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  Jeff Bailey   8/8/2003,  6:58:55 PM
Pivot Matrix for next week at this Link

 
 
  Linda Piazza   8/8/2003,  4:05:20 PM
Swing Trade Signals
Here's a recap for the week.
Tuesday, we closed an OEX short/put play after a 9.07 move our direction.
Wednesday, we closed an OEX short/put play after a 3.02 move against us.
Today, we closed two OEX short/put plays, one for a 0.74 move against us and another for a 3.75 move against us.
For the week, the total was a 1.56 move our direction.

 
 
  Jeff Bailey   8/8/2003,  4:01:28 PM
Flextronics (FLEX) $10.71 -2.19% Link ... may become vulnerable on UMC news as might Celestica (CLS) $13.80 -1.4% Link

 
 
  Jeff Bailey   8/8/2003,  3:58:37 PM
United Microelectonics (UMC) $3.63 -4.7% .... this was the contract manufacturer that may have been the one to spark some selling in the semiconductor group (besides NVDA). What seems to be the focus is the -0.2% month-to-month decline. Here's the brief... Link

 
 
  Jeff Bailey   8/8/2003,  3:54:54 PM
03:15 Update posted at this Link

My Internet connection has been down for past hour.

 
 
  Linda Piazza   8/8/2003,  3:54:03 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We have exited our short/put play at 393.75. Our entry was at 393.01, so the OEX move 0.74 against us.

 
 
  Mark Phillips   8/8/2003,  3:53:22 PM
XL $79.51 (+1.16) Could you revisit XL for a put play and let me know your comments please.You had mentioned this last week in your weekly option play.

XL was a recent OI Put play, and I had mentioned it as a possibility as a LEAPS put play a couple weeks ago. But after last week's sharp plunge to the $75 area, I removed it from consideration due to the limited risk reward, with my maximum envisioned downside as $70-72. This week, the stock has been moving steadily upward and has now moved above both the 50-dma and the 200-dma. I don't see any bearish prospects for the stock right here and expect it will probably work up to test major resistance in the $82-83 area before showing any appreciable weakness. Take note of the PnF chart, where price bounced right from the bullish support line at $75 and the upward move has the stock threatening to generate a new Buy signal. Link That would come on a trade at $81 and would negate the current bearish price objective. At this juncture, I would rate the stock "avoid" for both bears and bulls due to the inability to put together a favorable risk/reward scenario.

 
 
  Linda Piazza   8/8/2003,  3:46:59 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's squeeze this stop down to 493.75 now. I'll be issuing another stop in a few minutes to take us out at the then-current level.

 
 
  Linda Piazza   8/8/2003,  3:39:22 PM
Swing Trade Signals
It's time for traders to make their decisions about closing out our trade at the current OEX 493.29 or waiting for the market-on-close orders. We have a stop at 494. I'll be keeping the trade open a few more minutes.

 
 
  Linda Piazza   8/8/2003,  3:36:56 PM
Well, Jane and I think similarly. I've been using "sticking points" for years, although I stopped a while ago when I realized people might not be able to keep up with my highly technical language.

 
 
  Linda Piazza   8/8/2003,  3:23:59 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Here we go. This is why I held on. Lower the exit to 494. We're at strong support again, so conservative traders might just want to exit here.

 
 
  Mark Phillips   8/8/2003,  3:17:38 PM
BDK $40.07 (+0.83) Any thoughts on the activity today. I note 1.45k action in 9/03 45 strike puts along with a +2% gain in the stock and climibing as I write. Would like to short. Either this is the mother of entries or, my gut is telling me, time to sit aside.

The stock certainly looked weak up until the bounce over the past few days. Today's move would cause me some concern on the bearish side though, as it is up more than 2% and is moving through the 10-dma for the first time since this decline began. While it may be a great entry, daily Stochastics and MACD say otherwise, as they are both hinging up and the (5,3,3) Stochastics is giving a buy signal. I'd prefer to wait for renewed weakness before entry, with the 200-dma ($40.67) being the area where I'd expect to see renewed bearish interest.

 
 
  Linda Piazza   8/8/2003,  3:15:32 PM
I'm afraid we're getting the version of today's close where those five-minute candles just march in a straight line to the end of the chart.

 
 
  Linda Piazza   8/8/2003,  2:56:49 PM
Swing Trade Signals
We're approaching the close of the bond market. If anything is going to happen with the OEX, it's going to happen now, but there's no guarantee that it will. Intraday support has been established near 492.75, and if that's not broken rather soon, I think we're either going out within today's trading range or going up. I'm leaving the stop in place for now to take us out on a bump up, but will also be considering exiting if there's not some downward movement soon.

 
 
  Linda Piazza   8/8/2003,  2:52:27 PM
Reader T.G. sends this chart. Note the averages: Link

 
 
  Jeff Bailey   8/8/2003,  2:51:39 PM
Jonathan.... why do you think HUI.X is up today? Because of Italy saying it was in recession?

 
 
  Jeff Bailey   8/8/2003,  2:49:09 PM
Subscriber makes note of QQQ .... good e-mail from subsriber. Evidently, in Friday's Index Trader Wrap, fellow analyst Leigh Stevens made note that QQQ $30.00 is 50% retracement from May relative low. Link

 
 
  Linda Piazza   8/8/2003,  2:45:26 PM
Jim mentioned on the Futures side that Monday should be a big move one direction or another. I used to notice a lot that I'd see a perfect put setup on a Thursday, only to have it go against me and then go my direction the next week after I'd sold on a Friday. I learned not to just sell automatically on a Friday just to clear my account and avoid risk. Then, this spring came along. I once again learned to close trades on Friday when feasible again because of the weekend risk.

 
 
  Jeff Bailey   8/8/2003,  2:39:18 PM
S&P futures (sp03u) ... here's my "fitted retracment" chart of the SP03U where we first put these levels in place back on July 6th Link . Little bugger seems to be traded doesn't it? Link

 
 
  Linda Piazza   8/8/2003,  2:28:00 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower the stop to 494.75, above the last two five-minute highs.

 
 
  Jeff Bailey   8/8/2003,  2:21:23 PM
All be darned if I can find the news on what company in the semiconductor contract manufacturing segment (the worlds largest) commented on its weaker business trends in July.

 
 
  Linda Piazza   8/8/2003,  2:18:38 PM
I clicked on the wrong candle on that last post. We next want to see a move below 492.10, and preferably below 491.91. We might first see a test of 493-493.30.

 
 
  Linda Piazza   8/8/2003,  2:15:58 PM
Next we need a low below 492.49.

 
 
  Jeff Bailey   8/8/2003,  2:15:19 PM
Intl. Business Machines (IBM) $80.52 -.022% .... back near this morning's first 5-minute bar low and the "tech association" may be weighing vs. the more bullish Dow assocation.

 
 
  Linda Piazza   8/8/2003,  2:10:15 PM
Here's our drop again. Let's see if it holds.

 
 
  Linda Piazza   8/8/2003,  2:07:47 PM
Swing Trade Signals
We need to get that drop below OEX 493. I don't intend to keep this play open over the weekend. Participants should be making their own decisions about whether to wait out the last few hours today then. The OEX appears to be poised for a big movement, but it refuses to move. Our stop should take us out without too much of a loss, so I've decided to hold the stop as it is for now.

 
 
  Jeff Bailey   8/8/2003,  1:59:40 PM
QQQ Chart on 5-minute interval. Link with added DAILY retracement. This was chart I was looking at from (12:38:31) trader question.

Even a INDU/SPX/OEX bull is monitoring the QQQ and thinking.... It had better hold that $29.97 lower or its probably going to draw INDU/SPX/OEX off the highs.

QQQ trader is monitoring SPX/BIX.X for any strength/weakness to get feel for direction from DAILY S1 at this point.

 
 
  Linda Piazza   8/8/2003,  1:54:10 PM
Swing Trade Signals
Good thing we're aware of that 1:35-1:55 push (most often 1:45, however). We're still not out of the woods with our OEX play, however, and now need to see if support is going to hold. We still need a sustained move below 493.

 
 
  Linda Piazza   8/8/2003,  1:50:21 PM
Swing Trade Signals
If our stop had been hit during the 1:45 afternoon push, I would of course have honored it. If I'm trying to make a decision, however, I try to be aware that the purpose of this push is to test next support or resistance and that sometimes that support or resistance holds. Let's watch a few minutes, but I'm considering stopping us out of the play early unless the OEX zooms back down again after this test. (I learned this lesson when I had an old-fashioned broker and used to call him regularly during his lunch hour (Central Time) to put in an order to sell only to have the thing go the other way as soon as that order was in.)

 
 
  Jeff Bailey   8/8/2003,  1:48:30 PM
01:00 Update at this Link

 
 
  Linda Piazza   8/8/2003,  1:46:58 PM
Swing Trade Signals
My 30-minute oscillators are hooking up again, but we're also at the stop-running push. Sometimes stops are run exactly at this time before the OEX turns around. Let's wait a few minutes.

 
 
  Linda Piazza   8/8/2003,  1:25:08 PM
Here's the OEX version of the triangle, with the OEX testing the top trendline as I uploaded the image: Link

 
 
  Linda Piazza   8/8/2003,  1:18:50 PM
We have a neutral triangle forming on the OEX, so that a downside breakdown or an upside breakout should help us determine expected direction. A downside break would occur on a break below 492.90 and an upside break would occur on a move above 494.40 or so. We've seen lots of false breakouts and breakdowns lately, though, so give this some leeway, especially on a light-volume day.

What's the difference between a triangle and a wedge? According to my technical analysis texts, including those by Pring and Meyers, a wedge is formed only when both lines slant up or both lines slant down. In Pring's words, "whereas a triangle consists of one rising and one falling line, or one horizontal line, the converging lines in a wedge both move in the same direction."

 
 
  Linda Piazza   8/8/2003,  1:01:04 PM
Swing Trade Signals
After several days of record temperatures here in Dallas (109), we're brewing up some thunderstorms. I've lost my electricity before during storms like that. If I disappear, that's what happened. Just in case, you have an OEX 495.50 exit in place. Watch carefully if the OEX should decline to 490.50-491.50, as that's the site of the descending trendline from the July 28 highs and could provide a bounce point. If the OEX should descend that far, you might consider lowering stops aggressively to take you out on a bounce

 
 
  Linda Piazza   8/8/2003,  12:47:07 PM
Volume patterns still show strong patterns for the NYSE and weak for the Nasdaq, with light volume overall. No wonder neither the bulls nor the bears can gain any traction.

 
 
  Linda Piazza   8/8/2003,  12:40:38 PM
The OEX currently finds support from several sources. Two of those are support from regression channels. Here's a chart: Link

 
 
  Jeff Bailey   8/8/2003,  12:38:31 PM
QQQ $30.00 -1% ... Suggested entry for long on the Q's? Check out low of the day (28.99)? Bad tick? Thanks, Ron

Yes... "bad tick" as I have session low as $29.96. Most likley $28.00 derived from $29.99.

I'd look for a long-entry today at current levels, stop $29.74, or move back above $30.35.

Note... taking a retracement from DAILY S2 to R2 has 80.9% retracement right here at $29.97, with DAILY S2 of $29.79 matching closely to MONTHLY S1.

 
 
  Linda Piazza   8/8/2003,  12:23:14 PM
OEX 493.60 was broken, although we haven't yet had even a single five-minute close below that level. Bears next want to see OEX 492.60-493 broken.

 
 
  Linda Piazza   8/8/2003,  12:14:20 PM
The OEX found support and heads back up to test the top of the downward slanting regression channel again. OEX 493.60 needs to be broken firmly to the downside if those in bearish plays are to feel any level of comfort.

 
 
  Linda Piazza   8/8/2003,  12:04:05 PM
So far, the OEX continues to round slightly as it nears the top of the regression channel on its five-minute chart, preserving the series of lows highs and lower lows, but it's not falling far enough down to confirm that rounding down yet. So far, so good, but this is still dangerous territory if you're in a bearish OEX play.

 
 
  Jeff Bailey   8/8/2003,  12:03:45 PM
S&P Banks Index (BIX.X) 303.06 +0.55% ... moving above its MONTHLY 61.8% retracement here. This was early moring resistance, but still looking 304-ish.

 
 
  Jeff Bailey   8/8/2003,  12:02:01 PM
My thinking ... as it relates to my prior thinking of 1 step forward and 1.5 step back as we begin to look for the indices to work lower in gradual fashion, the current strength in INDU, SPX, OEX in relation to NDX/QQQ is that we should look for NDX to make sharper percentage moves higher in their oversold rebound attempt, but will most likely see INDU/SPX/OEX rebound currently underway all come to a head with the major inices approach levels in the matrix, which certainly start looking like they will meet and converging 21-day and 50-day SMA's.

If the broader NASDAQ Composite and NYSE Composite bullish % reverse lower, then that is when "the gig is up" for bulls, and we get more of the trend lower.

 
 
  Jeff Bailey   8/8/2003,  11:57:09 AM
NASDAQ-100 Index (NDX.X) .... Still looking for a bounce back in the NDX.X, but weakness today, further builds conviction to short/put a rally back near 1,250 area. Link

 
 
  Linda Piazza   8/8/2003,  11:56:46 AM
We have a hint of a downturn at the top of the OEX's five-minute downward-slanting regression channel. As with the last downturn, however, I won't feel comfortable with this downturn until we see a lower low. Even then, there's that whole bull flag possibility to consider, so those involved in current bearish plays need to see the OEX break firmly beneath support.

 
 
  Linda Piazza   8/8/2003,  11:43:03 AM
The current pattern of lower highs and lower lows on the OEX five-minute chart has it trading within a downward-slanting regression channel. We ought to give some consideration to the possibility that this could be a bull flag forming, with that possibility perhaps being more apparent when viewing a 30-minute chart. For that reason, we don't want to see a break over the current day's high.

 
 
  Jeff Bailey   8/8/2003,  11:41:05 AM
5-year YIELD ($FVX.X) lower by 13.8 bp at 3.067%.

 
 
  Linda Piazza   8/8/2003,  11:35:47 AM
Remember the OEX 30-minute chart I put up this morning with the two versions of the descending line off the July 28 highs? Here it is, un-doctored from this morning. Link

 
 
  Jeff Bailey   8/8/2003,  11:34:46 AM
NASDAQ-100 Index (NDX.X) 1,208.87 -0.68% .... with tech broadly lower, trying to judge impact on SPX/OEX/INDU ....

Trying to establish a quick look at what next week's WEEKLY levels might be and using H/L/C of 1,277,/ 1,206 / 1,210 ... I'd get WEEKLY S2 1,160, S1 1,185, P 1,231, R1 1,256 and R2 1,302.

Again.. just ballparking, but WKLY P of 1,231 would be equivalent to this weeks R2 and would note WKLY R1 for next week of 1,256 is correlative to MONTHLY Pivot, which may well be an NDX rebound point for MAX gain and excellent short/put area.

 
 
  Linda Piazza   8/8/2003,  11:32:01 AM
Volume patterns changed a little again as of a few minutes ago, with NYSE adv:dec now at 17:13 and with decliners now leading again on the Nasdaq, with the ratio at 12:15. Down volume led by about 100 million on the Nasdaq, but up volume led by about 85 million on the NYSE. Volume was light, however, at 358 million on the NYSE and 502 million on the Nasdaq.

 
 
  Jeff Bailey   8/8/2003,  11:27:06 AM
11:00 Update posted at this Link

 
 
  Linda Piazza   8/8/2003,  11:21:16 AM
Like Jane, I tend to look at zones of support and resistance rather than specific lines, although sometimes I do see specific points coming into play over and over. (OEX 500.80 was one for a while.) Right now, the OEX approaches an important zone of support. Depending on how thickly you draw the descending line off the July 28 highs or how many shadows you include or exclude, the OEX approaches it between now and 490.50. I would expect at least some attempt to bounce from this zone, although I of course hope the attempt will soon fail.

 
 
  Jim Brown   8/8/2003,  11:16:41 AM
CNBC reporting that short interest is 47% of the XMSR float

 
 
  Linda Piazza   8/8/2003,  11:16:30 AM
Swing Trade Signals
NYSE adv/dec figures are far too strong for my comfort while in a short/put play. As of a few minutes ago, they were at 18:11, and stronger than this morning's earlier figures. Nasdaq advancers had pulled ahead of decliners, too. Yet despite those volume figures, the only reason we're not already a few points in the money is that I lacked the courage after our two failed plays to enter short/put at 495, when the OEX hit the midline resistance in the regression channel depicted in my 10:07 post. I wanted to be sure first that the OEX was turning down from the test of that resistance.

We've now had a lower low on the OEX five-minute chart, and now want to see a push below 492.

 
 
  Jane Fox   8/8/2003,  11:08:26 AM
Linda let me assure you I am in your camp as far as shopping goes. I really dislike it also.

 
 
  Linda Piazza   8/8/2003,  11:05:49 AM
I feel like I'm a woman in one of those hated department-store commercials (hated because I hate shopping and hate all women being characterized as loving to shop) standing in front of a department store in the dark saying "open, open, open." I'm sitting in front of my screen saying "lower, lower, lower." We've just hit a roughly equal low on the OEX five-minute chart rather than the lower low I wanted.

 
 
  Linda Piazza   8/8/2003,  10:57:24 AM
We may have a lower high forming on the OEX five-minute chart, although I'd like to see a decline below the last 492.63 five-minute low to confirm that lower high before giving it strong credence.

 
 
  Linda Piazza   8/8/2003,  10:56:23 AM
A reader points out the following possible reverse H&S on the OEX 60-minute chart. It's an oddly shaped formation with a strongly slanting neckline that may make upside targets unreliable, but I thought I'd point it out in case it turns out to be the predominate pattern to watch today. If it does, that spells the end of our put/short position, of course. The one I/m seeing is slightly odd shaped left shoulder 488 on the 4th, head 485 on the 5th, right shoulder 488 on the 6th, neckline is sloping down with a 3 bar (60 min) deformed armpit that extends just over 495 on the 4th. (Thanks, K.W., for the input.)

 
 
  Alan Knuckman   8/8/2003,  10:53:20 AM
Just for reader’s clarification: I tend to provide more commentary on the T-Bond futures because we receive more technical and fundamental analysis and research information. In actuality, the 10 Year Note futures are more highly traded and a few years ago the trading pits were switched to accommodate the extra bodies. Volume yesterday was 700,000 Notes vs 373,000 Bond contracts. The Notes trade in a tighter range and one half basis point ticks $15.625. aknuckman@manfinancial.com

 
 
  Linda Piazza   8/8/2003,  10:48:50 AM
Swing Trade Signals
What is that Jane said once about one of her systems showing that the most successful plays were the ones that worked right from the beginning? This OEX play is not working right from the beginning. I've deliberately set a rather close stop because I wanted us out if the position was not working. With this being the Friday before opex week, we don't want to hang around in a play that's not working. Because this is a Friday, we'll be quick to take profits, too, if any occur, and therefore, I'll be watching closely around 490-491, ready to exit ahead of our planned 487 exit if necessary.

 
 
  Linda Piazza   8/8/2003,  10:42:59 AM
The TRAN, the transportation index, trades at 2561.08, just under the day's high of 2562.41 and just under the 21-dma at 2569.06. A sustained climb over that 21-dma might mean a test of the upper Bollinger band, near 2630.

 
 
  Jeff Bailey   8/8/2003,  10:31:05 AM
10-year YIELD Alert! Link lower by 3.3 bp at 4.196% (per Index Trader Wrap).

Benchmarking ... INDU = 9,157, SPX = 977.5, OEX = 493.67, NDX = 1,220, QQQ = $30.34, BIX.X = 302.00, $dx00y 96.06, $HUI.X = 170.74

This YIELD trade at 4.20% has 10-year YIELD PnF chart negating prior bullish YIELD count. Vertical count now lower to 3.8% (could grow, but initial YIELD count).

 
 
  Jeff Bailey   8/8/2003,  10:29:12 AM
S&P Banks Index (BIX.X) 301.84 +0.15% .... here's quick look at our BIX.X chart with MONTHLY/WEEKLY retracement. Similar "zone of resistance" perhaps as seen in other major indexes. Link

 
 
  Linda Piazza   8/8/2003,  10:23:10 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We are short/put the OEX at 493.01 (the OEX was actually 493.09 at the time the post appeared) with a stop just over the day's high at 495.50 and with a first target of 487.75.

 
 
  Jeff Bailey   8/8/2003,  10:20:37 AM
Altria (MO) $39.55 -0.92% ... edging below yesterday's low. and threatens a 2-month low close. I think there were a lot of naked $40 put sellers a couple of months ago. Stock stayed pegged at $40 since July expiration and they may be trying to unload.

 
 
  Linda Piazza   8/8/2003,  10:19:45 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Enter short/put now (OEX 493.01) with a stop at 495.50 and a first target at 487.75. We'll follow this down closely.

 
 
  Jeff Bailey   8/8/2003,  10:18:16 AM
Disk Drive and Semiconductor turning red with DDX.X -1% and SOX.X -0.76%

 
 
  Jeff Bailey   8/8/2003,  10:15:34 AM
QQQ $30.32 +0.06% .... isn't helping a INDU/SPX/OEX bull in the least is it? NVIDIA -16%, PIXR -1.9%, NVLS -0.17% on the loser list early, while SEBL +3.9%, JDSU +3.4%, NXTL +3.08%.

The big boys ... MSFT +0.75% Link , CSCO +0.57% Link , INTC +0.04% Link , +1.19% and QCOM -0.19% Link

 
 
  Jeff Bailey   8/8/2003,  10:10:12 AM
10-year YIELD ($TNX.X) ... I'm just noticing that my q-charts is just now showing 10-year YIELD trade. I may have inadvertently quoted an incorrect YIELD in this morning's 09:00 PM EST update. Something may not be correct at this time as I'm showing 10-year September futures contract (ty03u) 112'305 +0.43% higher by 15/32, yet q-chart 10-year YIELD ($TNX.X) higher by 2.3 basis points to 4.25%. Might be correct, but just getting trade ticks through now.

 
 
  Linda Piazza   8/8/2003,  10:07:03 AM
Swing Trade Signals
I love Q-charts' automatic regression channel feature, but sometimes it places the regression channels in strange places. Here's a hand-drawn one on the OEX 60-minute chart, showing the OEX currently at the midpoint. It can be and has been turned back at the midpoint, but a rise above that midpoint could have risk up to 505 or so. Link I'm watching, but feeling burned by the last two failed put plays.

 
 
  Jeff Bailey   8/8/2003,  10:03:14 AM
Supply/Demand Shifts this week. There have been several changes in many of the point and figure readings this week.

Yesterday, we discussed the Market Volatility Index (VIX.X), and I found that commentary tied in with an e-mail I got last night from Dorsey/Wright and Associates informing me that their Optionable Bullish % (a bullish % based only on stocks that trade options) reversed lower into "bull correction" status at 74% after having reversed up in late March from 32% to 38% and recently reaching bullish cycle high of 80%. This may tie in with comments made in VIX.X chart that institutions were larger sellers of puts, but may no longer be selling puts, and now turn to call sellers.

 
 
  Linda Piazza   8/8/2003,  9:59:02 AM
Our first morning reversal is due any moment and we should get some idea about the sustainability of this flagpole rally then.

 
 
  Linda Piazza   8/8/2003,  9:55:26 AM
It looks as if the OEX is headed toward the next resistance zone, between 496.25-498.80.

 
 
  Linda Piazza   8/8/2003,  9:53:36 AM
Volume figures aren't going to prove particularly reliable this early in the trading day, but I'll be watching their trajectory later in the day.

 
 
  Jeff Bailey   8/8/2003,  9:50:30 AM
Stock Trader's Almanac .... a look into next week has the Monday before expiration day showing Dow up 9 of last 12, with note that mid-August stronger than beginning. However, expiration Friday has Dow having traded lower 9 of last 12.

I will most likely bring this into the mix and bulls that may have traded SPX long from 965, may look for exit point sometime before Wednesday? Perhaps "zone of resistance" from 988 to 989 as decent target?

S&P 500 Index (SPX.X) 979.21 +0.52% here. S&P Banks Index (BIX.X) 302.8 +0.47% working its way to correlative 304 resistance.

Rememeber, we get new WEEKLY levels after today's close.

 
 
  Linda Piazza   8/8/2003,  9:47:21 AM
The OEX 50-dma is overhead at 497.48.

 
 
  Linda Piazza   8/8/2003,  9:43:13 AM
The OEX first five-minute's range was a bigger span than normal, and so we can look at retracement values as guides to early trading. The 50% retracement of that first five-minute range was at 492.91, just below the 493 S/R zone. Bears want to drive the OEX back below that level and sustain lower numbers. Bulls want to maintain numbers above that level.

 
 
  Jeff Bailey   8/8/2003,  9:40:37 AM
Dow Industrials (INDU) 9,169 +0.47% .... trader here has the INDU just above our "zone of resistance" from 9,155 to 9,165 (and DAILY R1). Expecting some consolidation here, maybe 50% retracement of this early gain.

NDX isn't cutting it early and at 1,222 with session high being 1,225, it has yet to test that MONTHLY 61.8 retracement.

 
 
  Linda Piazza   8/8/2003,  9:40:23 AM
VIX: Yesterday, Mark Phillips and I were discussing the VIX and the way it had popped up earlier this week and then dropped down again yesterday. That got me thinking about an admonition I dimly remember Jim making long ago about how expensive next-month options could be the week before options-expiration week, noting that institutions usually begin rolling into further out options that week. I've looked at the behavior of the VIX during options expiration weeks in the past, but this morning I decided to take a look at the week before options expiration. What I found was that since January, there's usually been one day--usually a Wednesday but twice a Monday--when the VIX popped up and then dropped back down the next day. Here are the stats: Wednesday, 1/9, VIX +.94; Thursday, 1/10, VIX -1.54; Wed. 2/12, VIX +1.75; Thurs. 2/13, VIX -.65; Wed. 3/12, VIX +.91; Thurs. 3/13, VIX -3.06; Wed. 4/9, VIX +1.39; Thurs. 4/10, VIX -1.95; Wed. 5/7, VIX +0.45, Thurs. 5/8, VIX -0.02; Monday 6/9, VIX +.26, Tuesday 6/10, VIX - 1.56; Mon. 7/7, VIX +.44; Tuesday 7/8, VIX -0.68. Although this is anecdotal and not conclusive evidence, it appears that the VIX often moves up the Monday or Wednesday on the week before options expiration week. Although this week's intraday movements appeared even more dramatic than some of the differences noted here, remember that these were closing values and some of those intraday movements were even bigger, too.

 
 
  Jeff Bailey   8/8/2003,  9:37:09 AM
Sector Action at the open is broadly positive, with fractional % gains. CBOE Oil Index (OIX.X) 272 +1.1% is early gainer, while Defense Index (DFX.X) 163.2 -0.2% the only losing sector.

 
 
  Linda Piazza   8/8/2003,  9:33:17 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We have been stopped out of our OEX short/put position at 492.75, with the OEX having moved 3.75 points against our 489 entry at the time we were stopped out.

 
 
  Jeff Bailey   8/8/2003,  9:18:30 AM
09:00 Update posted at this Link

 
 
  Linda Piazza   8/8/2003,  9:17:24 AM
Swing Trade Signals
The Swing Trade model has an open short/put position on a drop through OEX 489, with a stop at 492.75. Asian and European markets mostly bumped up, with the Nikkei, FTSE 100, and CAC 40 all climbing back over their 50-dma's. The DAX had never dipped below its 50-dma. The Nikkei ended a week's worth of declines. Our futures are up, too. Although the cash markets sometimes open differently than the futures closed, we're not far from our stop and are likely to be stopped out if the markets open up even slightly. Here's a view of where we are on the 30-minute OEX chart: Link While we'll hope that the 491.50-492.25 S/R zone and that descending trendline will hold back advances and that the OEX will now roll down past 489 and 488, that's not looking like the strongest possibility right now.

 
 
  Linda Piazza   8/8/2003,  7:37:07 AM
Good morning. It was about time. After dropping all week, the Nikkei closed up 61.97 points or 0.67%, at 9327.53, on a light-volume day ahead of the week's vacation many people take in August. This brings the index back above its 50-dma at 9293.55 but still down 284 points for the week. The Nikkei opened slightly underwater but didn't stay there long. It shot up more than 100 points within the first hour of trading, but lost a hefty percentage of those 100 points before the morning session closed. It dipped down below the flatline in the early afternoon session, but then climbed the last two hours to its final level near the middle of its rather wide day's range. The afternoon climb was produced by a Japanese private-sector machinery orders number that surprised to the upside, rising 2.4% month-over-month. According to once source, the Finance Minister also hinted that the economy might grow faster than the forecasted 0.6% GDP growth. In addition to the other economic news, Japan's June current account surplus fell 23.5% year-over-year.

Telecommunications companies led early gains after DoCoMo reported Thursday after the Nikkei's close. While gaining users and saying profit would double this year, analysts gave lukewarm comments, noting that the outlooks wasn't looking "that bad" or "as bad as some had probably expected," according to a Bloomberg.com article. Investors must have liked the results better than the analysts' interviews suggested, however, as DoCoMo surged during the morning session. Many technology stocks gained, but the banks did not. According to a Marketwatch.com report, a meeting in Washington led a Japanese government official in charge of stabilizing the Japanese banking sector to decide that he has to step up his efforts.

The dip in stock prices of some Japanese banks did not extend to some other Asian banks, however, with Korea Exchange Bank rising 3.6% and HSBC (HBC) gaining 0.3% after it reported earnings. Across Asia, trading was mixed today, with the Taiwan Weighted losing 0.50%, and South Korea's Kospi losing 0.80%, but Singapore's Straits Times closing flat, up 0.6%. Hong Kong's Hang Seng dropped 0.13%, and China's Shanghai Composite lost 1.08%.

Most European bourses currently trade up. Even Italy was gaining, despite a report that its Q2 GDP contracted 0.1%, the second quarter of contraction. Technically, that indicates that Italy is in recession. Fiat's problems impacted Europe's fourth-largest economy. While one market pundit opined that he didn't see conditions for growth, others point to increasing retail demand as a factor which might make Italy's recession a short-lived one.

After a Citigroup upgrade of European energy stocks, that group helped lead European bourses higher. Citigroup said the industry had lagged other industries and pointed to the relatively low P/E ratios. As of this writing, the FTSE 100 traded up 48.50 points or 1.18%, at 4144.10; the CAC 40 traded up 38.97 points or 1.24%, at 3169.53; and the DAX traded up 17.55 points or 0.53%, at 3349.44. The end-of-the-week's trading has pulled the FTSE 100 and the CAC 40 back above their 50-dma's, at 4097.40 and 3121.82, respectively. The DAX had not yet touched its 50-dma, at 3263.18.

 
 
  Jim Brown   8/7/2003,  11:26:49 PM
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  Jeff Bailey   8/7/2003,  11:25:20 PM
Pivot Analysis Matrix posted at this Link

 
 
  Jeff Bailey   8/7/2003,  11:25:10 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

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