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  Jeff Bailey   10/8/200,  5:12:55 PM
Guidant (GDT) $44.95 -1.7% .... halted ... JP Morgan saying it was told by Guidant that the medical device maker was recalling one of its vascular stent products.

 
 
  Jeff Bailey   10/8/200,  5:06:23 PM
Yahoo! Inc. (YHOO) $38.79 -0.35% .... trading $39.06 here. Guidance for Q4 revenues is $462-$502 million, which includes Overture contribution. Revenue guidance may not be comparable to consensus estimates of $371.95 million. Deutsche's analysts were predicting Q4 revenue guidance to be increased by $10-$15 million and for OVER to contribute $105 in Q4, which gives the impression that consensus estimates may not have included OVER contributions in their Q4 numbers.

 
 
  Jeff Bailey   10/8/200,  4:59:10 PM
Guidant (GDT) $44.95 -1.7% ... halted news pending.

 
 
  Jeff Bailey   10/8/200,  4:33:19 PM
Yahoo! Inc. (YHOO) $38.79 -0.35% jumps to $40.25 on headline number.

eBay (EBAY) $59.40 from $58.47 close

Amazon.com (AMZN) $56.35 from $55.70 close

QQQ $34.55 from $34.43 close

 
 
  Jim Brown   10/8/200,  4:32:08 PM
YHOO numbers were posted in futures monitor at 16:30:03

 
 
  Jeff Bailey   10/8/200,  4:27:18 PM
Yahoo! Inc (YHOO) $38.79 .... still waiting on numbers. See that "bad tick" at $39.74 at the close? That might be an after-hours upside reaction point early. Comes right at today's BLUE #2.

Yhoo edging up at $39.05

 
 
  Linda Piazza   10/8/200,  4:00:47 PM
I don't know about you, but I'm glad today is finished. It's more difficult to watch these tight-range days and figure out what's happening than it is to watch a strongly directional day. What does this wiggle of this oscillator mean? What does that one? I'm just glad we weren't in an official Swing Trade today while this occurred.

 
 
  Linda Piazza   10/8/200,  3:48:29 PM
The OEX five-minute H&S (continuation pattern) did confirm and did meet its downside target. It met it quickly, with a single five-minute candle. Now, if I squint just right, I see the possibility of an inverse H&S pattern (reversal pattern because it comes at the bottom of a decline) forming with shoulders at about 516.25, head down at 515, and neckline at about 517.20. A drop much below 515.50 would negate that possibility, however.

 
 
  Linda Piazza   10/8/200,  3:40:19 PM
The 60-minute OEX momentum indicator has just turned positive, although with a minimum 0.29 indication. This is the first time it's registered a positive number since the OEX had a 60-minute close below the 60-minute 21-pma. Does this hint at a move above the average again? I haven't watched this indicator long enough to know how reliable it might be.

 
 
  Linda Piazza   10/8/200,  3:29:06 PM
It looks as if we now have a lower high on the five-minute chart, with stochastic bearish divergence. To be sure of that, the OEX has to continue rolling, of course, along with the stochastics. The OEX currently tests the steep descending line to which I referred in my 15:11 post, so it's possible to see a bounce here. Markets are feeling heavier and heavier, but they're sure not making much downward progress.

 
 
  Linda Piazza   10/8/200,  3:21:59 PM
The 60-minute OEX momentum indicator has not yet registered positive numbers, although the 30-minute has. The 30-minute has been going back and forth from positive to negative values today, while the 60-minute has stayed negative since the first OEX 60-minute close below the 60-minute 21-pma. If the OEX continues its decline, that would have proven to be a helpful distinction between the two time frames. If the OEX does not continue declining perhaps it's less useful, although I wouldn't make any determination based on only one day of trading. The momentum indicator does now turn up, but its current value is -2.12. In any case, the OEX is only $0.26 above the level at which that signal was first given. I've wanted to watch this in real-time since reading Jim's Swing Trade article last night. So far, I've liked what I've seen as it applies to the OEX.

 
 
  Linda Piazza   10/8/200,  3:11:54 PM
The OEX has broken above a short-term trendline that was formed from today's (I double-checked) 9:30 high, through the 12:55 high and the 13:50 high. It remains just below the 30-minute and 60-minute 21-pma's.

 
 
  Linda Piazza   10/8/200,  2:54:27 PM
The Dow gains everyone's attention now. It's now testing the 50% retracement of its flagpole drop, at about 9617. If that's a bearish formation, it should probably break down soon. I don't think the OEX is going to break down unless the Dow gets below that psychological barrier.

 
 
  Linda Piazza   10/8/200,  2:44:07 PM
The current OEX five-minute pattern looks like a "b" distribution pattern after the quick fall just after 2:00 ET. It's natural that we should see a distribution pattern of some sort here, probably more because the Dow breached 9600 temporarily and bounced up than because of the OEX itself. The Dow's pattern looks more like a bear flag, so the OEX pattern may resolve into a flag, too. If it is a bear flag, it should break down before retracing much higher than 516, but the OEX has been overshooting these targets today, climbing higher but then breaking down after all.

 
 
  Jeff Bailey   10/8/200,  2:31:47 PM
Taking profits on eBay .... Despite the breakout of eBay today and its impact on bullish vertical count, would you consider taking profits on Jan. positions ahead of Yahoo's earnings report?

This is purely a question for each individual trader to adress themselves, but here's my thinking process ...

I would always consider taking profits. A trader that owned 2 calls or more could easily take one off the table, book some profit, then hang out until Yahoo! reports.

Downside? The one call you then hold falls on a negative Yahoo! market response.

Upside? The one you hold falls, but you took profits on the other. The one you hold surges higher on a positive Yahoo! response and you're still in the game. Sell them all and the only downside is the potential opportunity lost on a positive Yahoo! response.

 
 
  Linda Piazza   10/8/200,  2:26:23 PM
The OEX 30-minute 100- and 130-pma's are at 513.29 and 512.60, sandwiching yesterday's 513.05 low. I would think that it's going to be difficult to push the OEX much below that level, if it should reach that level at all. If bears succeed, the 60-minute corresponding averages are at 511.89 and 511.29, both near the bottom of Friday's gap. If the OEX gets pushed below the 513 level, that's going to be the next sticking point.

 
 
  Jeff Bailey   10/8/200,  2:19:08 PM
"Round to full" ... Your reference on Ebay "round to full here".......................what does that mean????? I think I know by inference but am not clear. Is it a technical term?Is it stock talk slang? What does it mean exactly?

When I first profiled a bullish trade in eBay near the $55 level, I profiled a PARTIAL position, as the stock had been stuck in a range since June, and as I look for that intra-day update, I do think I made note that when the stock broke to a 52-week high, a bull could then add to the position "round to full position" on the break higher.

This type of "legging in," which is also a term I get question on, is a slow, more cautious method of trading/investing, where a trader gets his/her feet wet with a smaller amount of capital at first, and when success is seen and you get some profits under your belt, begin to add to the profitable position.

Here too, this type of trade would relate you your BUSINESS PLAN where in an 11/17/2002 Ask the Analyst column, we discussed the need for a trader/invetor to actually have a business plan for their account. Link

 
 
  Jeff Bailey   10/8/200,  2:11:32 PM
Ah... there it is .... Stillwater Mining (NYSE:SWC) $6.71 +5.17% Link was the Palladium producer I was looking for. I thought it was listed on the AMEX and couldn't get a quote.

I'll show you the Palladium futures PnF chart in a minute, but bar chartists will note very similar technicals presenting themselves in SWC as that of Palladium futures.

Have some technical analysis work to be done on this one (SWC) as the PnF chart makes it a bit difficult to asses a level of risk at this point.

 
 
  Linda Piazza   10/8/200,  2:11:30 PM
Another reason I shouldn't be calling signals today: the "yesterday's low" I've been mentioning was actually today's previous low. The OEX is now below that low from which I was drawing the trendlines. It's now confirmed the H&S on the five-minute chart. Perhaps that formation did have some relevance because the drop went quickly once the neckline was violated to the downside. Perhaps that just happened in conjunction with some other market event and it was coincidence. I like my explanation better. The OEX is now perhaps headed down to test the confirmation level for the double-top formation, with that confirmation level near the top of Friday's gap.

 
 
  James Brown   10/8/200,  2:06:11 PM
Analyst sentiment appears to be turning the corner for some retailers as they look ahead to the Q4 holiday shopping season. USB upgraded Abercrombie and Fitch (ANF) to a "strong buy" and raises its price target to $40. USB also upgraded American Eagle Outfitters (AEOS) to an "out perform".

 
 
  Linda Piazza   10/8/200,  2:03:59 PM
There's a H&S on the five-minute OEX chart. Although these are usually topping formations, they're sometimes continuation patterns. It looks as if this one might confirm between 516-516.25, with a downside of another 1.30 points. As a reminder, I don't put great faith in five-minute formations, especially those that haven't yet confirmed, but this does allow us to watch for weakness: first, if it's confirmed, and second, if it meets its downside target.

 
 
  James Brown   10/8/200,  1:59:50 PM
And the downgrades keep coming for Biovail (BVF). The stock is down another 13 percent after Bank of America (BAC) started BVF with a "sell" and a $22 price target this morning. The stock is blowing through support levels on a daily basis. Currently the stock is trying to hold its ground at the $25 mark, which was support last December. Evidently, the BAC report was extremely negative and citing "aggressive accounting practices" per one Reuters article.

 
 
  James Brown   10/8/200,  1:52:44 PM
The XAL airlines index has been pretty strong hitting new 52-week highs. Prudential is now jumping on the bandwagon with new coverage starting at "over weight" for Continental Airlines (CAL) and AMR Corp (AMR), better known as American Airlines.

 
 
  Linda Piazza   10/8/200,  1:48:49 PM
Here comes the stop-running push, right on time. We'll want to see whether that upward push holds now. The OEX is now back above the lowest of the two short-term trendlines drawn off yesterday's low, but still below the first one drawn off that low.

 
 
  James Brown   10/8/200,  1:47:15 PM
Potential bullish entry point forming for shares of Corinthian Colleges (COCO). If you have faith in the current trend then a bounce at the simple 50-dma should be a bullish entry point. The stock is not reacting positively but Bear Stearns initiated coverage of COCO with an "out perform".

 
 
  Linda Piazza   10/8/200,  1:42:47 PM
The 30 and 60-minute indicators now look more bearish. They're still all so close to their various equilibrium levels while the OEX hugs their separate 21-pma's that I have to agree with Jim's recent comment on the Futures side that futures and price action could flip either direction quickly. Be aware, too, that we're right at the prime time to see a stop-running push.

 
 
  James Brown   10/8/200,  1:32:51 PM
We considered adding Zions Bancorp (ZION) to the call list last night after shares broke out of a nine week consolidation pattern but the company is expected to report Q3 earnings next week. Today, shares are bucking the weakness in the financial sector after receiving an upgrade to "neutral" from Fulcrum. The weekly chart suggests there is more resistance at $60 but if earnings are strong enough it probably won't last.

 
 
  Linda Piazza   10/8/200,  1:29:21 PM
The 30-minute momentum indicator now registers a negative number again. The 60-minute one has remained negative since it first dipped below the signal line. Does that mean that the 60-minute works better for our purposes? If we had used that as one of our indicators, entering bearish when the OEX first dipped below its 60-minute 21-pma earlier this morning, we would still have been comfortably in the trade while the OEX traded up in that bear flag. Whether or not that would have been a good idea remains to be seen, but I do note that the 60-minute 21-pma is now rounding over, another signal of declining momentum.

 
 
  Linda Piazza   10/8/200,  1:26:01 PM
There goes the second and lower of the two short-term ascending trendlines off yesterday's low. The OEX dropped below that trendline but is now back at the 516.50 level that keeps setting off the Q-chart signal.

 
 
  James Brown   10/8/200,  1:23:52 PM
Shares of VISX Inc (EYE), the creators of certain laser vision correction equipment, are breaking out to the upside. Potentially boosting shares was new coverage started by RBC Capital Markets with an "out perform". The stock has broken out of a two-month trend of lower highs and today's move puts the stock above its simple 50-dma and the $21 level. MACD has turned positive. Earnings are expected on Oct. 22nd.

 
 
  James Brown   10/8/200,  1:15:45 PM
Ignoring the downgrades today is Vimpel Communications (VIP), the Russian wireless telecom company. Shares of VIP have rocketed from their July lows near $40 to trade just under the $70 mark this week. Shares are very overbought but volume has been pretty decent on the last surge higher. This morning Morgan Stanley cut the stock to a "under weight" while ING actually downgraded VIP from a "hold" to a "sell". Yet the stock is still positive today. Looks like VIP could be suffering from a short-squeeze. The last figures showed short interested was over 5% of the float.

 
 
  Linda Piazza   10/8/200,  1:15:07 PM
The bulls were not able to engineer an upside breakout of the potential bear flag. The OEX breaks out of that flag to the downside, also breaking again below the ascending trendline off yesterday's low. Because we've already had one downside and temporary break of that trendline, though, it's now possible to draw a lower one, and that one hasn't been broken. The OEX trades at the 30-minute 21-pma, a sentence I could have typed at almost any point today, with almost all indicators near their respective equilibrium levels (RSI just above 50, for example), another sentence I could have typed almost any time today. Since that flag has been broken to the downside once before today, I'm still not reading too much into this, but giving a slightly bearish interpretation to the day's action so far. As has happened a lot lately, however, today's "slightly bearish" action could be the only bearishness we see, without any follow-through to the downside.

 
 
  Jeff Bailey   10/8/200,  1:09:48 PM
December Palladium futures (pa03z) $213.00 +3.62% ... doing some investigative work here as there may be potential for a reversal higher from $204 support in the making (upside alert set at $218). Looking for some public traded company's and browsing the internet. Here's an article that may give a few ideas (from Feb. 1999). Link

 
 
  James Brown   10/8/200,  1:05:51 PM
Traders interested in bullish semiconductor plays might want to check out KLA-Tencor (KLAC). The stock has been under performing the SOX but continues to have a strong rising trend. The recent action over the last few days is a positive breakout from a bull flag consolidation pattern. Its MACD has turned positive on the move and a short-term rally up to the $60 mark certainly seems like a possibility. Of course one of the risks in playing any chip stock right now is not knowing how investors will react to Intel's earnings report next Tuesday, which tends to lead the SOX up or down. KLAC is due to report earnings on the 22nd of October.

 
 
  Linda Piazza   10/8/200,  1:00:01 PM
The OEX is breaking above the 50% retracement of the flagpole drop that preceded the presumed bear flag, so perhaps it's not a bear flag, but we need to see at least a five-minute close to be sure. (Note: As I typed that note, the OEX dropped back below the 517.60 level that marked the 50% retracement. It's trying, but not sure yet it's going to make it.)

 
 
  Jeff Bailey   10/8/200,  12:56:36 PM
Washington Mutual (WM) $40.23 +0.67% .... session high here. Let's see if WM is a good "pulse stock" and hints of a bid coming into the banks and broader market.

Benchmarking BIX.X 317.91 +0.09% , SPX = 1,035.86 -0.32% and OEX = 517.42 -0.42%.

 
 
  Linda Piazza   10/8/200,  12:49:51 PM
If you zoom out to 15-minute or longer interval graphs, the current OEX pattern still looks like a bear flag, but it's getting a bit long in the tooth and needs to break down soon if it's going to do so. Indicators twitch one direction and then another, but mainly are hugging their respective flatlines while the OEX hugs the nearly horizontal 30-minute 21-pma. Given the bullish tenor of late, I would expect bulls to become emboldened soon and try a bounce, but I'm just not sure how far it's going to carry, and the indicators sure aren't given any tradable clues.

 
 
  Jeff Bailey   10/8/200,  12:43:18 PM
Excellent discussion on CNBC right now regarding NYSE specialist and AIG's Link stocks decline last last year and earlier this year.

 
 
  James Brown   10/8/200,  12:40:50 PM
Ouch! Shares of 99-cent Only Stores (NDN) are down more than 10 percent and hovering at support near the $30 mark and its simple 200-dma. Yesterday the company preannounced stronger Q3 revenues of $211.5 million on strong same-store sales growth. This is a 23% jump in revenues over last year. However, analysts are concerned about lower margins and growing operating costs. CIBC reduces their EPS numbers for NDN and D.A. Davidson cuts NDN to a "market perform".

 
 
  Linda Piazza   10/8/200,  12:39:46 PM
The OEX again heads up to test the 50% retracement of the flagpole drop that preceded the seemingly days-long consolidation in the form of a possible bear flag. That retracement is near 517.60. By the way, the 30-minute momentum indicator is now slightly (0.06) positive, while the 60-minute is at its most negative value of the day (-2.23), and MACD histogram values remain negative on both time-interval charts.

 
 
  Jeff Bailey   10/8/200,  12:37:48 PM
Energy Inventories .... earlier this morning the DOE reported that its statistics showed crude oil inventories rising by 5.4 million barrels, gasoline inventories falling 1.2 million barrels and distillates rising 200,000 barrels.

API reported inventories rose 8.2 million barrels, gasoline inventories falling 3.4 million barrels and distillates rising 537,000 barrels.

 
 
  Jeff Bailey   10/8/200,  12:34:02 PM
S&P 100 gainer show Aloca (AA) +2.23%, Caterpillar (CAT) +1.27% and Intl. Paper (IP) +1.2%, all deep cyclicals posting gains of 1% or more, with breadth weak at 93:7.

At the bottom today is McDonald's (MCD)-1.69%, SBC Comm. (SBC) -1.45%, AT&T -1.37%, Exxon/Mobil (XOM) -1.04% and Coca Cola (KO) -1.03%.

 
 
  James Brown   10/8/200,  12:33:06 PM
Bucking the downtrend in the markets today is Barr Labs (BRL). The stock is continuing its slow ascent off its simple 50-dma and has now cleared the $70 level. Bullish traders might consider playing it for a move up to the $75 level. Its stochastics, RSI and momentum indicators are all positive and its MACD is about to turn positive. I did notice that it is currently on a P&F sell signal that has reversed back into a column of X's. However, looking back over the last year on its point-and-figure chart BRL appears to have a history of producing these bearish sell signals only to reverse or consolidate sideways before running higher again. Earnings are near the end of the month.

 
 
  Jeff Bailey   10/8/200,  12:30:23 PM
Financials have Broker/Dealer Index (XBD.X) 631.47 +0.06%, S&P Banks (BIX.X) 317.45 -0.05%, KBW Bank Index (BKX.X) 915.61 -0.39% and S&P Insurance (IUX.X) 278.34 -0.16% showing mixed to fractionally lower results. XBD.X is/was the only financial sector that showed any type of move early that might have helped boost the SPX to sustainable new 52-week highs.

"Pulse stock" in the banks finds Washington Mutual (WM) $40.11 +0.4% steady above the $40.00 level.

 
 
  Linda Piazza   10/8/200,  12:12:30 PM
As the OEX hugs the 30-minute 21-pma, the indicators flatten, too. CCI shows a slight negative value, and so do the MACD histogram and the momentum indicator. RSI flattens at 49.58, about as close to the middle of its range as is possible, although there's perhaps a slight downward curve as it curls along the underside of a descending trendline. The OEX also hugs the ascending trendline off yesterday's low, with that trendline having risen to the current level. The OEX actually broke a little below that trendline on a five-minute basis, but now rises to test it again from the underside.

 
 
  Jeff Bailey   10/8/200,  11:53:54 AM
Phelps Dodge (PD) $53.91 +2.12% Link ... continues to impress. December Copper futures (hg03z) $0.85 +1.49% making new contract high again today.

I was talking to a buddy of mine last night. He works for General Cable (NYSE:BGC) $8.74 -0.11%. He was just getting back from Phelps' Climax Mine here in Colorado. I about fell off the sofa when he said business at BGC was picking up as copper had broken the $0.84 barrier. I guess when your in the business you notice things like that, but I never knew my buddy watch the metals prices like he does.

 
 
  Linda Piazza   10/8/200,  11:48:29 AM
As an addition to my 11:45 post, the 30-minute OEX MACD and momentum indicators remain negative, but RSI and CCI have both turned up, and MACD and momentum have less negative values than they did earlier.

 
 
  Linda Piazza   10/8/200,  11:45:20 AM
The OEX remains below the 50% retracement of the flagpole that preceded this presumed bear flag, but the rise over the last five minutes appeared to be an upside breakout of that pattern more than a higher high within the pattern. We'll see, but five-minute stochastics and MACD are slanting up as the OEX hits the top of the pattern rather than getting ready to roll down.

 
 
  Linda Piazza   10/8/200,  11:40:19 AM
As of a few moments ago, adv:dec ratios were 12:18 for the NYSE and 11:19 for the Nasdaq. Total volume was 436 million for the NYSE and 741 million for the Nasdaq. Down volume was higher than up volume, but not by huge proportions. New highs numbered 461 while new lows numbered only 7.

 
 
  Jeff Bailey   10/8/200,  11:29:00 AM
11:00 Update posted at this Link

 
 
  Linda Piazza   10/8/200,  11:27:46 AM
The current OEX five-minute pattern looks like a bear flag rising into resistance. The 50% retracement of the flagpole drop that preceded its formation would be at about 517.60, so the bear flag should break down before retracing more than that amount if it's truly a bear flag. We did see an earlier flag overshoot a similar 50% retracement this morning, however. Just as a notation, the momentum indicator still shows negative values on both the 30-minute and 60-minute charts. So does the MACD histogram.

 
 
  Linda Piazza   10/8/200,  11:19:52 AM
The OEX now sits on that rising trendline formed off yesterday's low. The 30-minute CCI is now red, MACD sort of reluctantly produces histogram values below zero, and the momentum indicator continues to signal more downside. However, RSI, always early, tries to hinge up a bit as the OEX balances on that short-term ascending trendline. I would expect there to be enough bullish fervor left in the markets for each possible bounce point to produce at least a tepid attempt at a bounce if not more. Although below the 30-minute 21-pma, the OEX is still close enough that I consider the level being tested and not yet violated.

 
 
  Linda Piazza   10/8/200,  11:09:17 AM
If you were away from your screens Monday, I spent that light-volume day exploring several indicators or chart tools I'd never used. It was a good way to increase my skills (actually, to throw me into massive confusion, which is what's happened as I tried to assimilate a lot of information at once and trade off all of it) and to keep me from overtrading on a light-volume day. One of the tools I explored was Donchian Channels. As I mentioned that day, I learned that Donchian Channels were a breakout tool, with the idea being that you bought (or sold) a break out of the channel. When I snapped the tool on my charts, however, across several time frames, I just wasn't finding any signals. I knew that couldn't be right. A reader explained that I might try superimposing several time frames on the same chart as he remembered that being a technique used with Donchian Channels. I did try that with Keltner Channels, but when I went in to work with the Donchian Channels and figure out how to superimpose several time frames, I discovered the offset parameter. Here's what I found: Link My presumption now is that I would have to combine these signals with other indicators, to help weed out the false signals from the good ones. Don't trade on this information unless you know more about these channels than I do. I'm still exploring this and know nothing more about it than what I've shown here. This setting used a length of 20 and an offset of 2.

 
 
  Linda Piazza   10/8/200,  11:00:21 AM
The OEX now sits on its 30-minute and 60-minute 21-pma's, with the MACD histogram now negative on both, with RSI turned down on both, and with CCI on the verge of going into the red on both, but not there yet. The momentum indicator now gives a sell signal. The OEX now faces a short-term ascending trendline at about 515.90-516, and then support near 515 and again at yesterday's low just above 513. The 30-minute 100 and 130-pma's now rise just underneath yesterday's low, so I would expect that to be the real battleground. A fall beneath that low would also confirm the double-top on the OEX, with a downside target between 507-508, but not all downside targets are being met, and this one would have to get through the formidable 511.50 area. Let's watch now and see whether that momentum indicator's signal would have been a good one to take.

 
 
  Linda Piazza   10/8/200,  10:37:38 AM
The volume patterns show a slight shifting, as the former positive adv:dec ratio on the NYSE switches to more decliners than advancers. Decliners have been ahead on the Nasdaq for some time.

 
 
  Jeff Bailey   10/8/200,  10:29:52 AM
eBay (EBAY) $59.00 +2.9% ... upside alert here at $59, which helps negate the potential for a "bull trap" pattern in the PnF chart. The "bull trap" is depicted by a triple-top buy signal where only one X above the triple top is found, where that buy signal is quickly reversed back lower. Link

Today's trade at $59 also has the current bullish vertical count building to $72.

The recent "sell signal" at $53 and reversal back higher begins to smell/look like a shakeout, where weak holders may have been shaken out of the stock, maybe a little liquidity was created, and bulls now look to take the stock higher.

 
 
  Linda Piazza   10/8/200,  10:29:52 AM
Jim mentioned that the momentum indicator had kept them in their short on the futures, but the momentum indicator has stayed just above the signal line on both the 30-minute and 60-minute OEX charts. That may mean we'd have to do some fine-tuning if we were to use this to signal OEX trades, or it may mean it's kept us out of trouble, too, keeping us out of a bearish trade until the OEX completes its testing of the 30-minute and 60-minute 21-pma's. Should we be in a bearish trade and should the momentum indicator have alerted us already? That depends on how this test of the central averages on those time frames resolves. I do note, however, that there was strong bearish divergence on that momentum indicator as this morning's highs were hit, highs that equaled those of 10/3, or nearly so, with the momentum indicator showing lower highs.

 
 
  Jeff Bailey   10/8/200,  10:24:01 AM
eBay (EBAY) $58.93 +2.7% Link ... upside alert here at 52-week high.

 
 
  Linda Piazza   10/8/200,  10:17:26 AM
The OEX continues to test its 30-minute and 60-minute 21-pma's, currently at 516.94 and 517.32.

 
 
  Jeff Bailey   10/8/200,  10:06:49 AM
Washington Mutual (WM) $40.09 +0.32% Link ... getting upside alert here at $40, which has been resistance past two months. Bar chart Link

 
 
  Linda Piazza   10/8/200,  10:03:13 AM
The OEX 30-minute and 60-minute charts show the possibility of a double-top forming in the OEX, with this morning's 520.02 high being a fairly close match for the 520.33 high of 10/3. A fall back below yesterday's low would confirm that double top. The downside target would be somewhere near 507-508, depending on whether you used yesterday's low as the absolute confirmation or--by studying the chart--decided that any dip into last Friday's gap would confirm the pattern. Before we start counting those downside targets, though, this current bounce has to fail. A new high would negate the double-top possibility, of course, and so far, the OEX is showing some initial strength in climbing back above the 50% retracement of the day's range.

 
 
  Jeff Bailey   10/8/200,  10:01:57 AM
Wholesale Inventories fell 0.2% in August, which was better than the 0.1% build forecasted by economists.

Remember that a decline in inventory would only come from demand outpacing supply.

 
 
  Jeff Bailey   10/8/200,  9:56:39 AM
S&P 500 Index (SPX.X) 1,036.74 -0.22% .... Index Trader Wrap note is that session low (1,035.30) has seen a test of support, of our cloned downward trend, which was broken to the upside in yesterday's trade.

 
 
  Linda Piazza   10/8/200,  9:53:19 AM
The OEX continues testing the 60-minute 21-pma, with the momentum indicator having gone negative for a nanosecond before changing to a slightly positive number as the OEX tries to bounce from that average. MACD, slow to change, remains flat, but RSI turns down, and CCI does, too, while remaining green. Here's our test of the MA, with the expected bounce attempt, one that seems weak currently. A 50% retracement of the day's current range would take the OEX back up to 518.55, just below the opening level, so that should be our new gauge of strength or weakness. If the current bounce is just a normal and to-be-expected measured distribution pattern, the OEX should not climb back above its opening level.

 
 
  Jeff Bailey   10/8/200,  9:52:02 AM
SAP Aktiengesell (SAP) $37.04 +9.8% (see 09:34:52) ... Announced that after an internal review of Q3 results ended September, it now expects software revenues to be approximately 430 million euro, which is levels reached in Q3 of 2002 and Q2 of 2003. The Q3 results were supported by better closure rates, especially in the United States, and some deals that had been expected to close in the second quarter but were signed in the third quarter.

The Company is reviewing the complete quarterly and market data and has not yet made any decision with respect to the Company's outlook for the full year 2003. Full third quarter results will be reported on October 16.

 
 
  Linda Piazza   10/8/200,  9:45:17 AM
That momentum indicator (set at a length of 21) is close to giving a sell signal by moving through the signal line, but it doesn't pay to anticipate signals. Since I'm new at watching it, I wouldn't issue a signal based on that indicator alone, but it is backing up the weakness we're seeing in the markets. I anticipate that it will give a signal about the time the OEX should drop below the 60-minute 21-pma, which it is currently testing, if the OEX should do so.

 
 
  Jeff Bailey   10/8/200,  9:43:00 AM
Terayon Communications (TERN) $7.25 -5.9% Link .... profiled this name as bullish yesterday. After the close, TERN filed a $125 million shelf registration, which is an initial filing that may or may not have the company offering debt or securities in the future for up to $125 million.

This would not change my thoughts toward yesterday's bullish profile.

 
 
  Linda Piazza   10/8/200,  9:41:33 AM
After reading Jim's article last night on swing trades for the ES contract, I've added the momentum indicator to my OEX charts. I'm not sure how well they'll perform on the 30-minute and 60-minute charts I like to study, but after doing a quick check last night, it seemed to be a good indicator to include. I've been accustomed to using ROC as a sort of momentum indicator before, but haven't used Q-charts momentum indicator itself.

 
 
  Jeff Bailey   10/8/200,  9:39:24 AM
S&P Banks Index (BIX.X) 316.53 -0.34%

 
 
  Linda Piazza   10/8/200,  9:36:03 AM
The first five-minute OEX range was from a high of 520.02 and a low of 518.86. The 50% retracement of that first five-minute range lies at 519.44. The OEX is obviously currently below the 50% retracement of that first range, showing some early weakness. Let's watch this figure for signs of early strength or weakness as the first reversal arrives in a few minutes. I'm looking now for another test of the 60-minute 21-pma, currently at 517.35.

 
 
  Jeff Bailey   10/8/200,  9:34:52 AM
SAP Aktiengesell (SAP) $36.30 +7.65% Link .... seeing news that this ERP software maker may have just raised Q3 outlook above consensus.

ORCL $12.41 +1.7% Link , SEBL +2.9% Link , BEAS $13.12 +2.1% Link seeing early gains.

Earlier this week, PSFT $20.90 +2.4% Link said quarterly results would be above consensus.

 
 
  Linda Piazza   10/8/200,  9:34:21 AM
The OEX is showing more weakness this morning than I expected so early, but it's still within the late-day five-minute consolidation band from yesterday.

 
 
  Jeff Bailey   10/8/200,  9:24:19 AM
Stock Trader's Almanac note Tomorrow has historically been one of two (July 18) worst trading days of the year (meaning lower) with the S&P up only 23.8% of the time.

As such, a trader long from last week's move above the WEEKLY/MONTHLY pivots and today's declines in Japan, might look to sure up some stops, and perhaps be a little more willing to sell WEEKLY R1 targets if trade is found at/near those levels in today's trade.

History is no guarantee for the future, and this year the SPX did gain 11.5 points on July 18 to 993.32.

 
 
  Jeff Bailey   10/8/200,  9:19:12 AM
09:00 Update posted at this Link

 
 
  Linda Piazza   10/8/200,  9:15:50 AM
Swing Trade Signals
I apologize for the length of this entry. Having perfected a new method of trading--entering just before the market turns and goes the direction opposite to my trade--I'm abstaining from offering official entries this week, at least until my performance improves. In my own defense, we've seen a pattern lately that's been thwarting entries. If you read my first morning summaries, I usually have a good idea where I want to enter. However, the entry I'm seeking usually comes either about ninety minutes before the close or in the last few minutes before the close, with little chance our target will be hit before the close. Since positions held overnight have not performed particularly well lately, I've been passing up those preferred entries. The next morning starts with the OEX in limbo, between support and resistance, and the process begins again.

I thought I might at least give an overview of what I see on the OEX. Here's the weekly chart: Link So, we have a cautiously bullish outlook predicated on the weekly chart. We're cautious because MACD is close to testing the most recent of its rising trendlines, and because we'd be idiotic not to be during October. (Grin.) Let's look at the daily chart: Link Here's what's showing up on the 60-minute chart: Link That hourly chart shows a possibility that the OEX is headed up to test 523, with the upward slant of the envelope suggesting that the OEX could move higher if it's successful in that test of the 523-523.50 zone. Here's what I'm left with, then. I know what I should be seeing on these charts during October, but I'm not seeing it. I've been posting those weekly and daily charts for several weeks now, and they always come out looking bullish, although there's always that bearish divergence to keep us on our toes. That bullishness worries me, but we still have to trade what we see. The question is: do we enter a bullish trade here, just ahead of 520 and then 523.50? Not me. I tried this same trade last week, and ended up entering on the high of the day. Also, futures seemed susceptible to weakness last night, dipping when the Nikkei and/or the dollar slipped. Although futures are up today, that's got me a little concerned. I'll wait for a test of 420 and then 422.50-423.50. After all, if the OEX is going to climb above that level and then establish it as support, we've still got another 25 OEX points ahead of us before the OEX hits next strong support. I can wait for that test.

 
 
  Linda Piazza   10/8/200,  7:09:50 AM
Good morning. The Nikkei opened in negative territory in Wednesday's trading and continued down all day, closing down 278.13 points or 2.57%, at 10,542.20. The strengthening yen appeared to be responsible, with the yen firming as investors anticipated that August Japanese machinery orders would rise for the third time out of four months. The dollar broke below 110 yen, with most analysts having previously believed that Japanese officials would intervene to keep the dollar above 110 yen. Defensive stocks such as paper companies and construction firms performed better than the exporters or banks.

Other Asian bourses were mixed. The Taiwan Weighted lost 0.60%, and South Korea's Kospi also lost 0.60%. Singapore's Straits Times gained 0.69%, however. Hong Kong's Hang Seng was essentially flat, down 0.03%. China's Shanghai composite gained 0.33%.

Most European bourses currently trade higher. Some analysts attribute the European performance to enthusiasm about their upcoming earnings season. Many expect that earnings season to show their companies profiting from a perceived recovery in the U.S. Company-specific news included the finalization of an agreement for GE's NBC television unit to buy Vivendi's U.S. media assets. Also, chipmaker STMicroelectronics benefited after HSBC Holdings raised its ratings of the company to an add rating from a reduce rating, citing expectations of higher-than-expected third-quarter sales. Vodafone was also gaining after an upgrade, this one by UBS AG from a "buy 1" rating from its previous "neutral 1" rating.

Currently, the FTSE 100 has gained 33.20 points or 0.78%, to trade at 4305.20. The CAC 40 has gained 21.32 points or 0.66%, to trade at 3276.07. The DAX has gained 46.20 points or 1.38%, to trade at 3401.98.

 
 

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