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  Jim Brown   1/29/200,  5:48:16 PM
PSFT est +0.20, act = +0.20 inline

That was the last alert for the day

  Jim Brown   1/29/200,  5:19:37 PM
AFFX is going to offer $120 million in convertible notes.

  Jeff Bailey   1/29/200,  5:07:23 PM
Closing Internals at this Link

  Jeff Bailey   1/29/200,  4:15:15 PM
QQQ $37.26 +0.45% .... looks to go out at the highs of the session. Pretty darned similar to 12/10/03 if you ask me.

  Jeff Bailey   1/29/200,  4:06:36 PM
NASDAQ-100 Volatility Index (VXN.X) 25.25 +0.35% ... just about flat.

  Jeff Bailey   1/29/200,  4:05:21 PM
QQQ options Feb. $38 puts takes the lead with 89,000 contract. Nice 14,500 trade at $1.25. That was at the bid and suggests a put seller.

Hmmmm with QQQ near $37, if I sell the $38 puts for $1.25, then $37 +$1.15 = $38.25.

OI on this contract as of Wednesday's close was 311,320.

  Jeff Bailey   1/29/200,  4:03:18 PM
QQQ Options ... most active today... Feb $37 puts and Feb $37 calls (80,000 each) then Feb $38 puts also 80,000.

  Jim Brown   1/29/200,  4:01:17 PM
Earnings after the close:

ADVS est +0.01, act = -2.31 (dil) guided inline
ABTL est +0.05, act = +0.09
AVID est +0.46, act = +0.47 beat
BORL est +0.04, act = +0.06 beat guided inline
CHRT est -0.16, act = -0.17 missed, no guidance
CNET est +0.02, act = +0.05 beat
CCUR est -0.01, act = +0.02 beat
DRTE est +0.14, act = +0.14 inline
DGIN est +0.20, act = +0.22 beat
EPNT est +0.02, act = +0.02 inline
FRNT est +0.19, act = Could be Friday
GILD est +0.42, act = +0.85 beat
GSPN est +0.06, act = +0.07 beat
ITMN est -1.15, act = -0.73 beat
IWOV est -0.06, act = -0.05 beat
KRON est +0.23, act = +0.23 inline guided low end
LEXR est +0.16, act = +0.21 beat mixed guidance
MCRL est +0.03, act = +0.04 beat
MSTR est +0.46, act = +1.02 ?? diluted
NEWP est -0.04, act = -0.04 beat
PSFT est +0.20, act = +0.20 inline
RNWK est -0.03, act = -0.02 beat
RSAS est +0.10, act = +0.10 guided inline
SAPE est +0.01, act = +0.02 beat
TKLC est +0.10, act = +0.13 beat guided to low end
VSEA est +0.10, act = +0.13 beat guided higher
VRSN est +0.13, act = +0.17 beat
YELL est +0.78, act = +0.71 miss, guided lower
IRF est +0.34, act = +0.34 beat
GTW est -0.15, act = -0.15 inline
SYK est +0.66, act = +0.66
NT est +0.02, act = +0.09 (+11 dil) guidance mixed

PIXR ending discussions with Disney about future pictures.
ADBE Raising estimates

  Linda Piazza   1/29/200,  3:59:28 PM
The OEX ends the day having climbed back above its 60-minute 100-pma, after having tested both it and the 130-pma. This should be a signal to go long. Any takers? This is not serious investment advice, since I would consider this a countertrend play and since I don't like lottery plays in front of market-moving economic numbers. Whatever happens tomorrow will overcome what we see on the charts tonight. However, I do note that the 60-minute MACD has made a bullish cross from below signal, with the histogram showing a positive value for the first time since Tuesday.

  Jeff Bailey   1/29/200,  3:53:42 PM
Tweeter Home Ent. (TWTR) $10.51 +3.03% .... (swing trade bullish from 01/29/04 $10.42, stop $10.20, target $11.50)

  Jeff Bailey   1/29/200,  3:53:02 PM
Express Scripts (ESRX) $69.59 +0.36% ... (swing trade bullish from 01/20/04 $68.89, stop $64.95, target $75.00)

  Linda Piazza   1/29/200,  3:52:44 PM
What's going to happen on the Nikkei Link in the overnight market? Currency issues tend to drive the Nikkei, and I'm not sure how that's likely to develop in the overnight market, but I do know that the Nikkei spent the last hour or so of trading last night rising strongly off its low. Intraday, the Nikkei touched support near 10,650, a level that represents historical support and also the top of a gap from August. Daily oscillators are bearish, but the shape of that chart looks a lot like a H&S developing. If that's true, the Nikkei, like our Dow, could rise into a right shoulder, having reached the neckline level again intraday in Thursday's trading. With that bounce at the end of the day in the Nikkei's trading, our own end-of-day bounce, as tepid as it might be, and that nearby support, it's possible that the Nikkei could end its four-down-days-in-a-row streak and gain tonight. Working against that theory are two realities. One is that articles suggest that Japanese banks tend to unload their stock holdings during February, and some think that banks are getting a head start. Another is that the Nikkei's steep fall has actually produced a P&F sell signal with a downside price objective of 10,300.

  Jeff Bailey   1/29/200,  3:51:48 PM
Bema Gold (BGO) $3.02 x $3.03.

  James Brown   1/29/200,  3:47:07 PM
Harman Intl (HAR) announced earnings last night that beat the estimates but shares were hammered this morning, down almost $10 before investors stepped in to buy the dip ($78 to $68). Now the stock has cut its losses in half and reclaimed its simple 50-dma. It will be interesting to see which direction it goes from here.

  Jim Brown   1/29/200,  3:43:51 PM
Lots of earnings after the close today. It is going to be a busy after hours. I will be posting them as soon as the market closes.

  Linda Piazza   1/29/200,  3:38:23 PM
So far today, the TRAN is forming a high-wave candle, nearly a doji, at the bottom of a steep fall. If this candle holds its shape into the close, that's a potential reversal signal. As was true of the potential bearish reversal signals we kept seeing form, this potentially bullish one would have to be confirmed by a tall white candle tomorrow, with that candle forming above current prices. Then, we'd have to see if the reversal eventually took the TRAN to a new high or a lower high. I suspect a lower high.

  Linda Piazza   1/29/200,  3:30:30 PM
Keltner resistance is moving above the current OEX position, so that support lines and resistance lines are snaking around its current position. It's above the midline of the Keltner channel, but only minimally so far. This is a level I expected to be difficult, so I'm not surprised to see it hesitate here. I expected it, in fact, to retrace back to lower Keltner support, perhaps to 560.75 or so, before it did or did not make another charge higher. I just am not sure whether it can break through that midline resistance or not.

  Jeff Bailey   1/29/200,  3:24:55 PM
Day trader bearish close alert .... Bema Gold (BGO) $3.03 offer. Lets close out here at $3.03 offer. (+$0.02, or +0.66%)

  Linda Piazza   1/29/200,  3:22:46 PM
For the interest of those who have been following the discussions about the 72-ema and tech-related stocks today, look at how the SOX behaved with respect to this average, with that average marked in green on this daily chart: Link Jonathan didn't know what he was starting when he applied a 72-sma to his short-term stocks and I converted it to a 72-ema and somehow mistakenly applied it to my daily charts, did he?

  Jeff Bailey   1/29/200,  3:21:12 PM
Swing Trade bearish stop alert ... Newmont Mining (NEM) $41.14 ($1.73, or +4.04%).

  Linda Piazza   1/29/200,  3:19:43 PM
The OEX is inching above central Keltner resistance. If it can sustain this level, there's no Keltner channel resistance showing up until 567.13. The 30- and 60-minute charts show plenty of resistance, however, between the current OEX level and that level, in the form of the 30-minute 100/130-pma's, at 564.80 and 564.11. The OEX charged right past the 60-minute version, however, so perhaps those aren't going to give it any problem, either. This action was action I thought might be possible today, so was my particular reason for not wanting to enter a bearish trade today.

  Jeff Bailey   1/29/200,  3:18:48 PM
Procter & Gamble (PG) 101.01 +2.41% ... new 52-week high for Dow component and attempts bold move above the $100.00 level.

  Jeff Bailey   1/29/200,  3:13:29 PM
03:00 Internals at this Link

  Linda Piazza   1/29/200,  3:13:06 PM
Thanks, Jane, for your information on Dan Sullivan's study. I guess the physics-studying portion of my brain hasn't kicked in, though. Haven't we had some 5% corrections? Such as the one in late March? Or June's more-than-19.1% correction from the March low to the June high?

  Linda Piazza   1/29/200,  3:09:29 PM
The long-awaited (by me, at least) bounce occurred while I was answering reader email. It's taken the OEX all the way up to central Keltner resistance, which I expected to be tested at some point. It's also taken the OEX up to the 60-minute 100-pma at 562.15. This should be a tough resistance level for the OEX. If it isn't, then I do expect it to be catapulted all the way to the top resistance of the nested Keltner channels, now at 567.08. We should see the OEX pull back here, though, perhaps just to Keltner support, now layered rather closely all the way down to today's low. It's what happens after that pullback that tells us whether we're going to see it catapulted up or whether it will find continued resistance here and eventually turn down for good. Well, not for good, but you know what I mean.

  Jane Fox   1/29/200,  3:07:05 PM
Linda a study done by Dan Sullivan showed the current market has gone 212 days without a correction of at least 5%. In the last sixty years, this has happened only 12 times. However, when it does happen, it lasts - on average - 313 days. So, by the "average" measure, we have another 101 days to go on the upside before we see even a 5% correction. The last time the market did this was when it went 404 days without a 5% correction - from May '95 through July '96.

  Linda Piazza   1/29/200,  3:03:12 PM
Reader Question: I keep hearing about a 5% correction that needs to happen before we can go back up. Where can I find more info on this and what numbers they are looking for. Please and thank you, have a great day and thanks for your hard work, you have taught me a lot.

Response: First, thanks for the compliment on behalf of all the writers at OIN. I've been hearing that 5% number bandied about a bit, too. It's not a typical Fibonacci retracement, and, as I studied the OEX retracements off the March rally, many are of the 19.1% range, retracing about that much of the climb that immediately preceded it. Pring says that typical retracements cover 1/3 to 2/3 of the previous move, with about 1/2 being typical. A retracement of 1/3 to 1/2 of the rally would still be a bullish development.

The 5% number may have come from a study by a professor at Tulsa University, Professor John K. Harris, who studied markets back to 1942. He found that when the initial 5% pullback occurred, the rally was only 60% completed. That puzzles me a bit, though, because supposedly he's concluded that since March, no pullbacks have exceeded 5%. Let's just look at the first pullback that occurred off the March Wilshire 5000 low of 7503.17. That first pullback occurred in late March, and was a 50% retracement. So, either I'm not understanding what this professor is doing or we've had a number of 5% retracements on the way up. I used the Wilshire because it's our broadest market.

  Jeff Bailey   1/29/200,  3:01:36 PM
Day trade bearish stop alert ... Emulex (ELX) $27.31 ($-0.39, or -1.45%)

  Jeff Bailey   1/29/200,  2:58:18 PM
Swing trade bullish alert ... Tweeter Home Ent. (TWTR) $10.42 here, stop $10.20, target 11.50.

Looks like a short squeeze just tweeting to happen.

  Jeff Bailey   1/29/200,  2:57:03 PM
Buy Prog. Prem. Alert ...

  Jeff Bailey   1/29/200,  2:53:53 PM
Buy Prog. Prem. Alert ... SPX = 1,129.11, OEX = 560.83, INDU = 10,474, QQQ = $37.05 (WKLY S2).

Bond market closes in 5 minutes.

  James Brown   1/29/200,  2:52:26 PM
Wellpoint Health Network (WLP) is trading higher today after beating estimates by a penny this morning. The stock is bouncing from support at $100 and looks bullish but remember the company is being acquired by Anthem (ATH) and will trade in conjunction with ATH's stock price. Which, by the way, also looks bullish but ATH is approaching resistance at 81-82.50.

  James Brown   1/29/200,  2:47:08 PM
Hmmm... it's interesting to see FDX slowly fading under resistance at $70 to support near $67.50 and its simple 200-dma. Shares have stronger support at $65.00 but its MACD indicator is rolling over again under the zero line.

  Linda Piazza   1/29/200,  2:44:22 PM
The OEX did reach a higher five-minute high, but only by 5 cents. Does that count? Perhaps so, but actually, the OEX is still churning around, mostly staying close to its first five-minute range. It's traveled slightly more than a point below that first five-minute range, and has stayed under the high of that range all day, but much of the time has been spent churning around somewhere near that range. I still think it possible that it will rise up to test central Keltner channel resistance and its 30-minute 100-pma, although perhaps not today. If the bulls take heart, it might even test the top of its Keltner channel since it stayed outside that channel for so long. That seems less likely at this point, but we've seen stranger things happen, and prices that are slung so far outside the Keltner channels often get catapulted to the opposite side.

  Jeff Bailey   1/29/200,  2:41:34 PM
Buy Prog. Prem. Alert ... SPX = 1,127.40, OEX = 559.84, INDU = 10,455, QQQ = $36.90.

  James Brown   1/29/200,  2:38:24 PM
Also noteworthy is the breakdown in shares of YHOO. The stock has broken support at $45.00 but did manage a meager bounce from its simple 50-dma near the $44 level. This might be a bearish candidate for a move toward the $40 region.

  Jeff Bailey   1/29/200,  2:38:14 PM
Sectors green that may have benefitted from buy programs ... Biotech +1.55%, HMO +0.24%, Drug +0.22%, Retail +0.09%

  Jeff Bailey   1/29/200,  2:36:11 PM
02:00 Internals at this Link

  James Brown   1/29/200,  2:34:12 PM
Keep an eye on General Motors (GM). Shares are rolling over and picking up speed. The stock broke through support at $52.50 yesterday and we're seeing a strong follow through today with a 4.68% drop straight to its next support level at $50.00 and its simple 50-dma. There is a gap from December in the 47-48 range and this could offer some support but if GM breaks $50 we may see it test the $45 level.

  Linda Piazza   1/29/200,  2:27:42 PM
So far, the OEX is resisting moving to a new five-minute high and confirming that bullish divergence on the five-minute price/MACD lows, but it doesn't have any Keltner resistance right ahead of it now. Next Keltner resistance gathers near 561.96-562.44, also the level of the 60-minute 100-pma. This is the central Keltner channel resistance and the moving average that I've been expecting the OEX to rise and test, but it's waited so long that they've both descended. They should be tough resistance, but that depends on how much pent-up oversold pressure still exists. If there's still a lot of pressure, a move up to the top Keltner resistance at 567 wouldn't be impossible.

  James Brown   1/29/200,  2:27:33 PM
The BMS split Jim just mentioned would be the 37th stock split announcement in the month of January.

  Jim Brown   1/29/200,  2:25:51 PM
BMS - just announced a 2:1 stock split and increased their dividend.

  James Brown   1/29/200,  2:24:53 PM
Looking for a bullish candidate? Check out JNJ. The stock has produced a triple-top breakout on its P&F chart as well as a breakout over P&F chart resistance. Its daily and weekly candlestick charts don't look too bad either with a potential bottom in place.

  James Brown   1/29/200,  2:21:34 PM
FYI: shares of Dow component MMM, which dropped strongly yesterday to close at price support of $80 have broken that support today, currently trading at $79.66.

  Linda Piazza   1/29/200,  2:18:50 PM
As I mentioned earlier, the OEX was showing tentative bullish price/MACD divergence on the last (then equal/since lower) five-minute low. That bullish divergence will be confirmed on an OEX move to a new five-minute high, so above 561.06, the last five-minute high.

  James Brown   1/29/200,  2:18:49 PM
Yesterday's earnings report pushed Altria Group (MO) up through short-term resistance at $55.00. We're seeing some follow through on that move today but shares are working on their 7th gain in a row.

  Jeff Bailey   1/29/200,  2:18:09 PM
Bulls coming to life here ....

  Jeff Bailey   1/29/200,  2:14:50 PM
Buy Prog. Prem. Alert ... SPX = 1,127.56 , OEX = 559.97, INDU = 10,465, QQQ = $36.87.

  Jeff Bailey   1/29/200,  2:05:50 PM
That buy program prem. alert came just after the OEX traded its WEEKLY S2 of 557.84.

On 5-minute intervals, I count 13 buy program premium alerts today versus 1 sell program prem. alert.

  Jeff Bailey   1/29/200,  2:03:41 PM
Buy Prog. Prem. Alert ... SPX = 1,124.91 , OEX = 558.81, INDU = 10,443, QQQ = $36.82.

  Jim Brown   1/29/200,  2:01:24 PM
FOMC Minutes for December: Link

FOMC minutes show that the Fed is worried about the rising budget deficit. No inflation in sight. They discussed changing the bias at the last meeting. Economy still growing slowly.

  Linda Piazza   1/29/200,  1:55:13 PM
This last drop came during the normal stop-running time of day, but the declining advdec line and high $TRIN say it's real. To be sure, watch the reaction. An immediate move up will signal that the dip is being bought (which hasn't happened much all day) and a further move down indicates something different.

  Linda Piazza   1/29/200,  1:53:17 PM
Like the NDX earlier, the OEX broke through its possible double bottom level.

  Jeff Bailey   1/29/200,  1:48:45 PM
Sectors broadly lower ... Biotech (BTK.X) 515.82 +0.82% Link and Utility ($UTY.X) 312.96 +0.03% Link only sectors I show holding a gain.

Insurance (IUX.X) 310.24 -0.03% Link just easing into negative territory. Close to its bullish vertical count of 320.

S&P Banks Index (BIX.X) 345.42 -0.77% Link at a session low.

  Linda Piazza   1/29/200,  1:42:27 PM
Possible double-bottom area for the OEX. There's bullish divergence (so far) on price/MACD lows. We saw the NDX break through a similar possible double-bottom level earlier today.

  Linda Piazza   1/29/200,  1:34:07 PM
The advdec line has been headed steadily down all day long. It's now back to that very negative level Jim mentioned yesterday, at a -3472. I've been watching for a possible sign of an impending bounce, but it sure hasn't shown up yet in this measure of market strength or weakness. If it's showing up now, it's only if we consider how extreme this number is compared to what we've grown to expect. So far, it shows every sign of becoming even more extreme. I've had to keep changing the number as I typed this post because it continues to drop.

  Linda Piazza   1/29/200,  1:29:47 PM
The NDX broke through Keltner channel support again, also through the horizontal support it established this morning. It tried an upside break of its potentially bearish formation, then turned around and headed down, breaking through bottom support. It's not looking good for any oversold bounce, or any potential bearish entries on that oversold bounce, but we've seen a lot of chop today and I'm not sure the markets are through chopping around. The SOX is now testing that 72-ema I pinpointed on the daily chart in a previous post. Sometimes the SOX violates this moving average, but it's done it on a closing basis only twice in the last six months. That makes this a possible bounce point, especially considering its proximity to round-number support at 500, but that also makes this a point at which the bearishness could be confirmed by a change in trend.

  Linda Piazza   1/29/200,  1:21:11 PM
OEX Keltner support is now firming up between 558.75-558.90. That doesn't mean that the support at the current level can't be violated, but when the lines congregate together as they're doing now, they often do hold. The trouble is that resistance is also beginning to congregate near 560.58-560.67, with slighter resistance between at 559.74. One of those has got to give. Going on Keltner channels alone, it looks as if the OEX might have an easier time rising than dropping, but I suspect that those descending Keltner lines might clump more closely together if the OEX doesn't break through soon, changing the picture quickly.

  Linda Piazza   1/29/200,  1:14:34 PM
Those tentative breaks over the descending trendlines on the NDX and OEX five-minute charts now have seen both the NDX and the OEX turn around and head back to support again. The OEX even slightly violated that support. This is opposite the action we've become accustomed to seeing over the last few months, when a dip below support of a potentially bearish formation saw bears getting trapped and the index involved turning around and heading higher again. This confirms another sign that the tide may have turned on a short-term basis anyway. However, we can't yet decide that the indices are not going to have that oversold bounce at all. Now we have to see what happens as support is tested again. The indices may just be reforming those former triangular patterns at the bottom of the day's range (flat bottom, descending top) into rectangular patterns as this day chops on.

  Jeff Bailey   1/29/200,  1:13:36 PM
Day trade short alert ... Emulex (ELX) $26.92 -2.17% here, stop $27.31, target $26.18.

  James Brown   1/29/200,  1:11:10 PM
The put play in QLGC is also looking pretty good with yesterday's drop through the $45 level of support on better than average volume.

  Jeff Bailey   1/29/200,  1:09:44 PM
01:00 Internals at this Link

  James Brown   1/29/200,  1:08:57 PM
Fortunately we have some movement in current OI put play ADBE. Shares have finally broken support at the $36.50 level after confidently closing under its 200-dma yesterday.

  James Brown   1/29/200,  1:07:01 PM
It's do or die time for current OI call play MWD. The stock has pulled back towards the bottom of its rising channel and technical support at its simple 50-dma. There was an early morning bounce from this level but the bounce is fading. Not helping is the breakdown in the XBD broker-dealer index below the 700 level.

  James Brown   1/29/200,  1:04:00 PM
Keep an eye on current OI call play ERSX. Shares have pulled back to is simple 10-dma (68.60). The stock bounced last time it touched this mild technical support. Should it break there is stronger price support near $67.50.

  Linda Piazza   1/29/200,  12:56:23 PM
The NDX is tentatively peeking over the top of the descending trendline it established in this morning's trading. That sure is a tentative move as yet, but it's already brought it up to challenge next Keltner resistance at the current level. The OEX is facing the same Keltner channel resistance at its current level. Central Keltner resistance for the OEX has now descended to 563.65, so the Keltner channels aren't going to have to catapult it very far any longer to test that central resistance. Top Keltner resistance lies at 567.99. Normally when the Keltner bands have been violated to the downside so strongly, the index is catapulted all the way back to the top of the Keltner channels, but unless that top line descends fairly quickly, I'm not sure that's going to happen this time. The OEX has significant resistance above its current level now. Both the central and top lines are still descending.

  Jeff Bailey   1/29/200,  12:51:30 PM
Spot Gold ... 397.30 -4.17%

Newmont (NEM) $40.52 -2.87% ... back to challenge lows of $40.51.

Bema Gold (BGO) $3.04 -1.93% ... just sitting here.

  Jeff Bailey   1/29/200,  12:41:26 PM
Daily Pivot Matrix observations early this morning, INDU 10,476.29 +0.07% tested its DAILY Pivot of 10,521.53 with a session high of 10,522.59, then turned back lower.

QQQ $36.88 -0.59% has sees low/high of 36.80-37.31, which is just about smack inside its DAILY S1 of 36.72 and DAILY Pivot $37.39. (8 cents above/below)

  James Brown   1/29/200,  12:31:43 PM
If you've been listening to the media they're making a big deal over this American Express/MBNA card deal. This really isn't "new" news. An anti-trust ruling against Visa and Mastercard in on September 17th, 2003 paved the way for AXP to begin launching new cards through banks that previously dealt with just Visa/MC. The real news here is that AXP got it done so quickly. Their earlier comments suggested it would be the second half of 2004 before any roll out would begin.

Shares of AXP are not moving much, currently painting an inside day.

  Linda Piazza   1/29/200,  12:24:34 PM
Other than a minor violation or two, the OEX has traded completely within its first five-minute range, so its trading pattern has been neutral according to the 5MRT. A study of that five-minute chart also shows a pattern of descending five-minute highs with a flat support at 559.40. That's typically a bearish formation, but I would certainly wait for a break of yesterday's low before considering such a formation confirmed. That's working against my impression that an oversold bounce might be coming. The markets are already so stretched to the downside and we may not yet have had enough time to bleed off the oversold pressure.

  Jeff Bailey   1/29/200,  12:24:31 PM
Bema Gold (BGO) $3.05 -1.61% ... has traded $3.00 twice today, but just sitting here.

  Jeff Bailey   1/29/200,  12:22:14 PM
Swing Trade Bearish stop adjustment alert .... NEM $40.75 -2.4% ... I want to lower stop to $41.14 here.

Spot gold look to be trying to firm at the $400.00 level.

  Jeff Bailey   1/29/200,  12:18:15 PM
12:00 Internals at this Link

  James Brown   1/29/200,  12:17:59 PM
Ouch! Weighing on the NWX networking index is a 25% drop in Foundry Networks (FDRY). The company announced earnings last night that were a penny above estimates. At least two analysts have downgraded the stock on the news, one of them a "sell".

FDRY has broken numerous support levels and is trading near its low for the day on extremely high volume of 17.9 million versus average volume of 2.5 million.

More... evidentaly FDRY missed the revenue "whisper" number...and some thought that management's tone was too cautious on the conference call.

  Linda Piazza   1/29/200,  12:14:45 PM
Here's what I'm watching on the NDX 60-minute chart. Link Today's decline stopped just above the minimal downside target predicted by this formation, but we're not seeing the expected action since.

  James Brown   1/29/200,  12:12:23 PM
When the rally began for Phelps Dodge (PD) back in May 2003 the stock was about $34. Now shares have spent a month failing at resistance of $80.00 (currently trading $72.40). Earnings were this morning and the company beat estimates on stronger than expected revenues (up 30%). If you're an optimists you might want to look for a bounce from short-term support of $70 and/or its 50-dma. If you're feeling bearish look for a breakdown at these levels.

  Linda Piazza   1/29/200,  12:06:51 PM
The NDX drop has been a flagpole drop if I've ever seen one. We should now see some sort of measured distribution pattern--the oversold bounce I've been expecting--but we sure haven't seen much of one yet. While it's always possible that a cascading drop could continue, I'm still watchful for that possible oversold bounce. The 60-minute chart showed a rough H&S formation that was confirmed with the drop through 1520, with the minimum downside target down near 1478, a level that the NDX has almost reached this morning. With the minimal target almost been met, that increases the possibility for a bounce. So far, there's lots of possibility and not much materialization, however, and the advdec line just continues to sink.

  James Brown   1/29/200,  12:04:49 PM
Netegrity (NETE) is getting an upgrade today. The company recently announced earnings that were only in-line with expectations and the stock fell drastically, sparking two downgrades one of them a "sell". Now that the stock has fallen from $14.00 to $9.39 in two days, First Albany is upping their rating to a "buy". Shares are bouncing on the upgrade (+4.68%) to $9.83.

  Jeff Bailey   1/29/200,  12:02:22 PM
Thanks Jonathan ... Yes, Barrick Gold (ABX) $19.25 -1.92% said it was removing it hedging strategy just before it topped at $23.50.

With Japan a big buyer of dollars in recent years (which have tanked), it might make sense that they now turn to gold. (grin)

  James Brown   1/29/200,  11:58:06 AM
It's all about the guidance. Sears & Roebuck (S) reported Q4 earnings this morning that beat estimates by 26 cents (net income was $2.24) on revenues that also beat expectations. But the company guided lower for the first quarter and said same-store sales should be flat to slightly higher.

Shares gapped down to peg its simple 200-dma before bouncing back above support at $42.50.

  Jonathan Levinson   1/29/200,  11:57:42 AM
No- the only news I've heard of that nature was Japan's hinting that it was considering diversifying into gold - the story was out last night but I have no link to it. The last I heard, Barrick was removing its hedges, and I've heard nothing to the contrary so far.

  Linda Piazza   1/29/200,  11:56:59 AM
The OEX nested Keltner channels are finally turning up, while the central Keltner channel resistance still declines. That central resistance is bound to be tested at some time or another, with that resistance at 564.46 but still descending quickly. That's near the 30-minute 100/130-pma's at 565.44 and 564.51. Before the OEX could climb that high, however, it would have to zoom above the 60-minute version of those averages, and the 60-minute 100-pma should prove to be tough resistance. That average is now at 562.25. The danger to bulls is that this whole thing is just going to roll over since the OEX is having so much trouble with the 60-minute 100/130-pma's. The danger to bears is that the OEX became so extended to the downside, that the Keltner channels suggest that it could be catapulted all the way to central resistance, if not to the top of the channels. The danger to anyone holding any options, either put or call, is that the thing is going to sit here all day in that small-range trading pattern I thought might happen, with all that new volatility leaking away, and option prices decreasing as it does.

  Jeff Bailey   1/29/200,  11:56:58 AM
Sell Program Prem. Alert ... SPX = 1,127.20 , OEX = 559.88, INDU = 10,479, QQQ = $36.94.

  Gerald Melson   1/29/200,  11:56:56 AM
They say there is a hundred ways to lose money on Wall Street everyday and none of it has anything to do with one's ability as a trader or investor. I noted the comments from Linda and Jonathan concerning the retail investor basically getting taken to the cleaners during fast market conditions as what happened yesterday with the Fed announcement. In Interactive Brokers, my broker, the YM system went down about 20 seconds after the Fed announcement. One could not get in or get out and this went on most of the rest of the afternoon. I did personally check with the exchange which claimed they were okay from their end. In short, the event certainly cost me profit potential and at the same time losses as well. Not a good day.

  James Brown   1/29/200,  11:53:39 AM
For the truly aggressive bull take a look at Netflix (NFLX). Shares have faded back to previous resistance, now new support at $70 (actually $69) and filled the post-earnings gap. I wouldn't chase it because the stock seems so overextended but this is technically support. NFLX has short interest equal to 83% of the float and a 2-for-1 split coming up on February 12th.

  Jeff Bailey   1/29/200,  11:53:38 AM
Jonathan .... Have you heard anything regarding some gold producers/miners reestablishing any hedging for their production?

  Linda Piazza   1/29/200,  11:47:01 AM
Jonathan, I had a Fidelity account during those fast-market times. Not only would Fidelity freeze up, but it would freeze my entire computer and it was happening to my trading partner, too, in another state, on another non-networked computer. If markets started moving quickly, then it was sure that we would be madly scrambling to reboot, one or the other of us reading prices out to the other over the telephone. Funny in retrospect, but not so funny then, when we were routinely trading 40-60 contracts of expensive options. Ah, those were the days.

  James Brown   1/29/200,  11:43:56 AM
Yesterday oil services stock Cooper Cameron Corp (CAM) announced earnings that drastically missed the estimates and guided lower for the current quarter. The stock plunged from $48 to $42. There was a small attempt at a dead cat bounce this morning but it too looks dead. Traders might want to consider bearish positions on a drop under current support of $41.00 (or a roll over near the bottom of the gap near $44 if we get it).

  Linda Piazza   1/29/200,  11:43:16 AM
The OEX appears to be violating (minimally) the ascending trendline it was forming off yesterday's low. As Jim just said, it's time now for bullish players to rally if they're going to do so, but OEX bulls have a hard task ahead of them today, as the OEX has spent the day testing its 60-minute 100-pma at 562.25 and its 130-pma at 559.97. In previous months, such a minor violation of a short-term formation would have been quickly followed by a ramping up, a relief rally as the bearish development was overcome.

  Linda Piazza   1/29/200,  11:37:39 AM
Reader Request: Where can I find what stocks are included in the BBH?

Response: The BBH is a Merrill Lynch HOLDR for the biotech sector. Here's a listing of the components: Link Many times when you want to know the components of a HOLDR or index, you can also go to www.amex.com and click through to the appropriate listing.

  James Brown   1/29/200,  11:37:32 AM
A couple of days after its Q4 earnings report Colonial Property Trust (CLP) is being downgraded to a "sell" by Smith Barney. The stock has produced a strong run from its mid-January lows and hit a new high after its earnings report. I don't see any details on the new "sell" rating but coincidentally the stock is near the very top of its rising channel.

  Jim Brown   1/29/200,  11:37:25 AM
GSK just lost a court ruling on Welbutrin patents. This favors IPXL among others. News just hitting the wires.

  Jim Brown   1/29/200,  11:34:33 AM
XMSR down -4 days in a row to $21.70 and now under the 50dma and the 100 dma

  Linda Piazza   1/29/200,  11:29:09 AM
Is anyone else seeing the potential for a H&S on the daily Dow chart? Link If that's a valid formation, then we should be on the watch for a bounce soon to form the right shoulder.

  James Brown   1/29/200,  11:28:32 AM
Sector under performers today:

XAU gold & silver index: -2.36%
NWX networking index: -3.29%
GSO software index: -1.91%
DDX disk drives: -2.32%
SOX semiconductors: -1.16%

Also feeling pressure is natural gas, airlines, and hardware.

  James Brown   1/29/200,  11:25:49 AM
French-based telecom Alcatel (ALA) is seeing some selling in its stock and shares are about to break what looks like support at $16.00. Investors are not reacting positively to news that ALA has won a supply contract to supply Korea Telecom for a "national information superhighway network".

If ALA breaks $16 the next support level appears to be the 50-dma near $14.00, which was previously price resistance.

  Jeff Bailey   1/29/200,  11:21:32 AM
11:00 Internals at this Link

  James Brown   1/29/200,  11:20:37 AM
Guidant (GDT) did beat estimates by 5 cents, but as Kernen just said on CNBC they guided somewhat lower for the current quarter. Shares are down 2.55% but have almost filled the gap from early January and well off its lows of the session.

GDT also announced an FDA approval for its resynchronization pacemaker.

  Linda Piazza   1/29/200,  11:19:23 AM
The TRAN has now dropped significantly below its 50-dma. It's no longer in the range where we could consider it testing that average, but instead has violated it. Is this predictive of likely action on its sister index, the Dow? It's possible, as the TRAN sometimes moves a few days to a couple of weeks ahead of the Dow, predicting its behavior, but the Dow has far outstripped its 50-dma, way down at 10,207.51. That would have to be a monster drop, and I'm not sure it will happen, at least not without a lot of zig-zagging along the way. However, this is definitely a bearish development.

  James Brown   1/29/200,  11:17:51 AM
Checking this mornings sector winners:
The bounce is pretty light this morning...

BTK biotech index: +0.99%
IUX Insurance index: +0.39%
HMO healthcare index: +0.39%
UTY utilities index: +0.41%
XBD broker-dealers: +0.39%
BKX banking index: +0.07%

  Jeff Bailey   1/29/200,  11:16:44 AM
Swing Trade bearish stop adjustment alert ... Newmont Mining (NEM) $40.86 -2.1% ... lower stop to $42.20 from $43.70.

  Linda Piazza   1/29/200,  11:09:28 AM
I'm still on the watch for a muted bounce, too, as are some of the other writers, but am aware that the high $TRIN and declining advdec line sure aren't predicting that possibility as yet. That's making me wonder if we haven't seen most of our bounce. My expectations for the day had been that we would likely see a small-range day while the indices performed that muted bounce to relieve some of the extreme short-term oversold pressure. Intermediate-term, I think much more downside is possible, still within the context of a normal pullback, but I thought there might be a consolidation day today as the Keltner channels moved into more of an equilibrium state. My faith in that possibility is being shaken by that TRIN and advdec line, however. My impressions pre-market are usually better than my impressions under the heat of the battle, but today I'm not sure that they were.

  Jeff Bailey   1/29/200,  11:08:28 AM
Day trade stop adjustment alert .... Bema Gold (BGO) $3.00 -3.22% (matching morning low) ... Lower stop loss to $3.08 from $3.11.

  Linda Piazza   1/29/200,  10:59:33 AM
In the context of our discussion about the 72-ema, here's a daily chart of the NDX with the 72-ema. See what you think: Link

  Jeff Bailey   1/29/200,  10:52:52 AM
AMEX Gold Bugs ($HUI.X) 213.93 -2.51% ... losing January lows here.

  Linda Piazza   1/29/200,  10:51:34 AM
I thought it might be you who used the 72-period moving average, Jonathan. I guess I translated it to an ema instead of an sma. I usually use an ema for anything over a 50-period moving average, though, as Pring's text suggests using ema's for longer periods. For those of you readers who don't know, ema's (exponential moving averages) give more weight to the most recent numbers while sma's (simple moving averages) give equal weight to all numbers used in the calculation.

  Jeff Bailey   1/29/200,  10:51:11 AM
Day trade short alert ... Bema Gold (BGO) $3.05, here, stop $3.11, target $2.94.

  Jonathan Levinson   1/29/200,  10:47:49 AM
I'm the 72 period SMA guy, and it seems to have translated to an EMA. The 72 period MA serves as a proxy for the longer intraday cycles on my short cycle charts, and is a general test of broad direction on all timeframes- a moving average version of automated regression channels, if you will. Once you start watching it, it often appears as an s/r "pivot" for direction changes. Just one tool in the toolbox.

  Jim Brown   1/29/200,  10:46:15 AM
I would confess to the 52, 78 and 130 ema but not the 72. (grin)

  Linda Piazza   1/29/200,  10:44:08 AM
Reader Question: Thanks for the MM input. Sorry for a dumb question, but I apparently missed something somewhere. Why and when did the 72-ema become important?

Response: That's not a dumb question at all. This question is in response to my 10:18 post in which I linked a SOX chart showing how the SOX had traded lately in response to its 72-ema. Why and when? I don't know. One of my fellow co-writers starting posting charts with that moving average and it looked weird to me. I had the same question you did, because it seemed a number pulled out of the oblivion. It wasn't a fib number, as far as I knew. Why the 72-ema? But when I began backtesting charts, I started noting that techs in particular seemed to trade in accordance with that average. So, I don't know why or when other technical analysts began watching this average, and unfortunately can't remember which of my co-writers first introduced it, but I do now watch some stocks and indices in accordance with this MA, since it appears appropriate. I asked yesterday which of my co-writers first introduced it, but no one fessed up. Whoever it was, thanks.

  Jim Brown   1/29/200,  10:43:49 AM
VRTS - $31.14 I would be a buyer of VRTS here at $31. This is just above strong support at $30 and well off the highs at $40 just last week. The CEO on CNBC was very positive and I think the reaction to the difference in company guidance and analyst estimates is overdone. I would look at the May $35 call (VIVEG $1.45) or the Aug-$35 call (VIVHG $2.35). My target would be a return to the $38-$40 level by April earnings.

  Jeff Bailey   1/29/200,  10:40:45 AM
Sector action is mixed

Strength ... Biotech +1.04%, Utility +0.84%

Weakness ... Networking -2.64%, Telecom -2.45%, Gold -2.12%, Software -1.45%, Disk Drive -1.41%.

  Linda Piazza   1/29/200,  10:35:06 AM
Today's five-minute pattern on the OEX looks as if it might be a bear flag rising into resistance. It's got lots of resistance to face overhead, including both 30-minute and 60-minute versions of the 100/130-pma's. The Keltner channels show gathering resistance at the current 560.50 level, up to 561.10, and then at 562.68 and 564.90. The central channel resistance, which will be tested at some point or other, is now at 565.65, but continuing to drop quickly. The OEX could break down out of a bear flag at any moment, but shouldn't retrace more than 50% of the flagpole drop if it's really a bear flag. That 50% level is just under 564. Trained by the last few months of market behavior, I continue to be watchful for a possible oversold bounce, however, aware that if enough bullish fervor remains, we could see that bounce carry the OEX and other markets far higher than we expect.

  Jim Brown   1/29/200,  10:25:05 AM
The Nasdaq has broken support at 2085 that has held for the last three weeks. If this drop continues we could see a slight pause at 2050 but real support does not begin until 2000, 1950 and 1900. 2000 would be the 50 dma.

  Linda Piazza   1/29/200,  10:18:53 AM
As Jim just stated on the Futures side, the SOX has now dropped below its 50-dma. Looks as if we'll get a test of the important 72-ema at 504.60. Here's a chart showing the 72-ema in green and the 50-dma in pink: Link Notice how the SOX trades in respect to that 72-ema.

  Jim Brown   1/29/200,  10:12:44 AM
Nasdaq is really tanking and much of it is on the weakness in the SOX which broke its 50 DMA at 515 and is trading at the low of the day at 510.00. The Russell is also very weak at -4.59 and is trading near support at 575.00. Definitely a trend change in the small cap/techs. VRTS did not help the sentiment last night and it appears even the BRCM earnings could not hold up the SOX.

  Jeff Bailey   1/29/200,  10:10:51 AM
10:00 Internals at this Link

Yesterday's internals at this Link

  Linda Piazza   1/29/200,  10:10:17 AM
The NDX drops below the potential double-bottom area. Guess we don't have to be too worried about oversold bounces just yet, right? Only, those Keltner channels just keep getting stretched tighter and tighter and tighter across many indices.

  Linda Piazza   1/29/200,  10:06:50 AM
The NDX has reached a potential double-bottom area on the five-minute chart, at 1488.60. We saw a reflexive bounce off that area in the last five-minute period, but the NDX is still in danger of rolling over and violating the double-bottom area. Again, with Keltner channels stretched so far to the downside, I'm watchful for possible oversold bounces today.

  Jeff Bailey   1/29/200,  10:04:39 AM
Sector Bullish % updates .... I've had several questions regarding a sector bullish % update. I'll try and get one done for this weekend's Ask the Analyst.

Sectors in a bear phase, or showing some internals weakening.

Aerospace/Airline "bear alert" 68%

Precious Metals "bear confirmed" 70%

Protection/Safety "bear confirmed" 74%

Retailing "bear alert" 66%

Textiles/Apparel "bear confirmed" 72%

  Jim Brown   1/29/200,  9:59:40 AM
Chicago Fed National Activity Index = 0.13, (last 0.55)
Conference Board Help Wanted Index = 38, (last 39)
Labor Turn Over Survey = +1.8%, (last -5.6%)

  Linda Piazza   1/29/200,  9:57:53 AM
The TRAN is easing below its 50-dma this morning, although it's still within a range that we could consider it testing this average. Unlike some tech-related stocks, the 50-dma has been more important in recent months than the 72-ema, so a break of the 50-dma on this index would be important, but we should consider this a possible bounce point. We saw the important 3000 level broken yesterday. I watch the TRAN because it often leads its sister index, the Dow, the way that the SOX often leads the Nasdaq.

  Jonathan Levinson   1/29/200,  9:55:01 AM
16B of Fed intervention money was expiring today, with 7B in 14-day repos. The Fed rolled that amount with a fresh 7B repo, and announced another 5.5B in overnights against the 9B expiring, for a net drain today of 3.5B. Is the Fed actually tightening, or has Ben "Dr. Defration" Bernanke cut a deal with Fukui-San whereby the BoJ will step in to pick up the slack?

  Linda Piazza   1/29/200,  9:54:38 AM
The OEX is below the midpoint of its first five-minute range, but appears to be slowing its descent and trying to rise back above that midpoint. (Note: it turned down again as I typed.) Complicating any attempts to rise are the presence of the 60-minute 100/130-pma's just overhead at562.59 and 560.65 (the midpoint of the first five-minute range), respectively. Without a lot of oomph, the OEX is going to have difficulty getting far above that 100-pma, and if it gets above that, the 30-minute 100-pma lurks overhead at 565.85. Still, unless we're to expect a cascading fall today, I would expect some continued testing of those averages before the OEX falls again.

  Jeff Bailey   1/29/200,  9:49:02 AM
Baxter Intl. (BAX) $27.58 -4.16% Link .... reported quarterly EPS of $0.62, which was a penny better than consensus. Revenues rose 12.2% year-over-year to $2.537 billion versus the $2.469 billion consensus.

  Jeff Bailey   1/29/200,  9:46:01 AM
Newmont Mining (NEM) $41.40 -0.76% ....

  Jeff Bailey   1/29/200,  9:45:14 AM
Express Scripts (ESRX) $69.05 -0.41% ....

  Linda Piazza   1/29/200,  9:43:47 AM
QQQ bears should keep a watch on the SOX, which ended yesterday on the 50-dma, and which is attempting to rise from that important average today. In scanning the daily chart, I actually find the 72-ema to have been more important, as the 50-dma is sometimes breached more severely than is the 72-ema, but that doesn't mean we won't see a bounce attempt at the 50-dma, as we sometimes do.

  Jeff Bailey   1/29/200,  9:43:33 AM
Baush & Lomb (BOL) $51.95 +2.16% Link ... reported quarterly EPS of $0.83, which was above consensus of $0.79. Revenues rose 15.2% to $550.1 million versus the $524.9 consensus.

  Linda Piazza   1/29/200,  9:41:30 AM
The OEX does appear to be slowing its advance at the gathered Keltner resistance. This would be the probable point from which the morning's first retracement would begin, with the retracement typically beginning in a couple of minutes. How far that retracement takes the OEX will tell us a lot about the kind of morning it's going to be, if not the kind of day. I'll first be watching that midpoint of the first five-minute range, at 560.65, as a measure of strength or weakness.

  Jeff Bailey   1/29/200,  9:39:15 AM
Ball Corp. (BLL) $59.80 Link ... indicated to open higher at $61.25 after the company reported quarterly EPS of $0.95, handily surpassing consensus of $0.71. Revenues jumped 31.1% to $1.193 billion versus the $1.164 billion consensus.

  Jeff Bailey   1/29/200,  9:37:14 AM
Apache (APA) $40.33 -0.29% Link ... reported quarterly EPS of $0.87, which was above consensus of $0.83. Revenues surged 45.8% year-over-year to $1.064 billion versus the $1.062 billion consensus.

  Linda Piazza   1/29/200,  9:35:59 AM
During the first five minutes of trading, the OEX range spanned from a low of 559.49, strong support on the daily chart, to a high of 561.80, with the midpoint at 560.65, and with the OEX currently above that midpoint. The OEX has risen to challenge first strong Keltner resistance from 561.80-562.55, however, so the advance should slow here. This is also near the 561.23 level that's the 38.2% retracement of the bear-market decline. As I mentioned yesterday and a couple of weeks ago, for some reason the 559.50 level proved more significant resistance on the way up than did 561.23, so might prove more significant on the way down, too.

  Jeff Bailey   1/29/200,  9:35:28 AM
Anthem (ATH) $79.49 +0.74% Link ... reported quarterly EPS of $1.43, which was above consensus of $1.38. Revenues rose 7.6% year-over-year to $4.294 billion versus the $4.294 consensus.

  Jeff Bailey   1/29/200,  9:32:11 AM
Exxon/Mobil (XOM) $40.81 Link ... higher at $41.10 after the energy giant reported quarterly EPS $0.68, which was 10-cents above consensus.

  Jeff Bailey   1/29/200,  9:29:09 AM
Boeing (BA) $41.54 Link ... higher at $42.10 after the company reported quarterly EPS of $0.50, which was above consensus estimates of $0.46. Revenues fell 3.5% to $13.214 billion versus the $12.739 billion consensus.

  Linda Piazza   1/29/200,  9:29:05 AM
A wise former writer once cautioned that we should watch the reaction of the futures overnight to help measure how the markets are digesting news and overnight developments in other markets. Despite the dive in the Nikkei (and partial recovery in the afternoon) and the downturn in European markets earlier today, our futures tended toward the mildly positive side. That, coupled with the degree to which the five-minute Keltner bands had been overstretched to the downside yesterday afternoon on the OEX makes me watchful for an oversold bounce this morning. I'm not sure it can travel far, however, and would look at it as an opportunity for new bearish entries. That's my impression now, however. Let's see what the day gives us. Remember that big-range days are sometimes followed by small-range days.

  Jeff Bailey   1/29/200,  9:13:45 AM
09:00 Update at this Link

  Jonathan Levinson   1/29/200,  8:33:19 AM

  Jonathan Levinson   1/29/200,  8:33:05 AM


The increase in the ECI looks inflationary, doesn't it? I'd expect that to be received as a bearish hint of further threat of tightening from the Fed, but equity futures are holding up. Only gold, silver and bonds are dropping currently.

  Jonathan Levinson   1/29/200,  7:55:59 AM
8:30 AM data today is the Employment cost index for Q4, est. .9%, and initial claims for the week ending 1/23, est 340K.

  Linda Piazza   1/29/200,  7:06:49 AM
Good morning. With tumbling U.S. markets, worries about a new global tightening cycle, pre-earnings jitters over upcoming earnings reports, worries about avian flu and currency issues, and disappointment with Japan's December lower-than-expected industrial production number, the Nikkei turned in a volatile day's trading. Those worries about a global tightening cycle were exacerbated when New Zealand's central bank raised interest rates a quarter point, mentioning that strong economic growth had produced inflationary pressures. The World Health Organization has said it will take at least six months to develop a vaccine for the deadly avian flu. Although the flu is not now known to be transmitted person-to-person, some fear that it might modify its genetic code so that it can be transmitted that way, leading to a pandemic. The Nikkei opened down more than 100 points in Thursday's trading, and then fell until mid-afternoon, eventually tumbling 186 points. About mid-afternoon, it began rising, trimming more than 100 points of its losses. It closed down 73.03 points or 0.67%, at 10,779.44. Japanese banks typically sell some of their holdings in February, and some may be trying to get in ahead of the rush, according to one market watcher.

Tech stocks led the declines in early trading, but finished with a mixed performance. After the bell, NEC and Fujitsu reported strong sales and Canon reported record 2003 profits, but those were the headline notations. We all know that surprises can be buried beneath those headlines, so verify earnings information before trading these stocks. Many banks declined. Automakers fell, not only in Japan but also across the region.

Most other Asian bourses fell, too. The Taiwan Weighted fell 1.15%. Taiwan Semiconductor reported strong profit and sales figures, according to one article, but that earnings report came after the bell. The company mentioned a strong handset chip market, but while mentioning stable demand for consumer electronic chips in the current quarter, also said that it saw less demand for computer chips. South Korea's Kospi fell 0.71%. Singapore's Straits Times declined 1.10% and Hong Kong's Hang Seng fell 0.73%. China's Shanghai Composite, open for the first time after a holiday, gained 1.78%.

Most European bourses currently trade lower, too, despite a January business confidence number for France that rose to a 32-month high, corroborating similar gains in Germany, Italy, Belgium, and the Netherlands within the last week. Buried in that report was a separate index indicating that fewer executives saw export orders rising, showing the effect of the rising euro on exports. Insurer Allianz led the declines, with Nokia, SAP, and STMicroelectronics also joining the decliners. STMicroelectronics, Europe's largest semiconductor company, fell after the company said it would see lower profitability in the first quarter, due at least in part to currency issues. The company reported a greater-than-expected drop in net income on sales that beat expectations, if I was deciphering the information correctly. BNP Paribas lowered its rating of the company to a neutral rating from its previous outperform rating. Europe's largest retailer, Hennes & Mauritz, bucked the trend by soaring almost 6% in early trading, after reporting a smaller-than-expected decline in Q4 profit.

As of this writing, the FTSE 100 trades lower by 47.40 points or 1.06%, to 4420.70. The CAC 40 has slipped lower by 42.17 points or 1.14%, to 3664.62. The DAX trades lower by 43.47 points or 1.05%, to 4106.77. Each of these indices has been treading water near the day's low for the last couple of hours, perhaps waiting and watching for the performance in U.S. markets or perhaps just finding support. The DAX is certainly near support at the 4100 level.

  Jeff Bailey   1/28/200,  9:36:24 PM
What to monitor/look for tomorrow .... I went back and looked at past WEEKLY Pivot Matrix, trying to see how this week's trade (when NDX/QQQ traded WEEKLY S2) unfolded in the days that followed. Here is a period that is similar to what we've seen so far THIS WEEK. Link

I'm now going to go to the Index Trader Wraps from 12/08-12/12 in the archive section Link of the site and try and see if there's something we can pick up on as a plan of action.

Hmmm... look at that 12/09/03 wrap "Dow 10,000 and Fed's comments finds selling" Link

OK... If I look at the 12/09/03 Pivot Matrix Link I begin to take notes as to how the QQQ, or whatever index you trade, traded as it relates to the WEEKLY and DAILY Levels.

I also look at the 12/10/03 Index Wrap, to get the DAILY levels for the following day.

Here is a back test model what trade took place in the QQQ for the WEEK of 12/08/03-12/12/03. Link If it were not for the 2-day meeting we just had, the days would be perfectly matched. This at least gives traders something to monitor based on what seems to be very similar "news" as it relates to how the QQQ traded in relation to DAILY and WEEKLY levels.

With the QQQ already at WEEKLY R2, our only test for support, or strength above a support level is the DAILY S1. Right now, all I can say is... "IF the QQQ does NOT trade DAILY S1 tomorrow (day after FOMC), then there is HINT of strength. The upward green trend on the chart is the upward trend from the March lows.

A trader short the QQQ at tonight's close, also has a good model to test for either SIMILARITY to the past, or DIVERGENCE from the past. A short/bear in the QQQ wants to see DIVERGENCE from the past.

OK... here's a QQQ chart, same 15-minute intervals with tomorrow's DAILY pivot levels. Link

A volume observation is that there was about 50% more volume in today's 15-minutes of trade at a similar FOMC announcement. Direction was the same, but there seemed to be a lot more interest in today's statement than the 12/09/03 statement.

It might also be worth a day trader's time to also look at a 5-MRT for 12/10/03, get a feel for how the Q's traded the day after 12/09/03. Might also be a good test for tomorrow's trade. I've been fighting the flu this week and really need to try and get some sleep.

If you took my swing trade short in Newmont Mining (NEM) today, the above discussion might also have us/you testing some things tomorrow.

"When EF Hutton talks. People listen."

"When the Fed speaks, markets listen."

  Jeff Bailey   1/28/200,  9:19:10 PM

Pivot Matrix for tomorrow at this Link

  OI Technical Staff   1/28/200,  8:12:37 PM
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