Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
  Linda Piazza   8/28/200,  3:57:52 PM
The OEX moved right up into the congestion zone from August 18-22. The daily chart shows the upper Bollinger band at 506.45 and turning up, so that if tomorrow's economic reports and Greenspan speech don't know it down, it may try for that level.

 
 
  Linda Piazza   8/28/200,  3:52:48 PM
Yesterday, I posted a chart of the TRAN showing how it had been trading since late October in relationship to an ascending trendline that I'd put on my chart to monitor a short-term trend back then. This afternoon, the TRAN trades right back up to that trendline, with the TRAN currently at 2670.37 and the trendline at about 2671.

 
 
  Linda Piazza   8/28/200,  3:43:33 PM
The VIX is currently at 20.03 after having dipped to 19.92.

 
 
  Linda Piazza   8/28/200,  3:40:12 PM
Will MOC orders send the OEX back down to the congestion zone from the last few days, or back up into the congestion zone from the August 18-22? I wouldn't be surprised at either action. The daily chart, however, does show the OEX having found support at the midline of its regression channel, as I noted this morning, and today's relatively strong candle, so far, negates some of the indecision displayed by yesterday's doji. The 5(3)3 stochastics have turned up from fully oversold levels and the 21(3)3's hook up again as they'd tried to turn down from overbought levels. It looks as if those 5(3)3's may need one more cycle up before they and the 21(3)3's will turn down in unison, although they had appeared to be doing so a couple of days ago.

 
 
  Jeff Bailey   8/28/200,  3:38:42 PM
SPY 100.79 +0.68% ... Day trade bear stopped on move back above $100.65.

Was finishing up 03:15 update when alert was sounded.

 
 
  Jeff Bailey   8/28/200,  3:36:49 PM
03:15 Update posted at this Link

 
 
  Linda Piazza   8/28/200,  3:31:22 PM
The OEX now tests that important 500.30-501 level, with 500.80 having been most important in the past. As I mentioned this morning, if it maintains this level, it could next test 504.

 
 
  Linda Piazza   8/28/200,  3:22:18 PM
The 30-minute OEX CCI turned and headed up through its trendline of lower highs after it had previously appeared to be breaking it to the downside--a fake breakdown, as I anticipated it might be. MACD is turning up along its trendline of higher lows.

 
 
  Jeff Bailey   8/28/200,  3:05:43 PM
03:00 NH/NL continues to build, if not ramp bullish.

NYSE now at 158:4 and NASDAQ at 225:12.

Thinking here is that there's got to be some individual traders doing the buying, not just computers, to have building new highs today.

 
 
  Jeff Bailey   8/28/200,  2:53:50 PM
Forest Labs (FRX) and Neurbiological Tech (NTII)..... FRX $47.21 +4% Link and NTII +7.4% Link today after some broker made bullish comment (was mentioned on CNBC, but didn't hear what broker) that investors may want to have exposure ahead of this September's FDA review of FRX's Alzheimers' drug for treatment of severe Alzheimers.

NTII manufactures the base compound memantine and both stocks were hit lower after FDA didn't approve the drug for early to moderate.

A couple of weeks ago, I was watching the evening news here in Denver. They were spotlighting a lady who has Alzheimers. The disease had her basically homebound and as a last effort to improve here quality of life, traveled to Europe where memantine is approved. She was very happy and she was saying her quality of life had improved to a high degree. While the drug is not a cure, it certainly seemed to extend or better her quality of life.

Upcoming FDA review is going to be rather critical for both companies.

Important for FRX's drug pipeline, which like most drug companies of late, shows lack of new drugs coming to market.

Several weeks ago (07/23/2003), at current levels ($1.45 per contract), I took a bullish position in the FRX November 55 calls (fhakk) and will simply hold these until they expire worthless, or get the FDA news.

 
 
  Linda Piazza   8/28/200,  2:47:35 PM
On the five-minute chart, the OEX builds a two-headed, two-right-shouldered (or is it three-headed, one-right-shouldered?) H&S to match the one Jane spotted on the futures. On the 30-minute chart, the CCI pattern of lower highs and higher lows closes in, and has to break one direction or the other soon. It appears to be breaking to the downside, but that may just be my tired eyes making me think so or it may be another fake before everything heads the other direction. MACD approaches its line of higher lows and must soon turn up again or it's going to violate that line, too.

 
 
  Jeff Bailey   8/28/200,  2:40:23 PM
Russell 2000 Index (RUT.X) 493.95 +0.61% .... session high here and flirting with its 52-week closing high of 494.82. Pullback earlier this week didn't even find a test of the rising 21-day SMA (472.42). Still eyeballing that round number of 500.00, but small caps continue to show good strength and signs the MARKET really believes in further economic growth here in the U.S.

I don't remember or know of any statistics on what percentage of sales this 2000 list of company's generates from overseas, but I might think it a much smaller portion that many of the larger caps.

 
 
  Linda Piazza   8/28/200,  2:35:28 PM
Since our global markets have been building on each others' gains, how is the Nikkei doing? The Nikkei looks ready for a pullback, perhaps to 10,000, perhaps closer to the 50-dma at 9,657, which also is the site of an ascending trendline off the April low. I haven't included the trendline because it obscures the 50-dma: Link

 
 
  Jeff Bailey   8/28/200,  2:35:13 PM
DAILY Pivot Matrix ... Jeff: With nothing better to do, I was reviewing you wrap from last night. Did you see how the morning lows stopped almost dead in their tracks at the daily s2s? This morning's highs came pretty close to their daily r2s.

With this in mind, I'm really thinking about holding a bullish QQQ trade taken today overnight (I'm more of a short-term 1-3 day buy/hold trader, but was wondering if a close back above today's daily pivot would pehraps hint of a higher trade into the weekend, with the target up at the monthly r1 of $33.30?

I hadn't had the time to check the high/lows, but your right. With few individual traders around, your thoughts of a close back above the DAILY pivots, which should have tomorrow's DAILY pivot levels moving higher, might just give us a correlative DAILY R2 to match the MONTHLY R1.

 
 
  Jeff Bailey   8/28/200,  2:17:08 PM
Volume levels at 02:00 PM EST for NYSE at 685 million, while NASDAQ pushes 941 million.

Yesterday at this time, found NYSE at 595 and NSADAQ at 836 million.

Economic data brings a few more players into today's trade, but really shows how may traders aren't around.

02:00 NH/NL reading for NYSE at 148:3 and very strong, while NASDAQ 207:12 also shows bulls willing to push their favorites to new highs.

 
 
  Linda Piazza   8/28/200,  2:07:40 PM
While adv:dec ratios show a strong 19:12 for the NYSE and 17:13 for the Nasdaq, and although up volume is 1.8 times down volume on the NYSE and 1.7 times down volume on the Nasdaq, total volume remains low. As of a few minutes ago, total volume was under 700 million on the NYSE and 960 million on the Nasdaq.

 
 
  Jeff Bailey   8/28/200,  1:50:18 PM
Per Jim's 01:49:14 ... what is that going to do to currency trading?

 
 
  Jeff Bailey   8/28/200,  1:46:02 PM
01:00 Update at this Link

 
 
  Linda Piazza   8/28/200,  1:44:56 PM
Careful, we're in the time zone when we often see a stop-running push one direction or another. We've already had couple of those today, haven't we?

 
 
  Linda Piazza   8/28/200,  1:39:03 PM
I really don't know what to say. I've been watching 30-minute OEX indicators today going from bullish to bearish, back to bullish and then to . . . confusing. I do note that while the 30-minute MACD currently flattens, it's been creating a series of higher lows for several days now. So has CCI. Of course, 30-minute CCI has also been creating a series of lower highs over the same time period.

 
 
  Linda Piazza   8/28/200,  1:29:21 PM
Reader Question: Is CSCO a good short above 19 (considering when they reported earnings and disappointed)?

Response: While the SEC doesn't allow me to give individual advice about positions or anticipated positions, I can certainly look at the charts and see what I can find that might help you make your decision. This explanation will be based on the chart, though, and not the fundamentals. I looked first at CSCO's P&F chart, always a good place to begin. I note that CSCO is on a buy signal, above its bullish support line and in an "X" column. There's P&F resistance at $19.50, but on a move above $20, CSCO will give a new P&F buy signal, so that tells me that some caution is in order here. That $20 mark will have a nice ring to it, too, and might bring in some retail investors. In addition, the $NWX, the networking index, has just created a P&F ascending triple top breakout P&F buy signal, so not only is CSCO strong on a P&F basis, but its sector is, too. As Jeff and others often caution, a hefty proportion of a stock's performance is based on that of its sector.

Of course, CSCO hasn't hit $20 and even a strong stock might need to retrace. Careful shorts can benefit from even a minimal retracement, although I'd certainly be careful about a short position in a stock that's on a P&F buy signal. That $20 is a nice round number, and it has a ring to it that might bring in more retail investors.

The bar chart shows OBV that has been steadily increasing since April, also a sign of strength. There's been a bullish cross of the 21-dma by the 10-dma. The 5(3)3 stochastics attempt to curl up again after just dipping out of territory indicating overbought conditions, a sign of strength.

There's a bearish or at least a less-bullish case to be made, however. Since the middle of May, the RSI tops have been declining. RSI currently tests that trendline and the outcome isn't known yet, but if it turns down from that trendline, that's continuing a somewhat troubling tendency. If RSI breaks through that trendline instead, however, that's another sign of strength. ADX remains low, indicating that CSCO currently could be considered range-bound. The chart shows that, too, with CSCO having traded in a range throughout this summer. I'm sure that's what drew your attention, because the presumption would be that CSCO would likely continue to trade in that range. The upper Bollinger band turns down, indicating that prices would likely be repelled when they hit that upper Bollinger band. Volume has actually been declining on the latest climb, since early August, also a troubling sign for the bullish case. The candles have grown smaller as CSCO climbs this week.

My usual presumption is that a range is going to continue, at least until it's broken! In this case, it would be easy for a short to enter on a move above $19.00 (as CSCO is trading today) and set a stop just above $20.00, and then know that you'd have an easy cutoff. However, the strength in CSCO's P&F chart and the $NWX P&F chart would give me pause if I were considering a short position here, no matter whether the ADX supports the presumption that the range-bound trading is going to continue.

 
 
  Jeff Bailey   8/28/200,  12:47:37 PM
AMEX Gold Bugs Index ($HUI.X) 195.03 +0.56% ... just getting upside alert at 194.64. This comes from last night's Index Trader Wrap, and red retracement which I had anchored from the recent July lows and attached to bullish vertical count of 228. Based on that chart, next upside target becomes blue retracement at 205.96.

Should have firming support at overlapping 184 level.

 
 
  Linda Piazza   8/28/200,  12:45:44 PM
Last week, Jim threatened to erase a certain ES level from his charts, and I certainly would like to stop typing anything that begins with a 498 when I discuss the OEX. However, I do want to note that the OEX bounce took the OEX up to a 61.8% retracement of the day's range, at about 498.75, and then the OEX fell back toward the 50% retracement of the day's range, at about 498.20, where it found support, and now it heads up again. When it fell back toward the 50% retracement, it also fell out of the rising wedge. That should have prompted a quick plummet, but ever since March, what's been happening instead is that after a break of a rising wedge, there's a shallow drop and then the prices start climbing the underside of the wedge. It happens on daily charts and it happens on the intraday ones, too. All those TA texts may have to be revised.

 
 
  Mark Phillips   8/28/200,  12:43:07 PM
CCMP $65.80 (+1.35) Continuing with its rebound from the bottom of its ascending channel, new OI Call play CCMP (+2.09%)is clearly outperforming the Semiconductor index (SOX.X), which is only up 0.3% on the day. As noted in last night's play writeup, a rally through Wednesday's high ($64.82) was a viable momentum trade and with the stock near its high of the day, that entry is certainly looking good. There's some congestion in the $66-67 area enroute to a test of the recent highs near $68, but for now playing the extremes of the channel ($63-71) looks like a valid strategy. Traders looking for pullback entries should look for a rebound from intraday support in the $64.50 area.

 
 
  Jeff Bailey   8/28/200,  12:39:16 PM
NH/NL for NYSE/NASDAQ at this link. Link

Note yesterday's trade saw 5-day SMA move below the 10-day, gives look that bullish leadership may be falling off again.

NYSE 10-day average still in column of X on its PnF chart and would take a reversal reading of 82% to show more meaningful loss of bullish leadership. Meanwhile, NASDAQ 10-day average still in column of O, but close to reversing back up at 98%, after recent low of 92% (on 2% box size). Nope... as close as 90.1% (8/14/03) reading was to 90%, it wasn't quite 90%.

 
 
  Linda Piazza   8/28/200,  12:27:04 PM
Here's the wedge I posted earlier: Link

 
 
  Jeff Bailey   8/28/200,  12:22:07 PM
Dollar/index observation. Quickly tried to match up the Dollar Index (dx00y) chart and SPX chart to see if there might be a relationship between dollar/stocks. Here's a chart where I benchmark from opening 30-minutes of trade. Link

Would think Day trader bear shorts the SPY here, stop just above today's high, looks for dollar weakness below 98.50 to have its head/shoulder pattern in play, taking the SPX with it to an SPX target to 985-980 area.

Treasuries find buying (is it defensive buying? Good GDP data, why not selling? Is the news baked into the cake?) with 10-year YIELD ($TNX.X) down 9.5 basis points to 4.41% (same direction as the dollar on YIELD).

 
 
  Jim Brown   8/28/200,  12:16:08 PM
The EBAY dip on the day before the split is normal. It is trader flight before the normal post split depression cycle. When companies split many mutual funds have rules about the number of shares of any specific company they can own. If you had two million shares of EBAY going into the split then you will have four million tomorrow. The cash position is the same but some funds have actual share limits. This means they have to sell 2 million shares or whatever they have over their internal limit. This produces pressure on the post split price. About 80% of the time it lasts from 1-4 weeks.

 
 
  Linda Piazza   8/28/200,  12:09:02 PM
The OEX moved right up to yesterday's range.

 
 
  Jeff Bailey   8/28/200,  12:02:24 PM
eBay (EBAY) $109.40 -1.9% .... I UNDERSTAND YOU CANT GIVE ADVICE.

EBAY is getting spanked a little -3. Your thoughts?

Are the big boys trying to scare away the weak holders ahead of the split tonight or are individuals running away beacause the stock did not run well for the last few days prior to split? Stock just could be tired.

I'd say eBay has made a nice pre-split run from the $100-$102 area. To $110, that's roughly an 8-10% move, with the bulk of it coming in a 2-day span.Link

I would agree that eBay just looks a little tired after a decent little run ahead of the split.

I think we discussed eBay a couple of weeks ago here in market monitor. Yes, here it is Link at 01:56:35 per trader's question.

I thought eBay would find support at the triple-top buy signal, but it pulled back into that congestion area, then rebounded. Here's the PnF chart Link

 
 
  Linda Piazza   8/28/200,  11:59:01 AM
Whoa! Rising wedge spotted on the OEX five-minute chart. Will it mean what it used to mean? (Hint: a downside break.) These haven't been working as predicted since March. Link

 
 
  Linda Piazza   8/28/200,  11:48:53 AM
A 50% retracement of the day's range on the OEX lies near 498.15, with the OEX currently headed up to test that level.

 
 
  Jeff Bailey   8/28/200,  11:34:10 AM
Oil Service Index (OSX.X) 92.23 +3.08% is this morning's sector winner and after reversing all of yesterday's early gains, bounce back higher today comes from a starting to round out 50-day SMA (80.9) and looks to have its shorter-term 21-day SMA moving higher at 88.68 looking to provide some near-term momentem. Further confluence of support build from slightly trending higher 200-day SMA at 88.

 
 
  Jeff Bailey   8/28/200,  11:30:47 AM
Russell 2000 Index (RUT.X) 491.76 +0.17% .... edges back into the green. It doesn't seem to be overly concrened by the Mass Layoff report does it?

 
 
  Linda Piazza   8/28/200,  11:30:43 AM
While decliners had drawn far ahead of advancers in earlier trading, they're more evenly matched now on the NYSE, with adv:dec ratios at 14:15 on the NYSE and 12:16 on the Nasdaq as of a few minutes ago. Up and down volume was evenly matched on both exchanges. Total volume remains far too low for comfortable trading, at 352 million on the NYSE as of a few minutes ago and 531 million on the Nasdaq. As Jeff mentioned earlier, the new highs swamp new lows again.

 
 
  Linda Piazza   8/28/200,  11:26:58 AM
Bear Repellent Rectangle: I like that. You ought to write your own TA book, Jonathan, with specialized terms.

 
 
  Jeff Bailey   8/28/200,  11:26:54 AM
11:00 Update posted at this Link

 
 
  Linda Piazza   8/28/200,  11:20:25 AM
So much for a distribution pattern on the OEX. What was beginning to resolve into a traditional-appearing "b" distribution pattern on the five-minute chart with the expected outcome being a downside break was just broken to the upside. Will the upside move hold? So far, the OEX remains above the 21-dma currently at 496.98 and the 60-minute 21-pma, currently at 497.12, but it remains below the 498.50-499 zone.

 
 
  Linda Piazza   8/28/200,  11:04:36 AM
Reader Question: Is that a H&S trying to form on the 60 min oex, shoulders 8/12- 8/28 or is the head and right shoulder too broad ?

Response: Good eye, as Jonathan says. Yes, that looks as if it's a potential H&S, although Jane might be a better authority on whether the head is too broad. I tend to think that even when a H&S formation is not classic, we're still seeing some of the same psychology at work, and so while I wouldn't count on a target being met as strongly if the pattern weren't classic, I wouldn't discount the interpretation entirely. Before we start thinking about downside targets, however, the formation has to confirm, and that confirmation would probably come on a break through about 493.40, although the exact location of the neckline is open to debate.

As Mark Phillips mentioned yesterday, however, in a conversation about a stock, a lot of these H&S formations haven't been working lately. They confirm, and then price breaks back above the neckline a few hours later or few days later, and the price marches on as if nothing had happened. My Pring TA text says that H&S's are among the most reliable of chart formations, but perhaps he wasn't talking about late summertime trading. If I were seeing only the regular H&S's fail to follow through after confirmation, I'd say that was evidence of a strong underpinning in the market, but I'm seeing some inverse H&S's act this way, too.

 
 
  Linda Piazza   8/28/200,  10:53:24 AM
Is the current five-minute pattern some sort of distribution pattern after the steep fall? That's the most likely explanation, but it may be too soon to tell. It looks a bit like a rising wedge, but sometimes we see a triangular shape that resolves into a rectangular shape, so that what we thought was a breakout one direction or the other was actually just a part of the formation of the pattern.

 
 
  Mark Phillips   8/28/200,  10:52:47 AM
EBAY $109.00 (-2.50) Well, it was bound to happen eventually. the bears found a way to deflate the EBAY balloon a bit this morning and the stock finally lost its steady support just above $110. We had a nice run in the stock, but clearly it is time to go with our stop soundly violated this morning. Adding to our incentive to thankfully move to the sidelines is the company's split tomorrow, as it appears traders are moving to the sidelines ahead of the event.

 
 
  Jeff Bailey   8/28/200,  10:42:19 AM
NYSE/NASDAQ NH/NL reading Only one hour under our belt, but current NYSE NH/NL is 48:0, while NASDAQ is 127:5.

Yesterday's totals were NYSE 115:17 and NASDAQ 163:6.

Will make note that yesterday's trade did see the 5-day average move below the 10-day average. This bearish crossover took place as the 10-day averages were edging up.

 
 
  Linda Piazza   8/28/200,  10:39:18 AM
If the OEX dips below 496 again, I would then expect a move down to 493.50, but that would be in a week when the volume is heavier. Right now, a modest-sized sell program could be producing a drop and then go away, as Jim mentioned earlier, and so a violation of a key level might not mean the same thing it would if volume were heavier. We've seen that happen over and over this last couple of weeks. This feels like "the real deal," but then so did all those other occasions.

 
 
  Linda Piazza   8/28/200,  10:35:06 AM
The FTSE 100 is now down 12.20 points or 0.29%, to 4194.20, after having been positive earlier today. The CAC 40 remains positive, up 31.87 points or 0.97%, at 3311.89, but about 25 points off the day's high. The DAX is up 2.34 points or 0.07%, at 3485.42, about 45 points below its day's high.

 
 
  Linda Piazza   8/28/200,  10:29:30 AM
The 60-minute OEX 21-pma is at 497.07, just above the daily 21-dma at 496.94, so the OEX currently retests both averages after breaking through their support.

As someone who has been watching the Nikkei zig and zag on either side of the flatline throughout the week, I'm cautious about drawing any conclusion just yet and will await the outcome of this retest. If the OEX can move above 497, then it's got that 498.50-499 level to retest next.

 
 
  Jeff Bailey   8/28/200,  10:26:07 AM
Amex Gold Bugs Index ($HUI.X) 194.07 +0.06% .... after morning dip lower to 191.84, bids back to positive territory.

Would be viewed a NEGATIVE in my opinion for broader equities if Treasury YIELDS move LOWER, yet GOLD continues to find a bid.

 
 
  Jeff Bailey   8/28/200,  10:24:19 AM
Dollar/bond With dollar showing some weakness (some money out of U.S) and Treasuries finding buying (money flowing into Treasury) may have stocks a bit vulnerable here. Not much sign of job demand (help wanted) improvement.

 
 
  Jeff Bailey   8/28/200,  10:22:27 AM
Dow Industrials (INDU) 9,279 -0.57% ... right at WEEKLY S1 here, and rather important support. If the bulls are going to bid'em, it should be here.

 
 
  Jeff Bailey   8/28/200,  10:20:51 AM
US Dollar Index (dx00y) (30-minute delayed) 98.90 +0.05% .... session low on the dollar after morning high of 99.35. Still showing trade above my 60-minute bar chart potential head/shoulder top, where neckline is at 98.50.

Again, I'm 30-minute delayed, but looking like a reversal in the dollar with stocks.

 
 
  Linda Piazza   8/28/200,  10:19:30 AM
The OEX has just fallen beneath the 21-dma. Since that moving average has been providing support for the OEX daily candles since August 14, if I'm reading the chart correctly, I would expect a bounce attempt to retest that moving average, currently at 496.94.

 
 
  Jeff Bailey   8/28/200,  10:17:20 AM
QQQ $32.57 -0.73% ... session lows here. WEEKLY pivot of $32.35 provided support early yesterday after open, but seeing other indices slice through some of their weekly retracement bracket levels as if they were not there. A WEEKLY S1 or Pivot should be more powerful than a WEEKLY retracement level, but observing some weakness on breaks through WEEKLY retracement levels, which often times we'll find indices stall around, before making a move from the level.

 
 
  Linda Piazza   8/28/200,  10:13:02 AM
Here's a chart I showed yesterday (and have been showing for several weeks): Link I've been basing some of my recent entries on this chart, and you can see from the candles hanging there that those entries went nowhere. Will today be different? Disclosure: As I mentioned yesterday, I'm still in a bearish OEX play in my personal account, as I tend to trade position trades, not Swing Trades, with much wider stops than would be comfortable for most readers.

 
 
  Jeff Bailey   8/28/200,  10:11:46 AM
Help Wanted Index came out at 38, which was below economists' forecast of 39. Not good to have not seen some slight improvement. July's 38 was same as June's 38 reading. While steady, not much growth in ads.

 
 
  Jeff Bailey   8/28/200,  10:08:43 AM
Dow Industrials (INDU) 9,298 -0.39% ... session lows here. Session high came right at our WEEKLY 61.8% retracement of 9,348 (session high of 9,356) and got "whacked."

I'm 30-minute delayed on the U.S. Dollar Index, but if dollar is reversing lower, this action would be viewed rather defensive.

 
 
  Linda Piazza   8/28/200,  10:04:25 AM
The OEX fell through the 50% retracement of the first five-minute range, predicting a test of the day's low, which the OEX has already exceeded. This may be one of those days I stomp around the office, but we're right back in that range now that's held the OEX captive. As I said yesterday, a drop below 498 should predict a move down toward 496, and if 496 fails to hold, that should predict a test of the week's low, but we don't have the volume to comfortably enter.

 
 
  Linda Piazza   8/28/200,  10:00:39 AM
Here's one thing I'm seeing on the OEX daily chart: Link

 
 
  Jeff Bailey   8/28/200,  9:56:38 AM
Help Wanted Index due out at 10:00 AM EST. Economists' forecast is 39.

Rather quiet morning once again and while many traders are taking the week off, not much volatility at all.

INDU +7, SPX +1.98, OEX +0.88, NDX +3.5, QQQ +$0.07, Treasuries finding stronger buying than I would have thought with 10-year YIELD ($TNX.X) down 7.1 bp at 4.465%. Trade looks rather cautious.

 
 
  Linda Piazza   8/28/200,  9:52:01 AM
That was quick. Although we trade the OEX, it's important for us to watch the other indices, and the quick retreat from the OEX resistance level was probably courteous of the SPX being knocked back from 1000. Although the OEX fell away from its test quickly, it didn't fall far, and the battle may not yet be concluded.

 
 
  Linda Piazza   8/28/200,  9:48:22 AM
Now the OEX moves into the 500.30-501 major S/R level.

 
 
  Linda Piazza   8/28/200,  9:46:55 AM
So far, that first retracement took the OEX back to 499.57, just pennies below the 499.57 level that represents the 50% retracement of the first five-minute range. So far, then, the 50% benchmark level is holding, but we usually enter a retracement period from about 9:50 to 10:10, and we still have economic data to come, so I'm not drawing too many conclusions yet. Usually, if that level holds on the retracement, a test of the day's high comes next, and that looks like what we're having now.

 
 
  Jeff Bailey   8/28/200,  9:43:40 AM
General Motors $40.02 +1.57% Link ... Goldman Sachs upgrades to "in line" from "underperform" and downgrades Ford (F) $11.55 -0.77% Link to "underperform" from "in line" as Goldman views GM as less overvalued than F. Goldman also thinks chance of GM upside earnings revisions and says the company has more leverage to additional production upside. Goldman increases their 2003 US sales and North American production forecasts, and increases 2003 OEM and supplier EPS estimates.

 
 
  Linda Piazza   8/28/200,  9:38:36 AM
The OEX 10-dma lies at 500.22, with the OEX currently challenging that level.

 
 
  Linda Piazza   8/28/200,  9:35:33 AM
The 50% retracement of the first five-minute OEX move lies at 499.61. Since this was a larger than normal five-minute candle, that retracement level might serve as a valuable benchmark during early trading. Bulls want to see the OEX hold above that level and bears want to drive it back below that level.

 
 
  Linda Piazza   8/28/200,  9:27:05 AM
Swing Trade Signals
The Swing Trade Model is flat today and did not enter a trade yesterday, either. Although there was an early breakdown below supposed key OEX support at 498 yesterday, I had made the decision to abstain from trades in the low-volume, tight-range market, and that turned out to be a good decision. After a false break to the downside and one or two to the upside, the OEX closed the day near the middle of a two-point range, producing one of the smallest doji I've ever seen on an OEX daily chart. This morning, futures indicate that the OEX may make yet another assault at 498.60-499, and if it opens above that level, perhaps even at 500.30-501. A sustained move above those levels sets up the possibility of a run toward 504-506. A failure to sustain 498.60-499 sets up the possibility of a failure down to 496 and then back to the week's low.

I've noted lots of possibilities, but we will most probably abstain from trading again, as the light volume produces treacherous trading conditions. As I mentioned yesterday, part of my responsibility lies in deciding when we should not be trading, and I would not normally trade my own account during conditions like these, and so do not want to put readers into a Swing Trade, either. That doesn't mean we won't be stomping around our various offices, mad that some big move is occurring without us tagging along. We may, and it may.

 
 
  Jeff Bailey   8/28/200,  9:23:12 AM
09:00 Update at this Link

I don't see any major surprises in any of this morning's data.

 
 
  Linda Piazza   8/28/200,  8:39:43 AM
CNBC is reporting this morning's numbers as follows: Q2 GDP was revised to +3.1%. As James pointed out in his Wrap last night, the original number had come in a +2.4% and there had been some disagreement as to whether the revision would take the number up or down. Initial claims were up 3000 to 394,000, which I believe is a little higher than the expectation, but still below 400,000. Continuing claims were up 26,000. The four-week average was up 500 to 396,250. I don't see much reaction in the futures, with the ES contract trading about where it was a few minutes before the announcement.

 
 
  Linda Piazza   8/28/200,  7:13:00 AM
Good morning. The Nikkei has been volatile of late, and Thursday's opening promised to continue that volatility. The Nikkei had traded in a nearly 80-point range within the first thirty minutes of trading, opening up, moving down, and then bouncing. Semi-related companies gained in early trading. The Semiconductor Equipment Association of Japan released information that July orders for domestic equipment used to make semiconductors climbed 6.3% month-over-month and 27.4% from the year-ago period. During the afternoon session, the Nikkei mostly just dropped ahead of important economic numbers expected tomorrow, including unemployment data and July's industrial production. It closed down 83.77 points or 0.81%, at 10,225.22, but did manage to close about 35 points off the day's low. The day's trading spanned nearly a 170-point range. Banks gained on the hope that Junichiro Koizumi will be re-elected prime minister and continue his campaign of reducing the banks' non-performing loans. Cyclicals dropped, but many of the semi-related stocks retained their gains.

Trading was mixed throughout the rest of Asia. The Taiwan Weighted closed down 0.55%, and South Korea's Kospi lost 0.81%. Singapore's Straits Times was flat, down 0.06%, and Hong Kong's Hang Seng gained 0.76%. China's Shanghai Composite lost 0.68%.

Most European bourses currently trade up. Overnight S&P downgraded re-insurer Munich Re's debt rating from AA to A+, a downgrade that may cost the re-insurer important and profitable U.S. casualty business. This morning, Munich Re reported its fifth straight quarterly loss, including an unexpected 1.12 billion euros set aside for taxes. Industrials perform well in early trading, as do the retailers. As of this writing, the FTSE 100 trades up 11.90 points or 0.28%, at 4218.30. The CAC 40 trades up 51.53 points or 1.57%, at 3331.55; and the DAX trades up 40.29 points or 1.16%, at 3523.37.

 
 
  Jeff Bailey   8/28/200,  2:26:36 AM
Pivot Matrix for tomorrow at this Link

 
 
  OI Technical Staff   8/28/200,  2:26:25 AM
The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

 
 

Market Monitor Archives