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  Mark Phillips   8/4/2003,  3:52:51 PM
HD $30.88 (+0.08) we've been looking for our bearish HD play to achieve the $30 level for a couple of weeks now, ever since breaking below the 50-dma. While it didn't quite get there at today's intraday low of $30.10, I hope conservative traders took advantage of the early weakness today to lock in some gains ahead of the expected and well-advertised bounce from that level. The rebound off the lows has been pretty solid (as has that in the broader market), but the stock continues to be unable to crest the 10-dma, which has now fallen to $31.49. In the interest of good position management, we'll get a bit more aggressive with our stop tonight, lowering it to $31.50. Should HD trade through that level on Tuesday, then we know it will be time to be out of the play.

 
 
  James Brown   8/4/2003,  3:51:44 PM
A quick look at the Dow Industrial's components show that AT&T (T), Disney (DIS), and McDonalds (MCD) lead the decliners (all down more than 1.74%) while Altria Group (MO), SBC Communications (SBC), and Procter & Gamble (PG) lead the advancers (all up more than 1.44%).

 
 
  Jeff Bailey   8/4/2003,  3:51:09 PM
China Yuchai Intl. (NYSE:CYD) $9.85 +21.7% Link .... medium-duty diesel engine manufacturer based in China. Not sure what drives stock higher today, but do see some type of fundamental research report from Friday with price target of $13.

 
 
  James Brown   8/4/2003,  3:48:35 PM
Looking over the OI watch list from the weekend we still see stocks like IBM and RCII poised right at support. Both could be put candidates if we get the breakdown. There was certainly little participation in the afternoon bounce by either stock.

 
 
  Linda Piazza   8/4/2003,  3:44:22 PM
Swing Trade Signals
We're currently a point below our Swing Trade entry. OEX 493.40-493.80 is likely to be support on the way down, so we may not get past that by today's close even if the OEX should continue declining. It would be nice to have that move and that cushion, however. A move below 493.40 will move the OEX below today's uptrending line.

It will soon be decision time for individual traders. The Swing Trade model will remain open unless stopped out before the close. I consider this an aggressive trade because of CSCO earnings tomorrow.

 
 
  Linda Piazza   8/4/2003,  3:33:51 PM
Decliners continue to outnumber advancers, but up volume is ahead of down volume on both the NYSE and the Nasdaq.

 
 
  Linda Piazza   8/4/2003,  3:32:29 PM
If market participants are remembering what a positive spin CSCO CEO Chambers puts on earnings, there may be a bout of short covering into the close.

 
 
  Jeff Bailey   8/4/2003,  3:32:17 PM
03:15 PM EST updated posted at this Link

 
 
  Jane Fox   8/4/2003,  3:29:28 PM
Excellent reminder Linda. What a day!

 
 
  Linda Piazza   8/4/2003,  3:28:25 PM
What's with IB today? I keep As Jane has sometimes cautioned and as I caution, too, do you have stops in place for times when you don't have access to your broker or when your broker experiences difficulties, as IB is doing today?

 
 
  Mark Phillips   8/4/2003,  3:16:33 PM
AZO $82.60 (-0.05) Nearly back to break even as I type, AZo has had a nice little afternoon rebound on the back of the broad market. I find it interesting that the rebound came from the vicinity of the 10-dma (currently $81.43), which was the most likely location for a rebound according to our analysis over the weekend. The extent of the rebound coupled with the fact that the stock appears like it will go out near the top of its range for the day would seem to confirm that buying that rebound was a prudent move. Now that we've gotten a solid rebound to define support, we'll be looking to see if the stock can get back into the $83-84 area.

 
 
  Linda Piazza   8/4/2003,  3:09:55 PM
As of a few minutes ago, advancers still led decliners, by 12:20 on the NYSE and 13:17 on the Nasdaq. Up and down volume proved nearly equal on the NYSE and up volume led down volume by nearly 2:1 on the Nasdaq. New lows trumped new highs on the NYSE, with 59 new highs to 94 new lows. While the number of new lows picked up a bit on the Nasdaq--now number 12--new highs remain strong at 99. Total volume was 951 million on the NYSE and 1.2 million on the Nasdaq.

 
 
  James Brown   8/4/2003,  3:06:18 PM
XAU - Gold & Silver Index - I know Jon likes to post comments about gold in the Futures Monitor, but I've not seen any here on the MM side. While there has not been much action in the December gold futures today we are seeing some movement in the XAU index.

The XAU had slipped back from 85 to 80 in the last several sessions in what looks like simple profit taking and now bulls are stepping in again near this minor support level. Currently the XAU is up nearly 2 percent today.

OptionInvestor.com doesn't have any gold stocks on the play list but Newmont Mining (NYSE: NEM) looks tempting. Shares have been consolidating sideways between $37.00 and $35.00 while the XAU slipped backwards, so we're seeing some relative strength in the stock price. Today's move higher in NEM (+2.5%) looks like an entry point for speculative (higher-risk) traders.

 
 
  Linda Piazza   8/4/2003,  3:05:21 PM
Swing Trade Signals
Here's another view of my reasoning for entering short/put at current levels, in addition to the chart I showed in my 14:56 post: Link Although the daily candle is currently a bullish one, the move has brought the OEX right up to the bottom of that important green trendline.

 
 
  Linda Piazza   8/4/2003,  2:59:08 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We are short/put the OEX from 495.88 (actually the OEX moved up as I was making my post so that readers could have gotten a better/higher entry), with a stop at 500.90.

 
 
  James Brown   8/4/2003,  2:57:26 PM
OSX - Oil Service Index. The OSX is the leading decliner on a percentage basis among the major sectors I follow (currently down 2.13 percent to 83.92). This looks like a failed rally near its descending trendline. Despite the trend I'm hesitant to look for bearish plays since the group appears so oversold from its June highs (check out its MACD) and is approaching what should be stronger support near 80.

I will note that September Light, sweet crude contracts are seeing some small profit taking (make that very small) after last week's big spike higher.

 
 
  Linda Piazza   8/4/2003,  2:56:58 PM
The OEX currently challenges one version of the ascending trendline off the July 1 low, with that trendline having been violated on Friday. Link

 
 
  James Brown   8/4/2003,  2:52:10 PM
BIX and BKX - banking sectors have produced some short-term bullish reversals. Friday was very bearish for the group as both indices closed below their simple 50-dma(s). The sell-off continued this morning but buyers stepped in at support of 850 for the BKX and 296 for the BIX (296 wasn't really support, but that was the low). Now both are showing what appear to be hammer-style candlesticks, which can become one-day reversal patterns. Unfortunately, it's risky to base a trade off the one session so we need to see some follow through. My gut says we get another day or two from the bounce then it becomes a fight as both indices run back into heavy congestion. Let's just say I wouldn't be heavily bullish until I saw new relative highs.

 
 
  Linda Piazza   8/4/2003,  2:51:35 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
The OEX currently tests the bottom of the violated regression channel on the 60-minute chart, with a rollover at the top of this channel having been the decision on which we based our successful trade at the end of last week. Our assumption is that this resistance will hold. If you agree, enter short/put now (495.89) with a stop at 500.90, just above 500.80 resistance.

 
 
  James Brown   8/4/2003,  2:44:36 PM
EBAY Inc. - EBAY - Shares of EBAY have slipped under their simple 50-dma in today's session. While the stock is up off its lows of $101.80 for the day, a retest of the $100 level could be in store. The stock hasn't traded under its simple 50-dma since last October. It will be interesting to see if the profit taking stops long enough for an end of August ramp up into its 2-for-1 split.

 
 
  Linda Piazza   8/4/2003,  2:44:12 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
My Monitor was down for a few minutes. In case yours was, too, here's a post from a few minutes ago: I'm gratefully removing the "just in case" entry on a drop through OEX 490.90, and now will watch for a rollover entry, hopefully between 496-498.

 
 
  James Brown   8/4/2003,  2:39:25 PM
We've had our eye on the Dow Jones Transportation Average. Most of July was pretty bullish for the group but the last two days is starting to look like a bearish reversal from overbought levels. The close back under the 2600 level and its simple 10-dma coupled with its MACD about to roll over and its bearish signals in its stochastics don't look promising. The $TRAN did bounce off the 2550 level this morning and it is off its lows for the day.

 
 
  Jeff Bailey   8/4/2003,  2:37:06 PM
Monster Worldwide (MNST) $23.32 -10.6% ... follow up to 10:36:09 post. UBS saying AOL news could be viewed as negative for MNST. UBS leaves estimates unchanged, but thinks that about 10% of MNTS's traffic comes through AOL. UBS says announcement slightly increases its emerging concerns about Monster's market share prospects relative to #2 and #3 competitors CareerBuilders and Hotjobs (owned by Yahoo!) .

 
 
  Linda Piazza   8/4/2003,  2:37:04 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
I'm gratefully removing the "just in case" entry on a drop through OEX 490.90, and now will watch for a rollover entry, hopefully between 496-498.

 
 
  Linda Piazza   8/4/2003,  2:34:24 PM
Another test of OEX 494.

 
 
  Linda Piazza   8/4/2003,  2:29:26 PM
I just noticed a question on the Futures Monitor from a new reader who noticed that Jane and Jim were seeing setups for trading the futures the opposite direction. For new readers, I'd like to clarify that you'll sometimes see different trade setups suggested on the Options side, too, with those different setups sometimes due to differing opinions about market direction, but most often having to do with differing time frames of the trades being proposed. Jeff also sometimes suggests index trades, and his time frame may be different than mine, and so we may be offering differing trades. Although we were stopped out of our Swing Trade this morning, those trades usually will be looking at a two-to-five day time frame, although they've been tending to the short end of that range lately. During that time frame, daytrade setups might occur going opposite the direction of the Swing Trade. We don't expect markets to go straight down or straight up the entire time we're in a Swing Trade. In addition, someone suggesting a position trade, held perhaps over several weeks, might have another outlook. It's confusing sometimes, but the different outlooks mean we can appeal to all types of traders and you get the benefit of different outlooks across different time frames.

 
 
  Linda Piazza   8/4/2003,  2:11:24 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
To clarify, our "just in case" 490.90 entry is for a short/put on a trade at 490.90, with a stop at 494.39. I just realized that I didn't indicate whether it was a short or long play. Like Jim on the Futures Monitor, I'm not yet convinced that we won't have another bounce attempt, but our order is there in case.

 
 
  Linda Piazza   8/4/2003,  2:03:54 PM
Here's anecdotal information that may or may not be relative to the tax cut conversation on the Future's Monitor: Tax checks for childcare credits were to be mailed out last week. My daughter's daycare informed her this morning that fees for her daughter's daycare would be increasing by $100/month. I don't imagine hers is the only daycare taking this opportunity to raise rates.

 
 
  Linda Piazza   8/4/2003,  1:52:16 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Our just-in-case entry is our original entry this morning at 490.90, with a stop at 494.39, our original stop. The last high was 494.19, so that 494.39 stop appears to have been valid for an entry that low. I hope to post a higher entry later today, however.

 
 
  Jeff Bailey   8/4/2003,  1:48:12 PM
SCO Group (SCOX) $12.01 -9% .... stock drops sharply in last 20-minutes after Red Hat (RHAT) $6.74 -2.4% announces it has filed a formal complaint agains SCOX in order to show that RHAT's technologies do not infringe on any intellectual property of SCOX and to hold SCOX accountable for its "unfair and deceptive" actions.

 
 
  Linda Piazza   8/4/2003,  1:48:11 PM
Swing Trade Signals
It looks as if OEX 494 held, at least temporarily. I'm hoping for another test of 494, if not a push toward 496-498. If we instead get a steep fall, I'm considering another short/put entry on momentum, but I'd rather have the rollover.

 
 
  Jeff Bailey   8/4/2003,  1:40:05 PM
01:00 Update posted at this Link

 
 
  Linda Piazza   8/4/2003,  1:26:04 PM
When we were stopped out of the Swing Trade this morning at $0.60 above our entry, I kept wondering if I'd set the stop too close, just ahead of another rollover, but so far, it doesn't appear so. The OEX now tests the consolidation band that contained prices through much of Friday's trading. I actually hope to see (although my account doesn't) a push up to 496-496 and a rollover from there, although I'm not sure all the conditions would be met today.

 
 
  Jeff Bailey   8/4/2003,  12:51:45 PM
Pacholder High Yield (AMEX:PHF) $7.65 -3.89% ... closed-end junk bond fund has been getting hit lower last two sessions. Not sure, but I might think it may own some Worldcom debt and recent news regarding Worldcom, which has had its bebt under pressure (from what I've heard) may be negatively impacting things here.

 
 
  Linda Piazza   8/4/2003,  12:42:01 PM
Here's what I see currently on the OEX: Link This looks bullish short-term, but I'm not playing it bullish myself and won't be issuing a Swing Trade signal to do so, either, at current levels since I expect a rollover from resistance or maybe a fall back into the regression channel.

 
 
  Jeff Bailey   8/4/2003,  12:31:57 PM
13-week Treasury ($IRX.X) higher by 2.4 basis points to 2.61%. I'll make note of this action after making note of this YIELD dropping suscpiciously on Thursday, 07/31 (see Whoa! 12:52:16 in 07/31 market monitor) Link , just about an hour ahead of SPX decline from 1,002 level.

Not sure, but may well be some short-term money went into this very short-term bond on Thursday, just ahead of SPX decline, now looking to come back to SPX after 20-point decline?

 
 
  Linda Piazza   8/4/2003,  12:25:32 PM
Swing Trade Signals
Our stop out of the short/put play may have been unfortunate as we may have just had a bump up before another downturn, but the OEX broke above the descending trendline depicted in my 11:20 post as well as the 491 level, with the violation of that level having been our reason for entering.

 
 
  Ray Cummins   8/4/2003,  12:23:44 PM
Spreads/Combos & Premium-Selling -- E-Mail Replies

(condensed) Considering the low volatility, I've also been thinking about some straddle plays. How do you choose which strike prices to use and how much time to buy? KU

As with most option-trading strategies, the key to success is knowledge of pricing theory. Recall that option premium consists of two components: Intrinsic Value and Time Value. Assume that a current stock price is equal to the strike price. In this case, the option premiums (both the call and the put) do not have any intrinsic value, only time value. The main factors that influence time value include:

(1) The number of days until expiration
(2) Implied Volatility
(3) How far the option is in- or out-of-the-money.

At-the-money options have the highest time value. As the option starts moving in- or out-of-the-money, its time premium begins to decrease. In addition, the closer an option is to expiration, the more an option's premium will shrink due to time decay.

This gives us a guideline in selecting both the strike price and time frame for straddle. We have to pick an expiration date for which the price of the straddle will not be too high (not too far from expiration). However, it should still provide enough time for the stock to perform as expected, before we have to exit the trade to preserve capital. Another important fact to remember; the highest increase in time decay for at-the-money options occurs in the last 30 days before expiration. That means we should rarely hold a straddle to expiration. When you understand the concept of probability of profit and how time decay works against you, you can begin to choose trades in which the other beneficial components (such as intrinsic value and implied volatility) help your position profit, even as time passes. Obviously, this subject is far too complex to explain in an E-mail, however a good place to find more information on volatility trading is: Option Volatility & Pricing, by Sheldon Natenburg (in the OIN bookstore). Good Luck!

 
 
  Jeff Bailey   8/4/2003,  12:22:08 PM
Sell Program Premium Alert .... INDU = 9,131, SPX = 975, OEX = 492, NDX = 1,252, QQQ = $31.12

 
 
  Linda Piazza   8/4/2003,  12:21:27 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were just stopped out of our Swing Trade, $0.60 above our entry.

 
 
  Jeff Bailey   8/4/2003,  12:20:35 PM
Buy Program Premium Alert ...INDU= 9,125, SPX = 973, OEX = 492, NDX = 1,255, QQQ = $31.91.

 
 
  Jeff Bailey   8/4/2003,  12:15:34 PM
Andrx Group (ADRX) $19.84 -10% Link ... stock lower after Mylan Labs (MYL) $33.97 +1.25% Link announces the launch of Omeprazole (generic Prilosec) ahead of expectations.

Wachovia making comments that firm had expected competition in generic Prilosed would likely accelerate the sequential decline in royalty ADRX receives from Kudco. Wachovia now reducing 2003 estimates to $0.80 from $0.84 and 2004 EPS estimates to $1.25 from $1.29 on ADRX.

 
 
  Linda Piazza   8/4/2003,  12:04:36 PM
The OEX is either testing the bottom of the potential bear flag on its five-minute chart or has actually drifted just below the bottom of that flag, depending on how the flag is drawn.

 
 
  Ray Cummins   8/4/2003,  11:58:18 AM
Spreads/Combos & Premium-Selling -- Portfolio Activity

The market is off to a terrible start this week with stocks moving lower in almost every major sector. Financial companies are among the worst performers however airline, retail and biotech issues are also enduring excessive selling pressure. Our portfolio contains a number of stocks in the latter category including Cephalon (NASDAQ:CEPH), Genzyme General (NASDAQ:GENZ), Icos (NASDAQ:ICOS), MedImmune (NASDAQ:MEDI), MGI Pharmaceuticals (NASDAQ:MOGN) and Invitrogen NASDAQ:IVGN), all of which are trading significantly lower. Internet-related shares are in a slump as well with Amazon.com (NASDAQ:AMZN), eBay (NASDAQ:EBAY), Expedia (NASDAQ:EXPE), InterActive Corp. (NASDAQ:IACI), NetEase.com (NASDAQ:NTES), and Monster Worldwide (NASDAQ:MNST) leading the sell-off. One bright spot is Royal Gold (NASDAQ:RGLD), a speculative candidate in the gold segment, which is up almost 5% amid a rotation to safe-haven stocks.

 
 
  Linda Piazza   8/4/2003,  11:57:01 AM
The OEX still trades within that tight pattern of higher highs and higher lows, rising off the low after the steep drop: hallmarks of a bear flag. We're still hoping for a breakdown somewhere short of 491.

 
 
  Linda Piazza   8/4/2003,  11:39:33 AM
Swing Trade Signals
As I mentioned might happen in my 11:20 post, the OEX comes up now to test the top of the five-minute consolidation band near our entry point. It's not something we like to see happen, but we did expect a bounce attempt at some point and the OEX 487-488 area was a natural point for that bounce attempt. The rise sill appears to be taking the form of a bear-flag, and it's rising into resistance (historical and from the descending trendline depicted in that 11:20 post), so we hope to see a breakdown near or just above our entry.

 
 
  Jeff Bailey   8/4/2003,  11:36:23 AM
11:00 Update posted at this Link

 
 
  Linda Piazza   8/4/2003,  11:20:52 AM
Swing Trade Signals
The OEX has broken through the bottom of the pattern shown in my 10:56 post, at least temporarily. It might now test the top of that pattern, near our entry level. So far, the current rise appears to be a bear-flag pattern and so can be expected to break to the downside. A descending trendline can be drawn off the Thursday highs, with that trendline now crossing just over 491. That trendline was the basis for our current 491.50 stop. Link

 
 
  Linda Piazza   8/4/2003,  11:05:54 AM
As of a few moments ago, 317 million shares had traded on the NYSE and 483 million had traded on the Nasdaq. Adv:dec ratios were at 7:23 for the NYSE and 7:20 on the Nasdaq--bearish numbers, of course. Down volume was six times up volume on the NYSE and 2.4 times up volume on the Nasdaq. New lows and new highs are roughly equal on the NYSE, although new highs continue to vastly outnumber new lows on the Nasdaq.

 
 
  Linda Piazza   8/4/2003,  10:56:58 AM
Here's what I'm watching on the OEX five-minute chart: Link

 
 
  Linda Piazza   8/4/2003,  10:40:49 AM
Swing Trade Signals
The OEX may be moving up now to test the bottom of the last consolidation band on the OEX five-minute chart, with that band spanning the 489-490.25 zone. On a retest and move down from that level, I will consider lowering our stop to our entry, but I need to see that test first. Conservative traders (and aggressive, of course) should be setting their own stops as they feel appropriate.

 
 
  Linda Piazza   8/4/2003,  10:37:42 AM
A move below the July 1 OEX 484.41 low will be damaging to investor psychology. That level represented the minimal 25% retracement of the March-June rally, and a move below that level would mean that we're likely to see a deeper 38.2% retracement, near 470.

 
 
  Jeff Bailey   8/4/2003,  10:36:09 AM
America Online (AOL) $14.98 -2% Link ... signs exclusive 4-year alliance and valued at up to $115 million with CareerBuilder.com, which will power the Careers and Jobs areas of several AOL brands. CareerBuilder.com will also receive promotion on several Time Inc. interactive properties as well as on CNN.com.

This deal may be viewed as competitive threat for Monster Worldwide (MNST) $25.03 -4% Link and Yahoo! Inc.'s (YHOO) $30.37 -3.5% Link job posting business.

 
 
  Linda Piazza   8/4/2003,  10:34:47 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower the stop to OEX 491.50.

 
 
  Linda Piazza   8/4/2003,  10:32:19 AM
The OEX now trades below one 488-area peak from the last year--487.94--and now approaches the other--487.42.

 
 
  Linda Piazza   8/4/2003,  10:30:04 AM
Swing Trade Signals
The OEX approaches the 488 level that was a major resistance level through much of the last year. A breakdown below this level will be bearish, although the OEX actually spent more time breaking through 484-486 than 488 as it moved up this spring. Still, this is a level many will watch. It might provide our first serious bounce attempt and is the reason I'm not moving the stop any closer than 492.75 at this time.

 
 
  Linda Piazza   8/4/2003,  10:27:13 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower the stop to 492.75. The OEX appears to be breaking down out of its "b" consolidation pattern on the five-minute chart.

 
 
  Linda Piazza   8/4/2003,  10:21:01 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower the stop to 493.85.

 
 
  Jeff Bailey   8/4/2003,  10:20:03 AM
Dow Industrials (INDU) 9,074 .... session low and trades WEEKLY S1 ... looks to follow SPX lower.

 
 
  Jeff Bailey   8/4/2003,  10:19:23 AM
S&P 500 (SPX.X) 970.26 -1% .... hasn't been able to find a bid after Factor Orders numbers. Session lows here.

 
 
  Jeff Bailey   8/4/2003,  10:16:04 AM
Dow Industrials (INDU) 9,106 -0.53% ... off its session low of 9,078.97. Didn't quite get a test of WEEKLY S1 of 9,074.40.

 
 
  Linda Piazza   8/4/2003,  10:14:52 AM
The Dow tests 9100, the COMPX 1700, and the OEX 490.

 
 
  Jeff Bailey   8/4/2003,  10:12:58 AM
S&P Banks Index (BIX.X) 297.77 -1.11% ... session lows and close to correlative DAILY S1, WEEKLY S1 and MONTHLY S1 of 297 support.

SPX 972.11 -0.82% .... just sitting here at WEEKLY S1.

 
 
  Linda Piazza   8/4/2003,  10:11:20 AM
Swing Trade Signals
I don't yet feel safe lowering our 494.39 stop until and unless we break down out of the current consolidation pattern, but conservative traders might begin lowering their stops as appropriate to individual trading styles.

 
 
  Jeff Bailey   8/4/2003,  10:03:09 AM
SPX 971.71 .... edged up to 972.78 on the Factor Orders data. Will hold profit stop at 973 here. So far, test of WEEKLY S1 held 10-minutes ago.

 
 
  Jeff Bailey   8/4/2003,  10:01:14 AM
June Factory Orders +1.7%, which was above forecast of +1.5%.

 
 
  Linda Piazza   8/4/2003,  9:56:59 AM
Swing Trade Signals
I had hoped for a bounce and rollover, but I guess the move up toward 494 was our bounce. We've now had a quick drop and have some small cushion ahead of the factory orders number. Since we have not yet our usual early-morning reversal, I expect that to come sometime soon. I won't be lowering our stop until we're past the volatility surrounding the release of the 10:00 number. Disclosure: I was so busy posting this morning that I did not have time to enter my own order for the short/put position, although I do have bearish stock positions currently. I will be looking for a possible entry.

 
 
  Jeff Bailey   8/4/2003,  9:55:05 AM
S&P 500 Index (SPX.X) 971.49 -0.88% .... For Index Trader Wrap, will note SPX trades WEEKLY 80.9% retracement here, and now sits on WEEKLY S1 of 971.14. Will place profit stop at 973 ahead of this morning's economic data.

On "negative reaction" if still not stopped out at 973, will close out on any spike lower to 967.

 
 
  Linda Piazza   8/4/2003,  9:51:02 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We are now short/put the OEX on a trade below 490.90, with a stop at 494.39.

 
 
  Jeff Bailey   8/4/2003,  9:45:01 AM
Economic Data June factory orders due out at 10:00 AM EST. Consensus is for +1.5%.

SPX 975.31 -0.49% trading downside target of 976 from last week, but looks to have a trade of WEEKLY S1 of 971.14 in it near-term. Would look to guard bearish gain with stop just above at 977 as daily interval stochastics now reach "oversold."

 
 
  Jeff Bailey   8/4/2003,  9:37:20 AM
Cash America (PWN) $17.20 +0.8% .... company raising Q3 guidance to EPS of $0.19 to $0.20 and full year 2003 EPS to $1.00 to $1.05 versus concensus of $1.03.

 
 
  Linda Piazza   8/4/2003,  9:36:12 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
My hope is that we get a bounce and rollover instead of an immediate drop through OEX 491, but I wanted to post the 490.90 entry in case that drop occurred. On an entry at 490.90, the stop will be 494.39, just over the last five-minute OEX high on Friday.

 
 
  Linda Piazza   8/4/2003,  9:32:36 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Enter short/put on an OEX trade of 490.90.

 
 
  Jeff Bailey   8/4/2003,  9:29:15 AM
NVIDIA (NVDA) $19.72 .... announced it will acquire privately held MediaQ for $70 million, with NVDA saying will be funded predominantly in cash.

 
 
  Jeff Bailey   8/4/2003,  9:27:07 AM
U.S. Steel (X) $26.10 ... reported Q2 loss of $0.01 (ex-items), which was 4 cents better than consensus estimates for loss of $0.05. The company said revenues rose 30% to $2.36 billion from $1.81 billion last year. Including a loss of $52 million, or 50 cents per share, from health care obligations related to the sale of its coal mining business, the company said its net loss for Q2 was $49 million, or $0.51 per share, compared to net income of $27 million, or 28 cents per share last year.

 
 
  Linda Piazza   8/4/2003,  9:22:36 AM
Swing Trade Signals
The Swing Trade Model opens flat this morning. With the poor performance of the financials on Friday, the historical pattern for this week in August, the bump up in the VIX after a decline below 20, and daily OEX indicators remaining bearish, we'll be watching for a bearish entry on a rollover, probably beneath 496-498, or on a breakdown through 491. Our favored entry will be on a bounce up to 496-498, which would reset the oversold hourly oscillators, but I don't know if we'll get that. I want to let the opening volatility subside before entering if at all possible.

While financials did not perform well on Friday, semis did. There's also a possibility of a bounce at 491 if we enter on a rollover. Participants should be aware of the risks when entering a bearish play today.

 
 
  Jeff Bailey   8/4/2003,  9:17:04 AM
09:00 Updtate posted at this Link

 
 
  Linda Piazza   8/4/2003,  7:18:19 AM
Good morning. The Nikkei opened down more than 70 points and plummeted straight down Monday morning, with exporters and banks leading the declines. During the middle of the day, the Nikkei tried to move up, but turned down at the end of the day again and closed at the day's low of 9452.79, down 158.88 points or 1.65%. A glance at the Nikkei's weekly chart indicates 9380-9420 is an important S/R level. The P&F chart shows that the Nikkei is on a sell signal and will give a new sell signal at 9400.

Yet Bloomberg.com reported that opening orders from overseas investors saw buy orders leading sell orders for the tenth straight day. Many attribute the Nikkei's trading pattern today and that of many other Asian markets to two causes: the performance of U.S. markets at the end of the week and the normal August volatility ahead of the August vacations taken by many. In addition, most companies have reported earnings, so investors will be selective about their buying after the recent strong gains. Of special importance to the Nikkei is the anticipated decline in June machinery orders when the number is released this Friday.

In South Korea, the apparent suicide of a Hyundai Corporation executive and the 8.3% drop in Hyundai's shares pressured the bourse. In Hong Kong, shares of the London-based global HSBC Holding (HBC), the world's second biggest bank according to one source, shaved 1% off its share price ahead of earnings that were released after the close of the Hang Seng. Those earnings showed the bank booking first-half profits that grew 21%, with those gains attributed at least partially to its purchase of Household International. The Taiwan Weighted dropped 0.25%, and South Korea's Kospi dropped a heftier 1.20%. Singapore's Straits Times fell 1.27%, and Hong Kong's Hang Seng dropped 0.64%. China's Shanghai Composite gained 1.18%.

Most European bourses currently trade up, at least partially helped by HSBC's earnings. Semi-conductor stocks also rise after a Deutsche Bank analyst said he expected memory-chip prices to rise this month and upgraded Infineon and ASML Holding to buy recommendations. As of this writing, the FTSE 100 trades up 43.60 points or 1.06%, to 4142.00; the CAC 40 trades up 25.46 points or 0.80%, to 3195.09; and the DAX trades up 14.19 points or 0.41%, to 3453.08.

 
 
  Jeff Bailey   8/3/2003,  1:50:56 AM
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   8/3/2003,  1:50:49 AM
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