Option Investor
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  Linda Piazza   9/29/200,  3:59:08 PM
Swing Trade Summary: OEX/SPX/DJX/DIA/SPY
9/29: Entered a bullish OEX trade at OEX 504.31.
9/29: Exited at 504.11.
Result for the day: 0.20 OEX points against us.
Results for the week: 0.20 OEX points against us.

  Jeff Bailey   9/29/200,  3:59:01 PM
ABMD $8.75 +4.8% Link would not hold excessively large position overnight (as it would relate to a trader's account), but not opposed to holding overnight.

  Jane Fox   9/29/200,  3:58:49 PM
I wrote an article on how to swing trade JBLU and a few others. If you had used the strategy you would have been long JBLU at $59.78. Link

  Linda Piazza   9/29/200,  3:57:28 PM
Is the OEX going to fulfill that pattern? Was the downside break a trap? I don't know the answer to that question, but knowing that's been the pattern lately sure kept me from jumping into a bearish position this afternoon.

  James Brown   9/29/200,  3:54:25 PM
Dow component winners:
Intel (INTC): +3.72%
Alcoa (AA): +2.36%
Microsoft (MSFT): +1.84%

Only 3 Dow components are weaker today:
3M (MMM): -1.93%
Eastman Kodak (EK): -1.86%
AT&T (T): -1.42%

  James Brown   9/29/200,  3:54:17 PM
Well, it's about time for them (JBLU) to announce another stock split.

  Jane Fox   9/29/200,  3:53:23 PM
James, I was waiting for you to notice JBLU. It is my favorite swing trader.

  James Brown   9/29/200,  3:51:11 PM
Wow! Really making a push higher today are shares of JetBlue Airways (JBLU). The stock is up 5.45% to new all time highs above resistance near $60.

JBLU is leading the bounce in the XAL airline index, currently up 3.46% on its own.

  Linda Piazza   9/29/200,  3:47:14 PM
If the OEX does not follow that pattern (see my 15:44 and 15:17 posts) that we've seen so often lately, that tells us something about what's happening to the buy-the-dip sentiment, at least on the short term. That's important for us to know. This points out the importance of watching day-by-day action and noting when there are divergences.

  Linda Piazza   9/29/200,  3:44:32 PM
Okay, we've had the zoom up this morning, the sideways consolidation that appears to be a possible distribution pattern, a downside break (false?), and then a touch of important support (top of last week's consolidation, the 30-minute 21-pma). Will the OEX now zoom up again, fulfilling that pattern that it's fulfilled over and over since March? (See my 15:17 post for a description of the pattern.)

  James Brown   9/29/200,  3:42:38 PM
SINA is still climbing into the afternoon, up nearly 13% on extremely strong volume of 25.6 million shares. The stock is responding to positive comments from a USB analyst on the three high-flying Asian Internet stocks: SINA, SOHU and NTSE.

NTES is bouncing from its 50-dma on strong volume of 8 million shares, up 8.1%.

SOHU is up 7.75% on volume of 8 million shares.

  James Brown   9/29/200,  3:31:37 PM
Nokia (NOK)...is still holding on to the majority of its gains this session after Barron's highlighted the stock over the weekend with positive comments. The article suggested that NOK is currently very attractive at current valuations and that there is plenty of growth still ahead for the company with big markets in China, Russia and India. Shares are up 3.8 percent to just above its 50 & 200-dma's.

  Linda Piazza   9/29/200,  3:24:39 PM
I'm not stomping around my office any longer, but instead feeling grateful that we got out of the long play in the nick of time. We perhaps should have shifted sides when we exited the long play, but time will tell. I'm still worried about the possible support that might be offered at the consolidation zone just below us and don't want to enter another doomed-to-be-stopped play.

  Linda Piazza   9/29/200,  3:17:40 PM
Here's a pattern that a lot of us have noticed lately: a zoom higher, a sideways consolidation that's presumed to be a distribution top of some sort, a confirming downside break of that consolidation, followed inexplicably by another zoom up. As I've scanned charts, I've sometimes noticed that those downside breaks were stopped when the OEX hit key support of some type. The 30-minute 21-pma lies at 502.25. If nothing else, it should be instructive for us to watch whether this type of pattern (a false break of support followed by a rebound) continues.

  Linda Piazza   9/29/200,  3:08:11 PM
I sure was hoping the OEX would hit 508-510, both because it would have benefited our long countertrend play and because I don't want to enter a bearish trade right here. A break below the 50-dma and 60-minute 21-pma would seem good reasons for assuming the rollover is in progress, but a break of those levels just puts the OEX right back into that congestion zone from Friday. I don't want to enter a bearish trade just ahead of that, with no cushion.

  Jeff Bailey   9/29/200,  3:04:12 PM
Treasuries closed at their price lows of the session with YIELDS higher. On Friday, Treasuries saw buying for net of session, and at 03:00 PM EDT, stocks got whacked lower from there. Just the inverse from the bond market today.

The potential negative as I see it would be the weakness of the dollar today.

  Mark Phillips   9/29/200,  3:02:03 PM
AMZN $49.92 (+1.36) Battling its way back from last week's dip, shares of AMZN are soaring higher this afternoon, once again knocking on the $50 level. It took an aggressive trader to buy the dip in this OI Call play near $48, but right now that is looking like a smart move.

  Linda Piazza   9/29/200,  2:49:41 PM
Volume patterns are bullish, with adv:dec ratios at 21:11 for the NYSE and 18:13 for the Nasdaq. Up volume is more than double down volume on the NYSE and more than three times down volume on the Nasdaq. Total volume as of a few minutes ago was 901 million on the NYSE and 1.2 billion on the Nasdaq.

  Jeff Bailey   9/29/200,  2:46:00 PM
SPX Intra-day chart with 5-minute retracement, but also the WEEKLY Pivot and WEEKLY S1. Slight bullish bias here as SPX tends to want to hover at BLUE #3 after decent bounce from RED #2. 1,010 may be BIG level today, but important for bulls to get the break above by the close to dictate this week's action. Link

  Linda Piazza   9/29/200,  2:42:08 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We just exited our OEX long play at 504.11. We entered the play at 504.31, so endured a $0.20 move against us. The OEX is free to climb to 508 now, as it appears to be shooting up as we exited the play! Isn't that the way it always works? You're free to join me in stomping around your respective offices. I was too afraid of keeping readers in a countertrend play that appeared to be going nowhere, however.

  Linda Piazza   9/29/200,  2:37:12 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's exit here.

  Linda Piazza   9/29/200,  2:32:35 PM
Swing Trade Signals
I'm thinking about exiting if the OEX doesn't stop us out before I can decide. Be prepared. I'm trying to watch a few more minutes to see what happens.

  Linda Piazza   9/29/200,  2:28:54 PM
But here's a different way of looking at the same five-minute chart as shown in my 14:26 post: Link It would be easy to let one's bias lead to a certain interpretation. However, I don't like this action, and we need to see an upside break of this formation if it is in fact a bull flag.

  Linda Piazza   9/29/200,  2:26:15 PM
Here's what I'm watching on the OEX five-minute chart: Link

  Linda Piazza   9/29/200,  2:20:20 PM
I mentioned on Friday that I watch a number of penny stocks as a sort of sentiment gauge. Most of them had given P&F buy signals, but my thought was that these were the most speculative portions of the underbelly of the market, even more speculative than the former high flyers that seemed to draw interest again beginning in March. In fact, it was the number of emails about those former high flyers back in March, the ones then priced under $10.00, that gave me the idea of watching the most speculative of stocks. Today, those penny stocks I watch are turning in a mixed performance. Many are at near-term support, and some are rising from that support while many are printing doji at support. Volume seems to be particularly low, although that's hard to measure since volume is normally so low on these stocks. As I mentioned Friday, I haven't owned any of these stocks I'm currently watching, although I did once buy a penny stock in my more speculative days. It disappeared off the screen sometime last year.

  Jeff Bailey   9/29/200,  2:03:24 PM
5-minute spreadsheet should be sent to all that requested it (if you requested it and didn't get it via e-mail, then send me another note). Thank you very much to the trader that put it together and it was nice of you to share your work! I've said before that we have a great group of traders/subscribers!

  Linda Piazza   9/29/200,  1:58:45 PM
The OEX five-minute pattern looks a lot like a bull flag. If it is, we may have our stop set too close, as flags sometimes retrace up to 50% of the previous move. That 50% retracement is back near the 502 level, but I don't feel comfortable with this countertrend trade and so prefer to keep the stop just under the 50-dma. I'm afraid that once the OEX gets any traction going to the downside, it will continue. Hopefully, the OEX will break out to a new day's high now, but that may depend more on the Dow's performance if it again approaches 9400 than it does specifically on the OEX.

  Jeff Bailey   9/29/200,  1:40:22 PM
01:00 Update posted at this Link

  Linda Piazza   9/29/200,  1:36:08 PM
Swing Trade Signals
We're moving into that time of day when we usually see a push one direction or the other. We may get stopped out of our position during that push. If it weren't for the 50-dma and the 60-minute 21-pma just below the current price, I would probably be closing out the long position now, just below our entry. It's not performing well, but it's not falling apart, either. However, with those averages just below, I think it's worth letting it ride for now. Conservative players might want to get out now, however, losing only their commissions and spread costs.

  James Brown   9/29/200,  1:35:10 PM
Current Sector Winners:
NWX networking index: +2.53%
SOX semiconductors: +2.33%
GHA hardware index: +2.04%
GSO software index: +1.7%

XAU gold & silver: +2.24%

  James Brown   9/29/200,  1:32:27 PM
The market strength is pretty wide spread with the RLX - retail index as the ONLY major sector index in the red and only fractionally so at that.

  James Brown   9/29/200,  1:29:49 PM
Current OI put play, GILD made a new relative low this morning under the $55 level of support but the intraday market bounce is being mirrored in GILD. We've been suggesting that short-term traders take advantage of the weakness the last couple of sessions to take profits. Today's candle could be forming a very short-term bullish reversal but until we see it trade above 56.50-57.00 the recent trend is still down.

  James Brown   9/29/200,  1:24:47 PM
Current OI call play, EXC is making yet another new relative high this morning.

  Linda Piazza   9/29/200,  1:22:16 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's raise the stop to 503, just below the last trough on the 2-minute chart. I'm keeping a rather tight rein on this countertrend position.

  James Brown   9/29/200,  1:22:16 PM
Current OI call play, APOL is producing a small bounce from the $65 level but the gains appear muted after an opening trade much higher near $67. Some traders may actually want to wait for a move back over minor short-term resistance at $67.

  Linda Piazza   9/29/200,  1:18:54 PM
The OEX again tests the high of the day. We need to see a new high of the day to keep the momentum going.

  Linda Piazza   9/29/200,  1:10:04 PM
After the quick rise, the OEX has been consolidating above the (simple) 50-dma at 503.42 and has been testing the 60-minute 21-pma at 503.85. As a gauge of short-term strength, I'm also watching using Jeff's 5MRT method, and the bullish #2 level is at 503.52, with the OEX also consolidating just above that level. Although I wouldn't like it, I wouldn't be surprised to see a deeper dip, however, down to the 50% retracement of the day's range. That's why we've got our stop set just under 502, because the 50% retracement of the day's range crosses near there.

  Jeff Bailey   9/29/200,  12:50:48 PM
ABIOMED (ABMD) $9.00 +7.86% ... here's intra-day 5-minute chart, with same PINK "fitted" retracmenet shown from the other day. Link

  Linda Piazza   9/29/200,  12:39:46 PM
The 30-minute oscillators are now moving into bullish mode, but we have to be careful here. We now have the 30-minute 21-pma and the 60-minute below current price (with the 60-minute 21-pma being tested now), and we also have the 50-dma just below current price. On Jeff's 5MRT system with the OEX, the OEX never hit the bearish #2. It rose from the day's low, consolidated just below today's opening price, and then climbed to Jeff's bullish #3. By Jeff's system, then, we shouldn't see a trade below today's opening price. We can and should expect consolidation and pullbacks, though. Let's watch this one to see if it's just a normal pullback or something more.

  Mark Phillips   9/29/200,  12:32:20 PM
JCI $95.33 (+0.01) Was it a breakdown or a head-fake? Shares of JCI finally traded below $95 this morning, giving that elusive PnF Sell signal we've been waiting for. Now the question is whether it was for real or just a trap. The stock is rebounding (weakly) with the rest of the market and I'm viewing today's price action as the prelude to a solid bearish entry point. With a bounce already underway, I'll be looking for a rollover below $96 as a solid entry point. A break back under today's intraday low ($94.64) looks like a viable momentum entry.

  James Brown   9/29/200,  12:31:59 PM
Crossing the wires right now, the SEC has filed a subpeona against Ken Lay of Enron fame. Lay is not cooperating with the SEC and refusing to provide some documents.

  Linda Piazza   9/29/200,  12:30:53 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Raise stop to 501.75. I'm sorry for the irritating $0.75 raise in the stop, but I want it positioned just under the 50% retracement of the rise from the day's low to the day's high. If the OEX continues to rise rapidly, I'll be raising the stop rapidly, too, as I wouldn't be surprised to see it switch directions quickly.

  James Brown   9/29/200,  12:29:10 PM
NVIDIA Corp (NVDA) is down 5.6% and breaking its simple 200-dma after Merrill Lynch downgraded the stock to a "sell" this morning. The stock is approaching what should be strong support at $15. We'll see if it holds.

  James Brown   9/29/200,  12:24:56 PM
After retracing nearly 50% from its July '02 to June '03 rally, shares of MedImmune (MEDI) are up 1.59% after UBS upgrades the stock from "neutral" to a "buy" based on valuation. The stock did just break its simple 200-dma on Friday so bulls should be cautious. The current trend is down.

  Linda Piazza   9/29/200,  12:24:19 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Raise stop to 501.

  Jeff Bailey   9/29/200,  12:22:49 PM
MedcoHealth (MHS) $24.39 -2.25% ... Dow Jones reporting that US Attorney filed complaint against MHS. On Friday, it was reported that U.S. Attorney in Philadelphia was set to file a civil complaint by Tuesday, which would join a whistle-blowers suit charging MedcoHealth with fraud, steering patients to pricier drugs and then destroying records.

  James Brown   9/29/200,  12:20:26 PM
Comic book fans will be happy to hear that Marvel Enterprises (MVL) has settled its legal dispute with one-time comics creator Joe Simon over the Captain America super hero. Marvel plans to develop the "property" with movies, TV deals and additional licensing agreements. The stock is up off its lows for the day with a clean bounce from the simple 50-dma.

  Linda Piazza   9/29/200,  12:17:53 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We are in a long OEX play from OEX 504.31. Our target is 508.50. Our stop is 500.

  Linda Piazza   9/29/200,  12:16:09 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Enter long here. Target 508.50. Stop 500.

  Linda Piazza   9/29/200,  12:13:34 PM
The OEX now breaks to the topside of its recent consolidation band, as well as breaking above the 50-dma. I'm considering a long play, but am watching how the OEX performs here at its 60-minute 21-pma, at the current level.

  Mark Phillips   9/29/200,  12:13:26 PM
The decision has been made for us with respect to the bullish LEAPS Watch List play on AMGN. Remember that the stock gave us an encouraging sign a couple weeks ago when it traded the $70 level and generated a fresh PnF Buy signal. After last week's carnage in the Biotech sector, with AMGN falling near the $64 level, that PnF Buy signal was looking an awful lot like a bull trap. That view has been confirmed this morning, with the stock trading an intraday low of $63.61. The trade at $64 delivered a fresh PnF Sell signal and that's enough to tell me to remove AMGN from bullish consideration. We'll drop AMGN from consideration at this point, as the situation has clearly changed from where we initiated coverage a few short weeks ago.

  James Brown   9/29/200,  12:13:13 PM
FindWhat.com (FWHT) is up 4.4% after First Albany upgrades the stock to a "buy". The upgrade comes after shares of FWHY just lost 33% of their value in the last week and a half.

The company just reaffirmed its Q3 and 2003 guidance on the 19th of September before retracting it hours later over concerns with its merger/acquisition with privately held European firm, ESpotting Media.

  Jeff Bailey   9/29/200,  12:07:25 PM
ABIOMED (ABMD) $8.84 +5.94% ... 5-minute bar chartist... see that 5-minue jump at 11:40 AM EST?.... Company's implantable heart granted Humanitarian Use Device designation by the FDA. This could clear the way for the company to submit and HDE application, which is similar to a pre-market approval application, and may then receive expedited review by the FDA becuse the AbioCor heart addresses a life-threatening condition for patients not treatable with existing therapies.

Last week we used the 5-minute bar technique to measure the MARKET's response to news in this stock.

I'd be looking DAY TRADE LONG here, stop $8.55, target $10.70.

  Jeff Bailey   9/29/200,  12:01:06 PM
Forest Labs (FRX) $49.15 -3.05% Link .... Jeff: I'm still holding the Jan. call options on frx for the reason of the approval of the late stage Alzheimers. I'm somewhat worried because the stock has really lost traction lately. What is your opinion?

Stock did break back below its 200-day SMA today ($50.52) and I would have rather seen stock show some consolidation along this longer-term SMA. I would remain "technically bullish" on the stock above $47 at this time (50-day SMA curling higher at $46.83, PnF sell signal at $47), but stock below its bearish resistance trend of $53 is near-term resistance.

I would still think January expiration is fine at this point.

I do see some news in latest hour the FRX received FDA approval letter to expand the use of its Lexapro to include the treatment of generalized anxiety disorder. Lexapro has mainly been used for treatment of depression.

  James Brown   9/29/200,  11:59:56 AM
Traders are "selling the news" as Walgreen Co (WAG) reported earnings this morning that were inline with expectations for 27 cents a share. Revenues jumped 14 percent as prescription drug sales soared. The company said they plan to launch nearly 450 stores in FY '04.

The stock is currently painting a big bearish engulfing candlestick, down 3.55%.

  Linda Piazza   9/29/200,  11:59:46 AM
The OEX is now just above the descending 30-minute 21-pma at 501.96, with the OEX having consolidated sideways as that MA descended to meet the price. The 60-minute 21-pma remains above at 503.89 and the even more important 50-dma crosses at 503.37. With that 60-minute 21-pma just above the 50-dma, it's now going to be tough for the OEX to push through that level, but once above 504, it's above all three. That's a long way from happening yet, however, but we should be watchful for all possibilities. We won't be taking an official long, however, but instead will watch how the OEX behaves near its 60-minute 100-pma, currently at 509.89, if it reaches that high.

  James Brown   9/29/200,  11:55:48 AM
The OIX oil index is fluttering on either side of unchanged after CIBC downgraded its outlook for the industry to "under weight".

  James Brown   9/29/200,  11:48:24 AM
Shares of Forest Labs (FRX) are down more than 3 percent and breaking under support at the simple 200-dma and the $50 level despite news this morning of a new FDA approval letter. The FDA sent FRX an approval to expand its use of Lexapro(TM) to include treatment for generalized anxiety disorder.

  James Brown   9/29/200,  11:42:21 AM
Retail Sector is slightly weaker as investors turn ho-hum over Wal-Mart (WMT) reiterating again how weekly sales are on target near the high end of their range. While this morning J.C.Penney (JCP) said September sales were near the low end of their range. Shares of JCP are currently down about 2.77 percent. Traders might notice that on JCP's weekly chart it is failing again at the trend of lower highs from the middle of 2001.

  James Brown   9/29/200,  11:35:42 AM
Shares of Office Depot (ODP) are down 3.78% after announcing a management restructuring. Today's drop is a breakdown through support at the $14.00 level and its simple 200-dma.

  Linda Piazza   9/29/200,  11:30:52 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Okay, good. Let's cancel that bearish entry. The OEX went lower than Friday's low's late-afternoon low, but immediately popped up again. What that tells me is that the low volume is leading to some slips one direction or another, but there's still an underlying short-term support to the market. I thought/hoped coming into the market today that it was time for a bounce or sideways consolidation while moving averages descend, and sure don't want to be entering a bearish play when that's the overall thesis, but if the OEX was going to fall out of its consolidation zone, we needed to be ready.

  James Brown   9/29/200,  11:28:55 AM
Moving in on the online discount brokers, Fidelity just announced $8 commissions for its online trading. Shares of Ameritrade (AMTD) and E-Trade (ET) are both down slightly.

  Linda Piazza   9/29/200,  11:25:28 AM
About 30 minutes ago, the OEX broke through a rising trendline built off five-minute lows since just after three Friday afternoon. Now it rises to test that violated trendline, to see if the trendline holds as resistance now. That trendline now crosses at about 501.05, handily enough just near the 50% retracement of this morning's first five-minute range. How do they do that? Let's see if the resistance holds, which will tell us a lot about the OEX's strength or weakness.

  Linda Piazza   9/29/200,  11:16:34 AM
Volume patterns are shifting now, with decliners now ahead of advancers on both exchanges, although the lead is modest on the NYSE. Down volume is modestly ahead of up volume on the NYSE. Up volume remains bigger than down volume on the Nasdaq, but not by the big proportions seen earlier today. There's been a definite shift, but volume remains light at 334 million on the NYSE and 513 million on the Nasdaq as of a few minutes ago.

  Linda Piazza   9/29/200,  11:09:23 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
On the basis of "trading what we see" and not what we think ought to happen, enter a bearish OEX trade on an OEX trade of 498.99, which is just below Friday's 499.37 low. For those following Jeff's 5MRT trade, the 61.8% level would not be triggered until nearer 498.50, so some might want to wait until that level is hit to enter a bearish trade. Our target will be 492 and the stop will be 503.25. I actually hope this trade does not trigger, but it may.

  Linda Piazza   9/29/200,  10:53:03 AM
The consolidation-until-moving-averages-decline-to-OEX-levels theory appears to have won out, and the 30-minute indicators now hesitate or turn down. More weakness shows up in price behavior, too. I'm going to be hesitant to enter a bearish trade, however, as the volume remains so light today, and that makes for unpredictable trading conditions, but stay tuned. As of a few minutes ago, the total volume was only 254 million for the NYSE and 405 million for the Nasdaq.

  Linda Piazza   9/29/200,  10:39:26 AM
The OEX now violates the 50% retracement of the first five-minute range. This late into the day, that level may no longer hold much significance, but the OEX does fall out of its consolidation pattern from today, and that may be significant.

  Linda Piazza   9/29/200,  10:29:13 AM
The SOX remains above its 50-dma this morning, with that 50-dma at 422.25 and the SOX currently measuring 531.14. I also note that the 50-dma lies close to the 50% retracement of the August-September move, with that 50% retracement lying just under 420. This would be an appropriate bounce level for the SOX, then, with that likely support underneath, although it's not unusual for an index to retrace 1/3-2/3 of any particular move. It's still possible for the SOX to retreat all the way to 407 and stay within a normal retracement of the move that immediately preceded the retracement. Many other indices have already fallen below their respective 50-dma's, too, so it's certainly possible that the SOX could do the same thing. I'm just searching the underpinnings of the market, seeing what others might be thinking as they're studying the various indices.

  Jeff Bailey   9/29/200,  10:27:58 AM
5-minute Spreadsheet Oh no!.... OK, all you traders have to do is enter the LOW and HIGH of the first 5-minutes in RED ZONE #1 and BLUE Zone #1.

For QQQ this would be cell H10 and J10.

  Linda Piazza   9/29/200,  10:17:35 AM
The early volume patterns supported the higher-prices-or-at-least-consolidation thesis this morning, with adv:dec ratios at 17:9 for the NYSE and 16:9 for the Nasdaq. Up volume was more than double down volume on the NYSE and more than four times down volume on the Nasdaq. Since total volume was so light--115 million on the NYSE and 234 million on the Nasdaq as of a few minutes ago--those volume patterns don't yet mean much however. They can be changed around fairly quickly.

  Jeff Bailey   9/29/200,  10:15:15 AM
5-minute spreadsheet ..... OK, I think I've sent the spreadsheet to all that requested. If you haven't received it yet, please send me one-more request, but I think I got everyone.

  Linda Piazza   9/29/200,  10:11:06 AM
The 30-minute 21-pma descends quickly toward the OEX current price as the OEX candles consolidate near the day's high. That 30-minute 21-pma currently measures 502.65. Either the OEX is going to have to bump up through that average sometimes soon, or else it's going to add more pressure to the OEX. Also near that level and even more important is the OEX 50-dma, currently at 503.38. The OEX needs a move above 503.50 before it can hope to get any momentum going.

  Linda Piazza   9/29/200,  10:03:42 AM
So far, the 50% retracement of the first five-minute OEX range is holding, so the conclusion so far is for early strength. The first morning retracement usually concludes in about five minutes, so we'll see after that how the OEX holds up.

  Linda Piazza   9/29/200,  9:55:50 AM
The 30-minute 21-pma lies at 502.95. Based on intraday charts, it appears that a firm push above that moving average, maybe above 503.50, perhaps has a chance of hitting the 509.50 level. Daily RSI turns up, too, and daily 5(3)3 stochastics try to make a bullish kiss from within territory indicating overbought conditions. However, the daily ADX shows -DI above +DI, verifying the impression that a bullish trade would be a countertrend trade, and the OEX faces several possible resistance levels on its way to 509.50. Therefore, instead of using these observations to help us place a bullish trade, we'll use them to help us decide when to watch for a rollover. It's tough to stand aside, especially when it's possible that this push might extend further than we think it will--I'm still trying to keep an open attitude about what will happen--but countertrend trades didn't work well last week.

  Linda Piazza   9/29/200,  9:46:13 AM
The OEX so far holds above the 50% retracement of the first five-minute range, but we're just now entering the typical first retracement period of the morning, so we'll need to watch longer. As of this writing, the OEX five-minute bars are not able to close above the day's open, although they're clustering up near that opening level. The 30-minute OEX indicators--MACD, RSI, CCI, 5(3)3 stochastics--are all either fully bullish or else turning up, but they can turn back again. It's still way too early to predict the day's direction, but so far the action is consistent with either a rising to test key averages or else a sideways consolidation until those key averages decline to the current levels. That second possibility is what's kept me from suggesting a countertrend bullish trade this morning.

  Linda Piazza   9/29/200,  9:36:43 AM
As expected, the OEX opens higher. The 50% retracement of the first five-minute OEX range lies at 501.05, and we can watch that 50% retracement for signs of strength or weakness in early trading.

  Jeff Bailey   9/29/200,  9:36:07 AM
5-minute retracement .... A fellow trader has put together an Excel Spreadsheet for the 5-minute retracement where a trader can type in the first 5-minute bar's high/low and get resulting levels. He has allowed me to send it to those that may not have the computer memory or retracement tool available in order to utilize this technique. If you would like a copy of this Excel spreadsheet, please shoot me an e-mail and I can send it to you.

  Jeff Bailey   9/29/200,  9:15:45 AM
09:00 Update posted at this Link

  Linda Piazza   9/29/200,  9:10:04 AM
Swing Trade Signals
It's possible we have entered a sell-the-rally mode rather than a buy-the-dip mode, but first we need a rally to sell. OEX 503-505, 506-508, and 509.50-511 seem likely resistance zones on any rally attempt. In the event the OEX rallies this morning, I'm inclined to stand aside and watch for a rollover later today or in the week rather than attempt a countertrend play. If the OEX surprises us and no rollover occurs, with the OEX instead punching up through the 60-minute 100-pma, we'll be climbing on for a long play if other parameters are right. A more difficult decision will come if no rally occurs and the OEX continues to drop. In that case, we may be considering a bearish play, hopping on for expected downside to the 492 area. That will depend on what we see.

These next few weeks are critical in our understanding of how markets will perform over the next few months. I'm trying to keep my eyes open to all possibilities, staying aware that oversold markets can become more oversold, and markets that are supposed to go down sometimes go up or consolidate instead.

  Linda Piazza   9/29/200,  7:12:11 AM
Good morning. With the important Bank of Japan quarter Tankan report due Wednesday, the yen rose amid optimism about the report. Speculation rises that the report will show the climate improving among large Japanese manufacturers. Industrial output and employment data will be released Tuesday, but most focus on the Tankan report, expected to show the first positive number in close to three years. The higher yen sent exporters lower, with the Nikkei opening down and declining throughout the morning session. Soon after the afternoon session opened, the Nikkei hit its 10,148.36 low of the day, but it managed to climb off that low, closing down 88.87 points or 0.86%, at 10,229.57. Exporters, particularly carmakers and techs, declined. Chemicals also declined. A few chip-related stocks managed a gain, bucking the trend. Banks had a mixed day, with some gaining after a media report that Mitsubishi Tokyo Financial Group had trimmed by half the bad-loan ratio in one of its units.

Asian bourses were somewhat mixed, with most trading down, but some only modestly so. The Taiwan Weighted lost 0.12%, and South Korea's Kospi lost 0.19%. Singapore's Straits Times closed flat, up 0.07%. Hong Kong's Hang Seng lost 1.32%, and China's Shanghai Composite lost 1.13%.

Most European bourses currently trade up. A positive article in Barron's sent Nokia higher. As was true in Asia, some chip-related stocks rose in early European trading, too. The Semiconductor Industry announced that August sales rose 4 percent and noted rising end-market demand. European carmakers outperformed their Asian counterparts, with the European carmakers gaining after Porsche announced its pre-tax profit for the year ending in July.

As of this writing, the FTSE 100 has gained 26.20 points or 0.63%, to trade at 4183.30. The CAC 40 has gained 19.73 points or 0.61%, to trade at 3236.49. The DAX climbed 31.26 points or 0.94%, to 3356.11.

  Jeff Bailey   9/27/200,  8:25:03 PM
Pivot Analysis Matrix for Monday and next week at this Link

  OI Technical Staff   9/27/200,  8:24:56 PM
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