Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
  Jeff Bailey   9/23/200,  10:04:26 PM
Pivot Matrix for tomorrow at this Link

 
 
  Jeff Bailey   9/23/200,  8:27:24 PM
Stock to watch tomorrow and next couple of weeks is Millennium Pharmaceuticals (MLNM) $16.50 +2.67%. NASDAQ-100 component where today's trade at $16.50 has stock's PnF chart giving the "bearish signal reversed" pattern. Link

 
 
  Jeff Bailey   9/23/200,  6:41:42 PM
Day Traders may want to get ready (with your 5-minute retracment technique) tomorrow morning on JBLU. The stock traded over 9.5 million shares today, and may be a good day trade (downside bias) after being added to S&P MidCap today, where index fund managers mirroring the S&P MidCap 400 had to buy the stock.

 
 
  Jeff Bailey   9/23/200,  5:21:08 PM
JetBlue Airways (JBLU) $60.44 +4.27% Link ... Just seeing this tonight, but JBLU was added to the S&P MidCap 400 Index by today's close and replaces Hispanic Broadcasting (NYSE:HSP) Link , which was fully acquired yesterday by Univision (NYSE:UVN) $35.20 +0.77% Link

 
 
  Jeff Bailey   9/23/200,  4:53:19 PM
Cisco Systems (CSCO) $21.15 Link ... adds 40 cents a share to $21.55 in after-hours trade when company says it has authorized up to an additional $7 billion in stock repurchases.

 
 
  Jane Fox   9/23/200,  4:14:10 PM
Hope you feel better tomorrow Linda.

 
 
  Linda Piazza   9/23/200,  3:58:57 PM
I'm holding overnight on my OEX long position, but that's not necessarily something I'd recommend for everyone. The 30-minute MACD now moves up through zero and CCI is green. RSI generally slants up. The OEX is above the 30-minute 100-pma. The daily chart shows a candle springing up from the "best-fit" trendline rising from early August through the present (cutting off a few lower shadows). Daily RSI tries to hook up. The outcome is still up in the air, but that's my personal decision. Know your own risk parameters before you make a decision, though.

 
 
  Jeff Bailey   9/23/200,  3:57:21 PM
Laughing... Thanks Linda. Oooooeee! a 28-cent gain. Thought it worth a shot with the dollar a little firm today. Might have moved some shorts to covering at BLUE #2.

If I could consistently knock out 28 cents on a SOES 1,000 share trade each day, I could almost keep "Drake" the dog in puppy toys. He's chewing them up faster than I can replace them.

 
 
  Linda Piazza   9/23/200,  3:55:45 PM
Congratulations, Jeff, on your QQQ daytrade based on the first-five-minute fitted retracement technique.

 
 
  Jeff Bailey   9/23/200,  3:51:59 PM
Geron Corp. (GERN) $14.99 +56% ... CNBC getting reading to talk about GERN moving up from small-cap to mid-cap biotech based on today's session. To think stock was $11.18 at 10:15:15 mentioning is incredible! Some of us remember GERN when it was $4.00! Amazing!

 
 
  Jeff Bailey   9/23/200,  3:38:02 PM
03:15 update posted at this Link

 
 
  Linda Piazza   9/23/200,  3:35:02 PM
The OEX now butts up against the descending trendline formed from the descending highs beginning Friday morning and carrying through until now. A push through this descending trendline will give bulls more conviction, perhaps.

 
 
  Linda Piazza   9/23/200,  3:30:42 PM
Reader Question: How can we play the scenario you just portrayed with the Nikkei rising tonight? Any suggestions. I don't know any closed end funds for the Nikkei.

Response: Great question, but no, I don't know of any, either, as I report on these markets but don't trade them. That was speculation anyway, a kind of "what if" scenario-building exercise. A look at the Nikkei's P&F chart ($NIKK on Stockcharts.com) shows that it created a double-bottom breakdown with Monday's decline. It's just above light P&F support near 10,400 and stronger P&F support at 10,350. The candlestick chart show that 10,400 support, too, with the Nikkei having gapped up above that level early in September, so that there's some gap-support perhaps coming into play here. All oscillators are bearish, though. If you're interested in playing a possible rebound, however, you might take a look at some of the Japanese exporters, to see if any of those are near crucial support, such as Canon, Sony, Honda, or Toyota. I generally stay away from them in my own trades, however, as it's just too difficult to keep track of political and other developments that might impact the trade. For example, even though I research these markets all the time, I haven't found a reliable source that allows me to always keep up with economic numbers as they're released. Sometimes I'll know one is due and not be able to find the result, or else I won't have seen notice of one and its result moves the markets. This is true even though I research late into the night and sometimes stay up to watch CNBC Asia.

 
 
  Linda Piazza   9/23/200,  3:16:59 PM
Tonight the Nikkei will be open for the first time since Monday's 4.24% loss. Will some consider the sell-off excessive and will there be a rebound tonight, recouping at least part of the losses? If so, that might set up the European and U.S. markets for a positive open tomorrow morning, but this is just pure speculation.

 
 
  Jeff Bailey   9/23/200,  3:07:15 PM
QQQ $34.42 +1.5% .... just a note too, the current QQQ trade is filling just a little more than 1/2 yesterday's gap lower. Good tie perhaps to $34.50, which is upper-end of yesterday's gap down. Might be some sellers at/near QQQ $34.50 that got gapped lower on yesterday's weaker dollar and weekend G7 meeting.

Speaking of dollar, I'm 30-minute delayed, but U.S. Dollar Index (dx00y) 94.00 +0.15% near session highs, and has been green since QQQ day trader bullish profile.

 
 
  Linda Piazza   9/23/200,  3:06:56 PM
A new day's high for the OEX and a solid move above the 30-minute 100-pma, with a 30-minute CCI move into the green: I'm out of my personal bearish position in the OEX and switching sides, although nervous about doing so. I'll be especially watchful near the 517.13 level that's the 50% retracement of yesterday's longer-than-normal first 30-minute candle.

 
 
  Jeff Bailey   9/23/200,  2:58:30 PM
QQQ $34.37 +1.32% .... gets a test of BLUE #4 here. Day Trade Bull from $34.21 can stick an offer out at $34.49 right now, then get ready to perhaps reload for a long back at $34.27. Should be raising stop to break-even here and BLUE #2.

 
 
  Jeff Bailey   9/23/200,  2:52:41 PM
QQQ $34.34 +1.2% ... session high for the Q's here. Now its time for BEARS to show some conviction? Doh! Bite your tongue. Never challenge the other side of the trade!!!!

 
 
  Linda Piazza   9/23/200,  2:52:09 PM
With the OEX poised to break through its 30-minute 100-pma at 514.93 or else turn down from its near-constant testing of that average this afternoon, the 30-minute MACD and CCI are also poised to break through above signal or turn down again just below signal. It could still go either way or no way, although the OEX now tries to break to the upside.

 
 
  Jeff Bailey   9/23/200,  2:51:26 PM
Jim challenges bulls at 14:13:17 ..... QQQ $34.29 looking for offers. (grin)

 
 
  Linda Piazza   9/23/200,  2:36:58 PM
This morning, when I heard about Citigroup's (C) plan to provide $200 billion to be applied to funding mortgage loans for underserved families, I wondered if the competition would hurt companies such as Centex (CTX) that also provide sub-prime mortgage loans. CTX has been trading in a bearish right triangle (flat bottom, descending top) since June. I just took a look at CTX, though, and so far, it's up modestly on the day, although it's printing an inside-day candle at this point.

 
 
  Jeff Bailey   9/23/200,  2:27:10 PM
Will a penny make the difference? Recent QQQ advance to BLUE #3 did see a 5-minute close above $34.29 at $34.30. Will this penny 5-minute close be the MARKET's hint that a notable intra-day higher high is in store? Too soon to tell but pullback test of BLUE #2 at $34.21 hasn't seen a 5-minute close back below.

This is about as "exciting" as a rather lackluster session can get.

 
 
  Linda Piazza   9/23/200,  2:23:50 PM
The chop continues, with the OEX still getting turned back by those averages, but generally climbing throughout most of the day. I'm considering setting my personal exit for the OEX bearish play at a move over today's high. With the 30-minute 100-pma currently at 514.96, today's 515.51 high doesn't give me a full point's leeway above that average, but I'm speculating that a move above that day's high might drive some short-covering into the close. Since I have a rather neutral view of the markets until I see how deeply the declines will go, I don't mind switching sides, but I sure wish the OEX didn't have to torture us a bit first. I'm not sure, however, that I'll actually switch sides unless the OEX violates that moving average fairly soon, so that there's still time for a climb. I'm not normally a day trader, and certainly not normally a scalper.

 
 
  Jane Fox   9/23/200,  2:13:01 PM
James - JBLU just broke the $60.00 mark.

 
 
  Jeff Bailey   9/23/200,  2:09:53 PM
QQQ 5-minute bar chart at this Link (see 14:02:53)

 
 
  Linda Piazza   9/23/200,  2:04:57 PM
So far, the OEX keeps turning back at its tests of its 30-minute 100-pma, but so far, this is also the "dreaded third choice" I mentioned this morning in my first Swing Trade post, with the OEX just oscillating around the averages, not really going anywhere or doing anything too definitive.

 
 
  Jeff Bailey   9/23/200,  2:01:53 PM
Day Trade Long in the QQQ here at $34.21, stop $34.03, target $34.49.

 
 
  James Brown   9/23/200,  1:59:54 PM
Sector and market indices are widely positive although most of the gains are mild.

The Leading sector winners are mostly tech with:
DDK disk drives: +1.57%
INX Internets: +1.71%
GSO software: +1.03%

Leading sector losers are:
DFI defense: -2.26%
OSX oil service: -0.21%

 
 
  Linda Piazza   9/23/200,  1:59:53 PM
The OEX is going to give the bearish divergence (equal stochastics highs and lower price high) another go, it appears, with five-minute stochastics turning down as price did, too. The OEX still needs to make it below 512.19 before climbing above the day's high for that potential bearish divergence to be realized, however.

 
 
  Jeff Bailey   9/23/200,  1:58:19 PM
Avid Tech (AVID) $55.56 +1.36% .... just sitting here after First Albany says that AVID could trade up to high $50's or low $60's next few weeks prior to earnings release on Oct. 16, but thinks upward revisions to EPS estimates are likely in second-half of 2003 and 2004, as there should be strong growth in media capital spending on AVID's digital broadcast product due in part to strength in the TV ad markets, which allows TV broadcast stations to loosen their capex budgets and update their TV newsrooms for HDTV transmission.

 
 
  Linda Piazza   9/23/200,  1:38:44 PM
On the daily OEX and SPX charts, the indices are finding support today along a best-fit rising trendline begun from the 8/06 low and carried through until the present time. It cuts off a part of the 8/26 lower shadow.

 
 
  Jeff Bailey   9/23/200,  1:38:39 PM
01:00 Update posted at this Link

 
 
  Linda Piazza   9/23/200,  1:31:18 PM
There's no bearish divergence as yet (see my 12:56 and 13:08 posts). The OEX hit a new relative five-minute high before it achieved a new relative five-minute low. Five-minute stochastics turned back up, too. We're just in the middle of chop, with the outcome of the tests of the 30-minute averages not yet known. We had a false break below those averages this morning, but now they're being tested yet again.

 
 
  Linda Piazza   9/23/200,  1:08:35 PM
The OEX and the five-minute stochastics did both turn down from the levels mentioned in my 12:56 post, creating tentative bearish divergence. To follow through, however, the OEX needs to fall beneath the previous five-minute low before it hits a new relative five-minute high. The previous five-minute low was at 512.19.

 
 
  Linda Piazza   9/23/200,  12:56:40 PM
The OEX heads back up to test the 30-minute 130-pma and the 30-minute 100-pma, at 514.37 and 515 respectively. The five-minute 21(3)3 stochastics have cycled all the way back to levels indicating overbought conditions, but have not yet turned down. If they do so from this level, and price with it, then bearish divergence will have been created, but that's a far from foregone action. The 30-minute indicators are looking more bullish again. The bearish trade isn't doomed, but those who entered on a break through the 30-minute 130-pma or through 513.75 might be set appropriate exit levels if the climb should continue, according to individual trading styles.

 
 
  James Brown   9/23/200,  12:53:24 PM
To follow up on the retirement idea, here's an example of what you might need to save:

Let's use the example of a 45 year-old professional making $70,000 a year.

You plan to retire at 65 and have a life expectancy of 85.

Many retirement calculators suggest you factor your post-retirement expenses at 70% of your peak earnings wage. So in this case you're looking to live off $49,000 a year for 20 years of retirement.

In our example we use $0.00 for pension money and $0.00 income from social security (hey, we're talking 20 years from now).

According to these figures you'll need $1.87 million by the time you're 65 to retire.

My question to Ray is how many covered calls and naked puts do I have to sell to get there?

 
 
  James Brown   9/23/200,  12:45:23 PM
A recent survey by the AARP now shows that 70% of Americans plan to work past the traditional retirement age of 65. Worst still, the survey suggests that almost 50% expect to work into their 70s and even their 80s.

Unfortunately, the reasons given for working longer had to do with financial needs, not professional or personal goals and enjoyment.

The Reuters article discussing the survey also states that by 2006 almost 46 percent of the U.S. population will be older than 44. What's so special about the 44 number, they don't say.

Whatever the case, it sounds like a good reason to polish up those investing skills.

 
 
  James Brown   9/23/200,  12:39:55 PM
KKD still dropping. - Shares of Krispy Kreme, a current OI put play, are still slipping lower despite a brief rally above the $40 level this morning.

 
 
  James Brown   9/23/200,  12:35:59 PM
Gold futures down but AU up... Current OI call play AU is bouncing higher from the $40 level despite a drop in the December gold futures of $1.60 to $386.80/ounce.

 
 
  Linda Piazza   9/23/200,  12:31:31 PM
Actually, Kofi Annan is a native of Ghana, and medieval Ghana (4th-11 centuries) was one of the world's primary gold suppliers and a center of trade, learning, and culture, according to the Columbia Encyclopedia.

 
 
  James Brown   9/23/200,  12:31:22 PM
Amazon.com (AMZN) breaking out ... current OI call play AMZN is breaking out to new highs above the $48 level as its MACD curls back towards a new bullish signal.

A reader recently emailed and asked what was driving this stock higher. Right now the rumor is that AMZN is having a really solid quarter, which should only improve as we move into the holiday shopping season. As the reader pointed out, shorts are getting killed as AMZN trades to levels not seen since September 2000.

 
 
  James Brown   9/23/200,  12:09:54 PM
Verizon Communications (VZ) cut its 2003 earnings forecast this morning citing higher labor costs and weaker demand. VZ said its full year earnings numbers hould be $2.56-2.60, excluding items, compared to estimates of 2.70 to 2.80 (Reuters).

Shares for the largest telephone company in the U.S. are down 4.78%, gapping below support at the $34 level on strong volume of 11.2 million shares.

 
 
  Linda Piazza   9/23/200,  12:08:48 PM
We got the OEX 512.50 confirmation of the bear flag violation (see my 11:45 post), but the OEX still zoomed up. This bhavior, seen on the five-minute chart, remains true to the patterns we've seen lately--those violations of what should be bearish patterns haven't resulted in the expected action. That urges extreme caution today if in bearish positions. We now have bullish volume patterns and add to that this confirmation that bearish breakdowns aren't working correctly. However, it may just be that the five-minute oscillators have to go through another up cycle or two before upside momentum is expended and the 30-minute oscillators complete a downturn. Watch those 30-minute 100- and 130-pma's.

 
 
  James Brown   9/23/200,  12:06:04 PM
FYI: The California Recall election is back on for October.

 
 
  Jeff Bailey   9/23/200,  12:00:21 PM
Advanced Micro Devices (AMD) $12.25 -1.36% ... stock falls from $12.50 level after company said "We're seeing a seasonal uptick, particularly on the consumer electronics side," ahead of the company's launching its new 64-bit processor for personal computers. Stock lower after company noted that corporations "are still reassessing" their information technology spending. AMD left its Q3 forecasts unchanged and declined to say when AMD is targeting profitability.

Semiconductor Index (SOX.X) 446.65 -0.55% eased back into negative territory on AMD's update.

 
 
  Linda Piazza   9/23/200,  11:45:50 AM
We have a bear flag, a downside break of the bear flag, a period of trading sideways instead of the expected drop. What have we learned to predict from this action? A move up. Unless the OEX drops through 512.50 soon, confirming the break of the five-minute potential bear flag, that's what we may get. (Note: As I was typing this, the OEX started moving down more strongly, so perhaps we'll get that confirmation.)

 
 
  Jeff Bailey   9/23/200,  11:35:54 AM
11:00 Update at this Link

 
 
  Linda Piazza   9/23/200,  11:33:58 AM
During President Bush's speech, the OEX rose in what appeared to be a bear flag. We will probably need to see a drop below 512.50 to confirm that the flag has broken to the downside. If that confirmation comes now, the flag did not retrace 50% of the flagpole drop that preceded its formation, but that confirmation is not yet apparent. We're seeing a mixture of bullish and bearish signs today.

 
 
  James Brown   9/23/200,  11:27:06 AM
Lowe's Raising Guidance... LOW raised its Q3 earnings forecast from 50-51 cents to 52-53 cents on increased demand for home-improvement supplies and new store openings. Shares are not reacting as consensus estimates were already at 52 cents a share.

LOW said that same-store sales were doing better than the previously expected +5%-to-6% gains for September. The company also said that they plan to 140 new stores in 2004.

 
 
  Linda Piazza   9/23/200,  11:16:47 AM
As of a few minutes ago, advancers still outnumbered decliners (17:13 on the NYSE and 18:11 on the Nasdaq) and up volume was still bigger than down volume. On the Nasdaq, up volume was triple down volume, while on the NYSE, up volume was only modestly bigger than down volume. Total volume was 356 million shares on the NYSE and 616 million on the Nasdaq. The NYSE had zero new lows and the Nasdaq, only two. Be cautious because these are not bearish volume patterns. At least not yet.

 
 
  James Brown   9/23/200,  11:13:00 AM
Big Broker Earnings... Shares of Goldman Sachs (GS) are down 3.15%, falling below the $90 level after reporting earnings this morning that beat estimates by 10 cents with $1.32 a share.

Shares of Lehman Brothers (LEH) have slipped 31 cents after reporting its earnings this morning. Estimates were for $1.35 and LEH beat by 46 cents with $1.81 a share. Revenues rocketed higher with a 74% jump to $2.35 billion.

Shares of Morgan Stanley (MWD) are down just 1 percent towards the $50 level after crushing the earnings estimates this morning. Wall Street was looking for $0.69 cents compared to last year's 55 cents. MWD turned in $1.15 per share. MWD said that equity underwriting, retail securities trading and bonds have all picked up considerably.

 
 
  Linda Piazza   9/23/200,  11:03:48 AM
Swing Trade Signals
The OEX now has a bearish engulfing candle on the 30-minute chart. Some of you will have entered a bearish trade, perhaps on a break below 513.75 or perhaps earlier, when the OEX traded back through its 30-minute 130-pma near 514.50. So far, everything is looking good. Consider setting a stop about a point above the 30-minute 100-pma. I wish I could have made this an official trade, but I'm just not sure how long this fever will allow me to stay at the computer today. Be especially watchful as the OEX approaches yesterday's low as that's also near the site of the 21-dma (as opposed to the 30-minute 21-pma, which is higher). If Bush doesn't say anything too alarming, there may be a tendency to try to bounce the markets.

 
 
  Jeff Bailey   9/23/200,  11:02:11 AM
SpectraLink (SLNK) $25.01 +11.6% Link .... new 52-weeker today. Haven't discussed since $16.00, but recent sell signal at $17.50 and reversal back higher to trigger triple-top buy signal at $20.00 has bullish vertical count building higher still to $24.

Really been picking up on a pattern of stocks that have given one sell signal in the upward trend being the buying opportunity on weakness and bulls getting some confirmation on the reversal back up.

Avaya (AV) $10.73 (unch) Link was another stock mentioned in same breath as SLNK, but SLNK has new product being well received.

 
 
  James Brown   9/23/200,  10:58:56 AM
The President is speaking now to the UN.

 
 
  Jeff Bailey   9/23/200,  10:56:02 AM
QQQ $34.22 +0.88% .... comes back to BLUE #1 of $34.21 here, but now we see it holding a 5-minute close above $34.21. Today's DAILY R2 in the daily pivot is $34.39 and that's pretty close to BLUE #3 in the 5-minute bar technique. At current level, I'm not sure it worth a QQQ long, but pullback to $34.10 better.

 
 
  James Brown   9/23/200,  10:55:49 AM
If you are listening to CNBC then you just heard the Big Kahuna (Joe Kernen) talk about the Smith Barney downgrade of the defense sector. The DFI defense index has been on an amazing run from its low near 410 in March to over 600 this month. Today's downgrade could do a lot to turn that bullish trend. Smith Barney downgraded several defense stocks after a recent poll showed a sharp decrease in public support for increased defense spending. Current support for increased defense spending is said to be at 31%, down from 50% last year and 80% the previous year.

Downgraded from "buy" to "hold" is ATK, EDO, LLL, LMT, NOC, and RTN.

Downgraded from "hold" to "sell" are ESLT and GD.

The big cap stocks seem to be suffering the brunt of the selling. The breakdown in shares of GD below the bottom of its channel and below support at its 50-dma certainly looks bearish!

 
 
  Linda Piazza   9/23/200,  10:50:38 AM
The OEX trades down near the bottom of the expanding orthodox broadening formation on its five-minute chart, but because the formation broadens, by definition, it's always difficult to tell when it's been breached to the downside. It hasn't been yet. However, the rising trendline on the five-minute chart, building since about 3:00 ET yesterday, now has risen to about 513.75. A fall through that level would also have breached the 30-minute 130-pma to the downside, after the OEX rose to test the 100-pma, our best-case scenario from earlier this morning. The 30-minute indicators now show the slightest hint of flattening or even turning down, in the case of the RSI, but on the MACD, it's necessary to squint to see that possible slight flattening. There's nothing conclusive there. It will take either a strong downward push or else more time to complete that flattening process, if indeed the OEX doesn't turn up instead. I'm wondering, too, if we might get some emotion-driven false signals with Bush speaking before the UN today.

 
 
  Jeff Bailey   9/23/200,  10:50:00 AM
eBay (EBAY) $54.62 +0.83% .... was edged out in Friday's poll for a day trade long, but seeing 5-minute close above BLUE #1 here, with BLUE #2 above at $54.82.

QQQ is $34.25, but if QQQ was trading $34.31, I think a day trade bull all over eBay.

Sorry I couldn't get to everyones favorite day trade stocks this weekend, but hopefully some day traders are applying the technique or finding it helpful.

 
 
  James Brown   9/23/200,  10:46:21 AM
Manny, Moe, & Jack The three boys at Pep Boys (PBY) offered an earnings warning this morning and shares gapped down below support of $16 and its simple 50-dma. The company actually reported same store sales were up 4-to-6% but told Wall Street that analysts were too optimistic and were not taking into account the expenses with the current restructuring of the company. PBY is lowering its guidance for Q3 and Q4. Fortunately for shareholders the stock has rebounded very strongly off the lows this morning and is only down 24 cents.

 
 
  James Brown   9/23/200,  10:38:21 AM
McDonalds Leading Higher Shares of MCD, are the leading gainers among the Dow components right now, up 1.8%. The move follows an upgrade by SunTrust from "equal weight" to "over weight". MCD has poked back above resistance at $24.

 
 
  Jeff Bailey   9/23/200,  10:36:53 AM
S&P Banks (BIX.X) 308.04 and QQQ $34.29 +1.06% here. See how QQQ having a little trouble holding a 5-minute close above $34.29. Hints there is a computer feeding some QQQ out here. Look for 5-minute support back at $34.21.

 
 
  Jeff Bailey   9/23/200,  10:31:34 AM
Cendant (CD) $19.03 +1.76% Link .... stock continues to perform well from $18.00 area. Most likely gets a bid from HOT action. (see 09:55)

Was also thinking weaker dollar could help with foreign vacation traveler visits to U.S. With weaker dollar, "U.S. vacation is on sale!"

Not certain if there is a true industry vacation trend, but I remember that Grandma and Grandpa always waited until the fall or spring to do their traveling to avoid the summer kid crowd.

 
 
  Linda Piazza   9/23/200,  10:29:49 AM
Chop, chop. The OEX five-minute chart now sports an orthodox broadening formation--a megaphone shape--at the top of its five-minute climb that began yesterday afternoon about 3:00 ET. These are supposed to be signs of emotion-driven trading, and supposedly they typically break to the downside. It hasn't worked that way of late, however. The OEX continues to test that 30-minute 100-pma.

 
 
  Jeff Bailey   9/23/200,  10:27:31 AM
S&P Banks Index (BIX.X) 307.55 +0.26% .... just sitting here at DAILY Pivot 307.52 and correlative WEEKLY Pivot of 307.52. A bid much above 308 would be intra-day sign of strength and could get major indices above morning highs and get a move going.

QQQ trader might tie this in with $34.29 too.

U.S. Dollar Index (dx00y) 93.96 +0.13% shows dollar stability, so I would think more bullish tone for day at this point.

 
 
  Linda Piazza   9/23/200,  10:24:03 AM
The earliest volume patterns have shown more advancers than decliners (16:11 on the NYSE and 17:10 on the Nasdaq) and stronger up than down volume. As of a few minutes ago, total volume was 164 million on the NYSE and 323 million on the Nasdaq.

 
 
  Jeff Bailey   9/23/200,  10:23:17 AM
Asian Internets .... I have been read your Index Wrap regularly. Why Sina and Sohu gained big percentage today, it seem to me every time Over all market pulls back, these internet stock went up to new high, and how much more from here they can move up. When they take break, US internet stock starts move up, I have been watching for the past couple months. Can you make some comments on that. Thank you.

The year of 2003 looks like the year of 2000, except this year goes up all the way. The market started going down from March 2000 until the end of year.

I haven't been keeping a close eye on SINA Link and SOHU Link but I have been thinking about a long in IIJI Link on break above trend.

We might want to check short interest on these names, but trade you're describing is that of short-covering when overall market pullback is seen. Shorts will use weakness to cover into when there's some supply to be found.

I don't see new (Sept. 15) short interest updates on these stocks at this time from NASDAQ, but should be coming soon. Here's SINA's short interest Link at the NASDAQ site.

 
 
  Linda Piazza   9/23/200,  10:15:52 AM
The OEX five-minute chart shows a rising trendline from about 3:00 ET yesterday afternoon, with that trendline now crossing just under 513.40. Traders who want to enter a bearish trade might consider using a breach of the 130-pma at 514.44 and/or a breach of that rising five-minute trendline as a sign that a rollover had begun, but be aware that 30-minute MACD still turns up strongly.

On the other side of the trade, the 30-minute 100-pma has now declined to 515.16 and the 30-minute 21-pma to 515.03, with the OEX currently testing those averages.

 
 
  Jeff Bailey   9/23/200,  10:15:15 AM
Geron (GERN) $11.18 +16.8% Link ... biotech name subscribers should be familiar with from earlier this spring. Presenting at UBS conference today.

 
 
  Jeff Bailey   9/23/200,  10:02:20 AM
QQQ $34.18 +0.79% ... just noting that 5-minute bar technique would have its 50% retracement at $34.29. Will make note of that with respect to WEEKLY Pivot of $34.29. Might not make sense for a bull to jump at a QQQ here, but look for move above $34.29, or get a pullback entry back near $34.00 for day trader.

 
 
  Linda Piazza   9/23/200,  9:58:56 AM
I didn't think that first quick, pat OEX rollover beneath the 30-minute 130-pma was the real thing. The OEX has now climbed just above the 30-minute 130-pma and rises to test the linked 30-minute 100-pma and 21-pma, at 515.17 and 515.27, respectively. A push through these averages should be a signal to go long, while a rollover now, back through the 130-pma at 514.44 should be a signal for a bearish play. The 30-minute oscillators are moving up, though, and if there's now going to be a rollover, it might take some time to accomplish as the OEX tests this level for a while and those bullish indicators flatten below signal. Will this instead be one of those dreaded oscillate-around-the-MA's days, completely with lots of false signals each direction? Be careful.

 
 
  Jeff Bailey   9/23/200,  9:55:23 AM
Starwood Hotels (HOT) $35.00 +2.7% Link ... higher on upbeat comments regarding higher occupancy rates.

 
 
  Linda Piazza   9/23/200,  9:47:51 AM
The OEX has obviously breached the 50% retracement of the first five-minute range, and has had a close beneath that level, indicating early weakness. The OEX looks to be heading back up to test that 513.87 50% retracement level. Supposedly, it should now have trouble sustaining that 50% level, but if it can sustain levels higher than that 50% retracement of the first five-minute range, then the presumption is that we'll see a test of the day's high (and the 30-minute 130-pma).

 
 
  Linda Piazza   9/23/200,  9:39:46 AM
The OEX touched its 30-minute 130-pma before turning down, but is this a rollover? That felt too easy, too quick, too pat, but maybe it's just my fever making me think so. I'm not convinced yet that we won't see another test of those averages, however.

 
 
  Linda Piazza   9/23/200,  9:35:41 AM
The 50% retracement of the OEX first five-minute range lies at 513.87. We can use this retracement level as a benchmark in earliest trading with bullish traders wanting the OEX to sustain that level on early pullbacks and bears wanting to drive the OEX below that level. This is different from Jeff's first-five-minute range technique for daytrading, and I certainly suggest reading his article if you haven't done so yet. I linked it yesterday, but here it is again: Link

 
 
  Linda Piazza   9/23/200,  9:31:13 AM
The OEX heads up to test those grouped averages mentioned in my 8:55 post.

 
 
  Jeff Bailey   9/23/200,  9:15:42 AM
09:00 Update posted at this Link

 
 
  Linda Piazza   9/23/200,  8:55:46 AM
Swing Trade Signals
Yesterday, I listened to a recording of Jim Awad, with Awad noting that by the middle of the week, we should know whether this is the decline that's going to stick or whether this is just another of the brief dips we've had lately before indices start their climbs again.

A study of the Dow's chart shows a fairly classic example of an evening-star pattern, with Nison giving a bit more leniency in the formation of an evening-star pattern to the indices than to individual stocks. He doesn't require that gap of the middle small-bodied or doji candle above the surrounding two candles on the indices. The OEX's evening-star pattern is not as classic, but nevertheless is fairly clear in its implications. So is the daily RSI's break through its rising trendline of higher lows. What isn't so clear, however, is the failure of the daily 21(3)3 stochastics to be tugged out of territory indicating oversold conditions. Also blurring the bearish picture is OEX's bounce from just above the 21-dma and support from the week before last's congestion zone. We also must keep in mind the tendency of late for the reversal signal itself to be the only reversal seen before the indices turn up again.

Therefore, we're going to watch for a test of the 30-minute 130-pma at 514.44 and the 100-pma at 515.18, with that last average just above the plummeting 30-minute 21-dma at 515.53. The 30-minute MACD turns up, although from below signal. As I type this, S&P futures have also turned up from their earlier negative numbers in the wee hours of the morning. My expectation is that we'll see a test of those 30-minute averages. Then there might be three reactions: a rollover, a punch through those levels, or the dreaded oscillation back and forth when we think we're seeing a signal develop, but it's a false signal.

I think we have to take what we're given, however. A test and rollover from those MA's, particularly if we get a test of the 30-minute 100-pma and then a move back down through the 130-pma, would be a signal to enter a bearish trade. A punch through both the 30-minute 100-pma and the 30-minute 21-pma would be a signal to go long. If we see a rollover, you might enter a bearish position. A first target would be 508, but pay special attention near the 21-dma at 510.26 and at yesterday's low, near 511. If we see the OEX climb above those averages instead, you might consider a long position, but the first upside target would have to be 517.50, just under the 518 resistance, with a move through 518.50 then portending a possible test of recent highs. That first target isn't going to be far above the entry, so you'd have to be fairly well disciplined, either setting a profit target and getting out immediately if that number were hit, or else being willing to risk a loss if the OEX turns down in return for staying in for a possible punch through that resistance, too.

I'm sick this morning, and when I run fever, my brain works at a feverish pace, too, making it difficult to make reasoned decisions. That means that although I'll be watching and making posts as often as possible, it's unlikely that I'll issue an official Swing Trade signal.

 
 
  Linda Piazza   9/23/200,  8:31:10 AM
Good morning. The Nikkei was closed for a holiday Tuesday, but some exporters in other Asian markets continued to be pressured by the declining dollar. Taiwan Semi (TSM), United Microelectronics (UMC), and Chartered Semiconductor (CHRT) bucked that trend. South Korea's Kospi traded in the red most of the day, but rose at the end to gain 0.55%. The Taiwan Weighted gained 0.15%. Singapore's Straits Times gained 0.11%, and Hong Kong's Hang Seng rose 0.65%. China's Shanghai Composite gained 0.65%.

Although the Nikkei was closed Tuesday, one potentially market-moving development occurred. Newly re-elected Japanese Prime Minister Junichiro Koizumi announced his cabinet selections. He will retain Heizo Takenaka on his cabinet, with Takenaka credited with the firm approach to bank reform that has steadied the banking sector in Japan.

In Europe, August consumer spending in France dropped 2.7% from July's number, with the summer heat wave and unemployment being cited as reasons behind the steep decline. French engineering company Alstom had declined 7.5% in early trading, perhaps on fears that the government-led bailout plan will prove too little, too late. Last week, EU regulators had blocked the government-led bailout plan for the troubled firm, but yesterday approved a plan to help the company avoid bankruptcy. Alstom's chief executive commented, however, that many customers had stopped placing orders on fears the company would go out of business.

As of this writing (6:56 am ET), most European bourses trade down, but many are off their lows. The FTSE 100 trades down 3.40 points or 0.08%, to 4224.80. The CAC 40 trades down 12.91 points or 0.39%, to 3270.04. The DAX has fallen 20.81 points or 0.60%, to 3435.46. (Note: I took a quick look at these indices before entering this post once the MM was up and running, and noted that the FTSE 100 is now slightly positive, up 3.90 points, while the CAC 40 and DAX have trimmed their losses, now down 4.35 and 10.18 points, respectively.)

 
 

Market Monitor Archives