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  Jeff Bailey   1/6/2004,  4:52:56 PM
Closing Internals at this Link

  Jeff Bailey   1/6/2004,  4:18:51 PM
Service Corp. (SRV) $5.70 +2.7% ... I got busy there in the last hour of trading with all heck breaking loose to the upside. I would mind holding this one overnight, as I also think this a good swing-trade long, with that MACD just hooking above its Signal.

  James Brown   1/6/2004,  3:56:10 PM
Bullish traders may want to keep an eye on St. Jude Medical (STJ). The stock was named as one of JPM's top 2004 medical technology picks this morning and shares are up more than 6%. The chart looks like a potential cup-and-handle formation. Look for a move over $64.00.

  Linda Piazza   1/6/2004,  3:55:08 PM
SIRI: A reader asked about this today, and I posted a chart showing some retracement levels. I mentioned that I wouldn't be interested in a long until it pulled back to one of those supporting levels. Well, I should have added that I wouldn't be interested except on a pullback and bounce. SIRI pulled back a hefty percentage today, retracing all the way to the 38.2% retracement of the most recent move, but it's doing it on big volume and oscillators haven't even yet begun to roll down. I'd be scared of it right here if considering a long with this kind of action. I'd want to see it steady off a bit first.

  Jim Brown   1/6/2004,  3:53:04 PM
Editors Play
For those in the Feb-DJX put play I just bought some more puts. I bought the DJV-NX (Feb-$102) strike for $1.05. Strong resistance above us at 10600-10650 and strong possibility we are about done.

  James Brown   1/6/2004,  3:50:31 PM
Another low dollar stock showing strength today is Xerox (XRX). The recent consolidation between 13.50 and 14.00 is breaking out higher on stronger than average volume.

  Jeff Bailey   1/6/2004,  3:48:09 PM
QLT, Inc. (QLTI) $20.23 +4.6% Link ... Jeff: It seems we have a bit of a breakout here. Is this a good enrty in your opinion?

Yes... QLTI is breaking out, and while stocks can exceed their bullish vertical count (RIMM as a good example) would simply note here that QLTI looks to be achieving its bullish vertical count of $20.50.

Can play long, but difficult to assess risk/reward. Would rather be long than short though (bears have no way of assessing risk). That's for sure!!!!

  James Brown   1/6/2004,  3:45:30 PM
Corning Inc (GLW) has really been strong the last two days with volume backing up the move. It is no coincidence that the recent basing near $10 just happens to be on the rising trendline of support that stretches back to October 2002. If GLW offers a dip it may be an entry point for bullish positions.

  Linda Piazza   1/6/2004,  3:40:55 PM
Here's what the OEX is doing with respect to that rising trendline off the 12/10 low: Link

  Jeff Bailey   1/6/2004,  3:38:49 PM
QQQ $37.41 +0.86% ... triggered long alert in swing trade bullish

  Linda Piazza   1/6/2004,  3:32:17 PM
The $TRAN is only slightly more than 10 points away from that 3050.40 March 2002 swing high (closing).

  Linda Piazza   1/6/2004,  3:29:19 PM
Why is this market weird? Because you can enter a trade with the advdec line negative, TRIN bearish, the VXO climbing, and the OEX up against strong resistance at the top of a climb so steep that it's unsustainable, and that all switches around and the thing still climbs. This is still an "I believe" market, and you better believe that it's going to climb continuously and act accordingly. That's going to change sometime, but probably only after we've all turned our backs.

I mentioned in my 9:19 post that during December's climb, the OEX has seen big-range days followed by a doji or small-bodied candle, then possibly another day or so of consolidation followed by another big-range candle. I wanted to watch to see if that pattern continued, and so far it has. It's far enough from the end of the day that MOC orders could still change that formation. The problem is that that two-candle combination is the beginning of a possible three-candle formation known as the evening-star, so this isn't typically a sign of strength. It just has been during December.

  Jeff Bailey   1/6/2004,  3:26:48 PM
Garmin Ltd. (GRMN) $58.25 +6.5% Link ... upside alert here at MONTHLY R1 of $58.18.

  Jeff Bailey   1/6/2004,  3:25:03 PM
Swing trade long alert ... for the QQQ on trade at $37.41, stop $36.90, target $38.20.

  James Brown   1/6/2004,  3:24:53 PM
The analyst currently on CNBC, Ed Yardeni with Prudential Equity Group, told Bloomberg yesterday that he expects the S&P 500 to hit 1300 by year end, a gain of 17% from last Friday.

  Jane Fox   1/6/2004,  3:21:13 PM
Linda I am doing my part in making them go higher because I am short NQ at 1504. You know the old saying plan your trade and trade your plan. (Gulp!)

  Linda Piazza   1/6/2004,  3:18:07 PM
That's not my fault, Jane. (Grin.) I did my part to send the markets lower into the expected retracement by getting stopped out of my bearish position.

  Jeff Bailey   1/6/2004,  3:17:20 PM
03:00 Internals at this Link

  Linda Piazza   1/6/2004,  3:14:26 PM
Me, too, Jim. (See Jim's 15:12 post on the Futures side of the Monitor.) I just got stopped on that last push and the OEX immediately fell back below my stop value, so now it can fall through the rest of the afternoon.

  Jeff Bailey   1/6/2004,  3:02:12 PM
Comcast Corp. (CMCSA) $33.45 +0.57% Link ... Upside alert I had set here at MONTHLY R1 of $33.47 on this stock.

  Linda Piazza   1/6/2004,  2:58:43 PM
The TRAN bounced today and is again within a day's reach of the 3050.40 closing swing high from March 2002. It's at 3033.44 as I type, but the flatlining oscillators don't give a clue as to whether it's more likely to fail in its test of that previous high or whether it's likely to push above it sometime this week--except that the flatlining MACD is showing bearish divergence with the price, not climbing as price does.

  Jim Brown   1/6/2004,  2:52:33 PM
French Flight:

A national network should never rely on a local news report from a source that does not know what a heated motorcycle jacket is. A female passenger was removed from the flight BEFORE it left France because she had wires protruding from her motorcycle jacket (it was an electrically heated jacket, or so goes the report).

The current report is that the flight IS NOT being escorted by iron darts, but there is a persistent rumor that the Bandidos and the Hells Angels are planning a retaliatory strike on the French.

Now that is funny and probably closer to the truth!

  Linda Piazza   1/6/2004,  2:46:43 PM
The OEX five-minute pattern now begins to look a little like a bullish right triangle with a flat top at 557.10 or so (with one minor violation of that level) and with an ascending, supporting trendline as the bottom side of the triangle. That would support Keene's thesis of a rise into the close, which we've certainly seen happen often enough. However, it's also possible to describe the formation as a rectangular one with a flat bottom just below 556 with a period in which that support was briefly violated this morning. The presumption with a rectangular formation is that it also will break out in the direction the OEX was going when the consolidation began--up--but the outcome is less certain with that type of formation. It would be more of a neutral formation than the bullish right triangle. We may soon be seeing the resolution, whichever it is, as the OEX climbs as I type. I'm just glad I've got a stop set on my bearish position so I don't have to second-guess myself all day.

  Linda Piazza   1/6/2004,  2:38:49 PM
So far, we've had 731 new highs today, balanced against 9 new lows. Adv:dec ratios remain modestly bullish for both exchanges. Down volume is higher than up volume on the NYSE, but up volume is more than double down volume on the Nasdaq. Total volume has been 1 billion on the NYSE and 1.6 billion on the Nasdaq. I used to hear that good volume but no progress was a bearish development, but . . . it takes a lot for me to believe those bearish predictions these days.

  Jane Fox   1/6/2004,  2:25:02 PM
American Bankers Association (ABA) reported today the percentage of customers who were late on their credit-card bills hit a record high in the third quarter of 2003. However, a seasonally adjusted 4.09% of credit-card accounts were past due in the third quarter, up from 4.04% in the second quarter and from 4% a year earlier but well below the record of 5.45% set in 1996. Analysts say the situation will only get worse and credit-card delinquencies are likely to stay high until the job market improves.

  Jeff Bailey   1/6/2004,  2:19:03 PM
02:00 Internals at this Link

  Jane Fox   1/6/2004,  2:18:59 PM
BAE Systems (BAE), Northrop Grumman (NOC) and United Airlines (UAL) will receive $2 million each over six months to develop plans for antimissile systems to defend commercial planes against shoulder-fired rockets.The companies, chosen from among 24 that sought the contracts, will develop and test prototypes and the government then will decide whether to choose one or more to further develop a system.

  James Brown   1/6/2004,  2:14:35 PM
I never would have thought December as a strong month for Wendy's (WEN) but the company announced this morning that same-store sales were up 9%. This is on top of the Mad Cow scare that surfaced last month. Evidently this is the third consecutive month of strong same-store sales numbers for WEN and the company is reaffirming its estimates. Shares are up on the news but currently struggling with resistance at $40.00. WEN also has tough resistance at $41.50 if you look at its weekly chart.

  Jim Brown   1/6/2004,  2:12:08 PM
NBC reporting a terror suspect on an air France flight about to land in Ohio. Aircraft being escorted by fighter aircraft. No further details.

  James Brown   1/6/2004,  2:08:33 PM
The SOX semiconductor index isn't seeing much follow through on yesterday's big gain but then it isn't seeing much selling either. Contributing to investors unwillingness to unload chip stocks is a big move by Varian Semiconductor (VSEA). The stock is up 5.7% after pre-announcing positive earnings. The company has raised their Q1 outlook to 11 cents a share, above the Reuters estimates of 6 cents. Revenues are expected to be near $100 million, above consensus estimates of $89 million.

Lehman Brothers was also getting in on the act with an upgrade for VSEA from "equal weight" to "over weight" and a new price target from $48 to $58.

Currently VSEA is trading above short-term resistance at $47.50.

  Linda Piazza   1/6/2004,  2:08:30 PM
OEX Keltner channel resistance has thinned out above the current OEX position. Usually when that happens, it's easier for the OEX to rise, but I've been noticing something curious today. Today, the OEX advances have been held back rather handily by a single line of Keltner resistance, with those single lines either turning it back after the OEX briefly pierced the lines or being the cause of some hesitation. We'll see if that holds true for the rest of the day, as it might just be an anomaly, but that's somewhat of a change from previous observations.

  James Brown   1/6/2004,  2:00:50 PM
Speaking of AAPL the company is due to announce earnings on January 14th and the stock has made a nice turnaround in the last two weeks finally clearing the simple 50-dma and resistance at $22.00.

  James Brown   1/6/2004,  1:59:05 PM
That's intersting...it was just a couple of days ago that rumors surfaced of Apple Computer (AAPL) making a smaller version of their successful Ipod mpeg player. The company denied such claims and some analyst came on TV and said it was probably just a hopeful teenager somewhere in a chat room. Yet just now on CNBC they showed Steve Jobs introducing a smaller version called the Ipod Mini.

  Jeff Bailey   1/6/2004,  1:58:52 PM
QQQ $37.25 +0.43% ... there it is... $37.26. Hey... eBay just hit an all-time high. Shorts may be picking up their short-covering here.

  Linda Piazza   1/6/2004,  1:58:22 PM
Here comes our stop-running push. Maybe. It's coming as the OEX trades sideways over the now-flattening 30-minute 21-pma. There's Keltner channel and other support coresponding with that support at 555.57 possibly offered by the moving average. Let's see where this goes, though, as these pushes sometimes get immediately slapped back.

  Jeff Bailey   1/6/2004,  1:56:12 PM
eBay (NASDAQ:EBAY) $65.19 +0.83% ... another all-time high.

  James Brown   1/6/2004,  1:55:08 PM
Aggressive traders looking for a put candidate might want to keep an eye on Inamed Corp (IMDC). IMDC made a lot of headlines in October after an FDA advisory panel approved the reintroduction of silicone breast implants if certain conditions were met. Since that time the decision has come under fire and shares have slowly been wilting. Now there is a high level of headline risk either direction with IMDC should either side gain an advantage. In the mean time the current trend looks bearish and after IMDC breaks the $45.00 level it should target the 200-dma near $40.00.

  James Brown   1/6/2004,  1:46:53 PM
Video game retailers are on the rise today. Eletronic Boutique (ELBO) narrowed its earnings guidance to the higher end of its range after reporting stronger than expected same-store sales numbers for the holiday shopping season. Shares of ELBO have rallied strongly for two days and have filled the gap from November 3rd when the company warned.

Fellow video game retailer GameStop Corp (GME) is following in ELBO's footsteps and surging more than 12% on very strong volume.

Meanwhile video-game producer Take-Two Interactive (TTWO) is also on the run today, up 9.87% and breaking back above resistance at $30.00 and its 200-dma.

  Linda Piazza   1/6/2004,  1:36:54 PM
The OEX has traded sideways into the 30-minute 18/21-pma's, currently at 555.68 and 555.44 respectively. This kind of action has typically produced a bounce in the past. We're in the usual stop-running time of day, so it's possible that we could see either a quick dip to test that support or a quick push up toward today's highs, with the reaction to either type of push telling us much about final direction.

  Jonathan Levinson   1/6/2004,  1:36:20 PM
The put to call ratio is now .62, VXO hanging low at 15.78. The TRINQ is at the lower end of bullish territory at .58, TICKQ -74.

  James Brown   1/6/2004,  1:32:12 PM
Brocade Communications (BRCD) is driving the strength in the GHA hardware index. Shares of BRCD are currently up 6.4% after Lehman Brothers upgraded the stock from "equal-weight" to "over weight". LEH also raised their price target from $6.00 to $7.50. Yesterday BRCD broke above its 50-dma and closed at $6.30. The upgrade today sent it to $7.00 before profit taking brought it back to 6.71.

  Linda Piazza   1/6/2004,  1:29:07 PM
For reference, today's OEX low has been 555.53. That's just below the bearish #2 on Jeff's 5MRT system, a level that was pierced on a five-minute basis, but not closed below on a five-minute basis.

  James Brown   1/6/2004,  1:27:15 PM
Atrix Labs (ATRX) just announced that it had completed its Phase III trials for Atrisone, an acne drug. Shares are shooting higher by more than 3.4%. There should be some resistance near $27.

  James Brown   1/6/2004,  1:25:24 PM
Maxim Integrated (MXIM)...MXIM was on our watch list last night and shares are performing strongly today, up 2.42%. The stock appears to be breaking out of a bull flag consolidation. There is some resistance at 52.50 but the $55 level looks like a good target for the bulls. Its MACD also looks very bullish.

  Linda Piazza   1/6/2004,  1:24:30 PM
The time for today's stop-running push period approaches in the next half hour period, but if today holds true to form, nothing much will happen, except perhaps stop me out the put position I'd rolled up into this morning. After thinking that I'd sold the OEX put I'd been holding too long and discovering that with family visiting, I either did not push the transmit button or made a mistake in my pricing, you can be sure I have a stop set today and I'll let IB do the selling for me. It's set just over the high of the day, a conditional order based on OEX pricing, so I could get taken out on a stop-running push this afternoon. I haven't had a good time this week, making that mistake, and making another when I sold a long position in CDE that I'd been using to hedge my bearish OEX position too soon, making a handsome profit but not as much profit as if I'd held on a bit longer.

  Jeff Bailey   1/6/2004,  1:23:19 PM
01:00 Internals at this Link

  Jeff Bailey   1/6/2004,  1:19:49 PM
QQQ $37.17 +0.21% ... Swing trade bull alert .... Will raise bullish profit stop to $37.04.

  Jeff Bailey   1/6/2004,  1:09:11 PM
QQQ $37.19 +0.26% ... Jeff: I see the QQQ traded your target of $37.25, or was that a bad tick? I didn't see an exit alert.

The QQQ did trade $37.25. I've got an alert set at $37.26.

  Linda Piazza   1/6/2004,  1:07:26 PM
I'm noting that there was bullish divergence on the five-minute chart, with MACD and stochastics reaching lower lows while the OEX reached a higher low on that last dip toward 556.

  Jonathan Levinson   1/6/2004,  1:06:39 PM
The US Dollar Index is seeing a battle waged in the 85.60 area. Meanwhile, the put to call ratio is up to .64, VXO down to 15.76.

  Jeff Bailey   1/6/2004,  1:04:47 PM
VeriSign (VRSN) $17.58 +2.8% Link .... continues to impress and another 52-weeker.

  Linda Piazza   1/6/2004,  1:04:25 PM
I should pay attention to my pre-market observations, when my observations are clearer, I think. I think Keene has said something to that effect, too, but my second post this morning commented on the frequency with which days like yesterday are followed by doji or small-bodied candles since December's climb began. So far, that's exactly what we're seeing.

  Jeff Bailey   1/6/2004,  1:02:22 PM
Service Corp. (SRV) $5.58 +0.54% .... here's my bar chart of SRV, with fitted retracement. Link

I had upside alert triggered yesterday, but wanted to see a smidge more bullishness above yesterday's high, and set alert there at $5.59. Thinking a big bull might come in and "top off" a position they look to be building.

  Linda Piazza   1/6/2004,  12:58:23 PM
Reader Question: SIRI ... XMSR ... Seems a lot of upside moves the last weeks, auto show this week, Las Vegas convention presentations for satellite radios, are these over valued, especially interested on XMSR, also hype on Gudlow & Cramer show last night on these stocks...

These stocks have received a lot of hype lately, and SIRI in particular has been the subject of several articles I've seen saying that it was expected to "catch up" to XMSR. I took a look at a stockcharts.com perf chart, comparing the two, and it's clear that SIRI has been outperforming XMSR since mid December, and in fact outperformed XMSR much of the spring and summer months. When I'm wondering about value and upside potential, I always check P&F charts first. SIRI's P&F chart reveals that it's on a P&F buy signal, has moved above its bearish resistance line, and is currently in an "X" column, all signs of strength. That P&F upside target is $4.50, however, not so far from SIRI's current level. While stocks can and do exceed their upside targets, a glance at the bar chart shows that SIRI is experiencing increased volatility as it approaches that target. Here's what I note on SIRI's daily bar chart: Link

XMSR has an ascending triple top breakout signal with an upside price target of $37.00. XMSR currently is in an X column and is above the bearish resistance line, so also shows strength. The daily chart shows a well-defined ascending regression channel that XMSR has been following nicely for several months. Take a look at XMSR on a monthly chart, however, and you'll see a stock that has been charging upward since November, 2002 with nary a pause. Volume gained as XMSR started its charge up the charts, confirming the strength, but that kind of climb begins to worry me a little. Let's look at the daily chart, though. Link A study of that chart shows that XMSR might be due to a pullback to the $25.50-$26.00 level before it moves above next round-number resistance at $30.00. Below that, support might be found at the 50-dma, with strongest support near the 38.2% retracement, near round-number support at $20.00. Even stronger support lies along the gently sloping red trendline seen on the chart, with the 200-dma rising to meet that trendline. At some point or another, XMSR needs to retreat to that 200-dma and the more gently sloping trendline to re-establish support, but I'm not sure it's going to happen any time soon. Because of that possibility, I'd sure feel better about an entry nearer $20.00 than $28.00, though, but until and unless XMSR violates that ascending trendline, there's no guarantee that such an entry would be offered.

I think I remember one of my co-writers covering SIRI lately. Anyone else want to chime in? Jeff, was that you?

  Jonathan Levinson   1/6/2004,  12:34:45 PM
Put to call ratio .63, VXO 15.94, down 4.61%.

  Jeff Bailey   1/6/2004,  12:27:17 PM
12:00 Internals at this Link

  Linda Piazza   1/6/2004,  12:11:14 PM
Since 11:00, the OEX has been falling, then climbing in a series of bear flags, then breaking down out of those bear flags and falling again. This is best seen on a one-minute chart. So far, this looks like an orderly decline, but the advdec line remains positive and the OEX is soon going to hit the likely support offered by its 30-minute and 60-minute 18/21-pma's. I would expect things to get a little more disorderly at that point.

  Jeff Bailey   1/6/2004,  12:10:06 PM
Day trade long alert ... Service Corp. (NYSE:SRV) $5.59 +0.72% ... long market, stop $5.45, target $5.88.

  Jeff Bailey   1/6/2004,  12:07:12 PM
S&P 100 Index (OEX.X) 556.23 -0.19% ... After looking at the OEX chart shown in Market Monitor, and several near-term levels of resistance (560) noted, I'm looking at the OEX's largest market cap weighted stock in General Electric (NYSE:GE) $31.34 -0.75% Link here this morning. I see a rather obvious head/shoulder top pattern in this one, and would tie in OEX 560 with the current "right shoulder."

  Linda Piazza   1/6/2004,  12:02:36 PM
The 30-minute OEX 18/21-pma's lie at 555.29 and 554.68 respectively and could be considered to be the next firm hesitation point for the OEX if it should continue to fall. The 60-minute versions have even more importance, with those averages at 553.71 and 553.03, respectively. Actually, I expect the OEX to retest its 60-minute 100-pma sometime over the course of the next month, however, as it's been so far extended above this important moving average for a long while, but that doesn't mean that the OEX won't bounce around a bit as it hits those 21-pma's and it doesn't preclude another attempt at a new high first.

  Linda Piazza   1/6/2004,  11:49:01 AM
Next OEX Keltner support is showing up near 556.25, with next support below that between 554.86-555.17. Support is beginning to firm up a bit now, with resistance lines thinning out. That may mean a small bounce on the very short term.

  Jonathan Levinson   1/6/2004,  11:47:29 AM
Put to call ratio down .63, VXO 16.46.

  Linda Piazza   1/6/2004,  11:45:07 AM
I was just doing calculations to find the exact number for the 38.2% retracement of the bear-market decline on the OEX. The Fib tools on Q-charts are great, but when you're dealing with monthly candles, just a little mistake in placing the tool can make a big mistake in calculating those figures. The exact figure for that retracement level on the OEX is 561.23, not the 560-ish number that the Fib tool was giving me. That gives the bearish OEX player entering now vulnerability up to that level or maybe even slightly above that level. I still think the nice round-number resistance at 560 might be expected to play a part. Just as an aside: doesn't it seem so strange now that the OEX once traded a high of 846.40?

  Linda Piazza   1/6/2004,  11:39:34 AM
The OEX did break down out of the supposed bear flag on the one-minute chart, but it did not reach a new one-minute low and now rises again, which puts the whole bear-flag synopsis back in question. However, the OEX could still be forming a symmetrical triangle or a rectangular bottom of a "b" distribution pattern. A move much above 556.60 would either of those possibilities into question, however.

  Linda Piazza   1/6/2004,  11:33:21 AM
Turning to the OEX one-minute chart shows a probable bear-flag climb after the steep drop from earlier. If that's what it is, it should drop out of that flag before moving higher than 556.76 or so.

  Jeff Bailey   1/6/2004,  11:33:20 AM
Ciber Inc. (CBR) $9.23 +1.98% Link .... today's trade at $9.29 came right at this stock's MONTHLY R1, where we've now seen a higher trade at MONTHLY Pivot of $8.76 and MONTHLY R1 $9.29.

CBR also trying to break out of nice little wedge, if bearish trend were taken from its 11/04/03 relative high of $9.70. Support should be firm at MONTHLY S1 $8.12.

  Jonathan Levinson   1/6/2004,  11:10:37 AM
The put to call ratio is up to .68, a decent jump from the previous .54 reading and back into neutral territory after that .45 opener. VXO is 16.51 here, down 1.2%.

  Jeff Bailey   1/6/2004,  11:09:33 AM
11:00 Internals at this Link

  Linda Piazza   1/6/2004,  11:08:22 AM
The OEX is now almost 14 points above its 60-minute 100-pma, with the OEX not usually moving that far away from this important average. Two resolutions often happen in this case--either the OEX pulls back to that average or it consolidates sideways while the average climbs. I haven't watched the OEX with relationship to this average when there might be a buying crescendo, however, so don't know how it would behave under that condition, if such should occur.

  Linda Piazza   1/6/2004,  11:00:04 AM
The VXO is testing the low of the day as the OEX moves back toward the opening high.

  Linda Piazza   1/6/2004,  10:48:17 AM
There's a sort-of inverse H&S on the OEX three-minute chart, but it's not confirmed by MACD bullish divergence as the head was formed. (H&S's can sometimes be continuation patterns, although that's not how they usually form.) It is, however, echoed by an inverse H&S on the 3-minute 21(3)3 stochastics, with the stochastics neckline violated to the upside at the same time the OEX appeared to move above the descending neckline of its misshapen formation. The OEX immediately turned down, rejecting the formation. There's the possibility that it's just forming a second shoulder. I'm watching this not because I expect three-minute formations to be reliable, but because this is one tool that can be used to gauge short-term weakness and strength. If the OEX can't move back above the neckline, that's showing short-term weakness. If it can't then meet the projected upside target (about 557.70 or so) after confirming the formation, that shows us weakness, too. Meeting the target would confirm short-term strength.

  Jeff Bailey   1/6/2004,  10:43:18 AM
Sell Prog. Prem. Alert .... SPX = 1,119.88 , QQQ = $37.07

On 5-minute bars, this is 4th sell program premium alert of session. No buy program premium alerts so far.

  Jeff Bailey   1/6/2004,  10:38:22 AM
AMEX Gold Bugs Index ($HUI.X) 249.14 -2.75% .... here's a chart of $HUI.X I've shown in the past. Looks like a double-top forming. Link

  Jonathan Levinson   1/6/2004,  10:36:32 AM
The put to call ratio is up to .54, VXO 16.60.

  Linda Piazza   1/6/2004,  10:31:15 AM
The $TRAN hugs its 10-dma today, with that MA at 3011.60 and the $TRAN at 3017.45 as I type. The TRAN has dipped below that MA on an intraday basis over the last couple of weeks, but never very far, and it hasn't closed below that average since December 10.

  Linda Piazza   1/6/2004,  10:23:39 AM
Keltner channels show resistance gathering at 556.75-556.85, but support is also gathering at 555.55-555.60 and at 554.28-554.48.

  Jeff Bailey   1/6/2004,  10:15:54 AM
QQQ $37.00 -0.25% .... low/high $36.95-$37.16.

  Jeff Bailey   1/6/2004,  10:14:53 AM
Sector action finds Dow Jones Home Construction (DJUSHB) 574.18 +2.24% and Networking (NWX.X) 267.16 +1.2% sector gainers. DDX.X +0.33%, RLX.X +0.2%, HMO.X +0.32%, XAL.X +0.51%, OSX.X +0.42%.

Losers HUIX. -1.24% , SOX.X -0.85%, GSO.X -0.63%, IUX.X -0.48%

  Linda Piazza   1/6/2004,  10:13:05 AM
The midpoint of yesterday's OEX big-range day lies at 553.65, a known S/R level. We're not really seeing bearish action until and unless the OEX moves below that level, with a close below that level confirming the bearishness. I'm still wondering about the possibility of a small-range day today, however, but not certain that's going to happen. Instead, I want to watch for a continuation of the usual pattern (large-range day followed by a small-range day, another day or so of consolidation, and then another big-range day) or for a change in that pattern. A big dip today would constitute a change in that pattern. The TRIN is kind of hanging in there but not really continuing to rise; the VXO is trying to rise, but still at low levels; and advdec is negative, but not disastrously so: I'd say this all has a bearish tenor, but not one bearish enough to predict final direction for the day.

  Jeff Bailey   1/6/2004,  10:10:07 AM
10:00 Internals at this Link

Monday's Internals at this Link

  Jonathan Levinson   1/6/2004,  10:04:34 AM
The put to call ratio opened at .45, an extremely low reading and a sign of caution for bulls, particularly with the 30 minute cycle oscillator so toppy. VXO 16.58, -.78%.

  Linda Piazza   1/6/2004,  10:02:55 AM
The OEX remains poised on that ascending trendline off the 12/10 low. European markets did not show much reaction to their also-disappointing services number, so let's see what happens here. I'm watching TRIN, advdec, and the VXO to help guide my decisions.

  Jim Brown   1/6/2004,  10:01:00 AM
Challenger Report = 93,020 (last 99,452)

  Jim Brown   1/6/2004,  10:00:37 AM
November Factory Orders = -1.4% (est -1.5%, last +2.2%)

  Jeff Bailey   1/6/2004,  10:00:19 AM
QQQ $37.02 -0.16% ... low of session here.

  Jim Brown   1/6/2004,  9:59:20 AM
December ISM Non-MFG Index = 58.6 (est 60.3, last 60.1)

  Jeff Bailey   1/6/2004,  9:58:23 AM
QQQ $37.12 +0.08% ... Low/high $37.05-$37.16

  Jonathan Levinson   1/6/2004,  9:54:22 AM
The Fed has announced an overnight reverse repo of 2.5B, which, combined with the expiry of yesterday's 6.25B overnight repo, makes for a drain of 8.75B for the day. I have no doubt that the Fed is trying to defend the dollar with these drains, but billions are relatively small amounts in the massive currency markets.

  Linda Piazza   1/6/2004,  9:49:44 AM
Keltner resistance for the OEX still remains thicker than support, but resistance is beginning to thin out, too. So far, the Keltner resistance is stopping the OEX, but with five-minute oscillators turning up, I don't have too much faith that it will continue to do so.

  Jeff Bailey   1/6/2004,  9:46:13 AM
QQQ $37.09 (unch) .... morning range so far $37.05-$37.16

  Jeff Bailey   1/6/2004,  9:43:28 AM
Networking Index (NWX.X) 267.20 +1.10% is loan sector winner in early trade.

Fractional sector losses across the board at this point, with the AMEX Gold Bugs Index ($HUI.X) 255.10 -0.42% and Utility Index ($UTY.X) 305.57 -0.41% early weakness.

  Linda Piazza   1/6/2004,  9:41:41 AM
The OEX temporarily finds support at the bearish #2 on Jeff's 5MRT system, but will soon face those gathered Keltner resistance lines at 556.30-556.50.

  Linda Piazza   1/6/2004,  9:39:02 AM
Markets have a way of speeding down to next support or up to next resistance just ahead of the release of economic numbers, and that may be happening this morning. Keltner channels show resistance lines now gathering much more thickly than support lines, with the interpretation being that the OEX will find it easier to move down than up on a very short-term basis.

  Jeff Bailey   1/6/2004,  9:37:22 AM
QQQ $37.13 +0.10% ... opening 5-minutes was low/high $37.06-$37.15, where high comes just under the WEEKLY R2 of $37.16.

Swing trade stop alert adjustment can have swing trader placing stop at $36.83. 5-MRT gives a RED #4 at $36.85. This stop will allow time for today's 10:00 AM EST release of economic data.

For upside intra-day ... BLUE #2 at $37.25, Blue #3 at $37.30 (tie with MONTHLY 19.1%) and BLUE #3 at $37.36 (tie with MONTHLY R1).

  Linda Piazza   1/6/2004,  9:35:29 AM
During the first five minutes of trading, the OEX ranged from 557.04 to 556.31, with a midpoint at 556.67. The OEX is below that midpoint currently, indicating weakness in earliest trading, but it's above 553 support and I think we're going to have to wait for 10:00 numbers to see the final reaction. I think a push up toward 560 still can't be ruled out, but I think that's the last hurrah for a little while if such a push does occur. That doesn't mean I think markets will collapse, but only pull back or consolidate for a while. We'll have to see how they perform before deciding whether the damage will be worse than that.

  Jeff Bailey   1/6/2004,  9:27:28 AM
QQQ $37.09 ... ticking unchanged at $37.09 in pre-market trade. Swing trade bullish stop alert will have me raising bullish profit stop to $36.85. I may fine tune this with a 5-MRT. Target remains $37.25.

  Linda Piazza   1/6/2004,  9:21:45 AM
With the OEX at new highs, the nested Keltner channels are particularly useful in determining where support or resistance might lie. The OEX ended the day yesterday very extended according to those Keltner channels, although I've seen it more extended. Nearest S/R lies near 556.15, but I'm unsure whether the OEX is likely to open above or below that level. If the OEX opens below, as is possible but maybe not probable, then it's going to serve as resistance. Next Keltner support shows up near 555.25 and then 553.86-554.35, near the 30-minute 21-pma at 553.44, but those Keltner levels are going to change based on what happens in early trading, too. Lowest Keltner support is at 551.41, which is just below the 60-minute 21-pma at 551.98.

There's no Keltner resistance showing up yet, since the OEX closed the day extended outside those Keltner channels. The envelopes I watch show 30-minute resistance at 557.22 and 560.91, but both those envelope lines are rising and can be climbed. The 60-minute envelope shows resistance at 559.43.

I should note that the OEX still weaves itself around the trendline rising off the 12/10 low, still following it fairly closely, although it did drop about 5 points below it on Friday's drop.

  Jeff Bailey   1/6/2004,  9:20:37 AM
09:00 Update posted at this Link

  Jane Fox   1/6/2004,  9:19:11 AM
Just as Google is preparing a long-awaited initial stock offering, Yahoo is expected to dump the search engine as its primary search technology on the Yahoo site within a few months. Yahoo also wants to combine personalization and customization features to extend the usefulness of searches and expand its use of "paid inclusion," that frequently surveys a merchant's site for the most up-to-date information and costs participants from 15 cents to more than $1 when visitors click on a link for that merchant. Yahoo wants to compete with Google by adding features its rival can't easily match. "We're not going to beat the competition by being the competition," says Jeff Weiner, the company's senior vice president in charge of its search and marketplace services. "We're going to beat the competition by being Yahoo." Gutsy move in my estimation.

  Linda Piazza   1/6/2004,  9:19:01 AM
Yesterday's OEX daily candle was a bullish one, like those seen repeatedly during December's steep climb. Usually those big-range days were followed by smaller-range days, often by a doji with prices closing near the opening level, so we'll watch to see if there's a change in pattern today. I continue to believe that the 560-ish area is both a price magnet and a strong resistance level, and it's difficult to believe that such an important Fib level will not produce either a pullback or prolonged consolidation. While I wouldn't discard the idea that the OEX could overshoot that level by a bit, I would think that consolidation or pullback would occur either before or just after that level was breached. The markets have surprised us by not hesitating much at what would normally be considered important S/R levels and then finding support or resistance where we didn't expect it, so anything can happen, but that's the scenario under which I'm operating now. One caveat to this theory is that everyone now expects such a pullback to occur, due both to the important levels being tested across various markets and also to the historical seasonal trends. You know what happens when everyone is lined up on one side of a theory, right?

  Jane Fox   1/6/2004,  9:18:51 AM
In a previously undisclosed ruling, the Army Corps of Engineers has exonerated Halliburton (HAL) of any wrongdoing in a Kuwait fuel-delivery contract that Pentagon auditors asserted had overcharged the U.S. government by more than $100 million. The release stated Halliburton's Kellogg Brown & Root had provided enough data to show it had purchased the fuel and its delivery to Iraq at a "fair and reasonable price."

  Linda Piazza   1/6/2004,  9:18:42 AM
European bourses have been climbing since my earlier report, but the FTSE 100, CAC 40, and DAX each approached flatline levels within the last hour and each bounced down, so final direction is unclear.

  Jonathan Levinson   1/6/2004,  9:18:29 AM
We await construction spending for Nov., est 0.5%, Factory orders est. -1.5% and ISM services for Dec., est. 60.8, all being released at 10AM.

  Linda Piazza   1/6/2004,  9:18:19 AM
Good morning. The Nikkei opened above 10,900, climbed briefly, and then fell throughout the rest of the day. It closed a few points off its low of the day, down 11.18 points or 0.10%, at 10,813.99. After U.S. economic numbers showed strong machinery orders, Asian construction-related stocks gained in early trading, but banks and automakers proved weak. Automakers had gained in Monday's trading after weekend statements coming out of the Detroit auto show, but dollar weakness finally caught up with the sector Tuesday, sending the auto stocks lower. Tech stocks were mixed.

Other Asian bourses were mixed. The Taiwan Weighted gained 0.30%, but South Korea's Kospi traded flat, down 0.08%. Singapore's Straits Times was also flat, but Hong Kong's Hang Seng gained 0.24%. China's Shanghai Composite gained 0.39%.

Some European markets are closed for a religious holiday today. Dollar weakness also hit European automakers, with that group helping to send many European bourses lower. Goldman Sachs lowered its outlook on the European carmakers to cautious, mentioning dollar weakness against the euro. Eurozone PMI for December missed expectations, falling to 56.6 from the previous 57.5, but market watchers deemed the dollar weakness against the euro as having more impact today than that miss. Stock-specific news sent Roche lower after the pharmaceutical company and partner Trimeris put trials of an AIDS drug on hold and news sent Commerzbank higher when it made changes in employee pension plans that will increase odds that it could be a takeover target. German utility Rwe fell after it revealed that revenue and net income will fall, although operating profit will climb at least 18 percent, in line with earlier expectations. French enterprise software maker Business Objects rose after Jefferies & Co commented on their channel checks of the company's prospects, saying that the French company was close to signing a large transaction and is likely to have a strong first quarter.

Currently, the FTSE 100 is down 12 points or 0.27%, to 4501.30. The CAC 40 trades lower by 13.14 points or 0.36%, to 3595.15. The DAX has fallen 18.30 points or 0.45%, to 4017.60.

  OI Technical Staff   1/6/2004,  9:18:04 AM
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