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  Jeff Bailey   2/4/2004,  5:36:15 PM
Closing Internals at this Link

  Jim Brown   2/4/2004,  4:01:38 PM
Earnings after the close:

CD est +0.27, act = +0.28 guidance lower
TMO est +0.34, act = +0.35 beat
ALL est +1.04, act = +1.06 beat
FLR est +0.57, act = +0.63 beat
BYD est +0.19, act = +0.19 inline
RMD est +0.38, act = +0.38 inline
AKAM est -0.01, act = -0.01 inline x-items
CERN est +0.43, act = +0.44 beat
CAKE est +0.30, act = +0.30
ENZN est +0.09, act = +0.05 may not be clean number
ESST est +0.19, act = +0.21 beat
FEIC est +0.10, act = +0.10 BookToBill 1.04
OIIM est +0.11, act = +0.13 beat
PIXR est +1.26, act = +1.44 beat
ROXI est -0.97, act = -0.92 beat

ALL buying back $1 billion, raising dividend +5 cents

  Jeff Bailey   2/4/2004,  3:57:04 PM
Bema Gold (BGO) $3.05 -0.32% .. gives it up at the end. Could have used that extra 4-cents but was running out of time.

  Linda Piazza   2/4/2004,  3:57:00 PM
Unless something drastic happens by the end of the day, the OEX will end the day mired within its recent congestion zone. At this point, even if it did break through 557 by the end of the day, I'd suspect that was due to end-of-day craziness and would also assume that it would rise right back up to retest that level tomorrow morning. I think we have to wait another day at least to see what's going to happen, and just maybe, two more days.

  Jeff Bailey   2/4/2004,  3:55:33 PM
Newmont Mining (NEM) $41.73 +0.55% ... crazy session for NEM in my opinion. Was much more volatile than today's trade in gold and the dollar.

  Linda Piazza   2/4/2004,  3:54:07 PM
Jim, I didn't even realize that TASR didn't have options. (See Jim's 15:45 post.) As I said, I just watch the thing out of amazement, so I never checked on whether it was optionable. Imagine being short that thing at $60.00 back in December!

  Jeff Bailey   2/4/2004,  3:53:13 PM
Day trade exit alert BGO ... Bema Gold (BGO) $3.08 x $3.09 ... close out here at $3.09.

  Jim Brown   2/4/2004,  3:45:33 PM
I wanted to short TASR really bad in the Editors Plays last Sunday but with no options and more than 50% of the float already short it was a potential disaster. Would loved to have done a straddle/strangle on it.

  Jeff Bailey   2/4/2004,  3:42:34 PM
Per Linda's 15:40:38 ... now if I could get the QQQ to cooperate with the 5-MRT Linda, that would be great.

  Linda Piazza   2/4/2004,  3:40:38 PM
Yesterday, I used Jeff's 5MRT system to monitor a possible daytrade in TASR, just because TASR fascinates me so much (don't trade it) and because I wanted to see how that daytrading system might work on a day after earnings. It worked beautifully. I've meant to post this all day, but here's yesterday's five-minute chart with the retracement levels marked: Link A bearish trade would have been entered at 142.78, with a projected downside to 124.42, a level that actually wasn't reached until this morning's open. Congrats, Jeff, for a trade that never happened--or maybe it did, but not by me. That thing scares me too much, going either direction.

  Linda Piazza   2/4/2004,  3:31:25 PM
Unless the OEX drops below 557 by today's close or rises above 564, it will end the day within the congestion zone that has been its range over the last five days. The shape of this formation is consistent with that of a "b" distribution pattern, with a sharp drop and then rectangular consolidation at the bottom of that range. That's bearish. The daily oscillators are cycling down and still have plenty of room to continue down before indicating oversold conditions. That's bearish. However, each of those candles has been springing up from its day's low, leaving lower candle shadows below them. That's not bearish. If that support continues to hold, the OEX could just continue to consolidate sideways while those oscillators cycle down the rest of the way and turn up again, or bulls could gain confidence at any moment and just abort the down-phases on those oscillators. When I wrote a summary last night of what I expected to happen today and this week, I wrote that I expected there to be some effort to hold markets steady into Friday's numbers, and that's certainly proven true today. I also noted some levels at which I would expect that holding pattern to be aborted, but I didn't mention the OEX. If the OEX were to breach 557 and sustain levels below that, I think we'd see a sharper drop. If it continues to hold within the current congestion zone, then every day will give more confidence to bullish traders.

  Jeff Bailey   2/4/2004,  3:22:07 PM
03:00 Internals at this Link

  Linda Piazza   2/4/2004,  3:16:50 PM
The BIX is once again testing its 30-minute 100-pma, with that average having been a magnet for the BIX all day long. The 30-minute oscillators aren't giving good clues as to final direction, and I wouldn't trust them if they appeared to be doing so.

  James Brown   2/4/2004,  3:16:14 PM
Sector Update with 45 minutes to go...

Big winners today:
DRG drug index: +0.81%
RLX retail index: +0.56%
DFI defense index: +0.47%

Big losers today:
NWX networking index: -4.17%
SOX semiconductors: -2.29%
DJUSHB home builders: -2.37%
BTK biotech index: -1.80%
XBD broker-dealers: -1.62%
UTY utilities index: -1.34%
XNG natural gas index: -1.21%

  Linda Piazza   2/4/2004,  3:13:29 PM
The OEX is now up slightly above the midpoint of the flagpole drop. Strictly speaking, the OEX should not retrace much higher before falling unless something other than the typical bear-flag climb is occurring, and this no longer has a bear-flag shape. However, since that broken 561 level was so important (also 561.23 being the 38.2% retracement of the bear-market decline), I've expected that to be retested, too. Still, be careful.

  Jeff Bailey   2/4/2004,  3:04:24 PM
Day trade short alert ... Bema Gold (BGO) $3.12 here, stop $3.16, target $3.05.

  Linda Piazza   2/4/2004,  2:53:28 PM
This looks like a bear flag climb off the low of the day for the OEX, with a tight pattern of higher high and higher lows. This is a typical pattern seen after such a steep fall, so it shouldn't be alarming to those in bearish plays, but rather expected. If it quacks like a duck, etc. However, lately, if it quacks like a duck, it's probably a swan about to rise in a graceful arc to the sky, so protect your positions. Set appropriate stops.

  Linda Piazza   2/4/2004,  2:51:08 PM
I love it, Jonathan. (See Jonathan's 14:48 post, perhaps on the Futures side.)

  Linda Piazza   2/4/2004,  2:49:34 PM
Someone else might have mentioned it, and I've missed it, but the VIX is back above 18, at 18.02 as I type.

  Linda Piazza   2/4/2004,  2:42:26 PM
While a 50% retracement of the OEX flagpole drop this afternoon would occur near 560.10, the ascending trendline off the 1/29 low crosses a little higher, currently at about 561. Even if the bearish tenor is to continue, the OEX might retrace up as high as that trendline before rolling down again. At least, it's presumed now that it would roll down again after an appropriate test of broken support. During recent months, that isn't what happened, with the OEX instead just shooting up to a new high. That could happen now, too, but in those other cases, the OEX usually just barely dropped after violating a support level, steadied, and then headed up for the test. We'll just have to see, but so far, this looks like an expected and normal measured distribution pattern that's rising toward broken support and supposed resistance. As such, it would be expected to break to the downside again.

  James Brown   2/4/2004,  2:38:53 PM
Labor Ready (LRW) may be about to break its simple 50-dma for the first time since April 2003. Shares have been rising steadily in an upward channel. A 38.2% retracement of the April-January run would put LRW near the 10.50 level.

  Jeff Bailey   2/4/2004,  2:32:54 PM
Futures/cash perspective ... some questions I think need to be addressed. Trading futures and cash are TWO different trades on an intra-day basis entirely.

A recent dow futures trade profiled from 13:50-13:59 would have had the QQQ falling from $36.65 to $36.58.

While a decent move lower in futures, entirely different in the QQQ.

I understand some frustration with seeing a profit erode in a QQQ trade to then see a loss, but even I didn't think this morning's decline to $36.51 from $36.65 was "profitable enough." Yes, it was better than the loss. Maybe stop was set too tight.

I'm not making excuses, but point moves in futures is entirely different than the moves in cash markets.

  Linda Piazza   2/4/2004,  2:21:24 PM
The OEX is now at bottom Keltner support, so we should see a bounce here. If a bearish tenor is to remain, the OEX probably shouldn't retrace higher than 560.10 or so before breaking to the downside again. I'd give it a little room to overshoot to the upside before drawing strong conclusions.

  James Brown   2/4/2004,  2:19:34 PM
We have been triggered on the new put play in AVID

  James Brown   2/4/2004,  2:18:19 PM
Patina Oil & Gas (POG) is fading after its recent bounce and appears to be in a new descending channel. Shorts might want to consider it as a potential play to $40.00.

  Linda Piazza   2/4/2004,  2:17:52 PM
There's been a H&S-like formation on the OEX 30- and 60-minute charts. I haven't talked about it because it's a continuation H&S and it's so rough that it's difficult to tell whether it should be considered valid. Although such things do exist, they're much rarer than H&S tops. This one didn't have bearish divergence, so it just seemed to have a lot working against it, so much that it seemed a bit ridiculous to even mention it. It was pretty difficult to tell whether the neckline would be an ascending one that followed the trendline off the 1/29 low or should be somewhere else. However, that quick drop once that trendline was broken again makes me believe that's where the neckline should be, and that we should at least give this formation some slight credence. If it does have any validity and if the downside target is met, that downside target would be somewhere near 553.

  Jeff Bailey   2/4/2004,  2:17:07 PM
Swing trade raise stop alert ... Express Scripts (ESRX) $70.01 +0.01% ... Account management has me "forced" to raise a stop to just under this morning's low at $69.25 to protect current gain. Target remains $75.00

Will give the stock a chance to continue to show strength against the major averages, but can't let this one turn to a loss.

  Jeff Bailey   2/4/2004,  2:11:53 PM
02:00 Internals at this Link

  James Brown   2/4/2004,  2:11:20 PM
IDEXX Labs (IDXX) is hitting new highs after its recent breakout above the $48.50 level. IDXX has already retested 48.50 as support and is now trading above $50.00. This could be a bullish play candidate.

  Linda Piazza   2/4/2004,  2:09:02 PM
The BIX, too, has fallen beneath its 100/130-pma's, but on the BIX, I watch these on the 30-minute chart. The neckline of that possible H&S on the 30-minute chart perhaps lies at 348, although I'm no longer sure that formation has any validity since the right shoulders (2) seem so out of proportion to the skimpy left shoulder. We shall see, but this has a downside target about 3 1/2 points below the neckline break, if it is valid and if that break does occur.

  James Brown   2/4/2004,  2:08:21 PM
Ron Insana just said the markets have been up 219 days without a 5% correction.

  Linda Piazza   2/4/2004,  2:06:25 PM
Now, that's a drop. That drop has moved the OEX all the way to the bottom of the Keltner channels, so we should expect a bounce, but that bounce should now fail at one of the many overhead resistance levels unless . . . unless it doesn't.

  James Brown   2/4/2004,  2:04:50 PM
Speaking of drug stocks, I've been watching JNJ for weeks now. I think it makes a compelling bullish play above the $52.50-53.00 level and has broken several longer-term resistance levels on its weekly chart (the 50-week ma, 200-week ma, descending trendline of lower highs from March 2002).

Unfortunately, I just seems to creep higher and that could be painful to play with options so we've never added it.

  James Brown   2/4/2004,  2:02:08 PM
Check out shares of Factset Research Systems (FDS). The stock has been in a down trend since its September highs. Most recently it has been struggling with its 40-dma and 50-dma and traders keep selling each attempt t break above them. There is support at $35.00 but at this rate it may not last very long.

  Linda Piazza   2/4/2004,  2:01:59 PM
The OEX is now back below both the 60-minute 100/130-pma's and the ascending trendline off the 1/29 low. It's holding just above 560 and the historical 559.50 support, but I take this violation more seriously than I did the one that occurred this morning. It has to hold below those former support levels, though, and we're still pretty close to that stop-running time of day when almost anything can happen.

  James Brown   2/4/2004,  2:01:22 PM
I agree. Yesterday I noticed a lot of drug stocks higher and today the DRG index is one of the few stock indices up today.

  Linda Piazza   2/4/2004,  1:59:21 PM
James, I was thinking that investors must be moving into defensive issues yesterday, too, when I was looking at the sectors that gained versus those that lost. As I was typing the information about advancing issues and noticing utilities and pharmaceuticals together on that list, I was remembering other times when we saw money move into those sectors.

  James Brown   2/4/2004,  1:56:07 PM
Yesterday I mentioned PG was breaking out strongly above the $100 level, up four days in a row. It's up again, making it five days in a row. It definitely seems like investors are moving money into defensive plays.

  Linda Piazza   2/4/2004,  1:53:52 PM
The BIX dropped out of that possible bull flag formation on its five-minute chart, but when it did, it just dropped right back to the neckline of its inverse H&S from the five-minute chart. It's bouncing from that neckline now. If it reaches a new five-minute high, above 350.42 and then climbs above the 350.76 shoulder level of its regular H&S on the 30-minute chart, then we can consider the bulls winning out on that stop-running push, at least on the BIX. If the BIX instead rolls down again and falls below its last five-minute low at 349.20, the bears may have won that round on the BIX. Am I being too hopeful to think anyone will win at all?

  Jim Brown   2/4/2004,  1:51:50 PM
I think the green on the Dow is due to month end retirement contributions going into blue chips for safety. Look at who is up. Some of these companies have been laggards of late. Like James said, WMT is suddenly up for four days. Link

  James Brown   2/4/2004,  1:51:24 PM
Bulls may want to check out Medtronic (MDT) Shares are up strongly the last three sessions and up four out of the last five sessions after a bounce from the 200-dma. Shares are approaching resistance at $53.00, which would be a 3-year high.

  Linda Piazza   2/4/2004,  1:46:45 PM
The nice thing about the stagnant markets on days like this is that you have plenty of time (at least until they break suddenly and out of nowhere) to consider your play and whether you should stay or exit. The bad thing about days like this is that you have plenty of time to worry over whether you should stay or exit.

Speaking of breaks, a downside one is occurring now in the OEX, but it's right at the 1:45 stop-running time of day. This is a test. If the OEX pops right back up, bulls will gain confidence. If it doesn't, bears will.

  James Brown   2/4/2004,  1:44:24 PM
If you think the SOX has more weakness in store for us then keep an eye on NSM. A breakdown under the $36.00 level and it could be a short to its 200-dma.

  James Brown   2/4/2004,  1:34:38 PM
It's interesting that Wal-Mart (WMT), the largest retailer on the planet, has suddenly put together three back to back days of gains and is up four out of the last five sessions. Today's rally breaks through resistance at its 200-dma and is approaching the bottom of the gap from November.

  Linda Piazza   2/4/2004,  1:34:14 PM
We saw no new five-minute high on the BIX, although the BIX swings up again to try again. What we are seeing on that five-minute chart is a pullback in the form of lower highs and lower lows just ahead of next resistance, with the possibility that this could be a bull flag pullback after this morning's climb. One troubling aspect, however, is that the formation is not tight in comparison to the previous trading pattern on the chart, but we've seen lately that these bullish formations don't necessarily have to be as classic as the bearish ones do, in order to fulfill their projected outcome. Still, I'm a little hesitant to conclude that we'll definitely see an upside break in this simply because in the recent past, a break above a bullish confirmation level and/or a bounce from a bearish confirmation level would have resulted in a wild and fast upswing, and that's not happening quite that way.

  Linda Piazza   2/4/2004,  1:28:35 PM
Reader Question: Ever since I first heard about your 1:35PM-1:45PM (+/-) stop-running push I've been trying to figure out the reason for its (for the most part) daily appearance, right on schedule. Could the reason have been right under my nose all the time? Could it be something as simple as traders returning from lunch, taking a half hour or so to get their bearings and then placing their bets?

Response: I think that's probably right. As I told this reader, this push used to arrive almost exactly at 1:45 each day, but the time period has expanded somewhat lately, to about 1:35-1:55, and there have also been many days when there isn't a push at all. As I've said before, I represent the self-taught trader on this board, and one way in which my education lacks is that I've never been with a big trading firm or on Wall Street, and so there might be some other explanation that I'm missing. Thanks, Mark, for the comments.

  Linda Piazza   2/4/2004,  1:23:12 PM
OEX bulls can't sustain a move over the 60-minute 100-pma, currently at 562.16, and OEX bears can't sustain one under 130-pma and the rising trendline off the 1/29 low, both currently near 560.70.

  Linda Piazza   2/4/2004,  1:10:42 PM
After retesting that inverse H&S on its five-minute chart, the BIX has started moving up again. Those watching this index for confirming signs of strength in the OEX, too, now want to see (or don't want to see, depending on outlook) a move above the last five-minute high at 350.42 and then above the 350.76 level that represents the shoulder level on its larger, regular H&S formation.

  Linda Piazza   2/4/2004,  12:59:23 PM
After breaking above the neckline of the five-minute version of an inverse H&S, the BIX came back down to retest that neckline, which it's now doing. Although this is normal and expected behavior, this index's behavior is looking less bullish than it did earlier simply because the near-miss at confirming that bigger 30-minute regular H&S should have resulted in a confident zoom up again. That's just not happening, and, in fact, the BIX turned down from just under the right-shoulder level at 360.76. That regular H&S is looking a little lopsided now, and I'm not sure that it has any relevance any longer, but I'm still watching all these developments.

  Jeff Bailey   2/4/2004,  12:25:03 PM
Newmont Mining (NEM) $42.19 +1.63% ... now back higher after morning low of $40.58.

  Jeff Bailey   2/4/2004,  12:23:05 PM
12:00 Internals at this Link

  Linda Piazza   2/4/2004,  12:22:39 PM
The BIX is breaking above its 100- and 21-pma's, a sign of short-term strength. Although I've been mentioning the 30-minute H&S, there's also, as a part of that formation, an inverse H&S on the five-minute chart, but it did not form at the bottom of a decline and did not feature bullish divergence. I didn't consider it valid. Still, guess which one is being confirmed? The bullish inverse H&S, of course. There's a two-point upside target on that inverse H&S target, so up to about 352, but first the BIX has to make it above the 350.76 shoulder level of its regular H&S on its longer-term 30-minute chart. It's going to be a regular battle of the H&S's or battle of the bulls and the bears. Still, if this breakout is sustained and not immediately rejected, this is a sign of short-term strength, and we should now watch for the possibility the OEX might show similar signs.

  Jeff Bailey   2/4/2004,  12:13:34 PM
QQQ $36.67 -0.7% ... I'm becoming convinced that in the past two weeks I have come upon a technique for picking mid-point of the QQQ's daily range better than any trader in the world.

  Jeff Bailey   2/4/2004,  12:11:38 PM
Research in Motion (RIMM) $84.96 -0.86% Link ... CIBC raising its bullish target on RIMM to $115 from $64. Firm things fundamentals continue to improve and there is potential for upside to its forecast over the next few quarters based on continued strong sell-through and new product introductions.

Sounds quite bullish, but might take a wait and see appraoch near-term. Might look for a "shake-out" type pattern with quick reversal back higher above $89.

  Linda Piazza   2/4/2004,  12:05:28 PM
The BIX 30-minute 100- and 21-pma's have moved lower, to 349.72 and 349.94, respectively, with the BIX now at 349.94 as I type. The BIX is getting squeezed, so that all it has to do now is trade sideways and it will have squeezed above that last barrier ahead of the 350.76 shoulder level of its possible H&S formation. If it can't break above it, however, it should soon turn down.

  Linda Piazza   2/4/2004,  11:59:52 AM
Looks as if we may have a new potential five-minute double-top (or is it a triple-top) formation on the OEX, to match the five-minute double-bottom formation we had earlier this morning. The confirmation level would be at 560.92 and the projected downside would be to about 559.70. The OEX is not looking as if it wants to confirm this potential bearish formation, however, and instead might resolve into another type of consolidation pattern at the top of this morning's rise.

  Jeff Bailey   2/4/2004,  11:56:24 AM
Pharmaceutical Index ($DRG.X) 349.58 +0.81% Link ... challenging its 52-week tweezer top highs of 350.23 found in June.

  Linda Piazza   2/4/2004,  11:51:05 AM
The OEX has had its test of this morning's gap, and has not yet been able to sustain a move above a 50% retracement of that gap. That's another bearish measure, but I don't think the OEX is through testing that gap. Keltner support gathers near 561.56 now, and then at 560.97. I'm thinking that it's possible that we'll get a test of that 30-minute 100-pma near next Keltner support at 563.20, just below the weekly pivot at 563.69, but first the OEX would have to move through the daily pivot, at 562.60 according to Q-charts.

  Linda Piazza   2/4/2004,  11:43:39 AM
The BIX is testing its 30-minute 100/21-pma's. The shoulder level of the possible H&S is at 350.76, so that's the next level to watch if 350.05 is breached, but I'm using the 350.05 level for the BIX as a kind of leading indicator of possible strength building in this index and in the OEX, too.

  Jim Brown   2/4/2004,  11:39:38 AM
I am beginning to fear the Jobs Report on Friday. The Challenger report yesterday and the falling employment components on both the ISM reports this week suggests the Jobs report on Friday could be well under +125,000-150,000 estimates. The Fed almost promised the lost jobs from the December report would be "found" in the January number. It would appear to me the only way they will be found is if they are conjured up out of thin air. If the Jobs report were to come in negative we could easily see the lows I mentioned earlier. Unfortunately it could damage sentiment and make rebounding from those lows much harder. Going to be a tough week in advance of the numbers.

  Linda Piazza   2/4/2004,  11:38:58 AM
I'm watching the BIX for an upside breakout over 350.05, which would represent a move above the 30-minute 100-pma and 21-pma, or a breakdown below 348.25, which would represent a breakdown below the 30-minute 100/130-pma's, this morning's low, and the neckline of a possible H&S formation on that 30-minute chart. The BIX's action may help confirm building strength or weakness in the OEX.

  Jim Brown   2/4/2004,  11:33:36 AM
The dip this morning on the CSCO news has brought the markets very close to substantial support. The Nasdaq 50 dma is 2017 and the low this morning was 2029. I think we could still see one more serious dip but getting under 2000 could be a challenge. The SOX is right on the 100 dma at 497 and the Dow is refusing to break 10450. This is the flaw in the scenario. The S&P 50 dma is right at 1100 and that is a good -30 points lower. The 50 dma on the Dow is just below 10300.

This suggests the next real drop we get should find support at 10300, 2010 and something in the 1110 range for the S&P. This is a blend of all the various support levels and sentiment assumptions. More later.

  Linda Piazza   2/4/2004,  11:30:01 AM
Because the OEX's first five-minute range was so large, I'm following the action today according to a 1MRT system rather than a 5MRT system, using the first one-minute range. For those who don't have access to intraday levels, that first one-minute range took the OEX from a high of 561.83 to a low of 560.51. Other than a minor breach (candle shadows only) of the bearish #2, the OEX has traded all day within the neutral zone according to Jeff's MRT system. The bullish #2, representing a breakout, occurs interestingly at 563.14, just below the 30-minute 100-pma at 563.30. That's pretty good correlation, but I certainly wouldn't be going long just a few cents ahead of that test of that 100-pma, I don't think. The central Keltner channel level is also 563.14, with the OEX sometimes overshooting key levels a bit.

  Linda Piazza   2/4/2004,  11:21:32 AM
So far, the OEX is turning down from its 60-minute 100-pma, as would be expected if a bearish tenor were to be continued. However, it hasn't yet fallen back below its 60-minute 130-pma and the ascending trendline off the 1/29 low, much less the 559.50 historical S/R level, so I consider the outcome of this test still in question. I'm watching the TRIN and Jane's comments about the TRIN, and also watching some key indices because of their nearby support, aware that if bears don't get this moving to the downside pretty soon, bulls are going to gain confidence. If the OEX squeezes above that 60-minute 100-pma and sustains levels above it, it soon faces the 30-minute version near 563.30. The OEX switches back and forth in its approach to these averages, with the 30-minute versions sometimes more important and the 60-minute sometimes more important, but Keltner channel lines confirm the importance today of that 563.30-563.35 level as well as the level of the 60-minute version.

  Jonathan Levinson   2/4/2004,  11:19:49 AM
The coupon pass added another 910M to permanent reserves, for a net add of 4.16B today. 3.25B in temporary additions expire tomorrow.

  Linda Piazza   2/4/2004,  11:11:26 AM
This morning the BIX is hugging its 30-minute 100-pma, with the 30-minute averages usually more predictive of strength and weakness on this index than the 60-minute versions. The BIX has a distinctly H&S-ish look on that 30-minute chart, with a descending neckline now near 348.25, near this morning's low. The BIX bounced strongly from that level this morning, but it's now beginning the slightest downturn beneath the 100-pma again, so the outcome (eventual confirmation of the H&S or rejection of it with a probable resultant strong climb) isn't certain yet. As Jeff has taught us, we watch the BIX if we're trading the OEX, since many of the financials in the BIX impact the OEX strongly.

  Jeff Bailey   2/4/2004,  11:10:59 AM
QQQ $36.65 -0.75% ... session low/high has been $36.51-$36.87.

  Jeff Bailey   2/4/2004,  11:09:53 AM
11:00 Internals at this Link

  Linda Piazza   2/4/2004,  10:59:37 AM
Without having yet touched the bottom of the descending regression channel on its 60-minute chart, the SOX nevertheless tries to firm at the expected 496-500 level. It's showing itself to be oversold on both a five-minute nested Keltner basis and a 60-minute 1.35% envelope basis, having fallen below both the channels and the envelope. The SOX sometimes follows both down, but note a sloppy inverse H&S on the five-minute chart with a descending neckline. That neckline descends so steeply that it's difficult to decipher where the neckline cross might be and whether the formation has any validity, but it's a first sign of possible firming. If the SOX rejects that formation, that tells us that the weakness continues, but if it confirms it and meets the projected upside, then that tells us that it's stronger on a short-term basis, anyway. I would expect strongest resistance near the central Keltner channel level, near 506.60.

  Linda Piazza   2/4/2004,  10:53:44 AM
The TRAN keeps trying to firm above 2844, a support level that I've been watching a week or two. The TRAN has plummeted so deeply that it's certainly time for it to firm up and climb back to retest broken support, but then I've been saying that for several days now. This is the support level I expected to eventually halt it, however. Unfortunately, my charting service is still not providing daily charts today, so I can't double-check that support level, but the 11/21/03 low was 2837.46, and the closing level that day was 2844.44, with the TRAN eventually bouncing to its recent high from that November low.

  Jim Brown   2/4/2004,  10:52:52 AM
I have been trying to get long on EBAY for a month. I keep raising my entry point and it keeps moving higher. With AMZN down -20% over the last 6 sessions you would think EBAY would be weaker. Instead it rocketed out of the gate this morning to a gain when the rest of the markets were down.

  Jeff Bailey   2/4/2004,  10:52:42 AM
Trimble Navigation (TRMB) $36.80 -3.69% Link ... now lower after Wachovia downgraded to "market perform" from "outperform." While Wachovia feels TRMB had solid quarter, firm thinks stock likely has factored in the Caterpillar JV and Mobile Solutions achieving breakeven in 2004 as well as cyclical growth expectations going into 2004. Wachovia also citing slowly eroding margins in the E&C and Field Solutions units, and a higher tax rate in 2004-2005. Sees stock fairly valued between $33-$38.

  Jonathan Levinson   2/4/2004,  10:51:56 AM
The Fed has announced a coupon pass, which is a permanent open market op, but no quantum specified yet. Link

  Jim Brown   2/4/2004,  10:49:06 AM
SOX down -11 at 497.00. Below round number support at 500 and coming very close to the 100 dma at 492. Techs could firm at any moment as we close in on that level. Russell down -7 to 570 and still above the 50 dma at 563. Could still see some weakness in the small caps and that could translate into the blue chip indexes.

  James Brown   2/4/2004,  10:48:29 AM
Current OI put play in EASI has been triggered on the decline this morning. I can't seem to find any catalyst for the breakdown but shares gapped lower to $48.15. Traded lower to 45.70 and bounced back toward $48.00. Now shares are slipping lower again. Our trigger was a move under $48.00.

  Jeff Bailey   2/4/2004,  10:46:38 AM
Express Scripts (ESRX) $70.33 +0.47% ... now back higher after session low of $69.38.

  James Brown   2/4/2004,  10:43:29 AM
Looking over some of our OI calls and their performance today...

ABK: holding its gains, nice relative strength.
DHR: pull back to $90.00 as expected.
ESRX: climbing back above the $70 level.
GENZ: trading sideways.
HSIC: bouncing higher in the last hour.
IBM: still building higher lows.
IMDC: slipping back towards $50.00.
MWD: trading lower towards the 50-dma.
TEVA: trading higher again.

  Linda Piazza   2/4/2004,  10:41:02 AM
We could have expected a retest of the 60-minute 100-pma on the OEX. It's too important to not be retested, and perhaps retested and retested. In addition, the OEX was looking pretty oversold on a five-minute basis, according to the Keltner channels. What happens after this is what's going to be important. Another fall back through the 60-minute 130-pma and the ascending trendline off the 1/29 low, both near 560.70, and then through 559.50 support will look much more bearish this time around than it did on this morning's open. We just don't yet know whether that's what's going to happen or not. The current pullback could be consolidation before another push higher.

  James Brown   2/4/2004,  10:36:33 AM
Harrah's Entertainment (HET) reported earnings this morning that missed estimates by 3 cents. The stock is down 4.83% on the news and breaking down through the bottom of its narrow rising channel. However, the stock may have support at its 50-dma and the $50.00.

  Linda Piazza   2/4/2004,  10:33:07 AM
The OEX now tests the 60-minute 100-pma from the underside, with that average at 562.19 currently. Although it's possible for the OEX to overshoot this average with the strong bounce this morning, this nearby level should provide resistance if the bearish tenor is to persist. That falling TRIN puts that bearishness in some doubt, doesn't it?

  James Brown   2/4/2004,  10:32:58 AM
EchoStar (DISH) gets an upgrade to "out perform" from Schwab this morning. The stock is rallying on the news, up 3.01% and bouncing from the bottom of its rising channel. This might be an entry point for a run to the $40.00 level.

  Jeff Bailey   2/4/2004,  10:32:28 AM
10:00 Internals at this Link

Yesterday's internals at this Link

I think a lot of delayed openings at the NYSE has its volume very light in first 30-minutes of trade.

  Linda Piazza   2/4/2004,  10:29:59 AM
Here's a chart of CSCO, provided today by one of our experienced readers, showing the propensity to bounce from this level: Link This also shows how the character could be changed if no bounce occurs. Many tech-related indices look like this, too. Thanks, Tab.

  James Brown   2/4/2004,  10:29:50 AM
O'Reilly Automotive Inc (ORLY) was started at a "buy" this morning by Wells Fargo but investors aren't buying it. The stock remains stuck in its short-term downtrend over the last several days and approaching technical support at its 200-dma. Technical oscillators are bearish.

  Jeff Bailey   2/4/2004,  10:28:52 AM
Day trade stop alert QQQ $36.79 ... looks like gaps are going to be filled.

  James Brown   2/4/2004,  10:22:51 AM
Bank of America is upping Limited Brands Inc (LTD) to a "buy" ahead of tomorrow's parade of retail same-store sales numbers. Something sparked a new buying spree in shares of LTD a couple of days ago and the stock has broken out of a three-month trading range on strong volume. Its P&F chart is sporting a bullish catapult breakout with a bullish vertical count to $24.00, which coincidentally is BAC's new price target on LTD.

  Linda Piazza   2/4/2004,  10:22:10 AM
The OEX is now above a double-bottom confirmation level on the five-minute chart, with the upside target projected to 561.50. This is a rough double-bottom formation, however, as it does have five-minute shadows that protrude below the double-bottom level. However, that upside target is now being met, showing us short-term strength. The real test will come at central Keltner channel support at 562.28 and at the 60-minute 100-pma near that level.

  Jeff Bailey   2/4/2004,  10:21:05 AM
QQQ after session low of $36.51 back to test morning high of $36.75.

  James Brown   2/4/2004,  10:14:51 AM
Also enjoying an upgrade from UBS is General Dynamics (GD). Shares of GD have been consolidating above the $90.00 level for three weeks now. Considering the defense budget increases in the current White House budget proposal aggressive traders might want to buy the bounce here in GD. If you're more conservative look for shares to break through the $94.50 level. An easy initial target would be $100.

Yesterday defense contractor Northrop Grumman (NOC) reported earnings and guided higher for the current quarter. NOC is also bouncing higher but has short-term resistance at $101.

  Jeff Bailey   2/4/2004,  10:13:56 AM
U.S. Dollar Index (dx00y) 86.93 +0.16% (30-min delayed)

AMEX Gold Bugs ($HUI.X) 213.61 -1.36% ... NEM $40.85 -1.59%

  Jeff Bailey   2/4/2004,  10:12:19 AM
S&P Banks (BIX.X) 348.59 -0.49% ...

  James Brown   2/4/2004,  10:09:58 AM
Avon Products (AVP) is being upgraded to a "buy" today by UBS after yesterday's earnings report and 2-for-1 split announcement. Shares of AVP are gapping higher (+3.93%) above resistance at its 50-dma but stalling at resistance of $68.00.

  Jeff Bailey   2/4/2004,  10:09:32 AM
Exress Scripts (ESRX) $69.48 -0.74% ...

  Linda Piazza   2/4/2004,  10:09:16 AM
No bounce on the OEX. I'd wanted to see a retest of the broken 60-minute trendline off the 1/29 low and the violated 559.50 support and 60-minute 130-pma. The OEX again nears the bottom Keltner support, now at 558.47. A violation of that bottom support usually produces a bounce. Watch the 1/29 low of 557.36, as that might serve as a possible bounce point, too, sending the OEX back up to test that broken support.

  Jeff Bailey   2/4/2004,  10:08:35 AM
QQQ $36.52 -1.11% ...

SOX.X 496.55 -2.35% (below its WEEKLY S1 of 498.04)

  James Brown   2/4/2004,  10:07:51 AM
semiconductor company ASMI is down 5.28% and under performing the SOX after Needham downgraded shares to a "hold". The stock is approaching support in the 23.75-24.00 level. A break here and it cold test its 50-dma near $22.00.

  Linda Piazza   2/4/2004,  10:06:45 AM
The SOX drops below 500.

  Jeff Bailey   2/4/2004,  10:06:37 AM
QQQ $36.59 .. back to test morning low

  Jonathan Levinson   2/4/2004,  10:05:39 AM
CIEN getting TASRed? Link

(humorous diversion only)

  Linda Piazza   2/4/2004,  10:05:26 AM
Higher-than-expected numbers on the 10:00 releases might help the OEX continue its measured climb into resistance. The nested Keltner channels show resistance gathering at 560.31-560.54 and then in closely layered lines from 561.47-562.44. So far, though, there's not yet much climbing going on. This still looks like distribution, but I'd like the OEX to climb a little higher before rolling down again, working off some of the short-term oversold pressure, as demonstrated on the nested Keltner channels.

  James Brown   2/4/2004,  10:04:03 AM
Ouch! CIENA Corp is down 15% after guiding lower for the current quarter. Shares gapped down this morning but are holding at support of its 200-dma just above $6.00.

  Jeff Bailey   2/4/2004,  10:03:26 AM
Day trade short alert .... QQQ $36.65 here, stop $36.79, target $36.27.

  Jeff Bailey   2/4/2004,  10:02:17 AM
QQQ $36.73 -0.51% ... first 30-minute volume was a modest 10.6 million shares, which is slightly below yesterday's first 30-min volume of 11.3 million.

  Jeff Bailey   2/4/2004,  10:00:15 AM
Garmin Ltd. (GRMN) $49.30 -2.37% Link ... stock has been defensive in recent weeks. Short interest has nearly doubled from 1.38 million to 2.7 million shares (12/15 to 01/15). Compant set to report quarterly earnings before the openening bell on February 11. Consensus is $0.45 per share.

Thoughts for stocks weakness is auto sales, where GRMN does provide automobile navigation systems.

  Jim Brown   2/4/2004,  10:00:09 AM
ISM Services = 65.7 , est was 60.0, last month was 58.0

  Jim Brown   2/4/2004,  9:59:57 AM
Factory Orders = 1.1% , est was +0.3%, last month -1.4%

  Jonathan Levinson   2/4/2004,  9:59:56 AM
A 3.25B overnight repo has been announced, with no expiries, for a net add in that amount.

  Jeff Bailey   2/4/2004,  9:53:56 AM
QQQ $36.73 -0.54% ... edging up from the session low of $36.59 and looks to refill morning gap lower.

  Linda Piazza   2/4/2004,  9:52:51 AM
After a flagpole drop, it would be expected to see a measured distribution pattern that climbed into resistance. This is an expected OEX bounce, even on a bearish day. The concern lies in the SOX's proximity to a presumed strong bounce point as well as the TRAN's approach to the 2840 support I pointed out a few days ago. Since the SOX sometimes serves as a leading indicator for the Nasdaq and the TRAN for the Dow, that shows us two possible leading indicators that perch at levels that are treacherous for both bulls and bears, depending on which way these head.

  Jim Brown   2/4/2004,  9:51:48 AM
CSCO trading down -1.84 this morning at 24.59 and showing no indications of a bounce off the bottom. The Russell is down -4.27 and at support from the 29th. The SOX hit support at 500 and is down -7.00. This level on all the indexes is where you would expect a bounce. It appears sentiment has weakened and techs are no longer leading the rally. The A/D is down -2300 issues and we are less than 10 min from the ISM Services and Factory Orders. COuld still go either way depending on the numbers.

  Jeff Bailey   2/4/2004,  9:46:06 AM
Sector action broadly lower with Networking (NWX.X) 290.98 -3.98%, Semiconductor (SOX.X) 500.68 -1.54%, Combined Telecom (IXTCX) 191.03 -1.1% and Utility (UTY.X) 311.36 -1.07% early sector losers.

Retail Index (RLX.X) 376.30 +0.18%, Oil Service (OSX.X) 101.00 +0.18% show fractional gains.

  Linda Piazza   2/4/2004,  9:44:14 AM
Careful, bears and bulls alike. The SOX sits right on round-number 500 support, at 500.55 as I type. Actually, the bottom support of its 60-minute descending regression channel lies near 490, but we can presume there will be a bounce attempt here.

  Jeff Bailey   2/4/2004,  9:41:10 AM
Trimble Navigation (TRMB) $38.56 +0.91% ... Reported Q4 (December) EPS of $0.29, which was 3-cents better than consensus. Company said revenues rose 9.1% year-over-year to $135.9 million versus the $129.4 million consensus. Company declared a 3-2 stock split.

  Linda Piazza   2/4/2004,  9:37:21 AM
During the first five minutes of trading, the OEX spanned a range from 561.83 to 559.10, with a midpoint at 560.47, with this midpoint being given special significance because of its proximity to so many levels of S/R. The OEX is currently below that midpoint, but this morning's steep decline sent it all the way to the bottom of the nested Keltner channels, so we can presume it's going to bounce now. Let's see how far the bounce carries it, but if the bearish thesis is to carry forward, it shouldn't bounce much higher than the central level of the Keltner channels, at 562.67 currently.

  Jeff Bailey   2/4/2004,  9:34:55 AM
Semiconductor Index (SOX.X) 500.00 -1.67%

  Linda Piazza   2/4/2004,  9:32:33 AM
The OEX is hitting that ascending trendline off the 1/29 low, 559.50 support, and the 60-minute 130-pma as I type, all near the current 560.26 level. This should be a strong bounce point, so if it isn't, the OEX is showing weakness this morning. Give this room for a little overshooting of key levels during early-morning volatility before drawing strong conclusions.

  Jeff Bailey   2/4/2004,  9:32:33 AM
QQQ $36.64 -0.83% ... low/high $36.60-$36.64.

  Jeff Bailey   2/4/2004,  9:29:33 AM
Newmont Mining (NEM) $41.50 ... higher at $42.00 after reporting quarterly EPS of $0.36, which was 6 cents better than forecast and nearly double the 19 cents a year ago. Here's a detailed financial statement. Link

  Linda Piazza   2/4/2004,  9:25:29 AM
As yesterday drew to a close, the OEX had been trading in an equilibrium position with regard to the nested Keltner channels, ready to break out one direction or the other. If futures are a good guide--and they aren't always--to the opening levels, that direction will be to the downside. Bottom Keltner channel support is at 559.28 and top Keltner resistance is at 566.24, but there's interim Keltner support and resistance along both directions, of course. At yesterday's close, Keltner support lay at 562.90, 562.25, 561.50, and then at 559.28. Known historical support also crosses at 559.50, and an ascending trendline off the 1/29 low crosses now near 560.25, just below the 60-minute 130-pma. A break of that trendline and concurrently through the 60-minute 130-pma would perhaps be significant, with the possibility of a fall through to 555 arising from such a break. However, even in that case, the remaining bullishness would suggest at least some sort of bounce attempt when that 1/29 low of 557.36 is hit.

What if the OEX rises instead? That's possible. It ended the day just above the 60-minute 100-pma, scrambling to stay on top of that average all day long, and I've wondered if some force might not be exerted to hold markets steady into the jobs number on Friday. If the OEX opens above that average, at 562.20, or bounces from the 130-pma back above that level, then it's possible that the OEX could continue grinding its way up in what we presume will be a lower high on the daily chart. Let's see what the opening gives us. I'm never good at guessing where the OEX will open based on where the ES futures contract was trading. Disclaimer: I trade index options and currently have an OEX put position.

  Jonathan Levinson   2/4/2004,  9:24:20 AM
NEM was scheduled to release earnings and projected reserves this morning at 8:30 and then host their conference call this afternoon at 4pm. I have found their projected reserves figure(91.3 million oz. 2 average production cost of $325 per) but I have been unable to dig up their earnings. Do you know how they did? Thanks, Richard --keep up the good work.

From Reuters:

NEW YORK, Feb 4 (Reuters) - Gold mining company Newmont Mining Corp. (NEM) on Wednesday said its quarterly earnings more than doubled as the price of gold increased. The Denver-based company posted fourth-quarter net income of $153.1 million, or 36 cents a share, up from net income of $75.1 million, or 19 cents a share, a year ago. In the most recent quarter, Newmont said special items increased its results by 3 cents a share. Analysts on average forecast earnings of 30 cents a share, according to Reuters Research, a unit of Reuters Group Plc.

  Jeff Bailey   2/4/2004,  9:17:10 AM
09:00 Update at this Link

  Jonathan Levinson   2/4/2004,  8:04:30 AM
We await Factory orders for Dec., est. .2% and ISM services for Jan., est. 60, both scheduled for release at 10AM.

  Linda Piazza   2/4/2004,  7:31:09 AM
Good morning. Following yesterday's pattern, the Nikkei dove toward 10,500 support in early trading on Wednesday, but this time, the Nikkei violated that support and it did so on a closing basis. The index closed down 194.67 points or 1.83%, at 10,447.25. CSCO's post-earnings decline hit techs and telecoms, especially ahead of NTT DoCoMo's impending earnings report. Electronics companies have declined since Sharp reported strong earnings earlier this week but did not raise 2004 forecasts. Comments by U.S. Treasury Secretary John Snow and renewed terror fears engendered by the discovery of ricin-laced mail sent the dollar lower against other currencies. Snow reportedly commented that the U.S. would not take steps to arrest the dollar's slide against other currencies. The dollar's weakness impacted Japanese exporters as investors worried about future earnings. Automakers traded lower, hurt both because of their heightened sensitivity to currency issues and a possible sell-the-news reaction after their strong January sales performances. Banks also declined, with those old fears about bad loans being mentioned again. Many of those fears center on UFJ Holdings, the nation's fourth-largest lender by assets. The Financial Services Agency has announced renewed special inspections of major banks, with rumors circulating that UFJ Holdings will be the focus of some of those inspections. A Moody's upgrade had helped Resona Bank buck the trend in early trading, but it closed down 3.3%. In stock-specific news, Pioneer bought NEC's plasma-display-panel unit, with Pioneer declining as is typical of the acquiring company. Some also mentioned Pioneer's derivation of 65% of its revenues from overseas sales, sales likely to be hurt by dollar weakness, and some articles discussed South Korean businesses' ascension in the plasma-display-panel business.

After the bell, NTT DoCoMo reported results that were termed upbeat, with the April-to-December reporting period's net income higher than that for the entire 2002 fiscal year. The projected operating profit and sales for the fiscal year ending in March 2004 appear a little lighter than that projected by Goldman Sachs' analysts, with the company mentioning expected operating profit of 1.09 trillion yen and sales of 5.03 trillion yen against GS's expected 1.11 trillion yen and sales of 5.07 trillion yen. A spokesperson for the company refused to comment on the company's interest in AT&T Wireless, but did mention the challenges the company faces from a saturated market. Also on the horizon for Japanese investors tomorrow are the conclusion of a Bank of Japan meeting and the December's Leading Indicators number, forecast to climb from November's 50 to 70.

Most other Asian bourses also fell. The Taiwan Weighted fell 0.17% and South Korea's Kospi fell 0.52%. Singapore's Straits Times tumbled 0.57%. Hong Kong's Hang Seng was flat, however, down only 0.03%, and China's Shanghai Composite rose 2.18%.

Amid speculation that on Thursday the Bank of England could raise rates by a quarter point and the ECB could lower rates, most European bourses trade lower. The term "bubble" has been applied to England's housing market, and recent signs of economic growth would allow the Bank of England to take this measure to taper back that housing market. As far as I can tell, the talk about the ECB lowering rates is more speculative than the hints about the Bank of England raising them. In addition, European market watchers this morning digest the eurozone services PMI number for January, up to 57.3 from December's 56.6. CNBC World commentators were characterizing this as a stronger-than-expected number, but were mentioning worries about components relating to employment. Both print and television spots featured France Telecom and Bayer, with France Telecom reporting a decline in revenue, at least partly due to currency issues, and with a U.S. Food and Drug Administration filing indicating that Bayer could soon see generic competition for one of its drugs. As was true in Asia, automakers declined.

As of this writing, the FTSE 100 was down 11.60 points or 0.26%, at 4379.00. Last week, the FTSE fell below its 50-dma, currently at 4423.77. The CAC 40 was down 35.04 points or 0.96%, at 3603.17. The CAC's 50-dma is at 3551.17. The DAX had fallen 43.86 points or 1.08%, to 4013.65. The DAX's 50-dma is at 3924.00. Each remains on a P&F buy signal, unlike the Nikkei that has created a descending triple bottom breakdown sell signal with a downside target of 10,300.

  Jeff Bailey   2/3/2004,  12:06:41 AM
Electronic Arts (ERTS) $44.53 -1.95% Link ... Looks to be showing some near-term weakness and after distribution from $50 to $41 in November (after red B), vertical count is bearish to $30.

I see unusual volume of 2,710 contracts traded in the Feb. $45 puts (EZQNI) where open interest as of Monday's close was just 7,117, which looks like an institutional hedge buying protection at $45.00, which is right where ERTS gave a second consecutive sell signal.

Here's a relative strength chart of ERTS vs. the QQQ Link which would depict ERTS as a weaker stock vs. the Q's.

Here's a bar chart I've put together with two different fitted retracement. Link

  OI Technical Staff   2/3/2004,  9:35:36 PM
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