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  Jeff Bailey   10/1/200,  9:34:53 PM
Pivot Matrix for tomorrow at this Link

 
 
  OI Technical Staff   10/1/200,  5:50:25 PM
The Proxy version of the Market Monitor will be taken down for maintenance and should be back up in about five minutes.

 
 
  Linda Piazza   10/1/200,  3:58:01 PM
Swing Trade Summary: OEX/SPX/DJX/DIA/SPY
9/30: Entered a bearish OEX trade at OEX 502.42
10/1: Stopped at OEX 502.50. Result for the day: 2.08 OEX points against us.
Result for the week: 2.28 OEX points against us.

 
 
  Jane Fox   10/1/200,  3:57:08 PM
Hear Hear Linda and there goes my Squirt title because I sure didn't think it was very valid either.

 
 
  Linda Piazza   10/1/200,  3:54:48 PM
In my 10:42 post, I noted a potential inverse H&S that reader P.G. had discerned on the OEX 60-minute chart. We had been talking about it for a few days, but I wasn't sure it had much validity. However, the OEX zoomed up as soon as it broke that neckline. Maybe it had more validity than I believed? The OEX broke through the neckline at about 502.50, and there would have been an upside target of about 8 points above that, although that upside target is difficult to determine since the formation is so rough and the neckline slanted so much. That would have made the upside target about 510.50 and the OEX high has been 510.14. Congratulations, P.G., for spotting that formation.

 
 
  Jeff Bailey   10/1/200,  3:50:43 PM
PNRA $39.27 -4.2% ... this is close enough. 10-minutes to close.

 
 
  Linda Piazza   10/1/200,  3:47:52 PM
It's my shoulders that are really sore today, Jane, from the strain of my head hanging so low as I watched action I thought might happen but was scared wouldn't carry through, happen without me and the readers along for a ride.

 
 
  Linda Piazza   10/1/200,  3:46:00 PM
The OEX is now punching through the top 1.35% envelope on the 60-minute chart, and following the now-curving-up top envelope on the 30-minute chart. When this happens, it's usually time to switch to a buy-pullbacks-to-the-averages strategy instead of a sell-the-rally one, but first there has to be a pullback. I also tend to be a little distrustful of late-day action. We have it straight from Art Cashin, however, that this is not short-covering but is broad-based buying of baskets of stocks. I guess those funds that got undressed earlier in the week are dressing up again. However, Cashin admitted to remaining cautiously aware of seasonal patterns.

 
 
  Jane Fox   10/1/200,  3:44:33 PM
Jeff - my jaw is really sore today.

 
 
  Jeff Bailey   10/1/200,  3:43:04 PM
S&P 500 Index (SPX.X) 1,017.71 +2.18% ... has anyones jaw hit the top of the desk yet?

 
 
  Jeff Bailey   10/1/200,  3:40:25 PM
PNRA $39.73 -3.16% ... after low of $38.75, stock has rebounded back to RED #3 of $39.68 and hovers here. With program trading curbs in place, will most likely be difficult to get a new session low and would look to close this day trade out before the close, preferably on a dip back to RED #4 of $39.25.

 
 
  Jeff Bailey   10/1/200,  3:35:23 PM
Program Trading Curbs in place as Dow Industrials gain 180 points. This now limits computer trading buy/sell programs remainder of the session unless INDU returns to within 90 points of yesterday's close. This would be 9,365.06.

 
 
  Linda Piazza   10/1/200,  3:34:35 PM
I sure wish this had happened a little earlier in the day and we hadn't had the recent experiences we've had with holding positions overnight. Tomorrow morning, we're set up well, however, as now we'll watch for a retest of the 60-minute 100- and 130-pma, but this time a retest from above those averages.

According to Jeff's 5MRT system, we would have entered long when the OEX moved above 504.75 (rounded off) and would then have expected a trade of 508. The trade would have worked smoothly, with no dips below previous three-minute lows during the climb. Unfortunately, I did not feel comfortable with that trade because too many resistance levels lay between 505 and 508, and on a couple of other days, the OEX hasn't followed the 5MRT system particularly well. We'll make a note that it worked like a charm today, however.

 
 
  Jeff Bailey   10/1/200,  3:32:00 PM
03:15 Update posted at this Link

 
 
  Linda Piazza   10/1/200,  3:13:23 PM
Here's a view of the OEX on the 60-minute chart: Link

 
 
  Linda Piazza   10/1/200,  3:11:23 PM
Swing Trade Signals
I'm not comfortable entering this late in the day, but the OEX now challenges the 60-minute 100- and 130-pma's, and is climbing above them as I type. That's a bullish event if the OEX holds at this level, but the OEX remains just below the 30-dma as I type. I'm hesitant to enter with so little time ahead of us and with economic numbers due tomorrow morning. I'm kicking myself a bit because by yesterday morning, I was predicting that the OEX might do just what it's done, but didn't act on that belief. Yesterday morning, however, when I was posting those charts, it seemed a possibility but not a probability. Now, I still see the possibility that the OEX could fail from its test of those averages or else bounce above them, and late-day shortcovering may not give us the complete answer.

 
 
  Linda Piazza   10/1/200,  2:57:52 PM
It looks as if we're going to get another test of the 60-minute 100- and 130-pma's, with a possible breakout above them. While I'm willing to go long on a trade over those averages, I am growing concerned about any entry--long or bearish--this late in the day. We've seen what happens to our trades overnight, even when we have some cushion protecting us. Unless something happens quickly, I'm beginning to think it may be better for us to wait until tomorrow morning for an entry. Sigh.

 
 
  Jeff Bailey   10/1/200,  2:54:52 PM
PNRA $39.04 -4.8% ... here's quick intra-day chart with 5-minute lower retracement. Link

 
 
  Jeff Bailey   10/1/200,  2:46:54 PM
General Motors (GM) $40.55 -0.92% .... at approx. 01:45 PM EDT, reported September sales rose 13%. Bank of America had estimated a 17% jump.

 
 
  Jeff Bailey   10/1/200,  2:45:03 PM
Daimler Chrysler (DCX) $35.70 +1.82% ... off session highs of $35.97 after reporting September sales fell 15%. Bank of America estimates were for decline of 9%.

 
 
  Linda Piazza   10/1/200,  2:42:22 PM
Swing Trade Signals
The 30-minute MACD begins to flatten now, and RSI begins to curve down. CCI turns down, too, but still measures a high 112.15. I'm still considering a bearish entry on a trade down through the 30-minute 100-pma.

 
 
  Jeff Bailey   10/1/200,  2:41:06 PM
PNRA $39.24 -3.2% .... trades RED #4

 
 
  Jeff Bailey   10/1/200,  2:39:56 PM
PNRA $39.50 -3.75%

 
 
  Jeff Bailey   10/1/200,  2:38:54 PM
DAY TRADE SHORT PNRA on trade at $39.50 (would be session low), stop $40.25, target $38.01.

 
 
  Jeff Bailey   10/1/200,  2:34:34 PM
Panera Bread (PNRA) $39.80 -2.95% ... well off bullish early gains of $43.20 here. Some rumors floating around that company may guide comparable sales to low end of range.

PNRA was/is scheduled to present at the RBC Capital Markets Consumer Conference today.

 
 
  Jeff Bailey   10/1/200,  2:30:42 PM
Treasury YIELDs now turning red. Hmmm.... this may need monitoring here. Why would treasuries bid, on stronger equity session is the question?

 
 
  Jeff Bailey   10/1/200,  2:28:53 PM
S&P Banks Index (BIX.X) 308.82 +1.41% .... session high of 309.32 actually exceeded correlative DAILY R2 and WEEKLY R1. Bullish move from the banks today, but might be "spent" for the day. Ability for BIX.X to trade WEEKLY R1 now lends some bullish thoughts for SPX trade near its WEEKLY R1. BIX.X was a little stronger within the pivot, and bulls should like today's leadership signs.

 
 
  Linda Piazza   10/1/200,  2:28:09 PM
The OEX 30-dma lies at 508.44, the site of a previously violated trendline. The 10-dma and 21-dma lie just above that. A break back above the trendline and those MA's would be bullish and would occur coincidentally with a break above the 60-minute 130-pma, and might predict a rise back to the 518 level: Link The 21(3)3 stochastics and RSI hint that the OEX may be able to break through those levels. However, that's massed and significant resistance, and it's going to be tough to break. By the end of this week, perhaps, we'll all be saying, "Of course, the OEX was going to . . . you fill in the blank." Right now, that's not so clear, however.

 
 
  Jeff Bailey   10/1/200,  2:25:24 PM
S&P Futures (sp03z) updated daily interval chart with our fitted retracement technique. IF futures can hold a settlement above 1,007.80, THEN should expect a test of 1,015.50, ELSE near-term support at 1,001.80. Link

 
 
  Linda Piazza   10/1/200,  2:13:50 PM
Swing Trade Signals
The OEX hit a high of 507.51, with the 60-minute 100-pma at 507.87 and the 130-pma at 508.04. Was that a close enough brush to consider that a test of the 60-minute 100-pma? Perhaps. We're going to turn back to the 30-minute chart as our guide. Now that the OEX moved above the 30-minute 100-pma, we're going to use a move below the 30-minute 100-pma as a bearish entry. That average is at 505.91, but I want to give the OEX a little room to overshoot, so we'll probably use 505 as our entry. There's no guarantee that will happen, but that's what I'm watching.

 
 
  Jeff Bailey   10/1/200,  2:08:10 PM
Market Volatility Index (VIX.X) 21.25 -6.47% ... while overwhelmed with various alerts, got downside alert on VIX.X at 21.22 at almost exact moment of SPX breaking above MONTHLY/WEEKLY Pivot. This action may hint of a sigh of relief for net longs and perhaps some removal for protective puts. I can't say this for certain, but my mindset from 10:34:02 post.

Could also bring in observation of December S&P futures (sp03z) 1,010.00 +1.59%, is back above its summer closing high resistance of 1,007.80. A good test for how much conviction bulls have, is if this futures contract can hold a close above 1,007.80 by today's settlement. I'll show an updated chart of this futures contract, that we've been following with our "fitted" retracement technique.

 
 
  Linda Piazza   10/1/200,  2:06:32 PM
The OEX is now above the 30-minute 130-pma (but testing it again), and I'm waiting for a test of the 60-minute 100 and 130-pma's, at 507.88 and 508.06, respectively. Over the last few weeks, it's been those 60-minutes that have turned the OEX, so I'm waiting for that test. Of course, in hindsight, we would have had a big enough trade to enter long this morning when I speculated about doing so, but each level had the potential to turn the OEX back. If the OEX rolls down now, we'll have a solid entry. If it pushes above those 60-minute averages and does it quickly with indicators cooperating, we'll have a long entry, but one that makes me nervous. That will be an entry near the top of the 60-minute 1.35% envelope.

That brings up another thought about indicators. Yesterday morning, when the OEX was hitting the bottom of the hourly 1.35% envelope surrounding a central 21-pma, I put up a chart comparing the bearish aspect of all the 60-minute indicators with a similar period when the OEX had hit the lower band and then bounced right to the top again. I used that chart to explain my hesitancy to enter a bearish trade at that particular level. Despite the bearish-looking indicators yesterday on the 60-minute chart, the OEX bounced from the bottom of the envelope up to the top. I love using indicators, but sometimes they're more helpful than they are other times. Sometimes they indicate a movement that has already begun rather than signal one about to begin.

 
 
  Linda Piazza   10/1/200,  1:51:18 PM
Our push began right on schedule at 1:45 ET. This stop-running push is going to tell us a lot about market direction. Specifically, it's driving the OEX right up to the 30-minute 130-pma and perhaps might send it to test the corresponding average on the 60-minute chart. If so, we're soon going to have the information we need--either a push through those levels or else a rollover from these levels.

 
 
  James Brown   10/1/200,  1:41:07 PM
Currently, there are only 3 Dow components in the red. General Motors is down 48 cents, AT&T is down 5 cents and Eastman Kodak is down 4 cents.

Leading the $INDU is Intel, Home Depot and Walt Disney.

 
 
  Linda Piazza   10/1/200,  1:29:42 PM
Hmm. The OEX 60-minute chart now sports a doji or near doji at the top of a climb, with that doji popping just above the descending trendline I've depicted a couple of times today. We saw an instance today when a similar potential reversal signal on the 30-minute chart did not confirm with the next candle, so all we can say at this point is that there's some indecision about driving the OEX higher. No kidding! There's lots of indecision to go around. At any rate, I'm just watching, hoping the charts deliver some signal that lets us know when it's time to enter. This might be the first sign, but it could also just be indecision during the lunchtime lull.

 
 
  James Brown   10/1/200,  1:26:40 PM
Sounds like you're searching for the Holy Grail, Jim.

 
 
  Jim Brown   10/1/200,  1:25:55 PM
Does Neimans have a foolproof trading system for sale? I will take one for Christmas please.

 
 
  James Brown   10/1/200,  1:22:29 PM
It's October 1st. Are you ready for Christmas?

Neiman Marcus is already publishing its 77th annual Christmas Book. This year's catalog is nearly 150 pages long. Inside you'll find some real winners like their $10,000 mermaid suit that even includes training on how to swim in it. Other gems include a $27,000 luxury ice fishing house, a $75K limited edition BMW coupe, and a $12 million Bombardier Lear jet. The entire catalog is online at their website: Link

 
 
  Linda Piazza   10/1/200,  1:21:23 PM
The OEX is definitely finding it tough going to climb above the 30-minute 100-pma at 505.88. The OEX keeps inching above that average only to slip back. What I'd like to see is a test of the 130-pma and then a roll back down through the 100-pma, giving us a higher bearish entry. We could place a stop above the corresponding averages on the 60-minute chart, with that stop being at firm resistance.

If the OEX instead climbs above the 30-minute 130-pma, we'll then wait until it climbs above the corresponding averages on the 60-minute chart before entering a long signal. That would have to happen fairly soon, however, as those late-day entries haven't been the best performers. I've counted how many candles cluster around those averages before there's a move away, and it's not unusual to see them cluster there through most of a trading day or even longer.

If the OEX does neither, but instead rolls down from here, I'll probably stick with the entry on a drop below the 50-dma, although if indicators cooperate, we may consider a countertrend bearish entry.

 
 
  James Brown   10/1/200,  1:13:47 PM
Afternoon Sector Leaders are:
____________________________
DJUSHB homebuilders: +4.9%
DDX disk drive index: +2.86%
RLX retail index: +2.2%

GSO software index: +1.51%
SOX semiconductors: +1.62%
BKX banking index: +1.49%

Sector Losers:
XAU gold & silver: -0.77%

 
 
  James Brown   10/1/200,  1:09:54 PM
Absolutely amazing! Porsche is saying that its N. American September sales are up 96% versus last September.

 
 
  Jeff Bailey   10/1/200,  1:03:58 PM
General Motors (GM) $40.64 -0.7% ... has erased bulk of this morning's 2% declines. Haven't seen a number out the GM or DCX $35.86 +2.28% at this time.

 
 
  Jeff Bailey   10/1/200,  1:02:27 PM
Ford Motor (F) $11.21 +4.17% ... September sales rose 5% from August. This was big upside to Bank of America's forecast for a 4% decline

 
 
  Linda Piazza   10/1/200,  12:58:10 PM
Here's where the OEX trades with respect to the descending trendline and the 30-minute 100 (blue) and 130-pma's: Link

 
 
  Jeff Bailey   10/1/200,  12:54:24 PM
December yen futures (jy03z) 0.905 +0.6% .... yen futures contract show yen strength today, and session highs of 0.906 came right at the level where yesterday's news of Japan's intervention came.

Yesterday, on intra-day basis, I thought a move much above 0.902 on this contract might weigh on stocks, but not the case today, and perhaps the tankan survey helps offset a bit. Still, I would think a move above yesterday's contract highs of 0.9105 builds some concern that too strong a yen could weigh on Japan's recovery.

 
 
  Jeff Bailey   10/1/200,  12:47:10 PM
S&P 500 Index (SPX.X) 1,009.08 +1.31% ... was reviewing today's buy/sell program premium alerts and will note that approximately 25-minute ago, did see a buy program premium alert, which lifted the SPX from 1,008.11 to our "zone of resistance" in the WEEKLY/MONTHLY pivots of 1,009.74-1008.87, which is current level of trade.

With a 5-minute retracement also on this chart, will note SPX has closed above BLUE #3, and this could be important level of trade from here on out. A move above BLUE #4 could see some build of buying by shorts/bears, and set stage for potential weekly gains to the 1,020-1,025 level.

This is looking so much like a replay of early August, isn't it? INDU +1.42%, SPX +1.34% and QQQ trailing a bit, but up +1.26%.

 
 
  Linda Piazza   10/1/200,  12:44:05 PM
There are lots of reasons to expect a failure near 507-508 for the OEX, with those reasons spanning the range from historical S/R, moving averages across several intervals, trendlines on daily and other charts. However, that's no guarantee that the OEX will rollover from that zone. It may thwart all seasonal patterns and rise instead. I've been trying to keep an open mind about all possibilities over the last few weeks, and that's certainly a possibility. That's why I've been trying to hold off this week for a test of these averages.

How will we know a rollover when we see it? Right now, I'm considering using the 50-dma as the line in the sand. That 50-dma currently lies at 503.71.

 
 
  Jeff Bailey   10/1/200,  12:35:42 PM
Forest Labs (FRX) $50.23 -2.37% Link .... bucked the broader market trade yesterday with upside gains, but finds some selling this morning after Eli Lilly (LLY) Link $63.13 +6.27% said the FDA has issued a second approvable letter for its Cymbalta depression drug, which would compete with FRX's Lexapro.

Also weighing on FRX is rumor it may be set to bid for King Pharmaceuticals (NYSE:KG) Link $15.75 +3.96%.

Disclosure: I currently hold bullish position in FRX.

 
 
  Linda Piazza   10/1/200,  12:31:37 PM
The OEX now tests it 30-minute 100-pma, with the 30-minute 130-pma a point overhead at 506.93. A point above that, we start finding the corresponding 60-minute averages. We're watching for a rollover or a bounce through those averages.

 
 
  Jeff Bailey   10/1/200,  12:26:47 PM
JP Morgan Global Mfg. PMI .... which is a combined effort by JP Morgan and NTC in association with the ISM and IFMPP said its Global PMI rose for a 5th month in September to 52.3 from August's 52.0. The rate of increase was the fastest since June 2002. Full story at this Link

 
 
  Linda Piazza   10/1/200,  12:23:24 PM
We now have a descending trendline from September 18 (see my 12:18 post) and the 30-minute 100-pma converging near 505.90. It should be quite a test.

 
 
  Jeff Bailey   10/1/200,  12:19:24 PM
Weekly Mortgage Applications data from the Mortgage Bankers Association giving further lift to Dow Jones Home Construction (DJUSHB) 484.97 +3.55% today. Here's our weekly tally of the data, and positive look to be coming from the recent decline in Treasury YIELDS, which have had mortgage rates falling for fourth-consecutive week. Link

 
 
  Linda Piazza   10/1/200,  12:18:49 PM
Here's a trendline I'm watching on the OEX: Link

 
 
  James Brown   10/1/200,  12:14:59 PM
Under performing the markets today is current OI put play, Cabot MicroElectronics (CCMP). The stock is down 1.87% and breaking support at the $55 level. There could be some support near $52.50 but bears are likely to target the 200-dma near $50-51.

 
 
  James Brown   10/1/200,  12:11:11 PM
As Bob Pisani points out the homebuilders are up strongly today. The DJUSHB index is up 3.3 percent to a new all-time high. Helping lead the way is OptionInvestor's play-of-the-day in Ryland Group (RYL), which is up nearly 4 percent near $76.

 
 
  Linda Piazza   10/1/200,  12:08:23 PM
The OEX has paused just beneath the bullish #2 on Jeff's 5MRT system. The #4 on his system hits near the 60-minute 100 and 130-pma's.

 
 
  James Brown   10/1/200,  12:07:56 PM
APOL, a current OI call play, is enjoying the market bounce with a 2.5% gain in today's session. Yesterday we suggested that those traders not willing to buy the dip to $65 might want to wait for a move back over $67.00. Well, we got it. Shares are currently at $67.70.

 
 
  Jeff Bailey   10/1/200,  12:04:41 PM
Index Trader Wrap .... will note that Stochastics (5,3,3) have turned up from "oversold" on the INDU/SPX/OEX, but not quite there yet on the NDX/QQQ.

Economic-related news yet to come would be from the Big 3 auto's and their September Sales Data.

 
 
  Linda Piazza   10/1/200,  12:01:58 PM
The OEX chugs up toward the 30-minute 100-pma, the lowest of the important averages we want to see tested. That average crosses currently at 505.89, with the 130-pma at 506.97. Over the last few weeks, however, there's been a stronger correspondence with the OEX's trading pattern in relationship to the 60-minute 100-pma, currently at 507.92, and 130-pma, currently at 508.11. The upper envelope on the 60-minute chart currently measures 508.35. A test and failure from that level would give us a solid bearish entry, while a test and push above those averages might renew bullish fervor and signal that we should enter long. We'll have to see what happens, but I'm glad that we're getting at least a near-test of those averages, and hope to see an actual test of those levels.

 
 
  James Brown   10/1/200,  11:59:09 AM
EBAY watchers will note that shares are not participating in the market's bounce today. Yesterday the stock broke its simple 50-dma and we're seeing a little bit of follow through today. The daily chart shows support at $50.00 but EBAY's P&F chart just produced a fresh double-bottom breakdown (sell signal) and there is plenty of room to fall. Looking back to the daily candlestick chart a break under $50 would lead to its next support level near $47.50, which will soon be supported by its simple 200-dma. I'm not suggesting any bearish plays here but it's one I keep on my watch list. If you squint your eyes you can almost see the making of a pennant formation with the higher lows and the lower highs funneling into a point. FYI: the company is expected to report earnings two weeks from tomorrow.

 
 
  James Brown   10/1/200,  11:43:30 AM
Wow! It was just last week that shares of Eli Lilly (LLY) were looking like a potential bearish candidate given its breakdown under the $60 mark. Today, shares have rebounded strongly, up 5.85% and back above its simple 200-dma on positive news from the FDA. LLY has received another approval letter for its Cymbalta treatment for depression. The letter states that no further clinical trials will be needed. However, the FDA has not yet issued an approval until they feel comfortable that LLY has solved its quality control issues at two of its manufacturing plants.

 
 
  Linda Piazza   10/1/200,  11:36:15 AM
A new high of the day on the OEX. It's certainly been difficult to keep from going long the OEX--a tactic I much would have preferred to entering a bearish trade on a violation of the 21-pma--but I'm still watching the overhead averages. We'll get a strong signal there, either for a long position or a bearish one.

 
 
  James Brown   10/1/200,  11:34:30 AM
One of today's big losers is Hollis-Eden Pharmaceuticals (HEPH), down more than 17 percent. The stock has had an incredible run, trading at $6.00 in early May and ramping up to $36 two weeks ago. The stock has plummeted back to earth and remains in free fall. Assisting it on its way down is Legg Mason who started coverage of the stock with a "sell" this morning and a $10 price target (HEPH closed at $24.24 yesterday). If HEPH closes under $20 its next stop could be the $17.50 level, which was resistance in June-July.

 
 
  James Brown   10/1/200,  11:25:52 AM
PeopleSoft (PSFT) is higher by almost 3 percent following an upgrade this morning. Wedbush Morgan raised PSFT from "hold" to a "buy" and slapped a $26 price target on it. The stock is rebounding from its simple 50-dma, where it bounced two days ago. The chart almost looks like a bullish flag formation and a move through $19.25 could be a breakout.

 
 
  Jeff Bailey   10/1/200,  11:23:32 AM
11:00 Update posted at this Link

 
 
  Linda Piazza   10/1/200,  11:21:32 AM
Here's what I'm watching on the OEX three-minute chart: Link

 
 
  Linda Piazza   10/1/200,  11:09:34 AM
The last OEX 30-minute candle was a bearish candle but it did not retrace more than 50% of the morning's first 30-minute candle, so I don't consider the potential evening-star reversal pattern confirmed. That's being made even more obvious by the current 30-minute candle's rise. As far as I'm concerned, anything can still happen and I'm trying to stay aware of all possibilities. I do not want to go short at this level, but if the OEX again falls beneath those 21-pma's, with appropriate signals on the indicators, we may be considering such a play. I still hope for more upside, however.

 
 
  Linda Piazza   10/1/200,  11:04:44 AM
Thanks, Jane, for your 10:57 comments on the potential inverse H&S on the OEX 60-minute chart. I sort of had the same feeling about the pattern, but I also don't want to ignore a potential sign of more upside. Sometimes when these potential formations show up but aren't classic, I try at least to decide if the psychology behind their formation might be similar to that behind the formation of a more classic pattern. Here, I just don't know.

 
 
  Linda Piazza   10/1/200,  11:01:32 AM
I'm hoping that the formation we're seeing on the OEX five-minute chart is a bull flag that will break to the upside before it retraces more than 50% of the rise that preceded it. If the OEX instead falls below that 50% level, we may be forced to consider a bearish trade from this level again.

 
 
  Linda Piazza   10/1/200,  10:59:27 AM
Swing Trade Signals
We may be forced into consideration of a bearish play soon, although I would again have preferred to have done it on a test of longer-term averages. Stay tuned.

 
 
  Jane Fox   10/1/200,  10:57:03 AM
Linda (re:post of 10:42) - you know what they say about experts, they are ex-squirts (grin). When I look at a chart if I don't see a H&S formation right away I usually say it is not there and I don't have one jump out at me on the OEX 60-minute chart. But here is what I see, the left shoulder is the 11:30 bar on the 29th, the head is the 10:30 bar on the 30th, so for a classic H&S you would want the right shoulder to form at 3:30 on the 30th (5 bars from the head). The right shoulder looks to be forming at around the 4:00 bar so OK. Neckline would be slanting down which is a plus according to "Classic Chart Pattern." So yes it is there but ...

 
 
  Linda Piazza   10/1/200,  10:46:51 AM
Volume appears extremely light today, at 262 million on the NYSE as of a few minutes ago and 430 million on the Nasdaq. What volume there is, is slanted strongly to the bullish side, however, but that low volume makes entries problematic. Everyone must be waiting to see what other market participants are going to do.

 
 
  Linda Piazza   10/1/200,  10:42:18 AM
Reader P.G. has suggested we take a look at this potential inverse H&S on the OEX 60-minute chart. We've been watching it a while. I'm unsure about its validity, due to the last shoulder's size in proportion to the head and also the degree to which it slants. Jane, as our resident H&S expert, what do you think? Link

 
 
  Jeff Bailey   10/1/200,  10:35:48 AM
American Petroleum Institute (API) reports crude inventories fell by 921,000 barrels, gasoline inventories rose 3.4 million barrels, and distillate inventories fell by 2 million barrels.

Department of Energy (DOE) reported crude inventories were unchanged, gasoline inventories rose by 2.4 million barrels, and distillate inventories rose by 100,000 barrels.

 
 
  Linda Piazza   10/1/200,  10:35:11 AM
The OEX 30-minute chart now shows a tall white candle followed by a doji--a possible reversal signal building. To complete that reversal signal, the next 30-minute candle should be a bearish one, and should retrace more than 50% of the first 30-minute candle. That 50% retracement lies at 501.21, which is near the location of the 30-minute 21-pma and just below the 60-minute 21-pma. I'm still watching, and wouldn't be happy about being forced to make a decision based on a violation of the 21-pma's rather than a rollover or bounce above the longer-term averages, but that may be all we're given. Let's see.

 
 
  Jeff Bailey   10/1/200,  10:34:02 AM
Market Volatility Index (VIX.X) 22.08 -2.81% .... turn the VIX.X upside down and recent sessions begin to look just like the SPX. I've shown the VIX with a retracement bracket I like to use from 16.78 to 40, where 80.9% retracement of 21.22, which is currently lower, might be a "line up" or correlate with SPX MONTHLY/WEEKLY pivot test.

Some talk this morning on CNBC that floor traders still net long, but some buying protective puts of late. One trade that might be in play when/if SPX reaches WEEKLY/MONTHLY pivot is to see if these "hedges" come off, put selling results, VIX.X decline, and SPX moves above this correlative resistance. Flip side is that recent economic data/currency action, has longs further hedging on the rebound, VIX pops higher from 21.22 and SPX finds tough going at the pivots.

 
 
  Jeff Bailey   10/1/200,  10:26:13 AM
XM Satellite Radio (XMSR) $15.97 +2.9% Link ... Announces it closed Q3 with an additional 237,395 new subscribers, its best ever quarterly performance. XMSR added that is is solidly tracking for 1.2 million subscribers in 2003. Earlier this morning, Rodman & Renshaw thought quarterly subscriber adds would be positive and made some valuation comments. R&R said XMSR's enterprise value equates to 21-times 2004 sales and $1,900 per subscriber. R&R noted that DBS and Cable operators currently value subscribers in the range of $2,000-$3,500 and generates revenue per subscriber at 5-times that of XMSR.

 
 
  Linda Piazza   10/1/200,  10:24:40 AM
The OEX moved above its 30-minute and 60-minute 21-dma's. The 30-minute MACD is moving above signal. CCI is already green. The 60-minute RSI curves up. The OEX keeps testing the 50-dma and sometimes moves above it. The daily 5(3)3 stochastics move up in full bullish mode. It's rather difficult to restrain from jumping into a bullish trade on those occasions when the OEX pops above its 50-dma, but 504 resistance and those important 30 and 60-minute 100- and 130-pma's lurk overhead. There's no telling where the OEX will turn back. That daily chart also shows that the OEX is beginning to build a consolidation zone from about 500-505. I'm waiting patiently for a better entry.

It's possible that better entry won't come today. The OEX could expend most of its energy rising up to test those averages and then hover there for a few hours or a few days before it gives us a strong signal.

 
 
  Linda Piazza   10/1/200,  10:16:32 AM
As many of you who have been reading my commentary know, I'm reserving judgment on what I expect to see happen with the markets, waiting until we get through this difficult seasonal period and see how the markets fared. However, as I study the OEX daily chart today, it shows some possible positive signs: Link Based on that daily chart, I would still consider a long play on a move above the 30 and/or 60-minute 100- and 130-pma's. We're a long way from that happening yet, and it may be that we'll get the rollover instead of the push through those averages.

 
 
  Jeff Bailey   10/1/200,  10:12:20 AM
5-minute retracement spreadsheet .... here is a download link for the 5-minute spreadsheet. Some modifications have been made so traders can copy a row of formulas lower if you would like to add some more stocks/indices to your intra-day observations. Link

Note: Levels currently displayed in this spreadsheet are NOT today's levels. You must entery TODAY's opening 5-minute range low/high.

 
 
  Linda Piazza   10/1/200,  10:07:37 AM
So far, the OEX 50-dma holds as resistance, although I don't yet have a strong feeling for whether the OEX will attempt to climb from here or decline from here.

 
 
  Jeff Bailey   10/1/200,  10:04:19 AM
QQQ $32.95 +1.63% .... MARKET response to 10:00 data looks bullish. QQQ now above BLUE #2, and shold find bid above $32.60 on intra-day basis.

 
 
  Linda Piazza   10/1/200,  10:02:38 AM
This morning's OEX rise stopped just below the 50-dma at 503.66. Let's see if that level stops it now.

 
 
  Jeff Bailey   10/1/200,  10:00:37 AM
QQQ $32.72 +1% would be looking short the QQQ on a break back below $32.59, stop $32.95, target $31.98.

 
 
  Linda Piazza   10/1/200,  9:57:44 AM
We're back in a wait-and-see mode on the OEX, hoping for an opportunity to see how the OEX behaves on a test of its 60-minute 100 and 130-pma's. Those averages currently measure just over 508, and they're linked with each other and with the top of the 60-minute 1.35% envelope. I'm also watching these averages on the 30-minute chart, and they're somewhat lower, at 506.17 for the 100-pma and 507.22 for the 130-pma. If we see the OEX roll beneath these averages, complete with appropriate indicator action, we'll have a bearish signal. If the OEX insteads moves above those averages, with appropriate indicator action, we'll have a bullish signal. Let's just hope we get the test and aren't forced into yesterday's decision all over again.

 
 
  Jeff Bailey   10/1/200,  9:57:24 AM
Sina Corp. (SINA) $35.58 -0.33% Link ... In reading P&F charts, I was looking at SINA, it has fallen quite a bit, and until the sell off from last week firms I will not be taking very aggressive positions. But in looking at SINA the Bullish X count from August that started at 29 was 6 boxes, suggesting a target of 47 (SINA reached 46, pretty close) and the stock has broken that line of X's, and has begun a new bullish count today. Is that original line still the target at 47, even after the fall to 33?

Excellent display of PnF-tolligy. You are correct. Until SINA were to give a PnF sell signal (column of O, supply, exceeding below a prior column of O) then the bullish vertical count of $47 is still in play.

Dorsey/Wright & Associates has grouped SINA with its Internet Bullish % (BPINET) and sector status is currently "bull confirmed" at 62.43% after recent high bullish % reading of 68%. Would take a reading of 62% to reverse back lower to "bull correction" status, and reading of 50% to fall to "bear confirmed"

 
 
  Linda Piazza   10/1/200,  9:50:52 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were stopped out of our OEX bearish position when the OEX traded 502.50. We entered at 500.42, so endured a 2.08 move against us. In retrospect, I can see a thousand reasons this trade should not have been held overnight, but that's hindsight.

 
 
  Linda Piazza   10/1/200,  9:44:56 AM
So far, the OEX holds above a 50% retracement of the first five-minute move, and is also holding above those 30-minute and 60-minute 21-pma's, now at 501.30 and 501.39 respectively. These are signs of early strength and may spell trouble for our bearish play since we now have little room for volatility surrounding the release of the numbers at 10:00. Conservative traders might want to exit now, ahead of those numbers, if we're not stopped out in a few minutes.

 
 
  Jeff Bailey   10/1/200,  9:42:34 AM
VaxGen (VXGN) $13.60 +11.8% .... jumped to morning high of $14.61 after announcing it was awarded $80.3 million anthrax vaccine contract from the National Institute of Allergy and Infectious Disease for the advanced development of its anthrax vaccine candidate, rPA102. The 3-year contract is intended to help fund many of the steps required for commercial licensing and could pave the way for a significantly larger contract for a national stockpile of anthrax vaccine.

PnF chart of VXGN Link is longer-term bullish with current bullish vertical count of $36.75.

 
 
  Linda Piazza   10/1/200,  9:35:33 AM
The OEX first five-minute range saw a low of 499.25 and a high of 502.00. The 50% retracement of that first five-minute range lies at 500.63. We can watch this 50% retracement for signs of early strength or weakness, and then move on to other measures for watching the OEX's behavior. For those in a bearish play, the wish list includes a sustained move below that 50% retracement.

 
 
  Linda Piazza   10/1/200,  9:32:48 AM
The OEX now heads up to test its 30-minute and 60-minute 21-pma's, each near 501.44.

 
 
  Linda Piazza   10/1/200,  9:23:02 AM
The DAX is now slightly positive, climbing since it hit its low of the day about an hour and a half after trading opened. Currently, the DAX trades up 2.85 points or 0.09%, at 3259.63. The FTSE 100 and CAC 40 are also near their day's highs, only slightly off those highs.

 
 
  Linda Piazza   10/1/200,  9:16:30 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Raise the stop on our open OEX bearish position to 502.50.

We have an open bearish OEX trade, entered when the OEX traded 500.42. Yesterday, the OEX fell back below its 50-dma. It tested and fell back from the 30-minute and 60-minute 21-pma's. Those averages each currently measure 501.44. To account for opening volatility, let's raise our stop to 502.50, a point above those averages and just above the high of yesterday afternoon. Our first target is a retest of yesterday's low near 496.50, with a possible retest of 493-494. Market participants appear hopeful about the economic numbers this morning, however, and the day ended with the five-minute indicators moving up again. It's possible we'll get stopped out of the play ahead of the release of those numbers. Feel comfortable setting alternative stops that fit your trading style.

If the OEX should pop up through the 60-minute 21-pma and we're stopped out of our play, we'll stand aside and watch for a retest of the 60-minute 100- and 130-pma's. We'll be considering a long play above those pma's and another bearish play on a rollover beneath them. Yesterday, I had hoped we'd see a test of those pma's and could enter at that point, but when the OEX broke below the 60-minute 21-pma again, that was a bearish signal that the OEX might head back to the bottom of the envelope I'm monitoring. It wasn't my favored entry, but I certainly liked it better than I liked an entry after the morning's first precipitous drop.

 
 
  Linda Piazza   10/1/200,  6:39:34 AM
Good morning. The long-awaited Bank of Japan's quarterly Tankan report was released before the Nikkei opened for Wednesday's trading. The report showed confidence for big manufacturers rising 6 points to a +1 measurement, beating expectations for a rise to zero. This was the first positive number in two years and nine months. One component of the report asked about the intentions of companies to increase business investment for the year ending March 31. That component showed that those businesses planned to increase spending by 4.4% for that period.

For the first hour of trading, the Nikkei moved in a 100-point range, trading both above and below the flatline, but by the afternoon session, the Nikkei had decided on a direction: up. The Nikkei closed up 142.19 points or 1.39%, at 10,361.24, at the high of the day. The index was helped by the banking sector. Late Tuesday, Mitsubishi Tokyo Financial revised its first half profit estimates sharply higher. Automakers and techs were mixed.

Other Asian bourses were mixed, too. The Taiwan Weighted lost 0.53%, while South Korea's Kospi gained 0.97%. Singapore's Straits Times was flat. Markets in China and Hong Kong were closed for a holiday.

European markets are mixed today, too. A number compiled by Reuters Group Plc showed September European manufacturing rising to 50.1 from August's 49.1. This was the first time since February that the number showed an expansion, indicated if the number moves above 50. New orders rose, and confidence grew as U.S. economic numbers encouraged exporters to believe their businesses would improve. In Germany, the September purchasing manufacturing index rose to 50.2 from August's 48.8. In France, the index dropped.

In stock-specific news, the telecom sector sees another alliance forming, as several small telecoms joined together to build purchasing power. The alliance is led by mobile phone operator Mmo2.

As of this writing, the FTSE 100 gains 26.50 points or 0.65%, to trade at 4117.80. The CAC 40 trades near the flatline, up 4.94 points or 0.16%. The DAX has lost 26.81 points or 0.82%, to trade at 3229.97.

 
 
  Jeff Bailey   9/30/200,  12:46:06 AM
Pivot matrix for tomorrow posted at this Link

Note there are NEW MONTHLY pivot levels after the completion of today's trade.

In my rush, I forgot to place the matrix in tonight's Index Wrap. I will place it in tomorrow morning's 09:00 AM EST update.

 
 
  OI Technical Staff   9/30/200,  12:45:58 AM
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