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  Jeff Bailey   1/13/200,  5:24:08 PM
Closing Internals at this Link

  Linda Piazza   1/13/200,  4:03:02 PM
The OEX just saw its first close beneath the 10-dma since December 10. It was only minimally beneath that 10-dma, though, and that change in tenor must be balanced by the day's long lower shadow, showing the OEX's bounce. Because of the nature of bull flags, I wouldn't be surprised to see a small white candle in tomorrow's trading as the OEX rises to and tests the 30-minute 21-pma, but that's not a prediction.

  Linda Piazza   1/13/200,  3:59:17 PM
There was a rough inverse H&S on the OEX five-minute chart, and this move up has perhaps confirmed it, although the right shoulder was a truncated one if so. It's possible instead that the OEX is just reaching the neckline now and will fall back to try to form a right shoulder. It's too rough of a formation to be sure. There was bullish MACD/price divergence as the head was formed, however, so it should be watched. If it's confirmed, its upside target is somewhere around 558.50, but I give less credence to five-minute formations than to ones formed on 60-minute charts. Still, it would be crazy in the environment of late to ignore any potentially bullish formation.

  Jeff Bailey   1/13/200,  3:57:02 PM
VIX.X 18.06 +7.37% .... SPX 1,121.32 (benchmarking)

  Linda Piazza   1/13/200,  3:51:12 PM
Without a strong move at the end of the day, several indices will be closing near their 10-dma's, either just over or just under, it appears. The various 10-dma's are: OEX 555.80, with the OEX at 554.99; Dow 10,487.85, with the Dow at 10,416.18; the TRAN 3020.59, with the TRAN at 3014.70; the Wilshire 10,902.19, with the Wilshire at 10,928.56.

  Jeff Bailey   1/13/200,  3:50:28 PM
Buy Prog. Prem. Alert ... SPX = 1,120.59 ... QQQ = $37.87

  James Brown   1/13/200,  3:45:42 PM
Another bank traders might want to watch is Golden West Financial (GDW). The company isn't due to announce earnings until Jan. 22nd but shares are already breaking down through the $100 mark today.

  Linda Piazza   1/13/200,  3:45:01 PM
The 30-minute OEX MACD is making a bullish cross from below signal, confirming my impression that the OEX might rise (perhaps this afternoon, perhaps tomorrow morning) toward the 30-minute 100- or 21-pma's. Bears would like to see the OEX consolidate while 30-minute oscillators cycle up, with the up cycle cut short as the MACD tries to move above signal, and bulls want to see a strong thrust up while the MACD cycles up, but we all just have to wait and see.

  Jeff Bailey   1/13/200,  3:44:12 PM
Market Makers / Specialists are a tricky bunch .... SWC $9.94 just printed $10.00.

If day traders traded a hard stop at $9.84 and displayed that order, we may have shown our hand (playing cards) as specialist comes down and takes those stop, and may now print it out at $10.00. We shall see....

Note: This should not be taken as "don't use a stop." However, day traders that are watching things on an intra-day basis often opt for mental stop, and monitor close when stop level is traded.

Day trader hint: Always have two stops for your trade. One is the closest to entry, where if traded, you are looking for the door on any type of bounce, preferably back to break-even/slight profit.... MORE IMPORTANTLY is to have a second "MAX STOP where you aren't looking for a bounce, and a level you FLUSH the trade.

Your first stop is set at a level where you DON'T THINK the stock should trade if your bullish target for the day is to still be in play. Then, if that STOP level is traded, it is often sign that the trade is NOT going to be able to hit your target and time to move on.

  James Brown   1/13/200,  3:41:16 PM
Yet another bank BB&T Corp (BBT) announced earnings this morning, profits were inline, but the company warned that 2004 may be "soft" due to commercial loan demand. Shares are down 3% to $36.67 but remain above current support at $36 and its 200-dma.

  James Brown   1/13/200,  3:36:48 PM
Despite beating earnings by 6 cents this morning shares of the Boston-based State Street Corp (STT) bank are down 3.76% after warning that 2004 may be a "challenging" year. Today's candle looks like a bearish engulfing pattern, which can be a one-day reversal pattern.

  Jeff Bailey   1/13/200,  3:33:20 PM
Day trade bullish stop alert ... SWC $9.84. ($-0.07, or -0.71%)

  James Brown   1/13/200,  3:30:30 PM
Announcing earnings on January 21st is EBAY. That's too close for us to play it on the OI call list but shares are showing a lot of relative strength today with a 2.57% gain.

  James Brown   1/13/200,  3:28:53 PM
Nimble traders may want to keep an eye on General Motors (GM). The stock is looking a little vulnerable here and all its technical oscillators are rolling over. If the market continues to pull back GM could test the 50-dma currently near $52.50. Watch out for earnings on Jan. 20th.

  Linda Piazza   1/13/200,  3:26:45 PM
The OEX is headed up to test the 30-minute 100-pma again, and possibly all the way up to the 30-minute 21-pma at 556.90, a test I've expected to happen sometime today or tomorrow morning as that average draws closer to the then-current OEX level. The OEX behavior as that average is tested will tell us a lot about intermediate-term action. I have no need to be right or wrong on this, but only want to know where risk lies and where stops should lie, too. Heck, I've been wrong lots, and very publicly wrong. I'm here to represent the self-taught and always-trying-to-learn trader, so I don't mind admitting when I'm wrong. I just mind doing being wrong with someone else's money at stake. Be careful if you're in a trade, either bullish or bearish, not to invest too much emotion in being right. Especially during opex week if you're in front-month options.

  Jeff Bailey   1/13/200,  3:26:22 PM
Day trade update alert in Stillwater Mining (SWC) $9.90 +1.74% ... not looking like my intra-day upside target of $10.16 is going to get hit. Best since entry has been $10.04.

I think there's been a good buyer in the stock today, and I'd look for specialist to try and print the close at $10.00. Look for a move back higher into the close at $10.00 where specialist may try and print orders out near the close. If so.... look to come just inside his offer with ours at $9.99. Specialist will want to print $10.00, and odds are he/she will take your offer to reveal $10.00 to print out today's fills.

  Jeff Bailey   1/13/200,  3:20:26 PM
I think you're correct Jane (15:19:35) ... QQQ $37.85 won't give up Friday's opening lows of non-farm payroll will they? QQQ session low $37.60.

  Jeff Bailey   1/13/200,  3:19:09 PM
Rally alert! ....

  Linda Piazza   1/13/200,  3:16:55 PM
Notice on the OEX daily chart that the pullback is so far taking the form of a bull flag pullback. Such a bull flag, as we know, can take prices down to a 50% retracement of the climb that immediately preceded it and still be considered bullish action. This pullback now isn't unexpected and isn't yet alarming. So far, it's just a pullback. I, for one, would feel better if the OEX would retrace 50% of the climb from the November low, which be at about 536.75, or 50% of its climb from the December 11 gap, which would be at about 545.75. Of course, I don't expect that to happen today, and because of the nature of flags, I expect it to happen in a pattern of lower highs and lower lows, if it does happen. That means we could see a bullish candle tomorrow as the OEX zigs and zags its way down in a normal retracement. Retracements do tend to happen more precipitously than climbs, however.

  Jeff Bailey   1/13/200,  3:09:38 PM
03:00 Internals at this Link

  Linda Piazza   1/13/200,  3:06:43 PM
Turning back to the OEX 30-minute chart, I see that the OEX dipped down and then rose back to test the 30-minute 130-pma again. It stopped right at that average, showing me that's what it was doing, but not yet proving to me whether it's going to turn down or eventually climb back over that average again. I really didn't expect the OEX to continue its plunge until the 30-minute 21-pma slid lower, closer to the current price, so that the OEX could pop up and retest it one more time before dropping again. It's got those 60-minute averages just underneath to provide some support, so unless a real plunge gets going, I expected that the OEX would have to consolidate this morning's losses before it could drop much more. We'll just have to see, though, because drops sometimes are more violent that climbs.

Did I just say that? Not lately, they haven't been. I'm talking about historically, in the old (pre 2003) textbooks.

  Linda Piazza   1/13/200,  2:51:41 PM
Not so fast. (My 14:50 post.) The COMPX has not fallen to a new low. All bets are off until it does.

  Linda Piazza   1/13/200,  2:50:26 PM
We have a new day's low on the OEX. Over the last 10 days to two weeks, I've been speculating that the OEX had pulled too far above its 60-minute 100-pma, and saying that I thought it was nearing time for it to retest that moving average. I was a bit early--just ask my brokerage account--but it looks to be headed down to do just that, with that average at 551.29, the downside target of the H&S formation.

That spot has very strong potential for a bounce, and you should prepare in case the bounce is bigger than we imagine. However, we're seeing something that we haven't seen in a long while: a bearish formation complete, confirm, and then head fairly close (so far) to its downside target. Will wonders never cease!

  Jane Fox   1/13/200,  2:46:27 PM
This move in the TRIN and even the TRINQ is simply amazing. Link

  Jeff Bailey   1/13/200,  2:46:10 PM
Keene's 14:16:27 comment was right as the SPX approached its WEEKLY Pivot, ticked 1,120.70. Pivot analysis traders will note WEEKLY Pivot at 1,120.75.

May have suckered in some overly aggressive bulls, but probably not pivot matrix bulls.

  Linda Piazza   1/13/200,  2:45:56 PM
The COMPX has resisted confirming its double-top formation, but it's now again at what should have been the confirmation level. I'm still waiting for a new day's low as confirmation, however.

  Jane Fox   1/13/200,  2:42:29 PM
Yes Linda (14:36 post) the TRIN has made an enormous move today and continues to rise. This is not good for the bulls.

  Linda Piazza   1/13/200,  2:37:48 PM
For reference, the previous OEX low of the day was 553.07.

  Jeff Bailey   1/13/200,  2:37:28 PM
VIX.X 18.03 +7.19% ....

SPX most active options .... Mar. 1,025 put (7,980), Mar. 1,125 put, Mar. 1,125 calls.

Look like put buyers and call sellers today.

  Linda Piazza   1/13/200,  2:36:29 PM
That $TRIN just keeps getting higher and higher, doesn't it, Jane.

  Jeff Bailey   1/13/200,  2:27:00 PM
Micrel Inc. (MCRL) $17.10 -4.41% Link ... check this S&P 500 mid-cap stock out on intra-day basis. Make the tie with SPX's recent test and rejection back lower of WEEKLY Pivot.

Computers in control of today's session, but this gives traders a stock to be looking bullish.

  Linda Piazza   1/13/200,  2:27:00 PM
The little blip up at 2:10 ran the OEX momentarily above the descending trendline off today's highs, but that lasted for all of two five-minute candles before the OEX was back under that trendline again and falling. It's now back below the 30-minute 130-pma, but not yet at a new day's low (which we need to see in order to consider the breakdown confirmed). If it is confirmed, it will soon challenge the 60-minute 100-pma at 551.26, near the downside target of the H&S on the 60-minute chart.

  Linda Piazza   1/13/200,  2:15:03 PM
Like the ES contract, the OEX is trapped between its 30-minute 130-pma at 554.23 and its 100-pma at 555.75. The 30-minute 21-pma slants down toward the current price, and is now at 557.24. Yesterday, I expected the OEX to trade sideways until that MA approached closely, and then to pop up and test it before rolling down again. It sorta worked like that and sorta didn't. The OEX traded in a rising bear flag, did pop up, but overshot the average before rolling down again. Today, I expect something similar: a sideways trade until that MA approaches (which might not occur today, in fact, but sometime tomorrow) and then a pop up to test it, and then a roll down again. That's the scenario I'm working against, and will now look for evidence to concur or refute it.

  Jeff Bailey   1/13/200,  2:08:20 PM
02:00 Internals at this Link

  Linda Piazza   1/13/200,  1:49:13 PM
It's still possible that the current OEX pattern could be a bear flag, just a somewhat larger bear flag than was forming earlier. The OEX has still not retraced more than 50% of the flagpole decline. I'm noticing, however, the flat top that's building near 555.35 (coincidentally, or not, also the site of a descending trendline off this morning's highs). This could also be a bullish right triangle, and yesterday we saw a similar one break to the upside.

  Jeff Bailey   1/13/200,  1:38:56 PM
Sell Prog. Prem. Alert .... SPX = 1,119.25 ... QQQ = $37.82

  Linda Piazza   1/13/200,  1:17:38 PM
This morning's rise off the OEX low looked like a quick bounce followed by a measured distribution pattern--a bear flag. However, that bear flag broke to the downside, and instead of a cascading fall, the OEX stopped its decline almost immediately. We've seen this before, so not all bullish tenor has been scared out of the market, anyway. The OEX could be setting up into a somewhat broader bear flag, with broader swings between higher highs and higher lows, but we'll just have to see.

  Jeff Bailey   1/13/200,  1:10:23 PM
01:00 Internals at this Link

  Linda Piazza   1/13/200,  1:06:52 PM
The COMPX is close to a confirmation of a double-top formation on its 60-minute chart. Classically, such a confirmation would come on a drop below the trough between the two highs, so on a drop below 2084. However, the COMPX dropped below that level once today already and bounce immediately upon hitting 2080, so I would certainly wait for a drop below today's low before considering the formation confirmed. It predicts a drop down near 2060, but these formations haven't worked better than any other bearish formations in the recent period. Let's see if it works now.

  Linda Piazza   1/13/200,  12:55:35 PM
As Jeff may have already pointed out, the BIX looks ready for a short-term reversal higher. The 30-minute chart shows that the previous period's candle was the second in a potential reversal signal, with that candle coming as the BIX was testing a lower 0.675% envelope. The BIX is already below its 30-minute 100/130-pma's, with those averages both near 337.85-337.90, and with the BIX about 4.5 points below that. That adds a bearish cast to the BIX's behavior. The BIX might be likely to find resistance nearer, then, at the 30-minute 21-pma at 335.93.

  Jeff Bailey   1/13/200,  12:55:13 PM
SPX 1,120.23 -0.62% ... back to test WEEKLY Pivot of 1,120.75 after session low of 1,115.93.

  James Brown   1/13/200,  12:55:10 PM
AOL is resurrecting the Netscape brand name as an ISP with unlimited access for just $9.95 a month. If you hurry you can bid on your own personal (first name) email address (like james@netscape.com) through EBAY as part of their marketing push.

This is not an endorsement... I just found it interesting.

  James Brown   1/13/200,  12:53:10 PM
Yes it is.

  Jonathan Levinson   1/13/200,  12:52:41 PM
James, that's an astounding number.

  Jane Fox   1/13/200,  12:49:50 PM
Linda (12:42 post) I am in the same camp. I am not bearish on the market long term as a matter of fact quite the opposite but I am very hesitant to take long positions here before the impending drop which I feel needs to take place before the market can make new highs that are sustainable. I feel any drop is a buying opportunity, however, this not the drop for which I am looking. I feel the market needs to retrace a good 38% before I will be a buyer again.

  James Brown   1/13/200,  12:48:58 PM
Absolutely amazing! Anyone with a mobile phone probably knows that you can upgrade your ring tones to any number of specialized sounds or the latest music hits. But having your phone ring to the latest hip-hop tunes will cost you anywhere from 20 cents to $2.75. Currently the average price is 60 cents. I believe on my carrier that fee is billed monthly. Who would have guessed that ring tone sales have hit $3.5 billion (with a "B") annually.

  Jeff Bailey   1/13/200,  12:43:08 PM
Day trade long entry alert .... Stillwater Mining (SWC) $9.91, here, stop $9.84, target $10.16.

  Linda Piazza   1/13/200,  12:42:27 PM
Bob P. was just saying on CNBC that he didn't sense a lot of panic and concern over the drop. I'm not panicked or concerned, either. I'm cheered, but not because I'm bearish as some might believe I am. In fact, I'm not particularly bearish, but was leery to committing funds to bullish plays when potential reversal signal after reversal signal was printed. I've dipped my toe into the water here and there with a few bullish equity plays, but I always bailed and took profits on the slightest hesitation because they were so overbought. I want to know where firm support lies or doesn't lie, and so I'm cheered at normal and natural retracements that let me know where I can find that firm support. That's what we're in the process of finding out today.

  Jim Brown   1/13/200,  12:35:15 PM
IBM has also been rumored for the last two weeks to be short on services revenue to the tune of about $2 billion below estimates.

  Linda Piazza   1/13/200,  12:34:32 PM
OEX Keltner resistance is beginning to firm up near 555.85, near the 30-minute 100-pma at 555.80. That doesn't mean it will hold, of course, but that's what shows up now.

  James Brown   1/13/200,  12:33:43 PM
One of our readers (Suzanne) has come up with a good reason for IBM's weakness. IBM's massive services division also includes plenty of consulting work. I know they bought a consulting firm... what was it? A year, maybe 24 months ago? The name escapes me at the moment. Anyway, Suzanne mentioned that consulting firm Accenture's earnings miss this morning does not bode well for IBM.

  Jane Fox   1/13/200,  12:30:42 PM
In a meeting with the new Canadian Prime Minister, Paul Martin, President Bush said Canada will be eligible for a second round of U.S.-financed reconstruction contracts in Iraq. Mr. Bush said he "understands the stakes" in rebuilding a free and peaceful Iraq but offered no details of what the contracts would be worth. Mr. Martin is eager to patch up the cross-border relationship after his predecessor, Jean Chretien, abstained from the Iraq war.

  James Brown   1/13/200,  12:24:47 PM

Have you seen any negative news on IBM this morning? Its drop accelerated and I can't find anything to account for that.



Hmmm.. that's a good question. The drop in IBM really is picking up speed and the breakdown under the $90 mark doesn't look good.

Unfortunately, I can't find any bad news. There's been nothing but good news for IBM today. Some of Tuesday's headlines for Big Blue:

Insignia Solutions signed an agreement with IBM to create a system for managing and updating mobile phones (Dow Jones).

Last night there was news that IBM and INTC created a defense fund to protect companies running Linux software help "defray the cost of defending themselves against lawsuits" (AP).

IBM broke the U.S. patent record for patents in a single year with 3,415 patents in 2003.

It is possible that investors might be concerned by the creation of the Defense fund. If IBM and INTC see a need to create such a fund then odds are that they see future litigation over Linux.

Then again I thought I heard some rumors last week that IBM might not make their numbers, especially for their services division and those rumors might be making the rounds again.

  Jeff Bailey   1/13/200,  12:24:21 PM
AMEX Gold Bugs ($HUI.X) 239.52 -2.01% .... perhaps hardest hit after Greenspan began speaking.

  Jeff Bailey   1/13/200,  12:21:04 PM
12:00 Internals at this Link

  Jeff Bailey   1/13/200,  12:13:19 PM
Dow Industrials (INDU) 10,404.75 -0.76% .... first to test WEEKLY S1 of 10,384.94, now looking to bounce.

  James Brown   1/13/200,  12:12:06 PM
Borders Group (BGP) is raising its Q4 outlook on stronger than expected holiday sales. Q4 sales were up 7% to $1.2 billion and BGP is raising its earnings guidance from $1.45-1.50 to $1.48-1.52. The earnings report isn't expected until February.

  Linda Piazza   1/13/200,  12:11:28 PM
The VXO is climbing today, at 17.45 as I type, but still far away from the 18.59 high on January 2.

  Linda Piazza   1/13/200,  12:09:01 PM
The OEX extended far below the nested five-minute Keltner bands, with that action also predicting a bounce. Keltner channel lines all slant down strongly between the current position and 558.19, where they thin out somewhat.

  James Brown   1/13/200,  12:07:19 PM
Our current OI put play in the Diamonds (DIA) is starting to pick up some speed. Coincidentally the low today was a bounce off the simple 21-dma.

  Linda Piazza   1/13/200,  12:04:58 PM
The OEX is now below the 30-minute 100/130-pma's, a bearish development, but we should expect now to see a bounce up to test those averages and perhaps all the way back up to the neckline on the H&S formation. Those averages are at 555.80 and 554.17, respectively.

  James Brown   1/13/200,  12:02:41 PM
Drug retailer CVS Corp (CVS) is certainly out performing the markets today with a 2.7% gain. This morning CVS announced same-store sales for December were up 9.4%, boosted by an early flu season. Plus, the company announced that it expects to beat its previous guidance of $1.95-2.00/ share for 2003. Earnings are expected in mid-February.

FYI: the "high" today of $38.38 looks like a bad tick for CVS. The real intraday high appears to be $36.78.

  Jeff Bailey   1/13/200,  12:00:31 PM
Mr. Greenspan's speech concludes .... SPX = 1,117.63 ... now begins question and answer.

  Linda Piazza   1/13/200,  12:00:14 PM
The OEX is below the 30-minute 100-pma, headed down toward the 130-pma at 554.18. It's firmly broken the 60-minute H&S neckline that I pointed out this morning, with a predicted downside target at about 551.40. (Note: The 60-minute 100-pma is at 551.13, near the predicted downside target, so that H&S is predicting that we'll get a test of that MA.) We should expect a retest of the neckline support, however, with that retest perhaps beginning as the 30-minute 130-pma is tested. The outcome will tell us whether the H&S has sticking power.

  Jeff Bailey   1/13/200,  11:56:44 AM
Sell Prog. Prem. Alert .... SPX = 1,120.20 (WEEKLY PIVOT) ... QQQ = $37.78

  James Brown   1/13/200,  11:56:25 AM
Concerns that demand in flash memory might subside in 2004 appear to be abating. Shares of SanDisk Corp (SNDK) have rebounded strongly from their mid-December lows ($54). The stock is currently battling with overhead resistance at $70 and its simple 50-dma. Giving SNDK an early morning boost was an upgrade from Morgan Stanley to "equal weight".

  Linda Piazza   1/13/200,  11:52:25 AM
In addition to testing its 10-dma, the OEX tests its 30-minute 100-pma at 555.88. While I think the 60-minute version is more important, I'm sure not likely to ignore the bounce potential of the 30-minute one.

For review, a move below the 60-minute 100/130-pma's would transform the former bullish mode into a bearish one. A move down to the 60-minute 130-pma at 548.31 (I wish) and then a bounce back up through the 60-minute 100-pma at 551.16 would be a bullish sign. Some watch the 30-minute versions for the same behaviors, but since the OEX sometimes overshoots those versions, I give the 60-minute ones more weight.

  James Brown   1/13/200,  11:52:16 AM
After a 65% gain in just the last 3 1/2 weeks JP Morgan is cutting shares of Research in Motion Ltd (RIMM) to a "neutral".

The stock is not seeing much of a reaction to the downgrade or the market-wide profit taking. RIMM -90 cents to 76.70.

  James Brown   1/13/200,  11:45:48 AM
QCOM has been a big leader in the telecom rally during the last few weeks and shares are holding up pretty well during the profit taking today, only down 1.19% (75 cents). A pull back and bounce from the $55 level might be a bullish entry point but earnings are coming up on January 21st and given the ramp up from its December lows there's a strong chance of a "sell the news" reaction no matter what sort of earnings result they deliver.

  Linda Piazza   1/13/200,  11:43:03 AM
If the OEX continues falling, it will soon test its 10-dma at 555.93.

  Linda Piazza   1/13/200,  11:41:45 AM
The OEX is slipping beneath one version of the neckline of its H&S formation on the 60-minute chart. If this is real, we should see a steeper decline, but I'm not counting on that just yet. We could instead see a rise with a lower shadow on the current 60-minute candle piercing the line. It's still not too late to form a second right shoulder or zoom up or do almost anything, but right now, it's violating that trendline. I'm waiting for a move below 555 as confirmation of the break.

  Linda Piazza   1/13/200,  11:36:01 AM
Reader Question: Any thoughts on MOGN... huge rise last 2 days with no material news-change of board directors. Can they really be that popular?

Response: MOGN presents at a JPMorgan Healthcare Conference later this week, so perhaps its rising in advance of that presentation on Thursday, too. I note that yesterday's rise was accompanied by big volume, suggesting that there was volume confirmation of the move. Furthermore, I note that OBV (on-balance volume) has been building, suggesting that smart money has been accumulating the stock for a while. Once yesterday's move sent the stock above the $43.12 level that had been the recent swing high, volume increased, either on short-covering, real buying, or both. Because yesterday's tall white candle was larger than normal, we should probably consider candle support at its midpoint, at $43.33. That level has more significance because it's also near that previous swing high from last September.

Its P&F chart shows an upside price objective of $49.00, with its all-time high at $54.75, so it's getting into territory where gains would be likely to slow. The move yesterday bumped it way above its top Bollinger band, suggesting that it's too extended on a daily basis, too. Today's candle so far is a doji, suggesting a possible reversal signal building, but a signal that would need to be confirmed by a candle that continues to signal a reversal by today's close and then would be confirmed by tomorrow's action. MACD remains strong, with the lines turning up and separating.

So, taken together, I'd say that the potential for a reversal makes it difficult to consider this for a long play right now. It's too late to chase it with equanimity. However, the volume confirmation (yesterday's volume and OBV for months), the likely candle support and historical support near $43.00 make it difficult to consider for a bearish play, too, other than a daytrade, and since I don't daytrade much these days, you'd probably need to ask Jeff's advice on that possibility or use his 5MRT system to gauge the possibilities. Below $43.00, I'd use the rising moving averages and the rising trendline off the October low as measures of the stock's behavior. I wouldn't be surprised to see it pull back, perhaps to $43.00 or perhaps not even that deep and then consolidate sideways while the moving averages catch up, dipping down at the last moment to one of those averages and then bouncing. If I were looking for a bullish entry in this stock, I'd want a pullback to the 50- or 72-dma, with a bounce from that level and confirming volume.

A caveat exists, of course. More than one, actually. If the markets do pull back into the typical January pullback, even defensive stocks such as pharmaceuticals can get caught in the pullback. In that case, the pullback might be deeper. Another caveat is that the recent big move is sure to have inflated MOGN's options prices, so if it should now drift down or up, volatility will collapse and options prices will, too. You could see it move your direction and still lose money in options. MOGN reports sometime between February 9-13, and I'm leery of entering options plays within two weeks, too, so even if MOGN does pullback to support and bounce soon, I'd stay away unless I had two weeks for the play to work ahead of earnings.

  James Brown   1/13/200,  11:35:00 AM
Current OI call play in Yahoo (YHOO) is holding up better than expected. Shares are only down 22 cents after trading to $50.41 this morning. We do plan to close the play as of this afternoon's closing price - unless we are stopped out at $49.00.

YHOO is set to announce earnings tomorrow after the bell. Estimates are for 11 cents a share.

  James Brown   1/13/200,  11:32:29 AM
News that Motorola (MOT) is selling more than $1 billion in equipment to China and news that Smith Barney is starting coverage of MOT with a "buy" has sent shares strongly higher this morning. Profit taking has pared those gains back to just +2%.

Shares of MOT look very overbought. The stock is up 18% YTD already and up more than 30% from its December '03 low.

  James Brown   1/13/200,  11:28:35 AM
The profit taking in the semiconductor sector is hitting Xilinx (XLNX) pretty hard. Shares are down 4.6% and forming a nice two-day reversal pattern. If it closes at current levels that could be a "tweezer top".

Meanwhile current OI call play MXIM is holding pretty well, only down 1.98% versus the 2.85% drop in the SOX.

  James Brown   1/13/200,  11:21:55 AM
Greenspan's speech being broadcast now...

  Jeff Bailey   1/13/200,  11:13:58 AM
11:00 Internals at this Link

  Linda Piazza   1/13/200,  11:09:48 AM
The OEX hit the possible neckline of its potential H&S, and we should expect some kind of bounce here, possibly into a second right shoulder. If recent bullish sentiment holds sway, it will bounce even higher than shoulder level. Because the neckline is ascending, we should consider the possibility that the shoulder level would ascend a bit, too, so that it's possible that a second right shoulder could bounce a bit above 560 before we should discount the possibility that it's forming a shoulder. Without this last year's performance with relationship to H&S formations, this H&S would look like a done deal, but recent performance has cautioned that these formations have recently been rejected with higher prices resulting.

  Linda Piazza   1/13/200,  11:06:01 AM
Another way of watching market sentiment, in addition to watching the NDX, is to take a look at the Russell 2000. (See Keene's 10:51 post.) Yesterday, the Russell plowed higher, closing at its high of the day. The problem, though, is that the pattern came suspiciously close to that of a last engulfing top. This is when, after an uptrend, a large white candle engulfs a small red candle. The Russell's pattern didn't quite match that classically, but Nison does give a little leeway to indices. Today, the Russell retreats below 580 again, but it isn't yet quite below a 50% retracement of yesterday's white candle, which would occur on a move below 579.11. That means that the Russell may actually be close to its first strong bounce point today, but that there are some signs of a potential reversal there.

  Jeff Bailey   1/13/200,  10:57:06 AM
March Palladium Futures (pa04h) 226.00 +3% ... breaking out higher yesterday with a triple-top buy signal at $210 and above its bearish resistance trend. Vertical count building currently to $268.00

North American Palladium (AMEX:PAL) $9.15 +6.39% Link and Stillwater Mining (NYSE:SWC) $10.19 +4.72% Link finding gains.

  Linda Piazza   1/13/200,  10:57:02 AM
Jonathan has been mentioning a "broad, lazy" possible H&S on the YM contract in his futures wraps. I don't know why I didn't notice that one on the OEX 60-minute chart until this morning except that I was focusing intensely on how the OEX was behaving with respect to the 60-minute 21-pma. Perhaps that was also because, as Jonathan also mentioned in his futures wrap, most of these are turning out like the previous possible one on the NQ, with prices shooting up past the shoulder level and then above the head level. I've been leery of pointing them out, especially as some technicians have been sneering at those who point them out too frequently.

  Linda Piazza   1/13/200,  10:40:33 AM
The Dow eases back below its 10-dma and below the 10,500 level, with MACD making a bearish cross from above signal. It's difficult to give too much weight to bearish developments, however, just ahead of the Greenspan speech I mentioned earlier or with the $TRIN not yet bearish, as Jane mentioned. It's difficult to assess whether this might just be a natural hesitation ahead of Greenspan's talk.

  Jeff Bailey   1/13/200,  10:40:31 AM
President Bush meeting with Canada's Prime Minister Can't understand what Canada's Prime Minister is saying.... he's speaking in French.

March Canadian dollar futures (cd04h) 0.7847 +0.3% ...

  Jeff Bailey   1/13/200,  10:35:18 AM
S&P Banks Index (BIX.X) 335.28 -0.45% ...

  Jeff Bailey   1/13/200,  10:33:22 AM
Semiconductor Index (SOX.X) 548.87 -2.10% ....

QQQ $38.08 -0.62% ....

Slightly defensive into Mr. Greenspan's talk.

  Jeff Bailey   1/13/200,  10:30:30 AM
Dow Industrials (INDU) 10,488 +0.03% ... right at its WEEKLY Pivot here.

  Linda Piazza   1/13/200,  10:27:38 AM
Good, Jane. (See Jane's 10:25 post.) With good reason, I'm a bit distrustful both of my own discernment and the market's action these days, and so would welcome confirmation from futures action.

  Jane Fox   1/13/200,  10:25:06 AM
Linda, I'm thinking a H&S on the 60 minute OEX chart is not anything to ignore. I will now go looking for similar setups in the futures.

  Linda Piazza   1/13/200,  10:22:49 AM
If that H&S I mentioned in my 10:14 post is valid, and if it's confirmed, it has a minimum downside target of 6 points below the neckline break, with that neckline now at about 557-557.25. The way these have worked lately, though, is that there's a brief break of the neckline if there's any break at all, with the index then turning around almost immediately to retest the neckline and then zooming up again past the head. We need to be watchful of this type of possibility today, too. A year ago, this would have been a classic setup. Although I was rarely one of those who traded on a H&S as the right shoulder began forming, as some technicians suggested could be done since these formations were so reliable, these days, I've almost switched to believing that they're a prelude to a climb. Still, it remains valid to watch these to gauge how much bullish or bearish sentiment remains in the market. When bearish formations don't finish setting up, we know that the market remains bullish. When they set up but don't confirm, we know it, too. When they confirm, but don't meet their downside target, there's still a lot of bullish sentiment driving the markets.

  Jeff Bailey   1/13/200,  10:22:48 AM
10:00 Internals at this Link

Yesterday's internals at this Link

  Linda Piazza   1/13/200,  10:14:38 AM
Dare I mention it? Here's a possible H&S on the OEX 60-minute chart: Link

  Jeff Bailey   1/13/200,  10:13:08 AM
Overstock.com (OSTK) $17.07 -1.84% ....

  Linda Piazza   1/13/200,  10:10:26 AM
While it's a 10-dma giving the $TRAN some difficulty today, it's the 60-minute 21-pma that's perhaps causing some hesitation in the OEX. The OEX has edged above that moving average, but can't seem to break completely free yet.

  Jeff Bailey   1/13/200,  10:08:56 AM
Overland Storage (OVRL) $23.07 +6.97% Link ... higher on STK guidance (see 10:03:26)

  Linda Piazza   1/13/200,  10:04:20 AM
On the Dow, the midpoint of Friday's tall red candle is at 10,518.96, with Nison (and Fibonacci numbers) suggesting that the Dow could find resistance at that midpoint. The $TRIN isn't suggesting that resistance will hold today on NYSE stocks, anyway.

  Jeff Bailey   1/13/200,  10:03:26 AM
Storage Tech. (STK) $30.27 +8.88% Link ... is morning driver for Disk Drive Index (DDX.X) 148.35 +2.32%. Late yesterday, STK gave Q4 EPS guidance in excess of $0.55 per share, which was above consensus of $0.50. STK said it sees revenues in excess of $650 million, well above consensus of $604 million. STK cited strength in Automated Tape Solutions.

  Linda Piazza   1/13/200,  10:01:14 AM
CNBC just mentioned that Greenspan would be speaking "in a little more than an hour," so I guess that 11:00 EST is right from my 9:59 post.

  Linda Piazza   1/13/200,  9:59:45 AM
So far today, all OEX action is contained within an ascending regression channel that began forming about 1:20 yesterday afternoon.

As a warning, remember that Greenspan speaks today in Berlin, at 11:00 EST, I believe.

  Linda Piazza   1/13/200,  9:56:32 AM
The Dow Jones Transportation Index is down fractionally, still challenging that 10-dma, but not yet able to move above it. The daily MACD has made a bearish cross from above signal, but it's done that before over the last month with the lines then uncrossing subsequently. As Jeff has said, we have to watch price action.

  Jeff Bailey   1/13/200,  9:55:48 AM
Fair Isaac (FIC) $54.80 +6.59% Link ... RBC Capital upgrades to "outperform" from "sector perform" saying its checks indicate that FIC has performed well on the revenenue and booking fronts in Q1, which suggests the company is poised for a strong fiscal 2004. RBC says that while FIC's management credibility and the share price were hurt by the company's Q4 miss, they believe that this correction has driven the stock's valuation to a very attractive level. RBC's price target is $65.

  Jeff Bailey   1/13/200,  9:53:01 AM
Sector action broadly positive with fractional gains. Only the DDX.X +1.62% and OSX.X +1.0% up more than 1%..

Weakness is SOX.X -0.93%, GSO.X -0.74%.

  Jonathan Levinson   1/13/200,  9:52:59 AM
6.5B in overnight repos expire today, and the Fed has just announced an overnight repo of 3.5B, which results in a net 3B drain. Bonds and equities are showing light weakness so far.

  Linda Piazza   1/13/200,  9:49:04 AM
Strongest OEX Keltner support is between 558.45-558.78, coinciding well with the flat top of yesterday's bullish right triangle and also with the 30-minute 21-pma, currently at 558.41. That should be a likely bounce point if the OEX should descend that far. The height (or lack thereof) of any bounce will tell us a lot about strength.

  Jeff Bailey   1/13/200,  9:46:59 AM
VIX.X 17.12 +1.78% .... most active SPX options are Jan 1,050 put (340), Jan 1,125 call, Jan 1,035 put, Jan 1,125 put.

Nothing significant at this point.

  Linda Piazza   1/13/200,  9:46:01 AM
During the first retracement of the morning, the OEX has moved below the midpoint of the first five-minute range. That's supposedly a sign of weakness in earliest trading, but the OEX is bouncing now. The $TRIN isn't yet signaling any weakness although it is climbing off its low of the morning. We've usually seen these early morning dips bought, so I'd be careful about drawing conclusions too soon.

  Linda Piazza   1/13/200,  9:41:22 AM
The TRAN is moving up to challenge its 10-dma, currently at 3019.93, with the TRAN at 3017.99 as I type.

  Linda Piazza   1/13/200,  9:39:35 AM
The Dow is challenging 10,500, currently just above that at 10,502.59.

  Jeff Bailey   1/13/200,  9:39:34 AM
Overstock.com (OSTK) $16.90 -2.81% ....

  Jeff Bailey   1/13/200,  9:37:02 AM
Market Volatility Index (VIX.X) 16.61 -1.24% ....

SPX 1,128.93 +0.14% ..

Per last night's Index Trader Wrap

  Linda Piazza   1/13/200,  9:35:47 AM
During the first five minutes of trading, the OEX ranged from 559.36 to 559.94, with a midpoint at 559.65.

  Jane Fox   1/13/200,  9:35:01 AM
The DOW ratio is neutral at 18:12 just like yesterday morning. But the TRIN is quite a bit different from yesterday morning in that it is a very bullish 0.56.

  Jeff Bailey   1/13/200,  9:33:42 AM
Overstock.com (OSTK) $16.86 -3.10% .... swing trade bull alert will move to the sidelines here. (-$0.17, or -1.0% from bullish entry of $17.03).

  Jane Fox   1/13/200,  9:27:05 AM
Despite the continuing slide in the value of the dollar import prices edged higher by 0.2% in December, less than half November's 0.5% rate. Petroleum prices rose 1.8%, while nonpetroleum prices edged up 0.1%. Prices of imported capital goods fell 0.2%, fully reversing the previous month's increase. Prices of imported automobiles and consumer goods were unchanged.

  Jeff Bailey   1/13/200,  9:26:24 AM
09:00 Update at this Link

  Linda Piazza   1/13/200,  9:23:20 AM
Yesterday at the end of the day, the Keltner channels suggested that the OEX might be headed up toward 561, with perhaps periodic pullbacks as it zigzagged up to that level, but futures this morning suggest some hesitation. First strong support is at 558.50, according to the Keltner channels.

  Jane Fox   1/13/200,  9:22:04 AM
Gerald, thank you for this reminder (9:01 post). I know I forget this important information sometimes in my trading.

  Gerald Melson   1/13/200,  9:01:40 AM
Keep in mind folks that when trading a particular equity traders do view some rules strongly. One is the percentage game of having things in your favor. Fifty percent of the price of an equity is based on the strength of t he market. Twenty five percent is based on the strength of the sector. Only 25 percent is based on the equity alone. So it helps to have the market and the sector in your favor. At least be strongly aware of the other attributes. All bets are off on major news events that might directly effect an equity, but even here be AWARE of the other percentage factors. One could also add seasonal aspects as well as earnings dates, dividends, etc. However, if day trading look directly at the above mentioned percentages. There role can be pivotal.

  Gerald Melson   1/13/200,  9:01:10 AM
Everyday we get upgrades, downgrades and a host of opinions from brokerage firms on where a particular equity stands. One of interest this morning is QCOM. Smith Barney is initiating QCOM with a HOLD and a $63 target. CS First Boston is starting QCOM with an OUTPERFORM with a $68 target. Take your pick.

  Jonathan Levinson   1/13/200,  8:31:18 AM

8:30am U.S. DEC. EXPORT PRICE INDEX UP 0.2%, EX-AG UP 0.2%

  Jonathan Levinson   1/13/200,  8:20:02 AM
We await export prices ex-ag. (prior 0.2%) and import prices ex-oil (prior 0.3%) for the month of December at 8:30AM. The Redbook is due at 8:55AM, and Greenspan speaks at 11:15AM.

  Linda Piazza   1/13/200,  7:10:59 AM
Good morning. The Nikkei opened slightly in the red, and then fell through most of the rest of the day, dropping below 10,800 at one point. In a burst of buying at the end of the day, the Nikkei climbed about 55 points off its low in the last few minutes of trading, still closing down 115.37 points or 1.05%, at 10,849.68. The weak dollar hit exporters, with carmakers turning down in early trading. Most closed down, with the exception of Mitsubishi Motors, climbing on a report that it might receive financing from DaimlerChrysler. Most tech-related exporters also dropped, although Sony moved off its lows and closed flat and Internet Investor Softbank gained. With overall bank lending falling 4.8% in 2003 from 2002's level, according to a Bank of Japan report, banks declined. Japan's largest publicly traded broadcaster, Fuji Television, plunged in early trading on news it would sell yen to raise cash for a new studio planned in conjunction with Nippon Broadcasting. Morgan Stanley downgraded the stock to an equal-weight/in-line rating from its overweight/in-line rating.

Other Asian bourses turned in a mixed performance, with semiconductors throughout the tech-heavy region also turning in a mixed performance. The Taiwan Weighted lost 0.15% and South Korea's Kospi lost 0.28%. In South Korea, LG Card dropped limit-down again, with the proposed bailout canceling almost all shares, as had been feared. Singapore's Straits Times climbed 1.04% and Hong Kong's Hang Seng gained 0.33%. Shares of PetroChina (PTR) fell after BP announced that it would sell 2% of its PetroChina holdings. China's Shanghai Composite dropped 0.36%.

European bourses shrugged off the performance of Asian bourses, and trade higher as of this writing. Oil majors recouped some of their recent losses, automakers gained, and many tech stocks gained, too. In stock-specific news this morning, SAP has been an exception to the climbing tech stocks. The German software company announced that although it expects to exceed previously forecast pro forma operating margins and earnings per share for the year, Q4 revenues would be 3% lower than in the previous quarter last year, although they would have risen 4% at a constant exchange rate. On news that the British air force would give the nod to a consortium led by EADS instead of one led by BAE Systems to supply new air-to-air aircraft, EADS gained strongly. Adecco regained some of yesterday's losses, with the Swiss staffing company's possible problems in accounting, control, and compliance issues in its North American operations indeed appearing to center around its acquisition of Olsten, as one analyst speculated yesterday. Sodexho Alliance is asking the French market regulator to study a January 9 Citigroup Smith Barney report that the French catering group says contains incorrect information. The French company says that the false information resulted in a decline in share prices. The surprise resignation of Lloyds TSB's finance director sent shares of the British bank lower.

As of this writing, the FTSE 100 has climbed 12.50 points or 0.28%, to trade at 4462.10, with the FTSE just off its day's low. The CAC 40 trades higher by 36.23 points or 1.02%, to 3596.33. The DAX has climbed 25.61 points or 0.64%, to 4021.52.

  Jeff Bailey   1/12/200,  11:32:51 PM
Pivot Matrix for Tuesday at this Link

  Jeff Bailey   1/12/200,  9:25:11 PM
Overstock.com (OSTK) $17.39 -0.62% ... news alert .... Late this afternoon, company reports that its current COO James Hyde stepped down, with the company citing an "insurmountable" difference in views with Chief Executive Patrick Byrne. News at this Link

Swing trade bull alert from today's profiled bullish entry of $17.03, will raise stop to $15.99 from $15.50 untill we learn what the "insurmountable" differences are. I do not like to see unexplained disagreement between CEO and CFO.

Trader's rule... "when in doubt... get out." Will follow closely tomorrow morning, but after-hours trade was thin, with last tick at 17:54:53 of $16.91.

  OI Technical Staff   1/12/200,  8:46:49 PM
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