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  Jeff Bailey   2/6/2004,  7:25:10 PM
Weekly MM trade table at this Link

I should have no open positions or orders at this time.

Last three weeks trade table at this Link

Note: The sum of columns are devided into two parts.

Traders that always trade a round lot of say 1,000 shares would focus on the Gain/Loss column, which is simply a sum of dollars and cents from each trade. For instance, the week of 01/19/04 to 01/23/04 a loss of $570.00 would be calculated. For the week of 01/26/04-01/30/04 a gain of $1,670.00 would be calculated. For the recent week, a gain of $1,270.00 would be calculated.

Traders that always trade a round $ amount, say $10,000 per trade, would focus on the % column. For instance, the week of 01/19/04 to 01/23/04 a loss of $414 would be calculated. For the week of 1/26/04-1/30/04 a gain of $740 would be calculated. For the latest week, a gain of $31.29 would be calculated.

 
 
  Jeff Bailey   2/6/2004,  7:06:56 PM
Pivot Matrix for Monday at this Link

Gold bugs.... on Monday morning, after this weekend's G7 meeting, keep an eye on the U.S. Dollar Index (dx00y) at DAILY R2 and WEEKLY Pivot correlation. Actually, keep an eye on that level Sunday, when the dx00y starts trading. If that level is traded, I'm thinking there's a chance for a weaker open for gold stocks, and maybe some good bullish entry points should dollar find resistance at that level, then begin to fall again.

 
 
  Jeff Bailey   2/6/2004,  5:43:08 PM
CNBC interviewing Lennar's (LEN) $45.01 +3.87% Link CEO, where part of discussion is today's jobs data, interest rates, and homebuilder sector. Might tie in with some of today's intra-day commentary.

A portion of the interview was in regards to the nonfarm data being just weak enough to keep the Fed on hold, Treasury YIELDS low, and mortgage rates low.

Now... one thing I saw from today's AMG Data Services inflow/outflow data was that all corporate bond classes saw net outflows of $829 million, where high yield corporate bond, or "junk," saw a net outflow of $1.6 billion!

Now look what took place in Pacholder High YIELD (PHF) $9.78 +0.82% Link , not only today when it tested its 52-week high of $9.87, but see how this closed-end high yield bond fund fell to $9.46 from its 52-week high of 01/29/04, and now quickly snaps back to that high?

The only reason I can think a junk bond fund sees selling is the thought that the Fed will be in a tightening mode.

Could it be that today's nonfarm payroll data was viewed as "just right" and not too hot, and not too cold?

Everbody out, and right back in again today?

 
 
  Jeff Bailey   2/6/2004,  4:51:17 PM
Cancel swing trade long alert for QQQ entry of $36.66 (from 10:21:46)

 
 
  Jeff Bailey   2/6/2004,  4:39:35 PM
Closing Internals at this Link

 
 
  Jeff Bailey   2/6/2004,  4:09:10 PM
QQQ $37.20 stop alert

 
 
  Jeff Bailey   2/6/2004,  4:07:24 PM
Day trade raise stop alert ... raise stop in QQQ to $37.20.

 
 
  Linda Piazza   2/6/2004,  4:02:49 PM
Have a great weekend, everyone. Congratulations to those who might have bought the OEX breakout above that inverse H&S neckline on the 15-minute chart, and then followed those stops up as the day progressed. Dealing with a possible need to leave suddenly today, which fortunately didn't materialize, I wasn't one of those engaging in that trade, but I enjoyed watching and thinking about those of you who might have been profiting. I'm worried now about the possibility of a pullback and how extreme it might be, especially with the Dow not able to move above a right-shoulder level and the OEX not quite able to close above the 2/02 high, but the SOX did manage a close over its 50-dma. So far, those H&S formations have not confirmed on the daily charts (with the possible exception of a TRAN formation that actually fell through a neckline before even forming a right shoulder), but I still can't stop worrying that one day, they'll start performing as they used to do.

 
 
  Jeff Bailey   2/6/2004,  4:02:06 PM
QQQ $37.25 ... still 15-minutes to go. Sessiion high has been $37.28.

 
 
  Jeff Bailey   2/6/2004,  4:00:48 PM
Agilent (A) $36.78 +4.39% ... had a good day today. I hope some traders played this one. I just had my hands too full this morning, but it traded well.

 
 
  Jeff Bailey   2/6/2004,  3:59:05 PM
Newmont Mining (NEM) $44.04 +4.48% .... going to peg the highs to the close.

 
 
  Jeff Bailey   2/6/2004,  3:56:26 PM
Newmont Mining (NEM) $43.97 +4.3% ... Swing trade close out alert here.

I don't want to risk a 4% gain into this weekend's G7 meeting.

 
 
  Jeff Bailey   2/6/2004,  3:52:20 PM
Newmont Mining (NEM) $44.09 +4.6% ... session highs here.

 
 
  Linda Piazza   2/6/2004,  3:48:41 PM
The OEX may be trying for its 2/2 high of 566.42, or even a breakout above that level. Right now, it's at or slightly above the midpoint of the fall from the 1/27 high to the 1/29 low. A close above that midpoint would be another feather for the bullish quiver, but I remained concerned about how long the OEX has overstretched that upper Keltner channel. I suggested this morning that bullish traders follow the OEX up with their stops, and now they have to decide whether to keep positions open over the weekend with the OEX looking overbought on a very short-term basis, with the possibility of a pullback toward central Keltner support at 563 (but climbing) or even toward bottom Keltner support at 560 (but climbing).

 
 
  Jeff Bailey   2/6/2004,  3:48:15 PM
QQQ $37.25 +2.14% .... BLUE #3 here with BLUE #4 just ahead at $37.42.

Will the QQQ bull a move to the 04:15 PM EST close like we saw in BGO yesterday? I think it can, so be ready to trade the day trade target at $37.40 if traded.

 
 
  James Brown   2/6/2004,  3:41:48 PM
A stock that's recently made an appearance on our watch list is XL Capital (XL). Shares have broken out today above resistance at $81.00 and may make an earnings run ahead of its Feb. 10th report.

 
 
  Ray Cummins   2/6/2004,  3:35:53 PM
Spreads/Combos/Premium Selling -- Q&A: More On Debit Straddles

Finding Straddles: After identifying a series of inexpensive options, the trader must determine if the underlying stock has the ability to move to a profitable position in the required amount of time. With a simple probability calculator, it is easy to estimate the chance of the underlying stock finishing outside the break-even points at expiration. One thing you must understand when using these tools is that volatility measures are generally based on 10, 20, 50 and 100 day statistics and thus it is important to make a conservative estimate so as to not to artificially inflate the probability of profit.

The final step is to look at a price chart of the stock to see if it has a history of moving the required distance in the allotted time frame. The important thing to examine is how often the issue moves through the necessary profit range in each of the past four or five (target) periods. Once again, simple option analysis software will do this automatically and more importantly, it will forecast the probability of actually profiting from the position. More questions on straddles? Send them to ray@OptionInvestor.com

 
 
  James Brown   2/6/2004,  3:32:40 PM
I've looked at hundreds of stock charts this afternoon and the bounce today is not only widespread but it also looks really tempting. It would not surprise me to see traders buying the bounce next week.

 
 
  Ray Cummins   2/6/2004,  3:31:01 PM
Spreads/Combos/Premium Selling -- Q&A: More On Debit Straddles

Finding Straddles: There are three rules to identifying favorable conditions for a straddle purchase. First, a trader should select options that are undervalued (cheap). Next, the underlying security must have the potential to move (high or low) enough to make the straddle profitable. Finally, the underlying stock should have a history of multiple movements through a sufficient range in the required amount of time to justify the overall risk/reward of the position.

The first step is to determine how fairly the options are priced. This may be done with sophisticated pricing software or by simply comparing the current levels of implied volatility to past levels of implied volatility (and occasionally, historical volatility). When the relative implied volatility is low, the options are effectively under priced.

 
 
  Linda Piazza   2/6/2004,  3:31:00 PM
Those planning their trades for next week should remember that in addition to statements that might come out of the G7 meeting tomorrow, Greenspan is scheduled to speak before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, on February 11; and then before the Committee on Financial Services, U.S. House of Representatives, the next day. This used to be called the Humphrey-Hawkins speech, I believe, but I'm not sure that's what it's called any longer.

 
 
  Ray Cummins   2/6/2004,  3:25:19 PM
Spreads/Combos/Premium Selling -- Q&A: More On Debit Straddles

Ray...You talked about the BSC straddle play in your 10:53 comments and as a fairly new option trader, I have thought about straddles because they are supposed to be "conservative". Should I be looking into this type of trading? What about upfront costs and risk/reward. Also, how do you know a good straddle when you find it? RW

I'll take the last question first since it is probably the most important. Favorable debit straddles are relatively simple to find in the right market (such as we have now) and the basic requirements are inexpensive options on issues that have proven historical volatility. Regarding experience level, the strategy is very simple and perfect for the novice trader providing he or she understands option pricing basics and follows a few simple guidelines. In addition, this type of approach to option trading can generate excellent returns because losses are limited to the initial investment and profits are limited only by time and volatility in the underlying issue.

 
 
  James Brown   2/6/2004,  3:20:55 PM
Coca-Cola Co (KO) is up today, actually up three days in a row. Also trading higher is Pepsico (PEP). Today's rally by Pepsico (+3.81%, which is a big move for PEP) is a breakout over the $49.00 level. Meanwhile KO is trying to breakout over resistance at $50.00. KO's P&F chart looks very bullish but the stock likes to churn sideways and could be challenging to play with directional option positions.

 
 
  Linda Piazza   2/6/2004,  3:20:17 PM
The OEX has spent the entire day since 10:30 hugging the top resistance of its Keltner channels after breaking through momentarily. It doesn't usually do that for so long without falling to central Keltner channel support. It did on 1/07, actually breaking through the upper channel on the 9:30 candle and then hugging that upper Keltner resistance through that day and most of the next day, too, after a brief dip toward, but not to, the central Keltner support. It wasn't until the open of trading on 1/09 that it actually tested that central Keltner support. It did it on the first five-minute candle of the day, falling more than 3 points in that first five-minute candle and then falling further before it steadied for a while, then continued toward the bottom of the channel that same day, eventually falling almost 7 points that day.

I'm not suggesting that will happen either on Monday or Tuesday. What I am suggesting is that the more overstretched the OEX gets on a short-term basis, as shown by the Keltner channels, the further and faster it usually gets slung to the opposite side of those channels when the Keltner channels finally catapult it the other direction. Bullish gains would have been better protected if the OEX had taken the time to come back and re-establish that support now and then, climbing along with the support.

 
 
  Jim Brown   2/6/2004,  3:19:01 PM
Consumer Credit was $6.6 billion and under estimates of $7.8 billion

 
 
  Jeff Bailey   2/6/2004,  3:12:08 PM
Newmont Mining (NEM) $43.80 +3.91% ... session highs here.

 
 
  Jeff Bailey   2/6/2004,  3:10:39 PM
Should see the major indices close at their session highs ....

For QQQ, I'm thinking either $37.25 or $37.42.

 
 
  Jeff Bailey   2/6/2004,  3:08:24 PM
03:00 Internals at this Link

 
 
  James Brown   2/6/2004,  3:03:56 PM
Looking for a way to play the bounce in the SOX, check out Analog Devices (ADI). The stock is bouncing from the bottom of its rising channel and 100-dma while breaking through its 50-dma.

Another alternative would be the Semiconductor Holders (SMH).

 
 
  Ray Cummins   2/6/2004,  3:02:21 PM
Spreads/Combos/Premium Selling -- Straddle Strategies: Part II

Another approach to straddles known as "riding the trend" is considered the more profitable technique for directional traders, but it involves additional risk and requires thorough knowledge of technical analysis. The key to this strategy is to monitor the underlying issue for a break-out or reversal through a technical support or resistance level. When the new trend has been positively identified, the lower priced options (losing side) are sold along with one-half of the higher priced options (profitable side). The remaining position is held until a reasonable profit target is met and downside protection is maintained with a trailing stop. Experienced traders favor this follow-up technique because it is based on known technical trends and the action generally occurs near the position's break-even points. When one of these points is reached, two simple trades lower the overall cost basis while retaining a high probability of eventual profit.

One final thought...As with any (long) option position, determining how and when to exit a play is a matter of personal preference but in most cases, if the underlying issue performs poorly, the play should be liquidated before time-value decay erodes the value of the options significantly.

 
 
  Jonathan Levinson   2/6/2004,  3:00:40 PM
*DJ US Consumer Credit Expanded $6.6 Bln In December

 
 
  Jeff Bailey   2/6/2004,  2:58:57 PM
Bond market closes in 1 minute.

 
 
  Linda Piazza   2/6/2004,  2:54:18 PM
Now the Dow surges after breaking above its not-as-bullish (bearish) right triangle, although it has not yet reached a new high of the day.

The SOX has pushed above its 60-minute 100-pma and is currently testing its 130-pma, moving into the gap from 1/28 and above 517.50 resistance.

 
 
  Ray Cummins   2/6/2004,  2:53:47 PM
Spreads/Combos/Premium Selling -- Bear Stearns (NYSE:BSC)

One of our recent straddle candidates deserves mention as the issue is rebounding from a 3-day slump that brought the new volatility play to profitability in less than two weeks. Traders who sold the bearish portion (MAR-$85P) of the play during Thursday's slide to near-term support at $80 easily paid for the entire position and now have "free" calls that will profit on any future upside activity. Of course, it can be very difficult to decide whether to ride the trend to the break-even point or trade against the straddle. The technique I described above is to hold the straddle until the value of either the put or the call options pay for the entire position. Then the remaining options are risk-free with unlimited profit potential. A similar method bases the target exit on the sum total of both positions. When one side of the position is worth the total initial debit, both sides of the position are closed and the credit from the lower-priced options is the profit. The latter strategy works well when there is still ample time until the options expire and that approach would have yielded a gain of $0.80-$0.95 in the BSC straddle.

 
 
  Jeff Bailey   2/6/2004,  2:52:51 PM
You'd better not be thinking.... ... That's it, Jeff's given the Qs the kiss of death for today's rally.

 
 
  Jeff Bailey   2/6/2004,  2:51:17 PM
Day trade long alert ... QQQ $37.14 here, stop $36.95, target $37.40.

 
 
  Jeff Bailey   2/6/2004,  2:49:55 PM
Newmont Mining (NEM) $43.58 +3.39% ... edging to session high.

Spot gold closed 403.20

 
 
  Linda Piazza   2/6/2004,  2:47:55 PM
The TRAN was due for a bounce, Jeff, and a big one, too, since the decline had been so big, don't you think? I've got the 50% retracement of the flagpole drop just above 2950, but I wouldn't be surprised to see it try to test 3000 again. (Not today, of course.)

 
 
  Jeff Bailey   2/6/2004,  2:43:14 PM
Trannies? ...

 
 
  Jeff Bailey   2/6/2004,  2:40:32 PM
QQQ $37.10 +1.72% ... first 5-minute bar chart close above BLUE #2 $37.09) today.

 
 
  Ray Cummins   2/6/2004,  2:36:45 PM
Spreads/Combos/Premium Selling -- "Early-Exit" Candidates

As another volatile week comes to an end, we have a few portfolio positions that require timely action in order to limit potential losses. Among the more recent plays in need of attention are Marvell Technology (NASDAQ:MRVL) and OM Group (NYSE:OMG), however today's rally has put a number of bearish positions on the "watch" list including: Stratasys (NASDAQ:SSYS), Benchmark Electronics (NYSE:BHE), Pulte Homes (NYSE:PHM), Beazer Homes (NYSE:BZH), Novellus (NASDAQ:NVLS) and Lennar (NYSE:LEN). In the bullish section, the activity in Cigna (NYSE:CI) is worrisome and the slump in Cephalon (NASDAQ:CEPH) is certainly not favorable.

 
 
  Linda Piazza   2/6/2004,  2:35:00 PM
I show the Dow breaking out to the upside--didn't I tell you--of that bearish right triangle on its five-minute chart. How about we rename all formerly bearish formations, now calling them not-as-bullish formations? There's no use calling them bearish formations or even potentially bearish formations. Maybe we ought to even consider calling them rocket-propellant formations, because when they break to the upside instead of to the downside, prices usually surge. So far, the upside break this time has been minimal and there hasn't yet been a surge, but there has been a five-minute close over the top of the formation, at least if I drew it correctly. I still want to see what happens in the right-shoulder level, near or slightly above 10,600, if the Dow continues climbing.

 
 
  Jeff Bailey   2/6/2004,  2:31:59 PM
Netflix (NFLX) $75.10 +2.65% ... here's a chart I've drawn up on NFLX per 13:54:52 question. Link

I used 120-pd chart only because I'm limited by horizontal scale and wanted to apply some type of upside trend as a projection for what might be considered a MAX upside into the split date.

This might also be a very good stock to follow as a "pulse stock" on how aggressive bulls and even bears are being with their buying/selling.

 
 
  Jeff Bailey   2/6/2004,  2:19:13 PM
02:00 Internals at this Link

Correction! I mistakenly typed in the NYSE NH/NL data for the NASDAQ NH/NL data at 01:00 PM EST. The above table is corrected, but the 01:00 internals table was incorrect for the NASDAQ NH/NL readings.

 
 
  James Brown   2/6/2004,  2:18:52 PM
Bulls can check out Avocent Corp (AVCT). The stock broke out over the $40.00 level of resistance a few days ago on big volume and has since seen some follow through on the rally. It's daily, weekly and P&F charts are all bullish (with a fresh triple-top buy signal for the P&F).

 
 
  Linda Piazza   2/6/2004,  2:10:34 PM
The SOX is pullback back below its 50-dma again. Note that while the SOX climbed above its 30-minute 100/130-pma's today and then surpassed its 50-dma, it pulled back after touching its 60-minute 100-pma at 516.28. Resistance levels are thick through here for the SOX, meaning that if it can surmount all these various resistance levels, it's performing well. However, I would expect a slowdown in the gains while all this is tested and retested, if not a pullback. Again, watch the 30-minute 100/130-pma's, because bullish players do not want to see a rollover back under both those averages again, currently at 510.40 and 513.07.

 
 
  Linda Piazza   2/6/2004,  2:04:30 PM
Here's the formation I spoke about on the DJI five-minute chart: Link Remember that whether this is a potentially bearish formation or not, not all bearish formations break to the downside. Some break the other direction. In fact, lately most do.

 
 
  Jeff Bailey   2/6/2004,  1:54:52 PM
Netflix (NFLX) ... hi jeff, in the weekend wrap someone noted nflx building a base. it seems it is starting it's split run. if so, would you have a target for it??? thanks mike

Let me do some more work, but NFLX is a stock I'm tracking in a MONTHLY stock pivot matrix.

February levels (based on January h/l/c) are 48.50, 60.95, 70.25, 82.70, 92.00.

February lows have been finding support at the MONTHLY Pivot.

 
 
  Linda Piazza   2/6/2004,  1:49:45 PM
There's a possibility that the Dow is setting up a bearish right triangle on the five-minute chart, with horizontal bottom support at 10,550 and with a descending top line. There have been a series of bounces from that level with lower highs each time. This isn't typically the form that a bull flag takes. If this should break to the downside, wait for a move below 10,546.81 to confirm, but then it should have a downside target of about 10,515. Watching this formation will allow us to measure signs of strength and weakness. A failure to confirm would show more strength than is apparent from this formation and might send the Dow sharply higher.

 
 
  Jeff Bailey   2/6/2004,  1:41:30 PM
Sell Prog. Prem. Alert

 
 
  Linda Piazza   2/6/2004,  1:40:14 PM
The SOX pushed back above its 50-dma, and this time, it didn't get pushed immediately back below it again.

 
 
  Jeff Bailey   2/6/2004,  1:15:37 PM
01:00 Internals at this Link

 
 
  Linda Piazza   2/6/2004,  1:14:56 PM
Now that the SOX has hit its 50-dma, bulls want to see it maintain levels above that MA. (It's currently dipped back below it.) What bulls do not want to see is for the SOX to fall back below its 30-minute 100/130-pma's now, having just edged above them. Those averages are at 510.18 and 512.97, respectively. This is one of the tests I've been waiting to see today.

 
 
  Jim Brown   2/6/2004,  1:14:10 PM
CD now saying they are going to be recording a one time tax benefit of +9 to +11 cents per share in the 1Q.

 
 
  Jim Brown   2/6/2004,  1:13:00 PM
CD has been halted for trading - Earnings were earlier this week

 
 
  Linda Piazza   2/6/2004,  1:10:55 PM
The SOX just hit its 50-dma.

 
 
  James Brown   2/6/2004,  1:08:34 PM
GM is still slowly bouncing higher despite news that it is recalling 1.8 million cars for ignition problems that may cause a fire.

According to an Associated Press article:
The models involved are certain 1998-2001 Chevrolet Cavaliers and Pontiac Sunfires built between March 1997 and April 2001. In addition, some 1998 Pontiac Grand Am, Oldsmobile Achieva, and Buick Skylark cars built between March 1997 and January 1998 are being recalled.

 
 
  Jeff Bailey   2/6/2004,  1:07:16 PM
Darden Restaurants (DRI) $21.81 -0.63% ... one of those stocks that really bucked this weeks more bearish trade, now sees profit taking on a bullish day.

 
 
  Jeff Bailey   2/6/2004,  1:05:54 PM
Electronic Arts (ERTS) $44.11 +0.02% .... One of the few stocks I'm monitoring with a more bearish bias that after declining this week, not seeing a bounce like others have.

 
 
  James Brown   2/6/2004,  1:04:55 PM
Barr Pharma Inc (BRL) has gapped up above its 50-dma and currently trading with a 4.2% gain after announcing earnings last night. The company reported earnings that were better than expected and reaffirmed its +20-25% guidance for earnings growth. BRL is just under resistance at $80.00. Momentum traders could use a move over $80.00 as a trigger to capture any run toward $85.00. If you prefer to buy the dip, look for BRL to fill the gap from today and buy a bounce from $77.00 (above its 50-dma).

 
 
  Linda Piazza   2/6/2004,  1:04:40 PM
Instead of confirming its bull-flag breakout by a move to a new high, the OEX turned around and headed back below that trendline again. It may be just testing the trendline a second time.

 
 
  Linda Piazza   2/6/2004,  12:59:44 PM
It looks as if the OEX has broken above the bull flag resistance, although it's now spending some time consolidating just above the trendline before heading up again. I would wait for a confirming move to a new high of the day, however, before I considered that breakout confirmed. It seems kind of tepid to me so far. I would have expected a quicker move up once it was broken.

 
 
  James Brown   2/6/2004,  12:55:09 PM
Shares of Boston Scientific (BSX) are not responding but its CEO said they expect the FDA to approve their Taxus drug-eluting stent this quarter.

 
 
  Jeff Bailey   2/6/2004,  12:52:15 PM
U.S. Dollar Index (dx00y) 85.97 -1.07% ... here's intra-day chart of DX00Y Link with some dollar/gold/bond comments.

Maybe I shouldn't use the word "disappointment" as I did, but the phrase "bond/dollar doesn't see rate hikes from Fed" coming anytime soon" based on the nonfarm data.

Some currency traders think that a Fed rate hike will prop up the dollar, but the 10-year YIELD ($TNX.X) falling 10 basis points to 4.074% and buying in Treasuries today would appear to be a reaction to still rather weak jobs data, keeping Fed on hold.

This has me further thinking that the gold trade is LARGELY (maybe 70%) dollar related, and not really a read on inflation/deflation (maybe 30%).

 
 
  James Brown   2/6/2004,  12:51:58 PM
Video game publisher THQ Inc (THQI) is up 11% to $18.08 today after last night's earnings report and guidance. Some analyst felt the company's guidance was too conservative and left room for more upside. At least two brokers have upgraded the stock to "out perform" and "buy". The stock has broken multiple levels of resistance but it looks dangerous to chase it here with additional resistance at $19.00 and $20.00 just over head.

 
 
  Linda Piazza   2/6/2004,  12:46:02 PM
Those on the futures side are talking about the various bull flags, and the OEX pullback still looks as if it's taking the form of a bull flag. We haven't yet had a higher high to confirm that, but the retracement is so far holding above the 50% retracement of the flagpole climb this morning. It's also holding above the 563.50-563.70 zone that topped off most candles during the recent consolidation period, with the exception of 2/02 when the OEX climbed to 566.42 before being slapped back into the congestion zone. Once the upper Keltner channel is violated, the OEX usually makes its way back to mid-channel support, if not to lower channel support, but that mid-channel support is rising along with price, so if the OEX holds up long enough, that mid-channel support will come up to meet it. I'm still watching the Dow's test of possible right-shoulder level (although I don't give H&S formations on daily charts much credence these days) and the ongoing SOX test of its 50-dma for clues as to strength or weakness in the markets. Those in bullish positions would like to see the Dow and SOX safely above those resistance levels.

 
 
  James Brown   2/6/2004,  12:44:55 PM
LM Ericsson Telephone (ERICY), the Swedish telecom giant, announced earnings this morning that beat the revenue estimates and suggested a return to growth in 2004. The stock has gapped up from yesterday's breakout at $23.70 to $26.48 (+11.72%). Goldman has upgraded the stock to "out perform".

 
 
  Jim Brown   2/6/2004,  12:44:13 PM
Amazing that CHKP is soaring after reports surfaced yesterday that there were security flaws in their software.

 
 
  James Brown   2/6/2004,  12:37:45 PM
I know we've seen a lot of talk about the SOX but as they say a picture is worth a 1,000 words. Here's another chart (or two): Link

 
 
  James Brown   2/6/2004,  12:31:02 PM
Check Point Software (CHKP) is soaring +6.19% and nearing 2-year highs after Wachovia upgraded the stock to an "out perform" and A.G.Edwards upped it to a "buy" this morning. CHKP is breaking out over resistance at the 21.50-22.00 level.

 
 
  Linda Piazza   2/6/2004,  12:28:51 PM
The SOX has now hit the top of that descending regression channel depicted in my 10:47 post. It's slightly above the 30-minute 130-pma, too, although it hasn't closed above that MA on a 30-minute basis yet. Thirty-minute CCI turns down, however, as the momentum slows from the earlier strong push. The SOX is in the process of testing that 50-dma just above 515, with the SOX at 513.58 as I type. The 30-minute descending regression channel has been in place since 1/13, and the SOX has so far turned down each time it's tested the top of that channel. However, this regression channel has formed inside a larger, ascending regression channel that James has pointed out on the daily chart, with this 1/13-present one perhaps representing just another pullback to longer-term support. The key as to whether the longer-term ascending channel or the two-month descending one wins out may be that 50-dma. Remember that the SOX sometimes overshoots support or resistance before turning around.

 
 
  Jeff Bailey   2/6/2004,  12:26:36 PM
Dow Industrials (INDU) .... here's a quick look at a 15-minute interval chart of the INDU Link

The 5-minute chart shows that after the INDU broke above WEEKLY Pivot of 10,537, it hesitated for about 5-minutes, but found a nice kick higher of that 10,537 to then trade the session high.

While a downward trend is not shown on this chart, today's trade would have the INDU above any downward trend, unless we place a cheater's trend at today's high.

 
 
  James Brown   2/6/2004,  12:25:09 PM
Surprisingly, shares of Intel (INTC) are only up 2%, bouncing from the $30.00 level but still stuck in its downward channel that began around January 10th. Bulls need to see INTC break above its simple 10-dma.

 
 
  James Brown   2/6/2004,  12:22:26 PM
Leading the SOX higher today is Maxim Integrated Products Inc (MXIM). MXIM reported earnings yesterday that beat the estimates by a penny with net income of 28 cents a share. Revenues rose more than 18% to $338.1 million above estimates of 329.7 million.

The stock is up 6.95% after garnering a couple of fresh upgrades this morning.

 
 
  Jeff Bailey   2/6/2004,  12:20:31 PM
Per Jim's 11:46:27 ... The intra-day support level I'm now watching closely is that INDU WEEKLY Pivot of 10,537 and the DAILY R1 of 10,527, which gives us a 10-point "zone" of intra-day support.

 
 
  Jonathan Levinson   2/6/2004,  12:19:28 PM
It's the binary dollar trade, James. Uncle Buck is the loser: Link

 
 
  James Brown   2/6/2004,  12:18:12 PM
An early afternoon update on sector winners and losers:

... Hmmm I don't see any losers...

SOX semiconductors: +3.78%
DJUSHB homebuilders: +3.62%
XAU gold & silver : +2.79%
XBD broker-dealer: +1.95%
GHA hardware index: +1.97%
NWX networking index: +2.14%
DDX disk drives: +1.58%
RLX retail index: +1.27%

 
 
  Jeff Bailey   2/6/2004,  12:17:33 PM
12:00 Internals at this Link

 
 
  Jim Brown   2/6/2004,  12:16:46 PM
NEW YORK, Feb 6 (Reuters) - Moody's Investors Service on Friday said it may cut its ratings on technology services provider Electronic Data Systems Corp. NYSE:EDS to junk, a day after the company reported a deep quarterly loss and issued a disappointing forecast for 2004. Moody's said it may cut EDS' senior unsecured rating of "Baa3," the lowest investment grade, affecting about $5.8 billion of debt.

 
 
  Jim Brown   2/6/2004,  12:14:02 PM
Cigna says it is going to layoff 3000 workers in an effort to save $300 million in 2004. Must be some really high paid workers.

 
 
  James Brown   2/6/2004,  12:11:15 PM
Current OI call play DHR is seeing some follow through on yesterday's bounce from $90.00. Furthermore the move has broken its short-term trend of lower highs!

 
 
  Jeff Bailey   2/6/2004,  12:08:06 PM
Homebuilders (DJUSHB) 581.60 +3.45% ... back above its rounding lower 50-day SMA again.

When CNBC reported some trader's comments regarding today's nonfarm payroll data not being too hot, but maybe just right as it relates to Fed policy, I was thinking.... "he's got to be kidding."

One test might well be the homebuilders, which might be more sensitive to Fed policy, which the bond market would react to.

The DJUSHB has been holding tough on each test regression channels lower and rising support. A downward trend from the high would be deemed near-term resistance at 597.

 
 
  Linda Piazza   2/6/2004,  12:05:17 PM
The SOX is moving ever closer to a test of its 50-dma, a closely watched moving average. That moving average is currently at 515.08, with the SOX currently at 513.82, and looking as if it's trying to make a move up to that moving average. Oops. The SOX dropped back a bit as I began typing.

 
 
  Jeff Bailey   2/6/2004,  11:58:42 AM
Newmont Mining (NEM) $43.23 +2.56% ... pinned under $43.50 for the most part. A little spike high to $43.56 found quick 5-minute reversal at this point.

While I'm 30-min delayed on my DX00Y quotes, I see it trading smack between the WEEKLY/MONTHLY retracement of 85.88 and 86.00. Here's the chart of the dx00y I showed yesterday. Link where the dollar index has gravitated to that "zone of support"

 
 
  Linda Piazza   2/6/2004,  11:58:24 AM
The OEX is sitting on next Keltner support, with the central Keltner support below that, having risen to 562.48. Keep in mind that a fall back to that central Keltner support will bring the OEX back inside the recent congestion zone--so adding more doubt to the bullishness of today's trading--but will keep it above a 50% retracement of the morning's flagpole climb--so preserving the bullish tenor according to that measure. OEX bulls would probably prefer that the OEX stay above 563.50-563.70 long enough for the central Keltner channel support to climb that high, so that a test of that support would not constitute a fall back inside the congestion zone.

 
 
  Linda Piazza   2/6/2004,  11:31:53 AM
So far, the OEX pullback on the five-minute chart is taking the form of a bull flag. We won't know for sure if that's what it is until the OEX breaks to a new day's high. If it is a bull flag, it shouldn't retrace more than 50% of the flagpole climb that immediately preceded it before breaking to the upside, so no further than 562 or so. Mid-Keltner channel support has now risen to 561.97, corresponding to that level fairly well.

Several factors keep me watching, however. One is the potential Dow H&S on the daily chart, so OEX bulls would also like to see the Dow reach and maintain levels above the right-shoulder level at 10,600. The other is the ongoing SOX test of significant resistance from its current level up to the 50-dma at 515. OEX bulls would like to see the SOX push above that MA and maintain levels above it. Otherwise, there's the potential for a rollover on both, which wouldn't be good for market sentiment, and therefore, for the OEX. The last factor is the fact that the OEX punched through upper Keltner resistance. Usually that means that it eventually works down to mid-channel support, but sometimes that means a plunge back to the bottom of the channel, which is currently at 557.03. That would bring about another test of the recent congestion-zone support. So far, due to all these factors, I'm reserving judgment about ;ong-term implications today's move.

 
 
  Linda Piazza   2/6/2004,  11:18:12 AM
OEX central Keltner support has now climbed to 561.63, but before that level is reached, the OEX might find first support at the 564.20 level and then at 563.47.

 
 
  Linda Piazza   2/6/2004,  11:14:47 AM
The SOX has slowed its gains now that it approaches the top of its intraday descending channel (which began forming in mid-January), its 30-minute 130-pma, and the more-important 50-dma overhead at 515. A fall back below the 30-minute 100-pma (509.86) now would supposedly be a bearish signal, but the rising daily RSI hints that the SOX is ready to devote some time to this test of overhead resistance, if not climb above it.

 
 
  Jim Brown   2/6/2004,  11:11:32 AM
Everybody is in the Consumer Confidence business it appears. Associated Press just released their most current consumer confidence numbers and they showed a drop in confidence to 91.7 for this week and down from 106.3 for the same period in January. This is not a good sign although this is not a widely followed survey. It does suggest the Michigan Sentiment for next week could see a decline.

 
 
  Jeff Bailey   2/6/2004,  11:10:52 AM
Buy/sell program premium alerts ....

Buy program alert times on 5-minute intervals have been... 10:05, 10:15, 10:30, 10:35.

Sell program alerts have been 09:35 and 09:50

Traders might be able to match these times with SPX on intra-day basis, look to see if there is level of trade that is correlative

 
 
  Jeff Bailey   2/6/2004,  11:06:03 AM
11:00 Internals at this Link

 
 
  Linda Piazza   2/6/2004,  11:03:44 AM
The DOW has a potential H&S on its daily chart. Does anyone really believe that the bearishness of that formation will be fulfilled after the multiple failures of these formations for 10 months? Nevertheless, the right-shoulder level would be just under 10,600, although it could conceivably be a little higher since some could argue in favor of a slightly ascending neckline. That means some could argue that the right shoulder could be slightly higher than the left. There was bearish price/MACD divergence as the head was created, but now MACD and RSI come back to retest their descending trendlines that formed as that divergence was created. I mention this only because someday, sometime these formations will have validity again and we actually saw some intraday ones work well this week on various indices. Watch those descending trendlines on RSI and MACD, however, as they may give a first hint of whether the Dow will round over into a right shoulder or will break above the right-shoulder level. That doesn't mean that the rounding-over process would necessarily take place in one day, either, even in the wild possibility that a H&S would actually confirm on a daily chart.

 
 
  Linda Piazza   2/6/2004,  10:55:25 AM
The OEX is now moving back inside the Keltner channels, with first support at the current 564.35 level. Next support is at 563.61, but stronger support is gathering near 562.70-563. Eventually, the OEX should now move back toward the central Keltner support, which is at 561.06 now, but climbing. That central support can climb quickly or not, depending on how quickly the OEX climbs.

 
 
  Jeff Bailey   2/6/2004,  10:53:50 AM
Semiconductor Index (SOX.X) 510.73 +3.02% ... session high has been 511.79. Current trade is right into a "zone of resistance" from MONTHLY/WEEKLY retracement of 510.17-512.19.

Here's the SOX chart from Tuesday evening's market monitor with WEEKLY/MONTHLY retracement shown. Link

 
 
  Jeff Bailey   2/6/2004,  10:49:57 AM
Research in Motion (RIMM) $91.09 +3.14% Link ... notable 52-week high on the NASDAQ.

 
 
  Linda Piazza   2/6/2004,  10:47:37 AM
The SOX approaches its 30-minute 130-pma and also the top of the short-term regression channel that it followed as it traded down to support on a longer-term ascending one on the daily chart. This is the real test for SOX bulls and bears. A move above that 130-pma and descending channel resistance would be a breakout signal (although I'd wait for a confirming move over the 50-dma). A rollover here would mean that today's climb was nothing more than an expected test of those averages and upper channel resistance, and, by the way, that 50-dma overhead at 515. Here are the 30-minute averages (130-pma in purple) and the channel: Link

 
 
  Jonathan Levinson   2/6/2004,  10:47:28 AM
For those following currency issues, the Fed and precious metals, this is an interesting discussion of Japan's recent comments about its reserves and gold. Link

 
 
  Linda Piazza   2/6/2004,  10:40:46 AM
It's time for those in bullish OEX positions to consider following the OEX climb up with stops appropriate to your trading style. The OEX has violated the upper Keltner channel resistance. That can be a breakout signal, so you don't necessarily want to close out positions, but after a brief or maybe hour-or-two climb, the OEX usually pulls back toward central Keltner channel support after such a breakout. That support is at 560.22 currently, but is climbing as price does, too. Following the OEX higher with higher stops seems a good idea.

 
 
  Jeff Bailey   2/6/2004,  10:37:02 AM
Newmont Mining (NEM) $43.46 +3.10% ... back to challenge morning high of $43.50. 5-MRT blue #3 is $43.48 where morning pullbacklow of $43.05 found buying at BLUE #1 of $43.10.

 
 
  Jeff Bailey   2/6/2004,  10:34:39 AM
10:00 Internals at this Link

Yesterday's internals at this Link

 
 
  Linda Piazza   2/6/2004,  10:33:36 AM
The OEX hits upper Keltner resistance and the upside target of its inverse H&S. This is bullish action, of course, but within the context of the OEX not yet breaking above the 566.42 high from Monday and being short-term overbought.

 
 
  Linda Piazza   2/6/2004,  10:24:15 AM
OEX upper Keltner channel resistance approaches at 563.88, but that resistance line is rising. The OEX sometimes violates this upper channel resistance and sometimes keeps climbing for an hour or two after doing so, but that's usually a sign that it's overbought on a short-term basis and will work its way back toward central channel support, currently just above 560 but rising. Since that inverse H&S has an upside target just above 564, I wouldn't be surprised to see the OEX keep pressing toward that level, but then I'd keep following the OEX up with stops if I had a bullish position. If the OEX turns around somewhere near the current level, then this morning's trade, as exciting as it has been, has been nothing more than a lot of zooming around with that congestion zone, and we still don't know the outcome.

 
 
  Jeff Bailey   2/6/2004,  10:21:46 AM
Swing trade long alert .... QQQ $36.92 +1.26% ... for pullback entry of $36.66, stop $36.24, target $37.40.

 
 
  Linda Piazza   2/6/2004,  10:20:39 AM
The SOX currently tests its 30-minute 100-pma, its first touch of this average since falling through it on the gap down on 1/27.

 
 
  Linda Piazza   2/6/2004,  10:19:07 AM
The OEX inverse H&S upside target is just over 564, at about 564.35. The OEX looks determined to meet that target just as quickly as the SOX version met its upside target this morning.

 
 
  Jeff Bailey   2/6/2004,  10:18:58 AM
Agillent (A) $35.54 +0.9% ... (see yesterday's MM 04:29:34) Link

 
 
  Jonathan Levinson   2/6/2004,  10:18:11 AM
1st 1/2 hour p/c ratio .58, VXO currently down 4.56% to 16.94.

 
 
  Jeff Bailey   2/6/2004,  10:17:42 AM
Homebuilders (DJUSHB) 576.68 +2.57% and AMEX Gold Bugs ($HUI.X) 222.35 +2.54% lead broad sector gains.

Pharmaceutical (DRG.X) 349.76 -0.06% and Defense (DFX.X) 206.41 -0.08% are only two sectors showing loss.

Gives impression that traders focused on some of the more recently beaten down sectors.

 
 
  Linda Piazza   2/6/2004,  10:15:27 AM
Today the OEX 30-minute and 60-minute 100-pma's lie in close proximity, at 561.87 and 561.62, respectively, with the 30-minute 130-pma also at 562.08. That should be massive resistance for the OEX. However, Keltner channels are beginning to slant up again, hinting that the OEX wants to travel up within those channels, gradually working toward 563.66, which is just above the strongest resistance from the recent congestion band.

 
 
  Linda Piazza   2/6/2004,  10:08:13 AM
While the OEX hasn't yet been able to maintain a level above its inverse H&S neckline (although it might be doing it as I type), the SOX has spent the entire day above a similar inverse H&S neckline, confirmed this morning with the gap higher. The upside target on the SOX version is somewhere near 506.50, and the SOX has already overshot that target. Just overhead is the 30-minute 100-pma at 509.77.

 
 
  Jeff Bailey   2/6/2004,  10:05:10 AM
Bema Gold (BGO) $3.33 +3.41% ... day trade setup alert ... I'm going to set up a day trade for where I'd be looking for bullish entry at $3.20, stop below $3.14, and a target bounce back higher to $3.30.

 
 
  Linda Piazza   2/6/2004,  10:03:22 AM
Zoom, zoom. The OEX is now violating the next resistance, apparently determined to get back to that 560.80 inverse H&S neckline area.

 
 
  Jeff Bailey   2/6/2004,  10:00:58 AM
QQQ $36.63 .... session low/high so far has been $36.53-$36.84.

The low just found at $36.53 was just above DAILY Pivot of $36.50.

 
 
  Linda Piazza   2/6/2004,  9:58:20 AM
The OEX Keltner channels suggest it's time for a short-term bounce soon. Next resistance is from a violated short-term ascending trendline and mid-channel resistance from 559.62-560.15.

 
 
  Jeff Bailey   2/6/2004,  9:55:56 AM
Dow Industrials (INDU) 10,465 -0.28% ....

Tried to type up a day trade short in the QQQ at $36.66 but QQQ moved to quickly below.

 
 
  Jonathan Levinson   2/6/2004,  9:54:39 AM
A big net drain from the Fed, with just 1.5B in weekend repos just added against 8.75B expiring, -7.25B.

 
 
  Jeff Bailey   2/6/2004,  9:53:16 AM
Swing trade raise stop alert ... NEM $43.21 +2.51% ... raise stop to $42.85, which would be just under morning low. Might try and backfill the morning gap higher from yesterday's close.

Session high of $43.50 came near the $43.40 50% retracement discussed.

 
 
  Linda Piazza   2/6/2004,  9:52:29 AM
There goes that OEX short-term trendline off the 3:00 low and the midline Keltner channel support, too. This is not looking good for the bulls, as Jim said earlier, but their hope remains that the OEX will once again steady ahead of that 557.36 low from last week. That represents the bottom of the OEX's recent congestion zone, a zone that formed within a possible "b" distribution pattern on the daily chart. Until that's breached, this is just more zigging and zagging within that zone.

 
 
  Jonathan Levinson   2/6/2004,  9:49:14 AM
The Fed has 8.75B worth of overnight repos expiring today, and I'm trying to guess whether it adds or drains today. We'll find out in about 10 minutes.

 
 
  Linda Piazza   2/6/2004,  9:48:08 AM
The OEX is currently bouncing from mid-channel Keltner support as well as a short-term ascending trendline off the 3:00 low yesterday afternoon. A steadying above that trendline and above mid-channel Keltner support would be short-term bullish, but the OEX has to get itself back above those resistance levels I've mentioned, and I'm not sure it can. A rising TRIN hints that it can't, but I'm watching the advdec line, too, and it's not diving yet.

 
 
  Jeff Bailey   2/6/2004,  9:45:04 AM
Dow Industrials (INDU) 10,489 -0.05% ... comes back to DAILY Pivot. Session high of 10,517.63 didn't see trade at DAILY R1 of 10,527.53.

I veiw this as rather weak.

 
 
  Linda Piazza   2/6/2004,  9:44:09 AM
During the first five minutes of trading, the OEX ranged from 561.38 to 559.90, with the OEX obviously currently below the midpoint of that first five-minute range, showing weakness in earliest trading. The OEX did climb above the inverse H&S neckline, but as I had cautioned, found resistance from several types of resistance grouped between 561.23-562.00. That's why I mentioned that it would be difficult to put full faith in a neckline break until those levels were cleared, too. It's now back below that H&S neckline, but I think we just have to see how this all settles out before we know what's happening.

 
 
  Jeff Bailey   2/6/2004,  9:42:51 AM
Spot Gold 405.40 ... NEM $43.25, BGO $3.34

 
 
  Jeff Bailey   2/6/2004,  9:41:07 AM
Newmont Mining (NEM) $43.25 +2.6% .... I've had a chart with retracement taken from the 08/26/03 pullback low of $36.51 to the recent highs of $50.28, where right here, at $43.40 is 50% retracement of that range. If NEM can get above, then 38.2% is higher at $45.01, which may now be our swing trade bullish target.

 
 
  Linda Piazza   2/6/2004,  9:38:52 AM
Reader Request: I have been watching Fifth-Third Bank for the last two months. The volume has really picked in the last 17 days and OBV is trending up. It has been in a trading range for 7 months. The P&F chart would be a triple top breakout with a trade of 61. Would you be so kind as to give me your analysis of FITB.

Response: I'm impressed that you're looking at two of my favorite indicators or tools when first examining a stock: the P&F chart and OBV. OBV, or on-balance volume for those of you unfamiliar with this acronym, shows whether money flows into or out of a stock. However, as I look at OBV, I notice that it has been trending up since about mid-January, but that it's been in a similar range throughout much of the last six or seven months. I'd call that a only short-term uptrend in OBV, then, within a range.

I agree that FITB has been in a range trading range, much of the same time that OBV has been in a range, too. The daily chart just shows a jumble within the congestion zone, so I took a look at the weekly chart. Link You mentioned that a new P&F buy signal would be given at $61, something I did not verify for myself since you'd already checked it. The obvious breakout point on the weekly chart is $60.00, but more resistance does show up at $61.45, confirming the importance of that level as seen on the P&F chart, according to your inspection. Right now, all that can be said is that it's still within the congestion zone and it may or may not break out. Some would consider an entry above $60.00 and some would consider waiting until that confirming P&F buy signal and move above next weekly resistance.

 
 
  Jeff Bailey   2/6/2004,  9:37:47 AM
QQQ $36.82 +0.98% ... just off session high of $36.84 and came just shy of DAILY R2.

I'm now looking for a pullback bullish entry at the DAILY Pivot, with thought the Q's should not fall below their DAILY S1.

 
 
  Jeff Bailey   2/6/2004,  9:35:25 AM
SPX 1,131.89 +0.3% ... trades DAILY R1 of 1,131.69.

 
 
  Jeff Bailey   2/6/2004,  9:28:18 AM
QQQ $36.47 ... $36.60 in pre-market.

In 09:00 update I noted pre-market high was $36.67, this was a penny above our DAILY R1 of $36.66. Might hint that some computers are selling that level early. Pre-market low was a tick at $36.39.

 
 
  Jeff Bailey   2/6/2004,  9:23:53 AM
Bema Gold (BGO) $3.22 ... trading $3.36 on the AMEX.

 
 
  Jeff Bailey   2/6/2004,  9:22:02 AM
Newmont Mining (NEM) $42.15 ... seeing pre-market trade at $43.10.

 
 
  Jeff Bailey   2/6/2004,  9:20:57 AM
Spot Gold $403.10

 
 
  Jonathan Levinson   2/6/2004,  9:20:18 AM
"Lead Kamikaze" Formation to accompany Jeff's last comment: Link

 
 
  Linda Piazza   2/6/2004,  9:19:46 AM
Futures are up minimally as I type. If the OEX should climb, what should we watch? The OEX ended the day yesterday with a potential inverse H&S on its intraday chart, perhaps best seen on the 15-minute chart. The neckline of that inverse H&S lies at about 560.80, with a projected upside to just over 564. The Keltner channels show resistance at 560.40 and 560.94 as the day was ending, so roughly analogous with that neckline. The next Keltner resistance doesn't show up until 563.20. However, just after climbing above that neckline, the OEX will face the descending trendline off the 1/27 high, at about 561.25; the 38.2% retracement of the bear-market decline, at 561.23; and moving average resistance at the 60-minute 100-pma, at 561.63. It's going to be difficult to put full faith in that neckline break until those resistance levels are cleared, too, especially since all these levels remain within the recent trading range for the OEX.

What if the OEX doesn't climb? Then we should watch that 557.36 level from the 1/29 low, especially since yesterday's lows dipped almost to that level before rebounding.

 
 
  Jeff Bailey   2/6/2004,  9:19:41 AM
U.S. Dollar Index (dx00y) 86.20 -0.8% (30-min delayed) ... falling 0.74 points here.

 
 
  Jeff Bailey   2/6/2004,  9:18:03 AM
09:00 Update at this Link

 
 
  Jonathan Levinson   2/6/2004,  8:43:24 AM
Average workweek rose by 0.2 hours to 33.7 while total hours worked in the economy increased by 0.8 percent.

 
 
  Jonathan Levinson   2/6/2004,  8:31:16 AM
+DJ US Jan Nonfarm Payrolls +112K; Consensus +160K

Unemployment rate 5.6%

 
 
  Jonathan Levinson   2/6/2004,  8:17:09 AM
We await the following news at 8:30: Non farm payrolls, est. 165K, unemployment rate (est. 5.7%), hourly earnings, est .2%, average workweek, est. 33.7. At 3PM, we await consumer credit, est. 7.3B.

 
 
  Linda Piazza   2/6/2004,  7:13:31 AM
Good morning. Ahead of the G7 meeting beginning in Florida today, the Nikkei opened near the flat-line level, climbed to 10,500, dipped to 10,400, and then traded in an increasingly narrow range throughout the rest of the day. The Nikkei closed down 3.68 points or 0.04%, at 10,460.92. The first climb in the Nikkei came as banks rebounded from their recent drubbing over an announced resumption of government special inspections into bad loans. Mitsubishi Tokyo Financial Group reported a quadrupling of net income and UFJ Holdings gave a positive report. Toyota rose in early trading, but some other automakers traded lower. Wednesday, Matsushita and rival Sony had both traded higher ahead of Matsushita's earnings due Thursday afternoon, but both fell in early trading on Thursday. Matsushita recovered to gain 0.1% by the close. After the close, the company raised expectations for the year and reported better-than-expected profits. The company also reported strong sales of cell phones and audiovisual products, according to one report. Sony did not recover by the close, battling the negative impact of a Multimedia Research Institute report that said Sony's market share for PC's declined 3.9% in Japan. Other stock-specific news included Sega's climb after its Thursday earning's report showed that net profits for the nine months ending in December soared 92%.

Most other Asian bourses traded higher. Most Asian airlines rose, despite spotty performances on quarterly earnings, with most still rebounding from their recent losses. Those losses came as some feared that avian flu outbreaks would curtail travel plans throughout Asia. The Taiwan Weighted gained 1.36% and South Korea's Kospi gained 1.11%. In South Korea, Q3 labor productivity in manufacturing rose 5.6% from the same period a year ago, and LG Electronics rose after reporting a much narrower-than-expected Q4 loss. Singapore's Straits Times climbed 1.41%. Hong Kong's Hang Seng climbed 2.14% and China's Shanghai Composite gained 2.18%.

European bourses mostly trade higher, with the exception of Russia's Moscow Times. As the morning rush hour began in Moscow this morning, an explosion ravaged an underground train, killing up to 40, according to one report. The explosion was probably set by a suicide bomber, that same article concludes. Another unusual occurrence affected European trading this morning, with the German Xetra trading system breaking and trading halting for a time before the system could be repaired. Elsewhere in Europe, the attention focuses on the G7 meeting and on the U.S. economic numbers, with varying opinions about the outcome of each. Some believe that the statement out of the G7 meeting will be similar to the one out of the last meeting, while others think that pressure will be exerted against the U.S. to do something about the dollar's weakness. Estimates of U.S. job increases were ranging up to an additional 300,000 jobs on CNBC Europe this morning.

Better-than-expected earnings from Ericsson helped send the European markets higher. Goldman Sachs upgraded the company to an outperform rating from its former in-line rating. Deutsche Bank continued gains after its earnings report earlier this week. In addition, much CNBC talk this morning centered on speculation about Deutsche Bank's interest in partnering up with another bank. JP Morgan upgraded Royal Dutch to a neutral rating from underweight, with the company still declining today after yesterday's Q4 earnings report revealed a sharp decline in profits. JP Morgan opined that expectations were now so low for Royal Dutch that the potential for further negative surprises was lessened.

As of this writing, the FTSE 100 trades higher by 16.80 points or 0.38%, at 4401.20. The CAC 40 has gained 15.75 points or 0.44%, trading at 3626.06. The DAX trades higher by 28.42 points or 0.71%, at 4043.21.

 
 
  OI Technical Staff   2/5/2004,  9:33:18 PM
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