Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
  Jeff Bailey   12/1/200,  4:16:36 PM
Netease.com (NTES) $46.70 +0.1% .... cancel day trade long for bullish entry at $47.20.

 
 
  Linda Piazza   12/1/200,  3:56:24 PM
Swing Trade Summary: OEX/SPX/DJX/DIA/SPY
12/01: Entered a bearish OEX trade at OEX 525.59.
11/26: Stopped at 526.50.
Result for that day: 0.91 OEX points against our position.
Results for the week: 0.91 OEX points against our position.

 
 
  Linda Piazza   12/1/200,  3:54:11 PM
Unless something surprising happens in the next few minutes, the OEX will end the day with a bullish candle moving through the midline of the ascending regression channel--a bullish development--and with daily oscillators turning up again. The OEX also ends the day just beneath the 527-529 resistance seen on the monthly chart, with 532-533 perhaps being next resistance. The thirty-minute and 60-minute oscillators have turned up again, too, with this afternoon's brief move down constituting a test of the 30-minute 21-pma. The OEX is between likely strong resistance and now-proven support. It looks as if we could likely expect continued testing of that overhead resistance tomorrow morning, but that remains to be seen.

 
 
  Jim Brown   12/1/200,  3:40:41 PM
Editors Play
You should be filled on all three levels of the DJX puts as outlined in the Editors Play on Sunday. The touch of Dow 9900 completed the setup. Link

 
 
  Linda Piazza   12/1/200,  3:22:53 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were just stopped out of our OEX bearish position at 526.50, after having entered at 525.59. We endured a $0.91 move against our position.

 
 
  Jeff Bailey   12/1/200,  3:01:22 PM
Bond market closed with 10-year YIELD ($TNX.X) finishing 7.2 basis points higher at 4.392%.

Should get about a 10-minute read on stocks for the close. QQQ $35.80 +1.18% slightly higher than its 03:00 PM EST mark of $35.78.

 
 
  Linda Piazza   12/1/200,  2:56:53 PM
The current pattern on the OEX three-minute chart looks suspiciously like a bull flag . . . and as I was typing, it broke to the upside.

 
 
  Linda Piazza   12/1/200,  2:34:44 PM
The drop was quick, but the bounce has been, too, with the advdec line spiking up and the $TRIN headed lower. We'd still like to see resistance hold. Currently, resistance lies in separate layers above the OEX position, perhaps unlikely to halt the climb until 525.25, near our entry, or 525.89, just above our entry.

 
 
  Jeff Bailey   12/1/200,  2:20:49 PM
VocalTec (VOCL) $5.04 -16.8% .... if still short from Friday's profile and did NOT stop out at $4.90, then would use the recent low of $4.90 and trade here to close with fractional loss!

 
 
  Jane Fox   12/1/200,  2:19:47 PM
An attorney representing billionaire investor Kirk Kerkorian told a federal judge when Daimler-Benz took over Chrysler five years ago, Daimler-Benz executives engaged in "plain, old-fashioned fraud" during the merger talks. DaimlerChrysler says the 1998 merger was one between equals, a trans-Atlantic union that created a global automotive giant. Kerkorian claims the deal was a veiled takeover, orchestrated to bilk shareholders out of billions in compensation.

 
 
  Linda Piazza   12/1/200,  2:17:20 PM
The OEX has now dropped into the 523.50-524 support zone, so we can certainly expect a bounce here. We want to see that bounce stop short of next resistance, hopefully just below our entry.

 
 
  Jeff Bailey   12/1/200,  2:17:10 PM
QQQ $35.55 +0.46% ..... Cancel day trade short entry from $35.75. (cancel as QQQ trades the bearish target without my entry of $35.75 being filled)

 
 
  Jeff Bailey   12/1/200,  2:15:43 PM
Sell Program Premium alert .... SPX = 1,062.72, QQQ = $35.54.

 
 
  Jeff Bailey   12/1/200,  2:14:21 PM
QQQ $35.60 +0.62% .... after 14:08:11 post, QQQ edged back up to $35.74, but didn't get the up-tick to $35.75. Now filling this morning's gap higher back to the downside.

SOX.X 525.18 -0.77% now approaching RED #6 of 524.56.

 
 
  Linda Piazza   12/1/200,  2:14:19 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Let's lower the stop now to 526.50, just over the day's high.

 
 
  Linda Piazza   12/1/200,  2:10:38 PM
For the first time today, the nested five-minute Keltner bands are showing resistance gathering strongly above the current OEX level. These Keltner bands are great at showing near-term resistance and support. While they perhaps aren't as useful for us OEX traders, since the point spreads between closest support and closest resistance aren't wide enough for us to trade many times, I don't think I'd be without them if I were trading futures. While I'm far from an expert on the use of Keltner channels, I've been watching them for a couple of months and I think them invaluable. Here's what they're showing now: Link Note the confluence of different channels just above the current OEX position. That doesn't mean that the OEX can't break through that resistance represented there, but it's showing that it's less likely that the OEX will do so than that it will head down, where fewer lines impede its movements.

 
 
  Jeff Bailey   12/1/200,  2:08:11 PM
QQQ $35.70 +0.94% .... day trade short on up-tick at $35.75, stop $35.84 to protect against a bond market close rally at 03:00 PM EST, target $35.55.

 
 
  Jeff Bailey   12/1/200,  2:04:37 PM
QQQ $35.74 +1.03% .... looks like a tempting short intra-day into close, but I'm a bit worried that with SOX.X currently trading its RED #4, QQQ dip into morning gap higher will be brief.

 
 
  Linda Piazza   12/1/200,  1:46:45 PM
So far, the OEX keeps finding support at a rising trendline that built off the 9:39 (3-minute chart) low. It's testing that trendline again as I type.

 
 
  Jonathan Levinson   12/1/200,  1:38:12 PM
Put to call ratio .71, VXO 16.05. These readings are becoming a type of bear bait. Puts are on sale.

 
 
  Linda Piazza   12/1/200,  1:32:44 PM
Be careful as we approach the typical 1:35-1:55 stop-running push. I struggled with the placement of the stop on the OEX position because we were so close to that time of day when we entered. A stop up closer to 529 actually made more sense, but that's a wide stop and it might be better for some participants to exit ahead of a test of 528-529 and then get back in on a rollover. Both types of trades make sense, depending on the option chosen and the patience of the individual trader.

 
 
  Linda Piazza   12/1/200,  1:18:34 PM
Thanks for your earlier information, Jane, on TRIN and the recommendation that we watch for a sub-0.60 level as a contrarian measure. The TRIN didn't quite get there, so we'll see how this plays out.

 
 
  Jane Fox   12/1/200,  1:16:41 PM
Linda it is so true that the VXO and TRIN cannot be used as timing tools, however, I think your OEX put play was well timed.

 
 
  Linda Piazza   12/1/200,  1:12:51 PM
The TRIN was low as we entered that bearish OEX position--not usually a good sign--but I had watched carefully as the TRIN approached 0.60 and then started up. Although I don't watch the TRIN as carefully as Jonathan and Jane do, we're getting several signals today (VXO, TRIN, approaching resistance) that the markets are either going to zoom up or turn around here. It seemed worth a risk of a bearish play. The trouble is that neither VXO nor TRIN can be used as absolute timing tools.

 
 
  Linda Piazza   12/1/200,  1:09:11 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We have entered a bearish OEX position at OEX 525.59, with a stop at 527.50 and a target of 522.

 
 
  Linda Piazza   12/1/200,  1:06:37 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Enter a bearish OEX position here. Stop at 527.50. Target 522.

 
 
  James Brown   12/1/200,  1:04:07 PM
Also enjoying the market's and the Dow's strength today is OI call play UTX. UTX is up 2.27% and quickly approaching its previous highs near $88.00. Currently, top of its rising channel should be near the round-number resistance at $90.

 
 
  Linda Piazza   12/1/200,  1:03:15 PM
The 30-minute MACD lines now touch from above signal. This is a danger point for both bulls and bears. This appears to signal weakness, a warning to bulls, but this is the very point, on the verge of a cross, at which the MACD sometimes recovers and turns up again.

 
 
  James Brown   12/1/200,  1:01:13 PM
Insurance stock PGR, a current OI call play, is finally seeing some follow through on the most recent bounce. The stock has surpassed our initial target of $80, bolstered by today's market rally.

Short-term traders will want to consider taking some profits off the table or at least raising your stop loss.

 
 
  Linda Piazza   12/1/200,  12:50:22 PM
Although a quick check of the OEX 30-minute chart over the last year showed an instance when the OEX traded as far as 12 points away from its 30-minute 100-pma, a ten-point distance was the more usual absolute distance away from that important average. More often the OEX traded only seven or eight points away from that average. The 30-minute 100-pma currently lies at 518.87, so the OEX is now just over 7 points above that average. A 10-point spread would take the OEX into that 527-529 zone that appears to be next resistance on the monthly chart, but anywhere through here looks like a danger zone. That doesn't mean that the OEX will zoom way down or even that it will necessary decline all the way to the 30-minute 100-pma if/when it should decline. It's likely that it would find at least temporary support at the rising 30-minute 21-pma, currently at 522.31.

 
 
  Jeff Bailey   12/1/200,  12:47:11 PM
Dow Transports (TRAN) 2,958.22 +1.26% .... back above our 80.9% retracement and now looks to challenge the 3,000 level for a second time. Will note that mid-point of regression trending higher and crosscrosses the 3,000 level as if another collision with 3,000 is in the cards. Thinking here is if TRAN going to re-test 3,000, most likely get bullish caryover with major indices.

 
 
  Jeff Bailey   12/1/200,  12:37:30 PM
Netease.com (NTES) $46.95 +0.64% ... here's intra-day chart of NTES and trade setup for long above $47.21, which has not yet been triggered. Link

 
 
  Jim Brown   12/1/200,  12:31:52 PM
Editors Play
You should be filled on the first two levels of the DJX puts as outlined in the Editors Play on Sunday. We need the Dow to hit 9900 to enter the last 1/3 of the position. So far everything is working as planned. Link

 
 
  Linda Piazza   12/1/200,  12:31:26 PM
Here's where the OEX is with respect to regular, run-of-the-mill straight-across horizontal resistance as seen on the monthly chart: Link Nearby levels assumed some importance in 1998 and again in 2001 and 2002.

 
 
  Jeff Bailey   12/1/200,  12:25:27 PM
Netease.com (NTES) $45.17 +1.07% .... day trade bullish/long on trade at $47.20, stop $46.55, target $48.90.

 
 
  Jonathan Levinson   12/1/200,  12:20:58 PM
Here's another, James, currently being blared over the Arena bullhorn:

12:21pm $GHA GOLDMAN SACHS COMPUTER HARDWARE INDEX RISES 1.3%

 
 
  Linda Piazza   12/1/200,  12:18:43 PM
Five-minute Keltner support now gathers near 525.36 and down to 525. If the OEX is to continue gains without overlapping the lows, first support should be found there. I note that five-minute MACD is not rising as the OEX rises and am watching it as it flattens to see whether it will first turn up or turn down.

 
 
  James Brown   12/1/200,  12:18:42 PM
The rally is pretty widespread this morning. More than a dozen sector indices are up more than one percent. As a matter of fact only one sector, the XAU gold & silver index, is trading in the red. The leading performers are:

BTK biotech index: +3.49%
DJUSHB home constr: +1.76%
IUX insurance index: +1.83%
DRG drug index: +1.42%

 
 
  Ray Cummins   12/1/200,  12:17:07 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity

The market is off to a great start this week with stocks moving higher in almost every major sector. Two of our new picks, Hovnanian (NYSE:HOV) and Martek Biosciences (NASDAQ:MATK), were among the morning's bullish issues and some of last week's plays; American Pharma Partners (NASDAQ:APPX), Broadcom (NASDAQ:BRCM), Eon Labs (NASDAQ:ELAB), Engineered Support Systems (NASDAQ:EASI), Invitrogen (NASDAQ:IVGN), and Toll Brothers (NYSE:TOL) have also performed well today. At the same time, it's been very difficult to offer bearish issues (to balance the portfolio) with any degree of success and recent positions in Mercury Interactive (NASDAQ:MERQ), Symantec (NASDAQ:SYMC), and Intermune (NASDAQ:ITMN) clearly demonstrate that fact. In addition, one of our new "bear-call" spread candidates, Mohawk Industries (NYSE:MHK), is already on the "watch" list as it jumped $1.90 to $73.98 in early trading.

 
 
  Linda Piazza   12/1/200,  12:09:49 PM
The OEX has just pushed through the bullish #2 on the 2MRT system, for the first time today displaying a bullish tenor based on that daytrading system. According to that system, the OEX should now see a test of the 528.70 level, giving us the needed 527-529 test.

 
 
  James Brown   12/1/200,  12:07:12 PM
It's a popular day to upgrade Fairchild Semiconductor Intl (FCS). Deutsche Bank has raised FCS to a "buy" and CSFB has raised FCS to an "out perform". The stock has gapped higher, up 2.65%, to $26.69. These are prices not seen since June 2002.

Meanwhile the $SOX is only up +0.73% trying hard to maintain its new high from this morning.

 
 
  Linda Piazza   12/1/200,  12:06:17 PM
Thanks, Jonathan and Jane for information on the TRIN.

As I type, the OEX has pushed above its previous recent 525.88 high.

 
 
  Linda Piazza   12/1/200,  12:04:36 PM
I would like to see an OEX push up to the 527-529 level, as that would give us a sounder entry for a possible bearish play, but I'm just not sure whether that will happen or not. To clarify my opinion, it is not my intention to limit myself to bearish plays unless the markets tell us that's what we should be doing, but this doesn't appear to be a good level for bullish entries. As has been true lately, the bulk of the day's movement so far was over before the release of the ISM, and by then the OEX had already once tested its previous recent high as it is again doing as I type. A push above that level should give us that 527-529 test.

 
 
  Jonathan Levinson   12/1/200,  12:03:05 PM
Linda, a gradually falling TRIN is not as bearish as a spike collapse. We need to correlate with price and oscillators- and it's telling us that there's a very strong predominance of buyers. Like the VXO, it's overextended to the downside, but the move is sufficiently gradual to make me wonder if, like the 10 day stochastic suggests, there isn't another move up brewing. I don't think so, but this is the message of these indicators.

 
 
  Jane Fox   12/1/200,  12:02:21 PM
Linda (11:58 post) I read the TRIN as quite bullish today but not so overdone that it cannot go lower. It just recently took out its last swing low which is bullish and is heading down. Very bullish territory, and where you would look for it getting overdone and needing to move back up, would be in the sub 0.60 area. I see the TRIN as supporting this rally.

 
 
  Jeff Bailey   12/1/200,  12:02:06 PM
Netease.com (NTES) $47.10 +0.96% .... Cancel day trade long entry from 10:45:35 and $47.90 entry. Will follow with new instruction.

 
 
  Linda Piazza   12/1/200,  11:58:41 AM
Is the TRIN getting dangerously low here? Perhaps Jonathan or Jane has an opinion, since they watch the TRIN more closely than I do, but other than some early morning spikes lower and the all-day low on the 24th, the TRIN appears to have approached the .70 level that usually marks a turnaround point for the TRIN. Is this a contrarian, bearish signal or are the markets going to zoom higher, sending the TRIN even lower?

 
 
  James Brown   12/1/200,  11:57:58 AM
Speaking of homebuilders, current OI call play Hovnanian (HOV) is up another 2.86% today at $94.89. The stock is getting very close to the top of its rising channel. Shares have appreciated over 9 points since we picked it and now is a good time to start taking some money off the table.

 
 
  James Brown   12/1/200,  11:54:45 AM
Homebuilder D R Horton Inc (DHI) has announced a 3-for-2 stock split this morning. Centex (CTX) had announced a 2-for-1 split a couple of weeks ago. The way this entire group has appreciated split announcements are probably going to be pretty common.

The way shares of Pulte Homes (PHM) are rushing towards the $100 mark I would expect a split announcement from them sooner or later.

 
 
  Ray Cummins   12/1/200,  11:51:44 AM
Spreads/Combos & Premium-Selling -- Synthetic Positions: Part II

One thing to be careful of when selling puts is the use of stocks in similar groups (such as computer hardware & storage) for margin/collateral. The idea is that if ELX slumps, you may need to sell other stocks to cover yourself and if these issues are in related industries, they would probably be "tanking" as well. Also, do not risk more than you can afford to cover in a worst-case scenario. (Murphy's Law looms large in the stock market!) Some of the benefits of bullish synthetic positions include:

1. The results are similar to being long on the stock.
2. You can use portfolio collateral to finance the call purchase through the sold (short) put.
3. For each play that you pick carefully, there is the possibility of large gains with a relatively low probability of loss.

Good luck, and be sure you completely understand the various outcomes and exit/adjustment techniques, and the potential risk of selling "naked" puts, before you use this strategy.

 
 
  James Brown   12/1/200,  11:48:40 AM
Dow component General Electric (GE) is also the beneficiary of an upgrade to a "buy" from A.G.Edwards. The stock is higher today but remains under pressure from its simple 50-dma near $29.00.

 
 
  James Brown   12/1/200,  11:45:51 AM
Certainly helping the Dow's gains is Intl Paper (IP). The stock is up 3.25% and back above the $38 mark after Deutsche Bank upgraded it to a "buy". Daily and weekly technical oscillators have all turned bullish but the stock remains under its simple 50-dma and there is plenty of congestion between here and $40.00.

 
 
  Ray Cummins   12/1/200,  11:40:03 AM
Spreads/Combos & Premium-Selling -- E-mail Replies

Hi Ray, I just started reading your section and I was interested in the "synthetic" position on Emulex - ELX. What is the idea behind this strategy and what are the risks and rewards. Thanks much! GW

Hello GW...Synthetic positions offer a way to capitalize on an anticipated stock movement without putting out as much cash as you would when buying the underlying issue in the open market. If you buy stock you are considered 'long' in the stock, as you own it, and you participate in all the upward movement of the stock. In the case of ELX, which is a more speculative "synthetic" play, you buy an out-of-the-money call option to take advantage of this possible upward movement, and you sell an out-of-the-money put option to pay for the call option. Selling an OTM put gives you some additional downside risk -- you must be willing to own the stock in the event of a sudden downturn -- but it allows you to use portfolio collateral to pay for the call option, as opposed to an outright cash investment. Selling an "OTM" put also allows you to retain a small cushion under the current stock price; it can stay the same or even decline slightly and you will not lose money.

 
 
  Jonathan Levinson   12/1/200,  11:36:16 AM
Put to call ratio .74, VXO 15.98. I wouldn't have to think so hard if the p/c ratio was about .25 lower or so, but no such luck. Dead neutral at .74.

 
 
  Linda Piazza   12/1/200,  11:32:38 AM
Five-minute OEX support now groups strongest near 524.50, slightly higher than previous support. I'm still watching how the OEX behaves in relationship to today's high, which was in turn a challenge of the previous 525.88 high achieved on 11/07. A break above that level might send the OEX up to test 527-529 resistance from its monthly chart.

 
 
  Linda Piazza   12/1/200,  11:10:24 AM
Even as the markets climb, the advdec line continues dropping lower. It did not round up into a right shoulder, as I mentioned I'd be watching to see happen, but instead fell. However, that advdec number may have been too strong to be continued at that level, and it remains strongly bullish.

 
 
  Jeff Bailey   12/1/200,  11:09:36 AM
VocalTec (VOCL) $5.48 -9.71% .... What would you do if you were still short VOCL? Please advise. Thanks

Hmmm... this sounds like one of those .... "there's this friend of mine ...."

If I were still short VOCL, I'd place a 5-MRT on VOCL and anybody not stopped out from Friday morning's bearish profile at $4.90 may note that today's RED #2 is $4.92 and that's a place to look to cover on further weakness today. A stop could also be place just above this morning's high of $5.78.

 
 
  Jonathan Levinson   12/1/200,  11:07:24 AM
The latest put to call ratio is .77, VXO 16.02.

 
 
  Linda Piazza   12/1/200,  10:50:50 AM
Swing Trade Signals
With monthly resistance showing up between OEX 527-529 and then again near 532, the OEX soon faces strong resistance. Should we be considering a bearish play at this level? I'm watching for/hoping for a bounce from just above 524, and to see how high that takes the OEX, as that might give us more information. I think a bearish position near today's current high would have been a decent risk, price-wise, but would it have been time-wise? That's a question we options players must ask ourselves, too. If it's within striking distance of the high that will be reached, but if the OEX is going to meander around a day or two before actually heading down, then we lose. If the OEX does steady off and then reach a lower high or else hit strong resistance, we perhaps will be considering a bearish play, so be thinking about whether you want to participate in such a play or not.

 
 
  Jeff Bailey   12/1/200,  10:45:35 AM
Netease.com (NTES) $47.04 +0.83% .... day trade long on trade at $47.90, stop to begin $46.20, target $49.50.

Look for short covering to come in on move above BLUE #2 $48.04.

 
 
  Linda Piazza   12/1/200,  10:42:20 AM
I'm watching a three-minute advdec chart, noting the potential for a H&S top on that chart. If that H&S is going to form, the advdec number, currently at 2792, should steady off about here and climb toward 3000 again and then round over. I'm watching this as a predictor of possible price action.

 
 
  Jonathan Levinson   12/1/200,  10:40:19 AM
The put to call ratio is down to .79, still neutral, VXO 15.85.

 
 
  Jeff Bailey   12/1/200,  10:34:24 AM
Netease.com (NTES) $47.02 +0.79% ... similar intra-day technicals developing as we saw on Friday in VocalTec (VOCL), on early morning attempt to backfill gap higher.

 
 
  Linda Piazza   12/1/200,  10:32:21 AM
The OEX did fall out of that bearish rising wedge on the 2-minute chart, with that fall being somewhat precipitous, at least on a two-minute basis.

 
 
  Linda Piazza   12/1/200,  10:31:13 AM
The OEX 527-529 zone shows up as historic S/R on the monthly chart.

 
 
  Linda Piazza   12/1/200,  10:24:41 AM
Five-minute Keltner bands show gathering OEX support at just under 524, with several lines coming together at that zone. Being that 523.50-524 is known historical S/R, that gives this zone extra significance.

 
 
  Linda Piazza   12/1/200,  10:23:21 AM
I'm watching the OEX today based on a 2MRT, and the OEX turned down from a test of the bullish #2, at just under 526. Based on that first two-minute range, the OEX's pattern today remains in the neutral zone.

 
 
  Jeff Bailey   12/1/200,  10:21:34 AM
QQQ $35.93 +1.52% .... just off session high of $36.01 and probably finds some round-number resistance there. Intra-day support seen at $35.80. Here's intra-day chart with 5-MRT. Link

 
 
  Linda Piazza   12/1/200,  10:17:53 AM
Since the first two-minute climb on the OEX, the subsequent climb has taken the form of a bearish rising wedge. These "bearish" formations haven't proven bearish at all of late, so I'm hesitant to draw any conclusions, especially about a two-minute formation, but that formation is now reaching its apex. In classical technical analysis, that would then predict a quick plunge.

 
 
  Linda Piazza   12/1/200,  10:14:47 AM
The OEX now challenges the recent 525.88 high. The upper 1.35% envelope surrounding the 60-minute 21-pma now crosses at 527.31, suggesting that the OEX might now climb that high. That envelope now slants strongly upward. Conventional wisdom suggests that when that happens, the OEX could climb the envelope, but a study I recently completed of a year's worth of data, studying the relationship of the envelope's slope to the OEX action when it hit the envelope, showed that there wasn't any correlation when the OEX hit the upper envelope boundary. The OEX might be quickly repelled or might climb the envelope, without much regard to the envelope's slant, so you just kind of have to decide your bias, keep your stops close, and plunge in when you're trading based on action near that upper envelope.

 
 
  Jonathan Levinson   12/1/200,  10:09:58 AM
Put to call ratio .81.

 
 
  Jane Fox   12/1/200,  10:08:44 AM
From And the Beat Goes On column - Phil Condit, Boeing (BA)'s chairman and CEO, has resigned with a comment that he wants to distance the aerospace giant from controversies over its defense contracting. "After thorough deliberations, the board decided that a new structure for the leadership of the company is needed." Last week BA fired CFO Mike Sears for unethical conduct when he negotiated the hiring of a missile-defense expert while she was still working for the Pentagon and was in a position to influence Boeing contracts.

 
 
  Jonathan Levinson   12/1/200,  10:06:11 AM
7.25B overnight repo announced, for a net 750M drain against the 6.5B expiring.

 
 
  Linda Piazza   12/1/200,  10:03:37 AM
OEX next support now gathers between 523.15-523.44, based on the nested Keltner bands. These have worked fairly well to predict support and resistance over the last weeks, so a violation of that level would now perhaps be significant.

 
 
  Jeff Bailey   12/1/200,  10:03:21 AM
QQQ $35.82 +1.24% .... making move above its WEEKLY R1 here. Was thinking Q's might look to backfill gap higher early this week. However, with SPX making new highs, QQQ looks to follow. Here's QQQ with new WEEKLY/MONTHLY levels of retracement. Link

 
 
  Linda Piazza   12/1/200,  10:00:43 AM
The ISM is much higher than expected, sending the OEX up to test the previous highs.

 
 
  Jonathan Levinson   12/1/200,  10:00:03 AM
ISM 62.8

 
 
  Jonathan Levinson   12/1/200,  9:55:07 AM
Awaiting the ISM data.

 
 
  Linda Piazza   12/1/200,  9:49:42 AM
Remember that the first reaction after the release of a key number sometimes is not the final reaction. Lately, though, there's been a danger in waiting until after the release of important numbers to enter, because the prime movement has already begun into the release of the number and it's too late to enter afterwards. Nevertheless, I'll take my chances and wait. I'm not going to wade in with a bullish position at this level, assuming that the morning's reaction means that today's trading will remain bullish. There's too much opportunity for a pop-and-drop day, and too much overhead resistance for my liking, even though I recognize the possibility for a rally day.

 
 
  Jonathan Levinson   12/1/200,  9:46:57 AM
ISM is estimated at 58.4.

 
 
  Linda Piazza   12/1/200,  9:45:48 AM
The OEX did find support near 523.30, as the Keltner bands and retracements of the first two-minute range predicted that it might. Bulls next want to see the OEX driven over the day's high, but I'm wondering if the OEX isn't instead going to wander around near the current level until that ISM number is released. That would be pinning it right at a key level into the release of the number, something we've seen happen over and over.

 
 
  Jonathan Levinson   12/1/200,  9:43:37 AM
Correction. There's a 6.5B 6-day repo expiring today. No further announcement yet from the Fed.

 
 
  Linda Piazza   12/1/200,  9:38:44 AM
First OEX support now gathers near 523.30. Let's see if it holds.

 
 
  Linda Piazza   12/1/200,  9:35:29 AM
For those who prefer to watch today's OEX trade based on the first five-minute ranges, and who do not have access to intraday figures, the first five minutes saw a low of 521.53 and a high of 524.30.

 
 
  Jeff Bailey   12/1/200,  9:35:13 AM
S&P 500 Index (SPX.X) 1,064.70 +0.61% .... here's SPX chart with updated WEEKLY and MONTHLY Pivot retracement. New 52-week highs here as 1,067 in play early. Link

 
 
  Linda Piazza   12/1/200,  9:33:50 AM
The OEX shot up so high in the early trading that I'm going to watch the OEX based on what happened during the first two minutes of trade. The OEX saw a range from a low of 521.53 to a high of 523.74 during that first two minutes of trade. The midpoint of that range lies at 522.64. The OEX currently trades above that mispoint, of course, but it's not even time for the first real reversal. Lately, the OEX and other indices have a tendency to get pinned right underneath next resistance or right above next support just before 10:00 economic numbers are released, and I wouldn't be surprised to see that happen today, either. The OEX trades above the 523.50-524 resistance zone that I would have expected to cap today's movements, with the next resistance zone up at recent highs. Below, 521.25-522 is first support.

 
 
  Linda Piazza   12/1/200,  9:22:40 AM
For three days of last week, the OEX tested the midline of its rising regression channel, each time turning down from that test. Each of the last three daily candles could be a potential reversal signal. This morning, the OEX promises to open up, perhaps predicting another test of that midline resistance. That midline now crosses at about 523.50-524, also a zone of important historical S/R. That should be tough resistance, but now various moving averages gather just underneath Friday's closing price to offer likely support, too. Many daily oscillators flatten, ready to move one direction or another with price, but giving inconclusive evidence in the meantime. The 5(3)3 stochastics have reached territory indicating overbought conditions and the fast line has hooked down, but there has not yet been a bearish kiss nor have the stochastics turned down out of territory indicating overbought conditions. Although the ADX level is low, indicating that we can trust overbought oscillators to turn down, I don't personally trust them just now, and I'm noting some bullish divergences setting up on those oscillators. For example, last week's low was higher than the mid-October low, but RSI, MACD, and stochastics all reached lower lows. That's bullish divergence. To mix up the picture, ADX shows the selling pressure line higher than the buying pressure line, indicating that we're in a sell-the-rally mode rather than a buy-the-dip one, but the OEX also trades above the 60-minute 100/130-pma's, countering that evidence.

We begin the day with mixed evidence, then, which makes me cautious. I know you're tired of hearing about my caution, but this mixture of bullish and bearish signals may indicate choppy trading ahead as the OEX chops between strong overhead resistance and building support. We'll have to see what develops as trading opens, but I'm thinking that it might now be wise to step aside for a test of overhead highs and see what happens at that point. Those recent highs will soon match the midline of the rising regression channel, and I've doubted whether the OEX had the strength to climb much above that midline, since its last approaches to the upper channel boundary have fallen short by greater and greater distances. I'm wondering if the OEX needs to pull back or else trade in a sideways consolidation for a while, as daily oscillators reset themselves.

 
 
  Jeff Bailey   12/1/200,  9:16:55 AM
09:00 Update posted at this Link

 
 
  Jonathan Levinson   12/1/200,  8:37:17 AM
We await ISM and Construction Spending data at 10AM, followed by auto and truck sales at noon. The Fed has no expiries today, and so any amounts added at 10AM will be net additions to liquidity.

 
 
  Linda Piazza   12/1/200,  7:11:53 AM
Good morning. The Nikkei traded in a huge, almost 500-point range in Monday's trading. Opening near 10,000, the Nikkei dipped almost 100 points, and then climbed steadily the rest of the day, soaring up almost 500 points from its low. It closed up 302.70 points or 3%, to close at 10,403.27. The Nikkei was weak in early trading as the government announced that it would not bail out Ashikaga Bank as it had Resona Bank, but would instead nationalize the bank. That development and others sent the Nikkei lower to test 9900, but the Japanese government reportedly flooded the money market with liquidity, according to several reports, to the tune of 1 trillion yen, rescuing the markets. Although the move with Ashikaga Bank will erase shareholder's stakes and the bank's stock was hit with sellers, many other banks ended up performing well, and the weaker yen propelled exporters higher, too. Techs, automakers, and telecoms gained.

Semiconductors were strong in Japan and across Asia. Most other Asian bourses gained, too. The Taiwan Weighted gained 1.70% and South Korea's Kospi gained 1.41%. Singapore's Straits Times climbed 1.39% and Hong Kong's Hang Seng added 1.13%. After China announced plans to shore up its shaky banking system, the Shanghai Composite gained 2.54%.

European bourses gain this morning, too. Talk on CNBC Europe this morning centered on the euro's new record high against the dollar, but the euro had eased slightly as of this writing. President Bush reportedly will remove protective steel tariffs, with the U.S. facing threats from global governments to retaliate with tariffs and duties against U.S. products. The move also helped European bourses. Chip stocks were strong in Europe as well as in Asia, but gains appeared broad based.

As of this writing, only Russia's troubled Moscow Times traded down, although that bourse was down more than 3%. The FTSE 100 had gained 40.20 points or 0.93%, to trade at 4382.80. The CAC 40 had gained 33.13 points or 0.97%, to trade at 3457.92. The DAX had gained 46.13 points or 1.23%, to trade at 3792.08.

 
 
  Jeff Bailey   11/30/20,  4:11:46 PM
Pivot Matrix with new WEEKLY and MONTHLY levels at this Link

 
 
  OI Technical Staff   11/30/20,  4:11:37 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

 
 

Market Monitor Archives