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  Jeff Bailey   9/20/200,  2:53:55 AM
Pivot Matrix for next week posted at this Link

 
 
  Jeff Bailey   9/19/200,  4:26:47 PM
Tipping Point (NASDAQ:TPTI) $13.60 -2.8% Link .... computer intrusion prevention software maker. CEO on CNBC right now.

Nice triple-top buy signal at $9.50, vertical count bullish to $28.50. Might advise bullish caution near-term until that bearish resistance trend is broken to upside, but what viruses have done for SYMC Link ,increasing rate of computer hacking could do for TPTI.

 
 
  James Brown   9/19/200,  4:24:23 PM
You're killing me, Jeff. Stop or I'll die laughing.

 
 
  Jeff Bailey   9/19/200,  4:17:34 PM
Day trader survey so far (see 14:06) .... SNDK, MXIM, AMAT, MMM, IBM, DNA, EBAY, AMZN, INTC, QCOM, SYMC, AMGN, KLAC, MSFT, CREE

Index .... QQQ, DIA

I'm seeing lots of EBAY correlations so far.

 
 
  Jeff Bailey   9/19/200,  4:08:53 PM
Service Corp. I think it is a steady growth business James. Fundamental investor just need to "dig" into the numbers. Stock used to fetch upwards of $40 per share, until aggressive acquisition strategy, much line AOL Time Warner (to be renamed Time Warner), had the company "buried" in debt.

Should I continue?

 
 
  Jeff Bailey   9/19/200,  4:06:51 PM
Day Traders I've received several e-mail from traders regarding the first-5-minute bar retracement technique.

I will cover in this weekend's ask the analyst column, but would request subscribers send me an e-mail in the next hour, with 3 stocks you like to day trade on regular basis. I'll try and sort by most interest, then we'll back test on those you like best.

If you could, in subject header, place the line "ask the analyst"

 
 
  James Brown   9/19/200,  4:06:46 PM
very funny, Jeff. I was going to joke about it being a "growth" business.

 
 
  James Brown   9/19/200,  4:03:00 PM
Weakness in Drugs - I'm noticing a lot of weakness in some drug stocks. LLY looks like a short under $60, GILD is already breaking the $60 level of support and shares of FRX are rolling over under its 200-dma.

 
 
  Jeff Bailey   9/19/200,  4:01:11 PM
Service Corp. (SRV) .... people are just dying to do business with them. Company profile at this Link

 
 
  James Brown   9/19/200,  3:57:01 PM
Service Corp - SRV - Not one to play options on but SRV is looking pretty tempting for the aggressive trader. Shares are up almost 4% today after bouncing from the $4.40 level. There is plenty of upside. Could be worth doing a little more due diligence on.

 
 
  Jeff Bailey   9/19/200,  3:52:45 PM
SPX WEEKLY pivot estimate .... using H,L,C for the week of 1,038.50, 1011.60 and estimating 1,034.00 (current trade) I get...

S2 1,001.13, S1 1,017.57, P 1,028.03, R1 1,044.7 , R2 1,054

There's that 1,044 again. While I don't know for certain, in review of last night's Index Trader wrap, we quickly discussed how the Dow Industrials MONTHLY R2 of 9,807 was out of stagger with the SPX. Next WEEK's R2 of 1,054 in the SPX might get things lined up for that to be a higher target than 1,044 next week.

 
 
  James Brown   9/19/200,  3:48:11 PM
New Highs - Columbia Sportswear - Shares of COLM appear to be hitting new all time highs at the $55 mark after spending the last 3 1/2 months consolidating sideways between $50-54. Volume has been stronger then average the last two sessions.

 
 
  Jeff Bailey   9/19/200,  3:45:38 PM
03:15 Update posted at this Link

Might be a speculative bullish play in ABC discussed at the bottom. JP Morgan's comments came just when I was going to send update, but added at last minute.

 
 
  Linda Piazza   9/19/200,  3:44:23 PM
The OEX now climbs back above the 30-minute 21-dma. The 30-minute MACD now curves back up just above signal. This isn't bearish action overall today. The OEX came back down and tested support and then headed back up.

 
 
  Linda Piazza   9/19/200,  3:27:11 PM
Here's what I'm noticing on the OEX daily chart: Link

 
 
  James Brown   9/19/200,  3:22:01 PM
Big Blue Filling the Gap. Shares of IBM are filling the gap from March/April 2002. Part of the move is probably fueled by short covering as the $90 level was major resistance. The top of the gap is near $97 but that close to the century mark and bulls might as well target $100 as resistance. The stock is up $1.27 to $93.26.

 
 
  James Brown   9/19/200,  3:13:05 PM
Lockheed Martin breaking down... Shares of LMT are breaking down under support at the simple 200-dma. I don't see any significant headlines to account for the move. LMT might find some support near 47.50 but the next stop is probably 45.

 
 
  Jeff Bailey   9/19/200,  3:05:42 PM
I'm slow today .... I'm just noticing session low on SPX came right near WEEKLY R1, while low on S&P Dec. Futures (sp03z) came right near our fittend 1,029.10.

 
 
  Linda Piazza   9/19/200,  3:03:11 PM
It looks as if that advice to consider closing any OEX bearish plays was appropriate after all, but this rise has just taken the OEX right back to next resistance. The 30-minute indicators have shown some early bullish tendencies, however, with CCI turning up again and RSI trying to hook back up. It's a grab bag about final direction, but it looks as if that round-number pinning could happen after all. Those of you with September 520 options, whether bullish or bearish, are going to find them losing value quickly if the OEX doesn't move soon.

 
 
  Jonathan Levinson   9/19/200,  2:53:58 PM
GE and MSFT are crucial stocks in the indices we follow, and I can't see GE or MSFT diverging meaningfully from them for long- it's Jeff who taught me to follow markets related to those we trade, and on my quote screen I watch GE, MSFT and INTC as "tells" on where the indices might want to go next.

 
 
  Jeff Bailey   9/19/200,  2:51:51 PM
S&P Dec. Futures (sp03z) today is first good test of our "fitted" retracement. While so far it would seem that 1,029.10 holds the retest. Link

I'm not overly impressed at this point as it would also makes sense that technical shorts below 1,029.10 squaring up today.

 
 
  Linda Piazza   9/19/200,  2:51:48 PM
To follow up on my 14:45 post, Jonathan comments often on GE, and I've often been a directional play when he makes comments about GE that are the opposite of the direction I've taken. Uniformly, I know my play is in trouble. It sounded a little as if I were slighting Jeff's commentary on GE there, and we all admire Jeff's acumen, but Jonathan's commentary helps keep me on the right side of the trade.

 
 
  Linda Piazza   9/19/200,  2:45:52 PM
I always follow Jonathan's commentary on GE for just that reason, Jeff.

 
 
  Linda Piazza   9/19/200,  2:44:56 PM
If in an OEX bearish play, I would consider exiting now, or on a break of 519.60. This could be just a stop-running move, but the OEX hit that important support, based there, and appears to be headed up.

 
 
  Jim Brown   9/19/200,  2:41:24 PM
That -5% drop in plastics orders in August is also pressuring GE. The plastics division accounts for about 10% of their earnings. GE made the announcement on Wednesday but it was not widely reported.

 
 
  Linda Piazza   9/19/200,  2:41:19 PM
Dialing down to a one-minute chart on the OEX, it's possible to follow a well-defined ascending channel that's presumably a bear flag. The OEX is following its boundaries closely, and just now hit the top of the channel. The OEX needs to break soon if it's going to do so.

 
 
  Jeff Bailey   9/19/200,  2:37:23 PM
Gosh Linda. OEX looks just like GE today.

 
 
  Linda Piazza   9/19/200,  2:35:21 PM
Here comes the test. Will OEX 518.50 break this time?

 
 
  Jeff Bailey   9/19/200,  2:33:43 PM
I here you there Jonathan. Just might have made sense. After all, Stock Trader's Almanac noted Dow Industrials (INDU) down 8 of last 12 years on Sept. expiration. What were the odds? A max pain of $27.50 may have given a day trader a negative bias toward the stock in today's trade, put on a watch list today.

 
 
  Jeff Bailey   9/19/200,  2:27:33 PM
AMEX Gold Bug Index ($HUI.X) 206.70 +3.27% ... afternoon low here.

Day Trade Bull in Bema Gold (BGO) $2.46 +6.03% from $2.43 might sit the offer $2.45 (53,500) x $2.46 (13,400) to let this day trade long go.

 
 
  Jonathan Levinson   9/19/200,  2:26:13 PM
Careful, Jeff. I agree, but maxpain analysis has let me down all year with few exceptions. Could be a great trade, but don't let the analysis excite you too much, as it's been very unpredictable in recent months.

 
 
  Jeff Bailey   9/19/200,  2:24:48 PM
Max Pain GE Max-pain for September expiration is $27.50. While I doubt GE would settle $27.50 today, that might of at least had me watching the stock for a day trade short today.

 
 
  Jeff Bailey   9/19/200,  2:11:35 PM
General Electric (GE) here's intra-day 5-minute chart. Link and my thoughts on impact of option expiration.

 
 
  Linda Piazza   9/19/200,  2:10:09 PM
Here's an update of a 30-minute OEX chart I posted earlier this morning. I'd hoped the OEX would violate its 30-minute 30-pma and the channel this morning, so I could feel comfortable issuing an official signal, but the break didn't come until this afternoon: Link

 
 
  Jonathan Levinson   9/19/200,  2:08:19 PM
The put to call ratio is steady at .66, VIX up all of .23 at 19.53, QQV -1.5. The TRIN.NQ is 1.32, TICK.NQ -244, showing neutral selling pressure on the Nasdaq, just a pullback so far showing on these indicators.

 
 
  Linda Piazza   9/19/200,  2:05:40 PM
We are seeing the expected bounce at 518.50, and can perhaps now expect to see some sort of measured distribution pattern. We don't want to see such a pattern take the OEX back above 519.00, however, but it's been overshooting upside tests today.

 
 
  Linda Piazza   9/19/200,  2:01:37 PM
OEX 518-518.50 is another potential bounce point.

 
 
  Jeff Bailey   9/19/200,  2:01:26 PM
General Electric (GE) $31.60 -1.55% .... not sure if we have any Level II trader, but did anyone notice how stock lined up at the offer once $31.64 was violated?

 
 
  Linda Piazza   9/19/200,  1:59:35 PM
A new OEX low of the day.

 
 
  Linda Piazza   9/19/200,  1:56:24 PM
Swing Trade Signals
(Note: I was unable to post for a few minutes, so this was prepared about 15 minutes ago.) If this were not so late on opex Friday or if volume patterns were not so inconclusive (advancers actually ahead now on the NYSE), we would be issuing an official bearish trade signal on an OEX trade below 519, as this would signal a fall beneath the rising regression channel support, the 50% retracement of yesterday's rise, and the 30-minute 30-dma that has been supporting prices as it's been climbing in that regression channel.

Unfortunately, it is this late and those volume patterns are what they are, so there will be no official signal. However, those that entered earlier on the unofficial signal are still doing okay, and those who want to gamble that OEX 518 will fall (a big gamble perhaps) can enter on a break of 519 with a target of 516.50, and if that falls, 515.50.

I'm all about warnings today, and here's another. I suspect that the break of 519 could come right during our usual stop-running period that's due to start shortly. Traders taking this entry risk that they're doing so on a stop-running push that will soon be reversed.

 
 
  Mark Phillips   9/19/200,  1:38:24 PM
AMGN $68.41 (-1.59) It looks like the vote on AMGN is not yet unanimous in favor of the bulls. After trading the $70 level yesterday and generating a fresh PnF Buy signal (target $81), Wachovia came out this morning with a downgrade to Market Perform and that was enough to drive the stock down to just below $68 prior to the current rebound. It's no great surprise to see that initial rebound, with the 50-dma ($68.36) providing support. The key will be whether the 30-dma ($67.81) and the rising trendline near $68 can combine to provide the strong support we're looking for. Traders looking for entries can certainly consider entering on successful rebounds above the $68 level, but remember to keep those stops in place. Our coverage stop is currently $67.50.

 
 
  Mark Phillips   9/19/200,  1:26:22 PM
DGX $64.09 (+1.38) An upgrade to Buy from Jefferies with a $70 price target broke this laboratory services stock out of its 2-month consolidation yesterday with a move over $62 and the bulls are following through today with another 2.2% gain on strong volume. Traders thinking of jumping on this bullish move should exercise caution, as the top of the July gap is at $64.50, with the PnF bearish resistance line looming at $66. This does not appear to be a good point to initiate new bullish positions, but with a new PnF Buy signal (target $79) entering on a pullback and rebound from the $62 area (confirming old resistance as new support) would be a much more favorable strategy.

 
 
  Linda Piazza   9/19/200,  1:19:11 PM
The OEX 30-minute chart now displays a formation that looks like a "b" distribution pattern, with a steep fall followed by a small rectangular consolidation band. Those usually break to the downside, but the volume patterns aren't showing a likelihood of an imminent break, and we should remember, too, that this is opex Friday. As subscriber K.W. and I were just discussing, there's a real tendency to park the indices about midday on opex Friday, and OEX 520 would be a nice round number at which to park the OEX. The bears mustered up enough uumph, as Jeff puts it, to drive the OEX below the 30-minute 21-pma, but can they drive it below the 50% retracement of yesterday's rally and that supporting 30-minute 30-pma (with both between 519.25 and 519)? I'm not sure.

 
 
  Jeff Bailey   9/19/200,  1:01:41 PM
General Electric (GE) $31.66 -1.4% .... look at 5-minute bar chart of GE. See the buying and then reversal of that 5-minute bar? I'm thinking GE being biggest weighted stock in OEX after expiration had something to do with it. What does a retracement fitted on that 5-minute bar look like?

What's the second largest weighted stock in the OEX? What does its 5-minute bar chart look like at the open? Link

 
 
  Linda Piazza   9/19/200,  12:59:49 PM
The OEX is now breaking below the 30-minute 21-pma, currently at 520.22. Earlier this morning, it broke briefly below this MA, but it hasn't had a 30-minute close below it yet. That may be about to change unless the OEX moves up quickly in the next couple of minutes. The 30-minute 30-pma has also played an important part in the OEX rise, and now that's at 519.14, about where the rising channel support (30-minute) lies, so care should still be exercised, especially as that level also marks the previous day's low.

 
 
  James Brown   9/19/200,  12:58:11 PM
Sector Winners & Losers

Winners:
XAU - gold & silver: +3.3%
OSX - oil services: +0.4%
XNG - natural gas: +0.4%
DFI - defense index: +0.23%

Losers:
NWX - networking: -1.26%
INX - Internet: -0.85%
TRAN - Transports: -1.11%
DRG - Drug index: -0.89%

 
 
  Jeff Bailey   9/19/200,  12:57:41 PM
Buy/sell program .... only reason I made note of this is I think there may be some potential for some expiration volatility today.

I still think there was a heck of a lot of covered call writing that took place earlier this summer when major indices were range bound. I discussed this in Index Trader wraps, thinking/believing that institutions were doing this above OEX 505 and most likely would be writing September expirations.

While index expired yesterday, doesnt' mean there aren't some stocks that have moved above, where there may be some "basket buying/selling" today to try and get things squared. Can never say for certain, but I do think portion of yesterday's gains were helped by some buying, where covered calls had moved in the money, and institutions were squaring things up for stock that was going to be lost anyway above OEX 505.

 
 
  Linda Piazza   9/19/200,  12:50:53 PM
Bears and bulls battle it out. Advancers and decliners are roughly equal on both exchanges, although down volume continues to have a slight edge on both.

The OEX has been rising to test the broken support from the possible bear flag, and now falls away from that test. If the bearishness is going to gain any momentum, it has to do it soon. If not, option premium is going to seep away and it might be better to close bearish positions. Those of us in a bearish OEX play need to see the OEX remain below 520 and then next need to see the OEX break below the current day's low.

 
 
  Jonathan Levinson   9/19/200,  12:45:59 PM
Steady-as-she-goes on the p/c ratio, .71 total with an equity pcr of .55 and index pcr of 1.41. VIX is down .09 at 19.21, QQV -1.59 at 25.45, VXN +.39. No signs of fear.

 
 
  Jeff Bailey   9/19/200,  12:34:42 PM
Buy Program Premium Alert .... SPX = 1,036.62

 
 
  Linda Piazza   9/19/200,  12:34:18 PM
On the OEX five-minute chart, we can see that the OEX fell out of the bear flag, but then trades sideways instead of falling. That's been a typical behavior with the OEX (and other indices lately), and usually precedes a climb (as happened as I began typing). I didn't type fast enough.

 
 
  Jane Fox   9/19/200,  12:27:02 PM
James, Tradestation shows a $TMW.X high on the 18th of 10076 and nothing since. On the 5 minute chart the last quote was at 10:25 yesterday.

 
 
  James Brown   9/19/200,  12:22:05 PM
Quote feed problems I've checked two different quote feeds and both of them lost track of the Wilshire 5000 index early Thursday morning (at least the charts do) and it looks like they're quoting yesterday's close +124 points to 10076. Anyone else have a quote for today?

 
 
  Linda Piazza   9/19/200,  12:21:53 PM
The OEX has now fallen out of the channel that may or may not be a bear flag, but hasn't yet fallen below 520. However, on the 30-minute chart, MACD is now tentatively breaking below its trendline of higher lows.

 
 
  Jeff Bailey   9/19/200,  12:19:47 PM
Lynx Therapeutics (LYNX) $7.50 +19% Link ... here's a small cap name I missed for bulls after a triple-top buy signal at $4.50. Looks like a MASSIVE reverse head/shoulder on the PnF doesn't it?

Will search for new, but see back on August 12, announced agreement with Pfizer (PFE) to study gene expression in cell camples. The agreement featured the application of Lynx's Massively Parallel Signature Sequencing technology to cell samples. Lynx is going to receive payments for the genomics discovery services it performs on the samples provided by Pfizer under the agreement.

 
 
  James Brown   9/19/200,  12:05:36 PM
Anglogold - AU - Shares of current OI call play are enjoying the rise in gold with its own 3.4% gain today. The stock is back up above the $40 level but we notice that volume is rather weak thus far.

 
 
  Jeff Bailey   9/19/200,  12:04:44 PM
Market Volatility Index (VIX.X) .... can we have bad ticks in the VIX.X? 16.03 -16.9% (not sure this is valid)

 
 
  Linda Piazza   9/19/200,  12:00:59 PM
On the OEX five-minute chart, the rise looks like a perfectly formed bear flag, except that it overshot the 50% retracement and went all the way to a 61.8% retracement of the flagpole drop that preceded its formation. It was a tight, not broad, formation of higher highs and higher lows after a steep fall. The five-minute stochs made a bearish kiss as it hit the top of the rising channel. So is it a bear flag or not? Only a drop first out of the flag, at 520, and then a new day's low are going to confirm it as a bear flag.

 
 
  Jeff Bailey   9/19/200,  12:00:43 PM
S&P Banks Index (BIX.X) 310.33 -0.18% .... doing much of nothing, but holding bulk of yesterday's rather impressive gains.

 
 
  James Brown   9/19/200,  12:00:16 PM
Dow Jones Industrial Components...
Leading the Dow's gainers are HPQ +1.33%, MSFT +0.8%, and IBM +0.77%.
Leading the Dow's losers are MRK -1.29%, SBC -1.15%, and GE -1.15%.

 
 
  Jeff Bailey   9/19/200,  11:57:47 AM
Gold Bugs Index ($HUI.X) ... here's a 5-minute chart, which I think shows how our fitted blue retracement, while crazy, looks to be in play. Link

 
 
  Jonathan Levinson   9/19/200,  11:52:03 AM
The put to call ratio is currently .72, with the FVX -.01 at 19.29, VXN +.91 at 30.66. The TRIN.NQ is 1.22, TICK.NQ +308. There's more pessimism in the Naz than on the S&P, but very little downside strength in price currently. Strength in the broad RUT as reported by Jeff could indicate that the sellers are exhausting themselves here, or, on the other hand, the Naz could be leading. Always an either/or to intermarket analysis.

 
 
  Linda Piazza   9/19/200,  11:49:30 AM
The OEX breached the 520.50-520.60 level. If it continues to rise, it now faces resistance from the midline of the rising regression channel, a midline that provided support earlier this morning. That midline now lies at about 520.90 and there's some slight resistance also between 521 and 521.40. The OEX has been overshooting upside targets a bit this morning, so the bearish rising formation (flag or perhaps wedge) scenario is still possible, but it's also possible that the OEX will hover just above these key levels through the rest of today or even rise. If you're in a bearish play, especially if in September options, consider your max pain level. Don't let too much time value seep away.

 
 
  Jeff Bailey   9/19/200,  11:44:13 AM
Bid may be forming in smaller-caps .... Russell-2000 Index (RUT.X) 519.60 +0.02% challenging yesterday's 52-week high. Best levels of morning session here.

 
 
  Jeff Bailey   9/19/200,  11:43:00 AM
5-year YIELD ($FVX.X) on the move here and now higher by 3.8 bp at 3.123%.

I keep looking for a bid to come into equities, but begin to wonder if this bond action is more dollar-related ahead of G7.

 
 
  James Brown   9/19/200,  11:37:21 AM
Weighing on the Transports... Morgan Stanley downgraded Fedex (FDX) to "equal weight" from "overweight" on valuation concerns. The company (FDX) just beat earnings by 4 cents on Wednesday. The stock is down 2.37 percent on the session and the Transports are down 1.34 percent.

 
 
  Linda Piazza   9/19/200,  11:36:59 AM
On the NYSE at least, volume patterns showed only a slightly bearish tone. As of a few minutes ago, less than 100 issues separated advancers and decliners, with decliners having a slight edge. About 100 million shares separated up and down volume, with down volume having a slight edge. Decliners and down volume had slightly more of an edge on the Nasdaq, but so far, it's not an overwhelmingly bearish pattern, perhaps in keeping with the orderly decline on the OEX at least. Total volume was 510 million on the NYSE and 781 million on the Nasdaq. Those patterns may need to be more bearish to break through next support, however.

 
 
  Jeff Bailey   9/19/200,  11:36:39 AM
Day trade long .... Bema Gold (BGO) $2.43 +4.7% .... bullish here, stop $2.39. With HUI.X at new 52-week highs, BGO off its recent 52-weeker of $2.59.

 
 
  Jeff Bailey   9/19/200,  11:28:57 AM
11:00 Update posted at this Link

 
 
  James Brown   9/19/200,  11:26:47 AM
Procter & Gamble - PG - Shares of PG have been exceptionally strong since they raised their first quarter outlook earlier this month. The stock has closed over resistance at $92.50 from June but is still under older resistance in the $94-95 range. Point-and-figure chart readers will notice how the stock bounced from its bullish support trend to breakout to new relative highs. I hesitate to play it under $95 but should it claim this mark too then the next stop is likely $100. The next level of resistance beyond $100 is probably $105 and then the old highs near $115-117.

 
 
  Linda Piazza   9/19/200,  11:24:16 AM
The OEX has not yet breached 520.50-520.60. So far, the rise appeared to be an orderly and normal retracement after a decline, perhaps beginning to shape up as a typical bear flag rise, but we can't be sure until the OEX falls out of this new pattern and achieves a new day's low.

 
 
  James Brown   9/19/200,  11:15:54 AM
Down 21 percent... Shares of BUCA, parent of the family style Italian chain Buca De Pepo, are down more than 20 percent after warning for its Q3 earnings numbers last night. Both USB Piper Jaffray and Merriman Curhan have cut the stock (to under perform and sell, respectively).

 
 
  Jonathan Levinson   9/19/200,  11:11:33 AM
The put to call ratio is currently. 73, with the index pcr 1.26 and equity pcr .60, still an orderly opex week. VIX is up just .14 at 19.44, VXN +1.16 at 30.91. QQV shows as unchanged, and I believe the quote.com is still offline for that symbol.

 
 
  James Brown   9/19/200,  11:10:48 AM
Amgen - AMGN - Shares of AMGN are down about $1.25 on a downgrade from Wachovia Securities. Wachovia is dropping the biotech giant to "market perform" from "out perform". Currently the stock is still finding some support at its simple 50-dma.

 
 
  James Brown   9/19/200,  11:07:03 AM
AmerisourceBergen - ABC - Shares of ABC were down more than $6 in pre-market activity on news that the company has come under a federal probe for its accounting and sales practices. The stock has been halted (at least I can't see any trades for it today!).

 
 
  Linda Piazza   9/19/200,  11:06:28 AM
Now watch OEX 520.50-520.60 to see if it serves as resistance.

 
 
  Linda Piazza   9/19/200,  10:56:07 AM
So far, we're not seeing much of a bounce, but the OEX now sits on both the 30-minute 21-pma at 51 and the 50% retracement of yesterday's rise, just above 519.36. This is a dangerous spot for bulls and bears alike.

 
 
  Linda Piazza   9/19/200,  10:49:52 AM
The OEX bounce came right on schedule, from just above the 30-minute 21-pma.

 
 
  Linda Piazza   9/19/200,  10:46:57 AM
The 30-minute 21-pma at 519.37 fast approaches. I wouldn't be surprised to see a bounce attempt from this level or especially from the 30-minute 30-pma at 518.81. This is especially true since the 30-minute MACD quickly approaches a trendline formed from its pattern of higher lows. A turnaround attempt might be staged there. If the bearish scenario remains in play, that bounce attempt probably should not take the OEX back over 520.50, although it's been overshooting upside targets a bit this morning.

 
 
  Jeff Bailey   9/19/200,  10:44:55 AM
Amex Gold Bugs ($HUI.X) 95.13 +2.72% ... clearly a sector winner this morning and takes out yesterday's highs. Not certain, but think sector finds bid ahead of G7 meeting? I need to get up to speed on this as it seemed highly discussed top in Treasury and currency pits.

 
 
  Linda Piazza   9/19/200,  10:38:54 AM
The OEX now breaks minimally below the midline support of the rising regression channel. A test of 520 is in progress. If in a bearish OEX trade, guard positions as the OEX approaches 519 and 518, especially if using September options. Maybe keep stops tight today to take you out on a profit.

 
 
  Jeff Bailey   9/19/200,  10:34:04 AM
Qualcomm (QCOM) $44.98 -1.61% .... Loop Capital commenting on a statement made by Qualcomm's CEO Irwin Jacobs that he now thinks a decision on 3G licences in China may be pushed out into next year since testing 3G technology is not expected to be completed until September 2004. Overall, Loop Capital doesn't see this as highly unexpected, but Jacob's comments weigh on stock in today's trade. Loop also saying Chinese government often makes decisions over a longer period of time than most governemnts.

QCOM has made a nice little move from $41.00, when subscriber e-mail had noted at that time that stock had generated the triple-top at $40.00 Link . Might not be a bad covered call write at current levels.

 
 
  Linda Piazza   9/19/200,  10:31:34 AM
Swing Trade Signals
I wanted to see a failure at the 50% retracement of the first OEX 30-minute range as a signal for a possible bearish position, but the OEX overshot that a bit (sign of strength or of emotional trading?). It also overshot the upside target from a double bottom seen on the one-minute chart, but now it's headed down to test support again. Although I lean toward a bearish outlook for today's trading and there's some confirmation for that outlook, there's not the overwhelming evidence needed to pull traders into a bearish trade with so many layers of possible support stacked just beneath current levels. Traders who don't mind taking on extra risk could enter bearish on a break of the current day's low or 520, with full awareness of possible 519 and 518 support.

 
 
  Linda Piazza   9/19/200,  10:23:49 AM
The OEX retraces more than 50% of the first 30-minute plunge. Now the next test is whether it can make a new daily high. I'm glad we're not in a bearish trade at this point, although the day could still turn out bearish. We just have to see.

 
 
  Jeff Bailey   9/19/200,  10:21:09 AM
Dow Industrials (INDU) 9,670 +0.12% ... has been better able to hold a bid this morning. IBM +1.21% and HPQ +1.71% gaining while JNJ -0.88% and SBC -0.66% lower.

 
 
  Jeff Bailey   9/19/200,  10:17:54 AM
Semiconductor Index (SOX.X 464.22 +0.48% .... session highs here. While gains are fractional, break above 465 could spark some short-covering in sector, which could spill over to broader equities.

 
 
  Jonathan Levinson   9/19/200,  10:16:15 AM
The TRIN.NQ is up to .86 now, TICK.NQ +207 on the bounce. The put to call ratio has risen to .67. These are all benign, neutral to bullish readings, but less bullish than we saw yesterday. Follow the price, which continues to reflect the ongoing uptrend, but there's a slight suggestion of fear in the markets this morning.

 
 
  Linda Piazza   9/19/200,  10:15:56 AM
We have another bounce from the midline of that rising regression channel I've depicted in previous posts. So far, this rise after the decline isn't taking on a recognizable bear flag or "b" distribution shape, but the pattern is still forming. As long as the OEX does not retrace more than half of the first 30-minute plummet, the action must be deemed bearish. So far, it's up in the air. Volume patterns are bearish except for new highs vs. new lows, but volume remains light enough and bearishness moderate enough that the volume patterns can switch the other way easily enough. It's still dangerous to draw too many conclusions, even if the OEX is acting the way we thought it would.

 
 
  Jeff Bailey   9/19/200,  10:13:32 AM
QQQ intra-day 5-minute chart. Using the 5-minute opening bar retracement technique and DAILY pivot matrix levels. Link

 
 
  Linda Piazza   9/19/200,  10:08:45 AM
Reader Question: What time today do the Sept. OEX options cease trading?

Response: You've just brought up an interesting topic, and I confess I don't know the entire answer. Here's a link that explains the trading hours for the OEX options, listing them as trading until 3:15 Chicago time (4:15 ET), as I did know. Link However, here's the interesting question. Settlement price today is based upon the closing price in the primary markets of each of the OEX components, as this page also explains, and as I also did know. Since those markets close before the OEX stops trading, I would presume that its value gets pinned at a certain level. I don't know the answer to this question because I rarely trade current-month options during opex week, so I haven't watched how the OEX trades from 4:00 ET to 4:15 ET. Perhaps this might be a question to ask your broker.

 
 
  Linda Piazza   9/19/200,  10:03:51 AM
Here's the intraday chart I posted earlier this morning, when I mentioned that I feared a bounce from the midline of the regression channel. Here's what the OEX did: Link However, it's headed down to test that line again.

 
 
  Linda Piazza   9/19/200,  10:00:34 AM
The 50% retracement of the plunge from today's high to the current low lies at 521.35. We're perhaps seeing the first retracement begin, and it will likely take the form of some kind of measured distribution, such as a bear flag or "b" distribution. We'll be watching that pattern's formation, gauging whether we can find a bearish OEX entry. We'll be watching volume patterns, too. So far, they support a bearish thesis.

 
 
  Jonathan Levinson   9/19/200,  9:58:26 AM
The put to call ratio is currently .57 on Interquote, with the VIX up .32 at 19.62, QQV flat at 27.04, VXN +.95 at 30.70.

 
 
  Jeff Bailey   9/19/200,  9:57:17 AM
5-year YIELD ($FVX.X) lower by 0.6 bp 3.079%

10-year YIELD ($TNX.X) lower by 2.4 bp at 4.16%

30-year YIELD ($TYX.X) lower by 4.1 bp at 5.059%

SPX 1,036.31 -0.31%.

 
 
  Linda Piazza   9/19/200,  9:56:54 AM
As I presumed when I wrote the first Swing Trade update this morning, we've missed that first move down. Those who entered on their own, risking a possible bounce at the middle of the regression channel, the 50% retracement of yesterday's rise, and the rising 30-minute 21-pma should be watchful now as those levels are tested. I expect a bounce from those levels, but now we can snap a retracement level on this morning's decline and gauge how strong the bounce is. Perhaps that will give us another entry on the Swing Trade model as I don't expect the bounce to be strong.

 
 
  Jeff Bailey   9/19/200,  9:54:11 AM
Treasury YIELD action. One thing I wanted to monitor yesterday morning was that YIELD move back higher from gap lower was that the rise back higher after their open wasn't simply a technical fill of the gap lower. Yesterday, Treasuries continue to see selling into the 12:00 PM mark.

One difference this morning is that YIELD move back up from the open is looking more like a technical fill and not really some type of "true" selling or eagerness to see a short-term allocation to equities.

 
 
  Jeff Bailey   9/19/200,  9:50:20 AM
SPX here's 5-minute bar chart. Blue retracement was from our previously fitted retracement technique. Shows how resulting retracement level may have come into play yesterday. Link

 
 
  Linda Piazza   9/19/200,  9:49:42 AM
I forgot to mention this morning that the 50% retracement of yesterday's rise also lies slightly above 519. With the 30-minute 21-dma and the 50% retracement of yesterday's rise lying near that level, and with the midline of the ascending regression channel at 520, there's strong bounce potential at those levels. That's leading to my hesitancy to enter a bearish OEX position this morning, but early action is bearish and those who have chosen to enter should just be aware of those levels.

 
 
  Linda Piazza   9/19/200,  9:43:53 AM
The OEX has now retraced slightly more than 50% of the first decline, at 522.185.

 
 
  Linda Piazza   9/19/200,  9:41:38 AM
There should be at least a minimal bounce attempt between OEX 521-521.40.

 
 
  Linda Piazza   9/19/200,  9:40:22 AM
OEX 30-minute MACD lines now touch as MACD curves over, but they haven't yet made a bearish cross and they remain above signal. Still, there's been no attempt as yet to reverse and recoup the 50% retracement of the first five-minute range. So far, it's looking bearish, but it's too early to get a good read on volume patterns.

 
 
  Linda Piazza   9/19/200,  9:35:42 AM
The 50% retracement of the first five-minute OEX range lies at 522.48. Bulls will want to drive the OEX back above that 50% retracement in the first reversal, due soon, while bears want to see the OEX remain below that level.

 
 
  Jonathan Levinson   9/19/200,  9:34:48 AM
Dec gold is trading both sides of 380, with the HUI up 2.23 at 202.38 and XAU +1.14 at 93.75.

 
 
  Jeff Bailey   9/19/200,  9:25:21 AM
5-year YIELD ($FVX.X) continues to reverse early morning buying and now has YIELD rising 1.1 basis points to 3.096% and per recent showing of intra-day 5-minute charts, has this shorter-term YIELD rising above my downward trend. Should provide a firm open for equities at this point.

 
 
  Linda Piazza   9/19/200,  9:24:18 AM
Swing Trade Signals
This daily OEX chart looks pretty bullish. A cautionary sign appears when studying the MACD, however. Although MACD slants upward, it's still signaling possible bearish divergence with price. Link On intraday charts, the OEX travels upward within an ascending regression channel. Both the 30-minute and 60-minute charts show indicators registering overbought conditions, but ADX levels high enough that the stochastic evidence can not be completely trusted. Nevertheless, it's probably time for a pullback to test support. First support could be found near 519.95, which is also near the midline support of the rising regression channel shown here: Link

Notice how the OEX has been finding support from the 30-minute 30-pma as it rises? We'll use this moving average and the bottom of the rising regression channel as our benchmark. We'll go long on a pullback and bounce from either the midline support or the 30-minute 30-pma. We'll enter a bearish trade on a breakdown below the bottom of the rising channel, which also happens to be near the long-term horizontal S/R detailed on the daily chart. We'll want volume before we venture into the market on an expiration Friday.

What about the potential move from yesterday's close down to the bottom of that regression channel? That's a more difficult decision. Many traders watch the 20, 21, or 22-dma's, and those still-rising averages now cross just under 519, near resistance that held for a while yesterday afternoon. That's also just under the midline of the rising regression channel. The OEX has been strong of late, and strong indices sometimes retrace only to the midline of a regression channel before shooting up again. This is opex week, too, with strange machinations. If volume proves strong with strongly negative patterns, such an entry would be feasible, but I'm afraid it will occur before we'll be able to get a read on those volume patterns. What if the OEX continues up? That's even more difficult. We'll have to see how that plays out, as there's not really much resistance showing up on the weekly chart between 524 and 550, but on top of other gains, we'd sure need everything working our way before we ventured in long.

 
 
  Jeff Bailey   9/19/200,  9:22:07 AM
09:00 Update posted at this Link

 
 
  Linda Piazza   9/19/200,  7:40:23 AM
Good morning. Buoyed by the strong performance in the U.S. markets, the Nikkei opened up 90 points Friday morning and soon tacked on almost 40 more points, but it couldn't hold onto its gains. The Nikkei closed down 94.90 points or 0.86%, at 10,938.42 and the low of the day. It traded in a more than 200-point range during the day. The declines were at least partly attributed to nervousness ahead of this weekend's election and G7 meeting in Dubai.

As has been true of the last few days, the day started off with banks leading the index higher. A newspaper reported the government will tighten rules that allowed banks to include tax-deferred assets as capital. Japanese banks will reportedly cut their deferred tax assets, taking writedowns as soon as the fiscal first half that will end September 30. In early trading, as the Nikkei was gaining, exporters tried to recoup some of the losses suffered as the yen had firmed over the last few days, but the still-firming yen limited the gains. While banks held onto some of their gains as the Nikkei declined, many exporters could not.

Other Asian markets were mixed. The Taiwan Weighted and China's Shanghai Composite gained, by 0.12% and 0.06%, respectively. South Korea's Kospi lost 1.31%, and Singapore's Straits Times declined 0.71%. Hong Kong's Hang Seng lost 0.91%.

Most European bourses currently trade down, with tech stocks, telecoms, and oil stocks leading early declines. In the U.K. banks and insurers both fell after Commerzbank Securities recommended a switch from banks to insurers. Although telecoms struggled throughout most of Europe, in London telecom equipment testing company Spirent (SPM) gained over 10 percent in early trading on rumors that Agilent (A) will bid on the company.

As of this writing, the FTSE 100 traded down 29.10 points or 0.67%, to 4285.60. The CAC 40 traded down 25.95 points or 0.76%, to 3389.06. The DAX was essentially flat, up 1.46 points or 0.04%, at 3613.48. The DAX's trading has been volatile today with one report noting that August producer prices in Germany rose 2.1% year-on-year, to their highest levels in two years.

 
 
  Jim Brown   9/18/200,  1:56:29 AM
End of Year Special We are getting ready to produce the end of year special. We have had various success with the various offerings over the last six years and each year it becomes a little harder to top the prior year. I would like to open it up to the monitor readers.

What would you like to see as a special this year?

Email me at eoy@OptionInvestor.com

 
 
  Jeff Bailey   9/18/200,  1:56:15 AM
Pivot Matrix for tomorrow posted at this Link

Additional note: According to Stock Trader's Almanac, September Triple Witching day (tomorrow) has Dow Industrials (INDU) down 8 of last 12 years. Maybe look for some morning follow through to 9,700, then fade. Get new WEEKLY levels next week, where better correlative support levels can then be identified. Thinking maybe something in the INDU 9,500's

 
 
  OI Technical Staff   9/18/200,  1:56:06 AM
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