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  Jeff Bailey   10/2/200,  10:01:50 PM
Pivot Matrix for tomorrow at this Link

 
 
  Jeff Bailey   10/2/200,  5:50:43 PM
Jonathan ... I'm also going to use that chart in tonight's Index Wrap as a "what to look for" when in pre-market cash we get the nonfarm numbers. Thought is with somewhat bullish bias going, a number that is better than consensus might see a quick dart to 1,025-1,029 futures, a little bearish capitulation, but some selling into that strength.

 
 
  Jeff Bailey   10/2/200,  5:47:11 PM
Short squeeze candidate .... Netflix (NFLX) $40.97 +18.7% Link .... BIIIIG volume of 5.2 million shares today, short interest as of 09/15/03 was building to 9.6 million shares. Link

 
 
  Jeff Bailey   10/2/200,  4:54:29 PM
December S&P futures (sp03z) here is chart I have been showing on the futures. Yesterday we though move above 1,007.80 paved way to 1,105.50 and got a little follow through today with CLOSE above 1,015.50. This gives bullish bias to 1,029.10. Here is thinking as we now await September non-farm payrolls which are due out before the opening bell. Link

Here's an overnight 5-minute chart for all you night owls. Link

 
 
  Linda Piazza   10/2/200,  4:49:44 PM
Swing Trade Summary: OEX/SPX/DJX/DIA/SPY
10/1: Entered a bullish OEX trade at OEX 510.71.
10/2: Stopped at OEX 508.50. Result for the day: 2.21 OEX points against us.
Result for the week: 4.49 OEX points against us.

 
 
  Jeff Bailey   10/2/200,  4:23:23 PM
Iomega (IOM) $6.84 +7.54% .... (Update to 10:41:37) Today's decline in the Disk Drive Index (DDX.X) 126.86 and this morning's report of IOM getting crushed.

I looked and looked and find that back on July 17, the company declared a one-time $5.00 cash dividend, which was payable today. So, this explains today's new pricing value.

 
 
  Jeff Bailey   10/2/200,  4:13:30 PM
Sun Microsystems (SUNW) $3.20 -1.53% ... Jeff: What do you think about some longer-term call options on SUNW? It seems to me there's enough bad news in the stock and it is still above its 52-week low. I understand it is somewhat speculative, but what about a small position?

It is tempting as a turnaround story, but with a bearish vertical count now building to $2.00, that may be where SUNW is headed into the end of the year. What fund manager wants to get stuck with this one in their end-of-year letter/prospectes to shareholders? With some BIG gains in other stocks for the year, SUNW may rate HIGH on the list of tax-loss sell candidates in Q4, which has just started and may be under some further distribution into December. How about waiting until ... mmmm .... December 23, and then looking long? Link

 
 
  Jeff Bailey   10/2/200,  4:02:32 PM
Freeport McMoran (FCX) $35.74 +4.19% Link ... new 52-weeker.

Maybe should set an upside alert on good'ol Phelps Dodge (PD) $49.31 +1.69% Link , or just buy the bugger here, stop $45, and target that bullish vertical count of $57. If memory serves me correct, had profiled Phelpsy back in April.

 
 
  Linda Piazza   10/2/200,  3:54:14 PM
Then, to give a balanced view, the OEX daily chart shows a doji or near doji as the daily candle. That can be a reversal signal, and it may also be significant that the OEX appears to be headed for a close just below its 21-dma at 511.67. RSI and stochastics indicate plenty more upside on the daily chart, but those can turn quickly if price does, too. Reader W.S. pointed out yesterday that many times over the last months, candles such as yesterday's were followed by doji and then by declines. He pointed out how similar yesterday's candle was to the June 16 candle in its range, but also pointed out the dissimilarity in indicators at the time the two candles were produced.

 
 
  Jeff Bailey   10/2/200,  3:53:57 PM
Aluminum Corp. China (ACH) $37.45 +8.36% Link ... new 52-weeker today. Vertical count bullish to $63.50.

 
 
  Linda Piazza   10/2/200,  3:47:43 PM
Here's what I'm noting on a five-minute chart: Link

 
 
  Linda Piazza   10/2/200,  3:41:54 PM
Here are a few things I'm noting on the OEX 30-minute chart: Link

 
 
  Linda Piazza   10/2/200,  3:23:58 PM
For those who might have remained in a bullish trade, remember that tomorrow sees potentially market-moving economic numbers.

 
 
  Linda Piazza   10/2/200,  3:14:17 PM
Is it okay if I repeat once more that we were stopped out for less than a dime?

 
 
  Linda Piazza   10/2/200,  3:07:41 PM
The OEX approaches its 511.80 high of the day.

 
 
  Jeff Bailey   10/2/200,  3:07:31 PM
Dow Industrials (INDU) 9,501 +0.34% ... getting upside alert here at psychological 9,500 level. Intra-day high. DIA $95.20 +0.41% also session high and making a move above BLUE #4. This trade on the DIA would be today's first 5-minute close above BLUE #4.

 
 
  Jeff Bailey   10/2/200,  3:03:47 PM
Bond Market Closes with some selling today. 10-year YIELD ($TNX.X) edged up 7.7 basis points and just back above the 4.0% level at 4.09%.

Benchmarking ... INDU = 9,495 , SPX = 1,020, OEX = 511, NDX = 1,337.7, QQQ = $33.24, RUT.X = 503

 
 
  Jeff Bailey   10/2/200,  3:01:58 PM
Biotech Index (BTK.X) 467.63 +2.71% ... did make a new session high in last 20-minutes, above morning rally high of 467.84. Slight tinge of bullishness for QQQ perhaps.

 
 
  Jeff Bailey   10/2/200,  2:58:22 PM
Cyclical Index (CYX.X) 563.21 +0.66% .... edging above its rounding lower 21-day SMA of 561.89. Is this the catalyst sector today on a technical basis? If so, then bias looks bullish.

 
 
  Jeff Bailey   10/2/200,  2:54:52 PM
QQQ $33.14 -0.14% .... testing short-term upward trend here and BLUE #2. Bond market closes in 7-minutes.

 
 
  Jeff Bailey   10/2/200,  2:48:05 PM
QQQ intra-day chart. Link

Just seems stuck. Declining volume patter as day progresses has me thinking there just isn't a lot of commitment/conviction from the MARKET today.

Tomorrow's economic calendar probably the cause. Pre-market has Nonfarm payrolls (consensus -25K compared to August's -93K) the bigger report. Then at 10:00 EDT ISM Services (consensus 63.0 compared to August's 65.1). The ISM Services may also be bigger number than usual after recent decline in Consumer Confidence. Still, the nonfarm payroll number will get most attention.

 
 
  Linda Piazza   10/2/200,  2:36:10 PM
Here we are again: the last 90 minute of trading, important economic numbers tomorrow morning, the OEX perhaps about to make a move. I'm not going to call a signal here because there are just too many risks, but those of you who watch Jeff's 5MRT system might note that the OEX is again approaching the bullish #2. We have not yet had a five-minute close above that level (at about 511.56), so a five-minute close above that level would be a change in pattern, but we've traded within the neutral zone all day. As Jane said the other day with reference to the ES, perhaps that should tell us something? There are times when we OEX traders perhaps can't use that 5MRT system alone, but it remains a helpful tool. Imagine perhaps that the OEX gaps down on news but opens right at a key support level, and we suspect that it will climb all day. We might want to enter at the open without waiting for a pronounced move above that opening level.

 
 
  Linda Piazza   10/2/200,  2:22:29 PM
The OEX 21-dma crosses at 511.47, and may be putting some downward pressure on the OEX, too. A close above that average would put the OEX above the 10-dma, 21-dma, 30-dma, 50-dma, and 200-dma, of course. That hasn't happened yet, however.

 
 
  Jeff Bailey   10/2/200,  2:20:15 PM
QQQ $33.20 +0.18% ... nice bid in the Q's coming in. Take an upward trend on 5-minute chart from yesterday's 11:00 AM low and attach it to today's 12:00 low at RED #2

 
 
  Linda Piazza   10/2/200,  2:19:44 PM
The OEX is breaking out of the five-minute symmetrical triangle to the upside, but it's a tentative break as yet. Those who did not take the official stop--and I know there are some out there--still need to see a move above today's high to feel any level of comfort. Do you realize that we were stopped out of the bullish trade by $0.07? Stops are a necessary evil, but it's difficult to assess the right place for them at times. In my personal trades, I keep a four-point stop, but I don't feel comfortable with that on the official trades, especially when in a bullish trade. Those calls lose money quickly when they go OTM. With puts, you can hang on a bit longer.

 
 
  Linda Piazza   10/2/200,  2:12:50 PM
One concern of mine when initiating the bullish trade today was that the upper 1.35% envelope surrounding a 21-pma was so close on the 30-minute and 60-minute chart. While the OEX has been trading sideways today, that envelope has been climbing along with the moving averages. Now the moving averages lie closer beneath the current price, supporting it, and the envelopes are further away, allowing for the possibility of a climb without piercing the envelopes. On the 30-minute chart, the upper envelope crosses at 514.80 and on the 60-minute, it crosses at 511.52. Today's 60-minute chart shows how important that upper envelope has been. That means that the OEX has a little more room to climb. Of course, a swoosh down will change all that, but here's the chart as it exists now: Link

 
 
  Jeff Bailey   10/2/200,  2:06:12 PM
Washington Mutual (WM) $39.36 +0.25% .... Jeff, Remember that WM still has a bad headline out there. Last month they said they would be reporting a loss on their mismanagement of their mortgage portfolio. WM has been greatly under performing the others in it's industry. If they release the actual loss they anticipate before earnings,or, they release a negative headline before earnings on the 21st to soften the blow.

Excellent comment. My thought might then be, if this news is this bad, then stock will not trade above $40, which is the trigger point for a bullish trade, and this may well be why WM has not been able to trade above $40.

 
 
  Jeff Bailey   10/2/200,  2:03:30 PM
Quick comparison of the Nikkei-225 Link , the DAX Link and the Dow Industrials Link

There's one thing that I can think of that has these three equity markets and economies tied together. Link

 
 
  Jeff Bailey   10/2/200,  1:58:40 PM
US Dollar Index (dx00y) 92.47 +0.08% ... has been either side of unchanged in today's trade, but trying to bid back a little. Some of this morning's tentative equity trade may have been tied to dollar giving back early gains against the yen, and some of the Treasury selling. In last hour, have started to see a little bid come back into Treasuries, and dollar firms. Would not surprise me if Japan is doing a little intervening as we type.

 
 
  Linda Piazza   10/2/200,  1:58:08 PM
This is what I'm watching on an OEX five-minute chart: Link

 
 
  Linda Piazza   10/2/200,  1:37:53 PM
The OEX continues to look as if it may be rounding over into a right shoulder on the five-minute chart. Depending on how that neckline is drawn (slanted or not), it might be crossing at about 508.75, but be careful about drawing too many conclusions too soon. We used to be able to begin shorting a stock or index as soon as that right shoulder began to round, but these patterns have not worked well lately.

 
 
  Linda Piazza   10/2/200,  1:17:38 PM
So far, that "zoom up, consolidate, breakdown, and then next zoom up" pattern still has a chance of repeating on the OEX. So far, the five-minute H&S pattern also has a chance of confirming. The bearish appearing 30-minute oscillators alternately try to flatten and then curl down again. At this moment, 30-minute RSI is flat, for example. Where she goes, nobody knows, but my overall bias has to remain bullish (but skeptical) as long as the OEX remains above its 60-minute 100- and 130-pma's.

 
 
  Linda Piazza   10/2/200,  1:09:10 PM
The OEX five-minute chart shows a possible H&S building, with a head with a rather spiky hairdo! The OEX appears to be rounding over into a right shoulder just below 510, but a move much above 510 might negate the possible H&S formation. I note that at 509.92, the OEX retraced more than 50% of the last 60-minute candle, a somewhat bullish event and one that perhaps hints that the H&S will not confirm.

 
 
  Linda Piazza   10/2/200,  1:03:44 PM
Whenever I have three losing trades in a row in my personal account, I usually step back and try not to trade until I understand what's happening. Is it me? Am I distracted by something going on in my personal life, such as a new puppy or a two-year-old granddaughter visiting? Am I ill (which I happen to be this week)? Am I letting myself be influenced too strongly by the information I'm reading and not paying attention to my own instincts and observations? Is it the market? Is it being driven by emotional-type trading that isn't as amenable to technical analysis? Is it a week chock full of potentially market-moving economic numbers? Is Japan active in the currency market, swaying currencies and markets, too?

This week, it's at least partly me. Tuesday morning, I noted my impression that the OEX might trade to the top of the 1.35% envelope surrounding the 60-minute 21-pma, but multiple resistance layers, a knowledge of seasonal trading patterns, and perhaps my illness led me not to trust my own observations. Today, too, I was so afraid that the OEX would turn down at the top of that envelope that I tightened the stop on the official trade, perhaps too tightly. We'll see later today. The entries we made had sound reasons behind them at the time they were entered, but those "had to take" failed entries would have been balanced by a nice profit Tuesday and Wednesday if I had felt stronger and felt courageous enough to act on my impression that the OEX would rise.

I'm going through this exercise in public not because I think I'm a terrible technical analyst or because I want reassurance, but because I think it's a process we should all go through when our trades aren't working. If you're not keeping a trading journal now, you might consider doing so. I confess I don't keep one now, but I did for a long while. It was that trading journal that first alerted me to the 1:45 push that tends to come each day. It was also that trading journal that alerted me that I need to be particularly careful about bearish entries on Thursday's and Friday's, because they just don't tend to work as well on those days.

 
 
  Jeff Bailey   10/2/200,  12:51:49 PM
Cyclical Index (CYC.X) 562.17 +0.47% Link .... not unlike the INDU/SPX/OEX , the CYC.X also testing its 21-day SMA here today.

As traders look for a catalyst group for further gains, this may be the sector to monitor near-term.

Touch and go type of session right now.

 
 
  Jeff Bailey   10/2/200,  12:44:14 PM
Lexmark (LXK) $63.92 +0.96% Link ... Announces that a federal judge in California has ruled against the Arizona Cartridge Remanufacturers Association in its lawsuit challenging LXK's cartridge return program.

 
 
  Linda Piazza   10/2/200,  12:42:39 PM
Remember that pattern we've seen so much lately: zoom up, apparent distribution top trading sideways, a downside break, and then another zoom up? Be alert to that possibility if you're in a bearish play on the break of support today. I'm not saying that's going to happen, but it's been a pattern that's repeated across charts on all time frames, over and over. If that pattern changes, we'll know something about the tenor of the markets, too.

 
 
  Jeff Bailey   10/2/200,  12:20:02 PM
Semiconductor HOLDRs (SMH) $35.33 +0.65% Link ... Jeff, I see the smh with a H&S top, having broken the neckline at about 35.70. The neckline is slanting up, and we just bumped it from beneath. Your opinion? thanks, CC

I see what you're looking at. If I take an upward trend from that first pullback after the gap higher (08/26/03 pullback) and attach to 09/11 pullback, then that neckline would have come into play as resistance this morning. Downside objective off the patter would be $31.84.

 
 
  Linda Piazza   10/2/200,  12:17:26 PM
Here's what I wouldn't be surprised to see: I wouldn't be surprised to see the OEX decline toward 506.50-507.50, and then attempt another bounce from that level. I'm not sure how far that bounce would carry the OEX, but there's just too much support layered there for bullish traders to ignore. I also wouldn't be entirely shocked to see that 508.49 level that stopped us be the low of the day, however.

 
 
  Linda Piazza   10/2/200,  12:06:38 PM
Swing Trade Signals
This makes three trades in a row that haven't worked for me, so I'm probably done for the week.

 
 
  Linda Piazza   10/2/200,  12:02:43 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were just stopped out of our OEX bullish play when the OEX traded 508.50. Actually, it traded 508.49, so we've been stopped out by a penny. We entered at 510.71, so the OEX moved 2.21 points against us.

 
 
  Linda Piazza   10/2/200,  11:58:49 AM
The OEX now falls through the bottom of the flag-type formation in which it has been trading this morning.

 
 
  Linda Piazza   10/2/200,  11:51:31 AM
The OEX has just reached its lowest level since the economic numbers were released at 10:00 am. It may be headed down to retest the descending trendline depicted on my 11:17 chart.

 
 
  Linda Piazza   10/2/200,  11:51:12 AM
Volume patterns now are about as neutral as it's possible for them to be. Adv:dec ratios as of a few moments ago were 16:15 on the NYSE and 15:14 on the Nasdaq. Up volume was about 1.5 times down volume on the both NYSE and Nasdaq, however, with 438 million shares traded on the NYSE and 643 million on the Nasdaq. New highs popped back up again, of course, with 281 new highs and 10 new lows.

 
 
  Jeff Bailey   10/2/200,  11:49:16 AM
11:00 Update at this Link

 
 
  Linda Piazza   10/2/200,  11:26:48 AM
Like Jane, I wouldn't be surprised to see today be a consolidation day. Big-range days are often followed by small-range consolidation days. I've been studying the 30-minute and 60-minute charts, noting how the 30-minute 21-pma has been rising (505.49 currently) to meet the 100-pma (506.42 currently) both of which are now near the daily, weekly, and monthly OEX pivots (506.41, 506.53, 506.01). While I don't trade based on pivot analysis, others do, and I certainly pay attention when I see all those pivot levels line up that way. That would now make me reluctant to enter a bearish trade on a move below the 60-minute 100- and 130-pma's, currently at 508.06 and 508.21. So, let's just hope this bullish trade works out well and we don't have to consider what happens if we're stopped out of this play and the OEX heads south instead.

 
 
  Jeff Bailey   10/2/200,  11:21:35 AM
Biotech Index (BTK.X) 465.85 +2.31% ... sector winner early. For day traders, just note how narrow that first 5-minute bar was. As mentioned before, when you get a narrow first 5-minutes, it may be useful to take a 10-minute interval to set up your intra-day retracement. See how nice the BTK.X has traded there? Perfect kiss of BLUE #5, pulls back 2.5 levels, now stabilizing at BLUE #4 and looking to kick back higher.

If you're trading a biotech stock intra-day, you might look for one of your favorite biotech day trade stocks to have traded BLUE #5, and if its sitting at at 2.5 level pullback right now, trade it long, with a nice tight stop under BLUE #2.

I know one subscriber likes to trade Chiron (CHIR) $53.57 +2.04%. See how it traded so close to BLUE #5, but just now slipping back below BLUE #4? If trader went long on day trade at $53.07, might trade out of stock on dip back below morning consolidatioin low of $53.58, with thought CHIR might pull back to $53.07 and BLUE #2, if the BTK.X doesn't extend gain from here.

 
 
  Linda Piazza   10/2/200,  11:17:40 AM
The 30-minute indicators begin to look less bullish, with the MACD lines now almost touching, although from above signal. I thought about raising our stop, but here's what I see on the five-minute chart: Link

 
 
  Jeff Bailey   10/2/200,  11:13:22 AM
LeapFrog Enterprises (LF) $40.15 +1.64% Link ... Jeff, I've been working on my PnF skills for the past year thanks to you. I'm not sure if you profiled LF yet, but yesterday I was looking for a trade at 37 to set up a bullish catapult formation.

I stuck a bid at 37 before the night before and amazingly got filled at the low of the day. Today, LF has traded 40 and still climbing. At 41 the catapult looks to launch.

Did I do my homework correctly?

Curtis on Kauai

Sounds like Curtis didn't get hit by tsunami! That's good news.

Good trade going here Curtis, and while LF's PnF chart isn't a "true" Bullish Catapult formation, where a triple-top buy signal is given and the stock reverses back lower by 3-boxes, you're playing a similar supply demand scenario. LF gave a spread triple top buy signal at $35, ran to $39, then pulled back 4-boxes to $35. The "catapult" type of action did begin on the reversal back up at $38, so I like your bullish entry at $37. You can now place a nice tight stop at $36, and with a bullish vertical count of $60, your $1 risk for potential reward of $23 isn't too bad! (grin)

A quick check of sector internals has Dorsey/Wright classifying LeapFrog as "retailing" and its sector bullish % (BPRETA) is currently "bull confirmed" at 77.27% after recently reaching 80%. This sectpr bullish % has not been at 80% dating clear back to 1997, where this sector bullish % has reached 78% twice. Once in March 1998, when it then reversed all the way back lower to 14% by September 1998, and then again in April of 2002, when bullish % reached 78% and fell all the way back to 16% by October.

To assess how sector may impact stock of LF, use these inflection points March (3), September (9), April (4) and October (A) on a PnF chart to see how LF traded with or against the sector bullish %.

 
 
  Linda Piazza   10/2/200,  11:03:10 AM
Volume patterns are bullish this morning, but only mildly so, and total volume was only 318 million on the NYSE and 495 million on the Nasdaq as of a few minutes ago. Those volume patterns can be turned around in a heartbeat. Well, maybe not a heartbeat, but you get the meaning.

 
 
  Linda Piazza   10/2/200,  10:56:30 AM
The OEX steadied and moves up again, but to feel any comfort with the position, we next need to see a new high of the day for the OEX.

 
 
  Jeff Bailey   10/2/200,  10:55:49 AM
Dow Industrials (INDU) 9,459 -0.1% ... has pulled back after morning high of 9,498.76, which might be tied to some round number resistance selling, but also came at its rounding out 21-day SMA of 9,485.

Index Trader Wrap reading are aware of this resistance, and why we may think the INDU/SPX/OEX now need some strength from the NDX/QQQ to provide the needed strength to get through this 9,500 area in the Dow.

QQQ $33.23 +0.24% off its highs of $33.43, but got a pretty good bid from BLUE #1 intra-day, and now trades its WEEKLY/MONTHLY pivots.

 
 
  Jeff Bailey   10/2/200,  10:49:38 AM
ABIOMED (ABMD) $9.15 +2.24% Link .... higher today after company said tht Medicare's payment for its BVS 5000 and AB 5000 product lines will substantially increase for hospital discharges on or after October 1, 2003 (yesterday). This news follows yesterday's notice from the Centers for Medicare and Medicaid Services (CMS) of action to correct a technical error in the calculation of the Medicare Inpatient Prospective Payment System reimbursement of Diagnosis Related Group 525.

 
 
  Linda Piazza   10/2/200,  10:48:12 AM
The Dow, SPX, and NDX have now all retraced more than 50% of the morning's rise, not bullish developments. The OEX currently tests the 50% retracement level, near 509.80.

 
 
  Jeff Bailey   10/2/200,  10:41:37 AM
Disk Drive Index (DDX.X) 126.98 -3.17% ... sector loser early. Iomega (IOM) $6.89 -39% is component being hit lower. Only thing I see is company filed June quarter financials. Link

 
 
  Linda Piazza   10/2/200,  10:28:21 AM
If the current pattern is a normal and to-be-expected distribution pattern after the morning rise, then it should not retrace more than 50% of the rise. That 50% level lies at about 509.80.

 
 
  Linda Piazza   10/2/200,  10:25:50 AM
Swing Trade Signals
We're going to keep the official stop where it is for now, but conservative traders might consider setting a slightly higher stop, at 509 or 509.25, near the 50% retracement of the first five minutes, and also just below a descending trendline that the OEX broke through this morning (three-minute chart). The OEX three-minute chart shows that level to have been important.

If we're stopped out of our play, we'll soon be considering switching sides.

 
 
  Linda Piazza   10/2/200,  10:17:23 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Raise the stop a point to 508.50. I want to keep a tight rein on this play, so will be raising stops rather aggressively.

 
 
  Jeff Bailey   10/2/200,  10:13:22 AM
Market Volatility Index (VIX.X) 20.90 -0.8% .... back below that 21.22 level. Yesterday, we thought VIX.X might fall to 21.22 as SPX rose to WEEKLY/MONTHLY pivots, and boy did they!

 
 
  Jeff Bailey   10/2/200,  10:11:48 AM
Semiconductor Index (SOX.X) 436 +2.12% ... intra-day note here is that SOX has just moved above BLUE #6. This may have QQQ upside to BLUE #6 $33.54 right now.

 
 
  Linda Piazza   10/2/200,  10:09:58 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We are in a bullish OEX trade from 510.71. Our initial stop is 507.50, although I may raise that rather quickly as I'm nervous about the trade. We are targeting 516.50.

 
 
  Jeff Bailey   10/2/200,  10:09:27 AM
Major Indices INDU = 9,478 +0.09%, SPX = 1,019.32 +0.10%, OEX = 510.75 +0.09%, NDX = 1,342 +0.53%, RUT.X = 503.52 +0.63%.

 
 
  Jeff Bailey   10/2/200,  10:07:27 AM
QQQ $33.30 +0.51% ... looks to be making the break above $33.22 resitance. Would be long the Q's here and now look for other major averages to pack on some additional gains from yesterday.

 
 
  Linda Piazza   10/2/200,  10:07:25 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Enter a bullish trade here. Stop 507.50. Target 516.

 
 
  Jeff Bailey   10/2/200,  10:03:09 AM
QQQ $33.21 +0.21% ... would take the QQQ long on trade at $33.30, which would be a session high. Was tempted at BLUE #2 of $33.22, but wanted to see the factor orders number. Now that we've got it, can wait for the MARKET response, which so far has been nothing.

 
 
  Jeff Bailey   10/2/200,  10:00:53 AM
Factor Orders fell 0.8%, which was below economists' forecast for a decline of 0.5%.

 
 
  Linda Piazza   10/2/200,  9:56:41 AM
The OEX has now climbed above a 50% retracement of the first five-minute range, but I hesitate to enter ahead of the 10:00 numbers, even if they're not usually market moving. We've had some losses from some of our positions due to the effect of economic numbers.

 
 
  Jeff Bailey   10/2/200,  9:51:42 AM
QQQ $33.12 -0.1% ... there was a "bad tick" 10-minutes into the session at $33.41. Session high so far has been $33.14, with low of $32.97. Entire morning trade on 5-minute close has been between BLUE #1 and RED #1, so rather neutral early.

Will make a day trader's not that BLUE #2 is at $33.22, and this is right smack at our WEEKLY Pivot. Remember too that MONTHLY Pivot is $33.21.

 
 
  Linda Piazza   10/2/200,  9:51:05 AM
The OEX comes up now to retest the 50% retracement of the first five-minute range, with that retracement at 509.23. So far, we're seeing mixed messages, but the overall tone must be judged bearish as long as the OEX remains below that level.

 
 
  Jeff Bailey   10/2/200,  9:49:16 AM
Economic data at 10:00 AM EDT we will get August factor orders. Economists looking for a decline of 0.5% after a 1.6% rise in July.

 
 
  Linda Piazza   10/2/200,  9:43:31 AM
Swing Trade Signals
We're going to consider a bearish entry if the OEX trades below 507.50, but that depends on how the indicators look at that time. Traders should be aware that this is a risky entry because it puts the OEX above the daily, weekly, and monthly pivots, all clustered near 506, also the location of the 30-minute 100-pma.

We're going to consider a long play if the OEX continues to find support at this level and then bounces. Traders should be aware that this is also a risky entry because the OEX trades near the top of the 30-minute and 60-minute 1.35% envelopes surrounding the 21-pma's. I'm not feeling particularly safe with any entry today, so we're going to be careful.

 
 
  Jeff Bailey   10/2/200,  9:39:26 AM
Panera Bread (PNRA) $39.95 +2.45% ... yesterday it was rumored that PNRA may have warned on earnings. Today, PNRA reaffirms Q3 quidance, and commented on statements it made at RBC conference. PNRA reaffirms its previously issued Q3 guidance of $0.23 and is issuing this confirmation in response to numerous telephone inquiries following its presentation at the RBC Capital Markets Consumer Conference 2003 yesterday. "At the conference, the company was asked to comment on comparable store sales. To provide even greater clarity to investors, the company is announcing that it estimates that third quarter system-wide comparable sales increases, when reported on October 16, 2003, will be in the range of 0.6% to 0.9%. This is due in part to the previously announced impact of the power failure in August, and Hurricane Isabel in September."

 
 
  Linda Piazza   10/2/200,  9:34:28 AM
The OEX first five-minute range saw a low of 508.46 and a high of 510. The 50% retracement of that first five-minute range lies at 509.23. 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.

 
 
  Linda Piazza   10/2/200,  9:33:16 AM
The OEX approaches the 60-minute 100- and 130-pma's, each located near 508.

 
 
  Linda Piazza   10/2/200,  9:31:41 AM
Perhaps we're going to get that test of the 60-minute 100- and 130-pma's, after all, and see it the climb above them was real.

 
 
  Jeff Bailey   10/2/200,  9:16:03 AM
09:00 Update posted at this Link

 
 
  Linda Piazza   10/2/200,  9:15:49 AM
Swing Trade Signals
The Swing Trade model is flat today after missing yesterday's big move. We've been waiting this week for the OEX to test the 60-minute 100-pma, currently at 507.95, and the 130-pma, currently at 508.12. That finally happened yesterday, but late enough in the day that I worried about entering the position. Late-day entries that we hold overnight have not worked well recently. As I mentioned yesterday afternoon, I also tend to distrust late-day pops above or drops below key levels.

This morning, futures have traded either side of the flatline. I'd like to see a retest of those averages in the early trading, with a long position entered on a retest and bounce from those averages and a bearish position entered at a drop through them. We may not get that retest, although it currently looks as if we might. If not, we'll use early indicators such as how the OEX behaves around the 50% retracement of the first five-minute range, dollar strength or weakness, and other such intermarket relationships to guide us. We'll be considering a long play as long as the OEX stays above those key averages, but we're going to have to be careful. As Jeff commented in his wrap last night, I believe the OEX has the capacity to climb toward 418-423 (Jeff had slightly different numbers), but the OEX now bumps up against the top of the 1.35% envelope surrounding the 60-minute 21-pma, and that's a sign that it's getting short-term overbought, perhaps needing to drop at least to the 60-minute 21-pma or consolidate at current levels to relieve that overbought pressure. I'm also aware of some bearish divergences building up across several time intervals, such as those Mark Phillips has been noting in his articles on the SPX. So, if we're in a long position, we're going to be careful and we're probably not going to carry the position overnight.

I'm still trying to reserve judgment about ultimate direction and play what I see. This morning, I listened to European commentators on CNBC Europe discounting yesterday's rally. They noted that last year saw the markets dropping in late September, making a big gain October 1, and then resuming the drop. That's true, but almost nothing else about that period correlates. The chart configurations were dissimilar. Still, I'm keeping that pattern in mind, aware that maybe due to quarter-end positioning by funds, it could be a repeatable pattern even if chart configurations appear dissimilar.

 
 
  Linda Piazza   10/2/200,  8:41:02 AM
As expected, the ECB left rates unchanged. Although the CAC 40 and the DAX slipped a little, the European indices basically treaded water after the announcement, perhaps waiting for U.S. economic numbers.

 
 
  Linda Piazza   10/2/200,  7:01:31 AM
Good morning. Intent on making up the huge losses suffered since the middle of September, the Nikkei opened up more than 100 points in Thursday's trading. The index held that gain and added to it during the day, closing up 232.29 points or 2.24%, at 10,593.53. The Nikkei's rise was prompted by the yen's fall against the dollar, with rumors circulating that the Ministry of Finance had sold its currency for the third day running. On Tuesday, the Ministry of Finance had confirmed that it had sold its currency, but government representatives claim that there had been no change in policy since Japan signed the G7 statement calling for market-based exchange rates. A newspaper reported that the Ministry of Finance might even increase the limit of government borrowing that can be used to purchase currency in its effort to manipulate the price of the yen against the dollar.

Another government policy helped the banks in early trading, although the banks did not retain all of their gains. The same newspaper revealed that the state-backed fund increased its purchase of stocks from the lenders in a program put in place earlier this year. The declines in the stock market earlier this year had threatened the stability of the banks as their holdings lost so much value, but the government program helped them reduce their holdings. Although the policy had been announced previously, the article drew attention to the benefits and banks rose. Many exporters gained, too, and retailers had a strong day. Auto stocks traded up after U.S. September sales were announced Wednesday.

Other Asian bourses enjoyed a good day, too. The Taiwan Weighted gained 2.12%, and South Korea's Kospi gained 1.55%. Singapore's Straits Times climbed 0.81%. Hong Kong's Hang Seng climbed 2.82%, and China's Shanghai Composite rose 0.87%, both trading for the first day since yesterday's holiday.

Most European markets currently climb as investors await a decision by the ECB as the ECB meets for the final time with Wim Duisenberg at the helm. The ECB is expected to keep rates the same, although some have whispered of a surprise rate cut. CNBC Europe mentioned that the pace of recovery and rise of euro are seen as key factors in determining ECB rates. Royal Ahold finally reported its revised earnings, revised because of accounting fraud in a U.S. food services unit. Ahold is important because it ranks as the world's third-largest retailer, and it gained in early trading after writing down the value of some assets by 3.2 billion euros, according to a Bloomberg article. Many stocks such as Nokia, gained due to optimism engendered by the better performance of the U.S. markets yesterday, although many technical analysts commenting on CNBC Europe remain skeptical of the U.S. markets' performance during October. Most still expect a decline.

As of this writing, the FTSE 100 gained 24.20 points or 0.58%, to trade at 4193.40. The CAC 40 gained 26.39 points or 0.83%, to trade at 3217.40. The DAX had climbed 12.89 points or 0.39%, to trade at 3342.72.

 
 
  Jim Brown   10/2/200,  6:40:22 AM
Website Problems
We had a massive attack on our website Wednesday night. As of 11:30 MT our main server farm is off line and not expected back for several more hours. We apologize for the inconvenience and are working to get it back as quickly as possible.

 
 
  Jeff Bailey   10/2/200,  6:40:08 AM
Pivot Matrix for tomorrow at this Link

 
 
  OI Technical Staff   10/2/200,  6:39:57 AM
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