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  Jeff Bailey   12/2/200,  5:56:49 PM
Pivot Matrix for tomorrow at this Link

On review, just now noting today's 02:00 PM EST sell program (1,069.30) came about 20-minutes after SPX traded MONTHLY R1 of 1,070.83.

  Jeff Bailey   12/2/200,  5:11:20 PM
North American Palladium (AMEX:PAL) $7.06 +6.9% Link ... nice move today.

Stillwater Mining (AMEX:SWC) $8.96 +5.11% Link .... nice move today.

December Palladium (pa03z) $192.75 +1.98%

  Jeff Bailey   12/2/200,  4:32:09 PM
Alcoa (AA) $34.15 +0.64% ... it just occured to me that individual stock day traders might not even consider trading a stock like AA on an intra-day basis.

Since I might be wasting my time with such a profile, I'm asking that any traders that did trade the stock long today e-mail me at jeff@sungrp.com

  Jeff Bailey   12/2/200,  4:13:39 PM
QQQ $35.69 -0.6% looks to be the 04:15 close.

  Jeff Bailey   12/2/200,  4:12:11 PM
Buy program prem. alert ... QQQ $35.70 -0.62%

  Jeff Bailey   12/2/200,  3:56:51 PM
QQQ $35.60 ... stopped on bullish trade from $35.73.

  Jeff Bailey   12/2/200,  3:55:55 PM
QQQ $35.64 -0.75% .... 18-minutes to close and does not look likely for target of $35.85 by close. Will stick with stop at $35.60, but might see late bid back to WEEKLY R1 of $35.80, where I'd look to close on that bounce if found.

  Jeff Bailey   12/2/200,  3:52:54 PM
Alcoa (AA) $34.14 +0.61% .... Day trade long from $35.01 will close out here at bid of $34.12, or get flat prior to close.

  Linda Piazza   12/2/200,  3:49:46 PM
I don't know what to call the five-minute pattern on the OEX chart any longer. A slow-motion breakdown?

  Linda Piazza   12/2/200,  3:35:33 PM
What was a symmetrical triangle on the OEX five-minute chart now appears to be reforming itself into more of a bullish right triangle with a flat top and an ascending trendline forming the support. However, the five-minute oscillators don't look nearly as bullish as that potential formation. As I type, it looks to be testing the downside support and perhaps breaking that direction.

  Linda Piazza   12/2/200,  3:18:23 PM
The OEX five-minute chart shows the OEX coiling into a triangle. We've seen these before lately, and we've seen lots of false breaks from these triangles. We've seen them break to the upside and then head down, and we've seen the opposite. This is a year to confound all previous technical analysis results.

  Jeff Bailey   12/2/200,  3:16:57 PM
QQQ $35.73 -0.44% .... after seeing a session low of $35.62, lower bullish target to $35.85 from $35.92. Keep stop at $35.60.

  Linda Piazza   12/2/200,  3:06:02 PM
I've now turned to watching the OEX based on its 60-minute chart, since it found support on the 60-minute 21-pma. It's now trapped between that average and the corresponding average on the 30-minute chart. The current bounce looks a bit too impulsive to be a classic bear flag bounce into resistance, but if it is, it should not take the OEX any higher than about 525.45.

  Jeff Bailey   12/2/200,  3:04:41 PM
QQQ $35.67 -0.66% .... trader questioning my previously typed target. Yes, I was typing fast. Bullish target is $35.92 (not $39.92)

  Jonathan Levinson   12/2/200,  3:03:45 PM
NQ is by far the weakest link, reversing the earlier situation in which YM was leading the way. It looks like the 30 minute cycle has lagged again, with the downphase finally picking up some steam.

  Jeff Bailey   12/2/200,  2:59:21 PM
Bond's close with 10-year lower by 1.2 bp at 4.38%.

QQQ $35.65, AA $34.14

  Jeff Bailey   12/2/200,  2:57:01 PM
BIG offer on AA at $34.15 ... let's see if this is a short, or specialist lining up some liquidity for big buyer to the close.

  Jeff Bailey   12/2/200,  2:56:07 PM
Alcoa (AA) $34.15 +0.64% .... while not a QQQ component, you can probably see what's at play here.

  Jeff Bailey   12/2/200,  2:54:38 PM
QQQ $35.73 -0.45% ... just sitting here and most likely rest of session determined on bond market close in 5-minutes.

With bonds finding some fractional buying into their close, it's a 50/50 call for what stocks do into today's close.

QQQ bullish bet is based only on intra-day observation that session low of $35.67 didn't see the test of overlapping $35.66, at least not yet. Day trade bulls really need to see a 5-minute bar close back above WEEKLY R1 of $35.80 after bond market's close.

  Linda Piazza   12/2/200,  2:51:34 PM
When the OEX declined, it dipped down to test the midline of its ascending regression channel and is trying to bounce from that support, but now all those support levels from this morning line up just above the current OEX position and might be expected to be resistance now.

  Jonathan Levinson   12/2/200,  2:47:17 PM
GE is printing a session high here.

  Jeff Bailey   12/2/200,  2:44:08 PM
QQQ $35.73 -0.49% .... day trade long here, stop $35.60, target $35.92.

  Jeff Bailey   12/2/200,  2:42:08 PM
Alcoa (AA) $34.12 +0.55% .... has weathered sell programs so far. Here's intra-day updated chart of AA. Link

Fine tune on day trade long from $35.01.... stop firm at $35.01, but lowering bullish target from $34.40 to $34.30.

  Jeff Bailey   12/2/200,  2:30:55 PM
OEX 524.37 -0.42% ... session low has been 523.85.

  Linda Piazza   12/2/200,  2:29:16 PM
Either I'm going crazy or Q-charts is, or else Q-charts is foretelling the future. I keep getting told that certain numbers have been hit when those numbers are below the current OEX number. Just got a signal a few minutes ago that the OEX was below 524.14, for example.

  Jeff Bailey   12/2/200,  2:25:54 PM
Sell Program Prem. Alert .... SPX = 1,064.5 , QQQ = $35.73, AA = $34.08

  Linda Piazza   12/2/200,  2:24:58 PM
OEX 523.50 and then 523 looks to be the next levels of possible support if the OEX doesn't get its act together now. The 30-minute MACD still slants down at the kind of shallow angle that sometimes portends an upturn, but the 60-minute MACD is beginning to round over nicely into a more convincing downturn. It's not yet fully committed, though.

  Linda Piazza   12/2/200,  2:13:08 PM
The OEX now falls beneath the 30-minute 21-pma. If this holds, this will be the first time since the afternoon of November 26 that the OEX has traded below that average. We should probably now expect a retest of that average, located at 525.80.

  Jeff Bailey   12/2/200,  2:05:19 PM
Buy Program Prem. Alert ... SPX = 1,068.35, QQQ = $35.87

  Linda Piazza   12/2/200,  2:04:58 PM
The OEX now has support gathering near 526.30 and then at 525.47, according the Keltner channels, but the 30-minute 21-pma lies between those two numbers, at 525.80. The 30-minute momentum turns down, 30-minute MACD tries to flatten and periodically appears to want to turn up again, and CCI and RSI have flattened again, too. There's nothing to go on by studying those, except that if price continues to move sideways while MACD cycles down, that might be deemed somewhat bullish, as price could then be expected to move up when the MACD and other indicators did turn up again. We just have to wait to see if that happens, though. There's still plenty of downside to be had on both price and indicators if they decide to turn down.

  Jeff Bailey   12/2/200,  2:02:36 PM
Alcoa (AA) $34.08 +0.44% .... raising stop on bullish day trade to break even here.

That sell program really hit the INDU.

  Jeff Bailey   12/2/200,  2:00:33 PM
Sell Program Prem. Alert .... SPX = 1,069.30, QQQ = $35.87

  James Brown   12/2/200,  1:47:48 PM
One of the more impressive moves on our play list today is the put play in KSS. The stock continues to fail at its declining 10-dma and today's drop put it below support at $48.00-47.50.

  Jim Brown   12/2/200,  1:46:19 PM
GM Auto sales up +22%
GM Truck sales up +30%
Raising production expectations +10,000 units for 4Q

  James Brown   12/2/200,  1:44:24 PM
Dow component and OI call play UTX is hitting not just one-year highs but new all-time highs above the $88 level. Raising stops isn't a bad idea here either.

  James Brown   12/2/200,  1:42:44 PM
The DJUSHB home construction index may be slipping back just a point or two but there's no weakness in OI call play HOV. The stock is up about $10 from where we picked it and we would suggest traders consider taking profits or significantly raising their stop losses.

  James Brown   12/2/200,  1:40:20 PM
Current OI call play DGX has come within 1 cent of our profit target range $75-76. Traders may want to consider taking some profits off the table or adjusting their stops.

  Linda Piazza   12/2/200,  1:25:32 PM
We now have bullish divergence on the OEX five-minute chart, with a lower five-minute low while oscillators made equal five-minute lows.

  Jeff Bailey   12/2/200,  1:09:45 PM
Alcoa (AA) $34.24 +0.91% ... BLUE #4 here.

  Linda Piazza   12/2/200,  12:57:16 PM
The OEX now falls back to test the 30-minute 21-pma again, with that average now just below the current OEX position, at 525.42. Even the usually reliable MACD has been fickle this morning, first slanting down at the shallow angle that sometimes portends an upturn, then looking as if it's going to curve up into a bullish cross, then turning down again, depending on the price action.

  James Brown   12/2/200,  12:51:56 PM
Shares of JetBlue Airways (JBLU) appear to be rolling over under their simple 30-dma and the $37.00 level. The stock does have some support at $34 and a breakdown there could be a trigger for new bearish entries.

  Jeff Bailey   12/2/200,  12:49:19 PM
S&P futures (sp03z) ... Last night I was working on another fitted retracement on the S&P futures after a bullish bias settlement at new highs. Still using PINK as the current retracement in play, but need higher levels just in case. Link

  James Brown   12/2/200,  12:47:46 PM
IBM isn't moving much despite winning a $200 million 7-year contract from Canadian Pacific Railway. Unfortunately, that's only $153 million in U.S. dollars but at the rate our greenback is dropping this contract might appreciate in value. *grin*

  Jim Brown   12/2/200,  12:42:38 PM
EBAY just affirmed their prior guidance for the quarter

  James Brown   12/2/200,  12:42:11 PM
Insurance company Unumprovident Corp (UNM) has been cut to a "sell" by Merrill Lynch, claiming there appears to be little upside for the company. Shares gapped down slightly this morning but bounced from recent support at $14.00. The stock is off about 13% from its highs but still up more than 140% from its March low.

  Jonathan Levinson   12/2/200,  12:36:33 PM
The put to call ratio is down to .70, VXO 16.34. I hesistate to draw any conclusions because of the higher low again printed on the indices, but resistance at yesterday's highs is looking pretty good from here. The daily cycle upphase continues to prove its worth, however, and if the lack of movement is any indication, it appearst that the market is every bit as confused as I currently am.

  James Brown   12/2/200,  12:31:56 PM
Advertising giant Omnicom Group (OMC) just got bigger. Yesterday OMC announced that McDonalds (MCD) had just consolidated its entire $1 billion ad budget and gave it to OMC. The news appeared to go unnoticed as the stock closed at $80. Now it seems that an upgrade to "equal weight" from Morgan Stanley this morning has brought investor attention back to OMC and shares are now hitting new one-year highs, up 5% to $84.

  Ray Cummins   12/2/200,  12:31:11 PM
Spreads/Combos & Premium-Selling -- E-Mail Replies Part III

From a theoretical viewpoint, a straddle whose strike price is near the price of the stock is cheaper than a straddle whose strike price is more distant from the underlying issue. The reason is that the straddle whose strike is close to the price of the stock is made up of a call and put whose value is mostly extrinsic, while the straddle whose strike price is not equal to the price of the stock is made up of an in-the-money option and an out-of-the-money option. Even though extrinsic value is highest in at-the-money options, the decrease in extrinsic value for ITM and OTM options is offset by the intrinsic value of the ITM option and this accumulation of intrinsic value is the fundamental reason why straddles grow in value as the underlying stock moves up or down. Hope that helps!

  Ray Cummins   12/2/200,  12:29:48 PM
Spreads/Combos & Premium-Selling -- E-Mail Replies Part II

Since the goal of the straddle buyer is to be delta "neutral," it is often necessary to buy more calls than puts, or vice-versa, to enter the position with a theoretical balance. This approach is called a "ratioed" straddle and the way to determine the delta of the overall position is to divide the deltas of the two options in question. Using our example above, if the stock price climbs to $27 before you can enter the play, the $25 call might have a delta near .75, while the $25 put would possibly have a delta near -0.25. The neutral ratio in this case is equal to .75/.25 = 3, thus you would need to buy 3 puts for every 1 call to open the position with a delta-neutral outlook. Of course, the price of an option also varies according to implied volatility and since that can occasionally have a significant effect on the equation, be aware when you are buying options that have additional premium due to market demand or potential volatility.

  Ray Cummins   12/2/200,  12:26:59 PM
Spreads/Combos & Premium-Selling -- E-Mail Replies

First, a quick review for readers who are new to the "Greeks" of option pricing and, more specifically, debit straddles:

The delta of a debit straddle can be positive or negative (or neutral), depending on where the stock price is relative to the strike price of the long options. Since the sum of the absolute value of the deltas of a call and a put, at the same strike price and expiration, equals 1, the two values have an inverse relationship (when the call delta increases, the put delta decreases). For example, if the underlying stock is at $25, a $25 straddle will have a delta of approximately 0 with the call option having a delta near .50 and the put option having a delta near -.50. If the stock price declines, the delta of the long put will decrease in inverse proportion (roughly) to the delta increase in the long call, disregarding any effects of volatility skew.

  Jeff Bailey   12/2/200,  12:26:31 PM
I'll grin when/if AA trades $34.40 (bullish day trade target) later today Jane.

  Jane Fox   12/2/200,  12:24:25 PM
Too funny Jeff!

  Jeff Bailey   12/2/200,  12:23:25 PM
Alcoa (AA) $34.10 +0.5% ... back to test BLUE #2. So far today, hasn't been able to hold a 5-minute close above this level. Even morning spikes to $34.20 found the 5-minute close back at or below $34.10.

Would like to see it get off its can here.

  Ray Cummins   12/2/200,  12:22:58 PM
Spreads/Combos & Premium-Selling -- E-Mail Replies

(condensed) Hello Ray...I have a question on the right approach to correctly positioning the straddle quantity. Normally I pick straddles when the stock is closer to the strike price. So if the stock is at 40, I buy a 40 straddle (5 contracts each). But sometimes the stock price is in between strike prices and picking the straddle in that case becomes a little tricky. Case in point, on the day before earnings announcement of HOTT (Hot Topic) the stock was at 26.6 and I bought the Feb 27.5 straddle. Alternatively I could have bought the Feb 25 straddle. So in this case the stock made a nice move the next day and then I realized it is gonna take some more price movement in order to make my calls profitable since the ITM puts were slightly expensive. That got me thinking that maybe I should have bought a delta neutral contract set by purchasing uneven number of calls to puts. But I don't know how to figure this out. (Maybe 7 calls/9 puts or 9 calls/7 puts)... I remember reading an article about this last year but I can't seem to find it. Am I thinking in the right direction? Any suggestions/pointers would of great help. Thanks again for all your help. Cheers, PA

  Jeff Bailey   12/2/200,  12:20:31 PM
United Online (UNTD) $19.33 +1.31% Link .... Stock was one of my "late October beaten down" Link bullish picks. Stock has been finding support at its rising bullish support trend. Will be presenting at the First Albany Annual Growth Conference on December 10. Scheduled to present at 02:20 PM EST.

  Linda Piazza   12/2/200,  12:14:41 PM
Since yesterday, I've been waiting for a test of 527-529 resistance as seen on the monthly OEX chart, a S/R zone that showed up during three separate years over the last five years. We don't have to look all the way back to 1998 to see that level showing up as resistance, however, as two separate trendlines on my chart show it as possible resistance: Link The topmost line marks an ascending line that began building off the November 3 highs, while the lower of the ascending trendlines is a line that began building off the August 4 low, being a line that I've carried forward. One now crosses near 528.50 and the other near 529.25.

  Jonathan Levinson   12/2/200,  12:06:38 PM
Linda, I think it's performance chasing by the fumble managers driving up those stocks. More a sign of mania/speculation than sustainable advance, but it looked that way in Jan 2000 too.

  Linda Piazza   12/2/200,  12:01:55 PM
I've been looking at a lot of monthly charts this morning. Even though this rally since March has looked so overblown and extravagant, a number of NDX stocks have barely lifted off their lows, at least as it appears on the monthly charts. ADCT, BEAS, BRCD, CIEN, CPWR, and JDSU are examples. Outside those stocks, however, broadening my search, I see stocks such as HAR, TOL, OHB, CTX, TASR, EASI, and NIHD that have gone absolutely vertical and surely need to be reined in a bit. Take a look at NIHD's monthly chart: Link What conclusion can be reached about the markets? Is this rotation out of former well-performing sectors into others? That's probably true of the homebuilders among those well-performing stocks and the defense-related stocks, too. Or, does this say that the economy hasn't improved enough to improve the bottom-feeding stocks' performances, while it's created a bubble in the best-performing stocks? Or could both ideas be true?

  Jim Brown   12/2/200,  11:57:14 AM
Stepford anchor! Excellent word picture!

  Jonathan Levinson   12/2/200,  11:51:48 AM


I have it on good authority that Bernanke has downloaded the latest patch for his Etch-a-sketch from CNBC. He no longer has to manually adjust the knobs as the new patch just keeps resetting the values to Dow 10,000/Nasdaq 2,000.

Sue Herrera seems to have turned into a "Stepford Anchor" who keeps droning "As the Dow closes in on..."

As I type this there's a guy on CNBC spouting that a weaker dollar benefits US Markets!

I'm beginning to see black helicopters circling overhead.

You're right. This is amazing.



  Linda Piazza   12/2/200,  11:46:54 AM
It's sort of now-or-never time for the OEX. The 30-minute 21-pma has risen to 524.95, just beneath the current OEX price. Either the OEX has got to rise along with that average, or else it's going to be breaking beneath it for the first time since the afternoon of November 26. If I were basing a bet just on what I think most market participants would like, then I'd be betting on a break higher to test that overhead resistance that looms above, but I don't think I'd be betting that it would get very far.

  Linda Piazza   12/2/200,  11:43:22 AM
Jane, I know you read a lot of traders' magazines and research. Have you ever read anything that relates the tightness/broadness of a flag with the amount it retraces before breaking? Does a skinny flag retrace a smaller amount than a fat one, for example?

  Jonathan Levinson   12/2/200,  11:26:39 AM
Reuters: Barrick CEO Greg Wilkins says hedge book, the largest in the industry, will be reduced to zero over time.

  Linda Piazza   12/2/200,  11:19:42 AM
We got the OEX bounce I expected although the OEX first dipped momentarily a little lower than I expected. The Keltner channel resistance lines now spread apart. When that happens, the OEX can sometimes move more easily through them. The outermost channel line now crosses near 527.20.

  Jane Fox   12/2/200,  11:17:25 AM
Intel (INTC), Caterpillar (CAT)and McDonald's (MCD) are the three best performers in the DOW this year. Eastman Kodak (EK), Merck (MRK) and AT&T (T) are the worst.

  Linda Piazza   12/2/200,  11:03:36 AM
The nested five-minute Keltner channels I watch show next support just below the level that would coincide with the 30-minute 21-pma, at 524.57, with the average now having risen to 524.72. That suggests that we should probably see a bounce soon, possibly from this level or possibly from the support I've just mentioned. Resistance begins to gather now near 525.70, though.

  Jeff Bailey   12/2/200,  11:00:13 AM
Aluminum Corp. China (ACH) $60.60 +1.93% Link ... Jeff, Over the past couple of weeks I watched ACH form a triangle that I thought was bearish, so I initiated a short position before Thanksgiving. Whether it was a coincidence or a direct result of the U.S. on lifting the tariffs on steel imports ACH broke out to the upside, so I covered my short and went long. Hopefully, my story will have a happy ending as ACH has a bullish vertical target of 84 and climbing.

My question is how would I recognize if a triangle is bullish or bearish as it is forming?

You really don't know until the buy or sell signal is given. Remember though... to qualify as a bullish/bearish triangle, the chart needs minimum of 5 columns of X and O.

Now... "column 1" would have been O's from 53-46 right? Then we could begin envisioning the triangle with lower highs and higher lows. However, when ACH trade up in column of X from $48 to $52, at that point, there was not going to be a triangle pattern as an equal high was created (Right?). Go and figure!

You can really begin to sense how there may indeed have been some shorts shorting the rallies and when $53.00 was hit, that was it.

Excellent tie with lifting of tariffs though.

  Linda Piazza   12/2/200,  10:51:46 AM
As the OEX declines to test the 30-minute 21-pma (and 18-pma, an average I also watch), the advdec line fell off a cliff, and is now at its lowest value of the day. However, the OEX keeps trying to bounce from that average.

  Jeff Bailey   12/2/200,  10:49:07 AM
Dow Industrials (INDU) 9,857 -0.42% .... session low here and now just below its DAILY Pivot.

Mention this here as it relates to Alcoa (AA) $34.06 +0.38% .... would really want INDU to show more than this to keep a day trade bull holding conviction for $34.40 at this point.

  Jonathan Levinson   12/2/200,  10:45:37 AM
Put to call ratio .82 for the 2nd half hour.

  Jeff Bailey   12/2/200,  10:44:36 AM
Nice 5-MRT on ICOS today too. (see 10:29:22)

  Linda Piazza   12/2/200,  10:36:55 AM
The OEX 30-minute 21-pma just keeps chugging up underneath the current OEX price, with that average now at 524.56. Since the afternoon of the November 26, the OEX has been finding support and bouncing from that average each time the average rose beneath it or the OEX dipped down toward it. If price remains where it is, by this afternoon, we're likely going to find out if that's going to happen again.

  Linda Piazza   12/2/200,  10:30:12 AM
The COMPX appears determined to reach for 2000, doesn't it? The 1.35% envelope surrounding the 21-pma now has an upper boundary at 2004.12, but the 30-minute CCI, RSI, momentum, and MACD all show bearish divergence with the price. Something's gotta change if the COMPX is going to reach that upper boundary.

  Jeff Bailey   12/2/200,  10:29:22 AM
Biotechnology Index (BTK.X) 486.55 +1.34% ... only sector showing greater than 1% gain.

Last week, trader asked about ICOS (NASDAQ:ICOS) $46.44 +1.46% Link and I thought bullish trigger point was move above 21-day SMA ($45.51) Link , which was broken to upside yesterday. Looks bullish here and break above $48.00 would have stock at new highs.

  Jonathan Levinson   12/2/200,  10:26:04 AM
Feb gold is up to a session high of 405.10, +1.30. Thinking out loud, given the degree to which gold and the Dow/Naz have been trading in tandem lately, I'd expect some upside on the latter anytime. So far it isn't materializing, but that's what the recent relationship would suggest.

  Linda Piazza   12/2/200,  10:25:31 AM
A drop through the OEX 525.50 level should see a quick drop toward 524.50, but the OEX again appears to be finding support near 525.50.

  Jeff Bailey   12/2/200,  10:21:45 AM
Alcoa (AA) $34.18 +0.73% .... here's quick intra-day for day trade long from $34.01. Link

  Jeff Bailey   12/2/200,  10:13:22 AM
Alcoa (AA) $34.00 +0.2% .... here

  Linda Piazza   12/2/200,  10:11:29 AM
The OEX just retested the midpoint of the first five-minute range again, and now rises to test resistance. It keeps getting turned back each time it tries to approach overhead resistance, now slightly lower at 526.75-526.80. The advdec line threatens to turn negative. The 60-minute MACD lines now touch, but haven't quite made a bearish cross. Some of these oscillators look like they did yesterday as we entered the OEX play, but without the strong and bullish market breadth that we saw yesterday. It's so tempting to see this as another bearish entry, isn't it? The TRIN still drops, however, and I'd like to see that settle at current bearish levels.

  Jeff Bailey   12/2/200,  10:07:24 AM
Alcoa (AA) $34.12 +0.55% ... day trade long on pullback to $34.01, stop $33.75, target $34.40.

  Jonathan Levinson   12/2/200,  10:04:39 AM
GE to a session high, with the put to call ratio up to .89. These are bullish signs. The VXO is up to 16.56, still very low but back above 16.

  Jane Fox   12/2/200,  10:02:25 AM
AT&T (T)'s president, Betsy Bernard, has resigned her position effective immediately. This departure follows a number of AT&T executive changes that many analysts see as Chairman and CEO David W. Dorman's effort to flex his muscles and put his stamp on the company's executive ranks. Ms. Bernard's departure marks a milestone at the company as she is well-liked and intensely loyal to the company.

  Jonathan Levinson   12/2/200,  10:00:15 AM
The Fed adds 4B via overnight repo for an 8.75B net drain.

  Jonathan Levinson   12/2/200,  9:58:49 AM
10:00am U.S. NOV. CHALLENGER LAYOFFS OFF 42% TO 99,452

  Jeff Bailey   12/2/200,  9:56:01 AM
QQQ $35.84 -0.19% .... in addition to 09:38:46 QQQ chart, those still able to use the 5-MRT could overlay it to then define "zones" or look for intra-day overlap of levels to begin defining intra-day support resistance, then use your 5-minute close rule. Here's earlier chart with 5-MRTs. Link

Thinking right now is that a QQQ trader is doing nothing at this point, as QQQ seems to be range-bound from $35.79-$35.87.

More of a bullish bias as I'm closer to $35.79, then get more protective of an intra-day gain as I near the $36.00 level.

Bull logic: IF QQQ can close 5-minute bar above $35.87, then trade LONG the QQQ, first target $36.00, stop $35.75.

Bear logic: IF QQQ trades $35.66, then look for bear entry on bounce back to $35.79, stop above $35.87, target $35.55.

  Linda Piazza   12/2/200,  9:55:43 AM
So far, the OEX has not even been able to approach that 526.80 resistance, much less break it. First support now lies near 525.50.

Perhaps the biggest problem with yesterday's failed play was that I lowered the stop too soon, but that remains to be seen. When you're in a trading slump, it's important to analyze what went wrong, so I'll be watching to see what went wrong with this one.

  Jonathan Levinson   12/2/200,  9:45:24 AM
Feb gold is holding above 400, currently 401.20, with silver bidding 5.405. The HUI is down 3.35 at 252.24, XAU -.91 at 111.3. Precious metals continue to trade like equities, still a confusing relationship since last week.

  Linda Piazza   12/2/200,  9:42:10 AM
The OEX 30-minute 21-pma, the same average at which the OEX found support during yesterday's brief dip, has now climbed to 524, a known S/R level.

  Jeff Bailey   12/2/200,  9:38:46 AM
QQQ $35.84 -0.16% .... some shorter-term traders have mentioned that they just don't have the time each day to place 5-MRTs on their charts and DAILY pivot levels. Here's something I'm investigating where a trader could start the week off with conventional retracement anchored from a WEEKLY R2 to WEEKLY Pivot, and then attach another retracement from WEEKLY S2 to WEEKLY Pivot, where the assumption is made that the S2-R2 defines the week's range of trade. Link

  Linda Piazza   12/2/200,  9:37:46 AM
The OEX now tests the midpoint of the first five-minute range. Overhead, resistance gathers near 526.80-526.85, so if the OEX should continue to rise, that would be the first place to look for strong resistance.

  Linda Piazza   12/2/200,  9:33:42 AM
The first five minutes of trading saw an OEX high of 526.60 and low of 525.35, with the midpoint at 525.98. The first reversal usually begins in a few minutes, and that will tell us more about early strength or weakness as we watch the OEX in comparison to that midpoint. The OEX is currently below that midpoint, indicating weakness in earliest trading.

  Jeff Bailey   12/2/200,  9:13:01 AM
09:00 Update posted at this Link

  Linda Piazza   12/2/200,  9:04:54 AM
The OEX yesterday approached long-term resistance between 527-529, resistance that showed up on its monthly chart in three different years. Since 1.35% envelopes surrounding the 21-pma, daily Bollinger bands, and extended trendlines also show this level as resistance, the presumption is that the OEX will turn down from its tests of these levels. However, prices have been known to climb envelopes, Bollinger bands, and the underside of trendlines. My own research into a year's worth of data showed that it's dangerous to make assumptions that relate the slope of the envelope (and perhaps Bollinger band) to the likely action of the OEX after it hits that envelope. In other words, it's dangerous to assume that the OEX is going to be quickly repelled when the envelope is horizontal or that it's going to climb the envelope when it slopes up. That was especially true when the OEX was approaching the upper envelope boundary.

Although 530 can be assumed to be round-number resistance also, 532-533 show up on the monthly chart, too, as possible resistance. We may too close, then, to consider long plays unless the OEX dips far enough to give us enough upside. Another dip to and bounce from 522-523 might be a suitable but risky entry for a long, depending on the conditions, but the low VIX/VXO continue to argue caution in bullish positions.

Rollovers from 527-529 also might make good bearish entries, with special caution exercised as the 523.50-524 zone is approached. With futures slightly down as I type, it appears that the OEX is going to open somewhere between support and resistance. Because I have again have initiated several failed plays in a row, I may step back again, giving commentary, but not offering play suggestions unless I see a stellar setup. While we can't equate the ES futures contract to the OEX cash market, those seeking new entries could watch Jim's momentum plays for guidance as to direction and approaching turning points for the markets.

  Jonathan Levinson   12/2/200,  8:56:16 AM
The Fed has 12.75B in intervention money expiring today. We await the 10AM announcement to determine whether the markets will get a net gain or drain from the Fed.

  Linda Piazza   12/2/200,  7:31:57 AM
Good morning. The Nikkei bounced around a lot during Tuesday's trading, but the range wasn't as wide as Monday's. It closed essentially flat, up 6.88 points or 0.07%, at 10,410.15. That was about 36 points off the low of the day, but about 140 points below the high of the day. Banks gained in early trading, despite the government's decision to take over Ashikaga Bank, but by the end of the day, banks were mixed, with Ashikaga and Resona, bailed out earlier in the year, both dropping. Autos had gained early, too, but also were mixed by the end of trading. Many techs gained and held onto to at least a portion of their gains.

Other Asian markets were mixed. In Singapore, Chartered Semiconductor gained in early trading after it announced that it had more orders than expected, and its losses would therefore be less than expected, but Singapore's Straits Times lost 0.51%. The Taiwan Weighted gained 0.70%, and South Korea's Kospi was flat, closing up 0.05%. Higher steel prices helped South Korea's POSCO post a 14% gain in operating profit. Hong Kong's Hang Seng lost 0.36%, and China's Shanghai Composite gained 0.18%. On Monday, government figures showed that Hong Kong's economy grew 4% from the year-ago quarter and 6.4% from the previous quarter.

In the early hours this morning, CNBC Europe commentators happily announced that the CAC 40 had climbed above the key 3500, but it has traded just below that number since that time, with many speculating that European markets are now on hold until after U.S. markets open, or perhaps just to digest strong gains made Monday. Vivendi Universal surprised to the upside and at first posted gains, but then slipped. Perhaps the earnings weren't a big surprise after all, despite being labeled so in at least one article, as CNBC Europe commentators mentioned that Vivendi had prepared investors and analysts to expect the gains. Also, many label the performance of certain of their units, such as the games unit, as abysmal. In Germany, October's retail sales climbed 0.4%, the first gain in four months. ASML, the Dutch microchip equipment maker, updated investors and analysts on its order backlog. With orders being spotty but picking up in recent weeks, the company said that the order backlog would be bigger than its recent guidance had led investors and analysts to expect.

As of this writing, the FTSE 100 was down 11.90 points or 0.27%, at 4398.10. The CAC 40 was up 3.44 points or 0.10%, at 3493.70. The DAX was up 7.18 points or 0.19%, at 3828.38.

  Jeff Bailey   12/1/200,  9:12:44 PM
Market internals .... NYSE and NASDAQ volume, A/D, NH/NL at this Link

  Jeff Bailey   12/1/200,  8:43:25 PM
Pivot Matrix for tomorrow (Tuesday) at this Link

  OI Technical Staff   12/1/200,  6:11:50 PM
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