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  Linda Piazza   9/4/2003,  3:55:07 PM
Today's OEX daily candle appears as if it's going to come pretty close to being a doji or else a spinning top at resistance (historical, from 1998 and more recent times). MACD still looks bullish and the 21(3)3 stochs still turn up although they're a little extended, but that doji or spinning top can be a possible reversal signal, so be careful as you make your decisions. We've seen a lot of doji that are followed by bullish days in this bullish climate, so I don't count my evening-star patterns before they appear. I also do not necessarily expect a big cratering, but do feel that the OEX should probably head back down to test 504-506 before it gets too extended without establishing that as a firm base. The OEX hasn't asked me what it should do, however.

  Linda Piazza   9/4/2003,  3:33:32 PM
Jane has just mentioned tomorrow morning's unemployment number release before the market opens. After the close tonight, we'll have Intel's mid-quarter update, as several of us have mentioned. Those are two potentially market-moving events, and all traders ought to be deciding within the next few minutes whether they feel comfortable holding overnight with such important announcements. We could see all kinds of permutations--Intel upbeat, unemployment numbers worse than expected: market concentrates on the good news, market doesn't care, market plummets. And the possibilities go on.

  Jane Fox   9/4/2003,  3:13:54 PM
On August 22 Jeff made this note "MU is looking to build a triangle formation where a 3-box reversal back to 13 then a move higher to 15 would give a bullish triangle. A bullish formation after the triple top buy at 14." Here is the PnF chart of MU and it looks like Jeff's "prediction" is coming true. Link

  James Brown   9/4/2003,  3:12:58 PM
Air traffic up - supporting some of the excitement and big gains in the airlines lately are all the improved traffic numbers coming out these last two sessions. Continental's traffic grew 1.7% in August with 82.2% of the seats filled in August. Southwest Airlines said traffic jumped 3.4% with seats filled up to 73.2%. AirTran Airways said traffic was up a big 32.6% with seats filled at 73.2%. US Airways also said passenger loads were higher, up to 80.8%. (source: WSJ)

  Linda Piazza   9/4/2003,  3:07:55 PM
QCOM was presenting at a conference this afternoon, I believe. I haven't seen any news out of the conference, however. QCOM had been moving up, although it's now consolidating just under $41.00. I mention this only because with so many conferences ongoing this week, there's always the potential for news to change the character of trading--news that you and I may not yet know.

  James Brown   9/4/2003,  3:07:36 PM
Mutual Fund Fallout - Shares of Janus Capital (JNS) and Bank of America (BAC), just two of the four mutual fund "families" that have been charged with fraud by Spitzer yesterday, are seeing more losses today. JNS is down is 6.7% and BAC is down 2.2% and below the $77.50 support level.

  James Brown   9/4/2003,  3:05:31 PM
Can the bulls make it seven in a row for the NASDAQ?

  James Brown   9/4/2003,  2:59:09 PM
The 3:15 PM ET update is posted. Link

  Linda Piazza   9/4/2003,  2:55:46 PM
Jim's posting of a chart with an old trendline reminded me to check this old chart. Remember it? Look where the OEX upper shadows have stopped the last two days. Link

  Linda Piazza   9/4/2003,  2:49:26 PM
The OEX tests that 515.50 S/R level again. If this level fails, look next to 515, where those 30-minute 18-21 pma's now gather. A failure at that level would now be more serious because it would breach those gathered MA's, but the support at 512.60-513 remains below that.

  Linda Piazza   9/4/2003,  2:38:07 PM
Here's one thing I'm watching on the OEX five-minute chart: Link

  Linda Piazza   9/4/2003,  2:32:38 PM
That's not a bear flag on the OEX! So what is it? Anyone know a name for an "N" shaped movement? A zoom up, a zoom down, and then another zoom up.

  Linda Piazza   9/4/2003,  2:28:27 PM
That OEX plunge erased the gains made in the 1:35 ET push, but stopped right at the 515.50 support I mentioned earlier. Now we begin watching for some sort of distribution process after this plunge--a bear flag or "b" pattern or even a symmetrical triangle at the bottom of the decline. If the current rise is part of such a process, it should stop before it retraces more than half the plunge--at about 516.14.

  Linda Piazza   9/4/2003,  2:16:29 PM
The OEX has now retraced 70.7% of the 1:35 push.

  Linda Piazza   9/4/2003,  2:15:18 PM
The OEX now bunches up in a consolidation pattern at the top of the latest five-minute push upwards, possibly in a bull flag. Presumably the OEX will break out of the pattern the same way it entered it--going up. If it does, the 30-minute 1.35% envelope tops out currently near 521.84. However, looking back through the chart and seeing the importance of the current OEX level for almost an entire year (1998) makes me question than usual-case scenario. (As I was typing, the OEX fell out of the pattern.)

  Linda Piazza   9/4/2003,  2:05:31 PM
The DJI is having trouble breaking through 9600. So far, the OEX holds the levels achieved in the after-noontime-lull push, but it looks as if it's headed down now to test support.

  Linda Piazza   9/4/2003,  1:56:23 PM
Any investors left from 1998? OEX 516.60-518 was an important level through much of 1998. It was both support (March-August) and resistance (August through October). It's come into play at other times, too.

  Linda Piazza   9/4/2003,  1:48:51 PM
Now comes the real test. The OEX punched through the resistance. Can it hold above it now? 515.50 or so should be nearest support, but those 30-minute MA's continue rising and are now near 514.80, and should be better support. It's the outcome of the test of resistance (or support) during this time period that lets us know about the tenor of the afternoon trading, and not necessarily the test itself.

  Linda Piazza   9/4/2003,  1:40:34 PM
The OEX reaches another new high.

  Linda Piazza   9/4/2003,  1:38:47 PM
Remember that we're in the stop-running time period when resistance or support is tested. Stops really are run during this period, and I'm not suggesting that you shouldn't adhere to yours. I am suggesting, however, that there are sometimes false breaks one direction or another during this period, breaks that soon get reversed, so don't draw too many conclusions too soon if you're considering an entry, either.

  Linda Piazza   9/4/2003,  1:34:26 PM
One tip: If you are going to violate SEC rules by providing confidential information, don't leave a voice mail as did the journalist tipping off firms to the discontinuation of the 30-year note.

  James Brown   9/4/2003,  1:22:24 PM
The 1:00 PM ET update is posted. Link

  Linda Piazza   9/4/2003,  1:20:36 PM
The series of higher lows on the OEX five-minute chart today has produced a steeply ascending trendline. The OEX currently tests that trendline. It's so steep that it cannot be maintained and so we can expect a trendline break at some time without that necessarily having many bearish connotations. Usually in a case like that, a new and more gently ascending (and more sustainable) trendline is established. However, that 30-minute 21-pma just keeps rising underneath the price. We now have a confluence of 30-minute MA's near 514.60. They should provide support through the afternoon, but if they don't . . .

This seems like a setup for either a parabolic rise or a plunge, but of course, we could instead just have a row of little candles marching out sideways.

  James Brown   9/4/2003,  1:19:25 PM
Biotechs Bouncing - The AMEX Biotech index (BTK.X) is bouncing off the 460 level, currently at 467. This is good news as Tuesday's big move was a breakout above its descending trendline of lower highs. A quick glance at the intraday and daily chart does show more resistance at 470. Checking the largest component in the BTK, AMGN, we see a small bounce from the $66 level underway. The last week shows a series of higher lows for AMGN but the stock is also suffering from lower highs as sellers walk it down.

  Linda Piazza   9/4/2003,  1:12:27 PM
Reader Request: Comments on ALL, please.

Response: First impression? ALL is in the middle of a trading range, currently trading between the grouped MA's just above 36 and the 50-dma at 37.11. Let's see if we can clarify the picture any further, however. I always head first to the P&F chart to get a perspective on supply and demand, and here I gain the same sort of impression. ALL is on a buy signal, but is currently in an "O" column, indicating short-term weakness, and it's right between the bullish support line and the bearish resistance line. That didn't clarify matters much. A glance at that P&F chart shows that a move above $40.00 will clear up a lot of the uncertainty, however, producing a new P&F buy signal and moving ALL above the bearish resistance line. A move below $34.00 will create a new sell signal and carry ALL below the bullish support line. I looked at the $IUX, the S&P Insurance Index, and it's also currently on a P&F buy signal but in an "O" column. No more clarity there, either.

Studying the bar chart more closely, I notice that today's action popped ALL above a descending trendline formed from the lower highs since the middle of June. That's great, and the oscillators have turned up as ALL moves up, confirming the recent strength. However, I also expanded the chart and placed a line at horizontal resistance, and guess where that line crossed? Right where ALL trades currently. Link (Note: I, too, had Monitor issues a few minutes ago. This chart was prepared during that time, although I don't think it's price has changed appreciably.) Not only is ALL trapped between MA's and between the P&F bearish resistance and bullish support, but it's trapped between these two trendlines, too.

One worry is that ADX has been declining over the last month, perhaps hinting that range will continue. Not shown on the chart because I wanted it to remain readable are the Bollinger bands. ALL currently approaches the top BB. The 5(3)3 stochastics are beginning to show potential bearish divergence from price, with the stochastics now reaching a higher high while price is still below the previous high. This could change however before stochastics or price finally roll.

A move above that 50-dma just above $37.00 might renew bullish sentiment enough to see ALL test $40.00 again, but it's too soon to judge what ALL would do if it tested that level. A move below $34.80 or so might predict another test of $32.00, but it's also too soon to tell what ALL would do after such a test. I don't blame you for wanting an opinion on ALL, but I think we're going to have to wait for a whole lot of other opinions before we can make many predictions--the opinions of the investors who vote with their dollars by sending it through one or the other of these levels. That opinion could come at any time. Although I'm not sure that ALL is presenting, there's an insurance conference today by Keefe Bruyette & Woods.

  Linda Piazza   9/4/2003,  12:46:33 PM
The OEX is being pressured between the overhead resistance and the steadily rising 30-minute 21-pma, with that average now at 514.37. Soon the OEX has to either break through that MA or break through the resistance that's been holding it back.

  James Brown   9/4/2003,  12:46:18 PM
Crude Oil - Light, Sweet Crude Oil futures for December continue to drop. Yesterday, they broke the simple 50-dma and now they have fallen below the $29/barrel mark to $28.52.

Meanwhile, Airlines have managed to hold on to the last four days of gains with a fraction 50 cent loss in the XAL.X airline index.

  James Brown   9/4/2003,  12:35:14 PM
Drugs - DRG.X - The DRG drug index is actually holding up pretty well in its current beaten-down, oversold state after two days of disappointing comments/downgrades from the likes of drug giants Pfizer (PFE) and Eli Lilly (LLY). Granted the DRG still can't break above its 200-dma.

  James Brown   9/4/2003,  12:15:22 PM
DJUSHB The Dow Jones U.S. Home Builders index continues to make gains and many of the stocks in this group look down right bullish. The recent July construction numbers showed a 6.1% gain for residential construction, evidence that the higher mortgage rates haven't hurt the builders (yet).

  Linda Piazza   9/4/2003,  12:14:28 PM
Remember that Fed Governor Bernanke begins speaking in a few minutes, speaking on the U.S. economy. His remarks could be market moving, although I couldn't venture an opinion as to which way they might move the markets!

  James Brown   9/4/2003,  12:10:35 PM
eBay Inc - EBAY - Yesterday we commented on EBAY's fall through support at $54 and its simple 50-dma. Now shares appear to be rebounding from its intraday low today near the simple 100-dma. Just speculation on my part but I wouldn't be surprised to see EBAY continue to consolidate into a series of higher lows and lower highs for a few days.

  James Brown   9/4/2003,  11:50:22 AM
I realize we may have a couple of bears growling in the monitor these days *grin* and I've grown furry from time to time as well. However, I have to say I'm impressed that the Industrials are holding above 9500 and that the NASDAQ is holding above 1850. Keep in mind that I would feel a lot more confident to even consider new long plays after a good two or three day consolidation.

  Linda Piazza   9/4/2003,  11:45:59 AM
The 30-minute 21-pma has now risen to 513.91. The OEX has tested this average a couple of times today, always bouncing from it. It has not had a 30-minute close beneath this average all week, so a 30-minute close beneath this average would show a change in trend. We're a point away from even testing that average, much less closing beneath it, however.

  Jane Fox   9/4/2003,  11:41:23 AM
Last week Jeff mentioned a long on RYL at 68, which was a PnF buy signal. RYL is now trading at 71.34.

  Linda Piazza   9/4/2003,  11:36:53 AM
Both Jane and I, and maybe Jonathan, mentioned in recent weeks that GE looked to be setting up a potential H&S pattern, but this week's trading has undone that possibility. GE has traded above the right-shoulder level, with the move above $31.00 putting it in position to challenge the June 17 high of 31.66. Tuesday's and Wednesday's moves were accompanied by high volume, too. GE, like many other stocks, is now jammed right underneath its upper Bollinger band, but like many other stocks, that BB slants upward and prices can and do follow BB's up when they slant that way. So far today, the candle is a small-bodied near doji, not indicative of strong willingness to send prices higher, but we've also been seeing that a lot lately during midday trading, with a late-afternoon surge changing the look of daily candles. I note that ADX has actually been declining during this latest rise, posing the question of whether GE could be establishing a trading range and so could be ready to turn down again. However, I don't note that GE is a stock that tends to prefer to trade in a range (as DD did for a long while, for example).

  James Brown   9/4/2003,  11:21:15 AM
Crossing the wires...

The Options Industry Council (OIC) says that equity option volume is up 6.5% year to date.

  Linda Piazza   9/4/2003,  11:18:37 AM
Yesterday, as I studied the 30-minute OEX chart, I wondered whether the rectangular-shaped consolidation at the top of the quick rise could be a "p" accumulation pattern. Now that pattern's getting a bit long in the tooth to consider it a "p" accumulation pattern, but the OEX still continues to find support at the 512.60-513 level. The 30-minute 18 and 21-pma's have now both risen to just below 513.50, providing support to the OEX at its current position. Something is going to have to happen soon, because now another dip toward the bottom of that rectangular consolidation zone will break through those moving averages. The OEX has not been below its 30-minute 18-pma since 2:30 ET on 8/28. With that support rising, one conclusion might be that the OEX will climb, but it still remains far above its 100-pma and already seems too extended from that basis.

  James Brown   9/4/2003,  11:12:53 AM
The 11:00 AM ET update is posted. Link

  Linda Piazza   9/4/2003,  10:52:33 AM
So far, the SOX has not been able to climb above the 50% retracement of yesterday's bearish engulfing candle, so although the SOX is in the green today, I still view the overall outlook as short-term bearish. That doesn't mean I believe the SOX will crater, but only that it's perhaps showing that it needs to either consolidate or pull back to regroup. A 25% retracement of the August gains lies near 436 and a 38.2% retracement of those gains lies near 424. As the SOX climbs, it's actually been retracing deeper amounts of each short-term move, so if it does need to retrace, a retracement of at least 25% certainly wouldn't be out of character. The real question is: does it need to retrace?

  Linda Piazza   9/4/2003,  10:39:11 AM
This morning, both traditional methods and the method using envelopes surrounding a central OEX 30-minute pma would both produce a (risky) short entry near 512.50-512.25. Earlier this morning, I noted that yesterday had seen several five-minute spikes down toward 512.80, which is near the 6/17 high of 512.67. I also noted that the 30-minute 21-pma has risen just underneath that level, to 512.25, but it's now risen higher, to just above 513, so 512.80-513 should now be support. Yesterday's trading produced rectangular consolidation, and a downside break of that consolidation would typically be a short entry, particularly since those other traditional methods of analyzing the possible trades would produce the same result. Traditional technical analysis also points out possible support beneath in the zone from 504-506, the reason behind setting one of those levels as a downside target.

Using the envelope method, we could take an entry on a penetration of either the 30-minute 21-pma or 18-pma, both just above 513, and then target the bottom of the envelope, near 506, or the 30-minute 100-pma, currently at 504.68.

Both types of entries would be triggered at similar points and would set similar targets, which gives the possible entries and exits more relevance in my mind. However, I'm just watching this week, not committing your money to this method until I've tested it in markets that have a bit more volume than we've had over the last few weeks. What makes such an entry particularly risky in this environment, despite the volume, is the recent buy-the-dip sentiment that's been prevailing and keeping downside targets from being met. Also, INTC's mid-quarter update this evening might mean that market action is more sentiment-driven than usual today.

  Linda Piazza   9/4/2003,  10:13:01 AM
The SOX now challenges that 50% retracement of yesterday's bearish engulfing candle, with that level at 449.84 and the SOX at 449.51 as I type but having reached a high of 449.88.

  James Brown   9/4/2003,  10:11:15 AM
Best Buy - BBY - Bob Pisani beat me too it. BBY sees Q2 earnings at 41-43 cents, above 40 cent estimates by Wall Street. The company announced comparable same-store sales of +7.5%. Here's a quote from the company's press release:

"Very strong sales volume, an improved gross profit rate and our 'efficient enterprise' strategy have positioned us for an outstanding fiscal second quarter," said Brad Anderson, vice chairman and CEO of Best Buy. "We believe this strong performance resulted from higher customer traffic levels in our stores, which were driven in part by the federal tax refunds received by consumers; our employees' superior commitment and execution; and market share gains."

  James Brown   9/4/2003,  10:10:52 AM
Very true, Mark. And having a Taco Bell in such a small confined space may not be conducive to maintaing customers... but they could charge more for seats near the front of the plane.

  Mark Phillips   9/4/2003,  10:09:18 AM
I like it, James!! Only problem is that they probably won't be able to put the little toys in the Happy Meals. I'm sure there's some way some of those little toys can be construed as a weapon.

  James Brown   9/4/2003,  10:06:31 AM
For all the active travelers out there: American Eagle airlines, part of AMR, is testing a way to let flyers purchase in-flight meals. I've got it! A new way for the airlines to make money. They can sell sponsorships on their planes. For X million dollars, we only serve Coca-Cola. For XX million dollars, we only serve McDonalds. Better yet, maybe we can get a little Taco Bell unit in the back to sell burritos.

  Linda Piazza   9/4/2003,  10:02:12 AM
The $TRAN, the Dow Jones Transportation Index, loses a few points today. Like many other indices, it's been pushing up against its upper Bollinger band, and even piercing it. Since 2750-2760 appears to be an area of at least slight S/R on its weekly chart, it would not be surprising for the TRAN to retreat and come back to test 2650-2680 support before climbing again, but so far, the TRAN is trying to find support at 2750, currently at 2959.55 but having achieved a low of 2749.73. (Note: The TRAN continues to move up as I type.)

  James Brown   9/4/2003,  10:00:37 AM
Even MORE August SAME-STORE sales #'s

- winners -
Target (TGT) sales +5.7%
Jo-Ann Stores (JAS.A) sales +9.8%
Brown Shoes (BWS) sales +2%
BJ's (BJ) sales +10.9%
Neiman Marcus (NMG) sales +7.6%
Ross Stores (ROST) sales +2%
Sears (S) sales +3.9%
JC Penney (JCP) sales +6.5%
Ann Taylor (ANN) sales +8.2%
Fred's (FRED) sales +7.3%

- losers -
Federated Dept. (FD) sales -0.8%
Gymboree (GYMB) sales -3%
Dillard's (DDS) sales -4%
Wet Seal (WTSLA) sales -10.7%
Abercrombie & Fitch (ANF) sales -11%
Gadzooks (GADZ) sales -33.6%

  Linda Piazza   9/4/2003,  9:54:41 AM
SOX bulls have a first task to complete today, too, and that task is to retrace more than 50% of yesterday's bearish engulfing candle. That 50% retracement lies at 449.84, with the SOX at 448.67 as I type.

  James Brown   9/4/2003,  9:53:27 AM
Kohl's Stores - has been one retail stock on my watch list. It broke out above the $64 level a couple of days ago but shares quickly failed under $65 and are now fighting to hold its simple 21-dma. It will be interesting to see if today's news, that August same-store sales were up 3.2%, can help it.

  Linda Piazza   9/4/2003,  9:49:29 AM
Studying the five-minute OEX chart, I notice a couple of spikes yesterday down to the 512.70 level, which is near the 6/17 high of 512.67. Yesterday, that resistance-turned-support held. Today I note that the 30-minute 21-pma has risen just underneath that level, to 512.25. From this historical and MA evidence, then, it appears that bears will want to break that 512.25-512.75 support as a first task. Not counting myself either bearish or bullish (maybe slightly bullish but mostly neutralish), I nevertheless want to see a pullback to support so that I know where that support lies. I am not ready to commit funds to a bullish play until I see that happen. Therefore, what I want to see happen is a break of 512. That might hint at a fall back to the 30-minute 100-pma near 504.30 to test its support again. Since 504 is also an area of historical support/resistance, two levels of support converge there.

  James Brown   9/4/2003,  9:49:08 AM
More retail numbers

Looks like good news for Petco (PETC) who's expects Q3 same-store sales to rise 6%.
Dollar General (DG) August same-store sales up 4.5%.
TJ Maxx stores (TJX) same-store sales climbed 1% in August.
Barnes & Noble (BKS) saw August same-store sales rising 2.7%.
Even the Finish Line (FINL) sees Q2 same-store sales up 21% (that's not a typo). Not so good news for May Dept. Stores (MAY) who's August sales slipped 1.1%. Same-store sales dropped 3.2%.

  James Brown   9/4/2003,  9:41:57 AM
Actually, I am seeing a big increase in analysts cutting stocks to a "hold" this morning.

  James Brown   9/4/2003,  9:39:56 AM
Just got an email from a reader, they believe that the broker-upgrade magic may not work for the markets today. From the looks of it, they could be right. I'm only seeing a few green spots on my screens.

  James Brown   9/4/2003,  9:37:43 AM
Biotech Bullet Dodging The BTK is shrugging off potentially bad news from Baxter (BAX) and Cerus (CERS) voluntarily halting their their Phase III trials for a pathogen-inactivated red blood cell program. The BTK is green while most of the major sector indices are red.

  Linda Piazza   9/4/2003,  9:36:28 AM
Today's first five-minute OEX range did not span a greater-than-normal distance. Under candlestick theory, the retracement levels may not be as important to watch in this run-of-the-mill candle. However, the 50% retracement of the first five-minute range lies at 514.40 for those who would like to watch how the OEX behaves in relationship to that level in early trading.

  James Brown   9/4/2003,  9:34:03 AM
More upgrades

Merrill Lynch is upgrading Network Associates (NET) from a "sell" to a "buy". That could keep the rally going for NET and shares might actually cross the $15 mark.

MER also upping some broadcasting/cable stocks: ETM, EMMS, ROIAK.

MER pushing CheckPoint Software (CHKP) from a "neutral" to a "buy".

USB upping Symantec (SYMC) from "under perform", yeah right look at the chart, to a "market perform".

Soundview is upgrading Foundry Networks (FDRY) and Take-Two Interactive (TTWO) from "neutral" to "out perform".

  James Brown   9/4/2003,  9:26:04 AM
Cisco Systems - CSCO - Lest I forget, CSCO also received an upgrade this morning. Goldman Sachs is upping its view from "in line" to "out perform". I think the analyst over there isn't drinking enough coffee. They're raising their price target on CSCO from $23 to $24. Come on guys, the stock closed at $20.27 yesterday!

  James Brown   9/4/2003,  9:22:52 AM
Broker-Technology Love Fest Continues. - As Jon has already pointed out the rash of analyst upgrades this week has become an outbreak. UBS is now upgrading the semiconductor equipment sector. Growing expectations for the economy and improvement in chip order flow being the main reasons. The entire list of stocks that UBS upgraded is:

Applied Materials - AMAT
KLA-Tencore - KLAC
Novellus Systems - NVLS
Lam Research - LRCX
Varian Semiconductor - VSEA

Maybe today, if the markets rally again, the SOX can actually participate.

  James Brown   9/4/2003,  9:16:06 AM
Trimble Navigation - One of my favorite low dollar stocks to watch... hmmm.. well it used to be a low dollar stock...TRMB is on the move again. TRMB is involved with the consumer side of GPS navigation systems, which is currently exploding and expected to remain very strong for the next several years.

  James Brown   9/4/2003,  9:10:36 AM
Retail The Retail sector could be strong today. Last night Costco (COST) said its August same-store sales were up 9%, coming in above analyst estimates of 6 to 7%. While this morning, the biggest retailer of them all, Wal-Mart (WMT) said its same-store sales jumped 6%, which was at the top of the range for 4-6%.

  James Brown   9/4/2003,  8:58:34 AM
The 09:00 AM ET update is posted. Link

  Linda Piazza   9/4/2003,  7:58:43 AM
The ECB leaves rates unchanged, at 2.0%.

  Linda Piazza   9/4/2003,  7:15:56 AM
The Bank of England leaves rates unchanged at 3.5%, as expected.

  Linda Piazza   9/4/2003,  6:51:09 AM
Good morning. Over the last week, the Nikkei has proved volatile in the first 30-60 minutes of trading, and it was volatile in Thursday's early trading, too. Before the first hour had elapsed, the index traded in an almost 100-point range. After ending the morning session in the middle of that range, the index climbed briefly in the afternoon and then plunged into the close, closing at its low of the day. The Nikkei closed down 68.74 points or 0.64%, at 10,646.95.

Perhaps the Nikkei was primed for profit-taking after the spectacular gains it has accumulated, as it was a day that began with good news. The Ministry of Finance announced that Japanese capital investment increased 6.4% in the April-to-June period and that business sentiment was improving.

Earlier in the week, an auction of 10-year government debt went better than expected, and bonds have been adding to their gains since then. The BofJ's Governor Fukui also indicated his concern about rising yields, perhaps helping to stem the losses in bonds. Some fear that banks will soon resume selling their bond holdings, however, as the end of the fiscal half-year approaches on September 30. Banks have incurred big losses in their bond holdings this year and may want to reduce their exposure, one journalist speculated.

Banks dropped today. Some exporters, especially computer-related exporters, also dropped as the yen strengthened, but Toyota gained on news that it gained U.S. market share from DaimlerChrysler's AG's Chrysler. Without offering incentives, Toyota and Honda each reported sales rising by more than 10%.

Other Asian bourses were mixed today. The Taiwan Weighted dropped 0.84%, and South Korea's Kospi lost 0.28%. Singapore's Straits Times gained 0.33%, and Hong Kong's Hang Seng also gained 0.33%. China's Shanghai Composite closed flat, down 0.03%.

European stocks have been trading in a tight range either side of the flatline today as those markets await the outcome of meetings by the ECB and Bank of England and today's U.S. economic numbers. No rate changes are expected as a result of those meetings. Auto stocks declined in early European trading, as did tech stocks. Construction group Lafarge dropped after reporting a 49% decline in first half net income. The biggest mover in European trading, however, has been Royal & Sun Alliance, dropping precipitously after announcing that it might seek $1.5 billion in financing in a rights issue, and might also take a charge of as much as $1.2 billion with a portion of that charge related to asbestos and environmental risks.

As of this writing, the FTSE 100 trades down 4.70 points or 0.11%, at 4257.40. The CAC 40 trades down 8.49 points, at 3414.29, and the DAX trades down 1.72 points at 3646.49.

  OI Technical Staff   9/3/2003,  12:07:40 AM
The Market Monitor has been archived. You may view it and any previous days here: Link

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