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  Jeff Bailey   9/12/200,  6:33:28 PM
Pivot Matrix for next week at this Link

Here's the S&P 500 Index (SPX.X) chart Link with new WEEKLY retracement. Looks almost identical to this past week.

  James Brown   9/12/200,  4:20:22 PM
Any thoughts if there will be a market reaction should Israel decide to take Arafat out of the picture (permanently)?

A recent Jerusalem post article suggested Israel actually eliminate him, not just expel him.

  Jeff Bailey   9/12/200,  4:17:16 PM
QQQ daily levels for Monday are 32.78 33.30 33.57 34.09 34.36

WEEKLY levels are 32.27 33.04 33.79 34.56 35.31

Bull might get a jittery bear fill at $34.09, I was thinking of sticking some out at $33.95.

  Jeff Bailey   9/12/200,  4:15:35 PM
QQQ $33.81 +0.5% ...... looks like they want it closed at WEEKLY pivot. After-hours trader might try and calculate tomorrow's DAILY and next WEEKS levels real quick.

  James Brown   9/12/200,  4:15:29 PM
For those traders who like to do their own research... here are a few bullish candidates I've been looking at today:

AVID, pulled back to $50 support/resistance and bouncing.

LEA, bounce from late July, early August levels and 50-dma.

NAV, nice pull back from $45 to 40 psychological levels, bouncing from support and 50-dma.

PCAR, my comments for the past three weeks have been to look for a bounce from the $80 level.

GDT has been able to maintain gains above $50.

ATH is offering a nice string of higher lows. The stock looks ready to breakout above resistance at $75 and its 50-dma. Traders could consider a trigger and target $80-82.

AET is producing a similar pattern. Higher lows as buyers push it higher. The stock is about to breakout above resistance at $60 and its 50-dma. Traders could use a trigger and target $65.

ITW, The pull back from recent highs has stopped at previous support/resistance near $70.

IR, The rising trend still looks strong. The pull back from psychological resistance at $60 has stopped at $55 and shares are bouncing from their 50-dma.

  Jeff Bailey   9/12/200,  4:02:25 PM
SPX 1,018.57 +0.21% ... closes right near its weekly pivot.

QQQ might get a last 15-minute push to its WEEKLY pivot of $33.80. A weekend pocket change-needing bull might try a bid at $33.70, stop $33.68 and target $33.80 to the close.

  Linda Piazza   9/12/200,  4:02:15 PM
Swing Trade Summary: OEX/SPX/DJX/DIA/SPY
We entered only one play this week, a bearish OEX trade yesterday when the OEX traded down through 410, with a stop at 413. We were stopped out at 413, for a 3-point move against us. As I mentioned yesterday, I usually set a 4-point stop initially, but switched to a tighter three-point stop as some had been uncomfortable with the wide stops. Although I might have closed the trade out yesterday for a small loss anyway ahead of this morning's important and potentially market-moving reports, that trade would have made money if we'd left it open. I'm going to return to the four-point stops as I've back tested them and they seem to present the best risk/reward. When we're stopped, it's for a bigger loss, but we're stopped less often.

9/11: Entered short/put OEX at 510.
9/11: Stopped at 513.
Results for the week: 3 OEX points against our position.

  Linda Piazza   9/12/200,  3:52:54 PM
The OEX has been in the process of retesting the top of this morning's gap, now that it climbed above it. That's expected, and the test will provide us with some information about whether that gap level is now support. However, I don't give too much credence to action late on a Friday afternoon. I keep going back to that daily candle, though, and thinking that supports a bullish more than a bearish case. The weekly candle is a doji, but it's following consolidation and not a climb, so it doesn't have the same bearish implications it would normally. So, at the end of the week, I'm left rather neutral (like that weekly doji, I guess), but certainly willing to consider a bullish scenario.

  Jeff Bailey   9/12/200,  3:52:12 PM
Microsoft (MSFT) $28.29 +1.61% .... after gapping down at $27;50, MSFT has done nothing but trend up the entire session. MSFT raised its annual dividend from $0.08 per share to $0.16 per share, which is annualized dividend yield of roughly 0.6%.

  Linda Piazza   9/12/200,  3:39:55 PM
The OEX today sprang from just above its 21-dma and is now back above its 10-dma at 512.22.

  Linda Piazza   9/12/200,  3:32:45 PM
MACD has never been my favorite technical analysis tool, Jane, because it moves so slowly and because I'm forever squinting at the chart, saying, "Are those lines touching?", but I'm finding it the most trustworthy in the current market.

  Jeff Bailey   9/12/200,  3:30:51 PM
03:15 Update posted at this Link

  Jane Fox   9/12/200,  3:25:31 PM
Linda that MACD divergence in the OEX has had me concerned for a while now for it shows up in the DOW and of course the SPX also. MACD doesn't have a divergence, however, in the COMPX and NDX.

  Linda Piazza   9/12/200,  3:21:18 PM
I know what the fundamentals say should be happening on the daily OEX chart, but here's what's actually happening: Link Until that support breaks, things don't look all that bearish, although MACD bearish divergence signals a need for caution.

  Jeff Bailey   9/12/200,  2:54:51 PM
Airline Index (XAL.X) 63.57 +1.16% .... sectors getting green. Almost like watching a horse race to the finish to see who can end up today's sector winner.

QQQ/NDX is best bet for index winner. Losts of shorts there.

  Linda Piazza   9/12/200,  2:53:32 PM
Yes, it is a doji, Jeff, and it's bullish coming after a decline. We need confirmation from Monday's action, however.

  Jeff Bailey   9/12/200,  2:52:29 PM
Isn't this some type of "doji" forming in the daily Dow candle? It is all so Japanese to me.

  Linda Piazza   9/12/200,  2:51:53 PM
The OEX currently tests the top of this morning's gap and its 30-minute 100-pma. A move above both would be bullish, but I'm not going to call a Swing Trade this late on a Friday afternoon. We options traders lose too much value over a weekend.

  Jeff Bailey   9/12/200,  2:50:50 PM
NASDAQ-100 Index (NDX.X) 1,351 +0.02% ... now moving into plus territory. Bond market closes in 11 minutes.

  Jeff Bailey   9/12/200,  2:48:34 PM
Cyclical Index (CYC.X) 561.13 +0.76% is sector winner now and best levels of the session. AA +3.29% Link , DD +2.23% Link and GM +1.26% Link now joining in.

All 3 are CYC.X components and also Dow Industrials (INDU) 9,455 -0.03% components.

  Linda Piazza   9/12/200,  2:44:41 PM
The OEX pulled back after hitting its 30-minute 130-pma, but not far and now it tests it again. Meanwhile, 30-minute CCI is inching toward the green. Yesterday, 30-minute MACD (8, 18, 6) broke above its trendline of lower highs. This morning, it came down and tested that trendline and now appears to be turning up again. I can't find anything too bearish here, but the OEX remains below its important 30-minute 100-pma and below this morning's gap and that's not bullish, either!

  Jeff Bailey   9/12/200,  2:44:23 PM
Recap of Prof. Zitzewitz' comments per study. Evidently, when Stanford Prof. heard of Spitzer's accusations, Prof. Zitzewitz took his Trim Tabs data he already had and produced his findings.

104 funds were used for study, 16 showed late hours trade.

Study showed a rather modest 0.05% cost to investors.

  Jeff Bailey   9/12/200,  2:38:03 PM
AMEX Gold Bugs Index ($HUI.X) 92.18 -2.22% .... session lows and challenges yesterday's low. Intra-day high came right after Michigan Sentiment, but gold bugs may have seen those lower YIELDS in Treasuries after modest core PPI data to take some profit.

  Jeff Bailey   9/12/200,  2:34:32 PM
NYSE Composite (NYA.X) 5,743.63 (unch) ... inched green in last minute.

  Jeff Bailey   9/12/200,  2:33:57 PM
S&P Banks Index (BIX.X) 301.18 +0.22% ... trying to challenge morning highs of 301.40 in last 10-minutes.

  Jeff Bailey   9/12/200,  2:32:36 PM
Networking Index (NWX.X) 223.24 +0.17% .... moving green here.

  Jeff Bailey   9/12/200,  2:31:48 PM
Russell 2000 Index (RUT.X) 507.91 +0.09% ... first major or broad index to inch into the green.

  Jeff Bailey   9/12/200,  2:30:06 PM
Indices paring losses .... not sure if it is Stanford Professor talk on CNBC or traders looking to front run today's low Treasury YIELD trade into the close.

  Jeff Bailey   9/12/200,  2:22:10 PM
CNBC will have the Stanford Professor on this afternoon (see last night's Index Trader Wrap). Traders/investors may want to listen in.

  Linda Piazza   9/12/200,  2:19:21 PM
The OEX confirmed the double bottom on the five-minute chart. Presumably, it will now test 510. The 30-minute 100-pma, 130-pma, 21-pma, and this morning's gap all combine between 510 and 511. A move above the top of this morning's gap would clear them all, and would theoretically be a sign to go long. I would be careful making too many assumptions about action on a Friday afternoon, and even more careful entering positions ahead of a weekend that precedes opex week. If you're in September options, you're going to lose a hefty portion of time premium over the weekend.

  Linda Piazza   9/12/200,  2:04:59 PM
A move over OEX 509 will confirm a double bottom on the OEX five-minute chart. It has a minimum upside target of only 510, however, bringing it right back to strong resistance.

  Jeff Bailey   9/12/200,  2:02:12 PM
Oracle (ORCL) $12.39 -4.54% Link ... JMP Securities reiterating their "market perform" rating this afternoon and price target of $15. Firm says that despite a slow start, with licence revenues at 12% below the firm's estimates, JMP feels that ORCL is on an up trend that should last several quarters. JMP's due diligenge shows significant evidence that ORCL is increasing sales capacity in response of higher activity levels. While these high levels did not translate into license revenues in the first quarter, JMP expects new license revenue growth rates to improve this year.

PnF chart of ORCL remains longer-term bullish with bullish vertical count of $23. Outperform? Not so certain at this point as ORCL's relative strength chart versus SPX shows stock underperforming since March, but reads "relative strength buy, column of O." Link

PeopleSoft (PSFT) $18.87 -0.84% seems to be more in favor with the market of late (relative strength vs. SPX) Link and perhaps why Mr. Ellison so wants to acquire PSFT?

The human resource enterprise group has undereformed the market, but may look to improve should job growth come.

  Linda Piazza   9/12/200,  1:39:44 PM
The OEX heads down to test that 508.15-508.30 level that keeps coming into play. As it does, we're in the 1:35-1:55 ET time period that often sees support or resistance tested. The OEX won't have far to move to test either one, with today's low just below and the 504-506 zone just below that day's low, and with 510.30 not far above, either.

  Jeff Bailey   9/12/200,  1:39:24 PM
Dynamic Materials (BOOM) $3.75 +30% Link ... mentioned this micro-cap earlier this week (see 01:57:14 on 09/09/03) Link for longer-term micro-cap bulls. Getting upside alert here at $3.75, which gets stock clear of bearish resistance trend. Today's trade at $3.50 gets stock back on a buy signal, and begins to generate bullish vertical count of $7.50.

Disclosure : I currently own partial position in BOOM, and my father has owned BOOM and continues to hold in his grandmother's trust.

  Linda Piazza   9/12/200,  1:29:32 PM
As of a few moments ago, volume stood at 665 million on the NYSE and 1 billion on the Nasdaq. Adv:dec ratios were 15:16 on the NYSE and 12:18 on the Nasdaq. Down volume led, too, on both exchanges. New highs still vastly outnumber new lows, but new lows at least number in the double digits, at 14 as I type.

  Jeff Bailey   9/12/200,  1:26:36 PM
01:00 Update posted at this Link

  Linda Piazza   9/12/200,  12:40:50 PM
This is an interesting and somewhat new development. After an upside break of a supposed bear flag (that's not the new part--that's been happening since the spring), the OEX fell back inside the bear flag and now actually breaks it to the downside. However, as it has been doing of late, it doesn't break far out of that five-minute bear flag. Without a retest of the day's low, this is a higher low on the five-minute chart. If the OEX moves up from here, we will also have seen first a false upside breakout of that channel and then a false downside breakout of that channel. I'm glad to be out of my call trade for a profit this morning and glad I decided not to initiate any new positions. Be careful, whether bullish or bearish, or neutralish but in directional trades. The OEX is between supposed strong support and supposed strong resistance, with only a couple of points of movement before it hits one or the other.

  Linda Piazza   9/12/200,  12:34:33 PM
Yes, Jane, the subscriber who sent those charts on the VIX and VXN often uses combinations of indicators that I wouldn't have thought to use.

  Linda Piazza   9/12/200,  12:32:18 PM
Here's a follow-up to T.G.'s VIX chart: Link

  Jane Fox   9/12/200,  12:28:10 PM
Linda (referring to your 12:10 post) using the ADX on the VIX, I like it.

  Linda Piazza   9/12/200,  12:15:57 PM
OEX 508.30 has been a key level today. The OEX first had trouble rising above that level when it was rising within its ascending regression channel, and then the climb moved quickly once it burst through 508.30. Now the OEX keeps coming back to that level to establish it as support.

  Linda Piazza   9/12/200,  12:10:34 PM
Here's an interesting VIX chart by an informed and skilled subscriber. Thanks, T.G. Link The OEX, sitting near support, tells us that we're at a turning point, and so does this VIX chart. Will the OEX find support here and the VIX retreat back within the channel T.G. has marked, or will the OEX fall through support and the VIX climb out of that channel?

  Jeff Bailey   9/12/200,  12:04:18 PM
Central Fd Cda (AMEX:CEF) $4.84 +1.25% .... per Jonathan's 11:52:40 .... keep an eye on this chart. BIG head/shoulder top forming with head $5.50, shoulders at $5.00 and neckline at $4.00 on a WEEKLY interval bar chart. Link

Probably attracting technical shorts, but set alert above $5.00. Short interest coming down below 1 million shares, but decent days to cover at 6.42 Link and might get a decent 2-3 day move out of stock should it break above the $5.05 level.

  James Brown   9/12/200,  11:57:41 AM
Retailers Weak - Retail stocks are weak today after the August retail sales report this morning. Department stores and apparel stores are suffering the biggest losses. Current OI Put play Kohl's (KSS) fell strongly this morning but has recouped most of its losses. Shares are currently trading at $58.23 -1.8%.

  Linda Piazza   9/12/200,  11:53:26 AM
Here's one reason the current level might be a bounce point and why I'm not all that bearish. Yet. Link That doesn't mean I'd be buying calls today (now that I've sold mine) ahead of a move back above the 30-minute 100-pma.

  James Brown   9/12/200,  11:48:28 AM
Video Games get downgraded. - USB Piper Jaffray downgraded a handful of video-game related stocks this morning. Gamestop (GME) , THQ Inc (THQI) and Activision (ATVI) were all cut to "market perform" citing valuation concerns and growth worries.

Current OI call play Electronic Arts (ERTS) the biggest video game maker out there is weathering the news pretty well, only down $1.88 to $88. This is a little surprising that USB would downgrade these game markets before the Q4 holiday sales season.

(FYI: if Microsoft wanted to it could corner the market in video games. It could just buy all of them (THQI, GME, ATVI) and TakeTwoInteractive (TTWO) and Electronic Arts (ERTS) and rival playstataion maker Sony (SNE) and only be $2 billion in the hole. An interesting thought considering that the U.S. consumer spends more money on video games each year than going to the movies.)

  Jeff Bailey   9/12/200,  11:44:12 AM
Amerco (UHAEQ) $22.13 +30.17% Link .... This one makes me so "sick." You know them as UHAUL, yes... the company that rents trailers. What a complex story. If memory serves me correct, last time we discussed this stock was back in June on thoughts that economic recovery could have the stock on the move. However, we had also made note that that company went into bankruptcy, but this bankruptcy had a positive twist as pointed out beautifully by Roth (an investment firm) when they upgraded the stock to "strong buy" from "buy" at $4.00.

What makes me sick is I actually bought a small position on the triple-top, but dumped it at $8.50 on the symbol change.

BIIIIIIIG short squeeze taking place here with 1.8 million shares short and days to cover ballooning to 12.27 as of Aug. 15 data. Link

Will make note that today's high of $26.66, is very close to the stock's PnF bullish vertical count of $26.75.

  Linda Piazza   9/12/200,  11:43:35 AM
As expected, the OEX 510.30-510.50 resistance held on that first test. I'm out of my personal call position for a small profit, and glad to be out because countertrend daytrades are not my style. The same 30-minute oscillators that were looking bullish earlier are now turning down again. With the close proximity of support and resistance, with this being the Friday before opex week, and other factors, I don't think there's going to be an official Swing Trade for us.

  James Brown   9/12/200,  11:35:38 AM
More MSFT spending spree what if's:
If MSFT really wants to control the Internet, they're only a couple of billion short from writing a check for EBAY (market cap $33.5B) and AMZN ($18B) (or maybe choose YHOO at $21.5B).

  Jeff Bailey   9/12/200,  11:31:46 AM
11:00 Update posted at this Link

  James Brown   9/12/200,  11:23:23 AM
Microsoft - MSFT - You may have heard that MSFT has chosen to double its annual dividend from a 8 cents a share to a whopping 16 cents. The total payout for MSFT will run about $1.73 billion. As expected this prompted many to reopen the discussion about what MSFT should do with its pool of cash. The company currently pulls in about $13 billion in free cash flow a year and its current hoard of $49 Billion is double what it was three years ago.

Just how much money is $49 Billion?

Let's say MSFT wanted to buy a few fellow Dow components. Based on Market cap, the software giant could write a check for United Technologies (UTX) and Eastman Kodak (EK) and still have $4 billion left over.
-Or they could move into the fast food and paper industries by purchasing both McDonalds (MCD) and Intl Paper (IP).
-Or they could buy Alcoa (AA) and Honeywell (HON).
-Or Caterpillar (CAT) and General Motors (GM).
- but if you like the idea of still having a few billion left, then MSFT could buy AT&T (T) and Boeing (BA).

  Linda Piazza   9/12/200,  11:16:27 AM
The OEX has now retraced more than 50% of the first 30-minute larger-than-normal candle. If it can hold this level, that's a bullish development, but only bullish in the very shortest term. The next test will come at the confluence of the 50% retracement from yesterday's high to today's low and the 30-minute 130-pma and the 30-minute 21-pma, all coming together between 510.30 and 510.50. If the OEX is going to be turned back today, that's where I would expect it to happen. Disclosure: I have a countertrend bullish OEX position, entered for a short trade only, not a typical Swing Trade, as there didn't appear to be enough upside (a couple of points) to risk an official Swing Trade.

  Linda Piazza   9/12/200,  10:57:09 AM
The possible "b" distribution pattern on the OEX has now morphed into a possible bear flag, although it's so steep that it's best seen on the one-minute chart. It looks as if it's possible that we'll get that bounce after all. Possible resistance points derived from retracement levels are the 50% retracement of the drop from yesterday's high, at 510.34 and also the 50% retracement of today's larger-than-normal first 30-minute candle, with that retracement level lying at 508.45.

  Linda Piazza   9/12/200,  10:51:24 AM
The Russell 2000 is also sitting tight, as Jeff mentioned the BIX doing. The RUT.X found support at the bottom of this week's consolidation band this morning and has climbed slightly, to 503.63 as I type. It remains below its 10-dma at 508.06, however, and I wouldn't be surprised for it to find resistance at that level if it should continue to climb.

  James Brown   9/12/200,  10:51:21 AM
PIXAR Inc - PIXR - Last week computer-generated "Finding Nemo" surpassed "The Lion King" as the U.S. top grossing animated movie with $328.7 million in ticket sales. "Lion King" had $328.5 million from its original release and recent large-format Imax reissue (Reuters). For you movie buffs, "The Lion King" is still the undisputed worldwide champ for an animated film with $780 million in ticket sales.

Despite this success, Bank of America (BAC) is starting PIXR with a "sell" rating and a $61 price target. Shares of PIXR have recently topped out near resistance at $75 and are currently trading at $70. The $61 price target by BAC is close to old support/resistance near $60 and PIXR's simple 200-dma.

  Jeff Bailey   9/12/200,  10:48:24 AM
S&P Banks Index (BIX.X) 300.24 -0.08% .... not much doing here, just sitting tight. Range has been 300.54 to 299.20.

  Jeff Bailey   9/12/200,  10:46:28 AM
QQQ's $33.33 -0.92% .... what's there to say here other than that overlapping WEEKLY/MONTHLY retracement support looks to be a granite floor at this point, not to mention the rising 21-day SMA of $32.98 and perhaps our old upward regression channel. That's about 4-levels of support in play today. Things may change with new WEEKLY levels next week, but you can well bet there are some shorts doing some squaring around this level.

  Linda Piazza   9/12/200,  10:42:40 AM
Me, too, Jim and Jonathan. I've been carefully using my own money to test the model I want to use for guiding trades, using my own money this week, and have had three successful personal trades in a row. The moment I gather my courage and put traders in an official Swing Trade again, it doesn't work. Actually that one would have, too, except for that tightened stop, but it was my decision to tighten the stop.

  Jeff Bailey   9/12/200,  10:42:18 AM
WEEKLY S1s hold support early morning in INDU and SPX/SPY. SPY's WKLY S1 was 101.35 and was pegged. I don't have the S&P futures futures pivots, but it would be a decent guess that futures may have pegged. The reason I think this is that both the SPY and futures good tools for some institutional hedge. Thinking is that when new highs were found, the WEEKLY levels are going to get some attention on downside, regardless of how weak some of today's data was.

Now... when I say "weak the data was," I'm putting this in the context of major indices recently trading new highs.

  James Brown   9/12/200,  10:39:53 AM
Progressive Corp - PGR - Shares of PGR are suffering from the "sell the news" attitude after the company released its August results this morning. Net premiums were up 26% while net income for August was up 53%. PGR is set to announce its next quarterly earnings in mid-October. The stock is down 3.3% to short-term support near $70.

  Linda Piazza   9/12/200,  10:33:42 AM
There's been a steep fall for the OEX since yesterday's high to today's low, without much of a retracement at any point--barely a credible bear flag to be found on that fall. Unless we're going to have a cascading plummet, we should have a retracement at some point, perhaps in the shape of a bear flag or other distribution form, and somewhere between here and 504 should be an appropriate place for one to occur. A 38.2% retracement of the current drop would take the OEX back up to 509.50 and a 50% retracement would bring it back to the 510.34 level, near the 30-minute 130-pma. As I type, though, it looks as if that "b" distribution form is still looking valid, with the most likely outcome theoretically being a break to the downside. Stay tuned.

  James Brown   9/12/200,  10:30:05 AM
Jane already mentioned it but Johnny Cash has died this morning at age 71. During his career he produced 1500 songs. His first No.1 was "Ring of Fire".

  Jeff Bailey   9/12/200,  10:25:02 AM
S&P 500 Index (SPX.X) 1,009.05 -0.72% Link .... sectors now red across the board with only Dow Jones Home Construction Index (DJUSHB) Link 438.59 +0.45% showing gains. Airline Index (XAL.X) Link 62.84 (unch), while AMEX Gold Bugs Index ($HUI.X) Link 201.77 -0.21% reverses earlier bid.

Oracle (ORCL) $12.29 -5.31% leads the GSTI Software Index (GSO.X) 138.67 -1.94% to sector loser status, with DDX.X -1.67%, RLX.X -1.25% and BTK.X -1.2% weak.

  Linda Piazza   9/12/200,  10:21:11 AM
The current five-minute OEX pattern looks like a measured distribution pattern, most likely a "b" distribution pattern. Those usually break to the downside, and often occur about midway through a drop. I would caution, however, that the OEX sits a possible strong support and today's volume remains extremely light. We can get lots of chop in volume like this. Personally, I'm unsure whether I should be buying calls to ride a quick test of broken support, or puts in anticipation of a breakdown of that "b" pattern. That means I should probably stay out!

  Linda Piazza   9/12/200,  10:11:34 AM
Small caps have powered much of this rally. The Russell 2000 now hovers just over 500, at 502.15 as I type and near the bottom of this week's consolidation zone. It's also near the midline of the rising regression channel, just now falling beneath that support. The 21-dma crosses at 496.13, near 496 horizontal support, but the bottom of its ascending regression channel now crosses at about 483, near the next 479 support zone. Daily MACD is near a bearish cross, RSI has headed down, and the 21(3)3 stochastics have begun to roll.

  Linda Piazza   9/12/200,  10:00:33 AM
Dow 9320-9325 is the target projected by the double-top (60-minute chart) that I mentioned being confirmed on Wednesday. Not all bearish targets have been met lately and watching whether this one is met or even exceeded will tell us much about strength or weakness in the market.

  Jeff Bailey   9/12/200,  9:59:05 AM
Gold/Treasury bonds Action between gold with AMEX Gold Bugs Index ($HUI.X) 204.93 +1.37% and Treasury buying with 10-year YIELD ($TNX.X) falling 14.1 basis points to 4.193% gives a VERY defensive look from the market.

It makes NO SENSE to see gold stocks rising (inflation) and Treasury YIELD falling (no inflation) and when we've seen this type of action, it usually comes from a more defensive posture from the market.

U.S. Dollar Index (dx00y) $96.07 -0.5% continues to weaken.

  Linda Piazza   9/12/200,  9:56:00 AM
Now would be an appropriate place for an OEX bounce up to test that gap and the 30-minute 130-pma. A failure to mount even a tepid bounce attempt with the OEX at the Wednesday low would certainly look bearish.

  Jeff Bailey   9/12/200,  9:51:03 AM
Univ. Mich prel. Sept. Sentiment comes in at 88.2 vs. forecast of 90.4

INDU = 9,404, SPX= 1,010, OEX = 508.25, NDX = 1,335, QQQ = $33.21, BIX.X 299.95, $TNX.X = 4.208%, $DX00Y = 96.14 (DELAYED QUOTE)

  Linda Piazza   9/12/200,  9:48:48 AM
The OEX approaches the Wednesday 508.08 low, another possible bounce point. Below this lies support in the 504-506 zone. A failure of that lower support would appear significant. Until then, the OEX just comes back to test its former bull flag, to establish it as support.

  Linda Piazza   9/12/200,  9:46:26 AM
Jane's reversal (see Futures side of the Monitor) happened right on schedule, in the OEX as well as in the futures contracts she watches.

  Linda Piazza   9/12/200,  9:39:31 AM
The OEX has retraced more than 50% of the first five-minute range, but as I mentioned earlier, I think it's more important to watch the 50% retracement of the gap, at 510.63. I think that's going to be a more important measure of early strength or weakness. That's also very near the 30-minute 130-pma at 310.44. Theory says that we should be short under that average.

  Jeff Bailey   9/12/200,  9:36:06 AM
S&P Banks Index (BIX.X) 300.14 -0.1% .... I would think all NYSE listed components should be open by now.

  Linda Piazza   9/12/200,  9:35:20 AM
The OEX gap is probably going to be more important to watch than the first five-minute range. The 50% retracement of that gap lies at 510.63. We can watch this as a benchmark of early strength or weakness. The 50% retracement of the first five-minute range lies at 509.67, and we can watch that, too.

  Linda Piazza   9/12/200,  9:30:42 AM
Swing Trade Signals
If I'd kept my usual four-point stop, we would not have been stopped out of the OEX trade, but I probably would have closed it for a small loss ahead of today's economic numbers and ORCL report anyway. The OEX ended the day right on a possible bounce point. It's probably opened below that bounce point--the 30-minute 100-pma as well as the 130-pma--today, but I would be reluctant to issue a signal ahead of further economic numbers. I may stay reluctant all day, as I hesitate to open a new Swing Trade on the last Friday before opex week. We wouldn't want to carry a position over the weekend, so I'd have to be sure markets were moving fast.

  Jeff Bailey   9/12/200,  9:19:08 AM
09:00 Update posted at this Link

  Linda Piazza   9/12/200,  6:39:35 AM
Good morning. On the last day before a three-day holiday and the day after the second-largest one-day decline this year, the Nikkei opened higher. It closed higher, too, up 166.48 points or 1.58%, at 10,712.81. At the end of the day, it had recouped a little over half the previous day's losses. Exporters, banks, and autos gained. In a little more than a week, on September 20, elections will be held. Some speculate that trading may remain cautious ahead of that election. Some members of Prime Minister Junichiro Koizumi's administration have been responsible for the reforms that have firmed up the financial sector, but are unpopular with other party members. Koizumi is expected to win reelection, however.

South Korean and Hong Kong markets are closed today for a holiday, as the Nikkei will be Monday. Other Asian markets were mixed. The Taiwan Weighed gained 0.39%, but Singapore's Straits Times lost 0.56%.

European markets are mixed today, too, although more trade up than down. Today, July French production figures were released, showing a drop of 0.3% month-over-month. Economists had expected a 0.2% gain. Another number released today showed July imports in France declining 5.3%, with some interpreting that decline as showing decreased domestic demand.

Philips Electronics (PHG) announced that 3Q sales in its semiconductor unit may rise over previous projections of 3% quarter-over-quarter growth. European chip stocks gained as a result. Currently, the FTSE 100 trades up 28.10 points or 0.66%. The CAC 40 gains 16.00 points or 0.48%, to trade at 3364.25. The DAX trades down 5.08 points or 0.14%, to 3561.77.

  Jeff Bailey   9/11/200,  1:58:54 AM
Pivot Matrix for tomorrow at this Link

  OI Technical Staff   9/11/200,  1:58:46 AM
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