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  Linda Piazza   8/26/200,  4:03:35 PM
Swing Trade Recap- OEX/SPX/DJX/DIA/SPY
Tuesday, August 26, 2003:
Entered a bearish position when the OEX traded 495.35.
Exited when the OEX traded 495.50.
Total for the Day: Sustained a 0.15 OEX move against our position.
Total for the Week: Sustained a 0.15 OEX move against our postion

  Linda Piazza   8/26/200,  3:57:19 PM
The OEX appears to have found support today on the midline of its daily regression channel, piercing that midline but then springing up. This hints at a possibility that the OEX could move back toward the top of that channel, currently between 504-506, depending on how the channel is drawn, but the daily oscillators remain mixed enough that it's difficult to trust that prediction.

  Linda Piazza   8/26/200,  3:54:37 PM
The OEX is now challenging the 10-dma at 499.73.

  Linda Piazza   8/26/200,  3:51:57 PM
Daily OEX RSI has turned up again.

  Jeff Bailey   8/26/200,  3:46:31 PM
Looking for a signal and quickly punched in the NYSE/NASDAQ NH/Nl numbers.

NYSE NH/NL is 38:22 and would have 5-day ratio at 85.4, and 10-day ratio at 85.4.

NASDAQ NH/NL is 82:10 and would have 5-day ratio at 94.1 and 10-day ratio at 94.1%.

Thinking of Day trader short in the QQQ on QQQ close below the WEEKLY pivot of $32.35. Thinking is we might see a dip lower in the morning on lack of economic data, but would want a move back below $32.35 at this point.

  Jeff Bailey   8/26/200,  3:39:58 PM
US Dollar Index (dx00y) 98.83 (unch) ... right at its 200-day SMA. Intra-day observation of slight bid back in dollar with equities. My only thinking here would be that selling/buying pressure in just about everything is going to be light this week and intra-day fluctuation is going to be very common.

  Jeff Bailey   8/26/200,  3:35:58 PM
03:15 EST Update posted at this Link

  Linda Piazza   8/26/200,  3:34:28 PM
Advancers now outnumber decliners on the NYSE and up volume is bigger than down volume. On the Nasdaq, advancers and decliners were exactly equal as of a few minutes ago, with up volume also ahead of down volume. Total volume appeared to have picked up, too, with 928 million traded on the NYSE and 1.1 billion on the Nasdaq as of a few minutes ago.

  Linda Piazza   8/26/200,  3:31:53 PM
The just-completed OEX 30-minute candle is difficult to decipher. Although the upper shadow is not long enough to consider this a shooting star (the real body of the candle should be smaller in relationship to the shadow), there's no denying that the shadow pierced resistance, but then the price begins to fall back, creating a real body that's just barely inched above the 498.50-499 resistance and remains below the 500.30-501 resistance. Still, even if the body is barely above 499, it is above that level. There's also no denying that if it had been a shooting star, which it verged on being, that's a possible reversal sign.

  Linda Piazza   8/26/200,  3:07:49 PM
OEX 500.30-501 appears to be next.

  Linda Piazza   8/26/200,  3:03:44 PM
The OEX is right back to the top of yesterday's bear flag. It was a bear flag since the OEX broke down below it and acted as it should when it broke down, but now whatever is powering this upsurge has driven the OEX above the top of that bear flag. We're soon going to see if 498.50-499 is going to be resistance, and we're going to see just as the bond market closes.

  Linda Piazza   8/26/200,  2:55:23 PM
OEX resistance masses in the 498.50-499 level, and a move over that level would show considerable strength. Resistance in that level comes from one version of the descending trendline off the mid-June OEX high (cutting off some of the candle shadows), the simple 50-dma at 498.41, and even the 30-minute 50-pma at 498.94. In addition, yesterday's bear flag resistance rises to that level. Jim sometimes talks about the 30-minute 100 and 130-pma's on the ES, and those averages on the OEX are currently at 498.47. There's both trendline and moving-average resistance at that zone, then. Above that, 500.30-501 appears to be the next zone to watch, but if the OEX can make it past those levels, 504 should be tested, if not 506-508. Currently, the longer-term daily 21(3)3 stochastics point to more downside, but the less reliable 5(3)3 stochastics are already in territory indicating oversold conditions in the very short term. They haven't yet made a bullish kiss, but show the slightest inclination to turn up again. RSI has flattened, not yet turning up with this afternoon's rise.

  Jeff Bailey   8/26/200,  2:49:22 PM
Gilead Sciences (GILD) $63.31 -1.7% ... Getting ready to stopped out of GILD at 62.49 within the next 60 minute probably. Stay long or take the loss? Thoughts?

Hmmmm... PnF chart Link is near-term bearish after GILD gave bouble-bottom sell signal at $64, which has current vertical count bearish to $51.00, which by golly is pretty close to the bullish support trend, which is longer-term bullish.

Hmmmm... GILD is a "biotech" and Amgen (AMGN) Link is a biotech.

With biotech sector bullish % (BPBIOM) from Dorsey/Wright "bear confirmed" I think even these two stronger names in the sector are seeing some profit taking.

Yes, I'd certainly honor stops if long either of these two names.

GILD has a rising 50-day SMA at $61.84, but will not AMGN did too at $67.90, which was broken to downside on Friday.

With NASDAQ-100 Bullish % ($BPNDX) currently "bear correction" status, these biotechs seem to be a sector within that is leading weakness right now. Link

  Linda Piazza   8/26/200,  2:31:05 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were stopped out of our OEX bearish trade when the OEX traded 495.50. We entered when the OEX traded 495.35, so we sustained a $0.15 OEX move against our position. I apologize for the delay in getting this exit posted, but I had difficulty posting for a few minutes. I hope many of you took the exit I suggested for the most conservative traders, posted this morning at 10:30 when the OEX traded 492.93 and 493.33. I think I'm done trying to find entries in this low volume environment.

  Jeff Bailey   8/26/200,  2:30:29 PM
NYSE NH/NL 10-day Avg. Chart at this Link and serves as a graphical representation of 14:06:22 post, and the NYSE NH/NL 10-day average. Might now be looking for bullish leadership to take a rest with the 5-day average crossing below the 10-day average, with thought then building that the shorter-term (5-day) leads to a longer-term (10-day) reversal back lower.

  Jeff Bailey   8/26/200,  2:06:22 PM
NYSE and NASDAQ NH/NL breadth at 01:00 PM EST reading. Link

  Linda Piazza   8/26/200,  2:06:19 PM
I've had this horizontal line (494.87) drawn on one OEX 30-minute chart since August 8. I'm not even sure why I put it on the chart originally, as it doesn't appear to line up with a key level on either the first candle body or the first candle shadow when I first placed it on the chart. However, it's come into play several times since then as the OEX approached the line, with one of those times being yesterday's low and the other being today's afternoon high. That line is being tested again: Link I keep finding over and over that these old trendlines come into play, even sometimes when there was a relatively minor reason for placing it on the chart in the first place.

  Linda Piazza   8/26/200,  1:55:55 PM
The potential OEX double top I mentioned in my 12:26 post did confirm with a move below 493.60. The downside target of 492.80 was not reached, however, before the OEX reversed. That predicted the strength we're seeing now, or rather showed that the OEX was not as weak as it appeared from the surface. The problem was that the OEX appeared to be headed down toward fulfilling that goal when it reversed quickly. The same candle that showed us that it wasn't as weak as it appeared to be was the one that moved up so strongly. So far, the OEX is hesitating at the 38.2% retracement of the day's range, just under 494.60. If the OEX is stopped here, that's a rather shallow retracement of the day's range, bringing us back to the "OEX is weak" theory, but we can't count on that happening yet.

  Linda Piazza   8/26/200,  1:42:02 PM
The OEX is currently at the 494.40 high from the last few hours. A sustained move over this level predicts more upside.

  Linda Piazza   8/26/200,  1:38:04 PM
We didn't have to wait long to see where the 1:35-1:55 push would take us today. Up. Let's see if resistance holds on this test.

  Linda Piazza   8/26/200,  1:31:54 PM
Here's something I'm noticing on the OEX thirty-minute chart: Link While I'm not counting on the same resolution, I certainly wouldn't mind seeing it.

  Linda Piazza   8/26/200,  1:25:24 PM
The Dow Jones Transportation Index, the TRAN, pauses just above its 21-dma at 2605.67, with the TRAN currently at 2609.23 as I type. If the TRAN should close below this average, it will be the first time it's done so since August 7, the third and last of three days in which the TRAN closed below that average. Before that, the TRAN had not closed below that average since July 3. It's a long time before today's close, and I'm not drawing any conclusions yet, but am watching. Although the TRAN appears to trade more in conjunction with its simple 50-dma, its action around the 21-dma might bear watching, too.

  Linda Piazza   8/26/200,  1:06:07 PM
Are we seeing a rounding-top formation on the OEX five-minute chart? During consolidations like these, the easy task is to find a formation or two. The difficult task is to discount all these formations on five-minute charts and not to micro-manage an account as the result of potentials setups.

  Jeff Bailey   8/26/200,  1:04:52 PM
01:00 PM Update will be a little late. I've been on the phone. (see Jim's 13:10:15 post).

  Jeff Bailey   8/26/200,  1:01:06 PM
Per 12:08:39 comments on the dollar .... How does the weakening dollar equate to possible weakening equities? We have seen that the weaker dollar has brought buying of equities and recently the strengthening dollar is showing weakening equities... What are you seeing or clue me in to your thinking, please. My thinking, based on observation, addressed in "Ask the Analyst" columns along with Index Trader Wraps, has been.... the WEAKER dollar was great, when Treasury YIELDS were falling, which had mortgage REFINANCING's taking place at a very healthy clip.

However... recent back up in YIELDS, now has mortgage REFINANCING falling (see this weekend's Ask the Analyst column. My thinking right now, near-term, is that the reversal in the dollar index today (near-term) is foreign capital LEAVING the U.S. and if refinancing of mortgages, which has been falling off continues, the MONEY SUPPLY could also expect to fall back near term.

What could be further negative near-term is dollar continues to reverse lower (money flows out of U.S) and some of the money that is in stocks, rotates out of stocks and into bonds on a near-term basis, with YIELDS at 52-week highs.

True, it is like a roller coaster. Eventually, YIELDS may fall enough where we then see a pick up in refinance, money comes back to U.S. dollar in the form of foreign capial coming back to U.S. ..... etc. etc.

Note: The Dow Industrials and NASDAQ-100 Index hit new 52-week highs last week, while the U.S. Dollar was strengthening.

  Linda Piazza   8/26/200,  12:49:09 PM
Until and unless volume patterns improve, the indices should have trouble making much headway. Adv:dec ratios stood at 10:21 for the NYSE and 9:21 for the Nasdaq as of a few minutes ago. Down volume was 2.7 times up volume on the NYSE and almost three times up volume on the Nasdaq. Total volume was only 517 million on the NYSE and 654 million on the Nasdaq, however, so it's still possible for a moderate buy or sell program to have a greater impact than it might normally.

  Linda Piazza   8/26/200,  12:26:37 PM
The OEX may be building a miniature double top on the five-minute-and-under charts, with a top near 494.40 and a confirmation level near 493.60. A sustained break through 493.60 and confirmation of that double top should set a minimum downside target of 492.80 or so, very near the day's low. Isn't it interesting the way these coincidences occur? As I've often said, these are not tradable moves, but watching whether the pattern confirms and then whether the target is met or exceeded gives a hint of strength or weakness. Until that pattern is confirmed, however, my assumption is that the OEX has just settled into a band of rectangular consolidation between those two levels. If that's true, a downside break out of rectangular consolidation would have the same downside target. An upside break would have a target of 495.20. As I type, the OEX makes another push up.

  Jeff Bailey   8/26/200,  12:13:50 PM
Asset allocation ... may be seeing some asset allocation taking place by foreign capital with dollar reversing earlier gains and now seeing some buying coming into Treasuries, with 30-year YIELD ($TYX.X) lower by 1 bp to 5.297%.

Benchmark 10-year YIELD ($TNX.X) up just fraction 0.4 bp at 4.531%.

  Jim Brown   8/26/200,  12:11:29 PM
Lazy day contest: To spice up the lunch time lull I am going to have a contest until 1:PM. I will give a copy of "Options, A Personal Seminar" 390 pages by Fullman and a copy of "Futures, a Personal Seminar" 240 pages by Fullman to the reader that provides us with the best caption for this picture. The race is on, send in those zingers to me. (Jonathan, you cannot win) Link

  Jeff Bailey   8/26/200,  12:08:39 PM
U.S. Dollar Index (dx00y) 98.68 -0.16% ... reversing overnight gains which saw the dx00y rise right to its MONTHLY R2 of 99.49. The dollar has made a rather large move in the past two weeks and may look for pullback to 97.37 level. Implications for equities uncertain at this point, but I would think equities weaker on dollar decline.

  Linda Piazza   8/26/200,  12:04:13 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We've had a couple of hours below our entry level today and the 50% retracement of the flagpole also lies near our entry. Lower the stop now to 495.50, to give the OEX a few cents' leeway above that 50% flagpole retracement.

  Linda Piazza   8/26/200,  11:49:13 AM
Yes, Jane, we're all seeing bear flags and the breakdowns, but I sure wish they'd work the way they're supposed to work. Someone needs to tell the various indices that they're supposed to break strongly to the downside once those flags are broken. A single retest of the violated support is okay, but not a continued finding of support and retesting.

  Linda Piazza   8/26/200,  11:43:48 AM
Swing Trade Signals
Okay, so the new bear flag has been broken to the downside. To confirm weakness, we need to see first a move below 493.50 and then a new day's low, with the current day's low at 492.75.

  Linda Piazza   8/26/200,  11:41:54 AM
As of a few minutes ago, total volume was 386 million on the NYSE and 525 million on the Nasdaq. Adv:dec ratios stood at 8:22 on the NYSE and 8:21 on the Nasdaq. Down volume was about 3 times up volume on the NYSE and the Nasdaq. What was interesting was that new lows almost equaled new highs on the NYSE, with 20 new highs and 18 new lows.

  Jeff Bailey   8/26/200,  11:37:16 AM
11:00 Update posted at this Link

  Linda Piazza   8/26/200,  11:26:43 AM
I snapped a new bear-flag regression channel on the OEX, a bigger one to encompass the morning's trading since 10:25. The OEX had one one-minute close out of the bottom of that channel, but now shoots back up into the channel again. Until the DJI breaks below 9240-9243 again, where it's been finding support this morning since about 10:35, we're on thin ice.

  Linda Piazza   8/26/200,  11:14:07 AM
Swing Trade Signals
The OEX appeared to be breaking down out of its bear flag, but I'd like to see confirmation by a move below the current day's low and instead it's rising to test the flag from the underside. Although this kind of controlled distribution is common after a quick fall and should be expected, and should be expected at levels of former support, the low volume worries me. If this is a true bear flag, it should break to the downside before or at about the 50% retracement of the flagpole, which it appeared to do, but now we soon need to see the OEX drop. In this case, the flagpole consists of the drop from 496.65 to today's low, with the 50% level just below our entry. I've got the official exit set at about a point above that level to give the OEX a little room to overshoot the retracement level due to the low volume. It's failure to drop after falling out of the bear flag worries me, however, but that's only because of the recent history with bearish plays.

  Linda Piazza   8/26/200,  10:54:51 AM
The DJI tests the important 9250 level, with the DJI currently just over that level. While the OEX's pattern looks like a bear flag, the DJI's looks a bit more like a rising wedge (seen best on the one-minute chart)--still a bearish pattern, but still needing confirmation by a break through the bottom support.

  Linda Piazza   8/26/200,  10:50:18 AM
As the five-minute OEX 21(3)3 stochastics turn up out of levels indicating oversold condition, the OEX hit the bottom of that potential bear flag and headed up again. The last time that stochastic topped out, the OEX traded at 497.72. We obviously want to see a lower high this time.

  Linda Piazza   8/26/200,  10:46:48 AM
The pattern on the OEX five-minute chart looks like a bear flag rising into resistance, just as Jane mentioned seeing a classic bear flag rising into resistance on the ES contract, too. I sure wish the OEX would hit that resistance and head back down, although we may be entering the period of the day when the OEX consolidates while we sit asking, "Should we take profit now? Should we hold on?"

  Linda Piazza   8/26/200,  10:40:33 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's lower our exit to 496.25.

  Jeff Bailey   8/26/200,  10:39:54 AM
Amgen (AMGN) $64.75 -2% .... discussed this one last week for bull looking for pullback entry. Today's trade at $65.00 gets stock back on a sell signal, with bearish count at $60. This $60.00 level would be more "ideal" bull entry, where I thought new entry bull might look for low $60's as entry near that rising bullish support trend. Link

  Linda Piazza   8/26/200,  10:33:03 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower exit to 496.50.

  Linda Piazza   8/26/200,  10:30:29 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
The most conservative traders might even want to exit here, as this is a prime spot for a reversal. The charts do not yet show that as a likelihood, but a gain is a gain.

  Linda Piazza   8/26/200,  10:28:04 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Conservative traders might now want to lower their exit to the entry level, at 495.35, but I'm keeping the official exit at 497 for a few more minutes because the low volume could cause a bounce to overshoot the bottom of yesterday's congestion band before it reverses again.

  Jeff Bailey   8/26/200,  10:25:22 AM
Home Builders Toll Bros. (TOL) $28.92 -2.36% now lower despite better than expected earnings, and Dow Jones Home Construction (DJUSHB) 435.51 -1.97% weak despite July New Home Sales at 1.165 million annual rate, which was above economists' forecast of 1.150 million. (June was upwardly revised to 1.2 from 1.16)

As noted in recent mortgage application data, bulk of July was stronger weeks of data, where next month we'll get the weaker late July and current August numbers from the homebuilders, where those data most likely don't look so good.

  Linda Piazza   8/26/200,  10:24:46 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower the stop to 497.

  Linda Piazza   8/26/200,  10:23:44 AM
The NYSE adv:dec and up/down figures are less bearish than they were earlier, but adv:dec figures remain at 11:16 for the NYSE and 7:18 for the Nasdaq. Down volume was ahead of up volume by only 15 million shares on the NYSE, but was about 2.5 times up volume on the Nasdaq. Volume remains light, at 127 million shares on the NYSE and 221 million on the Nasdaq, as of a few minutes ago.

  Jeff Bailey   8/26/200,  10:19:59 AM
10-year YIELD ($TNX.X) higher by 4.5 basis points at 4.572%. YIELD high for session came just above 4.60% at 4.609%.

  Linda Piazza   8/26/200,  10:19:37 AM
The OEX also currently sits on the midline support of its descending regression channel. This is also an appropriate bounce point, with the bounce now being expected to take the OEX only up to the bottom of yesterday's consolidation pattern.

  Linda Piazza   8/26/200,  10:17:11 AM
Although the OEX simple 50-dma is up much higher, the OEX exponential 50-dma is just above the current OEX level, at 494.65, and may be responsible for the pause near that level. Let's hope it's resistance now that the OEX has moved below it. Although I've long watched the exponential averages for the 100's and 200's, Mark Phillips' column last week alerted me to watch the exponential 50-dma, too.

  Jeff Bailey   8/26/200,  10:16:45 AM
S&P Banks Index (BIX.X) 298.19 -0.8% .... giving back a little more than 1/2 of yesterday's gains. Broader tech sector losses of 1.5% gives SPX/OEX negative look, with WEEKLY S2's in play.

  Linda Piazza   8/26/200,  10:13:32 AM
As of a few minutes ago, volume patterns were distinctively bearish, but volume remains too low for comfort. We'll have to expect some volatility as a result.

  Jeff Bailey   8/26/200,  10:13:17 AM
Defense Index (DFX.X) $172.37 +0.94% ... sector winner in early going. Has been a "quiet winner" in recent weeks and nice reverse head/shoulder pattern on WEEKLY interval chart (neckline 165, head 125) gives upside objective to 204.25. Move above 175 (61.8% retracement at 174.32, 50% retracement lower at 165) is further bullish.

Lockheed Martin (LMT) $50.99 +1.33% is a stock that comes to mind in group and PnF chart shows nice little pullback taking place Link where bullish vertical count is $66.00. Starting to round out 200-day SMA has been providing bearish support in recent weeks and 50-day bullish cross above 200-day SMA last week has served recent 2-day support. Link

  Linda Piazza   8/26/200,  10:11:44 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower stop to 498.50. I'm considering tightening it more, but will watch for a while.

  Linda Piazza   8/26/200,  10:09:00 AM
Swing Trade Signals
We should expect a test of the breakdown level, near 496.

  Linda Piazza   8/26/200,  10:07:36 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We are short/put the OEX at a trade of 495.35 (the OEX level when the entry appeared), with a stop at 499.50. Our first target will be 491.50.

  Linda Piazza   8/26/200,  10:06:11 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Enter short/put now.

  Linda Piazza   8/26/200,  10:04:19 AM
Swing Trade Signals
I'm considering a short entry. Preparing the entry now.

  Linda Piazza   8/26/200,  10:02:16 AM
The OEX has now popped above this morning's gap, but looks to be headed down to test it again, this time from the other side of the gap.

  Jeff Bailey   8/26/200,  10:00:40 AM
August consumer confidence comes in at 81.3 vs. consensus of 79.6 and July's 77.0.

  Linda Piazza   8/26/200,  9:59:05 AM
Once again, the OEX tests that gap from this morning. It failed on its first test of the gap. Will it fail this time?

  Linda Piazza   8/26/200,  9:57:56 AM
Watching the OEX one-minute charts, it looks as if the OEX is doing a lot of jumping around, but in reality, it's still in the midst of yesterday's consolidation band, a band that might or might not be a bear flag.

  Jeff Bailey   8/26/200,  9:55:36 AM
Monster Worldwide (MNST) $27.46 +0.69% Link ... exhibits relative strength for second-straight session and approaching its July 31 relative high of $28.32. Short interest Link still rather high at 13.4 million and lighter volume has days to cover still rising, now at 7.93%.

Longer-term relative strength vs. NDX back on a buy signal and I'm a bit surprised short interest didn't decline on recent pullback to low $20's. Link

  Linda Piazza   8/26/200,  9:53:02 AM
As I was typing, the 50% retracement of the first OEX five-minute range fell, with the OEX plummeting below that level.

  Linda Piazza   8/26/200,  9:52:26 AM
The 50% retracement of the first five-minute OEX range is holding, but barely. I'm watching a one-minute chart now, with the retracement levels from the first five-minutes' trade marked on the chart, and many of those one-minute candles are closing or opening right from that 50% retracement level, reinforcing the idea that the retracements might having bearing on early trading.

  Jeff Bailey   8/26/200,  9:48:59 AM
S&P 100 Index (OEX.X) 496.70 -0.19% .... sitting just under that 498 level into the consumer confidence numbers, which also finds the 50-day SMA rolling at 498.

Traders should be careful to "jump the gun" on any knee jerk reaction in the first 5-minutes or so after the release of consumer confidence.

  Linda Piazza   8/26/200,  9:47:09 AM
The OEX daily chart shows the OEX currently doing battle with the 21-dma, located at 496.82. Just above that are the 10-dma at 499.44 and the 50-dma (simple) at 498.40. A break above all those MA's might be considered bullish, but then the OEX has 500.30-501 waiting just above that.

  Jeff Bailey   8/26/200,  9:42:21 AM
NBTY Inc. (NBTY) $26.52 +1.14% Link ... Adams Harkness reiterating their "strong buy" rating and bullish target of $32 this morning saying competitive landscape continues to improve as category demand is strong and growing while its competition is going away. Adams Harkness believes Twinlab could be next to falter, file Chapter 11 as early as tomorrow and is in negotiations with potential acquirers. A/H thinks that NBTY should bid on the business if Twinlab sale does occur, since Twinlab still holds a strong position in the natural foods channel, where NBTY has little exposure.

PnF chart on NBTY is bullish with longer-term bullish vertical count of $48.50. Dorsey/Wright & Assoc. classifies stock as "healthcare" where sector bullish % (BPHEAL) is "bull confirmed" at 63.07%.

  Linda Piazza   8/26/200,  9:41:49 AM
So far, the OEX maintains the 50% retracement of the first five-minute range, but it's still too early to be sure that it will continue to do so. It's heading up now to test the resistance at the gap from 496.99 to 497.33, and now falling back a bit as I type.

  Linda Piazza   8/26/200,  9:36:57 AM
The OEX did span a larger-than-normal distance while printing its first five-minute candle, so retracement levels should be helpful to watch in early trading. The 50% retracement of the first five-minute span lies at 496.44. A sustained move above that level would show early strength, while an inability to sustain that level would show more early weakness. Currently, the OEX tests that level, with the outcome of the test as yet uncertain.

  Linda Piazza   8/26/200,  9:31:14 AM
The OEX opens higher than I expected but quickly moves down toward the bottom of yesterday's consolidation.

  Jeff Bailey   8/26/200,  9:30:17 AM
Toll Brothers (TOL) $29.62 Link ... indicating $30.05 after homebuilder reported Q3 (July) EPS of $0.90 per share, 9 cents better than consensus. Company said revenue rose 19.5% year-over-year to $693.7 million versus $681.7 million consensus.

  Jeff Bailey   8/26/200,  9:20:54 AM
09:00 Update posted at this Link

  Linda Piazza   8/26/200,  9:19:58 AM
Swing Trade Signals
We spent yesterday patiently or impatiently, depending on our temperaments, waiting for a bounce that never materialized and for volume that never materialized, either. My intention was to enter a bearish OEX position if we got that bounce, for reasons displayed on the charts below. Overnight, it appeared that markets would open up and we'd get our bounce this morning, but futures began to dive about 7:00 ET, along with the DAX.

That may leave us waiting again for a bounce that won't be realized, but I'd be reluctant to enter either bullish or bearish ahead of 10:00 ET when we see the August Conference Board Consumer Confidence number released. If all were ideal, we would have gotten that bounce this morning ahead of the 10:00 numbers, on stronger volume that gave us confidence to enter. I would have liked to have seen that mythical stronger volume accompanying an OEX move up to 500-501 and a rollover from there. Here's what I saw last night on intraday and daily charts, starting with the 15-minute chart: This 15-minute OEX chart shows a potential bear flag rising off yesterday's low. If it's a bear flag, it should break to the downside again by about 501, but it's possible that today's open will break below the bottom support of that potential bear flag. Link Thirty- and sixty-minute charts (not shown) showed indicators that were trying to turn up at the close of yesterday's trading, but also depicted the resistance between 500.30 and 501, resistance that was support through much of last week.

This 120-minute chart should be familiar by now. It shows that if and when a bounce does occur, the OEX may have difficulty moving much above 500: Link This daily chart shows an index that could retreat to the bottom of its consolidation pattern, but it also shows the possibility of a bounce: Link We may be left to contemplate whether we want to attempt a bearish entry without that bounce or whether we want to contemplate a bullish entry if the markets open low and then attempt a bounce. I'm going to be especially wary of a long entry because of the massed former support just ahead, especially with volume as low as it is, and a bearish entry will be difficult without an ensuing bounce, too, but I will look for an opportunity.

  Linda Piazza   8/26/200,  8:32:10 AM
I've spent the last hour searching for the reason the DAX fell off a cliff as I was typing my early report this morning (being positive as I began the report and falling straight down as I typed it), but I haven't been able to find a reason. I note that our futures fell at about the same time, too.

  Linda Piazza   8/26/200,  7:11:41 AM
Good morning. The Nikkei opened down, near 10,200, and fought to stay at that level all through the morning trade. With the yen strengthening again, the corporations that depend on overseas sales declined in early trading. Traders returned for the afternoon session with renewed enthusiasm, however, as the Nikkei climbed through the afternoon, closing up 55.93 points or 0.54%, at 10,332.57. That was just under the high of the day and 161.40 points off the low of the day.

Other Asian markets were mixed, but more fell than climbed. In South Korea, the Kospi fell 0.49% as the economy deals with a strike by truck drivers, begun last Thursday. The Taiwan Weighted dropped 2.26%, and Singapore's Straits Times fell 1.86%. Hong Kong's Hang Seng fell 0.10%, but China's Shanghai Composite gained 0.21%.

European markets are mixed this morning. The German Ifo index of business sentiment showed August's number increasing to 90.8 from a revised 89.3 in July. This is the fourth month of increases, and both the expectations and current-conditions components rose. This number, coupled with a weaker euro, revived optimism that Germany's economy has put the worst behind it. As I began preparing this report, the DAX was positive, responding to the report, but it's dived in the last few minutes and is now down 23.77 points or 0.68%, to 3476.32. The FTSE 100 is down 24.40 points or 0.58%, to 4201.50; and the CAC 40 is down 17.39 points or 0.53%, to 3273.97.

  Jeff Bailey   8/26/200,  2:55:14 AM
Pivot Matrix posted at this Link

  OI Technical Staff   8/26/200,  2:55:06 AM
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