Option Investor
Printer friendly version
  Jeff Bailey   1/20/200,  4:43:46 PM
Closing Internals at this Link

Note: QQQ traded $38.65 at 04:00 PM EST, but closed -$0.03 at $38.54 on closing 04:15 PM EST.

  James Brown   1/20/200,  3:52:45 PM
Yet another tech announcing earnings tomorrow is SanDisk Corp (SNDK). SNDK was hammered in early December on concerns that new competition would impact sales on top of a slow down in consumer demand for its flash memory products (part of this was a concern over an inventory glut). Those fears faded somewhat on broker comments that business should remain strong but competition is heating up. That still hasn't stopped investors from pushing SNDK back above the $70 mark and its simple 50-dma. Estimates are 76 cents a share.

  Linda Piazza   1/20/200,  3:52:16 PM
This morning's early piercing of the nested five-minute channels predicted that the OEX would fall to test midline support. (See my 9:35 post.) The OEX did test that midline rather early in the day, and now it's right back at that support. (The support has been rising during the day.) A new low would confirm that the OEX was falling away from that midline support and might predict a fall toward the bottom of the nested channels, currently at 560.84, but rising.

  James Brown   1/20/200,  3:49:20 PM
Another tech stock to watch tomorrow is CDW Corp (CDWC), known for its colorful catalogs that reach your mailbox full of computers, laptops and other consumer electronics. Shares are up 2.62% today ahead of its earnings tomorrow morning before the bell. Estimates are 58 cents a share.

  Linda Piazza   1/20/200,  3:44:05 PM
Here's an OEX chart of the ascending regression channel on the five-minute chart. The OEX currently falls through the bottom support, starting the fall after I began uploading the chart: Link The Fib levels measure off the distance between today's high and low, with the OEX currently below a 50% retracement of that day's range, but having climbed above it earlier this afternoon.

  Jim Brown   1/20/200,  3:40:08 PM
Initial market on close orders mixed with no bias

  James Brown   1/20/200,  3:39:37 PM
ah...the answer to the rise in the XNG appears to be El Paso Corp (EP), which was highlighted as a bullish pick this weekend in Barron's. Shares of EP are up 12.6% today.

  James Brown   1/20/200,  3:35:35 PM
The XNG natural gas index is up strongly today but oddly William Cos (WMB) is not following suit. Another natural gas play is Sempra Energy (SRE), which is up slightly but still under resistance at $31.00.

  James Brown   1/20/200,  3:31:36 PM
Announcing earnings after the closing bell tonight is Sanmina-SCI Corp (SANM). Shares are up strongly in just the last two sessions after breaking out above the $14 level. Estimates are for 4 cents a share. SANM could be a tech stock to watch tomorrow.

  Linda Piazza   1/20/200,  3:26:09 PM
Reader Request: Do you have any words of wisdom on effectively reading Market Depth?

Response: Traders discover that there are many ways of measuring market breadth and of interpreting those various indicators. Studies of advancing versus declining issues (either by subtraction or ratio method), new highs versus new lows, and up volume versus down volume all come under the heading of market breadth. Other breadth measures are derived from those, including the TRIN. When I'm watching the markets, I want to see measures of market breadth that fit with what I'm seeing on the market action. If there's divergence, I'm warned that I might want to snug up stops, prepare to exit positions, or prepare to enter positions, whatever the case might be. For example, if markets are advancing, but the advdec line has been falling all day, there's divergence. Experienced market watchers know that the advdec line usually turns down ahead of a market downturn, so that it's a leading indicator. I don't ever act solely on what I'm seeing on the various market breadth indicators, but I sure might hesitate to act if they're diverging from what I'm seeing in the indices. I'd probably hesitate to enter a bullish position if the advdec line was strongly negative, and down volume was swamping up volume, for example.

  James Brown   1/20/200,  3:14:40 PM
3M Co (MMM) is really weighing on the Dow Jones Industrials as the stock is falling 5.18% after announcing earnings this morning. MMM beat estimates by a penny with 77 cents a share. Revenues were up 14% to $4.72 billion and above consensus but they guided inline for next quarter and the full year.

Today's candle is a major reversal signal - breaking price support at $82 and its simple 50-dma on top of being a bearish engulfing pattern. The next support level is $80.00.

  Jeff Bailey   1/20/200,  3:05:52 PM
03:00 Internals at this Link

  Linda Piazza   1/20/200,  3:00:25 PM
The advdec line ha been advancing since about 11:40 this morning, at about the same time that the OEX began forming that ascending regression channel on the five-minute chart.

  Linda Piazza   1/20/200,  2:56:49 PM
The TRAN fell below its 30-minute 100 and 130-pma's today. It has now bounced from its 21-dma and risen back through the 30-minute 130-pma to retest the 100-pma. A sustained climb above the 100-pma, at 3020.08, would be bullish, but the rise to test this average looks like a bear-flag rise. A rollover back through the 130-pma would be bearish, of course. So far, though, the TRAN just gyrates within its recent congestion zone. I watch the TRAN because of its importance in Dow theory.

  James Brown   1/20/200,  2:56:39 PM
Nortel Networks (NT) and Lucent Technologies (LU) have been able to maintain some of their morning gains generated from an "out perform" upgrade by Wachovia. Both stocks have soared this year (2004) with NT running from $4.23 to $7.02 and LU sprinting from 2.84 to $4.80. It will be interesting to see if these two pre-bubble darlings will hold on to these gains after they announce earnings. NT is due to announce on Jan. 29th with estimates at 2 cents a share. LU announces tomorrow morning with estimates pegged at breakeven.

  Jeff Bailey   1/20/200,  2:54:24 PM
NYSE Composite ($NYA.X) 6,603.91 +0.55% ... challenging morning 52-week high of 6,605.12. Nice little break above last week's consolidation high today.

60-minute interval chart shows one of those reverse head/shoulder patterns again. Neckline at 6,570 broken to upside today. With head at 6,490 gives an upside objective of 6,650. Symetrical shoulders at 6,516.

  James Brown   1/20/200,  2:46:21 PM
Despite missing estimates by 5 cents this morning, Freeport Mcmoran (FCX) is in rally mode after reporting net income of 3 cents a share. FCX owns the largest gold mine in the world but they also produce a large amount of silver and copper. Looks like investors are using the recent weakness to buy FCX at support of $35.00 on the expectation that metal prices will remain strong. That or it's an oversold bounce and some shorts are just covering when FCX refused to break the $35 mark in spite of bad earnings news. (plus a $6 jump in gold to $413 today doesn't hurt the bulls any.)

  Linda Piazza   1/20/200,  2:40:04 PM
I'm going to consider that possible inverse H&S on the OEX defunct now, but the pattern we have been watching has perhaps resolved into an ascending regression channel. It's too broad and too extended to be a bear-flag rise after this morning's drop, especially since it's just retraced more than half the day's range, which occurred at about 564.25. For now, then, it appears to be just a run-of-the-mill ascending regression channel with the OEX currently near the top of that channel and due for a cycle down to the bottom, near 563.60. (Note: That cycle began as I was typing this.) The OEX has once again been following the 30-minute 21-pma higher, but this time, it's been hugging that average longer than it usually does over the last three touches of that average. There are a few ripples of weakness or at least not-as-strong-ness in the market today, but nothing that convinces me yet.

  James Brown   1/20/200,  2:38:06 PM
Morgan Keegan has upgraded Applied Micro Circuits Corp (AMCC) to an "out perform" just ahead of its earnings report out this afternoon after the closing bell. Estimates are for a loss of 2 cents a share. It looks like traders are selling into this morning's strength and taking some money off the table before the earnings report. Considering the run from $5.50 to $9.00 in just three plus weeks that's probably a good idea. Coincidentally, today's candle is turning into what could be a bearish reversal pattern called "dark cloud cover".

  James Brown   1/20/200,  2:22:39 PM
Powerwave Tech (PWAV) is up 4% to new 1 1/2 year highs ($10.66) after Needham upgraded the stock to a "buy". The company is due to report earnings after the closing bell on Thursday. Estimates are for a loss of 3 cents a share. PWAV is up strongly from the $8.00 level earlier this year and look like a good target for profit taking if they don't crush the earnings estimates.

  Linda Piazza   1/20/200,  2:13:47 PM
Studying the Keltner channels, it's possible to see that the OEX has spent most of the day settling toward a state of equilibrium, a state in which all three nested channels line up inside each other. The OEX isn't quite there yet, with central support near 563.17 but rising, but it's close. Usually after a period of equilibrium, sometimes up to an hour but usually less time, there's a big move. Lately, that move has been to the upside. Is it possible that we might have moved into a time when the normal ebb and flow of markets reassert themselves and the OEX sometimes breaks through that central support? Some patterns today suggest that may be possible, while others still maintain a strictly bullish outlook.

  James Brown   1/20/200,  2:13:08 PM
American Tech Research has upped three video game makers to a "buy". Those being upgraded are TTWO (breaking above its 50-dma), ERTS (churning sideways but up off its intraday lows), and ATVI (still under resistance at $19.25).

  Jim Brown   1/20/200,  2:10:25 PM
INTC only +50 cents above its low for the month set back on Jan-2nd. So much for their record earnings.

  Jeff Bailey   1/20/200,  2:07:21 PM
02:00 Internals at this Link

  Linda Piazza   1/20/200,  1:50:38 PM
The OEX confirmed the bullish inverse H&S by moving above its neckline, but it immediately began moving back down, tempering that bullishness. Another zig and zag and the formation won't have any validity, if it ever did. Last week, a formation such as this one would have been good for a few upside points if not a lot of upside points. Let's see what happens, but if this formation is rejected, then we've seen a bearish formation confirmed with the target hit, and a bullish one confirmed but then immediately rejected. That would be two pieces of evidence that on a very short-term basis, at least, the tenor has changed. However, it's too early in the afternoon to be sure. For now, this looks like more chop.

  James Brown   1/20/200,  1:48:29 PM
Shares of Sprint PCS Group (PCS) are up another 5.59% (to $7.95) despite a fresh "sell" rating from Deutsche bank this morning. The stock is rocketing higher on merger speculation after Cingular made an all cash offer to buy AT&T Wireless (AWE) this morning. I certainly wouldn't chase it here and at least one industry expert believes the U.S. would not approve of another merger in the industry (if the Cingular-AT&T Wireless deal does go through).

  James Brown   1/20/200,  1:40:09 PM
Cardinal Health (CAH) is down more than 1 percent (to $59.31) after UBS downgraded the stock to a "neutral" this morning. The drop is a breakdown under the $60 level and its simple 200-dma. CAH looks vulnerable to the $56 region on its daily and weekly chart but its P&F chart shows the stock right above (p&f) support. Earnings are quickly approaching Thursday morning. Estimates are 86 cents a share.

  Linda Piazza   1/20/200,  1:40:08 PM
Here's the inverse H&S on the OEX five-minute chart, with a neckline break now confirmed. I'm not trading on this formation today, but am watching it to measure bullish strength: Link

  Jonathan Levinson   1/20/200,  1:27:29 PM
It's amazing what persistent shorting can do for a stock, Linda.

  Linda Piazza   1/20/200,  1:24:36 PM
Concerning the 12:56 post James made: TASR continues to astound me. I don't have a position, either bullish or bearish, but just can't help shaking my head over a stock that was below $4.00 ten months ago and now is $119.95.

  Linda Piazza   1/20/200,  1:20:14 PM
The OEX pulled back instead of moving up through the neckline of the possible inverse H&S, but it didn't pull back far. Is it forming a second right shoulder? Or is it just pausing ahead of another thrust, possibly during the usual stop-running push that's coming up? Or will the inverse H&S be rejected and the OEX move down again? That's what we're waiting to see. For all this waiting and watching, the OEX has moved in a 1.50-point range since about 10:30.

  Jeff Bailey   1/20/200,  1:18:05 PM
01:00 Internals at this Link

  Linda Piazza   1/20/200,  1:03:47 PM
The OEX did turn up into a possible right shoulder on the inverse H&S on the five-minute chart. So far, it's looking okay for this very short-term bullish case. We just need to see if the OEX can confirm by moving through the neckline, now at about 564.30 or so, but ascending. I'm not using this as a trading tool, but rather to measure strength or weakness.

  Jim Brown   1/20/200,  12:59:50 PM
NAHB Housing Market Index for January = 68, estimate was 69, December and November were both 70

  James Brown   1/20/200,  12:58:47 PM
Another stock with extremely high short-interest is Netflix (NFLX) (about 70% of the float). NFLX is breaking out to a new all-time high today after churning sideways the last four sessions. Earnings are expected tomorrow after the closing bell with consensus estimates at 14 cents a share.

  James Brown   1/20/200,  12:56:27 PM
Speaking of high short-interest, shares of TASR refuse to fall and are holding on to recent gains near the $119 level. The stock splits 3-for-1 on Feb. 11th and announces earnings on Feb. 23rd. Short interest is near 53% of the float.

  James Brown   1/20/200,  12:54:00 PM
Thanks for the list, Jon!

  James Brown   1/20/200,  12:53:39 PM
Morgan Stanley has downgraded N. Carolina-based bank BB&T Corp (BBT) to an "under weight" rating. The downgrade pushs BBT closer to support at $36.00 and its simple 200-dma. Should this level break then BBT may drift back toward the bottom of its two-year trading range near $31.50.

  Jonathan Levinson   1/20/200,  12:52:26 PM
James, here's a list of more of similar stocks, "high short interest point gainers" as reported by Yahoo:

11:40AM High Short Interest Point Gainers : CALM +0.83 (Short Interest 37% of the float), CREE +1.75 (29% of the float), EVOL +1.46 (21% of the float), MICC +2.78 (18% of the float), BBOX +8.13 (16% of the float), CDWC +1.30 (12% of the float), MRX +1.72 (10% of the float), PHS +4.97 (6% of the float), CRMT +2.97 (6% of the float), PFGC +2.62 (6% of the float).

  Jeff Bailey   1/20/200,  12:52:11 PM
JDS Uniphase (JDSU) $5.58 +7.93% ... stock higher on rumor that Alcatel (ALA) $17.18 -0.75% may be interested in buying JDSU. No one from JDSU has been available to comment (probably wouldn't either), but many industry analysts say merger would make little sense and be counterproductive for Alcatel, which last year sold its fiber optics business to Avanex.

  Linda Piazza   1/20/200,  12:50:38 PM
The OEX is now at the right-shoulder level of a possible inverse H&S and it's at Keltner support, too. If it's going to form that inverse H&S, it needs to steady off at this level and then round up into the right shoulder. If not, and especially if it drops to a new low (below the head level), then we're seeing a possible bullish formation that failed to finish forming and confirm. That, together with a bearish target that was met earlier, shows some weakness. How much, I don't know, but more than we've seen lately.

  James Brown   1/20/200,  12:50:02 PM
Holy Cow! on CNBC now they're discussing Black Box Corp (BBOX), which is up $7.00 (14%) to $56.90 after their earnings announcement this morning. Results were 3 cents better than expected with 66 cents a share. Revenues were up 13% to $133.1 million for the quarter. This might be an issue to watch for some profit taking.

  James Brown   1/20/200,  12:45:40 PM
Hmm... an interesting observation. Citigroup's CFO said the declining bankruptcy rate was good news for Citigroup. That was the headline but I can't find any more information on it. I assume he's referring to consumer or personal bankruptcies, which I thought were rising. If bankruptcies are falling that sounds like good news for the economy.

Citigroup announced earnings this morning and beat estimates by a penny with 91 cents a share.

  James Brown   1/20/200,  12:39:49 PM
Don't forget that we'll be closing the General Dynamics (GD) OI call play this afternoon before their earnings report tomorrow... unless we get spike either direction this afternoon to take us out early.

  Linda Piazza   1/20/200,  12:35:14 PM
An analyst was speaking about AT&T this morning, Jeff, saying other analysts had misjudged its prospects. I don't remember which firm it was, though.

  Linda Piazza   1/20/200,  12:34:00 PM
We now have the possibility of an inverse H&S on the OEX five-minute chart, with a shoulder level near 563.25, a head at today's low, and a neckline that ascends slightly, but is near the current OEX level (564.14). There was no bullish divergence as the head was formed, but we saw last week that bullish divergence wasn't a necessary ingredient in inverse H&S formations. If the OEX should pull back into a right-shoulder level and then confirm the formation by moving above the neckline, the upside target would be somewhere near today's high, depending on the level of the rising neckline at the time it was confirmed. Now we can begin to watch for signs of strength, first watching for a confirmation of the formation.

  Jeff Bailey   1/20/200,  12:33:32 PM
Shoot... missed a good day trade long in T $21.49 +2.09% from $21.20 based on 5-MRT. Telecom and telecom equipment have been strong bullish trades of late.

  James Brown   1/20/200,  12:32:17 PM
Mercury Interactive (MERQ) has broken out above five-month resistance in the 52.00-52.50 range on positive comments from Goldman Sachs. Actually, Sachs has labeled MERQ as one of its top picks for 2004. MERQ was on our watch list this weekend for just such a move, which has produced a fresh triple-top buy signal on its P&F chart. Unfortunately, it is probably too dangerous to consider long positions here with MERQ's earnings report tomorrow afternoon. Estimates are for 27 cents a share.

  James Brown   1/20/200,  12:23:13 PM
One of the stocks on the OI weekend watch list was Thor Industries (THO) the RV maker. The company announces earnings on Jan. 27th and splits 2-for-1 on the same day. The combination of a possible earnings run up and pre-split run up has produced a bullish breakout above the $60 mark (up 3% today). Today's move also strengthens the fresh double-top buy signal on its P&F chart. THO may qualify for a short-term trade but we would not hold over the split and earnings.

  James Brown   1/20/200,  12:18:06 PM
Shares of APOL, another OI call play, are marching higher as well, hitting new all-time highs and approaching the $75 level. This could be round-number resistance so traders might want to wait for a break above this area or look for a dip back toward the $73.00-72.50 region as an entry point.

  James Brown   1/20/200,  12:15:08 PM
With just a week to go before its earnings announcement shares of AMZN, a current OI call play, is out performing the major indices with a small gain this morning.

  Linda Piazza   1/20/200,  12:11:42 PM
This morning, the $TRAN fell back below its 10-dma and now tests its 21-dma. This has been a strong bounce point over the last two weeks, but the $TRAN isn't yet bouncing. It is minimally off its day's low. There's been bearish divergence on the daily stochastics and RSI, as well as on the more reliable (lately) MACD, but we've seen that happen often lately, with the divergence eventually erased.

  Jeff Bailey   1/20/200,  12:07:44 PM
12:00 Internals at this Link

  Linda Piazza   1/20/200,  12:07:24 PM
The OEX has tested its 30-minute 21-pma, an area of likely support. The OEX should attempt a bounce from this level, and appears to have been doing so over the last 20 minutes or so, but the bounce hasn't been a strong one so far as we move into the lunchtime lull. The last three times the OEX has touched its 30-minute 21-pma, it's usually either bounced strongly away within a single 30-minute candle or it's done it within three or four candles. We're working on the second one now. Will the OEX instead fall back below that average to retest the 30-minute 100-pma? Evidence is inconclusive at this point, but I sure wouldn't expect it to happen right away if it's going to happen at all. (That's the signal for a strong decline that begins the moment this post appears.)

  Linda Piazza   1/20/200,  11:59:40 AM
The OEX did ultimately fulfill its downside target from the double-top formation this morning, so bearish formations are now meeting their downside targets, at least on an intraday basis. This tells us that the normal ebb-and-flow market movements are now beginning to reassert themselves, but it's going to take a while of this kind of action before bears at least will feel comfortable acting on those bearish formations they might see set up.

  Jeff Bailey   1/20/200,  11:52:24 AM
S&P Banks (BIX.X) 343.36 +0.01% ... tight range early from 342.83-344.54

Traded 52-week high, just above 12/31/03 and 01/02/04 highs of 343.82 early, but wasn't able to make a more bullish move higher from yesterday's gains.

Still can be a key sector near-term for SPX/OEX traders/investors to be monitoring and I would think BULLS want to see BIX.X continue last week's move higher on thought sector finds some value players based on last week's merger news from JPM buying ONE.

BIX's MACD trying to kick above Signal (12,26,9) looks bullish in upward trending BIX.X. Bar chart at this Link

  Jeff Bailey   1/20/200,  11:40:38 AM
Dow Industrials (INDU) 10,527.18 -0.69% ... first to test a WEEKLY Pivot (10,523.08).

  Jonathan Levinson   1/20/200,  11:36:25 AM
Put to call ratio up to .60, still quite low but still possibly due to the aftermath of opex week. VXO is up 2.03%.

  Linda Piazza   1/20/200,  11:29:44 AM
I'm seeing OEX Keltner resistance thin out into separate layers at the same time that the five-minute oscillators cycle down and look ready to turn up again. That sometimes predicts more upside, but the picture is clouded by the fact that Keltner support is thinning, too, and those oscillators haven't yet turned up. I wouldn't want to make a prediction here based on this information.

  Linda Piazza   1/20/200,  11:13:37 AM
I note that although the OEX did confirm a bearish pattern today and did see some downside as a result, it has not yet hit the predicted downside target near 562.75. It stopped short of that target, trading to a low of 563.12 so far. So far, then, we're still seeing those bearish patterns not meeting their downside targets. The OEX now tests the support again at the bottom of the possible "b" distribution form on the OEX five-minute chart, so it's still possible the target could be met, but the verdict is out, and the "b" distribution pattern keeps looking as if it wants to reform as a bear flag. If the bearish scenario is to be played out, the OEX should not retrace more than 50% of the morning's decline, so should not move higher than about 564.50.

  Jeff Bailey   1/20/200,  11:12:41 AM
11:00 Internals at this Link

  Jim Brown   1/20/200,  11:07:38 AM
CNN reporting Israeli planes attacking Lebanon

  Linda Piazza   1/20/200,  11:06:59 AM
Volume patterns prove bullish this morning, with adv/dec ratios at 17/13 for the NYSE and 16:14 for the Nasdaq as of a few minutes ago. Total volume was 467 million on the NYSE and 878 million on the Nasdaq. Up volume was 1.7 times down volume on the NYSE and 1.6 times down volume on the Nasdaq. Bullish traders want to see continued bullish trading patterns while bearish traders want to see some deterioration in these numbers.

  Jim Brown   1/20/200,  10:56:51 AM
New email worm/virus out this weekend. Be careful opening any attachments. Link

  Linda Piazza   1/20/200,  10:52:39 AM
The OEX did its usual thing of late: a momentary breakdown out of a bearish pattern and then a quick bounce. The pattern this time was a bearish "b" distribution pattern. The OEX so far remains within that pattern and hasn't broken to the upside by moving back over 564. If it does, it will see first resistance near 564.50.

  Linda Piazza   1/20/200,  10:46:55 AM
I'm seeing conflicting signals on the OEX. We saw a confirmed bearish formation this morning--the double top. The fact that a bearish formation was confirmed is surprising in itself. Now, after a steep fall, we're seeing the OEX consolidate into a typical distribution pattern, a "b" distribution pattern. That hints at further downside. The TRIN isn't bearish yet, though, and the 30-minute 21-pma is just underneath, ready to provide support if the OEX does drop through this "b" distribution pattern.

  Jeff Bailey   1/20/200,  10:37:41 AM
10:00 Internals at this Link

Friday's Internals at this Link

  Linda Piazza   1/20/200,  10:34:45 AM
The OEX heads down toward the 562.75 level that's the predicted downside target from the confirmed double-top formation. It's also near the 30-minute 18/21-pma's and near central channel support on the Keltner channels, all between 562.75 and 562.52. That might be our strongest chance of a bounce on the OEX so far. The OEX is falling out of the ascending regression channel that held its prices during most of last week.

  Linda Piazza   1/20/200,  10:27:39 AM
The OEX double-top formation has been confirmed, with a downside target now of about 562.75. Lately, we've seen the OEX turn around immediately after confirming bearish patterns, so if it does not do so now, the pattern has changed at least on the short-term. As Jane has pointed out, though, bearish traders would sure need to see the $TRIN higher to have much confidence in the downside today. It's climbing as I type.

  Linda Piazza   1/20/200,  10:25:07 AM
The OEX is close to a confirmation of a double-top formation on the five-minute chart. Such a confirmation would occur at a fall below the trough created this morning at 564.36. We've seen similar patterns confirmed lately and then the downside targets not reached, but that's what we're seeing on the chart.

  Jeff Bailey   1/20/200,  10:16:02 AM
Swing Trade Long alert .... Express Scripts (ESRX) $68.89 here, stop $64.95 target $75.00.

  Jeff Bailey   1/20/200,  10:13:36 AM
S&P 500 Index (SPX.X) with new WEEKLY pivot retracement. Stong correlative support at WEEKLY Pivot/MONTHRLY R1, which I think ties in nicely with bullish bias from e-mini S&P futures. Link

  Jonathan Levinson   1/20/200,  10:13:15 AM
The opening p/c ratio was .62, at the low end of neutral, VXO flat at 15.27.

  Linda Piazza   1/20/200,  10:11:37 AM
GE is climbing in what appears to be a bear flag after having fallen below this morning's gap. It has not yet retraced 50% of that gap again or of this morning's range, but it's trying still.

  Linda Piazza   1/20/200,  10:09:43 AM
The TRAN is once again finding support at its 10-dma and at the rising trendline off the June low. It's still within the congestion zone that has trapped it for several weeks now, not yet able to summon the strength to surmount that March 2002 closing high of 3049.96 or the intraday high at 3050.40, but not breaking down, either. Oscillators are inconclusive.

  Jonathan Levinson   1/20/200,  10:02:46 AM
My guess was correct- we have a 3-month and 6-month bill auction at 1PM today.

  Jonathan Levinson   1/20/200,  10:01:08 AM
A monster 2-day 14B repo has just been announced, and I see no expiries today. I assume that there's a treasury auction on deck for which this massive injection of liquidity from the Fed is destined. Checking now. That 14-thousand-billion dollars made available to the markets for the next 2 days.

  Jim Brown   1/20/200,  9:57:38 AM
INVN getting whacked this morning, -2.00, while SPW is up +3.50 after reaffirming guidance.

  Jeff Bailey   1/20/200,  9:57:18 AM
S1 Corp. (SONE) $9.66 +5.11% Link ... strong move early. Trade at $9.50 is 3-box reversal back higher. Plenty of room longer-term to current bullish vertical count of $21.75.

  Linda Piazza   1/20/200,  9:52:06 AM
The OEX is steadying near the midpoint of this morning's gap and trying to rise from here. That's a bullish action so far. However, it has begun its decline back inside the Keltner channels and now there's Keltner resistance showing up overhead, near 565.30, near the midpoint of today's first five-minute range.

  Linda Piazza   1/20/200,  9:48:10 AM
GE has traded to the bottom of its opening gap, also a spot where we might expect to see a bounce attempt. If that bounce attempt doesn't carry GE above the midpoint of the day's range, that's a bearish sign.

  Jeff Bailey   1/20/200,  9:47:52 AM
Forest Labs (FRX) $73.00 +3.51% Link ... higher after reporting Q3 (December) earnings of $0.60, which was in line with consensus estimates (FRX guided higher on 01/09/04). FRX said revenues rose 19.4% year-over-year to $700.5 million versus consensus of $703.7 million. For fiscal 2004, FRX sees earnings at the high end of $1.82-$1.92 guidance (consensus $1.94) and sees fiscal 2005 EPS of $2.30-$2.50, consensus $2.37.

  Linda Piazza   1/20/200,  9:46:11 AM
OEX Keltner channel support is lining up near 565.65-565.70, so we might expect a bounce near the current level, also near today's opening level. Oops. Maybe no bounce after all?

  Linda Piazza   1/20/200,  9:36:59 AM
During the first five minutes of trading, the OEX traded a range from 564.72 to 565.75, with the midpoint at 565.24, and with the OEX currently above that midpoint.

  Linda Piazza   1/20/200,  9:35:31 AM
Careful, bullish OEX traders. The OEX has punched through the five-minute Keltner channels to the upside. After doing so, it often climbs, sometimes for as much as another hour or so, but then often drops back toward the midline or bottom support of the channels. The midline support is now at 562.25, but is rising.

  Jane Fox   1/20/200,  9:22:54 AM
In light of Senator Kerry's strong showing in the Iowa Caucus and Dean's poor showing, it could be said that the results will force the Democrats to run on a platform that favors keeping the recent tax cuts in place, a stance obviously favored by the Republicans. The Kerry victory is therefore a victory for the Republicans and increases the likelihood that much of the recent tax cuts will be made permanent. This is good news for equities, which have benefited from the economic effects of the tax cuts.

  Linda Piazza   1/20/200,  9:21:03 AM
The OEX closed the week above the 38.2% retracement of the bear-market decline. Normal action after crossing such an important milestone would be consolidation for a period of days or weeks at that important zone while oscillators cycle down or a pullback to reestablish support, but not much has been normal about the markets lately. Next strong resistance (read as "hesitation point") lies in the 571.75-575 region.

  Jeff Bailey   1/20/200,  9:20:37 AM
09:00 Update at this Link

  Jane Fox   1/20/200,  9:19:00 AM
Europe is abandoning its long-held policy for a "strong" euro and top finance officials are emphasizing a desire for a "stable" euro instead. This new policy states the euro "must keep its value over the medium and long run, in line with economic fundamentals. In the present circumstances, we particularly stress stability and we are concerned about excessive exchange rate moves." The euro is now more than 50% higher than its low against the dollar, and some fear it threatens the region's fledgling economic recovery.

  Linda Piazza   1/20/200,  7:09:21 AM
Good morning. Although our markets remained closed for Monday's holiday, most other global bourses were open. The Nikkei closed above 11,000 for the first time since October 21, closing near the high of the day, up 179.13 points or 1.65%, at 11,036.33. According to CNBC Europe on Monday, Prime Minister Koizumi for the first time said that the felt the Japanese economy was recovering. According to other sources, he also commented that bad debt in the banking sector would be repaired by the end of this year. Finance Minister Tanigaki worried about the dollar's weakness, but reportedly said that currencies should represent economic fundamentals. Koizumi's statement had more impact. Volume was strong. The point gain might have hinted that all sectors gained, but information, telecom, and mining sectors reportedly declined. Gains were explosive in some stocks, however, and even Japan Airlines System gained almost 4% after canceling 120 flights on Monday for emergency engine inspections. Doesn't seem a catalyst for a strong gain, does it?

Most other Asian markets gained in Monday's trading. According to my quote source, the Taiwan Weighted and China's Shanghai Composite were closed. South Korea's Kospi gained 1.04%. Singapore's Straits Times gained 0.67% and Hong Kong's Hang Seng gained 1.98%.

Tuesday, the Nikkei dipped briefly below 11,000, but then climbed strongly as the end of the two-day Bank of Japan meeting approached. The yen weakened against the dollar, sending exporters such as Sony and Canon higher. Goldman Sachs also upgraded consumer electronic stocks to an overweight rating from its previous neutral rating, helping to send techs higher. Carmakers advanced. Then in the afternoon, the Bank of Japan surprised market watchers by announcing changes meant to improve liquidity. The change raises the reserves made available to lenders. Banks had been trading down prior to the announcement, but bounced before heading down again as the Nikkei dropped about 90 points into the close. Despite that drop, the Nikkei still gained 66.77 points or 0.61%, to close at 11,103.10.

Most other Asian bourses climbed on Tuesday. South Korea's Kospi gained 0.53% and Singapore's Straits Times gained 0.88%. Hong Kong's Hang Seng soared 2.39%. According to my quote source, both Taiwan's and China's bourses remained closed. Hong Kong's government announced that unemployment for the quarter ending in December fell to 7.3% from the previous quarter's 7.5%. China's National Bureau of Statistics announced that the country's gross domestic product grew 9.1% in 2003. Q4 growth was even stronger, up 9.9% over the previous quarter's level, with that number the first calculated under a new method that answered criticisms that China was understating growth. Some worry that the economy is heating up so quickly that gluts in autos, consumer goods, and property may occur.

Boosted by a weaker euro against the dollar and earnings reports by Infineon and Ericsson, most European bourses closed higher on Monday, too. Investors had expected worse results from Ericsson than the 2% loss in average selling prices, boosting the stock in Monday's trading. The FTSE 100 gained 0.67%, the CAC 40 gained 0.49%, and the DAX gained 0.69%.

With the dollar weakening against the euro today and the German ZEW Institute reporting a slightly weaker-than-expected 72.9 number for January's index of economic sentiment, European markets turn down from their highs in Tuesday's trading. They may be turning down in bull flags as they flatten ahead of the open of the U.S. markets. Most of the focus was on individual stories, with Swiss computer equipment maker Logitech International pulling back after reporting strong earnings, with investors perhaps reacting to the news that its net income was boosted by a one-time tax gain. Two European M&A deals were announced, involving French Air Liquide's plan to acquire Messer Griesheim's German, U.K., and U.S. industrial gas activities; and Danish brewer Carlsberg's plan to buy Holsten-Brauerei.

Currently, the FTSE 100 has eased by 2.70 points or 0.06%, to 4515.40. The CAC 40 has dropped 2.09 points or 0.06%, to 3687.88. The DAX has gained 2.43 points or 0.06%, to trade at 4142.35.

  OI Technical Staff   1/16/200,  11:00:52 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.


Market Monitor Archives