Option Investor
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  Jeff Bailey   12/5/200,  11:31:18 PM
If you're reading this ... and close to a TV, turn on CNBC and Luis Rukeyser. I'm using some of tonight's show with this weekend's Ask the Analyst column. Listen to guest Lawrence Auriana about his 4 favorite stocks, as we use Mr. Auriana's selections to help answer a trader's question about generating stock trading ideas.

  Jeff Bailey   12/5/200,  7:46:54 PM
Pivot Matrix for next week at this Link

In PINK ... is NDX/QQQ WEEKLY S2s, where trade at these levels would have the backfilling of the 11/21/03 to 11/24/03 gap higher, where no shorts below QQQ $34.50 had the opportunity to cover (break-even) profitable. This is where I would be buyer! Think about today's intra-day trade, an put yourself in the shoes of a bull that bought QQQ at $35.40 on Thursday, got gapped lower today (Friday), but did get opportunity to cut out at $34.49. Now look at Monday's DAILY R1/WEEKLY Pivot correlation. I think on Monday, this $35.37 may come into play. Traders may also want to reveiw this past week's (12/01/03) QQQ charts and our WEEKLY Pivot 38.2% retracement of $35.39.

As it relates to QQQ, more than a few traders e-mailed me yesterday and while not saying "you're looking through rose colored glasses" when discussing the POTENTIAL reverse head/shoulder pattern on the 5 and 10-minute time intervals, some e-mail suggested such. This is fantastic e-mail, but I assure you, I really do try and keep an unbiased view of the MARKET, but try and interpret the technicals to the best of my ability. IF Intel had not reported an UNEXPECTED Q4 charge of $600 million, what would today's trade have been like? Answer... NOBODY KNOWS! However, what if the QQQ had traded back to $36.18 today, and I then made note... "oh... this is the reverse head/shoulder pattern developing yesterday that I forgot to mention." Ooooo that'd make me mad.

Now that I've profiled a swing trade BEARISH TRADE (on my own, not to appease subscribers), I'm going to put on the same pair of glasses, look at a 60-minute chart, and note a POTENTIAL reversed head/shoulder pattern.

I consider this unbiased analysis, but as a trader and technical analyst, I'll point it out. Same thing applies for this POTENTIAL 60-minute interval reverse head/shoulder pattern as applied to the 5-minute interval observation. It's IN PLAY until the left shoulder is violated. The left shoulder I'm talking about is the November 11 trade at $34.85 (see the above Pivot Matrix DAILY S1). On November 11, the QQQ traded a low of $34.85 and bounced to as high as $36.02 by November 14 (congestion highs were either side of $35.80) so we should observe QQQ WEEKLY R1 in this WEEKS pivot matrix.

What I think is going to happen the remainder of the month.... is for a lower trade this week, fill in those gaps (11/21-11/24), then take'em back higher with a Dow 10,000 to finish out the month of December, as mutual fund managers look to end 2003 with a bang (see INDU MONTHLY R2)

  Jeff Bailey   12/5/200,  4:55:54 PM
Closing Internals snapshot at this Link

I know that this will add to your work load but I reeeallly like tne Internals Snapshot on MM. Dick

I received a lot of favorable e-mail from traders regarding today's postings of the Market Internals Snapshot. Dick is correct in that it does add to my workload. While I will not promise further hourly updates for the market monitor, I will post this table in the 01:00 PM EST intra-day updates.

I really felt pressed for time all day today. Let me tell you, trying to setup and profile a day trade, a swing trade, then update them, and try and bring in observations we discuss in the Index Trader Wrap, then write intra-day updates, upload them and post them to the site, it all takes time.

However... on days like today, when all week we were wanting to closely monitor the OEX and NDX/QQQ at what began to develop as some rather obvious support levels, I thought today was a good day to try and bring in some internal observations.

What I got out of the internals today was that while there was some heat to the downside at the open, and for those bulls holding a QQQ from $35.40, the internals didn't really give me any real clear trend/direction. These "mixed" internal observations early, and QQQ holding tough at $35.25, then allowed a bull to hang in there early, but be looking for an exit strategy and thinking... "you know, I think there's a chance I can get out of this break-even if not for a profit."

Once the QQQ bullish position was let go, it was time to regroup.

I had two trades lined up after I closed out the QQQ long at $35.49. I had another day trade long/bullish ready to go (internals were still mixed, saw a lot of sell programs, but little downside taking place after the open) where , when at 12:00, IF the QQQ traded $35.39 after seeing all those sell program alerts around $35.29 not have all that much impact, I was looking to bid the QQQ back at $35.29 for a day trade and target $35.57, with a very tight stop at $35.21.

The second trade I had lined up was the swing trade bearish, where the QQQ was traded (12:30:42), but the trigger came from the OEX trading 524.00, (WEEKLY Pivot 524.59) on thoughts that if three-prior sessions of support have way, we might see a flush lower.

  Jeff Bailey   12/5/200,  4:02:58 PM
QQQ $35.06 -1.59% .... not too far from its $35.04 close from Friday November 14th. The following week, Q's saw trade at their WEEKLY S2, where WEEKLY pivot for 11/17-11/21 was not tested.

  Linda Piazza   12/5/200,  3:58:09 PM
Swing Trade Summary: OEX/SPX/DJX/DIA/SPY
12/01: Entered a bearish OEX trade at OEX 525.59.
12/01: Stopped at 526.50.
Result for that day: 0.91 OEX points against our position.
12/04: Entered a bearish OEX trade at OEX 526.49.
12/04: Stopped at 528.01.
Result for that day: 1.51 OEX points against our position.
Results for the week: 2.42 OEX points against our position.

  Jeff Bailey   12/5/200,  3:58:05 PM
Buy Prog. Prem. Alert .... just before the cash close...

  Linda Piazza   12/5/200,  3:55:19 PM
Yesterday at the time I opened the OEX bearish trade, the 525 put was 5.50 x 5.80. That put is now 6.50 x 7.00, although it was much more profitable at the time I first began typing this entry. Still, we would have been closing that trade at a profit this afternoon. I'd intended to keep the trade open if we had not been stopped and nothing that happened today would have persuaded me to drop it ahead of this afternoon's drop. We just got caught by a spike late yesterday up a penny above our stop, but stops are necessary and there's no use whining about them.

This morning, I mentioned that I thought bear call credit spreads would have been a good idea Wednesday, when I wasn't watching and couldn't price them, or even yesterday afternoon on that spike. A 535/540 spread would have taken in $0.95 credit - commissions yesterday afternoon, even if the trader bought the bought call at the ask and sold the sold one at the bid. Already, that trade is close to being profitable. Give the weekend time to work its magic on time premium, and any further fall should enable a trader to exit profitably, although I usually just let these run until closer to expiration unless the market dictates doing something different.

  Linda Piazza   12/5/200,  3:47:05 PM
Today's OEX candle has been a nearly perfect bearish engulfing candle, missing only yesterday's small upper shadow. However, since that candle comes in the midst of consolidation rather than at the very top of a rise, I'm not sure whether it would carry the same weight. A study of the daily pattern shows a broadening pattern, and this broadening pattern is forming at the top of a rise. That usually has bearish implications, but we've seen a number of these patterns resolve by narrowing into a diamond shape (also usually bearish), breaking briefly, and then zooming up again. I think someone is going to have to write a post-2003 technical analysis book after the numerous failures we've seen this last year.

  Jeff Bailey   12/5/200,  3:42:58 PM
Sirius (SIRI) $2.12 -0.88% ... stopped on yesterday's bullish day trade profile from $2.19.

  Jeff Bailey   12/5/200,  3:16:14 PM
03:00 Internals snapshot at this Link

  Linda Piazza   12/5/200,  3:16:14 PM
The current five-minute OEX pattern looks a little bear-flagish, but if it is a flag, it should probably break down before the OEX moves much above 524. Once above 524, the OEX would then face resistance near 524.75, the site of the broken support. However, with the end of the day and end of the week approaching, I expect sentiment and emotion to rule over whatever is showing up on the technical charts, so now it just depends on how afraid participants are of holding onto stock and/or missing a buying opportunity that might guide decisions into the end of the day. When you place a descending trendline on the OEX tops from 12/03 through to this morning's top, you see that yesterday afternoon's last 30-minute candle that spiked above that line was just an aberration in an otherwise fairly predictable pattern.

  Jeff Bailey   12/5/200,  3:06:11 PM
QQQ $35.01 -1.7% ... here's 10-minute interval chart. Focusing on WEEKLY Pivot break, and upward trend from March lows. Link

Green arrow depicts my thought of BULLISHNESS aboves WEEKLY Pivot and trend.

Pink arrow depicts my thought of NEAR TERM BEARISHNESS below WEEKLY Pivot and trend.

Red arrow depicts my thought of INTERMEDIATE-TERM BEARISHNESS below WEEKLY R1.

We will get new WEEKLY levels after today's close.

  Jeff Bailey   12/5/200,  2:56:29 PM
QQQ $35.05 -1.62% ... after trading session low of $34.95, qqq bounced back to $35.15 about 15-minutes ago, finds resistance at WEEKLY Pivot, edges back lower.

  Linda Piazza   12/5/200,  2:55:31 PM
That test of the 30-minute 100-pma is underway, with that average at 523.79. The OEX pushed a few cents above that level, but couldn't maintain it so far. Oscillators provide mixed evidence on the 30-minute chart, with CCI turning up, Momentum turning down, RSI flattening, and MACD turning down.

  Jeff Bailey   12/5/200,  2:51:42 PM
Sirius (SIRI) $2.15 (unch) ... session low/high $2.14-$2.21.

  Jeff Bailey   12/5/200,  2:48:50 PM
S&P 100 Index (OEX.X) 532.68 -0.73% ... here's a 60-minute interval chart of the OEX and observations. Link

We can see perhaps how on Monday (12/01/01) major amount of buying took place, where the MONTHLY 38.2% retracement of 522.64 gives us a level where bears that saw new highs, may look to sit bids.

Not drawn on the chart would be today's DAILY S2 of 523.07.

  Linda Piazza   12/5/200,  2:37:54 PM
The OEX candles continue to flatline right along its 30-minute 130-pma, currently at 523.03. If the OEX steadies here long enough, then we should expect it to rise first to retest the 100-pma and then to test the broken support up near 524.80 if it gets past the 100-pma.

  Jeff Bailey   12/5/200,  2:27:25 PM
02:00 Internals snapshot ... Link

Green is improvement from prior hour.

Red is deterioration from prior hour.

Blue is unchanged from prior hour.

  Keene Little   12/5/200,  2:23:39 PM
Good analysis Jim. I wouldn't mind of few more of those to inflate the value of my puts. Something needs to be done to inflate the value of those puts.

  Jim Brown   12/5/200,  2:21:35 PM
That half point spike on the VXO at 1:30 got me to thinking. It would only do that if somebody bought a huge number of puts all at once. Considering the sell program that hit at 1:29 I have conjured up a scenario that fits. Assume you have a large portfolio and you think the market is still going up long term but you are worried it might tank short term. You can buy index puts as insurance but that is expensive and you hate to do it unless you need it. So you set a buy stop at say SPX 1063.50 to buy puts only if the market drops. The sell program a minute or two earlier hits your stop loss target and the huge put order goes in at market. Market makers see the big order hit their screens and do what market makers do, jack the prices out of sight. Since your stop loss order was at market you get hosed and the VXO rockets into the stratosphere. This is the only way I can imagine a better than half point gap on the VXO in the middle of the day.

  Linda Piazza   12/5/200,  2:18:25 PM
The five-minute Keltner bands show OEX first resistance at 523.48-523.56, both just below the 30-minute 100-pma.

  Linda Piazza   12/5/200,  1:49:20 PM
Of course, Q-charts cuts out when the markets heat up again. However, as close as I can tell, the OEX now rests on the 30-minute 130-pma.

  Linda Piazza   12/5/200,  1:42:46 PM
The OEX hesitated at its 30-minute 100-pma, but did not bounce from that level. Now it heads down to test the 30-minute 130-pma at 523.03. We're right in the middle of the usual stop-running time of day, so it wouldn't be surprising to see the OEX driven down to see how firm the support might be or driven up to see how firm the resistance might be. When I had originally called a bearish play yesterday, I'd thought it possible that the OEX might eventually break through these 30-minute 100/130-pma's to head down and test the 60-minute versions, slightly lower, but I'd expected a bit of volatility at current levels before that could happen.

  Jim Brown   12/5/200,  1:38:51 PM
Bonds are soaring today. The yield on the ten-year note has dropped to the lows for the month. Link

  Jonathan Levinson   12/5/200,  1:36:06 PM
Feb gold is savoring the air above 407. HUI back above 252.50 as well.

  Jeff Bailey   12/5/200,  1:30:42 PM
Swing trade Short ... QQQ here $35.08, stop $35.55, target $34.80 (WEEKLY S1 target for next week?) into next week.

I'd set this up earlier, simply based on a downside alert set in the OEX $523.73.

With break here, target will be lower, but want to have bearish exposure here.

  Linda Piazza   12/5/200,  1:29:27 PM
The OEX again tests the trendline that has supported it for all this month, slipping beneath it as I type. Thirty-minute MACD also slips beneath the signal line. However, we have that 30-minute 100-pma just beneath at 523.83, so that would perhaps be the appropriate time to see a bounce up to retest the support that's being broken now.

  Jeff Bailey   12/5/200,  1:17:39 PM
Market Internals snapshot at this Link

  Linda Piazza   12/5/200,  1:11:29 PM
This morning, I mentioned that an OEX bear call credit spread might have been a better idea than a directional play this week. Although I wasn't tracking the prices Wednesday while I was away from the MM, I did look yesterday afternoon, as I mentioned this morning. Although it wouldn't yet be possible to sell the spread for a profit, all this churning around wouldn't be churning one's stomach as long as resistance levels held. The OEX could churn around as much as it wanted as long as it stayed below 535.95 - commissions, and you'd be doing fine. We OEX traders might not think highly of making $0.95 - commissions on a trade that endures for days or maybe even until options expiration, but I sure think highly of a non-churning stomach and money in my account.

  Jim Brown   12/5/200,  1:08:55 PM
A new meaning to home alone: Link

  Jonathan Levinson   12/5/200,  1:04:31 PM
While we wait: Link

  Jonathan Levinson   12/5/200,  12:52:26 PM
Ten year notes are rocketing to the upside, now +10.7 bps at session highs. HUI is up 6.08 at 251.73. Equities still red.

  Linda Piazza   12/5/200,  12:45:10 PM
Jim mentioned that the Nasdaq was canceling some COCO trades. When that happens, I'm always reminded of trial lawyers asking a question they know isn't allowed, and then having the jury be instructed to ignore the question and answer. I don't think jurors can ignore what they've heard or its implications so easily, and I doubt traders can totally ignore the vulnerability they saw on those canceled COCO trades, either. (Note: Both my husband and daughter are attorneys, so I'm not being dismissive of attorneys as a group.)

  Jim Brown   12/5/200,  12:36:52 PM
Nasdaq is cancelling COCO trades from 10:46-10:58 AM

  Linda Piazza   12/5/200,  12:34:25 PM
I haven't looked at Donchian channels for a while, but was studying them this morning. On 11/24, the 15:30 candle closed at 519.13, above the top of the (20,2) Donchian channel, signaling an upside break on the scheme I've been testing. One exit would have occurred at the close of the 11/26 10:30 candle, at 517.93, for a loss of 1.20 OEX points. This type of exit occurred on a close below a shorter-term (5,2) channel. The other type of exit I had tested was on a two-point close below the previous 30-minute close. That exit would have triggered on 12/02, on the 14:00 candle, which closed at 524.16. The gain there would have been 5.03 OEX points, but since the trade was held so long, I'm not sure how profitable it would have been. I did not track it with options prices.

Another upside trade was triggered at the close of the 9:30 candle on 12/03, at 527.02, but this trade appeared doomed from the start. The 21(3)3 stochastics were just cycling up from oversold, and contrary to logic, Donchian channel breakout trades usually perform best when the stochastics are already pinned in overbought (on bullish trades) levels when the trade is triggered. One type of exit (short-term Donchian channel type) would have occurred at that same day's 14:30 candle, at 527.19, for a breakeven type of trade. The other would have been triggered at the close of the next candle, at 524.94 for a loss of 2.08 OEX points. There has not been another signal since.

This illustrates the choppiness of this market. Breakout systems work beautifully in a trending market, but the big gains accrued in trending markets have to offset the multiple small losses in a choppy, trendless one. Donchian channels breakouts would not have helped our performance in the last two weeks.

  Jeff Bailey   12/5/200,  12:30:26 PM
10-year YIELD ($TNX.X) session low for YIELD here and down 14.0 bp at 4.228%.

This gives me a bit of a defensive feel toward equities right now, but may simply be a reaction that Fed isn't likely to raise rates anytime soon. This in itself would be a bond market signal that economy is not overheating.

While this observation gives me a defensive feel, what I'm currently observing in the major indices is not all that defensive.

  Jeff Bailey   12/5/200,  12:26:12 PM
Sirius (SIRI) $2.15 (unch) .... session low/high $2.14-$2.20.

  Jeff Bailey   12/5/200,  12:16:53 PM
QQQ $35.28 -0.98% .... 5-MRT observation... see how in the past 15-minutes the QQQ's have found resistance at $35.29. Lots of sell program alerts, but no real decline. I sense great pressure here and a directional break could be coming.

Program alert action is just the opposite found on Wednesday, when SPX was pegged higher at 1,074. We witness a lot of program buys, no action, then hit lower to the close. My thoughts are that big hedge put on.

  Linda Piazza   12/5/200,  12:15:33 PM
Looking at a 30-minute chart of the BIX, the S&P Banks Index, I see that the 21-dma has been descending down to the level of the 100- and 130-pma's, adding its weight to that of the other averages. The BIX is currently just below the 130-pma. It's tried a couple of times to rise above the 100-pma, but it can't muster the strength. This remains a bearish trading pattern, so far today.

  Jeff Bailey   12/5/200,  12:14:30 PM
Sell Prog. Prem. Alert ... SPX = 1,065.09, OEX = 525.25 , QQQ = $35.26

  Jeff Bailey   12/5/200,  12:12:47 PM
Internals snapshot ... Link

Just not seeing anything here that moves me one way or the other (bullish/bearish).

  Linda Piazza   12/5/200,  12:05:24 PM
Q-charts' performance improves today. It's only now beginning to cut out on me, and I've had to change servers only a few times today, but right now, I can't get an up-to-date chart. When it cut out, the OEX was beginning to challenge the trendline that had been supporting prices since the beginning of December.

  Jeff Bailey   12/5/200,  12:04:26 PM
Sell Prog. Prem. Alert ... SPX = 1,061.13 , OEX = 525.20, QQQ = $35.25.

By my count on 5-minute bars, this is 12th of the day.

I count 4 buy program prem. alerts.

  Jeff Bailey   12/5/200,  11:55:00 AM
Market Internals snapshot. Link

  Linda Piazza   12/5/200,  11:24:39 AM
The rising trendline that has been supporting the OEX all this month, perhaps providing a H&S neckline, now crosses at about 424.75. Confounding those who would like to play bearish positions on the OEX upon a break of that trendline is the close proximity of the 30-minute 100-pma, at 523.67. The 60-minute version lately has been more important with respect to the OEX's behavior, with that average now at 521.91, but whether it's more important or not, bearish players should at least expect a period of volatility if not a bounce attempt as the 30-minute 100-pma is tested. I would probably expect a retest of the broken neckline on any bounce from the 30-minute 21-pma. In the past, traders would expect such a retest to be followed by a rollover, but bearish traders have often been confounded lately when such a retest resulted in a zoom up rather than a rollover.

  Linda Piazza   12/5/200,  11:12:22 AM
The Keltner channels show that OEX resistance gathers near 526, with various types of resistance showing up from other sources at a little over and a little under that level. Both the 30-minute and 60-minute 21-pma's are now just a little over 526, for example.

  Jonathan Levinson   12/5/200,  11:10:13 AM
HUI has just launched again, now up 6.8 at 252.45, Feb gold green, up 2.10 at 406.30. Ten year notes have pulled back to a 4.3 bps gain. The US Dollar Index is down to 89.27, back to the edge of the cliff but so far double bottom support.

  Linda Piazza   12/5/200,  11:02:37 AM
Jonathan, I'm finding a lot of the educational stocks on Q-charts' various scans today, such as volume rate scans. SLVN is one I'm seeing right now. Big engulfing candle on the weekly chart.

  Jonathan Levinson   12/5/200,  10:47:33 AM
HUI is back above 250 now, up 4.50. Link

  Jeff Bailey   12/5/200,  10:42:15 AM
S&P Retail Index (RLX.X) 374.61 +0.24% ... first sector I see that was red at the open turn fractions green. Retailers have been hit ever since "Black Friday" sales data. Most likely seeing some short covering here.

Kohls (KSS) $47.69 +1.51% Link ... which has really been the piglet in the sector, traded its PnF chart bearish vertical count of $45 on Wednesday, adding another 1.4% gain today. Note yesterday's intra-day action. Stock gapped higher, then backfilled its gap to $46.00 and BOOM! rallied to the close and extends gains today. Quite indicative of short covering when it comes at a new low, where most likely some institutional targets may have been achieved.

When reviewing historical trade of KSS, in April of last year, KSS did give a sell signal at $55, which gave a bearish vertical count of $49. While that bearish count was negated with a PnF buysignal at $56 in June, stock quickly reversed lower to a June low of $49, reversed up to give a low pole warning by early July, and by September was trading $65.00. Then gave the high pole warning.

  Jeff Bailey   12/5/200,  10:38:25 AM
S&P 100 Index (OEX.X) 526.41 -0.21% .... update to Index Trader Wrap. Morning low so far has been 524.78 and for a fourth-time this week, finds support at its WEEKLY R1, after Monday's break higher. Gives observation that bulls still hold conviction near-term.

  Linda Piazza   12/5/200,  10:35:47 AM
I was discussing with a co-writer the other day one aspect of the markets that has been confounding me for a long time. While I'm not particularly bearish, I do believe that markets ebb and flow, and that weak longs need to be shaken out by a robust pullback before anyone can trust the behavior and feel good about committing new money to equities. If that pullback turns out to be deeper than any imagine, well . . . but that's what we all need to know. I look at some of these monthly charts and can't think of anything but "bubble" and I'd be scared to death to commit my own money to those stocks or any other stocks in the sectors that might be impacted if those stocks implode. What surprises me is this: we see a bearish formation set up and see the expected breakdown. But then there's a rush of buying. But why would the rush of buying come in then, just as the breakdown occurs? If that's really a healthy dip-buying behavior on the part of institutions, wouldn't the institutions want to wait until the dip had played out? We can all calculate predicted downside from a pattern break, so institutions as well as technical traders would have some idea where to come in. Why come in just as the breakdown begins when it certainly looks possible to buy even lower? This behavior just seems suspicious to me and not particularly healthy. If markets are going to continue to rally, then I'd like to be in on it, too, so I'm not committed to trading only bearish, but I sure would want a firmer base than I think I'm feeling beneath my feet.

  Jeff Bailey   12/5/200,  10:34:53 AM
QQQ $35.50 ... here.

  Jeff Bailey   12/5/200,  10:28:49 AM
QQQ $35.43 -0.56% .... OK, QQQ makes a move above BLUE #2 ($35.39).

Day trade update for those long from yesterday's $35.40, will now adjust trade.

Raise stop to $35.15, and SELL new TARGET of $35.49 if achieved.

  Linda Piazza   12/5/200,  10:28:18 AM
The OEX 30-minute indicators show a mixture of settings. Both 5(3)3 and 21(3)3 stochastics show a propensity to roll over, having already completing a bearish kiss. MACD flattens, however, while CCI, RSI, and Momentum, always quicker to react, hook up. I'm always leery when I see a mixture of settings such as this because that kind of mixture can produce choppy behavior. There was a time when I would have given great credence to the fact that both 5(3)3 and 21(3)3 stochastics looked to be rolling down in unison, but stochastics haven't been as reliable since March as they once were, even when ADX indicates that a stock or index is range-bound rather than trending.

  Jonathan Levinson   12/5/200,  10:25:54 AM
Metals are reversing, with a Steve McQueen reversal in the HUI, now up 3.53 at 249.18, XAU +.91 at 110.23. Feb gold is down .50 at 403.70.

  Jeff Bailey   12/5/200,  10:25:28 AM
Sirius (SIRI) $2.16 +0.46% ... here's 10-minute interval chart of SIRI. Link and current thoughts.

  Linda Piazza   12/5/200,  10:12:38 AM
I noticed this potential pattern yesterday, which was the reason I kept the stop on our bearish play to what I then thought was a wide stop: Link I thought the OEX might be rounding down into a H&S pattern, but knew the propensity for second shoulders to be formed and was trying not to narrow down the stop too soon to allow for that second shoulder to be formed. That may have been what happened yesterday, aided by a little short-covering ahead of Intel's midquarter report. We'll just have to see, but it was part of my reasoning then, and nothing has yet invalidated that reasoning.

  Jeff Bailey   12/5/200,  10:05:40 AM
10:00 Internals .... will be an indicator I'll use as quick check of any progress/deterioration taking place during today's somewhat tense session.

NYSE: A/D 979:1427 , NH/NL 50:0

NASDAQ: A/D 654:1,709 , NH/NL 33:7

  Linda Piazza   12/5/200,  10:03:57 AM
The OEX has been doing battle with the confirmation level of yesterday afternoon's five-minute double-bottom. When the OEX hit that level yesterday, it gapped up on a five-minute basis, showing its importance. The gap level is from 525.65 to 525.94. This is a gap on a short-term chart only, so I'm not giving this level long-term significance, but it's certainly playing a part right now.

  Jonathan Levinson   12/5/200,  10:03:12 AM
The put to call ratio is 1.0 for the first half hour, VXO 17.17. Bears, beware of that high 1.0 print.

  Jeff Bailey   12/5/200,  10:02:18 AM
QQQ $35.25 -1.03% ... session low-high so far $35.16-$35.37

  Jeff Bailey   12/5/200,  10:00:33 AM
Sirius Satellite (SIRI) $2.16 (unch) .... updated trade info. Keep bullish stop at $2.12, but now raise day trade bullish target from yesterday's lower revised $2.21 up to $2.30.

  Jonathan Levinson   12/5/200,  10:00:15 AM

  Jonathan Levinson   12/5/200,  9:55:37 AM
Factory orders due now, exp 2%-2.1%, but it's a very lagging indicator.

  Jonathan Levinson   12/5/200,  9:54:47 AM
The Fed has drained 1B net, announcing a 3B weekend repo against 4B expiring today.

  Jeff Bailey   12/5/200,  9:51:27 AM
QQQ $35.31 -0.87% ... here's QQQ with 5-MRT. Link

With reverse h/s pattern negated this morning with trading below $35.25, the economic data due out at 10:00 AM EST, might give the QQQ enough energy to fill its morning gap lower back to the upside. I've marked the $35.50-$35.54 zone with this type of potential fill.

I removed the prior lower PINK retracement, only because my chart was too cluttered based on space limits, but marked some yellow zones lower, which have not yet been tested.

  Linda Piazza   12/5/200,  9:43:23 AM
The OEX is about to reach this trendline that has supported through recent trading: Link

  Linda Piazza   12/5/200,  9:35:05 AM
The first five minutes saw an OEX high of 526.33 and a low of 525.45. The midpoint of that first five minutes lies at 525.89, with the OEX currently below that level, demonstrating early weakness. The OEX remains above the bounce point from the last couple of days, however, so we need to be watchful during the first reversal that usually occurs in a few minutes.

  Jeff Bailey   12/5/200,  9:32:58 AM
Sirius Satellite (SIRI) $2.17 +0.93% .... let's keep yesterday's day trade bullish stop at $2.12 here.

  Jeff Bailey   12/5/200,  9:31:20 AM
QQQ $35.22 -1.1% ... here's my intra-day QQQ chart to start out with. Just cloning a retracement, will add the 5-MRT in a minute. Link

  Linda Piazza   12/5/200,  9:24:12 AM
I'm not going to whine about being stopped out yesterday afternoon by a penny before the markets turned around or about similar episodes in the recent past, resulting in a dismal record for the Swing Trade Model, but I do want to point out that yesterday's instance heightens my growing conviction that this isn't the right time for a directional play. I have a pretty solid idea of where resistance lies. Rather than a pure directional play, we would have been better off to have initiated a bear call credit spread Wednesday, using December 530/535 calls for the aggressive traders and 535/540 for those less aggressive. We could have held onto that bear call credit spread through all the gyrations of the market with great equanimity all through the rest of the week and we wouldn't have lost money on yesterday's trade. Actually, we could have initiated that trade late last week and although Wednesday's trading pattern might have caused us a little heartburn, it wouldn't have been much.

We could have initiated the same play at yesterday's close, after the spike up, too. December 535 calls were 2.45 x 2.80 and the 540's were 1.30 x 1.50. Even if one didn't manage to shave something off in a combo play, as often can be done, you'd have been taking in $0.95/contract minus commissions. (At maximum, if you couldn't shave off a nickel here or there, you'd be buying the 540's at ask at $1.50 and selling the 535's at bid at $2.45.) The most that could be lost would be $4.05/contract (if the OEX closed at or above 540) plus commissions, but chances are strong that the OEX will not close above 535.95, the point at which you'd start losing money (if commissions are not factored in) and chances are also strong that the OEX will dip low enough sometime between now and expiration that the spread could be sold for a profit. Since the OEX settles based on the closing price and you don't have that "wait until the next morning to see what's happening problem" you do with SPX settlement, I sometimes just let OEX spreads expire, collecting the maximum credit.

  Jeff Bailey   12/5/200,  9:17:56 AM
09:00 Update at this Link

  Jonathan Levinson   12/5/200,  8:30:07 AM
Ave. hourly earnings up .1.

  Jonathan Levinson   12/5/200,  8:28:34 AM
Unemployment 5.9%, nonfarm 57K vs. 150K expected. Futures tanking on the nonfarm number.

  Jonathan Levinson   12/5/200,  8:11:19 AM
We await the jobs data at 8:30AM, incl nonfarm payrolls at 150K exp. and the unemployment rate at 6% exp. Factory orders are released at 10AM, exp. 2%, then consumer credit at 3PM.

  Jonathan Levinson   12/5/200,  7:54:51 AM
NEW YORK (Dow Jones)--Bullish sentiment among investors was up during the week ended Wednesday, according to the most recent weekly online survey of members of the American Association of Individual Investors. Bullish sentiment rose to 69.37% from 60.38%, but bearish sentiment fell to 14.41% from 20.75% during the previous week. The percentage of investors who described themselves as neutral on the stock market fell to 16.22% from 18.87%, according to the poll.

That might be lowest percentage of bearish advisors I've yet seen. If it isn't, it's only by a few basis points.

  Linda Piazza   12/5/200,  7:21:24 AM
Good morning. The Nikkei closed down 56.53 points or 0.54%, at 10,373.46. After Intel's midquarter update last night failed to lift the upper limit of its expected earnings range and the company announced an unexpected charge, chip-related stocks fell across Asia. Some posited the theory that the indices fell in reaction to the expected response in U.S. markets rather than to the Intel news itself. Technology stocks were generally lower. Banks also declined, and some automakers did, too. One report suggested that Honda will purchase some Nissan subsidiaries as the two plan a dealership network that promotes cross-selling of both brands. Steelmakers were mixed after President Bush lifted tariffs.

Investors may be nervous ahead of a decision to send Japanese troops to Iraq and ahead of the important tankan survey to be released next week. Today, investors learned that the index of coincident economic indicators for October was at 100%, well above the 50% that marks expansion or contraction, and the index of leading indicators stood at 88.9%. Household spending fell, however, by 0.8%.

Most other Asian bourses also traded down. The Taiwan Weighted lost 0.34% and South Korea's Kospi lost 1.95%. Singapore's Straits Times was flat, however, closing up 0.06%. Hong Kong's Hang Seng lost 0.23% and China's Shanghai Composite lost 0.12%.

Most European bourses currently trade lower, too, with chip stocks also pressuring those bourses after Intel's update yesterday. Steelmaker Arcelor traded lower, saying that the company would not see an immediate recovery from the lifting of U.S. steel tariffs, adding that the weak dollar would effectively continue the protections to U.S. steel manufacturers, a thought expressed yesterday in the U.S., too.

Many feel the European bourses tread water ahead of the release of U.S. employment data this morning. As of this writing, the FTSE 100 has declined 18.60 points or 0.42%, to 4359.60. The CAC 40 has declined 27.06 points or 77%, to 3469.49. The DAX has fallen 19.08 points or 0.49%, to 3855.70.

  Jeff Bailey   12/4/200,  12:28:53 AM
Central Fund of Canada Ltd. (CEF) $5.25 -0.56% ... e-mail from trader/investor that has been holding CEF. Here's a WEEKLY interval chart I worked up per question regarding further upside targets. Link

  Jeff Bailey   12/4/200,  11:10:40 PM
Quick calculation .... when Intel close for trade today at $33.54, its market capitalization was $219 billion. In tonight's after hours trade at $32.47 INTC's market cap would fall to $212 billion.

By my calculations, this equates to a 7 billion hit.

How much was that charge for goodwill?

  Jeff Bailey   12/4/200,  10:13:24 PM
Nikkei-225 ($NIKK) 10,371.51 -0.56% Link .... Down 58-points in early going. Session low/high so far has been 10,366-10,456.

Taiwan Weighted ($TWII) 5,922 +0.03% Link ... with fractionl gain of 1.7 points. Session low/high so far 5,908-5,945.

South Korea's Seoul Composite ($KS11) 794.17 -1.3% Link ... down 11 points. Session low/high so far 791-802

Hong Kong's Hang Seng ($HSI) 12,331.6 -0.09% Link ... down 21 points. Session low-high has been 12,301-12,339 .... 700-point moves don't seem to mean a whole lot in Hong Kong do they? Whack the Dow Industrials (INDU) Link 200-points and that's a "big drop."

  Jeff Bailey   12/4/200,  10:00:34 PM
Pivot Matrix for tomorrow at this Link

  OI Technical Staff   12/4/200,  9:42:52 PM
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