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  Jeff Bailey   9/22/200,  10:03:39 PM
Pivot Matrix at this Link

  James Brown   9/22/200,  4:02:52 PM
Stocks to watch tomorrow... don't forget that we'll be hearing form Lehman Brothers (LEH), Morgan Stanley (MWD) and Goldman Sachs (GS) with their latest earnings report tomorrow. After last week's blowout by Bear Stearns (BSC) expectations could be high and disappointments could spark a sell-off.

  Linda Piazza   9/22/200,  4:02:35 PM
Swing Trade Recap- OEX/SPX/DJX/DIA/SPY
9/22: Entered a bearish OEX trade at OEX 514.50.
2/22: Profit stop at OEX 512.50.
Result for the day: +2 OEX points our favor.
Results for the week: +2 OEX points our favor.

  Linda Piazza   9/22/200,  3:59:44 PM
Once again, we see that pattern we've seen over and over throughout the last few months: a drop through a supposedly bearish distribution pattern, a steadying instead of the expected steep fall, and then a move up again. I've seen in individual stock charts as well as on the OEX's chart. I've seen it on daily charts and on five-minute charts. So far, though, there's one slight difference. Once the climb gets back into the former congestion zone, the index/stock usually shoots up through it. The OEX hasn't done that. Yet.

  Linda Piazza   9/22/200,  3:53:59 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were just stopped our of our OEX bearish play on an OEX move above 512.50. We entered at 514.50, so stayed in the play for a two-point move our direction.

For those of you who did not take the listed exit, and I know there were some, watch the 30-minute 130-pma at 514.43 and the 100-pma at 515.18.

  James Brown   9/22/200,  3:50:19 PM
Failed rally in MSFT ...There doesn't seem to be any specific news to attribute to the 3.57 percent drop (other than general profit taking) but MSFT has failed at the $30 mark and is trading near its lows for the day.

Meanwhile the GSO software index is down 2.2 percent on the session.

  James Brown   9/22/200,  3:44:30 PM
Shares are off their highs for the day but NetFlix (NFLX) ran up to pierce the $40 level midday on decent volume. NFLX has about 10.8 million shares in float and as of August 8th it had short interest matching more than 76 percent of that float.

  Linda Piazza   9/22/200,  3:44:15 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
I'm going to start ratcheting down the stop fairly closely. New stop at 512.50.

  Mark Phillips   9/22/200,  3:40:43 PM
GS $92.53 (-1.20) It looks like we're going to be left wanting in our bullish GS play. Last week's breakout over the $93 level looked really encouraging, especially with the corresponding breakout in the XBD index. But today we see the stock falling back to new support (old resistance) near $92. Normally, we'd be thinking of a fresh entry here, but we've got one of those pesky external events to deal with. GS is set to release its earnings report tomorrow morning and in keeping with our rule of not holding open positions over an earnings report, we'll be dropping the play tonight. Each trader has to make their own decision about the event risk as it pertains to their business plan, but my recommendation would be to exit open positions before the close. Better safe than sorry.

  Linda Piazza   9/22/200,  3:25:29 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower the exit to 513.50. That will probably take us out just before the OEX turns down and falls precipitously into the close, but so be it.

  Linda Piazza   9/22/200,  3:23:09 PM
I don't like this action. The OEX should have fallen more deeply and quickly after breaking down out of the midday consolidation zone. I'm considering an early exit, but I'm trying to give the OEX a little more time to test the bottom of that consolidation band.

  Linda Piazza   9/22/200,  3:17:45 PM
The OEX came up and tested the 512.50-512.60 level that had been the support throughout most of the day after this morning's precipitous fall. Such tests are normal and natural. So far, the OEX turned down from its test of that level, but I'm not convinced yet. The 30-minute indicators are beginning to look a little more bullish, so guard those stops, wherever you've set them.

  Jeff Bailey   9/22/200,  3:03:22 PM
Autozone (AZO) $90.32 +0.7% ... Jeff: I thought your AtheA column this weekend was great. Did you see how your stacked retracement on the five minute bars worked today? This stacked part of your technique is too crazy. I scalped 50 cents out of AZO on thought the stock might run ahead of today's earnings, but not willing to hold with today's negativity or uncertainty in the market. Just wanted to say thank for discussing this short-term trading technique this weekend.

No, I didn't see it until you mention it now. So far, AZO did pegg the top of the stacked didn't it? Do you also see how it came right back to the first 80.9% retracement of the first bracket, now gets a bid? Could be another run to the stop of the stacked at $91.17.

  Linda Piazza   9/22/200,  2:55:07 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower the stop to the entry, 514.50. After having a winning trade, let's not let it turn into a losing one if the OEX bounces after the bond-market close. Conservative traders might want to use an alternative 513.50, at least paying for the spread.

  Linda Piazza   9/22/200,  2:47:45 PM
The European markets closed as follows: The FTSE closed down only 0.68%, down 28.80 points to 4228.20. The CAC 40 closed down a much more substantial 2.69%, down 90.69 points to 3282.95. The DAX fell 3.42%, down 122.43 points to 3456.27.

  Linda Piazza   9/22/200,  2:43:05 PM
The Dow hit a low of 9501.80 and rebounded, but the rebound has been weak so far.

  Linda Piazza   9/22/200,  2:37:12 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Due to the connectivity problem, I wanted to discuss several potential exit points to watch during the afternoon. When a market falls steeply and then consolidates in a distribution pattern, as the OEX did today, those consolidation patterns tend to occur about midway through a decline. That would give us a downside target somewhere near 506 for the OEX. However, the 21-dma lies at 509.40, the support level of the congestion zone from week-before-last, as I mentioned earlier today. Unless the OEX falls quickly through that zone, traders might want to start tightening stops if/as that level is hit.

Also, although Swing Trades are meant to be followed anywhere from one to five days, with two probably being the most usual, I'm considering closing this one today. I haven't made a decision yet, but the OEX has fallen near the 30-minute 1.35% lower envelope (currently at 509.23), and when I was backtesting and this condition was seen, the trade was often stopped out on the 9:30-10:00 ET period the next day. It might be better to exit sometime this afternoon and then wait for an entry tomorrow morning.

  Linda Piazza   9/22/200,  2:28:40 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Sorry, but I wasn't able to post for a while. Lower the stop to 515.50. Conservative traders might want to use their entry levels instead.

  Jeff Bailey   9/22/200,  2:17:57 PM
Dow Diamonds (DIA) 95.32 -1.2% ... here's 5-minute chart I was hoping to show about 15-minutes ago for day trade SHORT opportunity. Looking for DIA to close at its lows for today. Possibly $95.00 or WEEKLY S1. Link

  Jonathan Levinson   9/22/200,  1:23:46 PM
Not Linda and I, but the reader and Linda :)

  Linda Piazza   9/22/200,  1:22:03 PM
It looks as if I wasn't the only one noticing SINA, SOHU, and NTES. (See my 13:19 post and Jonathan's.) The timing was accidental. Jonathan and I hadn't conferred.

  Jane Fox   9/22/200,  1:21:49 PM
Linda and Jonathan - you two should get coordinated just a little better - I mean your posts were a whole 12 seconds apart on the same stocks.

  Jonathan Levinson   9/22/200,  1:19:47 PM
Technically speaking what is your thoughts on SINA, NTES and SOHU at these levels...

They are in strong uptrends, but the daily chart oscillators are toppy. I don't believe that these stocks will resist a generalized downdraft, but until their clear uptrends reverse, the uptrends remain dominant. I personally have a lot of trouble buying a stock at its high, prefer to sell high and buy low. I'd be patient on the sell side, waiting for the uptrend to break, and personally wouldn't be buying here as they're toppy, but that's just me. Not advice, just way I see those charts.

  Linda Piazza   9/22/200,  1:19:35 PM
James just mentioned (his 13:08 post) one stock avoiding the sell-off today. A group of stocks avoiding that sell-off is the Chinese Internet-related group NTES, SINA, and SOHU. I haven't been able to find any news to explain the moves, but SOHU now approaches the July 15 high of 43.40, with SOHU currently at 41.81. SINA and NTES have this month already exceeded the summer's highs. When you look at how much these stocks have climbed over the last year, they certainly look overbought at these values, but they're still climbing. I'm not suggesting them as either bullish or bearish plays, just expressing my amazement.

  James Brown   9/22/200,  1:19:24 PM
Another stock that could have shorts on the run is Red Hat (RHAT), which has rallied more than 20 percent in the last two days. The stock has broken resistance at $9 and $10 on very big volume after the company's latest earnings report last week. RHAT beat estimates of $0.01 a share by a penny with revenues rising 35.8% year over year.

  James Brown   9/22/200,  1:15:13 PM
Stratasys - SSYS - Shares of SSYS are also hitting new highs today. The +5.5% gain today is building on Friday's big gain fueled by strong volume. I can't seem to find any specific news for two-day rally. It could be short covering. SSYS has a float of 4.9 million shares and as of Aug. 8th shares short totaled about 9% (which doesn't seem to be too high given the average daily volume of 446K). The stock has broken resistance at the $50 level.

  Jonathan Levinson   9/22/200,  1:13:11 PM
The put to call ratio is currently .71, VIX 19.77, VXO 20.66, and QQV +.77 at 25.70. The VXN is somehow lower by a whopping 2.06 at 27.68, either bad data or opex distortion.

  James Brown   9/22/200,  1:08:25 PM
Brightpoint Inc (CELL)...Momentum traders in CELL are ignoring the market weakness and have pushed the stock up another 8.7 percent to yet another new high. The stock remains extremely overbought but bulls are ignoring the screams of pain as they crush the shorts beneath them.

  James Brown   9/22/200,  1:02:01 PM
No doubt our readers have heard about the weakness in the overseas exchanges, which is contributing to our own weakness here.

England's FTSE 100: -28.80 to 4228.
German's DAX 30: -115.50 to 3463.

Japan's NIKKEI 225: -463.32 to 10,475.
Hong Kong's Hang Seng: -95.15 to 10,873.

  Jim Brown   9/22/200,  1:00:01 PM
Website Problems
We are still having problems with the website. We are running off the backup servers until we can get the problem corrected. The website will be sporadic all day until the problem is resolved. The backup servers are not as strong as the primary servers and the higher load factor on a day like today with the market in the tank is causing them to overload. PLEASE BE PATIENT. I have received a huge number of emails. We are working on it.

  James Brown   9/22/200,  12:53:08 PM
Afternoon Sector Winners
OSX oil services: +0.38%
XNG natural gas: +0.09%
XAU gold/silver: +1.72%

Leading Sector Losers
DDX disk drives: -2.28%
SOX semiconductors: -2.34%
NWX networking: -2.26%
GHA hardware: -2.01%
XAL airlines: -1.81%
DJUSHB homebuilders: -2.05%
RLX retail index: -1.8%

  James Brown   9/22/200,  12:39:28 PM
Speaking of high-fat...
Krispy Kreme Krumbles... Bearish traders will note that shares of KKD have finally broken support at the $40 level. Shares dropped early in the session to the $38.90 level before bouncing. Currently shares are trading under $39.50.

  Jane Fox   9/22/200,  12:29:47 PM
Of course, Linda if on the Atkin's diet it would be a high fat meal. (grin)

  Linda Piazza   9/22/200,  12:28:28 PM
Jane and I have both mentioned this on the Monitor before, but I certainly wish our markets took a midday break the way the Nikkei does. Sitting through the lunchtime lull is crazy-making sometimes. We'd all be better off if we could just go jog or cook a low-fat meal or read a few pages of a book on trading discipline.

  Jonathan Levinson   9/22/200,  12:26:16 PM
The VIX at 19.78 is the "new" VIX, calculated on the broader S&P 500 as of today, while the "old" VIX based on the OEX is now under the ticker "VXO" and gives a value of 20.81 according to Interquote. Here's the discussion from the CBOE: Link

  Linda Piazza   9/22/200,  12:25:05 PM
The OEX 21-dma has risen to 509.47, just at the bottom of the congestion zone from week before last. The OEX break below the former low of the day was tentative, to say the least, and the OEX is trying rather unsuccessfully so far to climb again, but if the OEX does break below 511.50-512, that 509.50-510 zone will be our next possible support level.

  Jonathan Levinson   9/22/200,  12:22:41 PM
The put to call ratio is down to .71, a rapid drop but complicated by opex distortions. VIX is currently 19.78, QQV +1.45 at 26.38, with the TRIN.NQ down to 1.26, just north of neutral. The market looks surprisingly complacent here.

  Linda Piazza   9/22/200,  12:19:47 PM
Reader Question: MMM forming a right shoulder on Daily chart might be bad portent for overall market. Think cheap dollar will keep it from forming?

Response: That's an interesting question. As a multi-national company, MMM might reasonably expect to benefit from a weaker dollar, making its exports more attractive to foreign markets. However, I'm not sure how much of MMM's business depends on foreign exports, nor am I sure whether we can believe Asian claims that they will allow their currencies to firm against the dollar. Does anyone believe the Bank of Japan won't intervene again?

Turning to MMM's daily chart, here's what I see: Link I have to mention, however, that MMM is a stock I avoid, for a simple reason. I've gotten burned every time I've tried to play it bearish, and that's usually when it's setting up a potential H&S that just doesn't confirm. My reservations may have more to do with my own experiences than what I see on the chart. If you learn that you don't have a good feel for a particular stock or index, it's usually best to learn from your experiences and stay away, and that's what I've done with MMM. I don't have a good feel for it.

  Linda Piazza   9/22/200,  11:57:42 AM
The OEX got as close as 514.33 to the 30-minute 130-pma at 514.68, but so far, hasn't been able to draw any closer. A move below the current day's low at 512.45 would certainly create the impression that the OEX was rolling down from an unsuccessful test of that moving average, but that hasn't yet happened. Until it does, the OEX may continue to retest that average.

  Linda Piazza   9/22/200,  11:49:28 AM
Although I'm primarily an OEX trader, I of course keep track of what's happening with the other indices. I'm watching the NDX rise, too, with its five-minute bear flag more intact than that of the OEX, which has gotten rather messy. The NDX approaches the bottom of its morning gap. Presumably, if it can move above that level, it might next test the 50% retracement of that gap, near 1383.50, but first it has to get past the bottom of the gap, a possible resistance area.

On the OEX, the 30-minute chart now sports a possible bear-flag formation. If that's what it is, it should break down before retracing more than 50% of the flagpole drop that preceded it, with that level now being near 516.50 if the entire day's range is encompassed.

  Jeff Bailey   9/22/200,  11:40:22 AM
Neurobiological Tech (NTII) $5.58 +9.34% .... stock moving above its 200-day SMA here today. Company manufactures Memantine and has partnered with Forest Labs (FRX) $48.44 -1% to market drug for severe Alzheimers. Should be getting some news out of FDA this month (September) approval/non-approval for application on treatment of severe/advanced Alsheimers.

  James Brown   9/22/200,  11:37:58 AM
IACI buys HotWire.com... if you're watching CNBC then you probably heard that InterActiveCorp (previously USA Interactive) has added another .com to its growing stable of Internet companies. IACI is spending $685 million for privately held HotWire.com, the discount travel website.

HotWire.com will be joining IACI's Expedia.com, Hotels.com, Home Shopping Network (HSN), Ticketmaster, Match.com, and LendingTree.com.

  Linda Piazza   9/22/200,  11:33:06 AM
The OEX looks determined to test that violated 30-minute 130-pma at 514.70 and perhaps then the 100-pma at 515.66.

  Jeff Bailey   9/22/200,  11:30:40 AM
Atrix Labs (ATRX) $23.61 -17.4% Link ... lower after company warned on earnings with company saying it might have trouble breaking even this year due to sluggish sales of its prostate cancer drug Eligard, and rejection of its generic skin products by U.S. regulators.

ATRX said the Eligard market dynamics (currently working on a stronger version of Eligard to better compete against Lupron, which is made by TAP Pharmaceuticals, a joint venture between Abbott Labs (ABT) and Japan's Takeda Chemical), the dermatology product and other factors will hurt 2003 results by up to $5 million, increasing the challenge of meeting its break-even target for 2003, the company said.

  James Brown   9/22/200,  11:27:26 AM
Williams Sonoma (WSM) gets chopped. ... Shares of WSM are down more than five percent on downgrade from CIBC. The analyst is pointing to rising inventory concerns and lowered their outlook to "sector perform" and dropped the price target to $32. WSM weakness this morning puts it below the simple 50-dma.

  James Brown   9/22/200,  11:20:35 AM
Broadcom Bouncing Back ... BRCM gapped down below the $26 level this morning after Wedbush Morgan cut the stock to a "hold" from a "buy" citing valuation concerns. However, since the opening bell shares have rebounded back into positive territory. The stock appears to have some support near $25 and its simple 50-dma but we're also seeing a trend of lower highs from the September top just above $28.

  Linda Piazza   9/22/200,  11:19:21 AM
One pattern hasn't changed. After breaking down out of the short-term potential bear flag, the OEX traded sideways and now rises to retest the formation. All through the recent months, these potentially bearish formations have often resolved this way. What we'll have to see now is whether the retest results in the zoom higher, the way it frequently has over the last weeks.

  Jeff Bailey   9/22/200,  11:18:16 AM
11:00 Update posted at this Link

  James Brown   9/22/200,  11:14:47 AM
Dow Industrial Winners ... with the $INDU down triple digits we see just four components in the green right now. AT&T (T) is the leader followed by 3M (MMM), Caterpillar (CAT) and Eastman Kodak (EMN).

  James Brown   9/22/200,  11:11:30 AM
Intuit (INTU) upgraded ... Shares of INTU are up 1.85% to $49.85 on a RBC Capital upgrade this morning who raised the stock to an "out perform" from "sector perform" and lifted INTU's price target to $60. The stock is currently struggling with the psychological $50 level but we also see additional resistance near $51.50 (double top from Jan-Mar this year) and more resistance near $55.

  Linda Piazza   9/22/200,  11:07:03 AM
The OEX broke down out of the fairly well formed potential bear flag, best seen on the 1-to-3 minute charts. Interestingly, it did so at the same time we had an apparently false tick on the VIX, above 22, all the way up to 23.90. The VIX is heading up again as I type, at 19.73 currently, but still far from that 23.90 value. The OEX arrested its decline, though, after falling out of the bear flag. It's still testing that support that we knew was going to be tough.

  James Brown   9/22/200,  11:03:49 AM
Dollar Tree (DLTR) Reaffirms ...Shares of DLTR are down 7 cents this morning after reaffirming its Q3 revenue estimates of $665-680 million. Reuters had consensus estimates pegged them near $677M. The company reports pretty late in the earnings cycle. Their last report was August 26th where they beat by a penny. These low-dollar discount stores have bee huge winners this year as consumers seek to stretch their spending money while the labor market has been weak.

Looking at the chart shows DLTR bouncing from the $34-35 level but shares remain under the simple 50-dma. Its MACD looks ready to produce a new bullish signal in the next couple of days and momentum traders might want to consider a short-term trade higher to $40 on a break of the 50-dma.

  Jonathan Levinson   9/22/200,  10:45:13 AM
The put to call ratio is currently .90, and the VIX 19.66. TRIN.NQ 1.28. Bonds are still in the tank, TNX +12.9 bps, suggesting that Ben Bernanke's credibility is experiencing "downside risks" as he tries to talk up treasuries. Gold is up 3.30, off its highs at 386.20 on the Dec contract, HUI +3.28 at 207.78 and XAU +.84 at 96.22.

  Jeff Bailey   9/22/200,  10:29:30 AM
December yen futures (jy03z) 0.8956 +2.13% shows big rise in yen vs. dollar and provides bulk of today's Dollar Index (dx00y) 93.94 -1.07% weakness. December Swiss Franc futures (sf03z) 0.74 +1.24% also has the more "neutral" Swiss Franc gaining ground.

Often times, when turmoil is seen (terrorist attacks here in U.S., war, currency) we will see the Swiss Franc, find a bid as country usually takes a more neutral stance on issues. Investors from around the globe will sometimes look to park assets in the Franc.

  Linda Piazza   9/22/200,  10:27:10 AM
On the OEX, we do have a classic-appearing bear flag rising after the precipitous drop. A 50% retracement of the entire day's move is just slightly over 517, while a 50% retracement of the five-minute chart move that immediately preceded it is at 514.13. The rise is such a tight pattern of higher highs and higher lows that I tend to think the OEX will get turned back nearer 515 than 517, but we'll have to see.

  Jeff Bailey   9/22/200,  10:25:57 AM
Motorola (MOT) $12.18 +9.8% .... up after multiple broker upgrades on announcement that company's current CEO Chris Galvin informed the Board of Directors of his decision to retire. Mr. Galvin agreed to remain as chairman and CEO until a successor is named and will work closely with the board's search committee to find a replacement.

Brokers say Mr. Galvin's departure is welcome and reflects Boards desire to unlock the company's hidden value. Merrill Upgraded to "buy" from "neutral" and thinks a new CEO could be more aggressive and put more emphasis on execution of growth and profitablility plans, including the possible disposal of underperforming or non-synergistic assets.

  Jeff Bailey   9/22/200,  10:16:03 AM
Maxim Integrated (MXIM) $42.14 -2.7% ... Dow Jones reporting that Qualcomm (QCOM) is expanding its patent infrimngement lawsuit against MXIM, citing an SEC filing. MXIM noted in its financial statement for the fiscal year ended June 28 that QCOM has filed a motion to amend its lawsuit to include three additional "transmission releated patents" that MXIM is allegedly in violation of.

  Linda Piazza   9/22/200,  10:16:03 AM
We can expect some sort of measured distribution pattern to set up now on the OEX five-minute chart. The last one, just above 515, lasted through only 3 five-minute bars before the fourth took prices below the "b" distribution pattern that had been trying to set up, but the 30-minute 100- and 130-pma's would appear too important not to see them tested again. We'll have to see, but I'm leaving our stop at 517 for the time being, until we see that retest of those levels or else a steeper fall. Distribution patterns sometimes retrace 50% of the fall that preceded it, and that would actually take the OEX just slightly above 517, so I don't want to lower the stop too soon.

  Mark Phillips   9/22/200,  10:13:15 AM
AU $41.14 (+1.09) A little bit of currency concern is all the mining stocks needed for that breakout move this morning. The XAU is up 1.75%, while the HUI is more than 2.3%, with the price of the December gold futures contract (GC03Z) soaring above $385 for the first time since early February. Note that a close at this level would represent a new contract high. Our AU play is benefiting from the strong sector action, gapping above $41 resistance and setting another new all-time high. Traders that entered the play on the last rebound from support should now be able to raise stops near the break even point. Our official stop now goes to $38.50, just below the 20-dma ($38.72)

  Jeff Bailey   9/22/200,  10:12:59 AM
Taiwan Semiconductor (TSM) $11.21 -3.19% ... Reuters reported that TSM, which is the worlds largest contract manufacturer of chips, said it plans to increase production at double the current capacity at a China plant open next year.

  Jonathan Levinson   9/22/200,  10:12:18 AM
The US dollar index is back down to 94. TNX is up 12.7 bps. With foreigners holding an estimated 40% of our treasury debt, that's a very unpleasant combination.

  Jeff Bailey   9/22/200,  10:09:32 AM
Based on overseas trade current losses here in U.S. just about 1/2 of what they could be by session's end. WEEKLY pivots looking like intra-day resistance on any type of intra-day rebound.

Dollar getting hit, but Treasuries seeing selling and Gold finding bid is all about the dollar trade and this weekend's G7.

Policy seems strong dollar against yen and Asia, but weak against Euro.

  Linda Piazza   9/22/200,  10:03:27 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower stop to 517.

It's nice when a trade works from the beginning. We're now approaching the next likely bounce zone, but sentiment has been so bearish now that I wouldn't expect a bounce over the 100-pma at 515.83. Disclosure: I was watching the trade setup so intently for readers that I completely forgot to enter my own order. Therefore, unless we do get a bounce, which I hope we don't for the benefit of readers in the trade, I sadly will not be participating in the trade.

  Linda Piazza   9/22/200,  9:56:28 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We have entered a bearish OEX trade with an OEX trade below 514.50, with a stop at 518.50. Our target will be 508. I would not be surprised to see that bounce up toward 517.50-518 or some turbulence as the OEX trades near 512-513, but we couldn't take the chance that the bounce would not occur.

  Jeff Bailey   9/22/200,  9:53:54 AM
S&P 500 Index (SPX.X) 1,024.56 -1.13% .... Here's updated MONTHLY/WEEKLY pivot retracement chart. Link

  Linda Piazza   9/22/200,  9:45:56 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
The first and riskiest entry will be a bearish entry on an OEX test of the 30-minute 100-pma at 515.68 (occurring now) and then a rollover beneath the 130-pma at 514.60, triggered when the OEX trades below 514.50. Stop at 518.50. I'm hoping for a bounce and rollover from a higher level, but we may not get that. I'm a little worried about possible chop today as dip-buyers fight it out with sellers, but we have to take our chances.

  Linda Piazza   9/22/200,  9:38:24 AM
Swing Trade Signals
The OEX first five-minute range was definitely a larger-than-normal range, and so we can watch the retracement levels of that first five-minute range as benchmarks in earliest trading. The 38.2% retracement of that first five-minute range lies at about 517.24 and the 50% at about 517.90. Our favored entry would be a bearish entry on a test and rollover just below 518, but the OEX is about to hit its 30-minute 130-pma at 514.12. The best we may get is a bounce to and roll down from 515.86, the 100-pma, but if that happens, we'll need an entry on a move down through the 130-pma. That's going to be a risky entry.

If any of you have not yet had a chance to read Jeff's article, "Day trader's 5-minute bar technique" (different than the technique I'm suggesting here, with a different purpose, too), I suggest you read it ASAP. Most interesting. Here's the link: Link

  Jonathan Levinson   9/22/200,  9:37:13 AM
Dec gold is up 4.30 at 387.20, HUI +5.9 at 210.39, XAU +1.8 at 97.94.

  Linda Piazza   9/22/200,  9:30:50 AM
Swing Trade Signals
We'll most probably be looking for a bounce up toward the 50% retracement of the first five-minute range and then a bearish entry.

  Jim Brown   9/22/200,  9:30:09 AM
Website problems
We lost a critical server late yesterday which took OptionInvestor off the air. We recovered on a limited mode overnight and then experienced another failure this morning. There will be continuing problems until at least noon today. Please bear with us.

  Jeff Bailey   9/22/200,  9:18:09 AM
09:00 Update posted at this Link

  Linda Piazza   9/22/200,  9:07:57 AM
In response to a reader who commented that the bearish developments many have warned will happen will now come to pass: Yes, it may finally be time for the effect to be seen, although it's been deadly to step in front of the speeding bullish train until now. Someone knowledgeable about the implications and constantly playing the bearish side would likely have a far smaller trading account by now, and mine was shrinking for that reason, too, because I was listening only to the bearish arguments and not paying enough attention to what was developing on the charts. I finally decided a couple of weeks ago to stop trading on what I thought ought to happen and instead trade on what I was seeing, and my trades benefited immediately. I thought that's what I had been doing, but it wasn't. I was still seeing absolutely everything through bearish lenses, the same bearish lenses that had protected me from dip-buying during the worst of the bear market. So, if I saw a bullish development and a potential warning sign, I gave far greater weight to the warning sign and failed to trade the bullish development, or worse, jumped in with a bearish trade at what I took to be a sign of a rollover. Over the last couple of weeks, I've traded both bullish and bearish, willing to see bullish developments as well as the ominous warning signs that loomed. While those warnings may yet come to fruition--and I'll be ready to play the downside, too--I missed a great opportunity to benefit my account when I didn't trade enough on the bullish side. Many others did, too. I can name stock after stock that I saw develop bullish characteristics and now are far above the levels where they were when I saw those developments, and yet I failed to take advantage of those developments that I was noting. That's a shame, for me and for others. I was wrong to listen too long to those prognostications and not trust what I was seeing on the charts. What we're seeing this morning sure looks bad. Let's see what the markets do with it, though. I'm ready to trade either direction if the setup is right.

  Linda Piazza   9/22/200,  7:15:35 AM
Swing Trade Signals
I had already written most of this post Friday afternoon, and my original write-up mentioned bullish price chart characteristics balanced by bearish divergences or potential bearish divergences apparent on OEX charts from 60-minute to weekly intervals, bearish divergences I had begun mentioning last week when the OEX achieved new highs, but MACD levels did not. In that original write-up, I had also mentioned the VIX level, historic trading patterns, and sentiment measures that had reached bullish extremes, all bearish signs. Based on those competing chart characteristics and some other signs, I had built a scenario in which the OEX spent the early part of the week testing 518 support and 523.50 resistance, seeing which would fall first. The Nikkei kick-started that process, however. The OEX is likely to open below the 518 support, tested only one day since the OEX closed above that long-term resistance Thursday.

If the futures continue their sharp decline and markets open accordingly, we may see a test of the OEX 30-minute 100-pma (515.87) or 130-pma (514.79) at the open. A market that gaps deeply at the open may make trading the OEX difficult today, but we'll be watching how the OEX behaves in relationship to those averages if that happens. Traditionally, in accordance with a model Jim has been tested on the S&P e-mini's for a while, a short would be triggered on a fall through the 130-pma, but on the OEX, there's close support just beneath that level, in the 512.80-513 zone. Traditionally, a long would be triggered if the OEX tested the 130-pma but then rose back through the 100-pma, but bearish sentiment this morning might make that a counter-trend trade. Our ideal entry would be on an open nearer 518-520 or an early bounce to and rollover from that level, but I don't think we're going to get that entry. Let's see when we're nearer the open.

  Linda Piazza   9/22/200,  6:41:54 AM
Good morning. Last week, market pundits warned that the Nikkei always declined after a general election, and the Nikkei wasted no time after this weekend's election. The Nikkei opened down 80 points. Before the first hour elapsed, the index had declined more than 240 points. Intraday, it doubled that decline, but pulled up a bit at the close, closing down 463.32 points or 4.24%, at 10,475.10. The decline may have had more to do with another development, however. After this weekend's G7 meeting in which Japan indicated that it may allow the yen to appreciate, the yen attained its highest value against the dollar since December 2000. That development slammed the exporters, and Japan's economy depends on exports. August's trade surplus rose a greater-than-expected 21% as exports rose 2.4% and imports fell 1.3%. The demand for those exports may decrease, however, if the yen continues its appreciation against the dollar. When this number was last reported, too, economists had cheered the then-reported increase in the import number, opining that it signaled a coming increase in manufacturing, with a need to import goods for that purpose.

Most other Asian bourses dropped, too. The Taiwan Weighted fell 1.43%, and South Korea's Kospi trumped the Nikkei's percentage drop, falling 4.46%. Singapore's Straits Times fell only 0.20%. Hong Kong's Hang Seng fell 0.87% and China's Shanghai Composite dropped 0.71%.

The Nikkei's steep decline and the effect of the weekend's G-7 meeting on currencies rocked the European bourses, too, and many trade sharply down. As of this writing, the FTSE 100 has fallen 51.30 points or 1.21%, to 4205.70. The CAC has fallen 82.57 points or 2.45%, to 3291.07. The DAX has fallen 90.43 points or 2.53%, to 3488.27.

  Jeff Bailey   9/21/200,  11:47:21 PM
Pivot Matrix for next week posted at this Link

  OI Technical Staff   9/21/200,  11:47:13 PM
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