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  Jeff Bailey   9/30/200,  5:50:52 PM
Aquinas Fixed Income Fund (AQFIX) $10.40 +0.09% ... can't remember why I had an alert set on this one, but was from something posted here in market monitor per subscriber question. I set an alert for end of day NAV and get alert at $10.40, which would have this fund (see profile at following link) Link breaking above what we had identified as a potential head/shoulder top formation. Link

My thinking here is if Treasuries have another bullish day again tomorrow, and stocks take out another daily low, then MARKET is getting more defensive.

  Linda Piazza   9/30/200,  3:58:35 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's let the OEX decide for us. A close below our entry is going to mean a close below the 50% retracement of the day's range, a bearish event. We don't want to face the ISM tomorrow with no cushion, either. Let's lower the stop to 500.50, just over our entry level. If the stop is hit, it means that there's been some short-term bullishness that may build tomorrow. If not, the trade will remain open. Check tomorrow morning, though, because I may be raising the stop ahead of morning volatility.

  Linda Piazza   9/30/200,  3:52:56 PM
Swing Trade Signals
We have a couple of points under our belts now, and have to make a decision whether to hold overnight or not on the OEX bearish position, if not stopped out before the close. Frankly, I'm torn. I don't like holding over important economic numbers, but today's action doesn't bode particularly well for equities, either. Today's earlier push allowed those envelopes I watch to decline further, so the OEX has more room to decline, too. Be back in a moment, but conservative traders might want to take their now-almost two points movement and run.

  Jeff Bailey   9/30/200,  3:47:51 PM
Good trade I think is Treasury YIELD calls, and equity index puts.

My thinking on Treasury YIELD call is there is potential for dollar to still see weakness, and could eventually trigger Treasury selling. Should YIELD continue to fall and calls not work out, I would have to think equities continue to decline, thus equity put side of trade works well.

  Linda Piazza   9/30/200,  3:46:04 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Lower stop to 501.

  Jeff Bailey   9/30/200,  3:41:07 PM
03:15 update posted at this Link

  Linda Piazza   9/30/200,  3:36:59 PM
The NDX again hovers right over its 50-dma at 1308.11, with the NDX at 1308.20 as I type. Many other indices are already below their 50-dma's.

  Linda Piazza   9/30/200,  3:33:57 PM
We can probably expect to see the OEX retest the broken H&S neckline, with that neckline at about 500.25.

  James Brown   9/30/200,  3:30:06 PM
Intl Business Machines (IBM)...the stock is hovering near the $88 level, down 1.3% on the session. This morning's low was a 38.2% retracement of the August-September rally. Unfortunately, the meager bounce from this level is fading and we could witness IBM pull back to the 50% retracement (of the same move), which would be $86. Coincidently, $86 also offers some minor price support.

Big Blue came out with some exciting news over a new semiconductor design today that would drastically improve performance or cut power consumption.

  James Brown   9/30/200,  3:24:01 PM
Autozone Inc (AZO)... Keeping an eye on shares of AZO. The stock has pulled back to the $90 level with volume fading on the consolidation. This would appear to be an entry point at "support" of $90 but it would take some faith to pull the trigger here with the markets weak. I'd probably wait and watch for a move back over $92. Should it break $90, look for a test of the 50-dma above $86.

  Linda Piazza   9/30/200,  3:22:41 PM
The OEX now breaks below the neckline of the H&S. If this formation has validity, the drop should accelerate, as it appears to be doing. Just below lies the gap that provided so much resistance this morning, with the 499.50 level being particularly difficult. That level may now provide at least some interim support on the way down.

  Linda Piazza   9/30/200,  3:17:34 PM
The OEX stopped where we would expect it to stop if it were forming a H&S at the top of its five-minute rise off the day's low, so there's nothing alarming going on. We do need a sharp drop, however, if we're to have any comfort level with this play. We need that either so we can close out the play this afternoon for a profit or have a cushion if we decide to hold overnight, with the economic numbers due tomorrow.

  Jeff Bailey   9/30/200,  3:05:05 PM
Intra-day yen futures contract .... here's intra-day December yen futures contract (jy03z) and some observations that may tie in with today's 01:00 PM EST update. This chart is 10-minute delayed, but gives the intra-day observation of how the yen/dollar relationship might be part of the puzzle. Link

  Linda Piazza   9/30/200,  3:02:22 PM
If the OEX five-minute pattern is a H&S building at the top of the midday rise, it should be flattening soon, and then rounding over. If not, I want us out of the trade quickly, as I don't want to stay in the trade if the OEX bumps firmly above the 30 and 60-minute 21-pma's. The five-minute indicators are trying to turn up, rather too close to the top of the "shoulder" area for comfort, but so far, price isn't turning up far along with them.

  Linda Piazza   9/30/200,  2:56:11 PM
Studying the OEX five-minute chart, I see the possibility for a H&S with a left shoulder at 501.93, a head at 502.34, and a neckline at 500.25. It's possible, then, that we'll see the OEX head back up toward that 501.90 level to form a right shoulder. We always have to be prepared for that possibility when we see this particular shape.

  Linda Piazza   9/30/200,  2:52:00 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's lower the stop to 502.50, just over the afternoon high.

  Linda Piazza   9/30/200,  2:50:13 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We have a bearish OEX position from OEX 500.42, the value at the time the entry appeared on the Monitor. Our initial stop is 503.50, although I may lower that rather quickly. I'm still nervous about a move up toward the 508 level. Our target is 496.

  Jeff Bailey   9/30/200,  2:48:30 PM
Current Thoughts I think equities have "adjusted" on an intra-day basis to today's news out of Japan on currency. Still... 10-year YIELD ($TNX.X) down 13.2 basis points to its close has that defensive look into the close and stocks may also be vulnerable into their close.

Bond market closes in about 13-minutes, and stocks giving back some gain from late-afternoon comeback.

  Linda Piazza   9/30/200,  2:46:41 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Enter a bearish trade here. Stop at 503.50. Target 496.

  Linda Piazza   9/30/200,  2:34:38 PM
Swing Trade Signals
With the failure to move over the 30 and 60-minute 21-pma's, I'm considering a bearish entry here. I'm trying to give it a few more minutes, as the current retreat could be only a bull flag pullback before the next upward push.

  Jeff Bailey   9/30/200,  2:32:29 PM
Forest Labs (FRX) $51.15 +2.64% ... session high here and gets a trade at BLUE #3.

  Linda Piazza   9/30/200,  2:05:38 PM
I've been noticing that the stop-running push that used to come near 1:45 ET, but sometimes between 1:35-1:55 now seems to happen nearer 2:00ET. During the March rally, it tended to happen nearer 1:35ET. Hmmm. Whenever it appears, remember that the object appears to be to test next support or resistance, to see if it holds. If it does, the retreat or bounce is sometimes swift, sending the market the opposite direction as that of the push. If support or resistance does not hold, then the move often continues in the direction of the push.

  Jeff Bailey   9/30/200,  1:57:31 PM
Trouble with you 5-minute spreadsheet? here's a screen capture of the 5-minute bar spreadsheet. Some are having trouble understanding where to place their 5-minute high/low values. This should explain where to place them. Link

  James Brown   9/30/200,  1:51:37 PM
Afternoon Sector Leaders:

DJUSHB home builders: +2.59%
HMO healthcare: +1.29%
XNG natural gas: +1.47%
BTK biotech index: +1.33%
OSX oil service: +1.02%

Afternoon Sector Losers:

GHA hardware index: -2.44%
SOX semiconductors: -1.87%
INX internet index: -1.7%

  Linda Piazza   9/30/200,  1:42:39 PM
We're also right at the time of day when we usually get a stop-running push one direction or another. Hold onto your hats--or your stops, that is.

  Linda Piazza   9/30/200,  1:37:42 PM
It could go either direction here. The Dow has bumped above 9300, currently 9302.70 as I type. The OEX hovers above a 50% retracement of the day's range, holding just under the 30-minute and 60-minute 21-pma's at 501.66 and 501.92 respectively. Those levels are our next test, as a rollover here could send the OEX back to test the day's low while a climb above that level could see a test first of 505-506 and then 508-509.

  Linda Piazza   9/30/200,  1:28:29 PM
Non-buyer's regret. Remember at 12:03 when I said that if this were any other season, I'd be considering a bullish play? At 12:03 the OEX was at about 499.50. I let my knowledge of seasonal trading patterns influence me even though I still have a wait-and-see overall approach to the markets.

However, I'm not kicking myself too much because we do need to be aware of seasonal patterns, events that might impact the markets (such as the end-of-quarter activity that might impact the afternoon's close), and economic releases. They do impact trading sometimes. There will always be another trade if we miss a great setup, but there might not always be a trading account with our names attached if we insist on staying ignorant of the volatility or unpredictability that might impact our trades. I didn't want to enter a long trade today because I think it's too likely that others will sell into any rise, blunting the possible upside.

  James Brown   9/30/200,  1:24:10 PM
Reader comments on BRCM:

One reader is suggesting that traders could open a "Mike Parnos Special" on BRCM by selling both a bear call spread above the current range and a bull put spread below it, which would provide maximum profit if the stock closed between $25 and $27.50 at expiration. It sounds like an interesting play. Our resourceful reader actually provided more detail but I'll let Parnos take a look at it. (Thank you, Brian)

One of my concerns is that the stock has already been stuck in this range for a month and given the volatility we normally see in October, I am not so sure it will remain here. I'm not the straddle expert (that would be Ray) but I would look into a straddle (buying both a call and a put at the same strike, maybe the $27.50 or 25's) play on BRCM, especially with its upcoming earnings report on October 7th. That could produce some volatility!

  Jeff Bailey   9/30/200,  1:21:59 PM
01:00 Update posted at this Link

  Linda Piazza   9/30/200,  1:14:24 PM
The OEX has now retraced more than 50% of the day's range, a bullish development on the face of things. Here's another view of the 60-minute chart I've been showing all day, showing that the OEX is indeed moving up from the bottom of the envelope. I next expect it to challenge the 60-minute 21-pma and perhaps even the top of the envelope, now just under 509. Link If the OEX had rolled over a few minutes ago, we would have had to take the chance and enter bearish, but I didn't want to enter at that level and am glad the OEX did move up and away from the bottom line, relieving some of that oversold pressure. If we find a bearish entry now, we'll do it from a better level. I'm also hoping for a test of the 60-minute 100 and 130-pma's, now near the top of the 60-minute envelopes. That should give us a clear entry, either direction, if we should be lucky enough to see that test.

  James Brown   9/30/200,  1:14:17 PM
Current OI call play APOL is also bouncing from support at the $65 level for the second day in a row. Yesterday Lehman Brothers raised their price target on the stock to $72 and told clients to use weakness as entry points for new bullish positions.

Traders could use the bounce at $65 as an entry point with a tight stop. Others might feel more comfortable waiting for a new move over the $67 mark, which has become very short-term resistance.

  James Brown   9/30/200,  1:10:43 PM
Current OI call play AMZN are holding up pretty well given the market weakness the last few days. The stock is bouncing higher from its lows of the session but we need to see it break the very short-term pattern of lower highs.

  James Brown   9/30/200,  1:05:58 PM
CS First Boston also started Marvel Technology (MRVL) at an "out perform" this morning. The stock is up more than one percent and continuing yesterday's bounce from the $36.00 level, which was old resistance. Today's move has reclaimed the $38 mark and its simple 50-dma. The MACD is just starting to hint at a bullish turn but that could still be a few days away while the stochastics and RSI are already turning bullish. Watch out for potential resistance at $40.

  Linda Piazza   9/30/200,  1:03:18 PM
If the pattern on the OEX five-minute chart was a bullish right triangle (flat top, ascending bottom trendline), it's been broken to the upside, with the OEX spending the last three three-minute candles testing that flat top near 499.50 and consolidating just above it. The OEX still has to get above the 50% retracement of the day's range before we can think in terms of even the shortest-term strength, however. As I type, the OEX is falling back below that 499.50 level.

  Linda Piazza   9/30/200,  12:50:14 PM
Swing Trade Signals
If the OEX moves above 500.46, we will drop our consideration of a bearish OEX play. Since a bullish play should be considered a countertrend play and since we have the Nikkei's example of the end-of-day trading in front of us, I won't be issuing a long signal, although a break above that 50% level might first see the 60-minute 21-pma at 502 tested. If that failed to hold as resistance, the next upside test might be a test of the 508.60 level, where the key 100-pm and 130-pma's cross, along with the top of the 60-minute envelope I've been monitoring. I would actually prefer to see an upside test of these levels rather than enter bearish here.

  James Brown   9/30/200,  12:35:25 PM
Broadcom (BRCM)...was started at an "out perform" by CS First Boston this morning but the stock is not responding. Actually, it looks asleep at the wheel, having trading in a $2 range between $26 and $28 for more than four weeks straight. The fading volume the last five days looks suspicious and I wonder if we're finally going to see a move (one way or the other) soon.

  Linda Piazza   9/30/200,  12:35:04 PM
Swing Trade Signals
I don't want to enter a set dollar amount for an entry into an OEX bearish play as I want to make sure that short-term indicators are cooperating at the time of entry, if there is an entry. The OEX appears to be on the verge of dropping through five-minute support, but it hasn't yet done so and it may yet bounce again and move up to test that 60-minute 21-pma. If we enter at this level, we'll be setting our stop just on the other side of that moving average.

  Linda Piazza   9/30/200,  12:30:57 PM
Swing Trade Signals
I'm considering a bearish entry. Be prepared.

  James Brown   9/30/200,  12:29:49 PM
Gold is off its highs for the session near the $390/oz level but remains positive, up $3 near $386. This is fueling a bounce in the XAU gold & silver index from its 90 level. There has obviously been a lot of interest in gold lately, especially with the shiny stuff up about $40/oz for the third quarter. Some speculators believe the current market environment could push gold to the $400-420 levels by the end of this year.

Not bullish on gold stocks is Prudential who downgraded Newmont Mining (NEM) to "under weight" and started Anglogold (AU) with an "under weight" rating as well. Both stocks are still in the green but are off their best levels of the day.

  Jeff Bailey   9/30/200,  12:27:31 PM
Dow Jones Home Construction (DJUSHB) 466.32 +1.11% ... threatening recent relative highs of 467 and looking bullish as 10-year YIELD ($TNX.X) fall 10.2 basis points to 3.975%.

  Linda Piazza   9/30/200,  12:22:29 PM
Is the OEX five-minute pattern showing a slightly skewed bear flag? Is this a bullish right triangle (flat top, ascending bottom)? It is a neutral symmetrical triangle, with the assumption being that it will break in the direction in which it was entered? You can bet I'm not the only person staring at those patterns and coming up with several different possible outcomes. We'll just have to wait and watch. I sure did want a test of a higher level before I had to make a decision about a bearish entry on a rollover, however.

  James Brown   9/30/200,  12:18:58 PM
Talbots (TLB) is bucking the weakness in the retail sector after being upgraded by SG Cowen to an "out perform" from "market perform". The stock is up 3.7% but still under resistance in the $36.00-36.50 range. Volume is coming in pretty strong. If the bounce continues, bulls could target resistance in the $39-40 range (see the weekly chart).

  James Brown   9/30/200,  12:14:21 PM
Forest Oil Corp (FST) ...is breaking out above the simple 200-dma and resistance at $23.50 on an upgrade to a "buy" from Fulcrum Global Partners.

  James Brown   9/30/200,  12:10:07 PM
Last week was pretty rough for the DFI defense index as several big brokers downgraded their outlook for the industry. Shares of General Dynamics (GD) took a beating as well, dropping out of its rising channel and breaking support at $80. Looking at it now, we're seeing a three-day bounce underway from the $75 level and its simple 100-dma. Old resistance at $80 could come into play but aggressive traders may want to keep an eye on it.

  Linda Piazza   9/30/200,  12:09:17 PM
There's still no move up to test the 50% retracement of the day's range, at 500.46. Studying a five-minute chart, it's apparent that the OEX is having trouble moving above the gap from 499.90 low of the 9:55 candle to the 499.14 high of the 10:00 candle.

  Jane Fox   9/30/200,  12:07:35 PM
James, I was wondering why DIS all of a sudden became one of the three DOW components to go green.

  James Brown   9/30/200,  12:03:54 PM
Disney sees "Strong" Growth...Speaking at the Goldman Sachs Communacopia Conference today, Disney's management said they see strong earnings growth for FY 2004, fed by its cable and broadcasting networks (Reuters). DIS owns the ABC network in addition to the Disney channel. We heard about the company's latest product Moviebeam yesterday. Shares are up 3 cents to $20.13, while trying to hold support at the $20 mark.

  Linda Piazza   9/30/200,  12:03:23 PM
Here's how the OEX looks now in comparison to the 60-minute 1.35% envelope (21-pma central average). Link I mentioned this morning my fear of entering bearish trades because of the possibility that the OEX might bounce from its touch of the lower channel, then rise to test the central average and maybe even the top of the channel. While it's far from certain that's happening, the possibility this morning kept me from jumping in on a bearish trade after the first drop, which we missed because I didn't want to enter ahead of the 10:00 numbers. Now I'm in a watch-for-a-retest mode, looking for a possible bearish entry on a retest and rollover from the central average or upper envelope. If this were any other season, I might even be considering a bullish play now, to ride the OEX up to test those levels.

  Linda Piazza   9/30/200,  11:50:48 AM
Although far from bullish, the 30-minute OEX indicators now look far less bearish. MACD flattens a bit, CCI hinges up although remaining red, and RSI flattens. The fast line of the 5(3)3 stochastics has turned up again, although the slow line has not yet done so. These developments are products of the consolidation, and they can quickly become either truly bullish (short term) or bearish with a break of consolidation. I'm still reserving judgment, still worried about the end-of-day action with this being the end of the quarter.

  Linda Piazza   9/30/200,  11:41:05 AM
After breaking briefly below its 50-dma this morning, the NDX now clings to levels just above its 50-dma at 1308.14, and may be finding support there. As I type, the NDX measures 1311.78.

  Jeff Bailey   9/30/200,  11:36:33 AM
11:00 Update at this Link

A look inside some of today's economic data.

  Linda Piazza   9/30/200,  11:27:25 AM
So far, the OEX has not been able to climb back above a 50% retracement of the day's range, so the tenor remains bearish for now. I'm still watching.

  Linda Piazza   9/30/200,  11:11:23 AM
The current pattern on the OEX five-minute chart fits the parameter of a bear flag--a tight pattern of higher lows and higher highs after a steep, flagpole drop. If that's what it is, it should break to the downside before retracing more than 50% of the flagpole, at 500.46. Until last week, a lot of supposed bear flags broke to the upside instead of the downside, so I'm just watching for now without drawing too many conclusions too early, especially as the OEX has been following its 60-minute envelope down for so long. If traders feel that the Fed is going to continue its intervention, propping up the dollar, that might change the complexion of trading, too, adding upside momentum to a short-term oversold market. And then we have end-of-quarter dressing or undressing, whichever it might be this quarter. Whew!

  Linda Piazza   9/30/200,  11:06:24 AM
Volume patterns continue to support the bearish thesis for the markets, with the adv:dec ratios at 10:20 for the NYSE and 8:21 for the Nasdaq. As of a few minutes ago, down volume was 4.5 times up volume on the NYSE and 5.8 times up volume on the Nasdaq. Total volume was a light 366 million on the NYSE and 595 million on the Nasdaq. New highs numbered 76 and new lows 13.

  Linda Piazza   9/30/200,  10:55:56 AM
A cautionary tale: Be careful about trading the indices today if there's currency manipulation temporarily propping up the dollar. Here's a view of the Nikkei's intraday trading Tuesday as first the dollar spiked against the yen in the morning and then as the dollar weakened in the afternoon, with the Nikkei's pattern largely attributed to the dollar vs. yen issues: Link

  Jeff Bailey   9/30/200,  10:50:56 AM
U.S. Dollar ... CNBC reporting that U.S. may have intervened on the dollar versus the yen. This could be viewed as positive intra-day.

Benchmarking ... INDU = 9,280 , SPX = 996.53, OEX = 499.66, NDX = 1,314, QQQ = $32.65, RUT.X = 487.10, $TNX.X = 3.966%, $HUI.X = 197.11

  Linda Piazza   9/30/200,  10:50:18 AM
Isn't it interesting that CNBC is reporting that the dollar is spiking against the yen just as the markets were on the verge of tumbling hard?

  Linda Piazza   9/30/200,  10:47:36 AM
The 50% retracement of today's OEX range lies at 500.46. I'll be watching that level as a measure of trading through the rest of the morning. A test of and rollover from that level might make a decent but risky new bearish entry. Since that 50% retracement level also just above the bottom of the consolidation pattern from Friday and early yesterday morning, a break above the 50% retracement of today's range will also mean that this closest resistance has not held. I'll then be watching for a trade up to and rollover from either the 60-minute 21-pma at 592.88 or a trade up to and rollover from the 60-minute 100- and 130-pma's, both currently just over 509. In the event that the OEX should actually break above those linked longer term averages, we would of course have to consider a bullish trade.

  Jeff Bailey   9/30/200,  10:44:32 AM
QQQ vulnerable to WEEKLY S1, even on daily basis. Here's intra-day chart per 10:35:20. Link

  Linda Piazza   9/30/200,  10:38:33 AM
Here's the crux of my worry about entering bearish right here. Here's another instance when the OEX followed the lower envelope down for a while. Take a look at the indicators while you're studying the chart: Link Now take a look at what happened later: Link As I mentioned another time when I posted similar charts, I'm not predicting that the OEX is going to climb that high and that quickly. I am saying that the rubber band is getting stretched pretty tight with the current trading pattern and that the OEX could attempt a bounce toward the 60-minute central 21-pma, currently at 502.87 or even the top of the envelope at 509.66. The indicators look terrible. They always do as the bottom of the envelope is hit. Sometimes the hit is followed by a deeper plunge, but often it's not.

  Jeff Bailey   9/30/200,  10:35:20 AM
QQQ $32.64 -1.44% .... Note RED #3 and DAILY S1 of $32.67 right here. If QQQ are going to get "crushed" today, this is point to look for morning bounce resistance.

  Mark Phillips   9/30/200,  10:30:14 AM
CCMP $56.04 (-1.99) Taking another run at support! We were wondering if CCMP was going to give us another entry point or not, and yesterday's rebound in the SOX gave us that answer, with the stock rebounding back to the $58 level. Opening weak this morning, CCMP gave us a fresh entry signal as it rolled just below the $58 level, picking up speed in the wake of the 10am economic news. The SOX is now down 3% on the day and CCMP is down a correspondingly large 3.1% after rebounding from its intraday low of $55.50. If the $55 level breaks, then we could see a fairly quick slide into the next support near $52.50.

  Jeff Bailey   9/30/200,  10:26:57 AM
Forest Labs (FRX) $50.98 +2.3% Link .... bucking some broader market negativity and trying to recapture its 200-day SMA ($50.37) here. Might be attracting some cash as recent FDA news provides positive catalyst, drug stocks not as economically sensitive. Good test for further strength would be a trade at $53 to get stock above its bearish resistance trend.

Relative strength vs. SPX looks to improve. Link

  Mark Phillips   9/30/200,  10:25:25 AM
JCI $93.73 (-1.92) Yesterday's dip below $95 gave us the PnF Sell signal and bearish entry trigger on JCI. Today's negative reaction to the economic data have plunged the stock well below that level, confirming ourbearish view. Traders got several potential entry setups -- the first was yesterday's drop below $95, the second was yesterday's rollover below $96 and then finally today's break back under $95. Look for next support to come in near the $90 level, at which point, conservative traders may want to consider harvesting some gains. Stops should now be lowered to $97.75, just above the 50-dma.

  Linda Piazza   9/30/200,  10:24:48 AM
The OEX does now look vulnerable down to 496 and then possibly down to 491-493, but it's also been dropping along a lower 1.35% envelope surrounding its 60-minute 21-dma for quite some time. Link Just as when the OEX violates a Bollinger band or follows it down for a while, that action indicates a short-term oversold condition. The BB's, or envelopes in this case, sometimes propel the index back toward the central average, like rubber bands stretched too tightly. Of course, I've also watched times when the OEX not only pierces those bands but trades outside them for a while. Still, I unfortunately don't think we have a safe bearish entry here.

  Linda Piazza   9/30/200,  10:07:23 AM
After this morning's first five-minute fall, the OEX consolidated in a "b" distribution pattern. The break out of that pattern, on a move below 501.90, would have been the place to enter a bearish OEX trade today, with the drop accelerating once that level was breached, proving its importance. Sometimes the old tried-and-true chart patterns do work as expected. In fact, since those distribution patterns usually occur about halfway down a decline, the OEX actually exceeded the expected downside on a five-minute basis.

What happens next? Next we'll watch for a retest of broken support.

  Jeff Bailey   9/30/200,  10:06:43 AM
Defensive look comes from AMEX Gold Bugs Index ($HUI.X) 92.89 +2.5% rising while 10-year YIELD ($TNX.X) falls 11.5 basis points to 3.962%. Meanwhile, U.S. Dollar Index (dx00y) 92.40 -0.73% continues to show the dollar sliding.

  Jeff Bailey   9/30/200,  10:02:10 AM
SPX markets look very defensive here. As such, would be looking short/put. SPX itself vulnerable here to 986 in quick fashion.

  Linda Piazza   9/30/200,  9:58:15 AM
It's tough to sit and watch an entry pass us up, isn't it? This morning, the OEX pushed below the 50-dma and the 60-minute 21-pma, also falling in the last few minutes below the 30-minute 21-pma. Any of those could have been taken as an entry, especially with the 30-minute MACD beginning to roll. However, I've learned through long, tough experience that entering a Swing Trade (as opposed to a quick daytrade) ahead of important economic numbers can be disastrous to one's account. Add to that today's status as end-of-quarter and the months-long consolidation pattern in which the OEX is currently mired, and those were just too many risk factors. Still, it's tough to watch the trade unfold in a way that would have been worked to our benefit. Good account management practice, but tough.

  Jeff Bailey   9/30/200,  9:53:32 AM
ABMD $8.45 -3.42% .... if still long and have not been able to sell full day trade position from yesterday, here's where 5-minute technique can still be of help. Note that so far, we've seen close test of RED #6. What a day trader might look for is bounce back to RED #2 $8.64, where after seeing low of $8.26, day trade bull sells that strength and cuts out.

  Linda Piazza   9/30/200,  9:43:27 AM
The thirty-minute OEX MACD lines now touch but have not moved below signal as the OEX struggles to regain the 30-minute 21-pma at 502.52.

  Jeff Bailey   9/30/200,  9:41:15 AM
Nice technique of "flashing" in ABMD by INCA at $8.88 in ABMD.

"flashing" is when a trader that wants a fill will place, cancel, place, cancel, place, cancel an order and get their market maker symbol to turn on and off, try and get other market makers attention (actually it is intended to upset them so they will fill your order and get you to quit flashing).

  Linda Piazza   9/30/200,  9:35:19 AM
The first five-minute OEX range was a high of 504.34 and a low of 502.37. The 50% retracement of that first five-minute range lies at 503.36, and we can watch this figure for signs of early strength or weakness. This is a helpful tool in watching the earliest trading patterns, but is not a daytrader's guide, as is Jeff's 5MRT system.

  Linda Piazza   9/30/200,  9:32:01 AM
The OEX falls below the 50-dma at 503.63 in early trading, also falling beneath the 60-minute 21-pma at 503.53.

  Jeff Bailey   9/30/200,  9:27:34 AM
ABIOMED (ABMD) $8.75 .... seeing Level II bid/ask of $8.70 x $8.90. For any day trade bulls that did hold overnight, would look to exit position for break even ($8.84) if possible, or let 5-minute bar form (may need 10-minute bar based on past observations), with stop as profiled at $8.55.

If I were to see some strength above $9.00, would sell into that liquidity early based on lower stock futures.

  Linda Piazza   9/30/200,  9:27:22 AM
A reader has just alerted me that some readers don't have access to five-minute data, and would like for me to provide the first five-minute range for the OEX. I'll be happy to do that since I'm usually calculating the 50% retracement of that first range anyway. However, it's difficult to imagine trading the OEX without those intraday charts, even when Swing Trading, as the shorter-term charts can help plan entries and exits. Livecharts.com offers free OEX real-time access on one, five, ten, fifteen, thirty and sixty-minute intervals. Although the charts are delayed for equities, they're real time for the OEX and some other indices.

  Jeff Bailey   9/30/200,  9:17:15 AM
09:00 Update reported at this Link

  Linda Piazza   9/30/200,  9:16:35 AM
Swing Trade Signals
We'll see important economic numbers released at 10:00 today, so it's unlikely that I'll want to move into an official play ahead of those number. Of course, as usual, that means we may miss the movement, because it might begin before the release of those numbers, but I'm hoping the early trade will help clear up some of the quandaries we see on the charts. Yesterday, the OEX found support on one version of the descending trendline that had trapped it most of the summer, and climbed, closing above the 50-dma. RSI turned up again, and 5(3)3 stochastics made a bullish kiss from deep within territory showing oversold conditions. MACD hints that it may be flattening slightly as it approaches the signal line. Link However, the overnight currency activity certainly muddied the picture, with futures currently down as I write and with the leftover short-term bullish sentiment apparently erased.

That's the overall climate. Here's a 60-minute look at the OEX: Link After studying the 60-minute chart, our plan for today would have been fairly simple if those futures had been positive instead of negative. We would have waited for a test of the 60-minute 100- and 130-pma's to make our decision. Based on yesterday's close, I would have believed it possible to see that test this morning. We could have entered a bearish trade on a rollover beneath those averages and a bullish trade on a push above them. Now I'm not so sure we'll get the needed test, and therein lies our quandary.

We could use the 60-minute 21-pma as our barometer for a possible bearish trade, entering on a break of the 60-minute 21-pma. An examination of the 60-minute chart shows that over the last week, breaks below that average led to big declines. However, just below the current level lies the consolidation zone from Friday and from early yesterday morning. We wouldn't have any cushion if the OEX decided to find support there again. What about a break below that consolidation zone? The OEX remains in a wide consolidation zone from the summer, all the way down to 491, so it's difficult to say where the OEX would find support. Complicating all this is today's status as the last day of the quarter, which makes trading even more treacherous. Without that bump up to test those important 60-minute 100- and 130-pma's as a guide, it may be that we won't have a trade that fits risk vs. reward parameters today, but I will be watching volume patterns and other intermarket relationships to see if I can find a viable trade.

  Linda Piazza   9/30/200,  7:21:55 AM
Good morning. It was time for a bounce on the Nikkei, and bounce it did. The Nikkei opened up near 10,300, consolidated for an hour, and then shot above 10,400. Unfortunately, the bounce did not hold, and the Nikkei declined through the afternoon, then plummeted into negative territory the last few minutes. It closed down 10.52 points or 0.10%, at 10,219.05. Both the early bounce and the afternoon decline could at least partly be attributed to the yen's value, with the yen declining against the dollar in early trading and then firming in the afternoon.

Although it had been time for a bounce after the rough week the Nikkei had last week, the possible catalysts to the morning bounce proved to be numerous. One possible catalyst was an unexpected drop in Japan's August jobless rate, falling to 5.1%. August's household spending in households headed by a salaried worker rose 7.4 over July's number. In addition and perhaps more importantly, the yen dropped sharply against the dollar. Some speculated that the Japanese government sold yen to drive its price down. Banks rose and semi-related companies continued their rise after yesterday's announcement by the Semiconductor Industry Association that August global chip sales grew 12.5% from the year-ago period. In the afternoon, though, the yen firmed, sending automakers and some other exporters down. Some also mentioned a reshuffling of the Nikkei as one contributor to the sharp decline at the end of trading. Banks retained some of their gains, but techs ended the day with a mixed performance.

Hong Kong telecom stocks rose after it was learned that Hong Kong companies may have preferential access in the China market under a China-Hong free trade deal. Hong Kong's Hang Seng rose 0.80%, and China's Shanghai Composite rose 0.87% in light trading ahead of a holiday. Other Asian markets were mixed, with most higher, but the Taiwan Weighted was one bourse closing down, by 0.57%. South Korea's Kospi gained 0.21%, and Singapore's Straits Times gained 0.13%.

European markets are mixed but mostly down, with the currency issue perhaps driving the performance of European bourses, too. Morgan Stanley announced its intention to trim its European equity exposure to 57 percent from its former 60 percent, citing currency issues, oil prices, and a possible increase in protectionism. On CNBC Europe this morning, a CNBC guest technical analyst pointed out a possible H&S top on the USD/JPY, highlighting the worried way other analysts around the world watch the recent behaviors of the currencies. Releases of economic data included France's September business confidence number, rising for the third consecutive month. In stock-specific news, the embattled Royal Ahold extended by one day its release of restated 2002 accounts, restated due to an accounting scandal. It will reveal those results after the bell tomorrow. Air France affirmed its expectation that it will wrap up an agreement with KLM Royal Dutch Airlines.

As of this writing, the FTSE 100 trades down 1.30 points or 0.03%, at 4141.40. The CAC 40 trades down 11.07 points or 0.35%, to 3177.64. The DAX trades down 37.16 points or 1.12%, at 3286.22. Each is near its day's low.

  Jeff Bailey   9/29/200,  1:08:38 AM
Pivot Matrix for tomorrow at this Link

  OI Technical Staff   9/29/200,  1:08:32 AM
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