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  Jeff Bailey   8/14/200,  5:35:12 PM
CNBC showing picture of a dock outside of Manhattan covered with people. I hope that dock doesn't have a weight limit.

 
 
  Jeff Bailey   8/14/200,  5:18:37 PM
American Power Conversion (APCC) $16.16 +0.81% Link ... higher at $16.57. Company makes battery power supply backup systems.

 
 
  Jeff Bailey   8/14/200,  4:53:20 PM
SPY $98.93 .... after-hours low was pegged at $98.00.

 
 
  Jeff Bailey   8/14/200,  4:52:15 PM
QQQ $30.89 .... recovering from late session lows of $30.35

 
 
  Jeff Bailey   8/14/200,  4:51:20 PM
NBC News reports Sr. intelligence officials say no sign of terrorism in regards to power outages.

 
 
  Jeff Bailey   8/14/200,  4:49:28 PM
ym03u settled 9,295

 
 
  Jeff Bailey   8/14/200,  4:48:22 PM
nq03u last 1,251.50 settled 1,245.50

 
 
  Jeff Bailey   8/14/200,  4:46:35 PM
es03u last 989.75 settled 987.75

 
 
  Jeff Bailey   8/14/200,  4:44:23 PM
Dow Diamonds (DIA) $93.10 +0.07% .... lower at $92.55.

 
 
  Jeff Bailey   8/14/200,  4:43:37 PM
S&P Depository Receipts (SPY) $99.31 +0.27% .... lower at $98.20 in late-session trade.

 
 
  Jeff Bailey   8/14/200,  4:42:44 PM
QQQ $30.60 ... down 30-cents from closing tick of $30.90.

 
 
  Jeff Bailey   8/14/200,  4:39:05 PM
Kimberly Clark (KMB) $50.26 +2.76% Link ... decent session today. Company makes diapers. One has to wonder if traders might have been front running power outages in North East on 9-month profit expectations?

 
 
  Jeff Bailey   8/14/200,  4:37:19 PM
Ohio Businesses .... reporting power outages.

 
 
  Jeff Bailey   8/14/200,  4:34:13 PM
QQQ $30.90 +0.09% .... QQQ hit lower at $30.65 here.

This would be tomorrow's DAILY S1 $30.65 and WEEKLY Pivot $30.64.

 
 
  Jeff Bailey   8/14/200,  4:16:04 PM
QQQ finishes out at $30.90 +0.09% .... I feel like a day trader bear from $31.07 got "Hambalied" today.

 
 
  Jeff Bailey   8/14/200,  4:08:36 PM
Dell (DELL) $31.39 +0.25% .... all over the map in after-hours. High has been $31.75 low $30.90.

 
 
  Jeff Bailey   8/14/200,  4:07:09 PM
Analog Devices (ADI) $37.09 +0.08% ... reports Q3 (July) earnings of $0.21 per share, which was in line with consensus. Revenues rose 16.8% year-over-year to $520.5 million, which was slightly below consensus. Giving guidance for Q4 of $0.22-$0.32, with consensus at $0.24.

Such wide range for EPS estimate from ADI hints company not certain of how things are going into Q4, but looks flat to higher.

 
 
  Linda Piazza   8/14/200,  4:00:12 PM
Swing Trade Signals
Part of my decision to stay in this trade overnight was due to the Dow's failure to close above 9323, a number talked about on CNBC all day. This was the 6/16 closing high, if I'm reading the chart correctly. Technicians had wanted to see a new closing high for the Dow.

 
 
  Linda Piazza   8/14/200,  3:57:24 PM
Swing Trade Signals
I will be leaving the Swing Trade open overnight, but individual traders should evaluate their own risk tolerances before deciding to stay in.

 
 
  Linda Piazza   8/14/200,  3:55:58 PM
I expect the Nikkei to test 10,000 tonight. It closed at 9913.47 last night. The outcome of that test could affect our markets, too, although a Nikkei close over 10,000 has to be balanced against Germany, Italy, and several other countries either in or teetering on the edge of recession.

 
 
  Linda Piazza   8/14/200,  3:51:01 PM
Swing Trade Signals
I'm considering leaving the OEX Swing Trade open overnight unless we're stopped at the end of the day. The flat trading earlier and then the zigs and zags over the last hour and a half have scrambled the indicators. The OEX is over its 21-dma, but under its 50-dma. It's above the midline support on the descending regression channel on the daily chart, but it's below a long-term ascending trendline I've had marked on my charts since March. On the five-minute chart, it's setting up a symmetrical triangle, and we won't know which direction it's going to break until it does. All this is winding up to say that both bullish and bearish predictions can be made for tomorrow's action, each with nearly equal validity. Make your own decision about whether to hold overnight or not, regardless of what my decision might be. One caveat is that participants with current month options are going to see the value deteriorate a lot overnight.

 
 
  Linda Piazza   8/14/200,  3:35:34 PM
Jonathan may be right about what to expect tomorrow. If you look at an OEX 30-minute chart, you can draw one of his famous bulloney bullhorns if you leave out that long shadow or tail from the 12:00 candle. Sometimes those broadening formations narrow and form a diamond pattern.

 
 
  Linda Piazza   8/14/200,  3:30:44 PM
Reader Question: When you give your entry/exit signals on the OEX, what strike price and expiration date are you trading?

Great question: I don't list a strike and expiration price because that's such an individual choice. For my own trades, I have an iron-clad rule against trading current-month options during opex week. That rule was developed just because of situations like the ones that have been setting up this week. Great trades appear to set up, but they just may not work because of opex machinations. Then, the next week, the index may continue exactly as it had been predicted to do, but anyone in front-month options was left out. I've broken my iron-clad rule three times over the last year and lost each time.

Other people love trading current month slightly OTM (out of the money) options during options expiration week. They're cheap and if the market moves across that strike, gains are much greater proportionately. Of course, if the market doesn't move across the option, you end opex week with much less money than you started. Some use risk capital only, willing to lose that risk capital on a lottery-type play.

Choosing a strike is an individual choice, too, and to some degree it depends on your expectations for the play. As I've mentioned before, if I'm buying an option but think that the market might move against me before it moves my direction, such as if I'm buying on a tentative break of a H&S neckline but think that the market might actually bump up and form a second right shoulder, I might buy a slightly OTM option because it's not going to devalue as much as the market moves against me. If I'm buying and I think there's going to be a quick but limited move, I'll usually buy an ITM option so that I can participate almost point for point in the small move. Others might employ different strategies. Some might even elect to enter a bear call spread when the Swing Trade Model is buying puts, for example. They're taking in credit, hoping to benefit from the same movement we are, but they're balancing a smaller hoped-for return with a smaller risk assumed.

 
 
  Linda Piazza   8/14/200,  3:18:45 PM
In the previous half hour, the OEX produced a big white engulfing candle on the 30-minute chart. Right now, it currently appears to be printing a big red candle that's engulfing the previous white engulfing candle.

 
 
  Linda Piazza   8/14/200,  3:17:33 PM
This reminds me more and more of trading during March: a formation sets up and it confirms, but then the market immediately zooms the other direction, breaking out of a different formation and confirming it. Then there's a push back the original direction.

 
 
  Linda Piazza   8/14/200,  3:07:01 PM
Swing Trade Signals
I always admired the writers who handled the Swing Trade, especially Jim when he was doing it. The more I handle it, the more I admire those writers. Trading the OEX is not like trading futures. We can get into a trade that appears to be setting up well, and see the trade changing, but it's not always easy or advisable for us to jump in and out of trades. Not all options traders even have the ability to trade in and out during the day. Without a $25,000 account, daytrades are limited to three per week. Even those who can daytrade are paying spreads and commissions on each trade. It's better to set reasonable stops and let them do their work.

Note that the big push was stopped, at least temporarily, at the descending trendline that could be drawn from the 9:30 high yesterday morning to the 12:00 high this afternoon.

 
 
  Jeff Bailey   8/14/200,  3:05:49 PM
I've got to get a better contact within the CIA regarding timing as to capture of terrorists. QQQ $31.12 +0.8%.

 
 
  Jeff Bailey   8/14/200,  3:00:15 PM
QQQ $31.15 +0.9% ... day trader stopped from $31.07

 
 
  Jeff Bailey   8/14/200,  2:58:27 PM
3-minutes to bond market close and with QQQ $31.11 +0.76%, I get similar impression that Jonathan gets that there is some front-running taking place on thought stocks are going to rally into their 04:00 PM close.

 
 
  Jeff Bailey   8/14/200,  2:53:43 PM
Sept. S&P futures (sp03u) chart on 60-minute time interval. From time to time I've shown the daily interval with "fitted retracement" which we made up in a recent Ask the Analyst column. Here's the 60-minute that still shows (I think) how some traders are trading this type of retracement levels.Link

 
 
  Linda Piazza   8/14/200,  2:52:23 PM
Jim was prophetic when he said they might try to take the market up one more time before the bond close. Let's hope it's the last time. We've got our stop in place. Let's just let it work.

 
 
  Linda Piazza   8/14/200,  2:48:32 PM
This drop now projects down to at least OEX 496 based on the 497-498 rectangular range since 12:30 and at least 494.50 based on the five-minute H&S formation. Downside targets aren't always met, but that's what they are. Supposedly, these are minimal targets, too. I would be tempted to say that since it took so long to break through 497, that the breakdown was significant and that we should see a quick drop, but I remember times in March and times in other opex weeks when we've seen the breakdown work perfectly and then . . . nothing. Right now, the OEX stalls in that 496.40-496.80 range we've been watching.

 
 
  Linda Piazza   8/14/200,  2:40:27 PM
The TRAN made it up to the 2625 level, to 2625.46. It's currently at 2620.22. It dropped back and made another attempt, but the second five-minute high was a lower high. The TRAN now retreats just below the intraday 2620.80 support, but has more waiting at about 2618. Below that, it's a fast drop on an intraday basis down toward 2606 and 2602, then down to the day's low below 2595.

 
 
  Jeff Bailey   8/14/200,  2:40:21 PM
QQQ ... Disclosure... I currently hold bearish trade in QQQ from $31.07.

Took my yellow lab Drake to the Vet today. He was so happy to go somewhere for a visit. Little does he know he's going to come back a "changed man." Dogs have a wonderful life as they really have little clue, nor worry about the future. Everything to them is a great adventure.

 
 
  Jeff Bailey   8/14/200,  2:36:43 PM
QQQ $31.05 +0.58% ... speaking of QQQ 60-minute chart... see all these hourly closes at $31.05? Keep an eye on the NYSE bid/offer. I think its him/her trying to get some type of peg at $31.00. I'm just a bit suscpicous of this character.

I think he/she is a bear, as hourly interval just can't seem to close above the DAILY R1 on hourly basis.

 
 
  Linda Piazza   8/14/200,  2:35:36 PM
The OEX inches oh-so-close to 496.40-496.80.

 
 
  Jeff Bailey   8/14/200,  2:33:10 PM
QQQ $31.05 +0.58% .... if shorter-term trader in the QQQ, flip your time-interval over to 60-minute. I like to use Stochastics setting (5,3,3). Ahead of bond market close, I'd really prefer to see the QQQ below DAILY R1 of $31.07 and get a decline going in Stochs. MACD/Signal still bullish, but starting to round, would be a "beauty" if MACD (0.149) (MACD settings 12,26,9) were to cross below Signal (0.1266)

 
 
  Linda Piazza   8/14/200,  2:32:57 PM
Swing Trade Signals
That five-minute OEX head-and-shoulder neckline just will not break. According to most technicians, the H&S formation is reliable enough that you should be able to enter as the right shoulder rounds over without waiting for a neckline break, but as anyone who has written me knows, I usually take a more cautious approach and wait until the formation is confirmed. Why didn't I today? Risk vs. reward. Getting in at the then-current OEX level allowed a stop closer to the current position. Waiting for confirmation meant a stop that was further away.

 
 
  Jeff Bailey   8/14/200,  2:27:18 PM
30-year YIELD ($TYX.X) .... now lower by 1.2 basis points to 5.436%.

10-year YIELD ($TNX.X) .... still higher by 4.6 bp at 4.606%.

Net between the two would be slightly higher type of YIELD trade for mortgages, but not too much. At least this would be by impression. I kind of think of the two combined as being 1/3 10-year and 2/3 30-year.

 
 
  Linda Piazza   8/14/200,  2:25:09 PM
Re Jeff's 14:19 post: Jeff, if I thought I could do anything to move the markets, I'd be doing it, including those orders. I've practically been on my knees in front of the screen today, begging, "Please, please go my direction."

 
 
  Linda Piazza   8/14/200,  2:20:36 PM
Swing Trade Signals
We're back slightly below our entry now. Those who waited for the slightly higher entry have a bit more cushion on those taking the official 497.28 entry. The OEX formed the second right shoulder that often occurs with H&S formations. I thought I had warned about that possibility when I mentioned the possible better entry, but I don't find a reference to that possible second right shoulder in my notes. I must have been thinking it but have neglected to write it. Next on our wish list is a push below the 496.40-496.80 support zone.

 
 
  Jeff Bailey   8/14/200,  2:19:09 PM
QQQ $31.03 .... don't know if any traders monitor Level II, but did anyone see that NYSE bid/offer from $31.04 to $31.06? $31.04 showed up AFTER the $31.06 offer was shown, and to me, looked a little bit like a trader trying to force some up-ticks at his offer.

It was probaly Linda trying to get some up ticks for a 1/8 partial position.

 
 
  Jeff Bailey   8/14/200,  2:10:51 PM
June FOMC notes are out .... Link see some blurbs across the wires that Fed was worried about "further disinflation" based on high number of unemployed. Had considered a rate cut in May, but decided to hold off.

 
 
  Jeff Bailey   8/14/200,  2:04:04 PM
QQQ $31.08 +0.68% .... here's updated 5-minute chart. day trade bear got a little weakness from $31.07, but looks to come back for a test of $31.11. Bear wants it to hold if he/she is going to get a shot at $30.87 target.Link

 
 
  Linda Piazza   8/14/200,  1:59:40 PM
Swing Trade Signals
So far, so good. Those who waited for a better entry may be getting one. I would not enter, however, if the OEX pushes above 498.50, for obvious reasons.

 
 
  Linda Piazza   8/14/200,  1:53:34 PM
Swing Trade Signals
That news about the yields crashing is probably not good news for our trade.

 
 
  Linda Piazza   8/14/200,  1:50:36 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We are short/put the OEX at 497.28 with a stop at 499.50. Our first downside target is 494.50 and next we'll look for a move to 493.50.

 
 
  Linda Piazza   8/14/200,  1:48:36 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Let's make this trade official after all and raise the entry. Enter short/put the OEX now with a stop at 499.50, just above the day's high. Conservative traders might want to watch for the push that usually comes this time of day, because it's possible it will be a push back up toward 498, giving you a better entry.

 
 
  Linda Piazza   8/14/200,  1:43:10 PM
Swing Trade Signals
I'm considering making the short/put entry official and raising the entry level. Be back in a second.

 
 
  Linda Piazza   8/14/200,  1:19:24 PM
The Dow tested 9300 again, dipping briefly below it and then climbing again.

 
 
  Linda Piazza   8/14/200,  1:10:08 PM
Swing Trade Signals
At this time, I don't think I'll be making this an official trade, but aggressive traders with risk money to spend could consider a short/put OEX entry if the following conditions are met: if the OEX rolls over before 498.50 and if the OEX then drops through 496.25 (the confirmation level for the double bottom). These traders should be prepared to exit quickly near today's low if the OEX should reach that level and then pause. I will follow the trade, but I don't want anyone in it unless they're aware of all risks, including the park-the-indices-at-max-pain-levels risk. The H&S minimum target projects down only to about 494.50.

 
 
  Linda Piazza   8/14/200,  1:01:47 PM
Here's what I'm watching on the OEX five-minute chart: Link

 
 
  Jeff Bailey   8/14/200,  1:00:56 PM
QQQ $31.07 +0.64% ... day trader short here, stop $31.15, target $30.87

 
 
  Jeff Bailey   8/14/200,  12:55:58 PM
NASDAQ-100 Index (NDX.X) 1,250 +0.75% .... just looking around at some levels within the matrix. The rather suspicious weakness in last 25-minutes may tie in the NDX.X session high of 1,254.00 , which came quite close to our WEEKLY R1 of 1,254.80.

While not a financial/bank-related stock in the bunch (NASDAQ-100 that is), the S&P Bank Index (BIX.X) 304.16 +0.66%, just off its session high of 305.11, which is also just shy of WEEKLY R1 (305.40), which found selling right at yesterday's higher open.

Two levels that appear to be nearest resistance right now, that may be in play for selling.

30-year YIELD ($TYX.X) now higher by 2.4 basis points at 5.472. There was some chatter of a large buyer in the 30-year bond late this morning.

 
 
  Linda Piazza   8/14/200,  12:51:16 PM
As Jim has warned many times, markets are sometimes parked near max pain levels at the end of opex week. That may be particularly true in a summer opex week when volume is low. Be cautious with your trades, especially if you're considering current month OTM options, because their value will leak away quickly now if markets sit still.

 
 
  Linda Piazza   8/14/200,  12:46:19 PM
Swing Trade Signals
As reader P.G. mentions, that 30-minute candle that stopped us out of our play has a bearish look to it. I've been considering possible entries, both short and long. A break above yesterday's high would appear to get the OEX past the next resistance that worries me, predicting a run toward 507-508, but a break above yesterday's high will mean the OEX will have already gained more than five points today. A short entry is more difficult. For the last three days, the OEX appears to have sprung up from its 10-dma, with that average currently at 493.71. If the OEX rises back toward today's high but rolls down ahead of 498, then a drop through 496.80 support might make a good entry, but we'd have to give the OEX some leeway to test that level, say to 496.25. That doesn't give us far before that 10-dma is hit again. It may be that cash may be the best position, but I'm still watching, with my eyebrows singed off after today's stop, but watching.

 
 
  Linda Piazza   8/14/200,  12:30:19 PM
Swing Trade Signals
It's bad form and bad account management practice to keep raising stops, but I wish I could have done that today. For clarification, I'm not opposed to playing the OEX long, but here's what I saw on the daily chart when planning today's trade: Link The OEX now butts up against one of the possible trendlines from the June high. A break above that trendline might see a rise toward the next one, between 507.50-508, but that breakout wouldn't be confirmed until a break above yesterday's high. Here's what I saw on an old 60-minute chart that I've been following since March: Link While today's close might see us glad we were stopped out of the OEX short/put play, I don't want to enter long here ahead of this kind of resistance. We need to wait until the OEX has cleared it before we consider a long position.

 
 
  Linda Piazza   8/14/200,  12:08:21 PM
The OEX now butts up against the violated ascending trendline from the August 6 lows, testing its resistance.

 
 
  Linda Piazza   8/14/200,  12:05:43 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were just stopped out of our OEX trade with an OEX trade of 498.25. We entered at 495.09, so sustained a 3.16 OEX move against us.

 
 
  Linda Piazza   8/14/200,  12:02:10 PM
If this is going to be a H&S formation on the OEX, it's going to be one with a slanted neckline and so possibly a right shoulder that's slightly higher than the left shoulder. That left shoulder had topped out near 497.50, and the OEX is already above that.

 
 
  Linda Piazza   8/14/200,  12:00:16 PM
After closing just below 2600 yesterday, the Dow Jones Transportation Index, TRAN, is back above 2600 today. Currently at 2620.18, it's attempting a breakout above the 2625 level and a move toward the July 31 high of 2653.23.

 
 
  Jeff Bailey   8/14/200,  11:58:11 AM
RF Micro Devices (RFMD $8.23 +3.5% .... yesterday had mistakenly analyzed, then erased comments based on trader's question regarding RMD. However, a couple of trader's were interested in RFMD technicals.

RFMD Pnf chart Link remains longer-term bearish at this point, and current vertical count is bearish to $0.00 (column of O from $13.00 to $7.00). The stock's chart does look like it is trying to find a longer-term bottom, with recent reversal from $5.00 to $8.00 creating a "low pole warning," which is often associated with a retracement of a more climactic amount of selling being reversed, and perhaps a shift in sentiment toward the stock. First sign of meaningful strength would come with a trade at $9.00, which would get the stock back on a PnF buy signal, and have the longer-term bullish vertical count initially building to $18.50

Dorsey/Wright and Assoc. has the stock classified as belonging to the telephone sector, where the Telephone bullish % (BPTELE) is currently "bear alert" at 63.16%, having just reversed lower from 70% bullish.

With RFMD having given the "sell signal" at $8.50 in December (after red C) ans showing some bullish participation as the telephone sector bullish% rose from 28% in March to 70% in July and just starting to show weakness, I would think a longer-term bull might look to implement a strategy of covered call writing at this point.

RFMD has been outperforming the broader S&P 500 Index (SPX) as depicted by this relative strength chart Link since June (after red 6).

 
 
  Linda Piazza   8/14/200,  11:51:52 AM
Looking at the OEX five-minute chart, there's the possibility of a steadying near 496.80-496.90, and a rise back toward 497.50--an incipient H&S formation, even though the head hasn't fully formed yet. Still, we should be expecting a possible bounce near the 496.80-496.90 support, and we're hoping it fails short of the 498 "head" level.

 
 
  Linda Piazza   8/14/200,  11:43:52 AM
Is this another bull flag on the OEX? Perhaps, but this one doesn't look as bull flag-ish as the previous one.

 
 
  Linda Piazza   8/14/200,  11:34:07 AM
Dow 9300 is a key level for us OEX traders to watch today.

 
 
  Jeff Bailey   8/14/200,  11:25:31 AM
11:00 Update posted at this Link

 
 
  Linda Piazza   8/14/200,  11:19:38 AM
This still looks as if it could be a bull flag on the OEX.

 
 
  Linda Piazza   8/14/200,  11:13:50 AM
Swing Trade Signals
Before we can begin to breathe again, we need to see a drop below 496.40, a level of historical, horizontal S/R. Without that, we're still looking at the possibility that the current decline is just part of a controlled accumulation pattern of one sort or another after the steep climb.

 
 
  Linda Piazza   8/14/200,  11:02:49 AM
This could be a "p" accumulation pattern or a bull flag forming on the OEX five-minute chart.

 
 
  Linda Piazza   8/14/200,  10:54:03 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's raise the stop back to 498.25. The OEX is pausing just under our stop, and I'd hate to be stopped out by a few cents before it turned down again. Conservative traders can leave it where it is.

 
 
  Linda Piazza   8/14/200,  10:51:40 AM
Swing Trade Signals
It sure looks as if we're about to get stopped out of our OEX short/put play. I hated to lower the stop because I see a couple of trendlines converging just above 498, but once the OEX was trading in the 493's, it was difficult to justify a stop that far above the then-current level.

 
 
  Jonathan Levinson   8/14/200,  10:49:29 AM
What is your thinking on where the Q's are going today and tomorrow? I think they are going down in next week or so but am thinking about rolling my Aug 31's into Sep next chance I get, probably a break even. The Q's still have not broken above the basis line on my daily Bollinger but are close.

I always agree with buying more time, but it depends on your risk tolerance. Direction is completely up for grabs here- there's big money in the water today added by the fed, and opex tomorrow could easily pin price above or at 31. Extra time will avoid a do-or-die situation for opex.

 
 
  Linda Piazza   8/14/200,  10:42:48 AM
Swing Trade Signals
The OEX confirms its double bottom on the five-minute chart. It now moves into a zone of resistance, but if this doesn't stop it, we'll soon be out of our play.

 
 
  Jeff Bailey   8/14/200,  10:36:16 AM
QQQ $30.91 +0.16% .... here's 5-minute chart with DAILY pivot retracment overlaid. Looking like a very narrow range session today.Link

 
 
  Linda Piazza   8/14/200,  10:33:19 AM
As of a few minutes ago, decliners still led advancers on both the NYSE and the Nasdaq, but not by large proportions. Down volume was also bigger, but also not by a big percentage. Volume was weak, at 173 million on the NYSE as of a few minutes ago and 259 million on the Nasdaq. New lows were climbing again on the NYSE, however, with 17 so far this morning.

 
 
  Linda Piazza   8/14/200,  10:30:15 AM
The OEX gets uncomfortable close (for those in bearish plays) to the confirmation level of the double bottom on the five-minute chart.

 
 
  Jeff Bailey   8/14/200,  10:26:26 AM
Charter Communications (CHTR) $3.78 -5% Link ... most actively traded stock in this morning's market and trade at $3.25 would be viewed as negative.

Charter is coming to market with a $1.7 billion junk offering, which the company had to raise yield on in face of a weakening junk bond market.

 
 
  Jeff Bailey   8/14/200,  10:19:44 AM
Treasuries find the 30-year yield lower by 3.7 bp to 5.411%, 10-year higher by 2.4 bp at 4.584% and 5-year yield rising 3.7 bp to 3.456%.

August Gold futures contract (gc03q) 364.0 +0.52%.

Bond/gold trade, especially 5-year gives sense of inflation.

 
 
  Linda Piazza   8/14/200,  10:09:29 AM
The SOX is down this morning, but still above its 10-, 21-, and 50-dma's, with those averages at 384.62, 385.63, and 381.53, respectively. At 389.29 as I type, the SOX is currently close enough to test one or two of them today.

 
 
  Linda Piazza   8/14/200,  9:58:48 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower the stop to 497.75. If the OEX should steady here and then move up past 496.60 or so, it will confirm a double bottom on the five-minute chart. That double bottom target projects up to 499 or so. OEX 497.60 was the 2:40 high yesterday afternoon before the OEX started dropping again. Let's give the OEX a few cents above that high as a final confirmation level of the double bottom and get out ahead of 499, if that should happen. So far, the OEX hovers near yesterday's lows, and I don't anticipate a confirmation of that double bottom, but you never know.

 
 
  Linda Piazza   8/14/200,  9:51:16 AM
Swing Trade Signals
Once we're safely past yesterday's low, we'll be lowering the stop again and then will start lowering it more aggressively.

 
 
  Linda Piazza   8/14/200,  9:48:59 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower the stop to 498.75. That's a little more than $.50 above the 50-dma and appears a logical next place for our lowered stop.

 
 
  Linda Piazza   8/14/200,  9:44:55 AM
The OEX is now below the 100-pma on the 30-minute chart, with that average at 494.74. The bears' next task is to drive the OEX below yesterday's 493.55 low and the historical support at that level.

 
 
  Linda Piazza   8/14/200,  9:41:57 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We are short/put the OEX from an OEX trade of 495.09, the level at the time the post appeared. Our stop will initially be 499.25, but I will be lowering it as we get past the 100-pma on the 30-minute chart. The first reversal this morning, due shortly, may take us back up to test that 497.50-498 level and I don't want the stop too close too soon.

 
 
  Linda Piazza   8/14/200,  9:39:13 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
The OEX is not sustaining that 50% retracement of the first five-minute candle, not the opening level. Go short now.

 
 
  Linda Piazza   8/14/200,  9:35:44 AM
The first OEX five-minute range was big enough to provide us with retracement levels to watch. The 50% retracement of the first five-minute range was at 495.88. Bulls want to see the OEX sustain that level in early trading.

 
 
  Jeff Bailey   8/14/200,  9:34:21 AM
S&P Banks Index (BIX.X) 302.36 +0.06% ... firm in early morning trade. Early resistance from WEEKLY/MONTHLY pivot retracmenet is from 302.45 to 303.04

 
 
  Linda Piazza   8/14/200,  9:32:27 AM
Swing Trade Signals
The OEX opens up. I'd like to see a test of the 496.50-497.50 level, giving us a higher and safer stop, and ensuring that the OEX isn't going to push above important resistance.

 
 
  Jeff Bailey   8/14/200,  9:29:40 AM
Later today at 02:00 PM EST, the full FOMC minutes will be released from the June 24/25 meeting, when the FOMC cut its fed funds rate by 0.25 points to the current 1.0% rate.

 
 
  Linda Piazza   8/14/200,  9:27:35 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
The Swing Trade Model is flat this morning. We were stopped out of our short/put OEX play just before the close yesterday on what may have been a short-covering rise. It felt safest to close the trade and capture our gains anyway with that big bounce the last thirty minutes and with important economic numbers due this morning. Today, we will be looking for another entry short/put. Our just-in-case entry this morning is on a drop through 494.50. Enter short/put on a trade at or below 494.50. That's just below the 100-pma on the 30-minute chart. The initial stop will be 498.50. I hope we'll get a chance to get in on a rollover at a higher price, but I wanted to have this possible just-in-case entry. Be prepared for some initial volatility. This trade is made riskier than usual because of options expiration week, and because of the tendency to hike options prices the Thursday before options expiration as market participants roll out of front-month options into further-out options.

 
 
  Jeff Bailey   8/14/200,  9:27:26 AM
The only negative I could really find in this morning's economic data, was a upward revision to prior week's jobless claims, and addition 2,000 filings for unemployment this past week. With revision and this past week's data, we actually saw an 8,000 increase in jobless claims as to what had previously been thought.

 
 
  Jeff Bailey   8/14/200,  9:21:05 AM
10-year YIELD ($TNX.X) Link rising 7.2 basis points to 4.632%. This morning's trade at 4.6% has the 10-year YIELD point and figure chart back on a YIELD buy signal, with vertical count now higher at 5.3%.

In late-June to mid-July the 10-year YIELD PnF chart built a vertical count to 6.15%, which was recently negated by the YIELD trade at 4.20% on 08/08/03, when the YIELD ticked lower at 4.190%.

 
 
  Jeff Bailey   8/14/200,  9:18:01 AM
09:00 Update posted at this Link

 
 
  Linda Piazza   8/14/200,  6:42:44 AM
Good morning. The Nikkei opened down 22 points, dropped to support near 9680, and then started working its way toward positive numbers. Tech stocks led the way up, but cyclical stocks climbed, too. Not only did the Nikkei regain positive territory, but it also closed up 160.72 points or 1.65%, at 9913.47. Economic figures released today showed that in July Japanese corporate bankruptcies dropped 23.7% from the year-ago period. As a Marketwatch.com article points out, the Nikkei has gained around 650 points in the last five trading days.

One cyclical sector performing well was the steelmakers. Mitsubishi Heavy Industries gained on stock-specific news that it would attempt to grow sales of large forklifts by producing a forklift to handle cargo in port areas, but other cyclicals performed well because of new hopefulness about the economic outlook. Paper stocks performed well, and will likely show strength if Japan's economic forecasts are revised up, as some anticipate they will be.

Other Asian bourses were mixed. The Taiwan Weighted dropped 0.10% and China's Shanghai Composite fell 0.68%. South Korea's Kospi gained 1.95%, Singapore's Straits Times climbed 0.47%, and Hong Kong's Hang Seng gained 0.70%.

Most European markets currently trade in the green, although the long-anticipated economic numbers released today showed Germany's economy shrinking 0.1% in the quarter that ended in June and the Eurozone's economy stagnating. Germany's economy now joins the Italian and Dutch economies as being in an official recession, with two successive quarters of declines.

In stock-specific news, Deutsche Telekom (DT) declined after surprising to the upside with its Q2 earnings, showing a profit when a loss had been expected. German insurer Allianz (AZ) nearly doubled analysts' expectations according to Marketwatch, yet slipped lower in early trading today. Perhaps it was their statement about "relentless cost-cutting" measures, partially responsible for the upside surprise, or the anticipated lower Q2 growth in life and health insurance unit that disappointed market participants.

As of this writing, the FTSE 100 trades up 34.40 points or 0.82%, at 4215.10. The CAC 40 trades up 18.53 points or 0.58%, at 3226.59, and the DAX trades up 26.60 points or 0.78%, at 3425.49.

 
 
  Jeff Bailey   8/13/200,  11:32:34 PM
Pivot Matrix for tomorrow posted at this Link

 
 
  OI Technical Staff   8/13/200,  11:32:28 PM
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