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  Jeff Bailey   1/8/2004,  6:14:20 PM
Lucent (NYSE:LU) $3.88 +10.54% ... seeing bar charts like these, which look similar to the point and figure chart pattern "bearish signal reversed" Link

And this Link

Should have traders on the alert right now.

You've got to look at a lot of charts, or have some candidates at the ready. Link

The "bearish signal reversed" point and figure chart pattern is a supply/demand pattern where in a longer-term bullish trend, a pattern of lower highs and lower lows is found, where a quick reversal back higher has shorts realizing their mistake (shorting stocks in upward trends) and running for cover. The move is extended as committed bulls round up with conviction.

  Jeff Bailey   1/8/2004,  5:28:24 PM
Closing Internals at this Link

  Jeff Bailey   1/8/2004,  5:13:41 PM
QQQ $37.99

  Jeff Bailey   1/8/2004,  4:58:59 PM
IBM Link ... went out at $93.04 +0.28%, released for trading here at $92.39.

  Jeff Bailey   1/8/2004,  4:57:20 PM
QQQ ... $37.98 ... no reaction.... IBM news no impact on tech...

  Jeff Bailey   1/8/2004,  4:55:42 PM
QQQ ... 100,000 shares at $37.96 just crossed. Somebody thinks they know something.

  Jeff Bailey   1/8/2004,  4:54:35 PM
QQQ $37.96

  Jim Brown   1/8/2004,  4:53:18 PM
IBM says received SEC wells notice about Dollar General relationship. SEC considering action against IBM on accounting practices

  Jeff Bailey   1/8/2004,  4:50:54 PM
QQQ .... $37.95 ... steady in after-hours... waiting on IBM's new.

  Jim Brown   1/8/2004,  4:38:54 PM
IBM $92.99 - Stock is halted news pending

  Jeff Bailey   1/8/2004,  4:12:38 PM
QQQ day trade sell alert ... running out of time. Let them have it at $37.99.

Sure thought we'd get a bigger rush of short-covering this afternoon. Most likely found on a gap higher tomorrow. Some correlation of early daily pivot analysis tied in with MONTHLY R2.

  Jeff Bailey   1/8/2004,  4:09:50 PM
QQQ day trade update alert $37.98 +0.8% .... 4-minutes to close... be ready to sell $38.05 as I think shorts don't want to go home short and they'll chase at the close.

  Jeff Bailey   1/8/2004,  4:07:44 PM
SPX Daily Pivots for tomorrow 1,122.57, 1,127.25, 1,129.58, 1,134.26, 1,136.59.

  Jeff Bailey   1/8/2004,  4:05:02 PM
Time 16:08:00 PM EST

  Jeff Bailey   1/8/2004,  4:02:15 PM
QQQ $37.96 +0.76% ... trade continues... 10-minutes to close.

Day trader bullish target remains $38.05.

  Jeff Bailey   1/8/2004,  3:59:08 PM
Sell Prog. Prem Alert SPX = 1,131.07 ... QQQ $37.95.

  Jeff Bailey   1/8/2004,  3:56:19 PM
QQQ .... with all this interest around $37.94, I'm going to project a close here at use current session high lows for preliminary daily pivot.

I get... S2= 37.46 , S1= 37.70 P = 37.84, R1= 38.08 , R2= 38.22

  Jane Fox   1/8/2004,  3:48:28 PM
In a total turnaround from this morning a federal judge has now accepted a plea agreement from Ms. Lea Fastow, wife of former Enron finance chief Andrew Fastow. This almost assures a plea agreement with Mr. Fastow and possibly his cooperation with prosecutors investigating Kenneth Lay and Jeffrey Skilling. Ms. Fastow, a former assistant treasurer at Enron, will go to prison for five months. Poor thing!

  Linda Piazza   1/8/2004,  3:39:20 PM
That low ATR Jane mentioned coupled with the collapsing volatility indices has made options trading a devil of a task. The collapsing volatility sucks the premium out of options so that even when the underlyings move your direction, and the ATR says they're not moving much, you're losing money. It's not always a great environment for premium selling, either, as the premiums collected are small for the risk that's incurred.

  Jim Brown   1/8/2004,  3:37:21 PM
Initial market on close orders mixed with a BUY side bias

  Jim Brown   1/8/2004,  3:34:13 PM
Traders ... AA ... a DOW stock reports today AFTER the bell and its report is considered the beginning of the earnings season. Some traders might consider YHOO as the official kick off for earnings. AA may very well set the tone for late night trading and especially with the Asian markets. Gerald

  Linda Piazza   1/8/2004,  3:30:56 PM
The OEX 38.2% retracement level has been safely surmounted and gains mounted. The rising trendline off the 12/10 low now lies at 562.75 or so, depending on how the trendline is drawn. It's a long trendline now, so the smallest deviation in the beginning could result in a big spread in price now, a month later. I see cautions everywhere, some where none apparently existed, but I'm watching that trendline, too, and also want to see that there's a close above the Fib level. With the tight range today, the OEX could fairly easily drop below that level into the close and show a more bearish candle with an upper shadow that was just produced. Not that bearish really means "bearish," however. Grin.

  Jeff Bailey   1/8/2004,  3:27:31 PM
SPX 1,130.61 +0.37% ... upside alert here as SPX tries to make a move above WEEKLY R2. MONTHLY R2 dead ahead at 1,131.85.

Did get a buy program prem alert at that level.

  Jeff Bailey   1/8/2004,  3:23:46 PM
Micron Technology (MU) $15.50 +2.17% Link ... upside alert I had set here.

Got to give James Cramer some credit here. He was BIG BULL at $12.50 and gets his double-top buy signal. Knowing Mr. Cramer's mentallity, he's probably trying to inflict some pain on the bears here.

With TXN +6.24% continuing to build gains, got to be bullish.

Continue to trade with discipline.

  Linda Piazza   1/8/2004,  3:18:21 PM
What's happened today on the OEX? Essentially, after amateur hour volatility was done, the OEX has found support at 560, but has not yet been able to build on the strength and sustain a move above the 38.2% retracement at 561.23. It's a draw, as far as I'm concerned, with the psychologically important 560 providing support, so far, and the important Fib number providing resistance, so far. Seems to me as if some are paying more attention to the psychological number while those in the know are selling, so far, at the important Fib number. Just so far, however.

  Jeff Bailey   1/8/2004,  3:14:48 PM
Day trade long update alert QQQ ... lower bullish target to $38.05, keep stop at $37.75.

  Linda Piazza   1/8/2004,  3:12:11 PM
The OEX just hit its day's high again. Hasn't moved over it yet, though.

  Jeff Bailey   1/8/2004,  3:10:50 PM
QQQ $37.94 +0.69% ... just sitting here last 15-minutes .... session high still $37.97.

  Jeff Bailey   1/8/2004,  3:08:01 PM
03:00 Internals posted at this Link

I've been having trouble with vendor feeds all day. N/A = Not available.

  Linda Piazza   1/8/2004,  3:06:52 PM
It's still too early in the day to decide how today's OEX daily candle will look, but if the OEX should end the day at the current level, there's nothing particularly bearish about today's candle. It may be small, but it doesn't have much in the way of shadows that indicate indecision. We would have to note, however, that it was forming right at that 38.2% retracement of the bear-market decline, and that might be significant.

  Jeff Bailey   1/8/2004,  2:57:50 PM
QQQ $37.94 +0.69% ... the moment of truth....

  Linda Piazza   1/8/2004,  2:51:15 PM
You know, for all this effort, the OEX is up only 1.24 points, as I type.

  Jeff Bailey   1/8/2004,  2:50:12 PM
QQQ $37.86 +0.53% ... volume spike interpretation.....

Here's what I'm seeing and think took place in the QQQ. After that big volume spike on 5-minute interval, QQQ pulled back into RED #1 of $37.80, traded a tick low of $37.76 (penny above day trade bull's stop) and now works back higher.

IF ... that big volume spike was market maker shorting to market to provide liquidity for BIG buyer, then current action makes sense, and may be seeing market maker now try and buy back that short.

IF not ... then there's a pretty big and formidable seller at that level right now and becomes a level of focus in session's ahead. May take note of $37.94 today, and see if it shows up in daily pivot analysis levels tomorrow.

The one tie I would have to make is when QQQ traded that level again, it ties directly to SPX WEEKLY R2 of 1,130.07.

Obvious near-term resistance right now...

  Linda Piazza   1/8/2004,  2:43:08 PM
I forgot to mention in my 14:38 post that those reversal signals have so far failed to produce the expected reversal.

  Linda Piazza   1/8/2004,  2:38:40 PM
Concerning Jonathan's post about whether we expect selling into the close, I'm not sure. I keep watching the TRIN, too, but as I mentioned in my 13:02 post, I keep noticing how often lately the OEX prints a small-bodied candle of one type or another--a reversal signal--on the third day after a tall white candle. I'm wondering if that's going to happen again.

  Linda Piazza   1/8/2004,  2:34:42 PM
Here comes the OEX dip toward the 30-minute 18/21-pma's. You know, sometimes I have a good idea of where the OEX is going on the very short-term and what it's likely to do, because it often telegraphs those very short-term moves with some accuracy or follows a typical pattern. Too bad the OEX isn't a good vehicle to trade those short-term moves. We can't benefit from them unless we want to throw a whole lot of money at a bunch of deep ITM options just to capture a small movement.

  Linda Piazza   1/8/2004,  2:29:41 PM
The OEX 30-minute candles are drifting sideways into the rising 30-minute 18/21-pma's, currently at 559.29 and 558.89. Lately when this happens, we've seen a quick dip down to those averages (a stop-running dip) and then a bounce. Bulls and bears alike should watch to see if that pattern repeats.

  Linda Piazza   1/8/2004,  2:26:25 PM
The OEX 30-minute oscillators taking on a more bearish aspect again, with the exception of momentum. Blink, though, and that will change. Don't put too much faith in oscillators right now unless you happen to know for sure that a trend change really is in the works. If so, could you let me know? I miss watching stochastics and having them be a useful tool.

  Jeff Bailey   1/8/2004,  2:25:28 PM
QQQ $37.83 +0.42% ... just seeing HUGE intra-day volume spike of 3.1 million shares from 13:40-$13.54 has QQQ traded 5-minute close of $37.91. Something's about to break intra-day. Old trader saying is "volume proceeds" price. That spike in volume comes among other 5-minute volume rates of about 500,000 per 5-min average.

  Jeff Bailey   1/8/2004,  2:19:30 PM
S&P Banks Index (BIX.X) 337.93 -0.32% .... tried to make a little run from late-morning resistance of MONTHLY Pivot 337.88 and pulls back in here to test as support. A kick higher and move above 340 would lend to bullish thoughts that OEX/SPX can move higher.

Still think SPX/OEX needs this sector to get back in gear.

  Jane Fox   1/8/2004,  2:19:19 PM
Linda you may be getting your 14:10 post wish. Link

  Linda Piazza   1/8/2004,  2:18:25 PM
Keltner OEX support is at 560.40, being tested and then at 559.08-559.29. Keltner resistance is at 560.81, 561.24-561.42, and 561.73. Really, though, until this thing really breaks one direction or another, this is just more coiling within a congestion zone.

  Jane Fox   1/8/2004,  2:15:13 PM
Hey Jane, I always look to the NDX as the leader, and here we are seeing how that works. But look at the individual stocks that make up the majority of the index -
CSCO is over $1 above the upper bollinger band. WOW. That's gotta be pure short covering.
MSFT however is making a clear bear engulf/dark cloud cover today.
ADX on the DOW has actually started to roll over if you can believe it.
But, the NDX is making a clear hangman today. Could be our 'blow off'.
A perfect top is a gap open higher (which we got), then a perfect reversal candle (which we are making with the hangman), followed by a gap down tomorrow (who knows with this market) making an island top.
Like Princess Lea said in Star Wars, 'help us Obi One, you're our only hope'.
Actually, I'm starting to think that a law must have gone into effect on Jan 1st that made it illegle to sell stock.
It's the only explanation!&#!&#
But I think Jim's right - we need Nas 2100, TMW 11k, or DOW 10,600

See great minds think alike. I agree with everything this reader has to say (not saying I have a great mind I was referring to Jim). Thank you.

  Jeff Bailey   1/8/2004,  2:14:15 PM
QQQ $37.91 +0.61% ... just off session high of $37.97. Day Trade Bull stop alert adjustment .... Raise stop to $37.75.

Will now look for bullish confirmation from OEX 560.81 +0.26%, which has not yet made a new session high.

  Linda Piazza   1/8/2004,  2:10:38 PM
$TRIN is moving up, as Jane has warned. I sure wish it would transition all the way into bearish territory, but more than that, I wish price would!

  Jeff Bailey   1/8/2004,  2:02:12 PM
Service Corp. (SRV) $5.88 +2.43% ... new 52-week highs here and upper-end of bullish regression. Swing trade bulls can raise stops to break-even.

  Linda Piazza   1/8/2004,  1:58:06 PM
The $TRAN is finally moving up again after dropping within three points of its 10-dma, but it's still well below a descending trendline formed off yesterday's and this morning's highs.

  Linda Piazza   1/8/2004,  1:54:00 PM
The VIX is hitting new intraday lows, currently 15.33.

  Ray Cummins   1/8/2004,  1:51:45 PM
Spreads/Combos/Premium Selling -- Market Movers

Among the bullish plays in our portfolio, some of the day's most active issues include: KOS Pharmaceuticals (NASDAQ:KOSP) +$1.65 at $46.95, Multimedia Games (NASDAQ:MGAM) +$2.67 at $46.98, Omnivision (NASDAQ:OVTI) +$1.24 at $61.79, Noble (NYSE:NE) +$1.17 at $36.24, Qualcomm (NASDAQ:QCOM) +$3.59 at $59.35, Schnitzer Steel (NASDAQ:SCHN) +2.84 at $56.24, and Yahoo! (NASDAQ:YHOO) +$1.02 at $48.69.

  Linda Piazza   1/8/2004,  1:50:04 PM
The stop-running push is coming right on time. Remember that the object is to see whether the push can stick or not. They certainly tend to stick more often when they're to the upside, don't they?

  Jeff Bailey   1/8/2004,  1:49:23 PM
QQQ $37.94 +0.68% ... upside alert set here at new session high.

  Jeff Bailey   1/8/2004,  1:48:49 PM
NYSE Composite (NYA.X) upside alert here at new session high.

  Linda Piazza   1/8/2004,  1:45:55 PM
I just noticed that the rising trendline off the OEX 12/10 low has now risen to 562-562.25, depending on how the trendline is drawn and how thickly it's drawn. I've been warning bears to be careful today and now I'll warn bulls, too, to fasten up stops as that level is approached. The OEX climbs that trendline and sometimes pierces it, but it doesn't get too far over it, or hasn't until now.

  Ray Cummins   1/8/2004,  1:42:51 PM
Spreads/Combos/Premium Selling -- Big Movers: Ryland Group (NYSE:RYL)

Another active issue in today's session is RYL, down over $9 at $73.50 after announcing that new home orders fell during the fourth quarter. The move incited a sell-off in the home-building sector and boosted gains in some of our other (bearish) portfolio positions such as Centex (NYSE:CTX) and Hovnanian (NYSE:HOV). Investors were particularly unhappy about Ryland's comments that first quarter earnings would be about the same as the first quarter of 2003, on new sales orders that actually dropped to 2,532 versus 2,778 a year earlier. Based on the current trend, the homebuilders segment will likely be one of the few market groups that does not benefit from the recent rally.

  Linda Piazza   1/8/2004,  1:34:02 PM
Stop-running push time, from now until about 1:55, most days.

  Jeff Bailey   1/8/2004,  1:30:21 PM
Russell 2000 (RUT.X) 578.51 +0.67% ... fractional session high here again... can the RUT.X lead the intra-day bullish action. It's trying to, but looking back to see if others will follow.

QQQ $37.87 +0.50% ... just off session high of $37.93.

  Linda Piazza   1/8/2004,  1:27:02 PM
As usual, the downside break of the OEX triangle has been the prelude to a zoom up, but so far, it's just zoomed up to test the broken support. Five minute oscillators look as if they're just now moving up into a bullish cycle, though, so there could be plenty more upside on this five-minute cycle. Keltner resistance is thinning out a bit, too, predicting that it could now be easier for the OEX to rise. First, it has to make it past that broken support, however. Keltner resistance is now ranging from 561.01-561.41, in single lines.

  Jeff Bailey   1/8/2004,  1:22:26 PM
Intra-day bear trap alert .... keep close eye on things here. Those 5-minute bar dips seen in last 10-minutes.... if we see new highs here, then those dips may have been a "trick" to influence selling, get some liquidity with supply at new highs limited.

In QQQ, with volume turned on, you can see it did bring in some volume. It is the quick reversal back higher to be suspicious of.

  Jeff Bailey   1/8/2004,  1:20:26 PM
01:00 Internals at this Link

  Linda Piazza   1/8/2004,  1:17:16 PM
Be cautious, OEX bears. First breaks out of symmetrical triangles have lately been a prelude to a big zoom up. One day or another that's going to change, and downside breaks will be real, but I haven't a clue whether that day is today or not.

  Jeff Bailey   1/8/2004,  1:15:24 PM
OEX 559.87 +0.10% .... breaking below intra-day triangle here.

  Linda Piazza   1/8/2004,  1:15:22 PM
The $TRAN has not approached its day high nor yesterday's high. Note that its 10-dma is below at 3019.22. Although the $TRAN has violated this MA briefly on an intraday basis over the last few weeks, it has not closed below that average since early December. Currently, the $TRAN is at 3023.32. Like other markets, the $TRAN is churning around in a congestion zone.

  Jeff Bailey   1/8/2004,  1:10:20 PM
Russell 2000 (RUT.X) 578.02 +0.59% ... just noting that RUT.X was first major index to trade new session high at 578.42.

  Linda Piazza   1/8/2004,  1:09:18 PM
After breaking out of the first smaller five-minute symmetrical triangle this morning, the OEX has formed a wider one, one detailed by Jeff in a previous post. As the OEX comes down now to test the lower trendline of that triangle, and does it during the lunchtime lull and the approaching time of the stop-running push, remember that downside breaks out of these triangles are sometimes false breaks. They sometimes precede a much stronger push upward.

  Ray Cummins   1/8/2004,  1:03:34 PM
Spreads/Combos/Premium Selling -- New Plays: Inamed (NASDAQ:IMDC)

Shares of IMDC, which makes products for plastic and reconstructive surgery, are being hammered today after the U.S. Food and Drug Administration announced Wednesday night that it needed more information on the company's breast implants before it revisits their application. The stock is down $7.62 at $42.18 and J.P. Morgan noted that "Investors are likely to find plenty of reason to be skeptical for a near-term resolution of this situation." With that idea in mind, it may be time to transition to a bearish stance on the issue. Short-term "premium selling" positions (naked calls) exist at $45 and $46.62 in January for aggressive traders.

  Linda Piazza   1/8/2004,  1:02:37 PM
The OEX was actually at one line of Keltner support when I mentioned lower Keltner support in my previous post. It's gone back up to challenge the resistance again, with five-minute MACD trying to turn up again. It's been doing that all day as the OEX coils, suggesting to me that there's at least the possibility of another thrust higher, with the result of that thrust telling us much about final direction. As Jane has mentioned, the $TRIN is in bullish territory, signaling great caution to bears, but it keeps trying to rise all day, too. This will resolve itself one way or another. Or maybe not. I keep staring at that small-bodied candle at the top of the OEX daily chart and seeing how many times tall white candles such as Monday's have been followed recently by 3-5 small-bodied candles before the next big move. This time, though, with all the indices near such important levels, it seems as if something must happen, but that's not always true, is it?

  Jeff Bailey   1/8/2004,  12:59:58 PM
Dow Industrials (INDU) 10,570 +0.39% ... same type of intra-day triangle as seen in the OEX. Dow trying to move above the uppwer end of our bullish regression. WEEKLY R2 of 10,625 now in play.

Largest priced has PG +0.88%, UTX -0.36%, IBM -0.48%, MMM -0.67%, CAT -0.33%.

Worst performers for 2003 ... T +2.58%, EK +1.36%, SBC +1.54%, MRK -0.14%, JNJ -0.17%.

  Jeff Bailey   1/8/2004,  12:55:15 PM
S&P 100 (OEX.X) ... intra-day chart. Pressure should be building. Link

  Linda Piazza   1/8/2004,  12:54:19 PM
Surprise. Keltner resistance did hold. Next support gathers between 559.80-560.11.

  Linda Piazza   1/8/2004,  12:50:40 PM
The OEX is at Keltner resistance again, at 560.90, with more at 561.17, but I'm betting on a possible push outside the channel again. Five-minute oscillators are turning up again as this resistance is faced. I'm not sure whether there will be new highs, but that's what we're all waiting to see!

  Linda Piazza   1/8/2004,  12:42:17 PM
The OEX is holding well above the descending trendline of the symmetrical triangle from the five-minute chart this morning, showing strength as it resists falling beneath that trendline. It's holding above 560, too, a presumed sign of strength. Yet, so far, there's no great enthusiasm to send it higher. We're just going to have to see, but I agree with Jeff that if the OEX could clear 562, then we could see an explosive move. I'm just not so sure the OEX can make it above that, and then not even that sure about the explosive move, since some breakouts have been quickly shot down, too. I'm afraid that the OEX could pop just above that level and then get slapped down, as it did this morning when it tried to move above the important Fib level.

  Jeff Bailey   1/8/2004,  12:40:07 PM
S&P Banks (BIX.X) 337.72 -0.38% ... session low has been 337.14, and very close to WEEKLY S1 of 337.11.

MONTHLY Pivot of 337.88 has found sellers intra-day after BIX fell below.

  Linda Piazza   1/8/2004,  12:35:21 PM
The $XOI, the Oil Index, has been on a tear lately, with its straight-up rise throughout December mimicking that of the OEX and some other indices. It's not doing so well this week, however, with many of the oil majors both here and in Europe trading weakly. BP and another European oil major, I can't remember which now, were downgraded this week. Among U.S. companies, I note that MRO prints a big red candle, a dark shadow to follow two days of doji. MRO remains above its 10-dma, however. XOM is down 1.29% today, dropping more than two points over the last couple of days after completing a reversal signal on Tuesday. (That's weird: a reversal signal that works.) It's dropped below its 10-dma, unlike MRO, but it's bouncing now from a 19.1% retracement of the November-early January climb. It's got presumed round-number support at $40.00 with the rising 21-dma just below that at $39.61, and with the 38.2% retracement at $39.13, near historical support.

  Jeff Bailey   1/8/2004,  12:35:04 PM
OEX 560.60 +0.23% .... Right on its MONTHLY R1 here. With GE bidding like it is on the alert for POWERFUL move higher on break at 562.

  Jeff Bailey   1/8/2004,  12:32:17 PM
Buy Prog. Prem Alert ... SPX = 1,128.12 ... QQQ = $37.86

  Jeff Bailey   1/8/2004,  12:30:33 PM
12:00 Internals at this Link

  Jeff Bailey   1/8/2004,  12:24:16 PM
General Electric (GE) $32.01 +1.13% ... continues to move higher. Buyers seems eager to buy the backfill of this morning's gap higher.

  Linda Piazza   1/8/2004,  12:23:31 PM
OEX 30-minute oscillators at one moment look bullish and at another look bearish, depending on current price action. Oscillators are not our best tools in a strongly trending market, which is one reason I'm watching Keltner channels and the envelopes that surround key moving averages instead. I'm more specifically watching that important Fib level at 561.23, the 38.2% retracement of the bear-market decline.

  Jeff Bailey   1/8/2004,  12:22:49 PM
SPY Oberservations .... buyers seem to be more aggressive. Now seeing prior day's high find firmer support intraday.

  Jeff Bailey   1/8/2004,  12:18:40 PM
Pressing the issue .... day trade long alert the QQQ $37.83 +0.39% here, stop $37.63, target $38.20.

  Linda Piazza   1/8/2004,  12:13:01 PM
As I suspected, Keltner resistance did not hold as well this last time as previously, although the OEX turns back down inside the Keltner channels now. The rise broke the OEX above its symmetrical triangle on the five-minute chart. Sometimes the first break is a false one, but less seldom when it's to the upside. We'll know better as the OEX comes back to test the top descending support line of that former symmetrical triangle, at about 559.50. It's still difficult to ascertain final direction, of course, but if the OEX falls below that line, then the break was a false one.

  Jonathan Levinson   1/8/2004,  12:12:19 PM
The put to call ratio has risen to .61 here, VXO 14.86.

  Jeff Bailey   1/8/2004,  12:04:14 PM
Networkers look like bear wreckers. +4.38% Link

Sector refuses to show any sign of weakness since the lows. Triple-top buy at 260 bullish.

Semiconductor's bid as well. Bullish guidance from Nokia build interest for handset chipmaker Texas Instruments (TXN) $31.20 now up 4%. Trade at $31 has demand building further.... Link

  Jeff Bailey   1/8/2004,  12:02:21 PM
11:00 Internals at this Link

  Linda Piazza   1/8/2004,  11:35:06 AM
Keltner channel resistance for the OEX now shows up at 560.44 and 560.72. I'm not sure it will hold this time.

  Linda Piazza   1/8/2004,  11:24:24 AM
I don't know what's going to happen today, either, but as the OEX heads up to test Keltner resistance once again, something about the way that resistance and the oscillators are configured makes me think that it might be more successful in moving above that resistance this time. This time, five-minute oscillators look close to turning up again as the OEX approaches the resistance. However, the pattern has resolved itself into a symmetrical triangle, so we have to wait and see how it breaks. Lately, we've seen a lot of false breaks, especially if the first break is to the downside, so be careful.

We've all got our own views about what might happen, and whether resistance or support might be stronger. The truth is, though, that none of us can talk the markets down or up, no matter with what passion we espouse our views. I see possible resistance and so am afraid of long plays while others see other things. Don't let your vision or your talk or ours keep you in a play longer than your account can tolerate the losses, however.

  Linda Piazza   1/8/2004,  11:14:16 AM
The OEX is back at potential Keltner channel support, and again should try to bounce, but it may drift down to next support at 559.01 first. Strongest Keltner support is currently at about 557.73, but is currently rising.

  Linda Piazza   1/8/2004,  11:04:54 AM
As of a few minutes ago, volume patterns remained bullish, with adv:dec ratios at 16:14 on the NYSE and 15:14 on the Nasdaq. Those ratios are much lower than they were earlier today, however, so although they're bullish, the trajectory has been toward less-bullish levels. The up/down volume patterns remained strong, with up volume about 1.86 times down volume on both exchanges. Total volume was 496 million on the NYSE and 867 million on the Nasdaq. New highs were already at 560 with new lows only 3.

  Linda Piazza   1/8/2004,  10:53:22 AM
I just noticed that on-balance volume has been decreasing on the SMH, the Semiconductor HOLDRs, since early November. OBV began to steady a bit in December, but did not climb as prices climbed. While OBV is no more foolproof than any other indicator, this is a sign that volume patterns weren't confirming the new rally that began in mid-December.

  Jeff Bailey   1/8/2004,  10:52:55 AM
QQQ $37.77 +0.19% ... bounce high here from session low of $37.60.

Just under 5-MRT Red #2. Session low so far came exactly at RED #3.

  Jeff Bailey   1/8/2004,  10:51:13 AM
General Electric (GE) $31.92 +0.78% .... quickly checked short interest, but nothing all that telling. Shorts added about 6.4 million shares from November 15 to December 15, with short interest at 37.8 million shares. Avg. daily volume of 22.5 had days to cover rising from 1.59 to 1.68.

Highest 12-month interest was June 13 at 63.8 million, with days to cover at 3.39, when volume was running 18.8 million per day.

  Jane Fox   1/8/2004,  10:49:23 AM
In a move that will put pressure on other wireless carriers to increase their capital spending and speed up plans to roll out similar features, Verizon Wireless is expected to announce it will invest $1 billion in the next two years to deploy a high-speed wireless Internet data network nationwide. This move is being touted by analysts as a signal that the historic decline in the telecommunications industry has reached a bottom as the economy picks up steam.

  Jane Fox   1/8/2004,  10:43:35 AM
Linda I usually ignore the first five minute candle on the TRIN, for some reason it is always huge.

  Linda Piazza   1/8/2004,  10:42:14 AM
Just for the heck of it, I placed a retracement tool on the $TRIN's range for the day, since it was climbing after a steep flagpole-like plunge. It turned down again just below the 50% retracement of that flagpole plunge from this morning. Think that $TRIN is subject to reacting to Fib numbers, too?

  Jeff Bailey   1/8/2004,  10:40:54 AM
General Electric (GE) $31.90 +0.66% ... per Jonathan's post and prior comments I made in Index Trader Wrap.... There goes the POTENTIAL head/shoulder top. This could be VERY bullish development for OEX! Link

Here's GE's PnF chart... Link

  Linda Piazza   1/8/2004,  10:39:01 AM
The OEX is challenging Keltner resistance now, with that Keltner resistance at 560.44, and just at the breakout point of the possible bull flag.

  Jeff Bailey   1/8/2004,  10:37:28 AM
10:00 Internals at this Link

Yesterday's internals at this Link

  Linda Piazza   1/8/2004,  10:37:18 AM
That pattern on the OEX five-minute chart is resolving itself into something that looks an awful lot like a bull flag. That, coupled with the too-low TRIN, should worry bears, but there's still that resistance overhead, too. I'm not sure what to think at this point.

  Linda Piazza   1/8/2004,  10:35:14 AM
The SOX gapped up this morning, charging above the outer 1.35% envelope on its 30-minute chart. The SOX sometimes does overshoot that outer envelope, and then sometimes climbs the topside of that envelope, so this isn't a sign that it's going to immediately turn down. However, it did fall back inside the envelope, and now rises to test it again, at about 533.08.

  Jane Fox   1/8/2004,  10:32:50 AM
Linda (10:28 post) no the TRIN is still quite bullish and that should worry any bears.

  Linda Piazza   1/8/2004,  10:31:30 AM
The expected bounce from Keltner support appears to be beginning on the OEX, but it's tepid. Here's where we need to be extremely watchful, with bulls hoping for a new day's high and bears hoping that the Keltner resistance from 559.67 (it's declined since my last post) to 560.34 catches the OEX and rolls it down again.

  Jim Brown   1/8/2004,  10:31:10 AM
Rumor IBM is going to warn on booking for the quarter.

  Linda Piazza   1/8/2004,  10:28:45 AM
The TRIN certainly isn't charging up into bearish territory, is it, Jane?

  Linda Piazza   1/8/2004,  10:27:12 AM
The OEX is at next Keltner support. It's a single line of support, but that single line is the bottom of the shortest-term channel, a usual short-term bounce point. Resistance now gathers from 559.74-560.45. I would expect now a bounce up to one of those resistance levels. A failure to attempt a bounce would show even more weakness than is being shown so far.

  Linda Piazza   1/8/2004,  10:23:41 AM
Will it be as easy as this? A single test of the 38.2% retracement of the bear market decline at OEX 561.23 and then the OEX drops? Somehow, that doesn't seem likely.

I should have said this morning in my 9:26 post that I was volunteering not to initiate any new bearish OEX positions. I avoided being stopped out of my position yesterday at the close by a few cents. I removed the stop this morning to watch early volatility in case there was a pop-and-drop day. I'm still watching, but about to reset my automatic stop just over the high of the day.

  Jeff Bailey   1/8/2004,  10:22:27 AM
QQQ $37.65 -0.08% ... session lows here. Looking for support to hold at $37.36-$37.38.

  Linda Piazza   1/8/2004,  10:18:52 AM
The OEX is falling back through the first layer of Keltner channel support, the support that held it up earlier, but it's now at the second line of defense. Below this, Keltner channel support thins out, suggesting that it will be easier for the OEX to fall than to climb on a very short-term basis, until 557.11-557.35 is hit. Note: A decline below the second line of defense began as I was typing.

  Linda Piazza   1/8/2004,  10:14:36 AM
The TRAN's high of the day has been 3037.44. Unlike some of the other indices, that's below yesterday's high, but the TRAN is currently rising and is just beneath that level so still might achieve new highs. I'm still watching 3050.40, a swing high from March 2002, but particularly watching for a close above that level, as Dow theory refers to closes. Yesterday it came close enough to constitute a test of that level if the TRAN should instead roll over now.

  Jeff Bailey   1/8/2004,  10:14:25 AM
Buy/Sell Program Prem. Alerts just got another buy program premium alert (SPX) 1,127.45, which is third of the morning (not counting the one at the open).

What I think is taking place today, with the futures contract at my zone of near-term resistance and SPX at WEEKLY R2, is that there is going to be some higher number of institutional computer activity today. With stocks at new highs, may be seeing the "buy stock" and "sell futures" against the purchases.

This is where a CLOSE in the futures builds a trader's near-term bias.

What traders should be doing is taking some profits, raise some cash despite the overwhelming bullish bias established from your arrows, but ready to get back long on further move higher as MARKET dictates.

  Jonathan Levinson   1/8/2004,  10:13:38 AM
CORRECTION- I missed a 24-day repo in the amount of 4B, for a net DRAIN of 1B from the Fed today.

  Jonathan Levinson   1/8/2004,  10:08:46 AM
Opening put to call ratio .54, VXO 15.02, QQV 19.93, VXN 22.07.

  Linda Piazza   1/8/2004,  10:05:13 AM
OEX Keltner support held on the first touch. Support can know be found at 559.96, 559.60, and 559.25. Will we perhaps have another test of 561.23? I'm not sure, with the BETA gapping down, as Jane has mentioned. The VXO is trying to rise off unfathomable lows, but VIX doesn't appear to be.

  Jeff Bailey   1/8/2004,  10:05:08 AM
S&P 500 Index (SPX.X) alert 1,127.00 +0.05% .... session high has been 1,130.04, which is fractions from WEEKLY R2 of 1,130.70. This ties in with my fitted retracement on futures chart at this Link

Today's trade is a good test for my fitted retracement levels. Are futures traders in the pits trading these levels, and developing similar bias?

  Jonathan Levinson   1/8/2004,  10:04:54 AM
A 13B repo expiring Jan 22nd has just replaced a 10B repo expiring today for a net 3B addition.

  Linda Piazza   1/8/2004,  10:01:26 AM
ECB President Jean-Claude Trichet did mention the possible dampening effect of the euro's gain against the dollar as many had feared he would do, but he seems to have tempered his statement. Here's an excerpt: Although recent exchange rate developments are likely to have some dampening effects on exports, export growth should continue to benefit from the dynamic expansion of the world economy.. The full introductory statement to his speech can be found by going to Link and clicking on "Key Speeches" and then looking for the statement "For introductory statements to press conferences, please see the section 'Calendars and events,'" in fine print just under the blue "ECB key speeches." Click on the link offered there. For some reason, the link I listed above will only take you to the main page, I believe.

  Jim Brown   1/8/2004,  9:57:10 AM
Wholesale Trade = +0.3% (est +0.6%, last +2.0%) Inventories +0.5%

  Jeff Bailey   1/8/2004,  9:54:39 AM
QQQ $37.74 +0.15% .... trying to backfill the bullish morning gap higher, but not quite. Low/high so far $37.68-$37.93.

  Jeff Bailey   1/8/2004,  9:52:46 AM
I wish I could track the dollar real time too. Can see some similarity with overnight futures. When I went to bed last night, dollar was bidding and futures were slightly red, then things changed.

  Linda Piazza   1/8/2004,  9:51:24 AM
The OEX high today has been 561.48, just above the 561.23 level that represents a 38.2% retracement of the bear-market decline.

  Linda Piazza   1/8/2004,  9:49:54 AM
OEX Keltner support now being tested.

  Jeff Bailey   1/8/2004,  9:45:23 AM
Jonathan ... great chart on the dollar index.... turn that thing upside down and it looks like the equity indices doesn't it.

  Linda Piazza   1/8/2004,  9:43:03 AM
From another perspective, the OEX this morning pierced the 0.675% envelope surrounding the 60-minute 21-pma. It's now pulled back so that the shadow pierces that envelope, while the body is below it. This is early in the morning, however, and anything can happen, so I'm watching that behavior.

  Jeff Bailey   1/8/2004,  9:40:57 AM
QQQ $37.87 +0.49% ... swing trade bull update from $37.41 entry.

Going to keep stop at $36.90 for today, but should QQQ move above $38.00, will begin to snug things up. If QQQ doesn't hit $38.00 level by tomorrow, will get new WEEKLY levels, and may make some upside adjutments to current target of $38.25. Will keep eye on the futures charts for bias, which continues to suggest a rather strong bullish bias continues to build.

  Linda Piazza   1/8/2004,  9:40:12 AM
The OEX now pulls back slightly. Keltner support looks as if it soon might be gathering near 559-559.70. Let's see if it holds in the first retracement of the day that usually begins about now.

  Linda Piazza   1/8/2004,  9:37:48 AM
The OEX is back at the rising trendline off the 12/10 lows, actually slightly above it now. While that trendline has tended to support the OEX, being a magnet for the prices if the OEX should try to slip lower, it's also been working the other way, drawing the OEX back if it tries to climb too far above it.

  Linda Piazza   1/8/2004,  9:34:41 AM
During the first five minutes, the OEX ranged from 559.31 to 560.85, with a midpoint at 560.08. The OEX is of course above this midpoint, indicating strength in earliest trading. Keltner channels show that it's wildly extended on a short-term basis. I'd ordinarily say that a move above 560 might set off fireworks, however, turning that breakout into a true "buy" breakout signal, but there's 561.23 waiting just overhead now.

  Jeff Bailey   1/8/2004,  9:32:52 AM
Texas Instruments (TXN) $30.62 +2.23% Link ... upside alert here as stock gaps out of nice support base.

Still some room to its bullish vertical count of $42.50, and the column of X that built after that triple-top buy signal remains bullish.

  Linda Piazza   1/8/2004,  9:29:29 AM
Big OEX breakout above the Keltner channels: This can be a breakout signal, but more often it's a signal that the market is too far extended on a short-term basis and that a pullback will occur. Perhaps not a big one, and perhaps not immediately, but such breakouts usually result in a pullback all the way to the bottom of the nested channels. That's at 554.25 now, but should be rising during the day.

  Jane Fox   1/8/2004,  9:28:15 AM
Me too Linda.

  Linda Piazza   1/8/2004,  9:26:30 AM
I tell you what: I'll volunteer to stop entering bearish plays, and maybe the market pullback can get started. Deal?

  Jim Brown   1/8/2004,  9:19:41 AM
The Board of Governors of the Federal Reserve System has released the following speech:

Speech by Governor Kohn on the United States in the world economy Link

  Linda Piazza   1/8/2004,  9:18:03 AM
Looks as if we'll have an opportunity to see what happens when the OEX challenges the 38.2% retracement of the bear-market decline, at 561.23. I'm done making prognostications about what will happen. Like Jane, I'm gratified to see better economic numbers being produced but really worried about the lack of any meaningful retracement. I don't know about Jane, but I'm one of those baby boomers worried about what will be happening when retirement happens--for my husband, as I want to keep working forever. I'm glad when our retirement accounts plump up a bit and I'd like to see them keep on plumping up indefinitely, but that usually isn't what happens and it scares me when it does.

  Jane Fox   1/8/2004,  9:02:43 AM
No explanation was given when a federal judge unexpectedly refused to accept a plea agreement with the wife of Enron's former chief financial officer, Andrew Fastow. The agreement between Lea Fastow and federal prosecutors would have almost assured a similar plea agreement with Mr. Fastow. Since Mr. Fastow is an extremely valuable source of information against former chief executives Kenneth Lay and Jeffrey Skilling any refusal of plea agreements could put that information in jeopardy. It was earlier reported that plea negotiations with Mr. and Ms. Fastow would give Mr. Fastow a 10-year prison sentence and "cut" Ms. Fastow's prison time.

  Jonathan Levinson   1/8/2004,  8:34:46 AM
MILAN -- Bank of America (BAC) holds EUR7 billion in Parmalat Finanziaria SpA (PRF.MI) assets, financial news Web site TGFIN reported Thursday, citing a Parmalat creditor association.

The EUR7 billion in assets held in a Bank of America account are invested in U.S. Treasury bonds, TGFIN reported.

Bank of America couldn't be reached immediately for comment.

Telephone calls to Mauro Sandri, a lawyer leading the association of Parmalat shareholders and bondholders, weren't answered.

  Jonathan Levinson   1/8/2004,  8:28:37 AM

  Jonathan Levinson   1/8/2004,  8:27:54 AM

  Linda Piazza   1/8/2004,  7:57:09 AM
The ECB has kept rates steady, but many still await the press conference, watching for any statement by President Jean-Claude Trichet about concerns over the pace at which the euro gains against the dollar.

Also of note, December's German unemployment numbers fell 21,000, well off the expected 5,000. In addition, manufacturing grew in the eurozone.

  Linda Piazza   1/8/2004,  7:07:05 AM
Good morning. Of particular interest to those watching global markets might be a special report by the IMF yesterday. In that special report, the IMF noted that the large fiscal deficits in the U.S. might impede both U.S. and global markets by prompting higher interest rates, jeopardizing Medicare and Social Security programs, and slowing the growth of global economies. Private sector investments would be reduced and national productivity might be reduced, too. As long as the U.S. is able to attract foreign investments, a spokesperson said, it should be able to manage the deficit, but if international investors move funds elsewhere, the country might no longer be able to do so. Tuesday, Federal Reserve governor Donald L. Kohn had stated that the dollar had declined as a result of lessened foreign demand for U.S. assets, but claimed that it had not yet negatively impacted the U.S. economy.

Unlike the pattern of the last couple of days, the Nikkei opened near the flat-line level, dropped for a few minutes, and then began climbing into the gap between Monday's closing level and Tuesday's opening level. The day's trading saw the Nikkei find resistance three times just under 10,900, moving down each time that level was tested, not able to clear the top of that gap. The Nikkei did close higher by 79.83 points or 0.74%, at 10,837.65, more than 100 points off the day's low. The Nasdaq's gains sent tech-heavy indices across Asia higher, including Japan's, but exporters lost in early trading. Automakers ended the day with a mixed performance. Semiconductors gained. A report that consumer electronics company Matsushita would trim its Southeastern Asia subsidiaries by 40% sent that company higher. After initially trading lower, Fujitsu ended the day higher. Media reports said that the company would release European model cell phones compatible with second- and third-generation technologies, and would do so by 2005. Sony fell, though, after announcing plans to introduce an online music service in the U.S. Sumitomo Trust announced that it would repay the public funds received in a bailout several years previously, sending the banking sector higher.

Other Asian bourses turned in mixed performances. The Taiwan Weighted gained 0.45%, but South Korea's Kospi lost 0.35%. Singapore's Straits Times gained 0.31% and Hong Kong's Hang Seng gained 0.35%. China's Shanghai Composite gained 1.44%.

European bourses trade higher this morning as investors await policy decisions by the ECB and the Bank of England. No rate changes are expected from either meeting, and as this report was being prepared, the Bank of England did confirm that there would be no rate change. However, many eagerly await the ECB press release, to be released shortly, and will glean it for mention of the euro's rise against the dollar. While most believe that new ECB president Trichet will avoid mention of the euro's strength if possible, many are afraid that he will mention the rate that the euro has been rising against the dollar and the dampening effect that might soon have on European economic growth. As I was preparing this report, CNBC World was flashing news that an EU commission spokesperson was saying that there would be no change or commentary on the euro FX, but I do not know whether that was official news.

European telecom equipment makers gained in early trading. Credit Suisse First Boston gave an upbeat prediction for Alcatel's earnings report on February 5. Other technology stocks gained, too, after the Nasdaq's strong performance and on speculation that capital spending would increase this year. In addition, Unilever soared after Proctor & Gamble reported that Q2 profit bested analysts' estimates, perhaps by as much as $0.04/share, and Deutsche Bank said that Unilever was undervalued, raising it to a buy rating. Air France also soared after announcing December statistics.

The FTSE 100 did not react much to the Bank of England's decision, although it did move down about 5 points. Currently, it's up 30.60 points or 0.68%, to 4503.60. The CAC 40 trades higher by 38.95 points or 1.09%, at 3602.46. The DAX trades higher by 43.03 points or 1.07%, at 4047.43.

  OI Technical Staff   1/7/2004,  12:04:48 AM
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