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  Jeff Bailey   11/5/200,  6:19:41 PM
Cisco Systems (CSCO) $23.00 in after-hours trade. CNBC keeps reporting that CSCO traded up more than $5 per share from its close of $21.80, but I only see after-hours high of $23.17.

  Jeff Bailey   11/5/200,  5:43:16 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   11/5/200,  4:43:38 PM
S&P futures (sp03z) settled 1,052.30, so closed above my bullish bias level of 1,051.20. If bulls can hold'em here overnight, tomorrow could be a little more lively than past two sessions.

  Jeff Bailey   11/5/200,  4:35:34 PM
News Corp. (NWS) $36.48 +1.05% Link ... Australian ADR higher at $37.90 after reporting Q1 EPS of $0.45, which was 16-cents better than consensus.

  Jeff Bailey   11/5/200,  4:28:51 PM
Netopia (NTPA) $12.10 +10% ... higher at $12.21 after reporting Q4 EPS of $0.02, which was 2 cents better than consensus.

  Jeff Bailey   11/5/200,  4:27:23 PM
The Mens Wearhouse (MW) $30.13 +0.43% .... higher at $30.33 after saying it plans to meet or exceed Q3. Current consensus is $0.19.

  Jeff Bailey   11/5/200,  4:24:54 PM
FOX Entertainment (FOX) $28.01 -0.49% ... higher at $28.40 on Q1 EPS of $0.45, which was 16-cents better than consensus.

S&P Dep. Receipts (SPY) $105.84 +0.07% higher at $106.09

  Jeff Bailey   11/5/200,  4:22:31 PM
CIENA (CIEN) $6.83 +1.94% .... higher at $7.00 on CSCO's earnings.

  Jeff Bailey   11/5/200,  4:16:09 PM
QQQ DAILY Pivot levels ... S2=34.89 S1=35.36 P=35.63 R1=36.10 R2=36.37

Based on $35.84 close.

OK... let's adjust bullish after-hours target lower to $36.35 from $36.45. Let's also raise STOP to $35.33.

  Jeff Bailey   11/5/200,  4:09:21 PM
QCOM ... now at $47.72 ... guidance for Q1 between $0.37-$0.40 versus consensus of $0.35.

QQQ $35.87 .... WEEKLY R1 of $36.01 dead ahead

  Jeff Bailey   11/5/200,  4:06:49 PM
QQQ $35.83 +0.78% ... 7 minutes to close

  Jeff Bailey   11/5/200,  4:06:12 PM
Cisco (CSCO) $21.80 +1.01% ... higher at $22.55 after headling $0.17 versus consensus $0.15.

  Jeff Bailey   11/5/200,  4:04:54 PM
Qualcomm (QCOM) $46.59 -1.54% ... spiked to $48.30, but $47.33 here after headling EPS of $0.35, compared to $0.29 estimates.

  Linda Piazza   11/5/200,  3:57:30 PM
Swing Trade Summary: OEX/SPX/DJX/DIA/SPY
11/05: Entered a bearish OEX trade at OEX 517.50.
10/28: Stopped at 519.00.
Result for that day: 1.50 OEX points against us.
Results for the week: 1.50 OEX points against us.

  Linda Piazza   11/5/200,  3:55:20 PM
I'm not sure whether we're set up for a bullish or a bearish position for tomorrow morning, but the OEX spent enough time testing those key averages today that a move away from them is significant. I note that the OEX is ending the day jammed underneath that old ascending trendline off the 8/06 low. I mentioned this morning that I had kept the trendline in place even though the OEX had violated it twice because it kept coming into play. It is this afternoon, too, it seems.

  Jeff Bailey   11/5/200,  3:52:11 PM
S&P Banks Index (BIX.X) 330.89 -0.01% ... which has nothing to do with CSCO earnings back to unchanged.

  Jeff Bailey   11/5/200,  3:49:43 PM
Overnight long/post market long profile in the QQQ $35.74 .... STOP today's lows to start.... target $36.45 in extended hours.

I will quickly calculate and post tomorrow's DAILY pivot levels in the market monitor at the 04:15 mark. However, CSCO usually reports BEFORE the 04:15 QQQ close.

  Jeff Bailey   11/5/200,  3:48:38 PM
QQQ $35.71 +0.53% ... what do you think?????

  Jonathan Levinson   11/5/200,  3:47:03 PM
Jeff... that would be Al Green and Ben Bernanke.

  Linda Piazza   11/5/200,  3:34:40 PM
Well, at least I don't have the distinction of setting a stop at the afternoon's high. The OEX fulfilled the 520-ish upside target predicted by the confirmed double top on the five-minute chart. I was afraid that the OEX would not then turn around at the target, but instead would then zoom up on short-covering ahead of the CSCO earnings. Actually, we should have been going long on a move above the 30-minute 100-pma, but I'm not doing that just ahead of CSCO earnings. That's just guesswork. Even if someone was privy to CSCO's numbers, which I of course am not, and the numbers were good, they'd also have to guess whether we'd get a CSCO rally or a sell-the-news reaction.

  Linda Piazza   11/5/200,  3:20:09 PM
As often happens, it looks as if the markets are being maneuvered into position near key levels ahead of the CSCO earnings announcement tonight. They'll probably gap tomorrow morning, but which direction? I don't feel confident enough making a choice tonight. As another writer mentioned earlier this morning, that feels too much like gambling. We've had our needed test of the 60-minute 100/130-pma's today. Now I hope tomorrow give us an opportunity to enter on a move away from those averages.

  Linda Piazza   11/5/200,  3:07:33 PM
In reference to Jonathan's 15:00 post (perhaps on the futures side), I do chart patterns on the oscillators and mention them often, too. RSI in particular many times signals a break of a price pattern. About a week ago, for example, I posted a H&S on RSI that broke through the neckline, predicting that price might do so, too. I don't chart A/D patterns that way, but I do pay particular attention to RSI patterns, as RSI tends to lead.

  Jeff Bailey   11/5/200,  3:04:01 PM
Networking Index (NWX.X) 250.73 (unch) .... while tech sectors claw back to unchanged, really not seeing extension of earlier observations.

GSO.X +0.24%, SOX +0.21%, DDX.X +0.05%

Cisco Systems (CSCO) $21.68 +0.46% ... trying to make a little run into earnings.

  Jonathan Levinson   11/5/200,  3:00:59 PM
Off-the-wall question for you: one of the tools I also use 2-min A/D, and watch for pattern development there as an additional guide to trading. For example, I bailed on an ES short a few minutes ago for minor profit, based on ES price meandering upwards, combined w/ 2-min A/D breaking upwards from a bullish pennant. Never see any of the authors refer to patterns on A/D or other sentiment indicators - is it just because this is so obvious?

Some chart patterns and some don't. You know I do, at least scoping for high and low trends on the oscillators I follow. However, due to the nature of oscillators and other such indicators, I don't chart for h&s or other more esoteric patterns, as I don't believe that indicators avail themselves of the same psychology as does price. With chart analysis, I'm a big believer in "whatever works". Backtest your thinking, and it will become clearer.

  Linda Piazza   11/5/200,  2:59:50 PM
The OEX confirmed the double bottom on the five-minute chart and at the same time bumped back above the descending trendline from the 10:55 candle today. That offered two confirmations of short-term strength, and since we have only a short term ahead of us before CSCO reports earnings, we had to decide on a logical stop. However, the confirmation that is now missing is a move higher. That's not happening. I may have the sad distinction today of calling a bearish play near the low of the day and then getting stopped out at the exact high of the afternoon.

  Jeff Bailey   11/5/200,  2:56:38 PM
QQQ $35.52 (unchanged) .... battles back to unchanged. 2-minutes until bond market close, with Treasuries looking to finish at their lows of the session, YIELDS at highs of session.

  Jeff Bailey   11/5/200,  2:53:48 PM
VERITAS Software (VRTS) .... $37.87 +2.18% .... not sure what the heck is going on here. BIG volume spike of 500,000 shares in last 5-minutes took stock to new 52-week highs.

  Jeff Bailey   11/5/200,  2:51:30 PM
Disk Drive Index (DDX.X) 138.76 +0.15% .... afternoon highs here. Joining SOX.X +0.34% and GSO.X +0.32% for fractional gains in tech-related sectors.

QQQ $35.46 -0.16%

  Linda Piazza   11/5/200,  2:51:13 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were just stopped out of our bearish OEX trade at 519.00. We entered at 517.50, so endured a 1.50 move against us. I was just watching the way resistance comes together at our original stop at 519.75, but didn't want to keep moving the stop around. Perhaps I should have left it at 519.75? Time will tell, but I didn't want to get us too far away from our entry and then have a short-covering spike take the OEX higher.

  Linda Piazza   11/5/200,  2:39:32 PM
The OEX moved while I was gone, but in the wrong direction. It's possible that our stop will be hit. I'm seeing resistance gather near our original stop at 519.75, so hardy souls who don't mind risking the extra 3/4 points can keep their stop at the original level. I'm also seeing support gather between 517.30-517.75, making it more difficult for the OEX to break through.

  Jeff Bailey   11/5/200,  2:39:00 PM
GSTI Software Index (GSO.X) 149.36 +0.12% ... afternoon highs here.

DOX +3.8%, SEBL +2.89%, IWOV +2.39%

Market cap top 5 heavyweights in the GSO.X.... MSFT +0.57%, ORCL +0.65%, VRTS +1.45%, ERTS +0.54%, CA -1.67%

  Jeff Bailey   11/5/200,  2:35:43 PM
01:00 to 02:00 internals ...

NYSE .... A/D 1305:1815 to 1276:1876 while NH/NL 206:7 to 220:9

NASDAQ ... A/D 1187:1813 to 1184:1890 while NH/NL 187:7 and 218:7

See 12:06:33 for 11:00-12:00

  Linda Piazza   11/5/200,  2:24:36 PM
Be back in five minutes. Please move the OEX below 517 for me while I'm gone.

  Jim Brown   11/5/200,  2:24:09 PM
Pre-CSCO preparations
Its time for shorts to cover, and longs to add to positions in time for the quarterly john chambers cheerleading. I was tempted to go long, but I just feel like long is wrong. P

Good point! So if we do not get a short covering bounce then the consensus will be that CSCO will not offer positive guidance? While I am in agreement with the potential for shorts covering in advance since we have not seen any afternoon decline there is always the potential that Cisco will echo the IBM, GE, DELL and MSFT comments that IT spending has not increased and there is no real recovery in sight. Chambers has said many times that his business will only improve AFTER a recovery has made significant progress. I have not heard him making bullish statements on the road this quarter as he usually does. Just a thought.

  Jeff Bailey   11/5/200,  2:15:37 PM
My internet connectivity has been off and on ... My quick thoughts per Index Trader wrap at this point is it looks like we will finish lows of the session unless a last-hour bond market close finds a rally back to SPX 1,050.

However, if we see close near the lows, then the trade I look for tomorrow is bearish on a modest gap higher to the 1,050 level, and failure back below 1,047, where we could then see a push back lower to the 1,030 level.

With the WEEKLY Pivot of 1,044.32, I'm very cautious to try and short ahead of CSCO's numbers, only after seeing the response to Intel's (INTC) 10/14/03 earnings report, which evidently were not fully baked into the cake when the stock gapped up from $31.07 to $32.78.

  Linda Piazza   11/5/200,  2:15:21 PM
Keene mentioned a reader email that referenced our view that a sell-off was imminent. Several writers have mentioned the possibility of a bounce, and I hope readers are keeping that in mind as a possibility, too. I've tried to keep my viewpoint as neutral as possible, letting the OEX price developments tell me what direction the OEX wanted to do today. While I'm worried about the implications of the low VIX/VXO, I had an open long signal until a few minutes ago, so bounce potential was considered, just as all readers should assay that potential for themselves. The OEX just hasn't triggered that long signal and hit the bearish trigger instead. I don't want to take a long signal now, just ahead of CSCO earnings this evening. We've had a good test of the 60-minute 100/130-pma's. This morning, it looked as if the OEX were breaking down below those averages, but instead it now clings to them. We'll have to see what develops but if we're stopped out of this play and the OEX bounces on CSCO news tomorrow, I'll look again at a bullish play if it's supported by other criteria.

  Keene Little   11/5/200,  2:08:41 PM
Great email from a reader challenging some of our views that we may be near an imminent sell-off, referencing things like oversold 60-min oscillators, neutral sentiment readings, etc. I'll answer that I agree with his assessment--I believe we have another rally in our very near future to new highs. It's after that new high that I believe we will have run out of bull-gas. From there, I believe people who continue to try to buy the dips will provide the fuel (long-covering) for the continued decline.

  Jonathan Levinson   11/5/200,  2:08:16 PM
In response to Stephen's email, I agree with these comments. On the bear side, I'd add the extreme bullish sentiment levels from Investors Intelligence (related to your VXO comments), and other overdone breadth measures in addition to the bullish percents. I've seen charts of the McLellan oscillators overbought and showing negative divergences, though I do not have these links handy.

More anecdotally, the lack of bullish capitulation in March makes me doubt we've seen a bottom. It seems that the sicknesses that caused the various corrections we've had so far are not gone, but if anything, have grown worse during this rally from March.

But, I agree that there are sound reasons to believe that we've not seen the top of this rally. It's for this reason that I continue to report neutrally on the oscillator configurations, and caution traders to stay nimble and flexible in their attitudes.

  Linda Piazza   11/5/200,  2:05:49 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
There was no new OEX low of the day, and now there's the potential for a double bottom on the five-minute chart. That double bottom will be confirmed on a move above 518.70. If confirmed, it would suggest an upside near 520. We have the choice of raising our stop to accommodate that expected upside if the OEX should confirm the double bottom, giving it room to turn over again, or lowering our stop to take us out soon after a double-bottom was confirmed. I'm taking the second choice. Lower the stop to 519.

Let's cancel the still-open long signal, too. I don't want to go long this late in the day, ahead of CSCO earnings tonight.

  Jonathan Levinson   11/5/200,  2:04:27 PM
The lack of depth on the pullbacks is bullish, but the short cycle upphase is coming to an end here, and bears should begin to press again. If the session lows hold, I expect bears to begin covering, and the delayed 30 minute cycle bounce could finally get moving. Still an iffy spot, but the longer the bulls hold price above the highs of the day, the better the chance of a more meaningful bounce.

  Jim Brown   11/5/200,  2:03:27 PM
Reader Question
I respect the views you all have pertaining to the Equity Markets BUT I cannot see anything in the charts or Sentiment Indicators I follow (Save for the VXO) that lead me to believe a sell off is imminent. Compx held 1940 gap. Huge support in the 1042-1046 range on ES.

60 min Stochastics are in oversold region on SPX and turning up on the COMP. Breadth continues to improve from lows.

5 and 10 day averages of Trin and the Put/call are neutral and save for a day or 2 here or there we rally on close.

I have a Strong Bearish Leaning based on the Bullish Percents and Low VXO. But each dip is still bought ferociously.

Short Interest is huge and its difficult to sell off when everyone whose short covers on each dip and then lays out new shorts. (The opposite of overhead supply)

Thanks to you all and would appreciate a reply. Stephen

Stephen, thank you very much for your email. I agree with you nearly 100%. However, most major market declines do occur when all the indicators are very bullish. If you check back to prior corrections they tend to come right at or immediately after new market highs. This is supported by the bullish internals. And, everyone is aware that the VXO has been at five year extremes of bullishness.

Also, when talking about sell offs it is important to make sure we are all on the same time frame. A sell off in my context in the monitor is 2-3 days. A sell off in a stock investors context could be weeks. In a swing trade context it could be hours.

In my market wrap last night I said I felt we could easily see some profit taking for as much as a couple hundred Dow points without any danger to the current trend. While many readers are expecting a much more severe event I am neutral. I know the number of bearish advisors is growing but that is actually a bullish events. Only when everyone is standing on the same side of the boat are we in danger. As long as there is balance we can move higher.

I would like to invite other readers to send in their viewpoints on this topic and I will forward them to Stephen and print any points I missed in the monitor.

  James Brown   11/5/200,  1:53:07 PM
Teasing the bulls with a new 52-week high are shares of Playboy Enterprises (PLA). The company reported earnings this morning before the bell and depending on whom you listen to the company either met expectations or missed estimates by a penny. Net income or rather net losses were 3 cents per share, which extended the losses from last year but revenues were up. Driving the stock higher was mostly likely the company's more positive guidance going forward. PLA is raising its 2003 profit projections by 14%.

  Linda Piazza   11/5/200,  1:52:46 PM
The OEX again tests the 60-minute 130-pma, the lowest of the key averages we've been watching today. We have not yet seen a new OEX low of the day, however, and the downside can't get going until we do. And it sticks.

  Linda Piazza   11/5/200,  1:43:11 PM
We're approaching the time of the usual stop-running push. I could see either a push up to test Dow 9800 again or a push down to test support. Remember that the reaction to the test is almost of more importance than the test itself. If the OEX were to punch down to 517, for example, but immediately popped back up to 518.50, then we'd know that the support was going to hold, at least for the short-term. That would help the longs who were stopped out on that push, of course, but that's why I call it a stop-running push.

  James Brown   11/5/200,  1:30:54 PM
Jeff may have already mentioned it but the strength in the homebuilders is amazing. Several of them are hitting new 52-week and new all-time highs today, despite the broader market weakness.

The entire sector (DJUSHB) is up nearly 400% from its lows in 2000. The sharpest gains have come in 2003, where the sector has nearly doubled from its March lows.

  Linda Piazza   11/5/200,  1:30:02 PM
The OEX fell beneath the ascending trendline that began forming on the 10:55 five-minute candle. Now we really need to see a new OEX low.

  Linda Piazza   11/5/200,  1:27:15 PM
I mentioned in a previous post that GE was approaching its 200-dma again today. Many stocks approach or test or fail beneath their 200-dma's, DD and BAC among them.

  James Brown   11/5/200,  1:19:20 PM
Shares of Safeway Stores (SWY) are spoiling and Smith Barney is suggesting investors throw it out with the trash before it really starts to stink. The SB analyst cut SWY to a "sell" this morning and shares fell to the $19.00 level before bouncing back. This move comes just one day after SWY convincingly breached short-term support at its simple 200-dma on big volume. SWY could be headed toward what appear to be its all-time lows near $16.50.

The weakness on Tuesday stemmed from SWY's labor troubles. The beleaguered grocery chain had been trying to sell its 113-store subsidiary Dominick's grocery in Chicago. Unfortunately, in a market that already suffers from tough competition no one is coming forward to make an offer for Dominick's. To make matters even worse Safeway has been unable to negotiate a new contract with its workers and unions have causing all sorts of trouble for grocers across the country. (source: Dow Jones)

  Jonathan Levinson   11/5/200,  1:11:24 PM
Agreed, Linda. GE and the markets in general feel like they'r ehanging at the edge of an abyss. The short cycle oscillators are not done their upphase, but it's growing close. If the longer intraday cycles don't hold price rangebound, the bulls could have a big problem starting today.

  Linda Piazza   11/5/200,  1:08:18 PM
As Jonathan would doubtless remind us, GE's close approach to its 200-dma today may be a factor in whether the markets bounce or don't. GE bounced from its last test of that average (currently 27.96 with GE at 28.31 as I type) in late October, but the bounce was weak. Will it bounce again or will it fall beneath that key average? I would imagine that a lot of effort would go into keeping GE above that key average, but that a lot of people would be bailing on a drop below it.

  James Brown   11/5/200,  12:58:20 PM
InteractiveCorp (IACI), previously known as USA Interactive (USAI), is down nearly 12 percent after announcing Q3 earnings this morning before the bell. The company misses consensus estimates by a penny. Net income came up short at 17 cents per share, despite a 36% jump in revenues. The stock is holding at short-term support near $32.50 for the moment but volume is extremely strong already past 36 million shares on the session. Average volume is closer to 8 million.

  Jonathan Levinson   11/5/200,  12:55:57 PM
Gold is holding its gains, currently trading 384.20, and HUI has begun to catch up, now +1.25 at 214.24. Bonds have crept up to almost flat, and equities are stalled at current levels with the intraday cycles indicating upside but the price action utterly unconvincing so far.

  Linda Piazza   11/5/200,  12:49:27 PM
The pattern in which the OEX trades still appears to be a bear flag rising into resistance. That's characterized by a tight range of higher highs and higher lows, occurring after a steep decline. That all fits the current pattern. It's just extending longer than I would like for it to extend (time-wise), but not higher (price-wise). Such a flag could retrace half the previous descent, as I mentioned earlier, which would bring the OEX just underneath our stop before it turned down again, so as soon as I closed the trade early, the flag would rise to that level and the OEX would drop. The 30-minute 100-pma lies between the current OEX price and that midpoint of the decline, too, currently at 519.36. The 30-minute momentum indicator isn't showing any strength, but MACD threatens a bullish cross, although from below signal and RSI has hooked back up again. We see a mixture of indications.

  James Brown   11/5/200,  12:47:44 PM
Ah... Finally... Microsoft (MSFT) is putting some of its $50 billion cash hoard to work. The company announced this morning that it is creating a $5 million reward program to help law enforcement agencies catch and convict those who create and release worms, viruses or any other malicious code. (Associated Press)

The software giant's first cash rewards are for information leading to the arrest for those responsible for the MSBLast.A worm and the SoBig virus. MSFT is offering $250,000 each.

  Jonathan Levinson   11/5/200,  12:41:20 PM
Most recent put to call reading was .77, VXO up .75 at 18.17.

  Linda Piazza   11/5/200,  12:33:35 PM
I must have jinxed our trade by saying that I was worried about a bounce because no sooner did I get that posted than the OEX bounced. This bounce takes it right into strong resistance offered by various long-term averages, but it's already moved the OEX above the last five-minute high. The stochastics are showing bearish divergence with the price, however.

  Linda Piazza   11/5/200,  12:28:35 PM
The OEX 30-minute chart now shows a series of small-bodied candles lining up just under the 100/130-pma's. As they line up, MACD tries to flatten and CCI rose, but RSI and momentum show the signs of hooking down again. Static trading creates these kinds of mixed-up oscillator signals so we just have to wait for price to do its thing and show us the final direction. I'm still worried about the possibility of a punch up toward 520, but so far, it's not happening.

  Jonathan Levinson   11/5/200,  12:22:41 PM
Dec gold is printing a high of the day, up 4.80 at 384.80, silver holding 5. Bonds are still flat to negative, equities weak but holding the middle of their range as the markets grow quiet.

  Jeff Bailey   11/5/200,  12:21:58 PM
Buy/Sell program alerts .... had mutliple buy program alerts in early going, but after a sell program alert where cash caught up to futures at the open, haven't seen a sell program alert. Will note though that today's sell program premium alert level is quite a bit lower than usual at -2.66.

A subscriber that seems to follow these closer than I, has made comment in the past that he has seen more bullish days, take hold when the sell program alert is unusually low.

I'm not sure how to make sense out of that observation (an interesting one).

  Jeff Bailey   11/5/200,  12:16:56 PM
ICOS Corp. (ICOS) $46.40 +4.5% Link .... nice bounce from yesterday's lows. Subscriber was looking for bullish entry on Monday at around $44 (02:10:10) Link , made sense with PNF chart and 21-day SMA too.

  Jeff Bailey   11/5/200,  12:06:33 PM
11:00 to 12:00 Internals ....

NYSE .... A/D 1007:1946 to 1163:1880 while NH/NL 158:6 to 182:7

NASDAQ ... A/D 917:1844 to 1116:1789 while NH/NL 153:5 to 172:7

  Linda Piazza   11/5/200,  12:03:20 PM
I'm not happy about the way our OEX trade is progressing and have been tempted to close it early. Yet I see bearish volume patterns, the OEX below the 30-minute 100/130-pma's (although inching above their 60-minute minute counterparts), a confirming Donchian channel breakout to the downside, and what looks to be a normal bounce back to test broken support. I see daily RSI in full bear roll, although near the neutral 50 level and 5(3)3 stochastics joining the RSI. ADX is low enough that we should be able to trust those oscillators. Daily 21(3)3 stochastics are close to, but not yet making a bearish kiss. So, I'm staying in for now, but nervous now about a test of 520.50.

  Jeff Bailey   11/5/200,  12:02:41 PM
Peregrine Pharma (PPHM) $2.49 +13.2% ... Hi Jeff There was a small pharmaceutical company you reported once some time ago. Volume and price have really taken off today. Have you looked at this recently? It has a bullish price objective of 4.50. Would like your opinion, thanks

Yes.... what comes to mind here, and I did look at the stock yesterday, is what took place in a small biotech yesterday, in regards to a protein found to be isolated in cancer tumors. Not exactly like PPHM's techniques, but similar.

I've had retracement on PPHM from $3.94 to $0.90 for a long time. See strong break above 50% of $2.42 today. Can play long, but stop goes under 61.8% retracement of $2.06.

Nice bullish crossover in MACD above Signal and comes just above zero (usually finds more powerful move on this setup).

Other retracement from 50% $2.42 has 38.2% at $2.78 and 19.1% at $3.36.

  Jonathan Levinson   11/5/200,  11:52:19 AM
MSFT printing another high of the day, up .69%.

  Jane Fox   11/5/200,  11:50:42 AM
All indexes, SPX, INDU and COMPX punched through the lower level first hour markers at the same time. However, the COMPX break looks like its punch has more force than the other two.

  Jeff Bailey   11/5/200,  11:49:11 AM
Australian All Ordinaries ($AORD) Link .... here's a chart of the $AORD on 20-point box scale, where this index finished today's trade at 3,255.80 -0.72%. Will want to monitor in coming weeks to see how a foreign market reacts to a rate hike.

I tried to find this Pnf chart on Dorsey's page, to see what scale they were using, which most institutions might be looking at. Still.... the 20-point box size would show a "low pole warning" back in April, which we could tie to the rebound seen in the U.S., where this 20-point box would also give a bullish vertical count of 3,420, which might be "reasonable" or tie in with highs seen in early 2002.

Downside RISK to a sell signal would be to 3,140, where from the recent high of 3,300 would represent a 4.84% decline.

  Jonathan Levinson   11/5/200,  11:43:37 AM
The put to call ratio is up to .83, VXO 18.07/ Bonds are down .4 bps, gold holding its gains, equities on what is so far a very weak bounce.

  Jonathan Levinson   11/5/200,  11:38:01 AM
The Fed has announced a 1.1B coupon pass, which is a permanent addition to liquidity (permanent open market op).

  Jeff Bailey   11/5/200,  11:37:32 AM
Pivot Matrix observations ...

All of the equity indices have seen trade at DAILY S2 this morning.

The S&P 500 Index (SPX.X) 1,046.66 -0.62% session low has been 1,044.88 and came very close to its WEEKLY Pivot of 1,044.33. So far, SPX has moved into our near-term "zone of support," and first sign of realy meaninginful intra-day strength would be back above 1,050.

  Jonathan Levinson   11/5/200,  11:36:53 AM
MSFT is printing a high of the day.

  Jeff Bailey   11/5/200,  11:33:12 AM
11:00 Internals showed...

NYSE ... A/D at 1,007:1946 while NH/NL were 158:6

NASDAQ ... A/D at 917:1844 with NH/NL at 153:5

  Linda Piazza   11/5/200,  11:32:34 AM
Swing Trade Signals
It's looking to me as if we might see a more prolonged bounce in the OEX now, perhaps only up to 518.50 but perhaps up to test the midpoint of the day's range. Those not willing to risk that bounce might elect to exit here, near our entry.

  Jane Fox   11/5/200,  11:31:34 AM
I have placed first hour "benchmark" levels on SPX, DOW and COMPX using them as a gauge for stronger/weaker market. The first one to break above the lower first hour pivot is the stronger market. This, of course, assumes any market breaks above.

  Ray Cummins   11/5/200,  11:29:31 AM
Spreads/Combos & Premium-Selling -- Portfolio Activity

Despite a second day of bearish activity, there were some big winners in the Spreads/Combos section, most notably in the delta-neutral category. The debit straddle in Priceline (NASDAQ:PCLN) was by far the best performer as the Internet issue plunged more than 25% after the company issued disappointing fourth-quarter guidance. The position offered up to $8 credit on $4.90 initially invested in only two weeks. Short-term plays in Digene (NASDAQ:DIGE) and Toyota Motors (NYSE:TM) also became profitable during the session amid earnings-related profitability and traders should consider locking-in gains in Zimmer Holdings (NYSE:ZMH), which has offered up to $9.80 credit on $5.20 invested in less than one month.

  Linda Piazza   11/5/200,  11:28:57 AM
As of a few minutes ago, volume patterns supported the bearish thesis. Adv:dec ratios were 10:20 on the NYSE and 9:20 on the Nasdaq. Down volume was 2.75 times up volume on the NYSE and 2.71 times up volume on the Nasdaq. New highs stood at 323 with 11 new lows. Total volume was 440 million on the NYSE and 767 million on the Nasdaq.

  Jeff Bailey   11/5/200,  11:26:02 AM
11:00 Update at this Link

  Linda Piazza   11/5/200,  11:22:49 AM
We now need to see a lower low on the OEX.

  Linda Piazza   11/5/200,  11:13:00 AM
I dislike having to post entries ahead of time because conditions can change by the time the entry level is hit, but when I was out there trading on someone else's signal, I sure wanted information ahead of time so I could decide if I agreed. By the time our downside trigger was hit, the OEX was due for a short-term bounce, and we got it shortly afterward. That bounce looks like a normal-and-expected measured distribution pattern--a bearish flag--but we'll have to see. Several layers of resistance now gather near 518.25 and 518.75, so we hope to see the bounce stopped there, but a bear flag rise can retrace up to half the flagpole decline. That midpoint would occur at 519.60, so our stop will take us out if the OEX retraces more than half that flagpole decline.

  Jonathan Levinson   11/5/200,  11:05:21 AM
The VXO is up to 18.30, +.88.

  Linda Piazza   11/5/200,  10:56:54 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were just triggered on a bearish OEX trade, with a trade below 517.50. Our initial stop is 519.75. Our target is 513, but we'll be watching closely as the OEX approaches 514.80-515, as that might be another prime bounce spot.

I think we can expect a bounce soon to test broken support.

  Linda Piazza   11/5/200,  10:47:24 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Here are two OEX entries, one bullish and one bearish, both based on the 100/130-pma's. The bullish entry is on a push above the 30-minute 100-pma, with some extra leverage given to clear historical S/R first. It's dangerous because of . . . well, you know all the reasons already. The bearish entry is on a drop below the 60-minute 130-pma. It's dangerous because of the bullish tenor in the markets, and the propensity for the markets not to meet bearish targets. Still, these are clear tests of these important averages, and I think we should risk an entry based on the OEX's behavior around them.

Enter a bearish OEX position on a drop below 517.50. Stop 519.75. Target 513.
Enter a bullish OEX position on a climb above 520.25. Stop 517.00. Target 525.

  Linda Piazza   11/5/200,  10:34:47 AM
We had a Donchian channel breakout to the downside at the close of the last 30-minute period.

  Jeff Bailey   11/5/200,  10:30:22 AM
Netease.com (NTES) $44.95 -0.5% .... was trying to get this intra-day chart worked up, but "too late." (stopped for bullish loss at $44.94) Link

  Linda Piazza   11/5/200,  10:29:45 AM
We're getting the hoped-for test of the OEX 30-minute 100/130-pma's and we may even get a test of the 60-minute versions. The OEX now heads toward the 518.27 level of the 60-minute 100-pma. I'm getting lots of confirmation of a possible bearish OEX play, but this is prime bounce territory, so I'm waiting for that test. The OEX 60-minute 130-pma lies at 517.67. We're now looking for a bearish opportunity on a drop below that average and a bullish on a move back above the 30-minute 100-pma. We've had our test.

  Linda Piazza   11/5/200,  10:24:33 AM
As Jim just mentioned on the futures side, the internals do not support a long play. Adv:dec ratios were 11:15 for the NYSE and 11:14 for the Nasdaq as of a few minutes ago. Down volume was higher on the NYSE and up volume higher on the Nasdaq, but volume was light.

  Linda Piazza   11/5/200,  10:22:14 AM
The OEX once again tests its 30-minute 100-pma at 519.53, temporarily bouncing again from that average. If it heads down toward the 130-pma at 518.99 (we can always hope, can't we), a touch of the 130-pma and a bounce back above the 100-pma would be a buy signal. On a fall through the 130-pma, I'd still need to watch for a test of the correlative 60-minute versions before considering a bearish play because they seem to have been important in recent trading.

  Jeff Bailey   11/5/200,  10:21:48 AM
December Gold (gc03z) 380.10 +0.02% .... I'm 30-min delayed quote here, but see the commodity giving back early gains. I was a bit perplexed at the early bid after Australia's interest rate move. One thing a "gold bug" doesn't want is for interest rates to move higher, and squash inflation fears.

  Jeff Bailey   11/5/200,  10:18:28 AM
Newmont Mining (NEM) $42.69 -1.43% .... What kind of correction can we expect on NEM after yesterday's annoncement? Regards.

The announcement has already been factored into NEM's price (in my opinion), but with Australia raising interest rates, might look for NEM to pull back into $40 support.

  Linda Piazza   11/5/200,  10:14:53 AM
By the time my 10:12 post could be uploaded, the OEX had started down again. It's now below 520.80 S/R and headed down to test 520, the next level of possible support. Below that lie those important averages we hoped to see tested.

  Linda Piazza   11/5/200,  10:12:55 AM
Swing Trade Signals
I would like to see the OEX five-minute oscillators cycle down and see the OEX reach a higher low on that cycle before considering a long position, but I don't know that we're going to get that ideal situation. I just distrust this morning's quick tag of the 30-minute 100-pma and wonder if that reflexive bounce was "it." A move above OEX 522.25 would represent an upside break out of the descending regression channel, but right now 30-minute momentum is not yet turning up, nor is 30-minute RSI, with those two usually being the earliest to signal a move up. I'm just not yet seeing any of the overwhelming evidence I need to go long. If the OEX returns to give those averages a more thorough test or if it consolidates at the current level long enough for five-minute oscillators to cycle down and start up again, maybe then.

  Jonathan Levinson   11/5/200,  10:12:46 AM
VXO is currently up .15 at 17.57, with the put to call ratio at .71 for the first half hour.

  Mark Phillips   11/5/200,  10:12:47 AM
ADTN $$67.72 (-4.01) No matter how you slice it, the opening action in ADTN has not been pleasant. This possibility was precisely why I made my post this morning (8:47) before the cash open. ADTN gapped down below $69 (not good) and continued south to hit $67.49 (OUCH!) before a very weak rebound that appears to be failing as I type. At this point, I would suggest avoiding the stock, especially in light of the fact that volume has already topped the ADV by more than 50%. Odds are very good that we'll be dropping the play tonight unless a miraculous rebound appears before the close.

  Jeff Bailey   11/5/200,  10:11:20 AM
Day trade long .... in Netease.com (NTES) $45.74 +1.12%. Looking for bull entry at $45.51, stop at $44.94 to begin with and target of $47.25.

Might also be a swing trade bull entry, where a bull that can build some gains to $46.60 or higher, might look to hold stock overnight and roll the dice on CSCO earnings.

  Jonathan Levinson   11/5/200,  10:09:52 AM
Either my eyes are playing tricks on me or the Fed has just changed their release for today, now showing a 2.75B reverse repo for this morning. This is a net 1.25B addition for the day against the 4B reverse repo coming due this morning.

  Jeff Bailey   11/5/200,  10:07:24 AM
ISM Services Index for October came in at 64.7, which was better than economists' forecast of 63.4 and September's 63.3 reading.

S&P Retail Index (RLX.X) 384.56 -0.48% down 1.9 points here.

  Jane Fox   11/5/200,  10:04:31 AM
From and The Beat Goes On Column - Prudential Securities is the latest to be investigated by the NASD (National Association of Securities Dealers) for issues involving so-called late trading of mutual funds. I read an article that says by some estimates 1/2 the industry has been involved in this type of trading.

  Linda Piazza   11/5/200,  10:02:36 AM
First OEX support should now be in the 520.80-520.60 zone. Let's see if it holds.

  Jeff Bailey   11/5/200,  10:02:27 AM
Factory orders came in at 0.5%, slightly below consensus of 0.6%.

Gold equities getting hit lower in early going, most likely on Australia's rate hike, and not overly robust September factor orders.

Newmont Mining (NEM) $42.50 -1.87% Link is biggest drag on $HUI.X after announcement of stock offering.

  Jonathan Levinson   11/5/200,  10:00:09 AM
Factory orders disappoint at .5%.

  Jeff Bailey   11/5/200,  9:59:53 AM
S&P Depository Receipts (SPY) $105.85 +0.08% .... addition to 09:44:49 post. Upper 5-MRT has BLUE #6 right near our WEEKLY R1 of 106.33. This really has Cisco Systems (CSCO) $21.44 -0.6% earnings after tonight's bell in play as catalyst for future direction.

Like many other stocks, a lot of good news has been baked into the cake, but what matters most is how much sugar or salt is added.

My little sister once baked a cake and mistakenly added 2 cups of salt and 1 cup sugar, instead of 1 cup salt and 2 cups sugar.

  Jonathan Levinson   11/5/200,  9:59:29 AM
ISM services upside surprise, 64.7.

  Jonathan Levinson   11/5/200,  9:58:32 AM
ISM data due now.

  Linda Piazza   11/5/200,  9:55:50 AM
Here's what I see so far on the 30-minute OEX chart: Link

  Linda Piazza   11/5/200,  9:46:54 AM
The OEX now tests the midpoint of the first five-minute range. I'd like to hold out until after the 10:00 numbers before making a decision on whether to trade today and what kind of trade to take. That may mean we miss a trade altogether, but better that than to be on the wrong side. Although the numbers are not expected to present surprises, I'd still rather be cautious. We've got enough working against us as it is.

  Jeff Bailey   11/5/200,  9:46:46 AM
Netease.com (NTES) $45.73 +1.26% ... this is becoming my "pulse" stock for pulse on short-covering. Stock starting to firm up in recent sessions. May have $50-$55 in it on a bounce.

Tempted for another day trade long here, but will wait for MARKET reaction to economic data at 10:00 AM EST. Might look for stock to backfill morning gap higher to RED #2 of $45.16, but after trading stock for bullish gains yesterday to $47.00 target, feel like I've got an accurate read on the stock.

  Jeff Bailey   11/5/200,  9:44:49 AM
S&P Dep. Receipts (SPY) $105.53 -0.19% .... per last night's Index Trader Wrap, I've also placed today's 5-MRT on the SPY. Red #2 at 105.30 and Red #3 at $105.19. $105.19 is most likely the more formidable intra-day support level, as this is VERY close to today's DAILY S2.

Currently noting the early morning low has been 105.45, where DAILY S1 is 105.47.

If you cut me into two parts, 70% of me would be bullish here, 30% bearish.

  Jonathan Levinson   11/5/200,  9:43:43 AM
Dec gold continues to hold 380, up .50, while HUI is -.83 at 212.16 and XAU -3.9 at 96.39. Silver is back above 5 at 5.02, while treasuries are still lightly lower, -.7 bps on the ten year note.

  Linda Piazza   11/5/200,  9:42:02 AM
Today's OEX first five-minute and three-minute ranges were so large that I'm dropping to a 2MRT system to watch the day's trading. For those without access to intraday charts, the first two-minute period had the same 520.51 high, of course, and a low of 520.06.

  Linda Piazza   11/5/200,  9:35:31 AM
The OEX traded a high of 521.51 and a low of 519.68 during its first five minutes of trading. The 50% retracement of that first five-minute range lies at 520.60. We can watch that midpoint for signs of weakness or strength as the OEX makes its first retracement of the morning, with the notation that currently, the OEX trades below that average. It's too early to consider the first retracement effort really underway, and so draw any strong conclusions.

  Jonathan Levinson   11/5/200,  9:34:43 AM
GE is printing a low of the day, but it's early. -.91% currently.

  Linda Piazza   11/5/200,  9:33:12 AM
A test of the OEX 30-minute 100-pma is occurring now.

  Linda Piazza   11/5/200,  9:32:34 AM
The OEX currently touches the ascending trendline from the August 6 low. The OEX has violated that trendline a couple of times--in late September and in late October, but since it sometimes seems to oscillate around the trendline, I've kept it on my chart, thinking it might still be relevant.

  Jeff Bailey   11/5/200,  9:28:56 AM
Beazer Homes (BZH) $101.31 Link ... higher at $103.50 after reporting quarterly EPS of $4.18, which was well above consensus estimates of $3.92.

  Linda Piazza   11/5/200,  9:26:42 AM
We OEX traders have a fairly straightforward task ahead of us today. That's to wait for a test of the 60-minute 100/130-pma's, just on either side of 518. If that test does not occur, we'll at least hope to see a test of the 30-minute versions, currently at 519.47 and 518.90. Despite the worry that low VIX/VXO combo engenders in me, we'll be considering a long play on a test of and bounce from those averages and a bearish play on a fall through the 60-minute versions. We're going to have to see some support to any play we consider, however, such as volume patterns or oscillator evidence or a Donchian channel breakout or something.

  Jeff Bailey   11/5/200,  9:19:27 AM
09:00 Update posted at this Link

  Jonathan Levinson   11/5/200,  9:17:54 AM
Seeing some bounce in the futures, with the Nasdaq futures (NQ3Z) back to flat at 1030.50, SPX (ES3Z) -2.25 at 1050. Gold is down to 380.20 from its morning high of 384, silver 4.99 from 5.03.

  Mark Phillips   11/5/200,  8:47:43 AM
ADTN $71.73 Murphy's Alive And Well This new Call play had some disturbing late-breaking news last night, with the revelation that the CEO sold 4 million shares of stock to diversify his personal financial assets. That sent the stock tumbling in the after-hours, trading as low as $69 this morning. This weakness could be a great entry point into the play, but it could also be a warning that the play is doomed before it gets off the ground. Watch the opening action carefully before committing to new positions. The $68 level should be strong support and if it is violated, then we would suggest avoiding the play until the bulls can mount some sort of a rebound, preferably on strong volume.

  Linda Piazza   11/5/200,  7:07:53 AM
Good morning. The Nikkei fell straight through its morning session, closing that session at the day's low of 10,668.39, down almost 180 points. Currency concerns sent the exporters lower in the morning's trading. Throughout the afternoon session, the Nikkei climbed, with that climb becoming parabolic in the last 30 minutes of trading. The Nikkei erased almost all of its losses, but couldn't quite close positive. It closed down 10.43 points or 0.10%, at 10,837.54. Some exporters still closed down. Telecoms and autos also were weak. Toyota reported after the close of trading, reporting net profits that were better than expected. The upcoming November 9 election impacts trading, too, with each party outlining the economic reforms it would take if elected. If elected, the opposition party will name a man once dubbed "Mr. Yen" as its finance minister, so dubbed as one might expect because of his impact on the currency markets.

Other Asian bourses were mixed. The Taiwan Weighted gained 0.55% and South Korea's Kospi gained 1.19%. Singapore's Straits Times lost 0.91% and Hong Kong's Hang Seng closed flat, down 0.01%. China's Shanghai Composite lost 0.32%.

Many European bourses trade down. A Reuters study measuring eurozone service industries PMI showed an expansion in October to 56 from September's 53.6, a better-than-expected result. The study covered Germany, France, Italy, and Spain, and showed expansion in each of those five countries. Adidas-Salomon reported an 8% decrease in its order backlog, attributing the decrease at least in part to continued weakness in North America. The company also noted the negative impact of foreign exchange movements.

Currently, the FTSE 100 trades down 36.40 points or 0.84%, at 4293.90. The CAC 40 has lost 29.05 points or 0.85%, to trade at 3395.76. The DAX has lost 36.75 points or 0.98%, to trade at 3704.96.

  Jeff Bailey   11/4/200,  12:45:47 AM
Nikkei-225 ($NIKK) Link .... 10,668.78 -1.65%.

Per Jim's 15:55:53 post.... "Get Gumby on the phone and see if he'll turn $1,000,000 out of the Japanese mutual fund for me tonight (based on earlier close of course)."

  Jeff Bailey   11/4/200,  12:45:40 AM
Pivot Matrix for tomorrow at this Link

  OI Technical Staff   11/4/200,  12:45:29 AM
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