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  Jim Brown   1/15/200,  5:21:59 PM
JNPR raising guidance on the conference call

 
 
  Jeff Bailey   1/15/200,  4:50:52 PM
Closing Internals at this Link

 
 
  Jim Brown   1/15/200,  4:16:51 PM
1133.25 Go Bulls! The SUNW and CREE earnings were positive at 4:00 and pushed them higher.

 
 
  Jeff Bailey   1/15/200,  4:15:50 PM
Jim! ... are the e-mini going to settle above 1,131.25? If so, I need to get in the mindset of a bullish bias. I'm 10-minute delayed.

 
 
  Jeff Bailey   1/15/200,  4:03:58 PM
QQQ based on a projected close of $38.14, DAILY Pivot levels...

37.25, 37.69, 38.08, 38.52, 38.91

I see resistance correlation at $38.52 with DAILY R1 and WEEKLY R1.

May well look for a QQQ long tomorrow morning, see how things shake out early, and if $37.95 provides any morning support. If so, then good upside target for a day trade is up near $38.50.

 
 
  Jim Brown   1/15/200,  4:01:17 PM
Earnings after the close

SUNW est -.05, actual -.04, rev beat est
JNPR est +.05, actual +.07, beat revenue
CREE est +.15, actual +.17, rev beat est, raised guidance
RMBS est +.05, actual +.08
TMTA est -.13, actual -.13

 
 
  Linda Piazza   1/15/200,  4:00:19 PM
Today's OEX candle is a high-wave candle, indicative of indecision. That one's an easy one, because the index sure couldn't decide where it wanted to be today. It's still closing above the midpoint of Friday's potential reversal signal, however, a bullish sign. Like the high-wave candle, though, neither means too much as long as they're coming from within a consolidation zone. Just means prices are still consolidating recent gains.

 
 
  Jeff Bailey   1/15/200,  3:56:20 PM
It pays to be late? ... Jeff, Thanks for the tip on TOL-you have made me $800 so far. I tried to get in when you said to this morning but it started to fall. I got in at 38.80 when I thought it had bottomed but then it kept going to 38.31. This afternoon, I took some profits @39.63 and of course it then went up to 40.01! I got back in @39.50 looking for your target of 41.90 but it promptly went to ~39.26 before it has started back up. These little stocks can really move (I usually play QQQ)! What timeframe are you looking at for the 41.90 or is it still on the table?

Robert

Take note of that trade at $40.01 right now. Tomorrow is option expiration for stocks, and that $40.01 a bit suspicious.

My higher target of $41.90 was based on today's 5-MRT retracement technique, along with a short-term upward trend, with thought that we might get a more MASSIVE upside squeeze in the SPX on today's Index expiration.

Please note: Since TOL had a slightly delayed open (many NYSE stocks will) I took my 5-MRT from the opening 10-minute bars.

My time line right now would be approximately 01:30 PM EST Tuesday.

 
 
  Linda Piazza   1/15/200,  3:52:51 PM
There's not much happening since MOC orders. Unless it gets exciting in the last few minutes of trading, the OEX looks to finish the day sitting on its 30-minute 21-pma and at the bottom of its rising regression channel from the last few days. The presumption is that it will rise within that channel again, but there's that bearish cross on the MACD and negative values on the histogram to consider. A similar setup this morning resulted in a climb, however, so it's difficult to know when to give weight to these signals and when not to do so. I tend to trust MACD a little more than other oscillators, but I don't trust oscillators too much at all in a strongly trending market. You don't hear me talk much about stochastics any longer, for example, even though I used to like watching stochastics.

 
 
  Jim Brown   1/15/200,  3:50:59 PM
I think they will try and pin it to 1130.00 for expiration purposes. If unsuccessful I think it will close below that.

 
 
  Jonathan Levinson   1/15/200,  3:47:31 PM
Yes indeed- a round trip today for equities.

 
 
  Jeff Bailey   1/15/200,  3:46:37 PM
Any guesses on the e-mini S&P futures close?

I'm going to guess 1,131.25.

 
 
  Jeff Bailey   1/15/200,  3:44:13 PM
QQQ $38.12 +0.11% ... there was another "bad tick" to $38.34 in the 15:00-15:05 5-minute interval to $38.34.

Take both bad ticks now observed, split the difference and add it to $37.95 and I come up with a QQQ close of $38.14.

Just making note of this for any day traders that might be thinking about opening and closing a trade before the close.

 
 
  Jim Brown   1/15/200,  3:40:18 PM
Initial market on close orders mixed with no bias

 
 
  Linda Piazza   1/15/200,  3:36:57 PM
Someone is going to have to do a lot of selling between now and settlement time for the SPX for it to reach that max pain level Jim mentioned this opex cycle, right?

 
 
  Linda Piazza   1/15/200,  3:31:37 PM
The BIX did fall back inside the inner 0.675% envelope, but the last 30-minute period printed a doji at the bottom of the fall, a potential reversal signal. That potential signal would have to be confirmed by a strong climb during this period.

 
 
  Jeff Bailey   1/15/200,  3:26:31 PM
Buy Prog. Prem. Alert .... SPX = 1,132.72 ... QQQ = $38.16.

Enjoy the ride, you've got another 30-minutes left.

 
 
  Linda Piazza   1/15/200,  3:21:45 PM
The OEX is bouncing from the bottom of the rising regression channel that's been supporting its prices over the last few days. As it touched the bottom of that channel, MACD makes a bearish cross and so doesn't appear to support the idea of a bounce, but rather that of a fall through the channel. However, a check of the last time the OEX hit the bottom of that channel, just this morning, shows that the 30-minute MACD had made a bearish cross from above signal that time, too. We can't count on that showing us the way.

 
 
  Jeff Bailey   1/15/200,  3:15:21 PM
03:00 Internals at this Link

 
 
  Linda Piazza   1/15/200,  3:14:48 PM
The OEX is slipping minimally below its 30-minute 21-pma. Will it find support here? It has for several days. The rising $TRIN suggests it may have more difficulty rising far this time. Unless that $TRIN turns around again, of course.

 
 
  Linda Piazza   1/15/200,  3:06:26 PM
It looks to me as if the OEX just about hit the minimum downside target for the last five-minute H&S formation, so we should probably expect a bounce soon, especially as the OEX is testing the 30-minute 21-pma again. It's violated the bottom of its regression channel, but only minimally so far.

 
 
  Jeff Bailey   1/15/200,  3:05:54 PM
Toll (TOL) $39.28 +0.51% ... session high found 65-minutes ago at $40.01.

 
 
  Jeff Bailey   1/15/200,  3:02:11 PM
Sell Prog. Prem. Alert ... SPX = 1,131.19 ... QQQ = $38.06 ... VIX.X 16.00

 
 
  Jeff Bailey   1/15/200,  3:01:31 PM
Bond Market Closed .... SPX = 1,132.27 ... QQQ = $38.14.

 
 
  Linda Piazza   1/15/200,  2:59:59 PM
The TRAN has descended to test its 30-minute 100-pma at 3017.20, with the TRAN at 3017.87 as I type.

 
 
  Linda Piazza   1/15/200,  2:51:39 PM
The OEX slowed its decline near the 38.2% retracement of the rally off the day's lows. That Fib level was at about 560.66. Someone watches the Fib levels, for sure. That's why I have been closely watching the 38.2% retracement of the bear-market decline so closely, as an important Fib number for such a long-term event was likely to be even more important.

 
 
  Linda Piazza   1/15/200,  2:47:13 PM
The latest in a host of OEX H&S and inverse H&S's, across many time frames, has just been confirmed. Until (and unless) the OEX moves below 560, however, it's still trading within the rising regression channel seen on its 30-minute chart.

The BIX sits now on envelope support and historical support near 341.80. Once it falls firmly within this inner envelope, it's likely to retrace eventually to the rising 21-pma, currently at 339.08. Of course, it can do that in several manners. One way is to trade sideways until the 21-pma approaches closely, and then to slip down and tap it, and then rise again. That's been the preferred method across most indices lately. One note: it was so far extended above the envelope that it could rebound all the way to the bottom envelope, now at 334.51, but rising.

 
 
  Jeff Bailey   1/15/200,  2:46:29 PM
There.... .... see that bad tick in the QQQ at $37.95? I think that's the lows into tomorrow's expiration.

Should the SPX make a new intra-day high, I'd really be looking to pound the QQQ from the bullish side, with a stop just under $37.95.

This "bad tick" doesn't make sens as it relates to current levels of trade $38.25, and I'm pretty sure a program of some sort was just set up for the QQQ at that level.

 
 
  Jane Fox   1/15/200,  2:45:02 PM
Linda looks like we have H&S all over the place. Three on the three markets over in the futures.

 
 
  Jeff Bailey   1/15/200,  2:42:36 PM
Sell Prog. Prem. Alert ... SPX = 1,132.02 (back in the zone here) ... QQQ = $38.17.

 
 
  Linda Piazza   1/15/200,  2:39:09 PM
Here we go with another H&S possibility on the OEX, visible on the five-minute chart. There was bearish price/MACD divergence. Will that matter, even if it's confirmed? Who knows. We're awash with H&S and inverse H&S formations this week. The neckline level is debatable, but is between 561.20-561.00.

 
 
  Linda Piazza   1/15/200,  2:33:37 PM
While the OEX has established a rising regression channel over the last few days, the $TRAN has established a declining regression channel during the same period. I'm not trying to link the behavior of the two or draw comparisons. Rather, I watch the TRAN, as I've mentioned, because of its importance in Dow theory. This afternoon's high was a lower 30-minute high, or at least it's looking that way so far. That would have to be confirmed with a lower low, of course. That high came at the top of the declining regression channel, with lower support down near 3000.

 
 
  Linda Piazza   1/15/200,  2:29:21 PM
The BIX has so far bounced at the 0.675% channel on its 30-minute chart. (See the chart linked to my 14:16 post.) If it can't achieve a new high, however, it may be destined to fall to midline support, in this case, the rising 21-pma.

 
 
  Jeff Bailey   1/15/200,  2:27:16 PM
NYCE U.S. Dollar Index Spot (DX/Y) ... was just looking at Dorsey/Wright and Associates point and figure chart on this dollar-based index. I see its bearish vertical count is 83.50.

The U.S. Dollar Index (dx00y) 86.62 +0.68% has come pretty close with an overnight session low of 84.85 on 01/12/04 (03:00 AM)

 
 
  Linda Piazza   1/15/200,  2:23:59 PM
The OEX has now established an ascending regression channel over the last few days. It hit the top of that channel with the last thrust up, and is now back below midline support. The lower channel boundary now lies at about 560. A strong stock or index might find support at that midline level, but the OEX could retreat all the way to that lower channel boundary and remain within the bullish channel. This isn't a flag, as it's too wide in comparison to recent action and it didn't build after a flagpole drop. It's just a run-of-the-mill rising regression channel. We can watch now to see how the OEX behaves near 560.

 
 
  Jeff Bailey   1/15/200,  2:20:43 PM
02:00 Internals at this Link

 
 
  Linda Piazza   1/15/200,  2:16:02 PM
Here's what I see on the BIX now: Link

 
 
  Jeff Bailey   1/15/200,  2:13:32 PM
QQQ $38.25 +0.44% ... $38.25 correlation in today's pivot matrix.

 
 
  Jeff Bailey   1/15/200,  2:11:57 PM
SPX 1,134.20 +0.32% .... important test coming at 1,133-1,131 after break above this "zone of resistance"

 
 
  Jeff Bailey   1/15/200,  2:09:27 PM
Per Linda's 13:59:57 ... it might not just be the short in the banks either.

 
 
  Jeff Bailey   1/15/200,  2:07:48 PM
QQQ $38.35 +0.46% ... right level, but wrong idea.

 
 
  Jeff Bailey   1/15/200,  2:01:07 PM
QQQ $38.35 +0.46% ... right level, but wrong idea.

 
 
  Jeff Bailey   1/15/200,  2:00:33 PM
QQQ $38.35 +0.46% ... right level, but wrong idea.

 
 
  Linda Piazza   1/15/200,  1:59:57 PM
Boy, there are some shorts being squeezed today in the banking sector. That 30-minute chart looks weird. Just weird. And unsustainable, but it's still climbing.

 
 
  Jeff Bailey   1/15/200,  1:59:50 PM
S1 (SONE) $9.18 +0.99% ....

 
 
  Jeff Bailey   1/15/200,  1:57:38 PM
Toll Brothers (TOL) $39.97 +2.27% ... right idea, but wrong timing and stop.

 
 
  OI Technical Staff   1/15/200,  1:56:41 PM
The Market Monitor server needs to be rebooted. We are taking the monitor down at 2:PM for 5 min. Please close and reopen your monitor at 2:05. Sorry for the problem.

 
 
  Linda Piazza   1/15/200,  1:56:10 PM
The $TRAN lags the other indices. Not only has it not exceeded its previous high, but it has also not yet touched today's previous high, although it's reaching for that level now.

 
 
  Jeff Bailey   1/15/200,  1:50:17 PM
Buy Prog. Prem. Alert ... SPX = 1,137.01 ... QQQ = $38.41

 
 
  Linda Piazza   1/15/200,  1:49:21 PM
The OEX is playing catch-up, finally exceeding its previous daily high from 1/09.

 
 
  Linda Piazza   1/15/200,  1:45:32 PM
I've turned to one-minute charts, and nothing's moving even on those. On the OEX five-minute chart, Keltner channel support has been catching up to the OEX move, with support now layered somewhat thickly down to 561.45. Most days, the Keltner channels have been great at showing support or resistance, but they haven't been as helpful with that today. The OEX has been dropping or climbing through them rather easily, as the case might be, which tells me that this movement isn't a normal, measured kind of movement. What the Keltner channels have been good for today is showing when the OEX is overbought, but this time, that catching-up support might predict that the OEX can continue climbing. That's if the support means anything this time around.

I do note that the OEX pierced the bullish #2 on the 5MRT system, but did not have a five-minute close above that level. It's still resistance, so far, but the OEX is headed up to test it again. Yesterday, the MRT system failed me, stopping me out of a bullish OEX position. Today, it's performing well and the Keltner channels are failing to provide their usual great information on S/R while the MRT system is working well.

 
 
  Jim Brown   1/15/200,  1:35:49 PM
Bloomberg reporting that SUNW is firing 300+ employees. Maybe that is a leading indicator for tonights earnings release.

 
 
  Jeff Bailey   1/15/200,  1:08:19 PM
01:00 Internals at this Link

 
 
  Linda Piazza   1/15/200,  1:06:37 PM
I just realized that even with all this zooming around today, the OEX has mostly traded within the neutral zone according to the 5MRT system. It did pierce the bearish #2 on this morning's steep decline, but had only one five-minute close below that level before it climbed again. Now it hesitates just shy of the bullish #2, at about 562.27. That's very close to the 0.675% envelope on the 30-minute chart, with that number at 562.69.

 
 
  Linda Piazza   1/15/200,  1:03:16 PM
When I mentioned in my 12:58 post that unlike some of the other indices, the OEX had not made new highs, I was referring to new daily highs. I realized later that the post was probably not clear.

 
 
  Linda Piazza   1/15/200,  12:58:08 PM
Unlike some of the other major indices, the OEX did not reach a new high. Neither did the BIX or the SOX, which perhaps explains why the OEX did not do so.

 
 
  Jeff Bailey   1/15/200,  12:56:52 PM
Networkers (NWX.X) 306.54 +2.2% have exploded to the upside, and there must have been something in IBM's call/earnings to suggest strong fundamental trends at the hardware level.

 
 
  Jeff Bailey   1/15/200,  12:50:59 PM
That's it for me for new trade entries today. I'm smart enough to think at this point I'm not going to figure out what impact index expiration is going to have on things, and I'm not feeling lucky at this point.

My bias at this point, from what I'm seeing is BULLISH, and RISK to bears on expiration looks VERY HIGH.

 
 
  Linda Piazza   1/15/200,  12:46:42 PM
So far today, the OEX has followed the typical pattern of late. A bearish distribution pattern sets up, but instead of the expected breakdown, it breaks to the upside and then zooms up. This tells us that, so far at least, that overly bullish tenor remains in the market, despite some encouraging signs we saw earlier in the week (a confirmed bearish 60-minute formation) that showed us that the markets might return to their usual ebb and flow. I'm not opposed to the markets rising--my retirement account will certainly benefit if equities rise to the moon--but I'm afraid that if the markets are too overbought the tension will snap it back too far the wrong direction when it eventually heads down. Institutions are buying, but so are a lot of weak hands, too, and as markets head up, more and more of them are signing on near the interim-term or short-term top. They're my neighbors and relatives and yours, too.

 
 
  James Brown   1/15/200,  12:45:43 PM
Another OI call play doing well is MXIM. Investors bought the dip to $54 and now the stock is up another 2.57% to break through the $56 level.

 
 
  James Brown   1/15/200,  12:44:20 PM
Current OI call play DGX finally produced the upside move we were looking for during yesterday's action. The stock surged to break through resistance at $75.00 and we're seeing more gains today.

 
 
  James Brown   1/15/200,  12:42:39 PM
Current OI call play APOL is also doing well with a 1.83% gain to another new all-time high.

 
 
  James Brown   1/15/200,  12:41:52 PM
To be honest I would have expected some of YHOO's post-earnings weakness to show up in shares of AMZN today but not so. AMZN is up another 1.43% after yesterday's breakout above the $55 mark.

 
 
  Jeff Bailey   1/15/200,  12:39:51 PM
Day trade bearish stop alert .... QQQ $38.36. ($-0.16, or -0.42%)

 
 
  Linda Piazza   1/15/200,  12:38:58 PM
The OEX is breaking out of the upper Keltner channel again, again a point of danger to both bulls and bears--to bulls, the danger that it will get sucked down inside the channels again, and to bears, the danger that this breakout signal will have follow-through.

 
 
  Jeff Bailey   1/15/200,  12:36:02 PM
QQQ ... bearish squint ..... right at DAILY R1 and MONTHLY R2 correlations.

 
 
  Jeff Bailey   1/15/200,  12:34:58 PM
SPX 1,13.40 .... juuuuust above morning highs.

 
 
  Jeff Bailey   1/15/200,  12:33:44 PM
Thanks Jonathan (12:24:15)

 
 
  Linda Piazza   1/15/200,  12:33:35 PM
Although the inverse H&S on the OEX 30-minute chart had several strikes against it, including the fact that these formations are less commonly seen as continuation patterns but are most commonly bottoming formations, we have to at least give it some consideration now. I mentioned it several days ago, but mentioned that in addition to that drawback, there was also no bullish price/MACD divergence as the head was formed. The formation is somewhat rougher than usual, too, so that it's difficult to decide where a neckline might be placed. All these reasons made me give it little credence, just as similar but fewer drawbacks made me give the new regular H&S little credence this morning. Still, wherever that neckline might be drawn, it looks as if the OEX might have pierced it. We now have a bearish H&S on the 60-minute chart, complete with bearish price/MACD divergence to confirm it, with a neckline that was violated, but with no follow-through. In addition, we have an inverse H&S with no price/MACD confirmation, forming as a less likely continuation pattern. Wonder if it will have any more follow through?

 
 
  Jeff Bailey   1/15/200,  12:30:03 PM
Day trade short alert .. QQQ $38.20 here, stop $38.36, target $37.80.

 
 
  James Brown   1/15/200,  12:29:06 PM
I may have wax in my ears and just missed this the first time but Reuters is reporting that the SEC is looking at Coca-Cola (KO) for possible earnings inflation. The stock is not reacting.

 
 
  Jeff Bailey   1/15/200,  12:29:06 PM
SPX 1,133.02 +0.22% ... just sitting here at WEEKLY R1.

 
 
  Jonathan Levinson   1/15/200,  12:24:15 PM
Jeff, initial price limits at 75$ on gold. Details at this Link

 
 
  Linda Piazza   1/15/200,  12:23:57 PM
As a matter of interest and not as a prediction of action, if the OEX should roll over from here, not only will it be making a lower five-minute high, but also it will be showing bearish divergence as far as the nested Keltner channels are concerned. This morning's first climb pierced the outermost Keltner channel while this most recent climb did not touch that outer channel, but only pierced the next-largest of the channels.

 
 
  Jeff Bailey   1/15/200,  12:22:24 PM
SPX 1,133.18 +0.23% ... challenging morning high...

 
 
  Jane Fox   1/15/200,  12:21:16 PM
I agree Jeff!!!

 
 
  Jeff Bailey   1/15/200,  12:20:42 PM
VIX.X 15.88 -5.19% ...

Be careful if your short alert!!!!!!!

We may be starting to see extreme option-related activity.

 
 
  James Brown   1/15/200,  12:20:10 PM
There's a lot of news out from McDonald's (MCD) this morning but the stock isn't reacting. MCD announced today that:

Total December comparable store sales +7.3%
December U.S. comparable store sales +12.2%
December systemwide sales are up 17.7%

Earnings for MCD are expected on Jan. 27th and the company has guided inline with consensus estimates of 35 cents.

 
 
  Jeff Bailey   1/15/200,  12:20:05 PM
Buy Prog. Prem. Alert ... SPX = 1,131.89 ... QQQ = $38.15.

 
 
  Jeff Bailey   1/15/200,  12:16:36 PM
Jonathan .... do you know what "limit down" is for gold futures?

 
 
  Jim Brown   1/15/200,  12:16:19 PM
Pentagon is considering a criminal probe into UTX.

 
 
  Jeff Bailey   1/15/200,  12:16:10 PM
12:00 Internals at this Link

 
 
  Linda Piazza   1/15/200,  12:14:18 PM
That last zoom up brought the $TRAN right up to its 30-minute 21-pma, with the $TRAN so far turning down from that level. It's trapped between that average and the 30-minute 100-pma just below.

 
 
  James Brown   1/15/200,  12:12:48 PM
Plenty of income investors would love a stock with a $7.00 annual dividend but they might change their mind when they find out it's the Washington Post (WPO). The company just raised their dividend from $5.80 to $7.00 but it's still yielding less than 1% with a share price of $840.00.

 
 
  Jeff Bailey   1/15/200,  12:10:58 PM
SPX 1,130.20 -0.02% ... last sell program not yet showing impact.

 
 
  Jeff Bailey   1/15/200,  12:10:12 PM
Networking (NWX.X) 303.61 +1.23% ... challenging BIX.X 341.46 +1.41% for sector gainer.

 
 
  Linda Piazza   1/15/200,  12:09:18 PM
The OEX broke out of the potential bear flag, paused momentarily to test the support, and then rose strongly, but now it's retreating nearly as quickly. Whether it retreats further or not, it at least undid the possibility of a H&S on the 30-minute chart, but I wasn't giving that much credence since there was no bearish price/MACD divergence. The bounce did come from its 30-minute 21-pma, almost to the penny, and now theory says that it should test at least 562.26, the site of the rising inner 0.675% envelope. Support also came from the descending trendline off the 1/09 high, former resistance supposedly now turned support. This isn't an exact science, however, and this quick retreat puts all those other conclusions at risk. The OEX is so far finding support during this retreat just above the midpoint of the day's range.

 
 
  James Brown   1/15/200,  12:09:11 PM
If you're looking for a stock with long-term strength shares of MicroStrategy Inc (MSTR) have not violated their long-term uptrend since it began back in November 2002. Its short-term (five-week) rising channel looks strong as well and MSTR is about to break out to new highs. Earnings are Feb. 19th.

 
 
  Jeff Bailey   1/15/200,  12:08:48 PM
Sell Prog. Prem. Alert SPX = 1,130.01 ... QQQ = $38.05.

 
 
  Jeff Bailey   1/15/200,  12:04:55 PM
SPX 1,129.99 -0.03% .... just turned lower after kissing MONTHLY R1

 
 
  Jeff Bailey   1/15/200,  12:03:56 PM
VIX.X 16.30 -2.68% ... getting whipped around, but below yesterday's lows.

SPX most active options... Mar. 1,125 calls, Jan. 1,125 calls, Mar 1,125 puts.

Bulls may be trying to leverage off this 1,125 level.

 
 
  Jim Brown   1/15/200,  12:00:08 PM
Philly Fed = 38.8, est was 29.0

 
 
  James Brown   1/15/200,  11:59:47 AM
Here's an interesting note from a reader:

Note from the local paper this AM: Washington Mutual is closing its Clearwater loan processing branch, and laying off 152 people. Nationwide they are closing 18 of 58 centers and laying off 2000 folks. All due to "the sharp drop in mortgage refinancings." FWIW.
-Jim

Unfortunately, I couldn't find this news on the web anywhere.

 
 
  Jeff Bailey   1/15/200,  11:59:17 AM
Dow Jones Home Construction (DJUSHB) 550.83 +0.24% ....

TOL $39.10 +0.05% .... session high was $39.57 low $38.31.

 
 
  Jeff Bailey   1/15/200,  11:57:48 AM
QQQ $38.05 ... nice comeback from $37.63.

 
 
  Jeff Bailey   1/15/200,  11:56:35 AM
Dow Indu (INDU) 1,0541.55 +0.02% ...

 
 
  James Brown   1/15/200,  11:56:23 AM
Nextel Communications (NXTL) might be worth watching. New reports are surfacing that Cingular Wireless isn't the only one courting AWE for a possible merger deal. NXTL has been named as a possible suitor. Bear Stearns has turned cautious and downgraded the stock (NXTL) to "peer perform". Investors' first reaction appears to be "sell" as NXTL is down 5.8% but this might be a potential entry point. If you can handle the event risk, NXTL has not broken its rising 40-dma in over four months. This morning's low was a bounce just above this level.

 
 
  Jeff Bailey   1/15/200,  11:55:57 AM
OEX 559.93 +0.02% ... first major index to get back green after earlier sell programs.

 
 
  Jeff Bailey   1/15/200,  11:54:12 AM
SPX 1,129.75 -0.06% ....

 
 
  Jeff Bailey   1/15/200,  11:53:20 AM
Toll Brothers (TOL) $39.00 -0.2% .....

 
 
  Jeff Bailey   1/15/200,  11:52:51 AM
S1 Corp. (SONE) $9.12 +0.33% ....

 
 
  Linda Piazza   1/15/200,  11:52:16 AM
If the 30-minute OEX H&S has any validity, which I'm not sure it has, here's where the OEX should now steady off for a couple of 30-minute candles before rounding down. I'm not giving this strong credence, but am watching so I can measure action against this possible scenario.

 
 
  Jeff Bailey   1/15/200,  11:51:36 AM
Dow Jones Transports (TRAN) 3,017.42 +0.01% ... juuuust edging back green.

 
 
  Jeff Bailey   1/15/200,  11:50:21 AM
Buy program premium alert was generated at from 11:00-11:05 AM EST, which would be SPX 1,126.55-1,127.51.

 
 
  James Brown   1/15/200,  11:49:49 AM
Smith Barney appears to be the first broker to issue a rating change after YHOO's earnings announcement last night. The firm is downgrading YHOO to a "hold". Shares of YHOO gapped down this morning but the stock is up off its lows.

 
 
  Jeff Bailey   1/15/200,  11:46:35 AM
SPX 1,129.83 -0.06% .... "he's baaaaaaack....."

 
 
  James Brown   1/15/200,  11:46:25 AM
Another overseas stock that has been doing well is French telecom Alcatel (ALA). This January the stock has broken out of a three-month consolidation between $12 and $14. The stock started to take on around Jan. 6th but really soared when Nokia announced its strong earnings numbers. This morning the company announced a deal to build some sort of communications network in a Chinese province. No details were announced. Currently ALA is up 29% YTD.

 
 
  Linda Piazza   1/15/200,  11:46:02 AM
The BIX is climbing the underside of its rising 1.35% 30-minute envelope.

 
 
  Linda Piazza   1/15/200,  11:43:53 AM
The OEX is breaking out to the upside out of the possible bear flag. It's breaking above a 50% retracement of the flagpole decline. It's possible on a day like today that it would overshoot that level a bit, so I'm not drawing conclusions too soon, but I had wondered if this might happen because of recent patterns and the lack of bearish price/MACD divergence at this morning's high.

 
 
  James Brown   1/15/200,  11:40:35 AM
Another interesting note that may be slowing the recent fall in the homebuilders is news that rates on a 30-year mortgage have dropped to 5.66 percent from 5.87 percent last week.

 
 
  Jeff Bailey   1/15/200,  11:39:47 AM
Seeing some fractional gains in ... BTK.X +0.03% Link , GSO.X +0.09% Link , SOX.X +0.31% Link , NWX.X +0.18% Link (I've changed scales to match that of Dorsey/Wright & Assoc., which is what most institutions will use)

qqq $37.82 -0.7% off its lows of $37.63.

 
 
  James Brown   1/15/200,  11:37:36 AM
FYI: an interesting observation. Shares of British Airways (BAB) have soared after a Jan. 5th announcement that it was returning to its normal schedule after some terror concerns over the holiddays. BAB is up 29% YTD already.

 
 
  Jim Brown   1/15/200,  11:36:59 AM
Philly Fed Manufacturing Survey due out at noon. Estimate is for a drop to 29 from 32.1 last month.

 
 
  Jeff Bailey   1/15/200,  11:35:22 AM
Russell-2000 Index (RUT.X) 580.59 -0.94% Link

On my bar chart, I've got a bullish regressiion channel from its October lows, where RUT.X has been either side of its upper channel resistance for the past 6 sessions. Looked to be breaking above channel yesterday, now just back below. Midpoint of this channel currently resides at 530.

 
 
  James Brown   1/15/200,  11:34:02 AM
Delta Airlines (DAL) is probably to blame for the weakness in the XAL airlines index. Deutsche Bank has downgraded the stock to a "hold" after yesterday's earnings miss. DAL was expected to report a loss of $1.65 but missed it by 6 cents. Revenues of $3.4 billion for the quarter did beat consensus but investors quickly sold the news. The stock traded quickly to its simple 200-dma before failing. That reversal is seeing some follow through today with a 7.7% drop to $11.20.

 
 
  Linda Piazza   1/15/200,  11:31:01 AM
If this OEX pattern is a bear flag, it should have about a point or less to go before it breaks to the downside. Because of the possibility of a H&S on the 30-minute chart, although I'm not giving that pattern a lot of credence as yet, it's possible that the OEX could linger near 559-559.40 for a few 30-minute candles before rolling down, forming the shoulder. Because it's opex week, the OEX could linger there through tomorrow or could do almost anything else.

 
 
  James Brown   1/15/200,  11:28:35 AM
All major sector indices are awash in red save the Banks and Broker-Dealers. Those hit hardest by selling pressure this morning are:

XAU gold & silver: -3.72%. This is the fourth day of steady losses for gold stocks.

XAL airlines index: -1.93%. Actually holding steady in some sideways chop.

OSX oil services: -1.4%. This is the fourth day of losses for the OSX.

GHA hardware index: -1.27%. Hitting a little bit of profit taking, but holding up.

 
 
  Jeff Bailey   1/15/200,  11:20:17 AM
Honeywell (HON) $36.56 +1.05% joins IBM and HPQ for Dow gainers.

 
 
  Jim Brown   1/15/200,  11:18:20 AM
Max Pain Levels for January

DJX 103.0
NDX 1500
SPX 1095
OEX 555
RUT 550
SOX 520
QQQ 35
INTC 27.50
MSFT 27.50
DELL 30.00
IBM 85.00
MMM 72.50
GE 30.00

Tonights earnings

JNPR 15.00
SUNW 4.00
TMTA 5.00
RMBS 25.00

Max-Pain is defined as the level for the stock/index where the most options will expire worthless. This is the target for the market makers as the options month comes to a close.

 
 
  Linda Piazza   1/15/200,  11:13:42 AM
Yesterday afternoon's trading and today's create the possibility of another H&S on the 30-minute OEX chart with a left shoulder at yesterday morning's high, a head at this morning's high, and a right shoulder now forming. Unlike the bigger H&S on the 60-minute chart, however, the one that was confirmed but which has not met its downside target, there was no price/MACD divergence this time. That gives it even less credence in my mind. I'll still be watching for a rollover at the shoulder level, particularly since the 559-559.40 level should mark the top of the possible bear flag, too, as some of the oscillators are forming H&S patterns of their own. CCI is, for example. The lack of price/MACD bearish divergence makes me question whether the OEX might exceed that possible right-shoulder level.

 
 
  Jeff Bailey   1/15/200,  11:11:41 AM
11:00 Internals at this Link

Yesterday's internals at this Link

 
 
  Jonathan Levinson   1/15/200,  11:10:01 AM
I'm asked to provide my preferences for short candidates in the precious metals sector. As I'm long term bullish on this sector and expecting a pullback within the context of what I believe to be a bull market for miners and metals, my own inclination is to either wait out the current correction or hold long term core positions, having taken profits from the remainder of my own position. That said, NEM is looking particularly awful today, having gapped in a 3 black crows pattern on the daily chart. I believe that there's more weakness to come, but next support is at 40, with the bulk of the drop possibly behind us. Link ABX looks similar, with support approaching in the 19-20 area. Link

I prefer the big, institutional names for shorts here because those are the ones that will get sold by the biggest holders first. However, again, I view this as a correction in a bull market, and personally do not "trade" the miners. My core position was added with gold at 292, and I added below 320/oz, selling the second tranche in the 395/oz area. I'm hoping to add more at or below that level, and continue to track gold daily in the Futures Wraps.

 
 
  Jim Brown   1/15/200,  11:06:15 AM
I would like to remind everyone that Monday is a market holiday and Friday is options expiration. SUNW, JNPR, TMTA and RMBS have earnings tonight, GE in the morning. This sets up a confusing situation for option traders. Most should have already squared positions but there are always the last minute holders to cause volatility. Also, with a three day weekend ahead we should see a downward bias for Friday. We have not had any terrorist news lately and that makes me more worried than when they are warning daily. All of this news should make the markets unstable for the rest of the week now that we have had some tech disappointments. The urge to hold for next weeks earnings should be waning. Should the four techs tonight surprise to the upside that condition could change.

 
 
  Linda Piazza   1/15/200,  11:01:54 AM
The OEX climb still looks like a possible bear flag climb into the midpoint of today's range. We've seen these things break quickly and unexpectedly (well, the first few times anyway) to the upside lately, but we've also seen a few instances when bearish patterns did perform as expected. I wouldn't say the tide had turned yet, but there are at least suggestions of a market that ebbs and flows again, instead of just flowing one direction.

I'm afraid today of a market that does nothing, however. That's what's happened over many opex cycles lately: patterns that set up and then do nothing from about mid-morning on Thursday on into Friday's close.

 
 
  Jeff Bailey   1/15/200,  10:55:54 AM
SPX 1,126.53 -0.35% .... has been sideways for 40 minutes now. One thing I'm seeing is SPX is trying to hold support at our downward trend from 01/09/04 high to 01/13/04 relative high of 1,129.07 as if "resistance broken, serving support" right now.

In recent days I've noted a lot of 1,125 put/call activity, and may suggest 1,125 peg for close. Just a thought based on observations.

 
 
  Linda Piazza   1/15/200,  10:53:33 AM
The volume patterns as of a few minutes ago were bearish with the exception of new highs/new lows. They showed decliners leading advances, with adv:dec ratios at 10:19 for the NYSE and 9:20 for the Nasdaq. Down volume was 1.9 times up volume on the NYSE and 3.1 times up volume on the Nasdaq. Volume was 366 million on the NYSE and 543 million on the Nasdaq. New highs totaled 420 and new lows 7.

 
 
  Linda Piazza   1/15/200,  10:48:01 AM
The OEX is slipping just beneath the 10-dma again, but it's close enough that it we could still consider it challenging the average. This is a possible bounce point, too. Note: The OEX moved back above it as I was typing.

 
 
  Jonathan Levinson   1/15/200,  10:45:00 AM
The p/c ratio is down to .67, VXO down to 16.70.

 
 
  Linda Piazza   1/15/200,  10:40:12 AM
The OEX's climb could be considered a bear flag building.

 
 
  Linda Piazza   1/15/200,  10:35:15 AM
The BIX isn't showing any propensity to turn down after retreating back to the 1.35% envelope. That envelope is turning up strongly, too, so that it's just possible that the BIX could continue to climb it. My research into envelopes showed that the envelope's slope didn't particularly impact whether prices were likely to climb it or rebound away from them, particularly when the upper envelope boundary was hit, so we really don't know what to expect here. It's a point at which bullish plays in BIX stocks are seeing some risks, then, but bearish ones are at risk that the BIX will continue to climb that envelope, too. I watch the BIX as an indicator for OEX behavior, as Jeff taught us to do long ago.

 
 
  Linda Piazza   1/15/200,  10:30:02 AM
The $TRAN is temporarily finding support at its 21-dma, just as it has several times over the last week, but that support is tenuous and the day is far from over. That MA is now at 3001.16 with the $TRAN's low of the day at 3001.04, just cents below that MA. Oscillator evidence is bearish on the TRAN. Now, can we trust it? ADX says yes. Recent experience says no.

 
 
  Jeff Bailey   1/15/200,  10:27:15 AM
Dow Industrials (INDU) 10,495 -0.4% .... WEEKLY Pivot here. Breadth negative at 28:2 with IBM $94.91 +4.01% and HPQ $25.20 +2.06%

 
 
  Linda Piazza   1/15/200,  10:24:40 AM
We should now expected an OEX climb within a measured distribution pattern such as a bear flag or a steadying in a measured distribution pattern such as a "b" distribution pattern. Such a climb should not take the OEX higher than a 50% retracement of the day's range, at about 559.35, so if it does, something else may be going on. I'd give the OEX a little room to overshoot that midpoint.

As Jim has warned us many times in the past, we often see things settle down about midmorning on the Thursday of opex week and then moves come as slow as molasses. It doesn't feel that way right now, but then it often doesn't.

 
 
  Jeff Bailey   1/15/200,  10:22:17 AM
Swing trade bullish stop alert .... S1 Corp. (SONE) $8.90 ... ($-0.31, or -3.37%).

Note: This trade profile was for Market Monitor only. Not longer-term traders/investors.

 
 
  Linda Piazza   1/15/200,  10:18:36 AM
The OEX has descended now to the 30-minute 21-pma, just above the 100/130-pma's, at 556.32 and 555.08, respectively. This should be a strong bounce point. Bears want to see a rollover from a lower high, while bulls want to see a new high. First, we have to get the bounce.

 
 
  Jeff Bailey   1/15/200,  10:17:12 AM
SPX 1,125.08 -0.48% .... this is yesterday afternoon's lows. Might get a bounce back near 1,128, but resistance at that level, turn back lower and break much below the session low of 1,124.50 sets up an intra-day h/s top, with downside objective to about.... 1,115.

 
 
  Jane Fox   1/15/200,  10:16:48 AM
Here is an image of the volatile TRIN and TRINQ this morning. It is like the market is just not sure if it should be buying or selling. Link

 
 
  Jeff Bailey   1/15/200,  10:16:15 AM
VIX.X 17.27 +3.10% ... highs of session.

 
 
  Linda Piazza   1/15/200,  10:15:38 AM
The TRAN is testing 3000, currently at 3001.71.

 
 
  Jane Fox   1/15/200,  10:12:41 AM
Linda the TRIN is not supporting this move down. Wish I had BETA to confirm the TRIN but this is odd.

 
 
  Linda Piazza   1/15/200,  10:12:39 AM
The OEX has now come down below the descending trendline off the 1/09 high, a trendline it tested yesterday and finally broke through at the end of the day. This is a bearish development, but just below are the 30-minute 18/21-pma's at 557.61 and 557.16. This should be another potential bounce point, but so far, bounces have been far and few between.

 
 
  Jeff Bailey   1/15/200,  10:11:48 AM
Gold Bugs ($HUI.X) 218.18 -4.41% Link ... looking near-term oversold but getting crushed again today.

This triple-bottom sell signal after double-top resistance looks very defensive.

Sector Bellwether Newmont (NEM) $42.71 -4.27% Link

 
 
  Linda Piazza   1/15/200,  10:10:14 AM
What's up with the $TRIN, Jane? It keeps dropping back, but that declining advdec line sure isn't showing strong volume patterns.

 
 
  Jeff Bailey   1/15/200,  10:10:07 AM
Sell Prog. Prem. Alert ... SPX = 1,127.27... QQQ = $37.78.

This came right as TOL swing trade long was stopped out.

 
 
  Jeff Bailey   1/15/200,  10:09:31 AM
Swing trade stop alert ... Toll Bros. (TOL) $38.65 ($-0.86, or -2.18%)

I anticipated the move, and participated in the loss.

 
 
  Linda Piazza   1/15/200,  10:05:44 AM
This morning the BIX hit the upper 1.35% envelope on its 30-minute chart--in fact, it punched way through it. Like a punch through a Bollinger band and then a retreat below it, that's often a worrisome signal to bulls. That may predict a retreat back down to retest its 30-minute 100/130-pma's, but it's just difficult to gauge, since sentiment and news drive the trading in these issues this morning.

 
 
  Jeff Bailey   1/15/200,  10:02:31 AM
Semiconductor Index (SOX.X) 543.79 +0.34% ... trying to hold a fractional gain.

Intel (INTC) $32.95 -1.31% ... AMAT $23.50 +0.55%

 
 
  Linda Piazza   1/15/200,  10:01:09 AM
The OEX approaches somewhat stronger Keltner support at 559. That's historical support, too, so I would anticipate a bounce here. If not, the OEX is weaker than we expected. Sure wish that chart feed had been consistent this morning, but I'm worried about the $TRIN, too. Jane mentioned it earlier. It's come up since then, however. Note: The OEX is falling a few cents below this support as I type.

 
 
  Jonathan Levinson   1/15/200,  10:00:55 AM
Another 3.25B 7-day repo brings the daily total to 4.25B in net additions from the Fed. There's still room for an overnight, and I'll continue checking for further announcements.

 
 
  Jeff Bailey   1/15/200,  9:59:44 AM
Bull trap alert .... I may have gotten caught in a "bull trap" right at the SPX highs and WEEKLY R1, just before that sell program. prem alert. Talking about my swing trade long in Toll Brothers (TOL) $38.84 -0.66%.

SPX 1,128.25 here.

 
 
  Jeff Bailey   1/15/200,  9:55:24 AM
Sector action mixed ...

Weakness is Gold Bugs ($HUI.X) 220.79 -3.26%, Airlines (XAL.X) 61.63 -1.55%, Internet (INX.X) 180.47 -1.19%.

Strength is Banks (BIX.X) 341.43 +1.37%, Oil Services (OSX.X) 96.13 +0.71%

 
 
  Linda Piazza   1/15/200,  9:54:42 AM
The first OEX retreat stopped a few cents below the midpoint of the first five-minute candle, but the OEX now comes down to test that level again.

 
 
  Jonathan Levinson   1/15/200,  9:53:52 AM
6B in 13-day repos expires today, and a 7B 14-day repo has just been announced for a 1B net add so far. We await the short term repo announcement, due any minute, to see where the Fed wants to lead the markets today.

 
 
  Jeff Bailey   1/15/200,  9:52:56 AM
Dow Industrials (INDU) 10,553.51 +0.12% ... session high has been 10,582.51 +0.14%, right at DAILY R1.

 
 
  Linda Piazza   1/15/200,  9:51:28 AM
The OEX is falling back inside the Keltner channels now, and should have just been at support, but it's falling through that 560.15 support. Next support is thinner, but exists at 559.28, 558.87, and 557.66-557.93.

Careful, I'm still having feed problems this morning, problems that caused me to miss entering a planned play. Better to miss an entry than an exit, however.

 
 
  Jeff Bailey   1/15/200,  9:49:45 AM
Sell Program Prem. Alert .... SPX = 1,130.31 ... QQQ = $37.86 -0.58%

 
 
  Jeff Bailey   1/15/200,  9:49:01 AM
SPX 1,132.23 +0.15% ... session low/high 1,129.25 - 1,133.29.

sitting right in our "zone of resistance" from MONTHLY R1 and WEEKLY R1.

BIX.X 342.40 +1.68%

 
 
  Linda Piazza   1/15/200,  9:43:25 AM
The advdec line sure isn't very strong for such a strong climb, but TRIN is bullish. The OEX has broken above the 38.2% retracement of its bear-market decline and also above the nested Keltner channels. This is a dangerous time for bulls and bears alike.

 
 
  Jeff Bailey   1/15/200,  9:43:10 AM
Swing Trade long alert ... Toll Brothers (TOL) $39.51 +1.15%, long entry here, stop $38.65, target $41.90.

 
 
  Linda Piazza   1/15/200,  9:40:57 AM
The 38.2% retracement of the OEX's bear market decline, at 561.23, approaches soon. The OEX overshot this the last time it was tested.

 
 
  Jeff Bailey   1/15/200,  9:40:56 AM
General Electric (GE) $32.08 +0.21% .... trying to creep above its very short-term downward trend from 01/08/04 relative high.

 
 
  Jeff Bailey   1/15/200,  9:39:31 AM
VIX.X 16.52 -1.37% ...

 
 
  Jeff Bailey   1/15/200,  9:37:46 AM
Premium of S&P Futures ($PREM.X) ... was "stuck" above the buy program prem level of -0.25 for about first 7 minutes of the session as if scramble to get long.

SPX 1,132.42 +0.16% .... very close to the 1,133 level. Session high so far 1,132.46.

 
 
  Linda Piazza   1/15/200,  9:37:18 AM
During the first five minutes of trading, the OEX ranged from 559.17 to 560.69, with the midpoint at 559.93, and with the OEX currently above that midpoint. That shows strength in earliest trading. As usual, let's watch the first retracement, due to begin in a few minutes. The OEX has broken above the upper Keltner channel boundaries. When that happens at the open, we often see a few more minutes of climbing, sometimes strong climbing that lasts for the first half hour or so, and then a turning down that results in a pullback at least to the middle channel support, if not to the bottom of the channel. Be careful.

 
 
  Jeff Bailey   1/15/200,  9:34:49 AM
S1 Corp. (SONE) $9.12 +0.33% ... steady at the open.

 
 
  Linda Piazza   1/15/200,  9:32:42 AM
Careful, OEX traders. My charting service and my online broker are giving different values for the OEX. One is wrong and one is right. I think my charting service has spotty feed this morning.

 
 
  Linda Piazza   1/15/200,  9:29:11 AM
The TRAN closed yesterday at 3031.61, also just cents above a midpoint--in this case the midpoint of yesterday's range. That still left a large upper shadow, not a bullish development, but since that candle was printed in the midst of a consolidation zone from the last month, it's not as significant as it might otherwise be. The TRAN closed back above the 10-dma. I'm watching the TRAN because of its significance in Dow theory. Yesterday, it came within 4-1/2 points of its 3049.96 closing high from March 2002 and within five points of its 3050.40 intraday high from that period. It's been testing this level for all of January, not able to climb above it or close above it, but not falling back, either. Oscillator evidence is inconclusive, but I don't trust oscillators right now anyway. We should be able to trust them on the TRAN, as ADX is below 20, but they sure haven't proven particularly helpful lately.

 
 
  Jeff Bailey   1/15/200,  9:16:34 AM
09:00 Update at this Link

 
 
  Linda Piazza   1/15/200,  9:10:32 AM
Yesterday, the OEX continued trading within a formation that might be a bull flag pullback, with such pullbacks sometimes taking prices down as far as a 50% retracement of the flagpole climb. December certainly qualified as a flagpole climb, too. There has not yet been a breakout of that possible flag, either to the upside, as suggested by the formation, or the downside. I expected a small white candle yesterday within that possible flag, but the upside was bigger and the candle bigger than I expected, too. The OEX retraced slightly more--cents more--than the midpoint of Friday's big decline, so we have to factor in that information, too, but since the breakout wasn't big, that evidence is inconclusive. The OEX ended the day against known possible resistance and shown Keltner resistance. An open today above 560.09 will be a breakout above the Keltner channels, and would suggest a point of danger to both bulls and bears. Such breakouts usually see prices move back within the channel and down toward the midpoint support, but they can be a breakout signal, too. Remember the 561.23 level that's a power Fib retracement point, the 38.2% retracement of the bear-market decline.

 
 
  Jane Fox   1/15/200,  9:08:45 AM
Largely due to a rise in food and energy prices, consumer prices posted a modest gain in December and core inflation remained at historically low levels. More fodder for the Federal Reserve's view that inflation is likely to stay low for much of 2004 and is under no pressure to raise interest rates.

Annually consumer prices increased 1.9%, the smallest rate in two years. The core rate was a 43-year low 1.1% and is nearing what some Fed policy makers regard as the "bottom" of the desirable range. Fed Governor Ben Bernanke is on record for saying the Fed should cut interest rates if core inflation falls below 1% but Fed policy makers have said they can afford to wait for the jobs market to recover before raising interest rates.

 
 
  Linda Piazza   1/15/200,  9:02:12 AM
European bourses have jumped since earlier this morning, with the FTSE 100 now up 6.60 points (well, some of the others have jumped), the CAC 40 now up 16.86 points and the DAX now up 15.29 points.

 
 
  Jonathan Levinson   1/15/200,  8:38:13 AM
NY Empire State Index 39.2

 
 
  Jonathan Levinson   1/15/200,  8:36:47 AM
Core CPI .1%.

 
 
  Jonathan Levinson   1/15/200,  8:35:33 AM
U.S. JOBLESS CLAIMS 4-WEEK AVG DOWN 3,000 TO 347,500

CPI up .2%, Initial Claims 343,000.

 
 
  Jonathan Levinson   1/15/200,  8:34:10 AM
Retail sales ex-auto .1%.

 
 
  Jonathan Levinson   1/15/200,  8:32:35 AM
Retail sales up .5%

 
 
  Jonathan Levinson   1/15/200,  8:22:32 AM
Awaiting 8:30 data: NY Empire State Index for Jan exp. 35, initial claims exp. 350K, retail sales for Dec exp. .8%, and retail sales ex-auto exp. .4%. CPI exp. .2%, Core CPI exp. .1%. IBM earnings exceeded First Call estimates of 1.50 by 6 cents per share. Q4 revenues were 25.9B, beating estimates of 25B.

 
 
  Linda Piazza   1/15/200,  6:59:43 AM
Good morning. The Nikkei opened at the flat-line level, but fell throughout the day, tumbling hard in the afternoon. It was hit first by a post-Intel-earnings sell-the-news slump in chip and other tech stocks. Sony was an exception, adding to recent gains after the GS upgrade. A news report also revealed that Sony would soon be able to conduct image searches in DVD recorders and other products, using software provided by IBM.

In addition to the profit taking in techs, steelmakers were hit hard when a report circulated that some companies had agreed to a 19% increase in the cost of iron ore imports in 2004. Banks and autos also declined. An economic release showed that December wholesale prices fell 0.1%, the 40th month in a row, according to one report. The Nikkei closed down 197.85 points or 1.82%, at 10,665.15. This was its lowest close since December 29.

Most other Asian bourses dropped. The Taiwan Weighted lost 0.17% and South Korea's Kospi lost 0.47%. In South Korea, chipmaker Samsung reported Q4 profits that increased by 24%, with the company citing strong sales of flat-panel displays and chips for consumer electronics. Those sales and cost-cutting efforts helped the company overcome a drop in memory-chip prices, said one analyst. Included in the release was the information that Samsung spent 60% more than Intel to expand production. The stock rose after its earnings release. Also, steelmaker Posco reported earnings, dropping 2.4% afterward. In addition, news circulated that South Korea's Foreign Minister would resign. Singapore's Straits Times tumbled 1.64% and Hong Kong's Hang Seng dropped 0.53%. China's Shanghai Composite dropped 0.37%.

European bourses show a mixed trading pattern, although many trade near the flat-line level, rising from lower levels earlier in the morning. Chip stocks were under pressure in Europe, too, both from the post-Intel sell-the-news slump and from one engendered by a European chip equipment stock, ASML. ASML's report revealed a higher-than-expected profit on a sales decline. Investors might also have been disappointed with its orders backlog, and the president and CEO announced his retirement. Auto stocks were lower in early trading, impacted by an economic release that showed December registrations falling 1.8%, but with that fall mostly attributed to Italy's 27.5 % decline in registrations. EADS announced that it expects the 2004 market to be a soft one, and declined on that news. However, the banking sector helped to pull the bourses off their lows of the morning. While the J.P. Morgan/Bank One deal had little impact on the Asian banking sector, European banks benefited.

As of this writing, the FTSE 100 trades lower by 1.40 points or 0.03%, at 4460.00. The CAC 40 trades higher by 3.75 points or 0.10%, at 3616.30. The DAX has risen 1.63 points or 0.04%, to 4056.84.

 
 
  Jeff Bailey   1/14/200,  12:18:14 AM
If this isn't the poster child stock for "give me bad news and I'll trade higher, I don't know what stock is. Link

Bulls make be getting their answer to the recent firing of its Red Lobster unit. Since I profiled this stock as bullish months ago, it hasn't had one bit of good news, other than the "mad cow" scare.

For bulls that may have bought DRI on that gap lower last week (some longer-term bulls may have) I would not be a bit opposed to writing the February $20 calls (DRIBD) for $0.80 at the bid and work down that cost basis. I think it will be a wait and see trade for the next three months, to see if a new Red Lobster president can't get things "ship shape."

 
 
  Jeff Bailey   1/14/200,  10:51:34 PM
Nikkei-225 ($NIKK) Here's Wednesday's PnF chart Link

Can the bulls hold it above 10,700? Let's find out....

10,791.79 -0.66% ... lower by 71.21 points. Session low/high has been 10,771.64 and 10,881.77.

 
 
  Jeff Bailey   1/14/200,  10:43:20 PM
Humph! look who gave a 5th consecutive buy signal on its point and figure chart ahead of tonight's IBM announcement. Link

 
 
  Jeff Bailey   1/14/200,  9:57:50 PM
Market Volatility Index (VIX.X) 16.75 -7.15% .. whipsaw the past two days isn't it? Lots of action ahead of expiration should have trader and investor expecting further volatility, into Friday's close.

As a comparison, the NASDAQ-100 Volatility Index (VXN.X) 23.17 +0.52%, which we might expect to be MORE volatile, is more steady/smooth like a glass-smooth lake (ahead or after a violent storm).

Most active SPX options today...

Mar 1,125 call (v:14,489 : oi= 49,332) so oi shows a 3,300 gain in oi on yesterday.

Mar 1,125 put (v= 13,910 : oi= 46,679) so oi shows a 4,500 gain in oi on yesterday's trade.

What this "counting of cards" from yesterday's trade and higher VIX.X suggests is a wide range into March of 1,155-1,090.

I think this only because if I take call strike of 1,125 and sell $25 premium, I get 1,150.

If I take put strike of 1,125 and sell premium of $31, I get 1,094.

Jan 1,125 call was 4th active today (v=9,543 : oi=45,056), while Jan 1,125 put was 6th active (v=6,981 : oi= 40,136)

The Jan 1,125 call becomes the more interesting as this is where the RISK is, based on tonight's after-hours news.

SPX closes above 1,125, and if institutions have been selling $4-$8 premium (add that to 1,125) the "save point" (not lose stock) is most likely 1,125 +$8, or 1,133.

Hmmmm.... 1,133, that sounds familliar.

Three ways to "save" a bullish position and not let it get called away. 1) buy futures as a hedge, 2) buy basket of stock, 3) buy calls back

On the alert if SPX breaks much above 1,133 (pivot matrix also suggests this is important level of near-term resistance).

With e-mini futures settling right at our fitted retracement level of 1,130.25, we've got to think there was some type of "save move" in play prior to much of tonight's after-hours news. Why else would futures trade higher to the close? Why would futures rebound from session lows late yesterday to finish in middle of the day's range? More buyers than seller for sure, but why more buyers and sellers?

Still, we didn't get the more "bullish bias" settle above 1,131.25 and bullish caution still advised, if trading levels.

Last tick I see on e-min S&P is 1,127.25.

 
 
  Jeff Bailey   1/14/200,  9:33:11 PM
S1 Corp. (SONE) $9.09 +7.06% ... some background on today's trade, via subscriber e-mail.

To be brief... evidently I haven't been the only one making note of SONE's bar chart in recent sessions. Subscriber e-mail informs me that another technical-based investment site advised bulls to buy the stock "at market" today after seeing SONE break above that downard trend, with a near-term target of $12.00.

I searched and searched for any news on the stock, or like stocks, and could not find any, and today's 1.42 milliion shares is impressive and bullish on this move higher.

The reason I note the subscriber's e-mail, is that market makers may know what today's trade was all about, and if there's an opportunity to "mess" with us, we'd expect some volatility, and pehraps a more unnatural trade near-term.

I've been following/trading SONE since late October, when I first noted this stock in an "Ask the Analyst" column Link where unfortunately for some bulls, the stock made a BIG move higher the day before that column was published to OI and PI subscribers.

This stock has NOT disappointed me in the least, but I wanted to let traders know one "reason" why the stock may have jumped like it did today.

 
 
  Jim Brown   1/14/200,  9:22:40 PM
IBM Earnings are expected at 7:30AM, conference call at 8:30. IBM earnings estimates are $1.50 with revenues of $25.1B. Guidance for the 1Q are $/93 with revenues of $21.34B. In their last update they said "earnings and revenue guidance is reasonable" and they would see double-digit growth in software. They also said in the call they did not yet see an economic rebound.

IBM is expected to at least meet estimates due to the falling dollar. Currency translation is a big factor for IBM. Expect an inline number or a beat but then look for the currency translation line item.

The Thursday morning announcement is a sudden change from their prior date of Jan-20th. Why announce at 5:20PM a date change to the next morning? Why not during market hours so investors can square positions? They have some news and they do not want it to leak out before next week. I suspect there is a surprise in the works. Positive or negative is unknown.

The conspiracy theorist in me is thinking IBM is NOT going to surprise to the upside and the sudden rush to confess after the INTC, YHOO, AAPL, QLGC earnings on Wednesday night is an attempt to hide in the crowd.

The optimistic view would be an upward surprise to offset a market dip by the big four above. OR, maybe they are just trying to eliminate three more days of declines on worry they might miss. Just get it over with and go on to the next quarter.

Either way you can bet the open will be volatile.

 
 
  Jeff Bailey   1/14/200,  9:14:59 PM
Pivot Matrix for tomorrow at this Link

 
 
  OI Technical Staff   1/14/200,  8:47:45 PM
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