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  Jeff Bailey   11/6/200,  5:23:17 PM
Pivot Matrix at this Link

Dow 10,000 may be in the cards early tomorrow, but bulls have some work to do. A nonfarm of 100K, could equate to a Dow 10K

With S&P futures (sp03z) setteling at a contract high of 1,058.50, bulls look to be in control.

  Jeff Bailey   11/6/200,  5:20:32 PM
QQQ $35.82 -0.07% .... will hold overnight into jobless numbers. May refine target/stop based on DAILY matrix results.

  Linda Piazza   11/6/200,  4:07:07 PM
Donchian channel update: the bearish trade signaled yesterday would now have been exited under both types of exits I've tested. That breakout occurred yesterday at the close of the 10:00 30-minute candle. That close was at 518.31. One type of tested exit would have triggered an exit at the close of the 2:30 candle at 518.84, for a small loss. The other would not have triggered until this afternoon's ramp up, and would have exited the trade at the maximum loss, 4 points. At the time the signal was given, 21(3)3 stochastics are already at levels indicating oversold conditions, one parameter often associated with profitable trades. However, ADX was a high 25.76 (perhaps suggesting that the trend was too mature already?) at the time of the signal, a parameter sometimes but not always associated with iffy or poorly performing trades.

The same candle that closed out that trade at the maximum loss produced an upside breakout of the channel, with a close at 523.66. Similar stochastics and ADX signals were present at the time that trade would have triggered.

  Linda Piazza   11/6/200,  4:02:58 PM
Swing Trade Summary: OEX/SPX/DJX/DIA/SPY
11/06: Entered a bullish OEX trade at 521.15.
11/06: Exited at 523.50.
Result for that day: 2.35 OEX points our direction.
Results for the week: 0.85 OEX points our direction.

  Linda Piazza   11/6/200,  3:49:54 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were just stopped out of our OEX long trade at 523.50, entered at 521.15. That one barely covered the commissions and spreads, but I expected an explosion into the close. It hasn't happened. Probably will now, though.

  Linda Piazza   11/6/200,  3:47:54 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Raise stop to 523.50. We may get taken out in a moment, but that's okay. Those who don't mind the extra risk might keep their stops near the breakeven level and ride out tomorrow's report, but that's not for me.

  Jeff Bailey   11/6/200,  3:41:02 PM
Short covering or bullish buying? .... as I check some of my "short covering" candidates, I'm not seeing it today. With the Dow Transports (TRAN) 2,982 +1.7%, S&P Retail Index (RLX.X) 386.50 +0.79% and Cyclical Index (CYC.X) 623.11 +0.75% seeing gains, I get the impession that the buying is from bulls, not bears.

  Linda Piazza   11/6/200,  3:37:38 PM
Swing Trade Signals
I'm not going to raise our official stop just yet so that we can stay in during the early volatility that occurs when we see MOC orders. However, 525 was our original target and you might begin setting profit stops for yourselves, perhaps slightly ahead of that number.

  Jim Brown   11/6/200,  3:31:16 PM
Strange divergences - Dollar rallying...market soft.bonds selling money rotating? Funds selling. Money rotating into what ?
SOX-Green/SMH Red...
NQ futures down significantly -7 NDX up 6 points....
OEX/SPX green ES = Red....
Option pricing messed up...no increase in Premium for higher volatility.
TRIN slides down stocks sell-off?
TRIN moves up.stocks move up?
Bulls can-not move market up earlier today on very good news and positive Greenspan news? VERY STRANGE MARKET ACTION TODAY. Reeks of distribution and a 1-day surge away from the mystical Dow 10,000 and Nasdaq 2000.
Monthly/Weekly/Daily charts are very extended. Great pro forma job numbers tomorrow should create a GAP event into the touted numbers. Every BEAR in the world intends to short Dow 10,000 and Nasdaq 2,000 and as such could set up for the mother of all BEAR-Traps.. Thoughts ?

You were thinking maybe the market should be reasonable? Come on 10,000 ! It may be the only clear signal in weeks.

  Linda Piazza   11/6/200,  3:31:14 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Raise stop to 522.50.

There's really no logical spot now for a stop because we're too close to 523-523.50 to use that for a stop, so we're just going to keep following the OEX higher. OEX 522.50 is just below the previous three-minute low. That's the best I could do for a technical level.

  Linda Piazza   11/6/200,  3:17:20 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Raise stop to breakeven (521.15). I do not want to lose money on this trade this afternoon, especially with the VIX so low and the Asian markets so volatile right now. Anything could happen in the overnight, so let's keep raising the stop and letting the OEX decide for us where we get taken out. Unless the OEX is firmly above 525 resistance as we head into the close, I'm reluctant to carry this trade overnight, and even then, if we've got a nice profit under our belts, I'll be likely to close the official trade.

  Jonathan Levinson   11/6/200,  3:11:16 PM
VXO is back below 18 at 17.76, still up .20 on the day, latest put to call ratio .78.

  Linda Piazza   11/6/200,  3:10:17 PM
The OEX is headed straight toward the 523.50-524 resistance.

  Linda Piazza   11/6/200,  3:08:17 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
I don't want to be taking any deep retracements against our position this late in the day. Raise the stop to 520.50. Conservative traders should now set their stops at breakeven.

  Jeff Bailey   11/6/200,  3:07:44 PM
Bond markets closed with benchmark 10-year YIELD ($TNX.X) rising 6.8 basis points to 4.418%.

  Linda Piazza   11/6/200,  3:06:52 PM
We have our new high of the day on the OEX.

  Jeff Bailey   11/6/200,  3:06:41 PM
Dow Industrials (INDU) 9,835 +0.15% ... ooops! Higher high.

  Jeff Bailey   11/6/200,  3:05:42 PM
Buy Program Prem. Alert .... SPX = 1,054.70

  Jeff Bailey   11/6/200,  3:00:09 PM
QQQ .... 60-minute chart interval observations .... Link

  Linda Piazza   11/6/200,  2:59:50 PM
Before we feel any comfort with the long side, the OEX has to break above the top of the flag pattern at 521.40. (Happened again. That very thing happened as I began typing. Next we need to see a new high.)

  Linda Piazza   11/6/200,  2:53:52 PM
The OEX hit the bottom of the potential bull flag (as seen on the three-minute chart) and started up again. Perhaps that is a bull flag after all. The 21(3)3 stochastics made a bullish kiss just after the OEX began the climb, so there's a good fit with the stochastics behavior and the formation, giving it more credence.

  James Brown   11/6/200,  2:53:10 PM
Looks like the bears need to pick up the pace on their leather goods habit.

  James Brown   11/6/200,  2:51:56 PM
For anyone interested in how the same-store sales numbers for October fared, below is a good list of some of the larger names who reported this morning.

October same-store sales:

CHICO's (CHS) ........... up 20.6%
Sharper Image (SHRP) .... up 12.0%
Neiman Marcus (NMG.a).... up 9.7%
Children's Place (PLCE).. up 8.0%
CACHE (CACH) ............ up 7.0%
BEBE Stores (BEBE)....... up 4.9%
JOS A Banks (JOSB) ...... up 4.6%
Wal-Mart (WMT) .......... up 4.5%
SAKS (SKS) .............. up 4.1%
Michael's (MIK) ......... up 4.0%
Fred's (FRED) ........... up 4.0%
Ann Taylor (ANN) ........ up 3.9%
Big Lots (BLI) .......... up 2.8%
Kirkland's (KIRK) ....... up 2.7%
Goody's Family (GDYS) ... up 2.5%
Ross Stores (ROST)....... up 2.0%
Talbots (TLB) ........... up 2.0%
Dollar Tree Stores (DLTR) up 1.7%
Target Stores (TGR)...... up 1.6%
Zales's (ZLC) ........... up 1.6%
Payless Shoes (PSS) ..... up 1.4%
Jo-Ann Stores (JAS) ..... up 1.1%
Gap Stores (GPS) ........ up 1.0%
TJ Maxx (TJX) ........... down 1.0%
Christopher Banks (CBK) . down 2.0%
Federated Dept (DF)...... down 2.0%
J.C.Penney (JCP) ........ down 2.3%
The Buckle (TKE) ........ down 2.3%
Sears (S) ............... down 2.7%
Dillard's (DDS) ......... down 5.0%
Brown Shoe (BWS)......... down 4.9%
Stein Mart (SMRT) ....... down 7.6%
Harverty Furniture (HVT). down 8.3%
Kohl's (KSS) ............ down 12.0%
CATO (CTR) .............. down 13.0%
Abercrombie & Fitch (ANF) down 14.0%
Wilsons Leather (WLSON) . down 19.0%
Gadzooks (GADZ).......... down 26.6%

  Linda Piazza   11/6/200,  2:50:01 PM
Donchian channel update: Yesterday, there was a downside Donchian channel breakout signal at the close of the 10:00 30-minute candle. That close was at 518.31. One type of tested exit would have triggered an exit at the close of the 2:30 candle at 518.84, for a small loss. The other would not yet have triggered.

  Jeff Bailey   11/6/200,  2:45:20 PM
QQQ $35.61 -0.63% .... 60-minute bar chart shows MACD giving bullish crossover above signal in last hour. Not a ramping higher type of crossover, but if buyers will hold at $35.51, and can get a late session rally into close, then may bode well for tomorrow's trade.

Again.... its going to be close, and it's NEVER easy.

  Linda Piazza   11/6/200,  2:43:59 PM
Like Jim on the futures side, I'm starting to worry, too, because this pattern isn't following the typical flag pattern any longer, as the declines seem more impulsive than the rises. Actually, that last statement was incorrect, since I worried all along about the long play in the low volatility environment. Still, the OEX is only testing support that we realized might need to be tested. I'm holding steady with our current 519.50 stop for now.

  Linda Piazza   11/6/200,  2:37:34 PM
Lower OEX high and low on the one-minute chart. Scanning out to the three-minute chart, however, that pattern looks like a bull flag pulling back to test resistance. We'll see. If it's a bull flag, it could still have a few zigs and zags before it breaks one way or the other . . . say until about 3:00, when the bond market closes?

  Jeff Bailey   11/6/200,  2:37:22 PM
Advanced Micro (AMD) ... On June 24, AMD cut their Q2 sales outlook to $615 million, down from previous guidance of at least $715 million....

Then.... on July 16, AMD reports revenus of $645.3 million (oops! missed guidance given just days earlier, but to the upside) and gives obscure Q3 guidance of... and I quote... "Q3 sales will increase."

  Jeff Bailey   11/6/200,  2:29:26 PM
Per Jim's 14:21:47 post. I've mentioned before that AMD is notorious for troubled guidance. Should we expect anything different? I would be careful in reading ANYTHING into this guidance, or any guidance AMD gives. They could be saying they're going to post a profit of $0.05. Go back and look at past AMD guidance and they will miss by wide margin up and down.

  James Brown   11/6/200,  2:27:41 PM
A blast from the past...Atari Inc (ATAR), a subsidiary from French Infogrames Entertainment, is getting some positive comments again today. First Albany is starting coverage with a "buy". ATAR has received two "out perform" ratings in the last couple of weeks. The company recently announced earnings on Monday and beat estimates by a nickel. The stock is too cheap to play options on and stock traders may want to wait and see the long-term trend of lower highs broken before considering any bullish positions.

  Linda Piazza   11/6/200,  2:26:24 PM
The support at OEX 521.20 held--at least it appears to have held. To be sure, we need to see a new high above 521.95. Otherwise, the OEX will be likely to retest that 520.80-521.20 level.

  Jeff Bailey   11/6/200,  2:23:47 PM
Microsoft MSFT) $26.14 +0.15% Link .... the sleeping giant continues to hover at its flat-as-a-pancake 200-day SMA of $26.00.

  Jim Brown   11/6/200,  2:21:47 PM
AMD saying they do not expect to post a loss in the 4Q. Since consensus estimates are for +.02 cents I guess this could be construed as a warning? To "not post a loss" would suggest zero or a penny? If they were affirming estimates I would think they would have worded it differently.

  Jeff Bailey   11/6/200,  2:20:41 PM
Trimble Navigation (TRMB) $29.32 +2.72% Link .... trying to challenge the $30 level again. Will the bulls try and get an exposive Friday rally trade underway on the break at $30.00 and have the stock printing BOLD for a new 52-week high?

Fund managers have been know to take some of their favorites to a Friday 52-week high so it gets bold print for the weekend paper.

Bears that had mounted HUGE short positions in the stock hope not!

  James Brown   11/6/200,  2:17:52 PM
Another retailer who's stock has been in a dead run higher from its March lows is Neiman Marcus (NMG.A). The stock is hitting new all time highs after reporting October same-store sales that rose nearly 10%. The company also guided higher for the next quarter. NMG now sees $1.12-to-$1.17 versus estimates of $1.03. This may be one stock worth watch listing for a pull back to the simple 30-dma, where shares have bounced for the last seven months.

  Jeff Bailey   11/6/200,  2:14:30 PM
Garmin Ltd. (GRMN) $51.46 -1.66% .... some traders may have gotten fills at $51.25 or $51.33. RED #2 is $51.33, and patient bull could sit bid there.

  Linda Piazza   11/6/200,  2:14:16 PM
Nearest OEX support should now be between 521-521.20, but stronger support is a little lower at 520.80.

  Linda Piazza   11/6/200,  2:10:43 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Raise the stop to 519.50.

I don't like keeping stops too close because of the propensity to get taken out just before a turnaround, but I'm nervous in this long, especially after reading the comments of many of my co-writers. I think there was ample evidence to support a long play, but if we're all nervous, so are a lot of other traders interested in selling into the rise. OEX 519.50 places the stop about $0.50 below the midpoint of the flagpole rise, so should hold in any pullbacks if they're just measured accumulation programs.

  James Brown   11/6/200,  2:10:05 PM
Turning in one of the best October same-store sales reports this morning is BJ's Wholesale (BJ). The company said October ss-sales were up 10.2%. This news has helped fuel a new BJ's rise to a new 52-week high.

The stock is up more than 160% from its March lows but remains a far cry from its highs last year closer to $49.

  Jeff Bailey   11/6/200,  2:06:59 PM
Day trade long .... Garmin Ltd (GRMN) $51.25 -2% ... long here, stop $50.90, target $52.50.

Note: since GRMN traded such a narrow 5-MRT, I'm using 10-MRT today. Note how stock has traded the 10-MRT almost to a penny. Session low of $50.73 would be RED #4.

  Linda Piazza   11/6/200,  2:01:09 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Raise stop to 518.50.

  Jim Brown   11/6/200,  2:00:03 PM
Fed thoughts - how about the fed wants to reserve all bullets untill spring summer (money supplies impact on interest rates) for the election cycle and allows for rates to continue the slow climb higher due to the bond market?

Absolutely! If the Fed could keep the official rates low through the summer the housing market could continue to ramp, elections would be business/economy positive and they could raise rates in the fall when the markets are normally bullish to absorb the impact.

  James Brown   11/6/200,  1:57:57 PM
No surprises in QUALCOMM's (QCOM) Q3 earnings report after the bell yesterday. The company reported in line with estimates for 29 cents per share and revenues near $870.8 million. Normally one would expect a high profile tech stock like QCOM who only meets expectations to see a sell-off the next day. Saving the stock from any weakness was their guidance for better revenues in the next quarter. QCOM now sees 37-40 cents versus estimates of 35 cent.

  Linda Piazza   11/6/200,  1:57:18 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were just triggered on a bullish OEX play on a move above 521.15. Stop 517.50. Target 525. I tried to correlate the OEX figure to Dow 9820, and did a pretty good job, because both hit those respective figures about at the same time. Unfortunately, both bounced back from that first touch. They're headed up again. Let's see if it sticks. I'm considering raising the stop quickly.

  Jane Fox   11/6/200,  1:56:29 PM
At 10:00ET we have the release of September's Wholesale Trade, which includes Sales, Inventories and the Inventory/Sales ratio. These numbers are important indicators of current consumption and of future manufacturing activity. Last month Wholesale sales increased in line with expectations, while inventories declined modestly. Prior number are (Sales and Inventories, in a month over month % and the Ratio):
June 1.6%, 0.0%, 1.22
July 0.5% 0.0%, 1.21
August 0.4%, -0.2%, 1.20

  James Brown   11/6/200,  1:51:50 PM
Buy another round as shares of Anheuser Busch (BUD) surge back above their simple 200-dma after Bear Stearns upgrades the stock from "peer perform" to "out perform". BUD did stall at their 50-dma this morning but it has broken the recent trend of lower highs. (The stock does move a bit slowly for option trading and there is a lot of congestion between $50 and $53.)

  Linda Piazza   11/6/200,  1:51:10 PM
I forgot to mention the usual stop-running push we often see this time of day. It's showing up right on time. Now we have to hope that we don't get triggered on our long play and then have the OEX turn right around. I was glad to see the OEX pull back in a flag-like formation before retesting the high, though.

  James Brown   11/6/200,  1:43:49 PM
Priceline.com's (PCLN) Q3 earnings announcement on Tuesday night had disastrous results for the stock. The company beat Q3 estimates by 3 cents but lowered guidance for the fourth quarter. Wednesday's session saw the stock drop more than 25% toward its July lows. At least one Wall Street analyst sees this as a buying opportunity. Legg Mason has upgraded the stock from a "hold" to a "buy" and put a $28 price target on PCLN. Thus far shares are not reacting to the upgrade and are slipping towards the stock's 200-dma.

  Jane Fox   11/6/200,  1:43:16 PM
At 3:00ET tomorrow is the release of September Consumer Credit, which does not have much of an impact of the markets because other more timely leading indicators for consumer spending are available, such as consumer confidence and weekly retail sales indices. Prior numbers are (change from previous month) :
June 0.5B
July 6.1B
August 8.2B
Consensus is for 5.5B increase over August. Link

  Jim Brown   11/6/200,  1:31:51 PM
Fed thoughts - let me tell you what I think... The Fed has slowly been pulling out money from the system... why? Take away some of the excess of course... Okay... then why talk about the jobs in a recovering environment... to build up expectations... why... to set up a sell the news event if the data is not so good... well why do that... because it is tax creation time... the Fed needs to have the stock market selloff forcing those that have profits to take them... they will need to add to the tax dollars collected for next year and this a great opportunity to do that... just my thinking... could be totally wrong but I think stock market offers tax receipts if investors are forced to sell... ABB

Interesting thought. I have mentioned the need for the Fed to create taxes several times lately. I would think that they would want to wait until December to get past the normal bullish November period. Milk the last drop theory. However, a crash in the December holiday period could spoil sentiment. Also, the desire to create a taxable event would probably be offset by the desire to keep the economy and the consumer fired up into the first quarter. A strong economy will eventually produce more taxes than a quick market drop. I would have to think they would not take it down now on purpose.

  Jim Brown   11/6/200,  1:31:05 PM
Follow this train of thought. Last month everyone was thinking the jobs report would be a disaster because the Fed heads were out the day before making comments about the jobless recovery. Their comments were taken as an attempt to gloss over the coming jobs report disaster and estimates for job losses doubled and tripled in a 24 hour period. In reality the jobs report showed a gain of +57,000 jobs and the market soared on short covering and investor relief. Since the Feds get the data 24-48 hours before the public they already knew the jobs would be positive BEFORE they made those comments. It was a perfect setup by the Fed heads and they must have laughed for a week.

Today, we have had both Greenspan and Bernanke make job recovery comments. The jobs report is expected to show +50,000 to +60,000 jobs gained. The whisper number is in the +200,000 range.

Now, the question is "what are the Feds trying to do today?" Are they trying to set us up again and if so how? What should we really believe? Seems to me we are setting up for a dissapointment with tomorrows number but then again it is the bad news that provides the market bounces.

  Jane Fox   11/6/200,  1:19:42 PM
Tomorrow's 8:30ET economic report is October Employment Situation, which includes; Nonfarm payrolls, unemployment rate, hourly earnings and average workweek. It is probably the most widely monitored report by financial markets. Last month net employment rose for the first time since January, increasing by 57,000 and far exceeding consensus estimates, which had called for another decline. The unemployment rate was unchanged, at 6.1%. Prior numbers are (nonfarm payroll, employment rate, average hourly earnings in month over month % and average workweek):
July -57K, 6.2%, 0.3%, 33.6
August -41K, 6.1%, 0.2%, 33.7
September 57K, 6.1%, -0.1%, 33.7
Consensus is for 65K, 6.1%, 0.2%, 33.8

  Linda Piazza   11/6/200,  1:05:10 PM
I would feel marginally better about our potential long entry if the OEX were to pull back to 520 first before moving up again and pushing through our entry, just so all the five-minute oscillators aren't maxed out at the time of the entry.

  Linda Piazza   11/6/200,  1:00:39 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Enter a bullish OEX play on a move above 521.15. Initial stop 517.50. Initial target 525.

  Jeff Bailey   11/6/200,  12:50:50 PM
S&P 100 Index (OEX.X) 520.43 +0.03% .... positive territory for first time today. This has been the "weaker" major index. How the heck can it be showing some early strength?

Top 5 heavily weighted.... GE -0.87%, MSFT +0.22%, WMT +0.58%, C -0.12%, PFE -0.72%

Percentage gainers .... HIG +5%, CSCO +4.6%, MAY +2.7%, NSC +2.2%, BUD +2.1%

Rally caps in place!

  Jeff Bailey   11/6/200,  12:49:09 PM
Kohl's (KSS) $52.91 -2.32% ... Jeff: I liked your bullish thoughts this weekend for KSS as an October bullish play, and also thought it a good idea to wait and see if the 10/27 gap was filled back to the downside. Do you think it means anything that KSS first hour close was right in the middle of this gap, as if that is a point of equilibrium near term?

Hmmmm.... I see what you're looking at. I'm not sure. Maybe we should try and find some stocks that were trading at a low end of a range, find some where they backfilled some gaps, and try and figure out what the supply/demand characteristics were after that. Maybe we can compile a list of stocks, see if there is any tie to this. Then, if there is, figure out the action points where the stock gave clear signal for the move higher.

  Linda Piazza   11/6/200,  12:46:50 PM
One problem with such range-bound trading patterns is that moving averages cycle up or down toward the current price, providing multiple levels of possible support or resistance, and the congestion sets up lots of S/R lines, too. Every time you consider a position, there's some important S/R zone just ahead. I saw the bullish falling wedge this morning and knew to be prepared for an upside break. I knew that upside break, if it occurred, would swing the OEX back above the 30-minute 100/130-pma's, which it had been testing. But OEX 520.80-521 has been such an important S/R zone that it seemed foolish to enter just ahead of those levels. I believe that a break of 521 should predict a test of 525 if the bullish tenor remains strong, but ahead of 525 lies some fairly hefty resistance, too.

  Jonathan Levinson   11/6/200,  12:43:32 PM
The put to call ratio is up to .82 now, VXO up .77 to 18.83. Ten year bond futures are still weak, down 4.2 bps currently. Equities are drifting higher, approaching resistance.

  Jeff Bailey   11/6/200,  12:35:46 PM
Biotechnology Index (BTK.X) 464.74 +0.8% ... now a sector winner in today's trade. Previously mentioned ICOS Corp. (ICOS) $47.35 +1.02% showing a little bid.

BTK.X component gainers HGSI +2.4%, GILD +2.28%, MEDI +1.56% (all 3 are NDX/QQQ components).

  Linda Piazza   11/6/200,  12:34:07 PM
I'm glad I could get the OEX moving by saying that it wasn't moving. We're watching now for a move above today's high for a long entry. Everything is going to have to be just right for that long entry, however, or we'll pass up the signal.

  Linda Piazza   11/6/200,  12:32:14 PM
I'm not sure how the pitchfan calculations were made, Jane, and I haven't been able to find much information on it when I searched this morning pre-market. Jonathan was correct comparing them to Andrew's Pitchfork, too, as the writer who described them compared them to a combination of a Gann fan and an Andrews Pitchfork. Sure picks out those S/R zones in a great way, though.

  Jeff Bailey   11/6/200,  12:31:02 PM
Norfolk Southern (NSC) $21.21 +2.96% .... percentage gainer in the Dow Transports (TRAN) 2,949.10 +0.55%. NSC higher despite yesterday evening's news that it will take a $107 million Q4 charge related to voluntary employee separation program.

  Linda Piazza   11/6/200,  12:28:04 PM
The OEX broke above the five-minute bullish falling wedge, came back and tested it and then began rising again. Then . . . nothing. It's either consolidating beneath next resistance before moving up again or else it's just doing nothing and all these five-minute patterns we're watching don't have much significance. An argument against the consolidating-before-moving-up theory is that 21(3)3 stochastics have continued to move up while it consolidates, suggesting that the OEX couldn't make forward progress despite the impetus that the stochastics implies. As I believe Jonathan pointed out earlier, we're not seeing any patterns fulfill their potential. As I type, though, the OEX tries to move up again, so we'll see.

  Jeff Bailey   11/6/200,  12:23:29 PM
VeriSign (VRSN) $16.67 -3.36% Link .... yesterday, when looking at the GSO.X as it showed some late session bid, I was looking for the catalyst stock, which was VRTS. I mistakenly typed in VRSN on my point and figure chart (meant to type in VRTS) and found a VERY bullish looking supply/demand chart on VRSN. Note the triple-top buy signal in September at $16.50, where that column of X creates the bullish vertical count of $26. Then, just recently at $16.50, stock triggers the "bullish triangle" pattern. With stock now breaking above longer-term trend, VRSN excellent bullish candidate in my opinion for new bull entries here.

VRSN March $17.50 are bid/ask $1.80 x $1.90, but a nice little pullback to $16.00 and the rising 21-day SMA of $15.52, might be good entry point for a little 3-box reversal on the PnF chart.

  Jane Fox   11/6/200,  12:21:07 PM
Linda is the pitchfork calculations based on the GANN formulas in anyway? That correlation is phenomenal.

  Linda Piazza   11/6/200,  12:18:06 PM
Speaking of Gann (see Jonathan's 12:11 post, perhaps on the futures side), I've been playing around with the Q-charts pitchfan, which some have compared to a combination of a Gann fan and other tools. How cool is this? Look at the way the various red and grey lines pick out the support and resistance zones. Link

  Linda Piazza   11/6/200,  12:10:48 PM
I actually expected more of a reaction today (in the equities) from the Bank of England's decision to raise rates. While that decision was widely expected, I thought it would be a harsh reminder that we've got some tightening ahead of us, too, some day.

  Jonathan Levinson   11/6/200,  12:08:18 PM
December gold is down 1.10 currently at 381.60, silver -.014 at 4.971, with the HUI -4.06 at 208.03 and XAU -1.26 at 95.43.

  Jim Brown   11/6/200,  12:04:51 PM
This is the inverse chart I used in my wrap when the VIX first broke under 17.50. The outlook is clear only the timing is unknown. Link

  Jeff Bailey   11/6/200,  12:03:38 PM
QQQ $35.50 -0.94% ... well, QQQ low of $35.34 couldn't have come closer than it did to our stop of $35.33. Here's a 10-minute chart of QQQ, with some very short-term trends drawn, that may also be in play. Link

Bulls want to see that little "cradle" at $35.42 from trends show some support, maybe get a little rally going when the luch time crowd returns.

It's going to be close, and it is NEVER easy.

  Linda Piazza   11/6/200,  12:02:40 PM
Despite my oft-repeated worries about the low volatility indices, we have to trade what we see while keeping those stops tight. What we're seeing right now is the OEX breaking above the bullish falling wedge produced on today's candle, moving above the 30-minute 100/130-pma's while doing so, with 30-minute MACD about to move up through the signal line and with the MACD histogram positive. This should actually be a time to consider a long position as it would allow us to set a close stop just below the 60-minute 130-pma, but 520.80-521 has been such an important S/R zone that I can't see entering just ahead of those numbers. I'm not entirely sure the OEX is through oscillating around those key moving averages or that up is the final direction.

  Jonathan Levinson   11/6/200,  11:54:28 AM
Linda, they always give up on the indicators when they grow extreme- that's the best time to listen carefully to them, in my experience.

  Linda Piazza   11/6/200,  11:49:45 AM
Jonathan, I placed an SPX/VIX chart one on top of the other to show the inverse correlations, too, but this man reads and he's read the "new range" stuff for the volatility indices. I don't know whether they're going to find a new range or not, but I wouldn't be sure enough of that new range to be sitting on recent gains without a stop underneath.

  Linda Piazza   11/6/200,  11:46:51 AM
If that OEX five-minute pattern was actually a bullish falling wedge, as I mentioned as a possibility in my 11:21 post, it has broken to the upside. The OEX has now hit resistance near 519.50 and may hesitate here or retest 519 or 518.50 support. The OEX is now moving away from the 30-minute 100/130-pma's, so we'll be considering a bullish play on a move above the day's high.

  Linda Piazza   11/6/200,  11:43:33 AM
It is sad to see that happening to friends, Jane. It's also part of the reason that we can't get a normal and natural shakedown. I haven't been particularly bearish yet, but I keep looking at the weekly charts of some of these stocks and they're just zooming up at an unsustainable rate. I don't want to buy them when their charts look like that, and if I were tempted, I'd sure be quick to bail if they stuttered the slightest bit, and therein lies the problem. We just need that shakedown.

  Jane Fox   11/6/200,  11:37:16 AM
Isn't it sad Linda to just sit and watch this happen to friends.

  Linda Piazza   11/6/200,  11:35:46 AM
I know what the problem is today. We had an out-of-town visitor last night, a physicist who has developed a process for reclaiming oil out of depleted reserves. That's to tell you he's a smart man. He's also a man who lost literally millions of dollars since March, 2000. I spent several hours last night trying to convince him to at least put stops on some of the former mo-mo stocks he's bought recently, and I mean recently. He's convinced everything is going to go up and he's going to be left behind. I described various strategies he might use, such as selling a call and buying a protective put with the proceeds. He wanted no part of anything to do with buying protective puts, as it was too much trouble. I think I finally convinced him to set some stops.

  Linda Piazza   11/6/200,  11:21:22 AM
The paying-attention-to-the-VXO part of me says that we should go lower today, but I keep looking at the OEX five-minute price pattern since this morning's open and seeing a falling wedge. That typically breaks to the upside. None of these wedges have worked well over the six months, however, either bullish or bearish.

  Linda Piazza   11/6/200,  11:14:41 AM
I really don't want an entry just ahead of the dead zone, but that may be what we get. I'm still waiting and watching. Volume patterns still support the bearish side of the argument today with the exception of the new highs/new lows figure, but that was true of yesterday, too, and our bearish play did not fare so well.

  Jonathan Levinson   11/6/200,  11:12:02 AM
The put to call ratio is down to .69, equity pcr .62 and index pcr 1.2.

  Linda Piazza   11/6/200,  11:09:54 AM
Swing Trade Signals
We'll be considering a bearish OEX play on a trade at 517.25 and a bullish one on a trade above today's high. This post is to let you take a look at the various indications on your own charts and see if you agree. I'm not going to post a signal ahead of time because I want to see how the indicators are behaving as an entry level nears. If the charts look due for a bounce just ahead of a bearish entry, we're going to pass it up. If the charts look ready to roll over just ahead of a bullish entry, we'll pass that up, too.

  Linda Piazza   11/6/200,  10:56:05 AM
Over the last week or two, I've been mentioning the possibility of a continuation inverse H&S on the 60-minute OEX chart. Link When the OEX moved up strongly on Monday, I thought it had perhaps just truncated the right shoulder or that the formation was not a valid one after all. Now I'm studying it again, thinking that perhaps the market just wanted the neckline to be in a different place than I had thought it should be. Of course even if this is a valid inverse H&S, that doesn't mean it will confirm. Such formations do fail to confirm. However, I guess I'll continue to watch this formation, aware that a strong push above 525 might predict a move up toward the 545-550 next resistance on the weekly chart.

  Jeff Bailey   11/6/200,  10:54:04 AM
Sirius Satellite Radio (SIRI) $2.31 +2.21% Link

  Jeff Bailey   11/6/200,  10:53:14 AM
XM Satellite Radio (XMSR) $21.81 +2.49% Link ... higher after reporting Q3 loss of $1.12 per share, which was narrower than the $1.17 per share loss forecasted by analysts. XMSR said revenues rose 384.7% year-over-year to $26.9 million, which was above consensus for $24.8 million. XMSR said it added 237,395 subscribers in the recent quarter. XMSR added that it believes it can beat 2004 analyst's estimate of 2.5 million subscribers.

  Jeff Bailey   11/6/200,  10:48:04 AM
Sector weakness with just over an hour of trade under our belt has AMEX Gold Bugs Index ($HUI.X) 209.32 -1.3% leading decliner, while the CBOE Internet Index (INX.X) 164.65 -1.12% challenging.

Networking (NWX.X) 252.51 +0.66% and Transports (TRAN) 2,945.39 +0.42% showing fractional gains. Retail HOLDRs (AMEX:RTH) $93.49 +0.47% find marginal bid.

  Jeff Bailey   11/6/200,  10:39:43 AM
Similar thoughts .... To add a little funadmantal flavor to your trade, I'm looking at a carbon copy of yesterday. If the AM shorts were scared out by CSCO yesterday, I see the same thing happening on the Friday jobs report today.

I agree to a point. I was looking for more "action" one way or the other this morning. Just seems like bulls are looking at bears, bears looking at bulls, and neither really doing anything.

I'm trying to give the QQQ a chance with stop at $35.33.

Tomorrow's release of October Nonfarm Payrolls is for economy to have added 65K jobs, after adding 57K in September.

Continued gains in productivity cuts both ways. Good for lower inflation, but high levels of productivity not all the beneficial for jobs growth. America is just too darned productive!

  Linda Piazza   11/6/200,  10:39:33 AM
Here's something I'm watching on the OEX 30-minute chart: Link

  Linda Piazza   11/6/200,  10:35:30 AM
The OEX continues to test the 30-minute 100/130-pma's, with the 21-pma now having sunk down to trade near those averages. A bearish cross of the longer-term averages by the 21-pma would confirm the weakness, although such crosses tend to be late. However, the 30-minute oscillators tell a mixed-up story as always happens when there's a prolonged testing of a certain area, and this testing has been going on since yesterday morning. The 60-minute indicators are just as mixed up, but at least some of the indicators on each chart begin to hint at upward curves, tentative as they are right now. We can't rule out a bounce from these averages, and, like yesterday, we have to keep that possibility in mind if price action dictates a bullish play.

  Linda Piazza   11/6/200,  10:19:29 AM
The OEX is testing the 30-minute 100/130-pma's, so now we turn to the 60-minute counterparts as our trigger for a bearish play. If they're touched and the OEX bounces back through the 30-minute's again, we'll have to consider the potential for a long play, too, at least keeping it on our radar screens. Right now, I'm seeing the potential for a bounce from around 517.50-517.70, a familiar zone from yesterday, but so far I would expect such a bounce to be corrective only.

  Jeff Bailey   11/6/200,  10:17:17 AM
Cisco Systems (CSCO) $22.68 +4.03% .... lows of session here. Networking Index (NWX.X0 252.62 +0.7% giving back early gains.

  Linda Piazza   11/6/200,  10:11:57 AM
The earliest volume patterns were bearish with the exception of up/down volume on the Nasdaq--lots of people buying CSCO and related stocks, perhaps, because adv:dec ratios are bearish. There's some concentrated buying in a few issues. Still, volume was too light to count on those volume patterns. All they serve to do now is to make me cautious about entering new long positions without really telling me much.

  Jeff Bailey   11/6/200,  10:11:19 AM
Kohl's (KSS) $54.43 -1.36% .... after openining low of $51.25, stock comes back to fill morning gap.

Will begin looking for some base consolidation over next week. Bullish spin? Good comp's going forward.

  Jonathan Levinson   11/6/200,  10:08:52 AM
That put to call reading is high, but not extremely so. With the intraday cycles juxtaposed, we may be looking at our range for next little while, with the shorter intraday cycles pointed south and the longer intradays pointed north but wavering.

  Jonathan Levinson   11/6/200,  10:05:04 AM
The put to call ratio is .90 for the first half hour, VXO +.85 at 18.41.

  Jonathan Levinson   11/6/200,  10:03:55 AM
Another 2.75B overnight repo from the fed brings us to a 2.5B net add for the day.

  Linda Piazza   11/6/200,  10:03:01 AM
Next resistance for the OEX between 520.40-520.50.

  Jeff Bailey   11/6/200,  10:01:29 AM
InterVideo (IVII) $11.16 -32.9% Link ... lower after reporting Q3 EPS of $0.12 (ex-items), which was 2-cents worse than consensus estimates.

A subscriber sent me an e-mail with thought that IVII declines might be having negative impact on NetFlix (NFLX) $54.31 -7.39%

See 09:54:13

  Linda Piazza   11/6/200,  10:01:14 AM
It feels to me as if there's a bounce coming, but even though the OEX is bouncing from the 30-minute 130-pma, I'm not sure the move will be a big one, so I'm not ready to act on it. (I'm a fast typist, but the move up began as I was typing this. It always looks as if I'm typing it after the fact rather than before. Easy enough to "predict" a bounce if it's happening as you type, right?)

  Jeff Bailey   11/6/200,  9:57:46 AM
QQQ $35.54 -0.78% .... per last night's Index Trader Wrap, will note that daily interval bar chart does show Stochastics (5,3,3) back lower. Session low of $35.47 at this point sits right on top of our little "zone of support" from $35.30-$35.46.

  Jeff Bailey   11/6/200,  9:54:13 AM
NetFlix (NFLX) $53.90 -8.29% Link ... Hello Jeff, I can't find any news and wondered what is causing the sudden drop???? Thanks

I haven't seen any news at this point, but stock has made a nice move higher from $40. Most likely bulk of shorts that were going to get squeezed to this point have.

With stock giving a double-bottom sell signal today, would be more cautious from bullish perspective.

  Linda Piazza   11/6/200,  9:45:54 AM
The OEX is below the bearish #2 on the 5MRT system, also confirming early weakness, but it's now testing the 30-minute 130-pma, a prime spot for a bounce--at least for the bounce that would normally accompany the first reversal of the day.

  Jonathan Levinson   11/6/200,  9:44:19 AM
There are 7.25B net in expiring repos, with 10B of 14-day repos expiring against 2.75B of reverse repos. We have a 7B 14-day repo just announced, so just .25B will drain if the fed does nothing from here. We await the 10AM announcement for the balance. The fed is definitely tighter than we've seen recently.

  Jeff Bailey   11/6/200,  9:43:44 AM
QQQ $35.62 -0.60% .... Day trade bull from yesterday's BULLISH entry of $35.74 ...

I've placed upper 5-mrt on QQQ and see BLUE #3 at $36.02, which would be right near WEEKLY R1 of $36.01. This most likely today's upside target.

As such... will stick with upwardly revised stop of $35.33 right now, but if wee see trade above BLUE #2 of $35.93, will immediately raise stop to break-even, or look to book gain.

  Linda Piazza   11/6/200,  9:41:12 AM
The OEX confirms the early weakness. We'll now be watching for the test of the 60-minute 100/130-pma's, currently at 518.30 and 517.78.

  Jeff Bailey   11/6/200,  9:38:09 AM
Sector action mixed very early part of morning trade.

Networking (NWX.X) 256.19 +2.07% only sector showing greater than 1% gain.

AMEX Gold Bugs ($HUI.X) 209.96 -1.0% only sector lower, most likely after Bank of England's 25 basis point rate hike.

  Linda Piazza   11/6/200,  9:37:51 AM
First support for the OEX shows up just above 520, with that support from historical S/R and from a gathering of nested Keltner channel lines at that level and then down to 519.50. If the OEX drops below that gathering support, we'll add another bit of evidence to the "early weakness" thesis.

  Linda Piazza   11/6/200,  9:34:23 AM
The OEX first five minutes included a high of 521.11 and a low of 520.31, with the midpoint of that range at 520.71. The OEX currently trades just beneath that midpoint, signaling early weakness, but it may be too soon to make preliminary judgments as the first reversal typically does not begin for a few minutes.

  Jeff Bailey   11/6/200,  9:32:55 AM
Boston Scientific (BSX) $34.98 +0.34% Link .... trades post 2:1 split today.

  Jeff Bailey   11/6/200,  9:30:20 AM
Kohl's (KSS) $54.17 Link ... lower at $51.00 after company reported Q1 same store sales fell 11.6% in October, which was below consensus estimates for a 6% decline.

KSS was a stock I had profiled this past weekend for a PARTIAL bullish entry, and would currently not look for a new bullish position today. If long from earlier this week, would hold, with profiled stop at $49.00.

  Linda Piazza   11/6/200,  9:28:39 AM
I forgot to add the "or" section to my 9:26 post. Or, we will watch for a violation of the 60-minute 100/130-pma's as a signal for a bearish play.

  Linda Piazza   11/6/200,  9:26:35 AM
The OEX closed above the 60-minute 100/130-pma's and could open near them. Should we consider a long play right at the open? I don't think so. A former futures writer for the site used to warn that we should watch how the futures react overnight to good news and bad. A tepid reaction to good news should be a caution signal, and that's what we got after CSCO's earnings last night and after this morning's economic reports. Of course, it's also notable that last night's decline in response to the Nikkei's plummet produced an inverse H&S in the NQ's and then confirmed the neckline. That's true, too, but the 8:30 spike this morning to 1444 hit the projected minimum upside target for that inverse H&S, so that it's been fulfilled already. That tepid reaction to good news adds to the caution I already feel due to the low volatility indices. I honestly don't know how to weight those various concerns against the bullish tenor of the markets and will watch this morning for the OEX to tell us where it wants to go. If it's going up, we'll hope for a blip down to the 30- or 60-minute 100/130-pma's first and a bounce from there.

  Jeff Bailey   11/6/200,  9:23:17 AM
09:00 Update at this Link

  Linda Piazza   11/6/200,  9:01:41 AM
Incoming ECB President Jean-Claude Trichet announced that the ECB decided to leave the key ECB interest rates unchanged. The members expect "some further stickiness of inflation rates." Huh? Stickiness? They see "additional signs of a gradual economic recovery in the euro area" and believe "that the recovery of the world economy is clearly making progress." Here's a link to the ECB site, with the statement available under the "Press Release" tab: Link

  Jonathan Levinson   11/6/200,  8:30:46 AM
8:31am U.S. Q3 OUTPUT UP 8.8%, MOST IN 11 YEARS

  Jonathan Levinson   11/6/200,  8:30:20 AM
8:30am U.S. 4-WEEK AVG. INITIAL CLAIMS OFF 10,000 TO 380,000

8:30am U.S. WEEKLY INITIAL CLAIMS DOWN 43,000 TO 348,000

  Jonathan Levinson   11/6/200,  8:29:13 AM
Initial claims 348K, non-farm productivity 8.1%, unit labor costs -4.6%.

  Jonathan Levinson   11/6/200,  8:25:04 AM
Awaiting Initial Jobless Claims, exp. 380K, Nonfarm Productiviy exp. 8.5%, and Unit Labor Costs exp. -5%.

  Linda Piazza   11/6/200,  7:18:00 AM
Good morning. The Nikkei started out in the red Thursday morning and then plummeted through the rest of the day, closing down 285.24 points or 2.63%, at 10,552.30. Losses were attributed to the upcoming November 9 general election and nervousness ahead of the U.S. jobs report on Friday. Although the declines were broad-based, banks were hit particularly hard. Much discussion centered on the financial reforms the two parties might enact if they were to receive a majority in that general election. Another contributing factor was the lowered forecast by chipmaker Rohm. A Marketwatch.com article noted that Toyota was almost the only stock that sidestepped the declines, gaining after reporting earnings that surprised to the upside earlier this week.

In China, China Unicom lost ground after Deutsche Bank cut its recommendation for the mobile-phone company, and Legend Group fell after the company reported lower-than-expected earnings and Goldman cut its recommendation to an underperform rating. China's Shanghai Composite fell 2.04% and Hong Kong's Hang Seng fell 2.32%. In South Korea, reports of a strike surfaced, with workers protesting government labor policies. South Korea's Kospi dove 1.92% lower. Other markets also declined, with the Taiwan Weighted losing 2.10% and Singapore's Straits Times declining 0.79%.

European markets have traded tentatively today ahead of Bank of England and ECB meetings, with many correctly speculating that the Bank of England would be the first of the top four central banks on the globe to raise rates. Speculation had also correctly centered on a likely 25 basis-point raise, with some pointing to the explosion of consumer borrowing in England as the reason behind the likely rate change. Housing prices have soared this year, increasing concern about a bubble, but others point to the impact that will be suffered by small manufacturers. Balancing the hesitation brought about by these ongoing meetings was good news on the economic front from Germany. Unemployment fell and factory orders rose, with some crediting Schroeder's labor market reforms for easing unemployment. Although the unemployment rate remained at 10.5% for October by German standards, it fell from the previous 9.4 to 9.3 by EU standards, with 12,000 fewer jobless claims. Still, the German government cut back its revenue forecasts for 2003 and 2004.

The FTSE 100 dropped slightly from its pre-announcement level, but only slightly, and it appears to be headed up again. The index currently trades 9.40 points or 0.22% higher, at 4312.80. The CAC 40 has gained 6.87 points or 0.20%, to trade at 3400.12; and the DAX has gained 6.53 points or 0.18%, to trade at 3724.23.

  Jeff Bailey   11/5/200,  10:41:54 PM
Pivot Matrix for tomorrow at this Link

  OI Technical Staff   11/5/200,  10:41:42 PM
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