above morning high here.

 
 
  Linda Piazza   8/1/2003,  1:59:54 PM
Reader Question: I'm looking at CTMI as a potential earnings play into 8/5 when they report... How would you say this equity is shaping up on a technical basis... TIA

Response: First I checked average daily volume to ensure that CTMI trades more than 200,000 shares/day, as I don't advise trading anything without that minimal volume flow. CTMI met that measure, averaging over 400,000 shares/day. I know that this reader is also experienced enough to be aware of the dangers associated with volatility around earnings.

CTMI recently fell beneath the bottom of rectangular trading pattern that had been containing prices since March. Link The downside target can now be projected by measuring the width of the trading range and projecting it downward. That provides a downside target of about 12.70. ADX measures 35.76, indicating that the (downward) trend remains strong. OBV has been declining. Of course CTMI currently presses against its bottom Bollinger band and many indicators are at levels indicating oversold conditions, so it may be due for a bounce, but these chart conditions suggest that it would have difficulties climbing over 16.50-16.65, the locus of the bottom of its former range and the declining 21-dma. I checked the P&F chart, too, which confirms that CTMI is on a sell signal, having just given (today) a spread triple top bottom breakdown.

 
 
  Jeff Bailey   8/1/2003,  1:57:27 PM
General Motors (GM) $37.44 +0.02% ... bids back to positive territory.

 
 
  Jeff Bailey   8/1/2003,  1:49:09 PM
General Motors (GM) $37.30 -0.34% .... Link reports July sales fell 5.5% year-over-year.

 
 
  Jeff Bailey   8/1/2003,  1:47:31 PM
Daimler Chrysler (DCX) $35.28 -1.25%... Link reports July sales down 8% year-over-year.

 
 
  Jeff Bailey   8/1/2003,  1:41:45 PM
01:00 Update posted at this Link

 
 
  Linda Piazza   8/1/2003,  1:40:59 PM
Although adv:dec ratios were 10:19 on the Nasdaq as of a few minutes ago, down volume was only slightly ahead of up volume. That's a change from earlier today. Is someone doing some concentrated buying in a few issues?

 
 
  Linda Piazza   8/1/2003,  1:33:37 PM
Swing Trade Signals
We got a spike about $.40 above our stop before the OEX headed down again. We were taken out on one of the stop-running spikes we frequently see this time of day, but there's always a question of how to react to those spikes. With solid gains under our belts and with OEX 493 and 491 lurking just below, I decided against widening the stop. Some of us may be having seller's remorse this afternoon, just as some conservative traders did this morning after taking profits ahead of the ISM numbers, but congratulations to all who honored their trading plans.

 
 
  Linda Piazza   8/1/2003,  1:22:10 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Our stop at 496.25 was just triggered, with an 8.25 movement in our favor at the time we were stopped.

 
 
  Linda Piazza   8/1/2003,  1:20:42 PM
Swing Trade Signals
If I were a betting woman, I'd bet that the 1:35-1:55 push is going to spike up to our stop before the markets head down again. Jim's last post reminded me to mention that it's my intention to close this position ahead of the weekend, if we're not stopped out this afternoon.

 
 
  Jeff Bailey   8/1/2003,  12:44:06 PM
Deutsche Bank (DB) $61.44 -4.89% .... Would you, should I, wait for a recovery to short/put?

Here's how I always try and anwer this question and its a difficult one, where the only way to anwer it is with a small position.

1) What if the stock just continues to fall to $57 or bullish support trend of $51. Is it worth 1 put at this time? Link

2) If the stock were to recover a 3-box reversal to $65 or even $67, if I do buy one put, will my account be damaged severely?

Why is this stock breaking a level of support, where the market has been willing to be a buyer in the past?

3) If I were long at $64, do I cut my loss here, or look for a rebound to back to $64, with the observation that the stock did fully achieve its bullish vertical count of $65 (column of X from 38 to 46).

My (Jeff Bailey's) answer is get at least a partial.

 
 
  Linda Piazza   8/1/2003,  12:43:46 PM
The TRAN has moved back below 2600 again, currently at 2597.72.

 
 
  Linda Piazza   8/1/2003,  12:36:36 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
The OEX has not traded above 496 for a couple of hours now. Lower the stop to 496.25.

 
 
  Jeff Bailey   8/1/2003,  12:32:41 PM
Art Cashin on CNBC discussing this morning's SPY trade (see 09:51). Evidently, heavy volume was due to some rumor of big seller/buyer of puts and traders reacted on thought something was up, or that somebody might know something bad getting ready to happen. Art thinks that has now abated.

 
 
  Linda Piazza   8/1/2003,  12:30:46 PM
On the 30-minute OEX chart, this pattern sure looks like a "b" distribution pattern. Link These usually break to the downside. Time will tell, however.

 
 
  Jeff Bailey   8/1/2003,  12:29:41 PM
Deutsche Bank (DB) $61.43 -4.9% ... I've been so busy the past couple of mornings with U.S. economic data that I haven't been able to update on global markets news all that much.

I see Deutsche Bank reported earnings late yesterday Link

 
 
  Jeff Bailey   8/1/2003,  12:24:28 PM
Monster Worldwide (MNST) dueling analysts. Yesterday, RW Baird upgraded to "outperform" from "neutral," with target raised to $32 from $23 based on stronger than expected earnings results and didn't feel valuation reflected the likelihood of substantial revenue and earnings growth over next couple of quarters.

Today... Bank of America downgrades to "neutral" from "buy" based on valuation as well as lack of near-term catalyst with target of $25.

 
 
  Mark Phillips   8/1/2003,  12:21:27 PM
LEN $62.59 (-2.59) Well,, we're making some solid progress this morning! Since my earlier post, shares of LEN have continued to deteriorate, hitting an intraday low of $62.59 just now. This looks like a good spot for conservative traders to take some gains off the talbe.

Here's a question I got about the play this morning.

When you have a chance could you remind me why 62-63 was the initial target? Isn't LEN in a PnF sell?

Yes, LEN is on a clear PnF Sell signal now, a condition that was reinforced by a fresh Sell signal with the trade at $65 earlier in the week. The vertical count from the PnF chart is $55, so there is certainly the possibility of more weakness ahead. The rationale behind the $62-63 profit target was due to the fact that this area was the site of the prior high a year ago, and we could see a rebound from a test of that support. Traders willing to give the play more room to run to the downside could target a drop to the $60 area, or even the 200-dma just above $58. As it stands right now, there is an unrealized gain of nearly $9 in the play from where we picked it and good position management would dictate taking some gains off the table near a possible support level.

 
 
  Jeff Bailey   8/1/2003,  12:20:23 PM
Ford Motor (F) $10.81 -2.2% ... reports that July sales declined 7.1%.

 
 
  Jeff Bailey   8/1/2003,  12:15:31 PM
Micron Technology (MU) $14.75 +0.75% .... stock has been hanging in there and not much volatility. With a fitted retracment from $6.60 to $16.69, can really see the $14.77 and 80.9% retracement as a resistance point near-term. Got a little excited on July 23rd when stock spiked above to $15.66 and have an alert set for further bullishness after some consolidation just above $15.00.

Still holding previously profile calls, but stock hasn't done much in last week.

 
 
  Linda Piazza   8/1/2003,  12:09:56 PM
That bear flag on the five-minute OEX formation may be resolving into a miniature H&S, a not very reliable pattern on the five-minute charts, but one to watch anyway. The neckline appears to be at about 493.80, although I'd certainly give it to the day's low at 493.57 before considering it confirmed. Because this formation is so small, it doesn't project very far to the downside, with a target near 492. That's certainly not tradable, but it would get anyone short/put the OEX past the 493 barrier.

 
 
  Jim Brown   8/1/2003,  12:09:40 PM
Obviously Jeff and I have no life outside of the market.

 
 
  Jeff Bailey   8/1/2003,  12:08:15 PM
NYSE NY/NL Chart (10-day Average) Here's my hand chart on PnF basis of the NYSE NH/NL and 10-day average, which smoothes out some of the day to day volatility and creates a 2-week trend. This is where I've come up with the observation that bullish leadership is tapering off among 1,2 and 3-lettered stock. I tried to discuss this in Wednesday's Index Trader Wrap. Link

 
 
  Jim Brown   8/1/2003,  12:04:03 PM
This is the Adv/dcl hi/lo numbers for all markets since mid May. Notice the increase in the new lows to multi month highs. Link

 
 
  Jim Brown   8/1/2003,  11:58:46 AM
Speaking of new high/lows. Notice how the new lows has been climbing despite the new market highs. This is the NYSE. I will show the total market in a minute. Link

 
 
  Jeff Bailey   8/1/2003,  11:57:30 AM
Semiconductor Index (SOX.X) 391.23 +0.41% .... Broadcom (BRCM) $21.08 +4% after downgrade by Wachovia to "market perform" from "outperform," saying that while company's core business continues to achieve solid growth, channel checks indicate BRCM should experience considerable weakness in its server revenue second half of 2004. Sees valuatioin between $19 and $24.

PNF chart of BRCM Link gave double-bottom sell singal at $23 and bearish count is at $10. I'm not counting on $10, but would asses downside to a test of bullish support trend over time. Might look for a rebound short/put opportunity back near $23/$24.

 
 
  Linda Piazza   8/1/2003,  11:48:50 AM
The OEX rises to test the underside of the violated bear flag, but it's doing so without having yet made a new low. I don't consider that bear flag violation confirmed.

 
 
  Linda Piazza   8/1/2003,  11:43:09 AM
You share my daughter's birthday, Jeff. Want me to send you a reminder each year?

 
 
  Linda Piazza   8/1/2003,  11:42:18 AM
The latest OEX bear flag appears to be breaking to the downside but confirmation will not occur until a move below today's low of the day. We've had some false upside breakouts and downside breakdowns lately.

 
 
  Jeff Bailey   8/1/2003,  11:42:13 AM
Memory I had to look it up Linda in my excel spreadsheet I'm keeping track of for NH/NL breadth. I had to look at my divers license too, as I couldn't remember if I was born on the 25th or 26th.

 
 
  Jane Fox   8/1/2003,  11:39:15 AM
Ah come on Jeff you are famous!!

 
 
  Linda Piazza   8/1/2003,  11:39:07 AM
I knew you'd know the answer to the last time we saw equal new highs and new lows, Jeff. Thanks.

 
 
  Jeff Bailey   8/1/2003,  11:37:32 AM
Per Linda's 11:31:11 ... I show that on March 27, just one day after a not so famous analyst's 40th birthday, the NYSE showed 37 NH and 36 NL.

Holy crud... I'm losing it. (correction.... one day after my 40th b-day. Oh how the years have passed and brain cells have been lost)

I wonder if Jim Brown takes anything for his memory lapses?

 
 
  Jeff Bailey   8/1/2003,  11:35:08 AM
11:00 Update posted at this Link

 
 
  Linda Piazza   8/1/2003,  11:31:11 AM
New highs are equal to new lows on the NYSE: 45:45. When's the last time we saw that happen?

 
 
  Linda Piazza   8/1/2003,  11:21:21 AM
The OEX rises now to test its 50-dma from the underside, with that 50-dma at 495.90.

 
 
  Linda Piazza   8/1/2003,  11:05:43 AM
Volume patterns show adv/dec ratios of .33 for the NYSE and .36 for the Nasdaq. These are very bearish numbers, of course, showing decliners running about 3:1 ahead of advancers. Down volume is 3.71 times up volume on the NYSE and 2.3 times up volume on the NYSE. These are bearish but sustainable numbers. Total volume as of a few moments ago was 356 million on the NYSE and 449 million on the Nasdaq. New highs run noticably lower today than has been usual and new lows continue to pick up in number.

 
 
  Jeff Bailey   8/1/2003,  10:52:01 AM
Merck (MRK) $54.22 -1.91% .... what a disappointment after that spread-triple-top buy signal at $61 to then follow with such an anemic earnings report. Might be a "bear trap" here at $54.00, but I'm doubting it. Still holding October calls, but can't wait to sell them now if stock rebounds to $59. Link

MRK is a Dow component and today's "sell signal" combined with Wednesday's sell signal in IBM should have Dow Industrials Bullish % ($BINDU) reversing lower to "bull correction" status.

 
 
  Jeff Bailey   8/1/2003,  10:48:52 AM
Monster Worldwide (MNST) $26.32 -0.86% .... morning low found a suspicious buyer just above $25.00 at $25.02. We've noted from time to time how a stock may trade within a penny of a buy/sell signal or 3-box reversal. Can't read too much into it, but I think shorts are a little pressured of late and might hint they're getting a little more aggressive with their covering. Link

 
 
  Jeff Bailey   8/1/2003,  10:42:09 AM
Market Volatility Index (VIX.X) 22.49 +5.88% .... In the past, we've seen either put selling or call buying at this level. Link

 
 
  Jeff Bailey   8/1/2003,  10:37:53 AM
S&P Banks Index (BIX.X) 302.37 -1.27% .... session lows here with daily Stochs now "oversold" and MACD of 0.23 below Signal of 1.11. I'm thinking MACD would approach 0.00 at ...mmmmm.... 301.35.

 
 
  Linda Piazza   8/1/2003,  10:37:02 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We're probably due for a bounce although I can't guarantee that the OEX won't dive again any moment. If you don't want to risk a bounce up to our 496.75 stop, you might exit now.

 
 
  Jeff Bailey   8/1/2003,  10:35:13 AM
Intl. Business Machines (IBM) $80.12 -1.39% .... a little soft again today after Wednesday's trade at $81.00 and double bottom sell signal. Bear wouldn't mind a trade at $80.00 to build the bearish vertical count a little deeper. Link

 
 
  Mark Phillips   8/1/2003,  10:33:43 AM
With the markets looking weak in the wake of all those economic reports this morning, we've got some Put plays that are performing quite nicely.

LEN $64.03 (-1.15) It certainly looks as though yesterday's crack below $65 was a preview of things to come, as the stock sheds another 1.5% so far this morning. Remember, our target on the play is $62-63, so traders with open positions should start planning their exit here.

MRK $54.00 (-1.28) Yesterday's sharp reversal from just below the 200-dma provided the optimum entry into our MRK play and we've gotten some nice downside confirmation this morning. First was the trade at $55, which could have been used for aggressive momentum entries, but the real gem was the trade below $54 that generated a new PnF Sell signal. Traders looking for that entry on weakness should be in the play by now. Look for resistance to begin building in the $55-56 area now and trail stops to $57, which is just above both the 200-dma and yesterday's intraday high.

 
 
  Jeff Bailey   8/1/2003,  10:33:19 AM
Deutsche Bank (DB) $61.05 -5.49% .... Nice retracement representation using conventional approach from $70.34 to $36.44. Has 19.1% at $63.86 and 38.2% at $57.39 as first target. These ADR's can show many gaps from their overseas trade and a little gap to $60.00 currently in play.

 
 
  Linda Piazza   8/1/2003,  10:29:43 AM
Swing Trade Signals
The OEX approaches another bounce point at 493. Conservative traders who have not exited should give strong consideration to a possible exit, at least of partial positions, between 491-493, if the OEX should decline that far, as it's a zone in which a strong and sudden bounce might be possible.

If you're a conservative trader who did exit ahead of the ISM, congratulations! You made a wise decision because the ISM could just as easily spiked the markets upward. A profit is a profit.

 
 
  Jeff Bailey   8/1/2003,  10:28:19 AM
S&P 500 Index (SPX.X) 980.14 -1.02% .... nearing our overlapping MONTHLY/WEEKLY retracement of 976.70-976.67. Stochastics on DAILY are nearing "oversold" so let's stick with the plan and look to cover today's "spike" lower. SPX has broken below its 50-day SMA of 984.92 today, but I still think its rather aggressive rise has enough momentum to find SPX support not too far from here.

 
 
  Linda Piazza   8/1/2003,  10:25:28 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
The OEX has now spent some time below its 50-dma at 495.88. Let's lower the stop to 496.75.

 
 
  Linda Piazza   8/1/2003,  10:19:07 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's lower the stop to 497.50.

 
 
  Jeff Bailey   8/1/2003,  10:18:49 AM
S&P Banks Index (BIX.X) 303.04 -1.06% .... Getting close to its WEEKLY S2 of 302.7 with a session low of 303.18.

This is perhaps where we build on the recent observation that BIX leads SPX weakness, and then perhaps INDU/QQQ.

Now.... I will note that Treasury YIELDS now in the red, with 10-year YIELD lower by 5.2 basis points. Might see banks firms a bit here at WEEKLY S2.

 
 
  Jeff Bailey   8/1/2003,  10:15:53 AM
QQQ $31.62 -0.58% .... As SPX traded its WEEKLY R1, the QQQ low of $31.49 was a penny above its WEEKLY Pivot. (Just so trader's know where they are in relation to the indexes we should be looking at, in addition to the one you're trading).

 
 
  Linda Piazza   8/1/2003,  10:14:47 AM
The OEX may be building a bear flag now, but we've seen those break to the upside before and this one could do so, too.

 
 
  Linda Piazza   8/1/2003,  10:13:35 AM
Swing Trade Signals
If we get a new low of the day, I will be lowering the stop again.

 
 
  Linda Piazza   8/1/2003,  10:08:33 AM
The early volume patterns show decliners and down volume leading.

 
 
  Linda Piazza   8/1/2003,  10:07:00 AM
This move down has turned the daily RSI and 5(3)3 and 21(3)3 stochastics down, with all having room to go before turning up again. With that said, we're certainly in bounce zone, with 30-minute and 60-minute oscillators hinting at oversold conditions on a shorter time frame.

 
 
  Jeff Bailey   8/1/2003,  10:04:50 AM
S&P 500 Index (SPX.X) 982.31 -0.8% .... slips below the WEEKLY S1 of 983.24 here. Per Index Trader Wrap, I'm looking to cover prior bearish profile from 983 on a "spike" lower near 975.

 
 
  Linda Piazza   8/1/2003,  10:03:19 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower stops to 499.10.

 
 
  Linda Piazza   8/1/2003,  9:59:35 AM
The OEX currently rests exactly on an ascending trendline from July 1 to the present--a key moment among many we've had this week.

 
 
  Jeff Bailey   8/1/2003,  9:59:01 AM
Revised Univ. Mich. Sentiment was 90.9 and a smidge better than forecast of 90.5 and its preliminary reading of 90.3. We usually don't get too much of a reaction from the revised.

The upward revision was largely attributed to the expectations component, which jumped 7.8%.

 
 
  Linda Piazza   8/1/2003,  9:51:37 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Conservative traders worried about a bounce should give consideration to exiting at least partial portions of their positions before the ISM.

 
 
  Jeff Bailey   8/1/2003,  9:51:06 AM
S&P Depository Receipts (SPY) $98.93 -0.49% .... is second most active security in early trade. QQQ $31.63 -0.53% is 7th most active. Somewhat rare to see the SPY ahead of the QQQ. May hint that institutions are doing some asset allocation adjusting today.

 
 
  Linda Piazza   8/1/2003,  9:48:33 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
As the OEX now dips toward the 495-496.25 zone that is our next goal, let's lower the stop to 501.25.

 
 
  Jeff Bailey   8/1/2003,  9:46:00 AM
10-year YIELD ($TNX.X) unchanged here at 4.474% ..... Last night we looked at 10-year YIELD with new MONTHLY pivot retracement. The bullish vertical count on YIELD is to 6.15% (61.50 on the chart) and would only be negated at this point with a YIELD trade of 4.200%. That's just above the MONTHLY pivot and may be close to my thoughts last night of a level where the YIELD fear would subside. Link

 
 
  Linda Piazza   8/1/2003,  9:44:03 AM
Swing Trade Signals
As Jane has often cautioned, have a plan in place for dealing with the release of this morning's economic numbers. She's especially warning today that we could get an upside surprise that might be dangerous to shorts. Think ahead of time how you'll handle this matter. Decide ahead how you'll handle a spike down to 495 or 496, too. I was glad to see us come into this morning's trade with a little bit of cushion, and have tried to set the stop so that we can weather a bit of volatility, but it's always a tradeoff. We don't want to get stopped out on an initial burst that fades quickly, but neither do we want to set stops so wide that we give up all our gains. Your individual style might dictate a different stop or exit than I've got planned.

 
 
  Linda Piazza   8/1/2003,  9:39:36 AM
The midpoint of the first five-minute OEX range is 498.13. Those of us in bearish plays want the OEX to stay below that level, which is currently being tested. Bulls want to drive the OEX back above that level and then sustain that number in early trading. Because 498.65 or so has been such important S/R over the last couple of weeks, I'd probably give that number more credence.

 
 
  Jeff Bailey   8/1/2003,  9:36:07 AM
Deutsche Bank (DB) $62.02 -4% .... downside alert here below $63.00. Mentioned this one late yesterday for potential bearish trade. Would look partial positions short/put here. Link

 
 
  Linda Piazza   8/1/2003,  9:32:05 AM
The OEX opens near the 498.65 level, a number I've typed numerous times over the last weeks.

 
 
  Jeff Bailey   8/1/2003,  9:29:55 AM
S&P futures Chart (sp03u) ..... here's an updated chart of the S&P futures, which was derived from our July 6th Ask the Analyst column.Link

 
 
  Linda Piazza   8/1/2003,  9:18:05 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We are short/put from yesterday when the OEX broke through 504.50, with aggressive traders being advised to ease in beginning when the OEX traded near 506.50. Let's lower our stop this morning to 502.25. That's above the 50-and 100-pma's, as well as above the midline of the rising regression channel on which we based our play yesterday. Link The bottom line of the rising regression channel now lies a little north of 495, since it's rising. This also roughly coincides with a long-term trendline marked on my charts since March, which now crosses somewhere around 496. As I warned yesterday, a bounce could come fast and furiously, so have an exit plan in place that fits your parameters, regardless of profit plans or stops that might be printed here. Some traders might begin exiting all or partial position between 496.25-496.50, for example, getting out ahead of a possible bounce. If that level is approached, I also will begin lowering the stop rather aggressively to take us out on a bounce, preserving the majority of our gains.

 
 
  Jeff Bailey   8/1/2003,  9:14:38 AM
09:00 Update posted at this Link

 
 
  Linda Piazza   8/1/2003,  6:54:40 AM
Good morning. Perhaps it was time for the Nikkei to attempt a bounce since it had dropped 300 points from Tuesday's intraday 9932.18 high to Thursday's intraday 9632.66 low. Market pundits explained Friday's 80-point gap open by attributing it to Thursday's U.S. economic numbers. Whatever the reason might have been for the strong open, the Nikkei couldn't hold all those gains. Turning negative at one point in the afternoon session, the Nikkei struggled up again the last two hours of trading and closed up 48.46 points or 0.51%, at 9611.67. Some of those same market pundits explain that the Nikkei's trading is likely to become more volatile as traders prepare for their summer holiday in August, which begins in a week.

Most other Asian markets gained, too, with South Korea climbing to a many-month high after North Korea agreed to U.S. proposed talks on North Korea's nuclear weapons program. South Korea's Kospi gained 1.93%, while the Taiwan Weighed gained 1.36%. Singapore's Straits Times was one of the few losers, dropping 0.11%. Hong Kong's Hang Seng climbed 1.12%, while China's Shanghai Composite was flat with a gain of 0.02%.

Many European bourses currently trade down. A Reuters/NTC Research eurozone manufacturing index release saw the July number increase to a greater-than-expected 48 from June's 46.6, but some may have been disappointed that the number remained below 50, still not showing growth. French Bank Societe Generale tried to pull up the banking sector after reporting Q2 net income in line with expectations. Many banks are gaining along with Societe Generale, but Deutsche Bank continues to be underwater, as Jeff and I both pointed out yesterday. A number of analysts have now weighed in on Deutsche Bank, including Sanford Bernstein & Co., and JPMorgan. Sanford Bernstein said Q2 results show that the banks restructuring efforts have not improved its earnings-generating ability. It maintained its underweight rating. GS weighted in on another European bank, HVP Group, maintaining its underperform rating.

As of this writing, the FTSE 100 trades down 21.80 points or 0.52%, at 4135.20. The CAC 40 trades down a minimal 3.40 points or 0.11%, at 3206.87. The DAX trades down 29.10 points or 0.83%, to 3458.76.

 
 
  Jeff Bailey   7/31/200,  12:31:06 AM
S&P 100 Index Chart (OEX.X) with new monthly pivot analysis retracement at this Link

 
 
  Jeff Bailey   7/31/200,  12:30:59 AM
Pivot Matrix posted at this Link

 
 
  Jim Brown   7/31/200,  12:30:50 AM
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  Jim Brown   7/31/200,  12:30:39 AM
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