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  Jeff Bailey   1/7/2004,  9:34:51 PM
Follow up to Tuesday's Option action (see MM post 02:03:57 AM EST)

On Tuesday, the Jan $37 puts (QQQMK) was most active contract and traded 48,068 and open interest as of 01/05/04 close was 65,154. Tuesday's closing OI tally (I don't get it until the next day) rose to 86,955. So I think my analysis of "bullish" put selling and lower VXN.X was correct. Today's QQQ low of $37.09 furthers this analysis.

Today (Wednesday) the VXN.X 21.91 -3.73% fell lower. Most active options were Jan $35 puts (v:39,696 / oi:348,856), Jan $37 puts (v:36,115 / oi:86,955), Feb $37 puts (v:30,408 / oi:23,122) and Feb $38 calls (v:28,405 / oi:43,385). Again... open interest (oi) tabulation is based on Tuesday's close.

 
 
  Jeff Bailey   1/7/2004,  9:16:02 PM
Pivot Matrix for tomorrow at this Link

 
 
  James Brown   1/7/2004,  4:18:56 PM
Don't forget that tomorrow also brings a wave of retail same-store sales numbers.

 
 
  Jim Brown   1/7/2004,  4:14:03 PM
PG just raised guidance for Q1 and Q2 of 2004. Will exceed current expectations by +2 to +4 cents.

 
 
  Linda Piazza   1/7/2004,  4:00:04 PM
Congratulations to those of you brave enough to risk bullish OEX plays today. You were braver than I was, with the OEX just below the 38.2% retracement of the bear-market decline, and were certainly more profitable, too. As a reader reminded me today, the trend is your friend.

 
 
  Jeff Bailey   1/7/2004,  3:54:25 PM
General Electric (GE) $31.67 +0.95% ... alert set a penny above the 06/17/03 "left shoulder" high of $31.66.

Benchmarking OEX 558.93 +0.21% here.

 
 
  Linda Piazza   1/7/2004,  3:51:22 PM
The OEX still has to climb a lot higher before today's candle is transformed into a bullish one. The candle currently is a hanging man candle, typically also a reversal signal when it comes at the top of a climb, for what good reversal signals have been lately. Today's body has to be bigger in relationship to the long lower shadow for it to be considered a bullish candle.

 
 
  Linda Piazza   1/7/2004,  3:46:38 PM
The $TRAN has not been able to regain this morning's high, but did rise above the day's low, into the middle of the day's range. The day's candle will likely be a typically bearish one, but since it comes within the midst of a consolidation band and not at the top of a rise, its bearishness is discounted. The TRAN is still in the process of testing that previous swing high, with the outcome as yet unknown.

 
 
  Linda Piazza   1/7/2004,  3:39:02 PM
Typically for the last month, on a day that follows first a tall white candle and then a doji, we see a second doji that morphs into a bullish candle at the end of the day. That morphing process is usually well underway by this time of day, however, so I'm a little confused as to whether it will occur today. Look as if it might be beginning, but it just feels a little more sluggish than usual today.

 
 
  Jim Brown   1/7/2004,  3:37:23 PM
Initial market on close orders mixed with a BUY side bias

 
 
  James Brown   1/7/2004,  3:34:11 PM
After a few weeks of basing along its simple 200-dma shares of Sepracor (SEPR) are finally moving again. Today's 6% gain is a breakout over the $25 mark and the 50-dma. Bulls could target a move to the $30 region.

 
 
  Jeff Bailey   1/7/2004,  3:31:53 PM
Buy Program Prem. Alert ... SPX = 1,124.00 .... QQQ = $37.58. (First prem. alert since 11:45 AM EST).

 
 
  James Brown   1/7/2004,  3:28:46 PM
Shares of GTech Holdings (GTK) are rebounding off the bottom of their rising channel again and today's move put its above resistance at $50.00. There is minor resistance at $51.00 but this could be an entry point. Earnings are in March.

 
 
  Jim Brown   1/7/2004,  3:21:01 PM
VXO just broke under 15.0, amazing. Must be a lot of premium selling today.

 
 
  Jeff Bailey   1/7/2004,  3:19:40 PM
03:00 Internals posted at this Link

 
 
  Linda Piazza   1/7/2004,  3:18:12 PM
Yes, Jonathan, the ECB meets tomorrow and has a press conference scheduled. I haven't heard many prognostications about what will or will not be decided, however. Here's the ECB site: Link

 
 
  Jane Fox   1/7/2004,  3:16:21 PM
A gauge of shipping rates in the world's busiest shipping ports and hence, of shipping activity is The Baltic Freight Index. This index has recently reached a new multi-year high and at its highest level on record. Economists are reading this as an upturn in the global economic activity is underway. The BFI tends to be tightly correlated with major commodity indexes such as the CRB Raw Industrials index. Link

 
 
  Linda Piazza   1/7/2004,  3:14:56 PM
OEX 560-561.23 still beckons, with the rising trendline off the 12/10 low now having risen to that level, too. The 0.675% envelope on the 30-minute chart is also at 560.41 with the same envelope on the 60-minute chart at 559.97. We should be seeing the ramp job continue, according to recent patterns, but so far, that's not happening today. I'm still watching to see whether the OEX closes beneath the 553.65 level that was the midpoint of Monday's range. Until and unless that happens, I won't consider the reversal signal on the daily chart confirmed.

 
 
  Jonathan Levinson   1/7/2004,  3:11:46 PM
Linda, is there an ECB rate decision due tomorrow?

 
 
  Linda Piazza   1/7/2004,  3:01:23 PM
Over the last few weeks, Jeff's 5MRT system, Fib retracement levels, and MACD have become my favorite tools, but they've pretty much all failed today, not because they're not good tools but because the market action is weird. The OEX hit some of the bearish signals on Jeff's 5MRT system today, but then zoomed back up to the day's high. I've been snapping Fib tools to measure bear and bull flags all day, to little avail, too.

 
 
  James Brown   1/7/2004,  2:57:54 PM
I would urge caution for anyone following the BBY put play. Shares have not broken down as expected and the poor sales numbers by Circuit City today might suggest that BBY's will be better than expected (a.k.a. BBY ate CC's lunch again). BBY is expected to have some type of conference call to discuss the December sales numbers tomorrow and if they're good the initial reaction is likely to be painful for the bears.

 
 
  James Brown   1/7/2004,  2:52:07 PM
CSFB is bullish on biotech and they named current OI call play GILD as one of their top large cap picks in the sector. Shares are up 6.88% on the news and breaking out above resistance.

 
 
  James Brown   1/7/2004,  2:50:07 PM
FYI: for those following the General Dynamics (GD) play, I'm surprised that shares have rallied today and are trading back above the $90 level. We were expecting the dip to continue for another point or so. I can't find any catalyst for the move aside from potentially bullish news somewhere else in the sector.

 
 
  Linda Piazza   1/7/2004,  2:48:40 PM
That last plunge dropped the OEX back below the 30-minute 21-pma at 556.54. It's easing back above that average now, but perhaps still within a range that it could be considered testing the average. Today's outcome is far from settled yet.

 
 
  Jonathan Levinson   1/7/2004,  2:41:12 PM
An awesome 20%+ move taking place in NT, all the more impressive given the billions of shares in its float.

 
 
  James Brown   1/7/2004,  2:39:50 PM
U S Cellular (USM) has also been a "hot" stock the last two days. Shares have broken out above resistance at 35.00-to-35.50. There doesn't appear to be any news driving the rally but today's move is piercing its descending bearish trendline on its point-and-figure chart. It's current vertical price objective is $61.

 
 
  James Brown   1/7/2004,  2:35:46 PM
Another unexplained rise was the 10% jump in Iron Mountain (IRM) yesterday. The stock is falling on profit taking today (-5%) but traders may want to watch for a bounce from the $40.00 level.

 
 
  Jim Brown   1/7/2004,  2:32:41 PM
Seeing Art Cashin on CNBC reminded me. He predicted the Dow would close 2004 at 9300. Be interesting to see how close he is with 44 years on the floor.

 
 
  James Brown   1/7/2004,  2:31:06 PM
Hmmm... I can't seem to uncover what is driving shares of (99c Only Stores (NDN) higher by more than 8% today. Volume is very strong at 1.7 million shares.

Rivals Family Dollar Stores (FDO) and Dollar Tree Stores (DLTR) don't have any news either.

Maybe NDN will announce some extraordinary same-store sales figures tomorrow??

 
 
  Jonathan Levinson   1/7/2004,  2:20:24 PM
Euro futures now down 10 bps, a big move today. Looks like the ECB meant to step in after all. USD Index up to 86.12.

 
 
  Ray Cummins   1/7/2004,  2:20:21 PM
Spreads/Combos/Premium Selling -- Cyberonics (NASDAQ:CYBX)

Among the other active issues in our portfolio, CYBX is leading the volatility contest, down over $2 in pre-market trading and now up $1.51 at $34.07. The catalyst for the bearish activity was the medical device maker's mediocre outlook. The company said profits for the quarters ending in January and April will be below analysts' estimates as costs increase more than expected from the launch of a new device for depression. However, the announcement was followed by statements that the U.S. Food and Drug Administration had no outstanding questions about Cyberonics' application to use its nerve stimulator, currently used to treat epileptic seizures, to treat depression. That was seen as favorable news by investors because the company has been testing the device for depression and now believes the FDA will assess the device during a meeting in April rather than later in the year. As a result, the device could be approved earlier than expected, thus improving the company's bottom-line in late 2004. Our position in the issue is bullish at the $30 strike, so today's rebound was a very fortuitous event.

 
 
  James Brown   1/7/2004,  2:08:23 PM
One of the best performing sectors today is the XAL airlines index, currently up more than 2%. This is on top of yesterday's gains. The group's sudden move coincides with the December traffic data becoming available. While several carriers saw traffic slip, the declines weren't staggering considering the current "elevated" terror threat level. The question is whether or not this is new buying or just shorts covering.

 
 
  Linda Piazza   1/7/2004,  2:06:52 PM
Doubtless some are going to notice the possibility for an inverse H&S on the OEX five-minute chart with a head at today's low. While inverse H&S can and sometimes do form as continuation patterns, they are usually bottoming formations. We have seen them as continuation patterns since March with increasing frequency, but to increase the likelihood that we're seeing such a pattern, we would have wanted to see bullish price/oscillator divergence on the dip this morning. There was no such divergence, lessening the possibility that we could be seeing an inverse H&S. That doesn't mean that the OEX can't and won't round up now, but that's what's showing up so far.

In fact, the current five-minute OEX formation looks like a "b" distribution pattern to echo this morning's "b" pattern, and it's forming right where this morning's similar formation formed. Is this "do overs"? Do the bulls want another chance to make it turn out differently? We'll see.

 
 
  Linda Piazza   1/7/2004,  1:59:47 PM
While the OEX blew through a possible neckline of a potential H&S on its five-minute chart, the COMPX did not blow through a similar possible H&S neckline, with that neckline at about 2067.15. That means that COMPX traders should be aware of the possibility that the COMPX could rise again into a right shoulder, at about 2071. If it moves much past that, however, the possibility of a H&S is negated.

 
 
  Jonathan Levinson   1/7/2004,  1:52:16 PM
In Jeff Bailey's most recent email update, he states the following:

Fellow analyst Jonathan Levinson made some comments in today's Market Monitor that early morning selling may have been a result of rumors of an explosion in New York City, where the eventual realization that these were rumors, brought in strong buying into the lunchtime hour.

Please note that I stated at the time that I was reporting on "UNCONFIRMED rumors", as I always do when reporting potential market moving news that I cannot confirm in mainstream sources. I believe that Jim Brown did so as well at the same time.

 
 
  Linda Piazza   1/7/2004,  1:52:12 PM
Thar she blows! Seriously, I expect to see continued volatility as important Fib levels are approached but with important support just below, too. I don't know how it's going to turn out, but I was just about to warn about the possibility of a H&S on the five-minute chart with a neckline at 557.50 when the OEX blew through that possible neckline. It's rising quickly again, of course.

 
 
  Linda Piazza   1/7/2004,  1:41:17 PM
I've got an old ascending trendline off the December 15 low--not quite parallel to the one off the December 10 low--and the OEX has been pausing along that trendline all day. It's hugging that trendline right now. The more-important and higher trendline off the 12/10 low has ascended, of course, as the day has progressed and is now at 560.10 or so, just at the bottom of the 560-561.23 zone I've been watching. Since December 10, the OEX has had one other 5-point dip below that trendline, but mostly that trendline has been a magnet for the prices, too. It's a steep trendline, and should be too steep to be sustainable, but it's been sustainable up until now.

As the OEX moves up, some 30-minute indicators are beginning to flatten or show hints of flattening. We all know that they can turn in an instant, however, following price, so I mention it only in passing.

 
 
  Ray Cummins   1/7/2004,  1:36:58 PM
Spreads/Combos/Premium Selling -- Netflix (NASDAQ:NFLX)

James "beat me to the punch" on NFLX but since it is a current (and regular) position in our portfolio, I will elaborate on his comments. NFLX is certainly showing signs of technical strength and Tim Truenbach, a popular chartist with Tradingmarkets.com, mentioned Tuesday the "base it is attempting to break-out of right now." He also noted that "the stock has a pivot point at $59.33 and is looking solid thus far." Tim's observations are worthy and from my perspective, the stock is a good "bullish" bet for the coming months because the company has solid fundamentals with potential for growth. In fact, I use the service myself and wouldn't consider going to a local video store when someone will mail videos to my home and allow me to keep them as long as I need to without a late charge. In any case, our bullish positions in NFLX are comfortably profitable and we will be looking for new "premium-selling" entry points at the $55 strike in January and the $45 strike in February.

 
 
  Jane Fox   1/7/2004,  1:33:56 PM
Yesterday the CRB index gained 2.22% for the largest one-day advance since May 1st, 2000 and printed the highest level since July 1988. This will put pressure on those who think that the Federal Reserve will keep interest rates unchanged for the full year. Sharply increasing commodity prices and the falling dollar are factors that could put a huge monkey wrench in that forecast.

 
 
  Linda Piazza   1/7/2004,  1:24:42 PM
Careful, OEX bulls and bears alike. The OEX is falling back to the top support of its bull flag. This could be a normal test of support, a prelude to a further climb, or could be a sign of weakness and inability to sustain the breakout.

 
 
  James Brown   1/7/2004,  1:23:34 PM
Another stock with relatively high short interest (26%) is Chinese Internet Netease.com (NTES). Three days ago the Chinese internets all soared and NTES broke above resistance at $40 and its 200-dma. As of today the rally continues and the stock has now broken above its simple 50-dma.

 
 
  James Brown   1/7/2004,  1:21:41 PM
Breakout for Netflix (NFLX) today. Shares are hitting new all-time highs above the $61 level. The stock could run as shorts panic to cover. The latest data suggest short interest is nearly 70% of the float.

 
 
  Ray Cummins   1/7/2004,  1:19:15 PM
Spreads/Combos/Premium Selling -- Digene (NASDAQ:DIGE)

Another active issue in the biotechnology & drugs segment is DIGE and today the stock is up $2.34 at $41.58 on robust volume. The company, which develops proprietary gene-based testing systems for the study of human diseases, makes a test kit that screens for certain strains of human papilloma virus (HPV), a common sexually transmitted virus believed to be present in nearly all cervical cancer cases. Some recent comments in a California newspaper suggest health care giant Kaiser Permanente will soon offer women this new DNA test to screen for cervical cancer and that will certainly boost the company's bottom line. Our (January)position in the issue is "bullish" at $35, but there is also a potentially favorable opportunity for conservative spread traders at the $35 strike in February.

 
 
  Linda Piazza   1/7/2004,  1:18:10 PM
The OEX bull flag has broken to the upside, with a nominal new high of the day to confirm the upside break.

 
 
  Jeff Bailey   1/7/2004,  1:17:31 PM
Buy Program Prem. Alert SPX = 1,124.57 ... QQQ = $37.56

 
 
  James Brown   1/7/2004,  1:15:19 PM
The NWX networking index is one of the best performing sector indices today (+1.25%) and Nortel Networks (NT) is to blame for the move.

Shares of NT are up 13% on big volume of 66.8 million shares after Verizon (VZ) announced it has chosen NT to build its Voice over IP networks (VoIP). UBS has also upgraded NT from "neutral" to a "buy".

The breakout today puts NT above resistance at $4.75 and the $5.00 and pushes its 2004 YTD gains to more than 27%.

 
 
  Linda Piazza   1/7/2004,  1:13:48 PM
The 50% retracement of the OEX midday rally's flagpole lies near 556.50, so if this is a bull flag pullback, as it appears to be, it should break to the upside before retracement further than that level.

 
 
  Jeff Bailey   1/7/2004,  1:09:42 PM
01:00 Internals at this Link

 
 
  Linda Piazza   1/7/2004,  1:08:49 PM
The TRAN overshot a 50% retracement of the day's decline, but not by as much as some of the other indices. It certainly never came close to the morning high at 3042.65, less than 8 points away from the 3050.40 swing high I've been watching. Now the TRAN hovers just above the 50% retracement of the day's range, with that level at 3021.34 and with the TRAN at 3023.74 as I type. It's still a sign of strength that it's holding above that level, however, even if it is a nominal sign of strength. A move back below the 50% level would not be a sign of strength, however.

 
 
  James Brown   1/7/2004,  1:08:36 PM
Monsanto Co (MON) is up about 3.6% after reporting Q1 earnings that were 2 cents better than expected (minus one-time items). Revenues were up 21.5% and above consensus estimates. The stock should have some support at $28.00 and it is trading into the $29-$30 level of resistance (as see on its weekly chart).

 
 
  Linda Piazza   1/7/2004,  1:04:57 PM
Examining volume patterns show that advancer and decliners were roughly equal on the NYSE as of a few minutes ago, while the adv:dec ratio on the Nasdaq was a more bullish 17:14. Up volume was strong, at least on the Nasdaq, however, with up volume a modest 1.2 times down volume on the NYSE but almost double down volume on the Nasdaq. Total volume was 844 million on the NYSE and 1.2 billion on the Nasdaq. New highs were 489, a bit lower than the last couple of days, I believe. Jeff will probably fill us in on the more exact numbers for this time of day.

 
 
  James Brown   1/7/2004,  1:04:04 PM
Shares of Tektronix Inc (TEK) are finally seeing some weakness after Morgan Stanley downgraded the stock this morning from "equal weight" to "under weight" claiming shares were fully valued. It was just a couple of weeks ago that the stock shot higher after pre-announcing better than expected earnings. Normally the top and bottom of the gap would be support/resistance levels.

 
 
  James Brown   1/7/2004,  12:57:17 PM
The No 2 consumer electronics retailer Circuit City (CC) is firmly stuck in rival Best Buy's shadow. CC reported this morning that total December sales had dropped 1 percent while same-store sales fell 2 percent, all while consumer electronics were expected to lead the charge for Christmas this year. Shares of CC are down 13.5% and under what should have been support near $9.00 and its simple 200-dma. Volume is huge at 23.3 million vs. the average of just 4.4 million.

Meanwhile shares of Best Buy (BBY) are churning sideways as investors wait to hear from their conference call tomorrow.

 
 
  Ray Cummins   1/7/2004,  12:50:12 PM
Spreads/Combos/Premium Selling -- Forest Labs (NYSE:FRX)

I haven't heard much talk about this issue today and yet it is one of the "big" movers in the market. Shares of FRX are up $5.69 at $67.40 in the wake of the company's announcement of positive Phase III results for their Alzheimer's treatment. Earlier today, Forest reported that results of a clinical study of Namenda as "monotherapy" for mild to moderate Alzheimer's disease demonstrated the drug's success versus placebos with respect to the study's primary efficacy measures of cognition and global outcome. The company plans to file a supplemental New Drug Application for Namenda in the coming months and investors are pleased with the news. Our bullish "premium-selling" positions are comfortably profitable, however traders might consider a new bullish spread (at the $60 strike in February) on any consolidation.

 
 
  James Brown   1/7/2004,  12:50:07 PM
Lucent Technologies (LU) is really enjoying the new year. Its 2004 YTD gains are already more than 20% and the stock is hitting new one-year highs. I'm not suggesting traders chase it but it's interesting to see money chasing these low dollar tech stocks.

 
 
  Linda Piazza   1/7/2004,  12:49:47 PM
The current OEX pullback looks like a bull flag pullback on the five-minute chart. Will it perform any better than the bear flag from this morning? We'll have to wait to see, but so far, this remains a market in which the bullish formations perform better than the bearish ones, which isn't hard to do since the bearish ones don't perform at all.

 
 
  James Brown   1/7/2004,  12:46:58 PM
Hitting the software group today was an earnings warning from JDA Software (JDAS) late last night. Estimates had been for 10 cents a share. Now the company expects breakeven to +0.01 cent a share. The stock is down more than 16% and holding just above its simple 200-dma.

 
 
  Jane Fox   1/7/2004,  12:45:46 PM
Linda I sure hpe this crazines does not last until March like it did in 2000. And I most definately think this is crazy. When have you ever since a market that does not retrace? 1999 and 2000!

 
 
  Linda Piazza   1/7/2004,  12:41:47 PM
Jane (see Jane's 12:36 post), I just wish someone had told me that it was going to be like 1999 in March or that I was as inexperienced a trader as I was then, gleefully buying nothing but calls, unaware of what could happen. That's made me cautious this year when I see SOHU charge up from sub-$2.00 levels in late 2002 to $43.40 in mid-2003 and TASR charge from sub-$4.00 levels in January 2003 to $93.50 in December. 1999 and early 2000 taught me not to trust that kind of action, and those are just two stocks I can mention.

 
 
  Ray Cummins   1/7/2004,  12:40:44 PM
Spreads/Combos/Premium Selling -- XM Satellite Radio (NASDAQ:XMSR)

Linda made some remarks about XMSR in yesterday's MM and again today in her 9:59 AM post. I concur with her thoughts on the technical condition of the issue and want to point out that readers who initiated the bullish calendar spread offered last Sunday (1/4/04 Spreads/Straddles/Combos) are enjoying favorable gains and the possibility of an "early-exit" opportunity after only three sessions. Monday's opening debit in the position was $0.80-$0.85 and today the closing credit reached $1.10-$1.15, which is a potential gain of $0.35 ($350 on 10 contracts) in the speculative play.

 
 
  Jane Fox   1/7/2004,  12:35:50 PM
Andrew Fastow, former Enron finance chief, and his wife are negotiating plea bargains that could send them to federal prison for their roles in the accounting scandal that brought down the energy company. If the parties involved agree on the proposed plea deals, the couple will appear in court to change their innocent pleas to guilty as early as Thursday.

 
 
  Jeff Bailey   1/7/2004,  12:35:42 PM
QQQ most active options .... Feb $37 put , Jan $37 put, Jan $35 put, June $34 put ... With VXN.X 22.22 -2.37% ... begin to confirm last night's Market Monitor observations.

 
 
  Linda Piazza   1/7/2004,  12:33:24 PM
This morning's move has erased the OEX losses, and once again we see a second doji in a row on the of-course-uncompleted daily OEX candle. Typically lately, the late afternoon ramp has turned that second doji in a row into a bullish candle by the end of trading.

I'm not so sure that will happen today or rather what will happen when and if the OEX zooms to new highs. I'm not sure whether it might get slapped back down. A move up certainly would fit the theory I've stated in the Monitor that the 560-561.23 level is both a price magnet and strong resistance. I expected some volatility for a few hours as the OEX churned between the 30-minute and 60-minute 21-pma's, but the OEX of course moved above the 30-minute version. It still faces the trendline off the 12/10 low, not yet challenged today and I'm still watching how the $TRAN behaves, consolidating below its next resistance and showing some vulnerability to the downside. I respect Fib levels and that OEX 38.2% retracement of the bear-market decline is an important one. I just have trouble believing that the OEX can easily zoom through and then past that level without some retracement either shortly before or after doing so. While I do not consider myself particularly bearish despite my current play (closed out a bullish equity one just yesterday, for example), I do not feel comfortable entering a bullish play just below such an important level. That doesn't mean that it wouldn't perform well: I just fail to see how that would fit my risk parameters to enter just under known strong resistance. I believe that the OEX can and might exceed that level at some point this year. I'm just not sure that point is right now.

 
 
  Jeff Bailey   1/7/2004,  12:27:21 PM
General Electric (GE) $31.45 +0.28% ...

 
 
  Jeff Bailey   1/7/2004,  12:24:54 PM
QQQ $37.54 +0.53% ... session high so far has been $37.58. DAILY R1 $37.52, with DAILY R2 higher at $37.71.

 
 
  Jeff Bailey   1/7/2004,  12:21:14 PM
S&P 500 Index (SPX.X) 1,124.16 +0.04% .... now challenges yesterday's highs. Will monitory buy/sell prog. premium alerts here.

 
 
  Linda Piazza   1/7/2004,  12:18:11 PM
The TRAN hit a low of 3000.02 in the five minutes before the bounce began, its low of the day. I've been thinking over the last couple of weeks that the $TRAN bears watching because of its importance in Dow theory. Over the last week, it's been coming near the 3050.40 closing high from a swing high in March 2002, but unable to push over that level. Now, the market bounce began just as the TRAN hit that important 3000 level.

 
 
  Jeff Bailey   1/7/2004,  12:15:35 PM
QQQ $37.52 +0.45% ... building gains....

 
 
  Jeff Bailey   1/7/2004,  12:14:58 PM
S&P Banks Index (BIX.X) 339.00 -0.3% .... after morning low of 337.75, trying to bounce here.

 
 
  Jeff Bailey   1/7/2004,  12:13:18 PM
S&P 500 Index (SPX.X) 1,123.96 +0.02% ... bids back to fractional gains. May see some short-covering start to pick up here. Might have trapped some bears this morning.

 
 
  Jonathan Levinson   1/7/2004,  12:11:08 PM
The put to call ratio is approaching the high side of neutral at .78, VXO low at 15.45 (up .72% on the day), QQV 20.18, down 2.7% to new record lows, 20.18, ditto VXN down 1.71% at 22.37.

 
 
  Jeff Bailey   1/7/2004,  12:10:58 PM
QQQ $37.47 +0.35% .... new 52-week highs... overhead supply should be limited.

 
 
  Linda Piazza   1/7/2004,  12:10:00 PM
The OEX is now at the top of yesterday's congestion zone, the one that stopped advances until the end-of-day surge. There's Keltner resistance showing up here, but the Keltner resistance is slight as yet. Still, if anything is going to stop it today, this will be it, but with the TRIN trending lower and the advdec line still moving higher, it's not looking yet as if it's ready to stop.

 
 
  Jeff Bailey   1/7/2004,  12:07:16 PM
12:00 Internals at this Link

 
 
  Linda Piazza   1/7/2004,  12:02:28 PM
There's now a bullish MACD cross from above signal on the 30-minute OEX chart. These points at which the MACD approaches the signal lines are points of danger to both bears and bulls, as they're the very point at which the MACD sometimes turns. It looks as if a charge up to 559-561.25 might be in the books. There's a determination to reach these levels, isn't there?

 
 
  Jim Brown   1/7/2004,  11:55:56 AM
Hearing that the last spike was on a rumor the threat level was going back to yellow.

 
 
  Linda Piazza   1/7/2004,  11:46:37 AM
Here's how the OEX action looks on a 60-minute chart, with the OEX finding support on the 60-minute 21-pma: Link It's rising toward that trendline off the 12/10 low again. It moved above the 50% retracement of the flagpole rally and the 30-minute 21-pma, giving a more bullish tenor to the day, but it's still possible that the OEX simply overshot those levels. Let's see, but it's not looking good for short-term bearish positions at this point.

 
 
  Jeff Bailey   1/7/2004,  11:45:11 AM
Networking Index (NWX.X) 273.76 +1.29% .... joins Disk Drive (DDX.X) 137.62 +1.65% for technology leadership.

 
 
  Jeff Bailey   1/7/2004,  11:44:08 AM
NASDAQ Composite (COMPX) 2,052.54 +0.25% ... upside alert set here, just above yesterday's 52-week high. Supply should be limited.

 
 
  Jeff Bailey   1/7/2004,  11:42:53 AM
QQQ $37.37 +0.08% .... Game Wardens say this year's bear hunting harvest expected to be strong.

 
 
  Linda Piazza   1/7/2004,  11:41:41 AM
John Snow was quoted as speaking bullishly about the economy and saying that the tax cuts should be made permanent.

 
 
  Linda Piazza   1/7/2004,  11:39:01 AM
And there's the has-become-typical zoom up after the fake break out of a bearish position (see my 11:30 post). Let's see if it carries the OEX much past the 556.25 level.

 
 
  Jeff Bailey   1/7/2004,  11:38:24 AM
Is that a gunshot I just heard in the distance?

 
 
  Jeff Bailey   1/7/2004,  11:37:39 AM
Buy Prog. Prem. Alert .... SPX = 1,119.82 ... QQQ = $37.30

 
 
  Linda Piazza   1/7/2004,  11:30:14 AM
The OEX looks as if it's beginning to break down out of the bear flag, but let's not be too hasty about forming a judgment, as this has typically beem a prelude to a zoom up in recent trading.

 
 
  Jane Fox   1/7/2004,  11:26:43 AM
After admitting to misstating about $2.5 billion in revenues during 2000 and 2001, Qwest executives are likely to be seeing additional civil charges brought against them by the SEC for their roles in questionable telecom deals. The notifications, called Wells notices, signal a new chapter in a nearly two-year investigation into the Denver-based telecommunications company. A Wells notice is not an official charge by the SEC but rather a notification that the SEC's enforcement staff intends to recommend to the commission that it file suit. Those who receive the notice can try to persuade the SEC not to charge them. Good luck!

 
 
  Linda Piazza   1/7/2004,  11:18:31 AM
The OEX moves up toward the bearish #2 on Jeff's 5MRT system (555.80) and the 50% retracement of this morning's flagpole drop (556.23) and the 30-minute 21-pma (556.26). It's still making that move in a pattern that looks like a bear-flag rise, but much depends on what we see as the OEX draws closer to those levels. Because of the bullish tenor in the markets, I wouldn't be surprised to see those levels overshot a bit, but we'll see. If this is a bear flag, then the OEX should break down upon or before hitting those levels.

The problem for those who want to wait and see is that a breakdown, if it should occur, could come fast. So could a bounce to new highs. However, until the OEX retraces more than half Monday's candle, this action is still not deemed bearish on a daily chart basis.

 
 
  Jeff Bailey   1/7/2004,  11:09:59 AM
11:00 Internals at this Link

 
 
  Linda Piazza   1/7/2004,  11:04:38 AM
ABCnews.com carried a story this morning purportedly clarifying all the concerns about the various cancelled or delayed international flights. Supposedly France is searching for a no-show passenger on one of the cancelled Air France flights, with this man believed to have a concealable bomb that would not be detected by conventional means. France supposedly feels that it might have warned the man by canceling the flight too soon, and now feels that he may board another plane using a different alias. Here's the link: Link

 
 
  Jonathan Levinson   1/7/2004,  11:04:12 AM
The put to call ratio has risen to .78, VXO 15.99 currently as the US Dollar Index holds 86. Bonds are still positive, with 10 year note futures up 1.8 bps currently. The Dow is leading to the downside in percentage terms, Nasdaq bringing up the rear.

 
 
  Linda Piazza   1/7/2004,  11:01:24 AM
So far, the OEX climb does fit the idea of it being a bear-flag climb after the flagpole drop, but if that's what it is, it should be breaking to the downside before climbing more than another point.

 
 
  Jeff Bailey   1/7/2004,  10:57:39 AM
QQQ $37.24 -0.26% ... trying to move higher from morning congestion lows. This may be first sign that bear hunting season is experiencing "opening day."

Will have better idea at $37.43.

 
 
  Jeff Bailey   1/7/2004,  10:56:06 AM
S&P Banks Index (BIX.X) 338.14 -0.56% ... session low 338.01. Same type of congestion taking place in major indices. WEEKLY S1 337.11 (tie with OEX and QQQ comments)

 
 
  Jeff Bailey   1/7/2004,  10:45:46 AM
QQQ intra-day chart of QQQ and tie into yesterday's trade. Link

 
 
  Linda Piazza   1/7/2004,  10:42:08 AM
I'm kind of expecting several hours of small-bodied candles sitting between the 30- and 60-minute 21-pma's while the OEX decides what to do. Although it violated the 30-minute version rather easily this morning, the 60-minute should provide even stronger support, and I would think the OEX would need to consolidate those losses before it could continue dropping. I entered a bearish position now, instead of hours from now, just in case that consolidation doesn't happen. I'm going to be watching closely, however, as changing conditions might have me exiting quickly and standing aside for a test of 559-561.25.

 
 
  Linda Piazza   1/7/2004,  10:35:11 AM
The current OEX climb does look like a measured distribution pattern such as a bear-flag climb, but we've been fooled at other times. Thirty-minute and 60-minute MACD looks bearish, turning down from above signal with histograms negative. However, we've seen these configurations before, and although I trust MACD right now more than I do other oscillators, no oscillators are completely trustworthy in a strongly trending market. The OEX has been such a market. The trend may be ending or it may not be, but if you're entering with a bearish position, guard your positions well with stops. If you've entered today, possibilities include a really tight stop shortly after the OEX violates the 50% retracement of the flagpole drop, which would be somewhere just over 556.23, that midpoint, or just above the high of the day, or just above the rising trendline off the 12/10 low, with that trendline currently somewhere near 559.20. Those stops should depend on your outlook and your trading style. I have just entered a personal bearish position, and I've set my stop at that rising trendline. If I see conditions changing such as TRIN dropping or something of that nature, I might elect to use the lower exit, changing my conditional sell order, but right now I've got a conditional sell order if the OEX should violate that trendline to the upside.

 
 
  Jeff Bailey   1/7/2004,  10:34:25 AM
QQQ and OEX QQQ $37.16 at WEEKLY R2 while OEX 555.25 at WEEKLY R1.

 
 
  Jeff Bailey   1/7/2004,  10:28:05 AM
Express Scripts (ESRX) $64.90 +1.46% Link ... after test of tending higher 21-day SMA yesterday, and 3-box reversal on PnF chart.

 
 
  Jeff Bailey   1/7/2004,  10:23:50 AM
General Electric (GE) $31.22 -0.47% ... INDU 10,4778 -0.62%, SPX 1,117.75 -0.52%, OEX 555.05 -0.48%.

 
 
  Jeff Bailey   1/7/2004,  10:22:10 AM
Service Corp. (SRV) $5.62 -1.4% ... session low/high $5.58-$5.70. Looking for support at $5.55.

Day trade bulls that did carry overnight can raise stop to break-even, or just under session low.

 
 
  Linda Piazza   1/7/2004,  10:18:38 AM
What I want to happen is for the OEX to climb laboriously up toward 555.80-556.25 in a measured distribution pattern such as a bear flag, with that slow and measured climb dropping the options prices, too, leaking some of that inflated value that would have been pumped into them on the quick drop. I don't want to be buying a put position, only to have the OEX drop and the puts actually drop in value, too, or not gain. It can happen, especially if you're buying ATM option. Puts quickly lose "time" premium as they go into the money and when a quick drop inflates them like they've probably been inflated this morning, you have to be careful. You would have to see another big and quick drop to keep the volatility up and the options prices up, too.

 
 
  Jeff Bailey   1/7/2004,  10:16:10 AM
Intel (INTC) $33.33 +1.30% Link ... higher after Berstein upgrades to "outperform" from "market perform" based on their belief that above-normal seasonal revenue during first-half of 2004 is increasingly possible, and that further gross margin expansion resulting from cost saving has not been entirely discounted. Raising 2004 estimates to $1.27 from $1.20 versus current consensus of $1.24. Target raised to $42.

 
 
  Jim Brown   1/7/2004,  10:14:59 AM
Rumor of explosion in New York City

 
 
  Jane Fox   1/7/2004,  10:13:55 AM
Linda (10:09) it is fun to have a market that moves isn't it?

 
 
  Linda Piazza   1/7/2004,  10:12:44 AM
The OEX is now trapped between the 30-minute 21-pma and the 60-minute 21-pma, above the 60-minute version and below the 30-minute version. I expect some volatility as the OEX churns between the two. The 30-minute is at 556.19, so that coincides with the 555.80-556.25 levels I see as important from the 5MRT and 50% retracement of this morning's plunge. Although it's possible that the OEX could overshoot that 50% retracement of the morning's plunge by a bit, if it moves much above 556.25, then something else is at work and I'll want to stand aside and not enter.

 
 
  Jonathan Levinson   1/7/2004,  10:12:26 AM
Opening p/c ratio was .73, neutral, with the VXO currently back below 16 at 15.98, Nasdaq volatility (VXN) -.35% at 22.68, and Nasdaq-100 volatility (QQV) -.34% at 20.67.

 
 
  Linda Piazza   1/7/2004,  10:09:39 AM
Wow. The market is moving. Whether I'm in it or not--looking for a bounce back up to 555.80-556.25 (bearish #2 on the 5MRT system-50% retracement of the flagpole plunge) to enter--it's still fun to have something happening again.

 
 
  Jeff Bailey   1/7/2004,  10:09:22 AM
10:00 Internals at this Link

Yesterday's internals at this Link

 
 
  Jonathan Levinson   1/7/2004,  10:08:32 AM
The Fed is taking no action today, for a net 2.5B add.

 
 
  Linda Piazza   1/7/2004,  10:06:26 AM
The OEX 553.23-553.52 zone should provide the next bounce point. That represents the midpoint of Monday's big candle and also bottom Keltner support. We'll see. I planned to enter this morning, but got occupied in answering email--an occupational hazard. Q-charts offers audio signals when Fib levels are hit. I should have used them.

 
 
  Linda Piazza   1/7/2004,  10:03:21 AM
The OEX pauses now on the bearish #3 on Jeff's 5MRT system and also on the 60-minute 21-pma. This should provide at least a minimal bounce point, perhaps with the opportunity for a bearish entry for those so inclined. Oops. No bounce. The OEX dropped through the bearish #3 as I typed. Options prices are going to be pretty inflated with this quick drop.

 
 
  Linda Piazza   1/7/2004,  9:59:35 AM
Reader Question: Thanks again for your comments yesterday on XMSR, stock went above 28.00 and looks as if it to break 30.00 resistance in real hours, pre-market already above that, lot's of coming news out as mentioned yesterday, Las Vegas.(also for SIRI), now Jet Blue, do you see that the stock has already violated the ascending trendline or any possibility, we are short on the stock, looking for another resistance level if any, looks as if to exit short position, everyday new high, any comments, appreciated as usual.

Response: The SEC does not allow us to comment on individual positions, but I can take a look at the stock's chart for the benefit of all readers. The daily chart shows that XMSR opened just under $30.00, as this reader had feared that it might. That open popped it above the ascending regression channel, but it's been dropping ever since. The open also popped it above its Keltner channels, with such an open either producing a breakout signal or signaling that it's way too far extended to the upside, or both. XMSR has been dropping since its open as selling hit near $30.00, fitting the "too extended" hypothesis. Resistance shows up from about $28.90 up to $30.50 on the weekly chart, but strongest resistance might be at about $31.58, from the 61.8% retracement of the bear-market decline. You should look for support now at about $28.40-28.90, from historical horizontal S/R and also from the top of the regression channel. Keltner channels verify first support at that level. That's being tested as I type, and a decline below that level will emphasize the weakness. While it's possible that XMSR could be building a reversal signal today--a dark cloud cover or blended lines, for example--oscillators have not yet turned down and much depends on today's action. So far, the trading action is showing weakness, but until and unless it retraces more than half yesterday's range and moves back into the channel, it's hard to be sure.

 
 
  Jeff Bailey   1/7/2004,  9:58:13 AM
QQQ $37.16 -0.45% ... testing WEEKLY R2 here.

 
 
  Jonathan Levinson   1/7/2004,  9:54:24 AM
Awaiting the Fed's announcement as to its expiring 2.5B reverse repo from yesterday. If nothing is done, its expiry will result in a 2.5B net addition today.

 
 
  Jeff Bailey   1/7/2004,  9:52:55 AM
QQQ $37.29 ... low/high $37.22-$37.34 ... MONTHLY R1 of $37.36 serves resistance early.

 
 
  Jane Fox   1/7/2004,  9:52:00 AM
Jeff I'm sure if we had a bearish day no one would believe it.

 
 
  Jeff Bailey   1/7/2004,  9:48:41 AM
Per Jane's 09:45:19 ... based on what I saw yesterday Jane... it could well be "bear season" and bears ain't got a clue.

 
 
  Linda Piazza   1/7/2004,  9:48:11 AM
The OEX is again approaching its 30-minute 18/21-pma's, a likely bounce spot for the OEX. The five-minute pattern shows a likely "b" distribution pattern, though, so these two bits of evidence argue against each other, as much other evidence does today.

 
 
  Jeff Bailey   1/7/2004,  9:47:05 AM
AMEX Gold Bugs ($HUI.X) 247.12 -1.38% .... Looking 240'ish here.

 
 
  Jeff Bailey   1/7/2004,  9:45:25 AM
QQQ Jan $37 put (QQQMK) .... after yesterday's trade, open interest now shows 86,955.

 
 
  Linda Piazza   1/7/2004,  9:43:12 AM
The VXO is up . . . to a whopping 15.75.

 
 
  Jeff Bailey   1/7/2004,  9:42:11 AM
Darden Restaurants (DRI) $18.72 -10.34% .... downside alert here at MONTHLY S1 of $19.82, with MONTHLY S2 below at $18.59. Red Lobster unit struggles, and "turnaround" executive is leaving. Good news or bad news?

Would keep bullish stop tight, but stock may now be "dead money" trade for at least next three months. Would look to sell near-month covered calls with $20 strike.

 
 
  Linda Piazza   1/7/2004,  9:37:32 AM
The OEX has so far not been able to climb above the midpoint of its first five-minute range, so continues to show early weakness. Advdec line is positive. $TRIN is dropping fast. So far, I'm getting mixed signals. Nothing here screams imminent reversal yet.

 
 
  Jeff Bailey   1/7/2004,  9:35:53 AM
Sector Action mixed at the open...

Strength ... Disk Drive (DDX.X) 137.27 +1.39% (FLSH +5.7%, SNDK +5.06%), Airline (XAL.X) 64.96 +1.35%

Weakness ... Oil Index (OIX.X) 324.35 -1.27%

 
 
  Linda Piazza   1/7/2004,  9:34:03 AM
During the first five minutes of trading, the OEX ranged from 557.88 to 556.84, with the midpoint at 557.36. The OEX is below that midpoint, indicating weakness in the early trading, but let's see how it performs in the first reversal, typically beginning in a few minutes. The OEX has just hit one short-term ascending trendline on my five-minute chart, and the advdec line is still slightly positive. The OEX did not open below the bottom of yesterday's small-bodied candle, and so did not conform to the next parameter of a classic evening-star pattern, but Nison says that indices should be given some leeway since they don't gap as much as a stock would.

 
 
  Jeff Bailey   1/7/2004,  9:33:37 AM
QQQ $37.30 -0.1% ... low/high so far $37.22-$37.33

 
 
  Jeff Bailey   1/7/2004,  9:21:26 AM
09:00 Update posted at this Link

 
 
  Linda Piazza   1/7/2004,  9:18:01 AM
Yesterday's daily candle on the OEX was a small-bodied candle on the top of a steep rise, following Monday's tall white candle. You know the drill. This can supposedly be the second candle in a possible three-candle reversal signal known as an evening star. Since this candle printed just under the 560-561.23 important S/R zone, supposedly that's even more ominous. Supposedly. We've seen this happen repeatedly throughout December, with no reversal. Ever. Such days have typically been followed by days in which the OEX trades in another tight range throughout most of the day, looking as if it may even be printing a second doji until late afternoon when there's a sudden ramp into the close. So, we have this recent pattern battling against the previous weakness implied by this type of pattern, and I'm not able to weigh one against the other with any clarity except to say that one day or another, a reversal signal will really signal a reversal.

As yet, this is only a potential reversal signal, however. In a classic evening star pattern, the OEX would open today below yesterday's candle body, so below yesterday's open at 557.31. With S&P futures down only 1.40 as I type, it's unclear whether there's any possibility for the OEX to open below that level. If it does and if other signs corroborate any weakness (TRIN, volume patterns, etc.), however, I'm probably going to try a personal bearish play again, waiting until after the opening volatility if I can so I'm not paying those exorbitant options costs that we see in early trading, hoping to catch the downswing when it occurs. I wouldn't suggest this with anything other than risk money, however. The signal would not be confirmed until and unless the OEX closes below the midpoint of Monday's tall white candle, so below 553.65. Even then, since March we've seen a lot of reversal signals completed, with the only reversal being the red candle that formed the signal.

Since I'm a big fan of selling premium and employing spreads, why am I doing this with a put play instead of a spread? With the volatility indices so low, options prices are low, too, so that the optimum play switches a bit, and the option purchase might be better than premium-selling plays, where the small premium collected isn't enough to offset the risk incurred. Maybe. So McMillan tells me in a chapter on option volatility and how it affects spreads. Mike Parnos might tell me something different, and I trust Mike, too.

 
 
  Jane Fox   1/7/2004,  9:13:10 AM
The upside to the weak dollar is that some European carmakers need to expand their manufacturing capacity in dollar-denominated markets due to the huge losses once their revenues and profits are translated back into their native currencies. The markets where the dollar serves as the principal business currency are, of course, in the US but also Mexico and Brazil.

At the North American International Auto show, DaimlerChrysler unveiled a Mercedes-Benz family car that will be built at its Tuscaloosa, Ala. plant. Saab, the Swedish unit of GM, plans to add an SUV to be built in a GM plant in the U.S. Ford's Volvo unit said it, too, is open to the idea of using its parent company's U.S. plants to buffer currency fluctuations, but has no plans to do so yet.

 
 
  Jane Fox   1/7/2004,  9:05:59 AM
The privately held company, Bechtel Group Inc. (the company I used to work for), will receive $1.82 billion in additional Iraq reconstruction work, which nearly doubles the work the San Francisco-based engineering company already is performing in Iraq. Bechtel National Inc, a subsidiary of Bechtel Group, beat out two other competitors Washington Group International Inc and Fluor Corp (the company my husband works for).

 
 
  Jane Fox   1/7/2004,  9:04:25 AM
Richard Ketchum, general counsel of Citigroup's investment bank has accepted the NYSE's new post of chief regulatory office, although still subject to approval by the exchange's board. Mr. Ketchum's hiring is a turning point for the NYSE and is, in a large part, due to the SEC's alleging that Big Board securities cops failed to spot wrongdoing on the exchange's trading floor.

 
 
  Linda Piazza   1/7/2004,  7:06:16 AM
Good morning. As happened in Tuesday's trading, the Nikkei opened up, climbed for a few minutes and then fell throughout the morning session. It fell throughout most of the afternoon session, too, but climbed in the last few minutes, trimming its losses. It closed down 56.17 points or 0.52%, at 10,757.82. Automakers and other exporters continued their decline as market watchers worried that the Bank of Japan's efforts to prop up the dollar against the yen might not be effective. The impact on currencies of Treasury Secretary John Snow's planned speech to U.S. business leaders today worried investors in Japanese exporters, too. Bank-related stocks also traded lower, and techs proved mixed. NTT dropped when news was released that the government intended to resume selling a portion of its holdings of the telecom giant in a few months.

Other Asian bourses were mixed. The Taiwan Weighted closed flat, down 0.04%, and South Korea's Kospi gained 0.44%. Analysts at Credit Suisse, Credit Lyonnaise, and Kyobo Securities helped boost South Korean semiconductor company Samsung Electronics after all mentioned high expectations for the current quarter's operating profit, but credit-card company LG Card dropped limit-down again. Investors worried that the troubled company's bailout plan will cancel all shares. Singapore's Straits Times gained 0.40% and Hong Kong's Hang Seng gained 0.93%. China's Shanghai Composite climbed 0.81%.

European bourses show mixed patterns in early trading, but the ones we typically watch all trade lower. Some European automakers bounced after yesterday's declines due to a GS downgrade. Two upgrades today sent Nokia higher. JP Morgan raised the stock to overweight and Dresdner Kleinwort Wasserstein raised it to a buy rating. After announcing passenger loads and other statistics, European airliners gained in early trading. The European oil majors declined, however, the worst-performing sector.

Currently, the FTSE 100 has dropped 26.30 points or 0.58%, to 4478.90. The CAC 40 has fallen 20.31 points or 0.56%, to 3575.51. The DAX has dropped 18.27 points or 0.45%, to 4017.17. Each is near its day's low.

 
 
  Jeff Bailey   1/7/2004,  2:03:57 AM
NASDAQ-100 Volatility Index (VXN.X) 22.76 -4.37% ... still checking some things against tonight's Index Trader Wrap. Why would VXN.X fall?

Did you say... "because idiot bulls are buying calls like there's no tomorrow!!!"

Will note biggest volume in QQQ today was Jan $37 put (QQQMK) at 48,068, where open interest was 65,154.

Second biggest volume was Jan05 34 put (ZQQMK) at 35,275 where open interest was 24.673.

Third biggest volume was Jan 38 call (QQQAL) at 33,747 where open interest was 64,422.

Only way I can get a VXN.X lower is with put selling and call buying and only reason to think put selling at current month 37 strike, is you don't think QQQ settles out much below $37 come January expiration. BIG short calling it quits and trying to get some premium? We shall see.

Index Trader Wrap readers will remember "Watch out for this tomorrow" from 12/17/03 at this Link

 
 
  Jeff Bailey   1/7/2004,  2:03:47 AM
Marvell Technology (MRVL) $40.18 +3.82% Link

One of the two NASDAQ-100 components giving a reversing upward point and figure buy signal in Tuesday's session. Comes after test of bullish support trend, where institutional bulls will often be lurking.

On November 19th, MRVL reported Q3 (October) pro forma EPS of $0.25, which was a penny bettern than consensus, saying revenues rose 58.4% year-over-year to $215.3 million, versus consensus of $213.4 million. Stock gapped lower next trading session, and may have been attributed to Q4 guidance (January) for revenues to grow 10-12% sequentially, which implied a range of $236.8-$241.2 million, which compared to consensus of $239.3 million.

Broker notes from Piper Jaffray (11/17/2003) had stock lower into earnings, when Piper said it thought MRVL's business was "feeling the squeeze" as it relate(s)(ed) to major architectural problems that have caused more than a years slippage and have resulted in a key design loss at Dell Computer.

Broker notes from Legg Mason on 11/20/2003 was reiterating of "buy" rating and $46 price target, based on company's conference call, where Legg Mason was lead to believe MRVL could give strong Q1 outlook and strong fiscal 2005 guidance.

Broker notes from Pacific Growth on 11/20/2003 was upgrade MRVL to "overweight" from "equal-weight" based on valuation, using weakness to add to positions. Believes company will be able to deliver superior growth over next two years as MRVL's unique CMOS-based mixed-signal and DSP technologies open up fast new markets such as consumer, industrial, and automotive.

 
 
  Jeff Bailey   1/7/2004,  2:03:37 AM
Pivot Matrix for tomorrow at this Link

 
 
  OI Technical Staff   1/7/2004,  2:03:25 AM
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