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  Jeff Bailey   2/9/2004,  5:19:18 PM
Pivot Matrix for tomorrow at this Link

 
 
  Jeff Bailey   2/9/2004,  4:40:49 PM
Closing Internals at this Link

 
 
  Linda Piazza   2/9/2004,  3:56:17 PM
With the exception of a minor violation of the bearish #2 on Jeff's 5MRT system when the OEX dipped to its low of the day, the OEX has remained within a neutral zone today as demarked by that system. Now that the day is ending, the OEX is perhaps headed down to retest that low of the day. Like Jim, I tend to be a little skeptical of movements that happen in the last few minutes of the day, though.

 
 
  Linda Piazza   2/9/2004,  3:48:59 PM
So much for predictions of more OEX downside with the TRIN rising a few minutes ago as the OEX tested mid-Keltner support. I used to be able to change VIX characteristics merely by posting information on what the VIX was doing, and looks as if I've now transferred that ability to the TRIN. No sooner had I made my last post than the TRIN turned around again. However, the OEX has just now risen back to that violated mid-Keltner support, a level that we should have expected to have retested, so we shall see. It's important to note, however, that the 563.50-563.70 level proved strong resistance through the recent consolidation period, so that its support could also now be presumed to be strong. Jeff has mentioned pivot points that lie in this area, too, including the weekly pivot at 563.27, according to Q-charts. The 30-minute 100-pma crosses just above 563. We're seeing lots of levels of support converge in this area, so it would have been surprising not to see a bounce attempt here. Let's see how far it carries.

 
 
  Jeff Bailey   2/9/2004,  3:44:50 PM
Cisco Systems (NASDAQ:CSCO) $24.75 day trade stop alert. Couldn't quite get a break of RED #3 at $24.60.

 
 
  Linda Piazza   2/9/2004,  3:25:24 PM
The possibility of a Dow H&S formation remains intact, although it remains a possibility only and perhaps a remote one. The 21(3)3 stochastics show plenty more upside to the current Dow move, but today's trading pattern has not as yet violated the possible right-shoulder level with the possible exception of a candle shadow that moved slightly above it. RSI action isn't yet definitive. It isn't breaking above its descending trendline as yet, but neither is it definitely falling away from it. It's hugging it.

 
 
  Linda Piazza   2/9/2004,  3:21:11 PM
The OEX is trying to find its footing at that mid-Keltner channel support--actually from just below it--but the TRIN suggests that it's going to find the upward slope a bit too slippery. As Friday ended, I was worried about a pullback since the OEX had been hugging the upper boundaries of that upper Keltner channel for so long. It sure didn't look as if it was going to happen today, but now it's looking a lot more as if it is.

 
 
  Jeff Bailey   2/9/2004,  3:19:21 PM
S&P 100 Index (OEX.X) 564.02 -0.36% ... just off session low of 563.36, where WEEKLY Pivot of 563.30 is found. Last week's WEEKLY Pivot was 563.70

 
 
  Jeff Bailey   2/9/2004,  3:15:41 PM
03:00 Internals at this Link

 
 
  James Brown   2/9/2004,  3:13:05 PM
Heading into the last 45 minutes...

Best Sector Performers
OSX oil services: +2.38%
OIX oil index: +1.60%
XNG natural gas: +1.31%

Worst Sector Performers
NWX networking index: -1.35%
SOX semiconductors: -0.88%
DRG drug index: -0.68%
XAL airlines index: -0.62%
...overall any selling seems pretty mild.

 
 
  Linda Piazza   2/9/2004,  3:04:25 PM
Central Keltner channel support did not hold for the OEX. Unless the OEX pulls itself up by its bootstraps fairly quickly, that suggests a fall to the bottom Keltner channel support, currently at 561.93, but now dropping instead of climbing. The OEX may simply have overshot that central support, however. The next few minutes should tell us.

 
 
  Linda Piazza   2/9/2004,  2:54:47 PM
The TRAN hasn't yet made it up to a 38.2% retracement of its recent plunge, with the TRAN's high today at 2913.51 and with that retracement level at just over 2919. A 50% retracement is at just under 2952, and I would look strongly at the possibility of a rollover at that level, if the TRAN should make it that high. It was natural to expect a retracement after such a steep drop, but the steepness of the drop must give TRAN bulls some pause. That's not a prediction, of course, but many moving averages are converging toward that level as the TRAN moves up and that's a typical retracement level at which strong resistance might be found. If the TRAN could instead move above that level, the 61.8% retracement lies near 2985, also a level of historical S/R.

 
 
  Linda Piazza   2/9/2004,  2:46:11 PM
Here's where we see whether or not the central Keltner support will hold for the OEX. The OEX is at that central support, found from the current OEX level, down to 564.38.

 
 
  Jeff Bailey   2/9/2004,  2:44:15 PM
Day trade short ... Cisco Systems (CSCO) $24.67 here, stop $24.75, target $24.45.

 
 
  Linda Piazza   2/9/2004,  2:41:41 PM
The SOX has also traded sideways long enough for its 30-minute 21-pma to catch up with the current price. Oscillators slant down, but they're doing so at a shallow angle, as sometimes happens when they're going to turn right back up again. Momentum turns down more strongly, however. We just have to wait to see what's going to happen, but it's possible that the SOX will now find strength from that 21-pma, now at 517.08, and bounce toward 521-524. If it falls through that average instead, it may be headed down for a retest of the 30-minute 100-pma, currently at 512.38.

 
 
  Jeff Bailey   2/9/2004,  2:40:30 PM
William Lyon Homes (WLS) $68.65 +4.01% Link ... homebuilder trading new 52-week high today. Today's trade at $67 is spread-triple top buy signal, with room to bullish vertica count of $83.00.

 
 
  James Brown   2/9/2004,  2:36:41 PM
Lehman Brothers has upgraded Laboratory Corp (LH) this morning from "neutral" to a "buy" but the trend today for several stocks gapping higher on upgrade news appears to be a slow fade lower.

LEH has raised its price target on LH to $49. Currently, LH is trading near $41.73 with support at the $40.00 mark. LH is due to report earnings on Feb. 12th before the open with estimates at 53 cents a share.

 
 
  Linda Piazza   2/9/2004,  2:30:40 PM
The OEX has hung around near the top of the Keltner channels long enough for the central Keltner support to rise up close to the current price. That central support is at 564.46 currently, with bottom support at 562.

 
 
  Linda Piazza   2/9/2004,  2:20:13 PM
The OEX now tests the 30-minute 21-pma, with a fall below that average suggesting a retest of the 30-minute 100/130-pma. Right now, it's holding above it.

 
 
  Linda Piazza   2/9/2004,  2:11:23 PM
The COMPX has still not been able to pull away from the 60-minute 100/130-pma's, although it has inched above them. So far, price and MACD diverge, with MACD making a higher high while the COMPX is so far at a lower high. That can be erased if the COMPX moves above its 2/02 high of 2085.49 before turning down again.

 
 
  James Brown   2/9/2004,  2:11:04 PM
After constantly losing market share to Best Buy (BBY) we're now starting to see management at Circuit City (CC) make some drastic changes to "improve financial performance" as they state in their press release.

CC announced that it will close 19 superstores by the end of February. These 19 closures will be permanent and according to CC allow management to focus on their other 600 stores. The company still plans to open 65-70 superstores in their current fiscal year but a majority of these will be relocations.

Investors seem to be applauding the move with a 4% gain in the stock price.

FYI: If you happen to be near one of the 19 superstores being shut down the close-out sale begins on Tuesday.

 
 
  Jeff Bailey   2/9/2004,  2:06:42 PM
02:00 Internals at this Link

 
 
  James Brown   2/9/2004,  1:59:57 PM
Merrill is raising its rating on Walgreen Co (WAG) from a "neutral" to a "buy". The stock did gap higher on the open but has been unable to maintain its gains. Merrill's new price target is $40.00 (WAG is currently at $34.50). WAG's P&F chart is pointing toward a $54.00 price objective with a nice breakout above resistance after months of building a base.

 
 
  James Brown   2/9/2004,  1:52:21 PM
Another defensive Dow component marking some gains today is PG. Shares charged higher in late January and early February. Late last week saw some profit taking but traders are buying the dip above $101 and its simple 10-dma. This may be an entry point for interested bulls.

 
 
  James Brown   2/9/2004,  1:47:08 PM
One of the big winners today is Dow component Coca-Cola Co (KO). The stock is up 3% on a strong breakout above resistance at $51.00. Today's gain marks a new one-year high and its fourth gain in a row.

Earnings are expected on Wednesday morning before the open. Estimates are 44 cents a share.

 
 
  Linda Piazza   2/9/2004,  1:45:56 PM
Although there's some validity to an argument that the Dow's possible H&S could have a slightly ascending neckline, and so the right-shoulder height might be slightly higher than the left-shoulder height, the Dow's climb today is getting close to an area where we'd have to say that the H&S pattern is defunct. It's not quite there yet, and that would also depend on the close today. A push slightly above the right-shoulder level with a close below it would leave only a candle shadow above that level. I'm watching the Dow's RSI with respect to that descending trendline that I pointed out in my 11:56 chart. RSI had been turning down beneath that descending trendline, but now it's trying to straighten out that hook, trying but not yet quite succeeding in pushing above the trendline. As I said earlier, RSI can be notoriously fickle, but trendline breaks sometimes warn of impending price breaks, too. I'm watching for a definitive roll down beneath that trendline or break through it.

 
 
  James Brown   2/9/2004,  1:42:47 PM
Enjoying some strength today is Group 1 Automotive (GPI). Raymond James has upgraded GPI to a "strong buy" and shares gapped higher at the open this morning. The stock is above recent resistance t $38.00 but still has additional resistance at $40.00. The stock could be building the cup part of a cup and handle formation.

 
 
  Linda Piazza   2/9/2004,  1:31:24 PM
The Dow isn't getting immediately slapped back as it climbs over 10,600, but it's also fighting Keltner resistance at its current level and having difficulty climbing, too. It looks as if it may just be gathering strength, but there's a possibility that this Keltner level will stop it, as it has the last two times it's been hit. The Keltner channels show upper resistance at 10,625, so it's possible the Dow could climb that high before seeing next resistance on a Keltner-channel basis.

 
 
  James Brown   2/9/2004,  1:11:51 PM
General Motors (GM) has announced its second recall in four days. This time the largest automaker on the planet is recalling over 600,000 mid-sized SUV's. This recall involves a potential short-circuit in the wiper module that has lead to two crashes. The models involved are 2002 and 2003 Chevy Trailblazers, GMC Envoys, Oldsmobile Bravadas and some Isuzu Ascenders.

Shares of GM are still slowly drifting higher from last Tuesday's low.

 
 
  Linda Piazza   2/9/2004,  1:11:19 PM
As is obvious, the OEX has spent the day in the neutral zone as is depicted by Jeff's 5MRT system. It's also spent most of the day moving across a horizontal line drawn at the level of the first five-minute low. Those movements across that line are getting smaller and smaller in amplitude. I'm wondering if, during the usual stop-running time of day that typically comes from 1:35-1:55, the OEX might not dip down to or slightly below central Keltner support, with the outcome of that dip showing us more about afternoon direction. At least, we hope the afternoon direction is something more than sideways. A quick dip down to that support and just-as-quick climb might portend further upside, while a failure to recover quickly might predict a fall toward bottom Keltner support. I saw one other time in November when the OEX hugged the top of the Keltner channels through two days, though, and it wasn't until the open the next morning that the OEX fell through Keltner support, declining 7 points that day. Bulls would probably prefer a gentle slope down to that central support and a bounce after re-establishing that support.

 
 
  Jeff Bailey   2/9/2004,  1:06:40 PM
01:00 PM Internals at this Link

 
 
  James Brown   2/9/2004,  1:06:01 PM
American Power Conversion Corp (APCC) is down another 3.15% on top of Friday's big drop. The company announced earnings on Thursday afternoon that beat the street by 2 cents but investors sold the news. While APCC traded well off its Friday's lows there is no follow through on the bounce today.

 
 
  Jonathan Levinson   2/9/2004,  12:57:56 PM
It looks like the 4.5B net add achieved by 6B in overnight repos was not enough, and the Fed has announced a further addition of 1.311B via coupon pass. This latter is a permanent market operation, adding to the 900M or so added last week.

 
 
  James Brown   2/9/2004,  12:42:48 PM
Shares of Andrx (ADRX) are up strongly today (+4.5%) after filing an abbreviated new drug application with the FDA to provide a generic version of a 50-milligram Toprol-XL drug. Toprol-XL is a treatment for hyptertension and angina drug sold by AtraZenca (AZN).

AZN is trying to defend itself from this generic version and filed a patent infringement suit to stop ADRX from selling its generic version in the U.S. and the U.S. (-Dow Jones News)

 
 
  Jeff Bailey   2/9/2004,  12:42:32 PM
PETCO (PETC) $31.06 -4.6% Link ... off session lows of $29.85 after SEC filing disclosed selling of 12.2 million shares by insiders.

 
 
  James Brown   2/9/2004,  12:34:57 PM
A note on the new OI call play in DHI from this weekend. Shares appear to have gapped higher this morning, breaking above possible resistance at 30.25. Unfortunately, my Qcharts is only showing the opening tick. Other sources still report DHI at new highs near $30.29.

 
 
  Linda Piazza   2/9/2004,  12:34:17 PM
The OEX dipped beneath that short-term ascending trendline that began forming Friday afternoon, and now comes back to test the broken support. It still looks as if the OEX might drift down toward its central Keltner support, if not to bottom Keltner support, with that central support now near 564 and with bottom support now at 561.10.

 
 
  James Brown   2/9/2004,  12:26:17 PM
Sector Update this hour...
The best performers
OSX oil services: +2.45%
XNG natural gas: +1.40%
OIX oil index: +1.32%

RLX retail index: +0.64%
BTK biotech index: +1.02%
XBD broker-dealers: +0.89%
GSO software index: +0.87%

The worst performers
NWX networking index: -0.80%
DRG drug index: -0.46%

 
 
  Jeff Bailey   2/9/2004,  12:12:46 PM
12:00 Internals at this Link

 
 
  Linda Piazza   2/9/2004,  11:56:11 AM
Here's something I'm watching on the Dow daily chart: Link

 
 
  Linda Piazza   2/9/2004,  11:35:11 AM
Those lower support levels for the OEX that I just listed might not be needed, as the OEX again appears to be finding support at that short-term rising trendline that began forming Friday afternoon.

 
 
  Linda Piazza   2/9/2004,  11:32:50 AM
If the OEX should decline below midline Keltner support, or if that support should continue lower during the day, then I would expect the OEX to find next strong support on its 60-minute 100/130-pma's, at 562.13 and 561.02, respectively. Lower Keltner support has risen to 560.75, so is drawing closer to the support shown by those moving averages. If the OEX did not find support there, the tenor might have changed, but we'd have to see whether the Keltner channels had moved lower, too. Otherwise, a violation of those channels to the downside would predict a short-term oversold condition, perhaps suggesting that the support had just been overrun.

One note, however: Today, the OEX reached a high that equaled the February 2 high with some 60-minute oscillators showing higher highs. If the OEX should continue turning down, that's showing bearish divergence. I certainly wouldn't suggest jumping in with bearish plays on this evidence alone, as we've seen how reliable oscillator evidence can be, but it does warn traders to be watchful.

 
 
  Ray Cummins   2/9/2004,  11:23:07 AM
Spreads/Combos & Premium-Selling -- Portfolio Activity

As the morning wears on in absolutely lackluster fashion, there is little notable activity in the portfolio. Among the new positions, Countrywide Finance (NYSE:CFC) and Netflix (NASDAQ:NFLX) are enjoying continued buying pressure; +$1.90 at $87.44 and +$2.04 at $78.67, respectively. Kohl's (NYSE:KSS), Standard Pacific (NYSE:SPF) and Mediimune (NASDAQ:MEDI) are higher as well, but all three issues should offer favorable entries for spread traders. Among the bearish plays, Sohu.com (NASDAQ:SOHU) is rebounding from recent losses, up $1.24 at $30.29, and the bounce can be used by "premium-sellers" to increase the credit in the sold (short) call at $35. In the straddles group, all three "earnings speculation" plays are virtually unchanged, thus offering excellent entry opportunities in those positions.

 
 
  Linda Piazza   2/9/2004,  11:13:19 AM
The OEX has now reached that short-term ascending trendline that began forming Friday afternoon, also the location of Keltner channel support. Stronger support lies at the central channel support, now at 563.73.

 
 
  Jeff Bailey   2/9/2004,  11:12:32 AM
11:00 Internals at this Link

 
 
  Linda Piazza   2/9/2004,  11:02:03 AM
The short-term ascending trendline from which the OEX bounced earlier this morning has now risen to 564.70, near Keltner channel support. To continue the short-term trend, we should see this trendline continue to provide support. The OEX is trying to bounce from above that trendline, however, as it perhaps coils into a series of lower highs and higher lows.

 
 
  Linda Piazza   2/9/2004,  10:38:56 AM
Hmm. Volume looks really light this morning on the NYSE-traded stocks, with total volume as of a few minutes ago only 237 million on the NYSE. It was a somewhat stronger 418 million on the Nasdaq.

 
 
  Linda Piazza   2/9/2004,  10:36:39 AM
The OEX's decline this morning has been a gentle pullback within the center of the shortest-term of the Keltner channels I watch. Unless something changes, then, I'm looking for support to hold near or slightly above the central Keltner channel support, currently at 563.57. That's analogous to the resistance that showed up through much of the recent congestion zone, so would amount to a pullback to establish support at previous resistance.

 
 
  Linda Piazza   2/9/2004,  10:32:41 AM
Although the SOX surpassed its 30-minute 100/130-pma's Friday at midday, the COMPX is just now pulling above its 130-pma, with the SOX having led it here, as is usual. This morning has seen a couple of small-bodied candles perched on that 30-minute 130-pma. They haven't yet soared above it, and still remain within a distance that might tell us the average is still being tested rather than that the COMPX has safely cleared it. If SOX action on Friday is any predictor, the COMPX will climb, but perhaps that still depends on the SOX, with the SOX needing to add to Friday's gains. Since the SOX doesn't usually stack one big-range day on top of another, I'm not sure how likely that will be, but perhaps other tech sectors will pick up the slack if the SOX doesn't gain. It's still looking a bit unclear to me.

 
 
  Jeff Bailey   2/9/2004,  10:13:27 AM
10:00 Internals at this Link

Friday's Internals at this Link

 
 
  Linda Piazza   2/9/2004,  10:12:09 AM
The OEX is just hitting short-term support at 564.50, with that support offered by a short-term ascending trendline formed from Friday afternoon's lows. Note: As I began typing, the OEX began bouncing from that trendline, but so far, it looks like a reflexive bounce only. Watch to see if the OEX can hit a new five-minute high or instead achieves a lower five-minute high.

 
 
  Linda Piazza   2/9/2004,  10:09:13 AM
The SOX had a big-range day on Friday, climbing strongly. Over the last few months, the SOX tends to follow such big-range days with either smaller-range days in which it gains and produces small-bodied candles, high-wave doji days, or sometimes with big drops. The drops are less frequent, with doji being the most frequent candlestick formation seen after such big gains. These aren't predictions of today's action, but do suggest that daytrading SOX bulls might have trouble reaping many gains today if that pattern persists.

 
 
  Linda Piazza   2/9/2004,  10:03:35 AM
So far today, the Dow's action still fits within the possibility of a H&S developing on the daily chart. The oscillators give mixed evidence, however, and certainly don't predict that such a formation will be confirmed or its downside target met if it does confirm. Price action isn't showing a lot of weakness as yet, either, with price holding well above the 21-dma. Still, it's something to put on the radar screen, even if none of us puts much faith in H&S formations on daily charts any longer. This one did have bearish price/MACD divergence as the head was formed.

 
 
  Jonathan Levinson   2/9/2004,  10:02:37 AM
10:00am U.S. DEC. WHOLESALE SALES UP 1%, UP 8% YEAR-OVER-YEAR

Little reaction from the futures so far, Dow futs creeping back up to unchanged.

 
 
  Jonathan Levinson   2/9/2004,  10:01:33 AM
10:00am U.S. DEC. WHOLESALE INVENTORIES UP 0.6%, MOST IN 1 YEAR

 
 
  Jonathan Levinson   2/9/2004,  10:00:30 AM
Wholesale inventories +.6%.

 
 
  Jonathan Levinson   2/9/2004,  10:00:12 AM
10:00am U.S. WHOLESALE INVENTORY-SALES RATIO RECORD LOW 1.17

 
 
  Jonathan Levinson   2/9/2004,  9:57:31 AM
Awaiting wholesale inventories, est. .3% but with range up to .5%. Due in 2 minutes.

 
 
  Jonathan Levinson   2/9/2004,  9:53:45 AM
A generous 6B overnight repo from the Fed replaces the expiring 1.5B for a net gain of 4.5B today.

 
 
  Linda Piazza   2/9/2004,  9:52:10 AM
So far, the OEX hasn't been able to maintain levels above the midpoint of the first five-minute range, indicating weakness in the earliest trading. We've seen enough trading, however, to begin to move toward other benchmarks of OEX strength or weakness, such as Jeff's 5MRT system. So far, the OEX has remained within the neutral zone depicted by that system. Keltner channels continue to show the vulnerability--but not the prediction--to more downside. Before we see how vulnerable the OEX is to the downside, however, the OEX may bounce first. It's nearing 564.76 Keltner support as five-minute oscillators near levels showing the OEX oversold on a short-term basis. Next strong resistance lies at 566.16 and above. It's possible that we could see the OEX continue to hug the upper Keltner channels for a while, so that vulnerability may not be seen today. Let's watch.

 
 
  Linda Piazza   2/9/2004,  9:46:54 AM
The TRAN does battle with the 2900 level this morning. The 38.2% retracement of the plunge from the 1/22 high lies at about 2919, with the high today just above 2902. The TRAN has currently slipped back beneath 2900, but only barely beneath that level. It's common for 1/3 to 1/2 of a big move to be retraced, but we can't really consider the TRAN's climb bullish until it maintains levels above a 50% retracement of that plunge.

 
 
  Jeff Bailey   2/9/2004,  9:44:17 AM
QQQ $37.25 +0.32% .... updated QQQ chart with new WEEKLY retracement/pivot levels. Link

 
 
  Linda Piazza   2/9/2004,  9:36:55 AM
During the first five minutes of trading, the OEX spanned a range from 566.53 to 565.06, with a midpoint at 565.80, and with the OEX currently near and slightly below that midpoint. We haven't really seen the first retracement, however, and that may change the outlook. Keltner channels show strongest support below the current level at 563.19-563.58, the mid-channel support level. I note an ascending trendline also at 564.44, too, however.

 
 
  Jeff Bailey   2/9/2004,  9:30:26 AM
S&P 500 (SPX.X) Chart with new weekly pivot retracment/levels. Link

 
 
  Linda Piazza   2/9/2004,  9:26:51 AM
It was great to have Leigh Stevens back this weekend and to read his input on the OEX. For those of you who might not yet have read it, take a look at Sunday's Index Trader Wrap: Link

As I mentioned Friday afternoon, the OEX opened the day by breaking above the upper Keltner channel boundary and spent the rest of the day hugging that upper boundary. Although the OEX occasionally spends an entire day and sometimes even two hugging an outer Keltner boundary, it's a bit unusual for it to do so. The longer it does, the more likely it might be that the OEX's next retracement might be to the bottom Keltner channel rather than to midline Keltner support. Midline support currently lies at 563.13, with bottom support at 560.12, but both are rising. The daily chart shows the short-term 5(3)3 stochastics in full bull cycle but the longer-term 21(3)3's not yet fully committed, not yet making a bullish kiss. RSI had hooked up, but then flattened in the afternoon. MACD had been headed down, but flattened. There's mixed evidence here, but then oscillators haven't been the best indicators of price action, either, lately. The price chart showed the OEX breaking above the 563.50-563.70 level that had topped most price movements over the previous trading sessions, but not above the 566.42 resistance that had turned it back on 2/02. Still, the OEX looks to be headed up again, perhaps into a lower high or perhaps an equal high, as Leigh suggested in his wrap. We all know that it could also reach new highs. I'm watching that possible H&S on the Dow, without putting too much faith in to H&S formations as they've failed so often this last year. Still, the possibility exits in this index that's so closely watched by retail investors.

 
 
  Jeff Bailey   2/9/2004,  9:26:00 AM
In what has started to become a regular event. HL Camp & Company has not posted its current buy/sell program premium levels. When they do, I will update here in the market monitor.

 
 
  Jeff Bailey   2/9/2004,  9:19:52 AM
09:00 Update at this Link

 
 
  Jonathan Levinson   2/9/2004,  9:17:48 AM
The Fed has a relatively small weekend repo of 1.5B expiring today. We await the 10AM announcement to determine what the Fed's bias for the day will be.

 
 
  Jonathan Levinson   2/9/2004,  8:26:54 AM
Full text of the President's interview on Meet the Press: Link

 
 
  Jonathan Levinson   2/9/2004,  8:20:19 AM
We await wholesale inventories for December, with estimates ranging from .3% to .5%, to be released at 10AM.

 
 
  Linda Piazza   2/9/2004,  7:24:28 AM
Good morning. With the dollar showing strength as the currency markets opened Sunday, the Nikkei opened above 10,500 and soon climbed within five points of 10,600. That was to be its high of the day, however, as the Nikkei dropped through the rest of the day. It eventually fell 237 points from its day's high, but moved up a few points into the close, closing down 58.31 points or 0.56%, at 10,402.61. Tokyo Electron and Matsushita Electric Industrial, two companies reporting earnings on Friday, helped boost enthusiasm in early trading. Tokyo Electron said it was seeing strong demand for semiconductors, and raised its earnings forecast for the year as had Matsushita earlier. One source listed Tokyo Electron as the world's second-largest marker of semiconductor production equipment, so if anyone should know about demand for semis, Tokyo Electron should. Other tech stocks climbed in early trading, too. Toyota also led the early gainers.

By the end of the day, Toyota was down 1.1%, but most of the tech stocks mentioned earlier retained at least some of their gains. Headline stocks headed lower included NTT after the company decided not to award across-the-board pay hikes, sending NTT and NTT DoCoMo lower. Yoshinoya D&C, a beef bowl chain, said that it will no longer serve beef dishes as a result of the government's ban on U.S. beef, sending this company's stock lower. One report said that the government might consider allowing imports of U.S. beef if all imported beef is tested for mad-cow disease.

Profit-taking came due to many reasons, some associated with normal February patterns for the Nikkei and some due to a feeling that the dollar's strength will reverse again and that the early strength as currency markets opened was a short-term reaction to the G-7 meeting's conclusion. Although the G-7 statement said that "excessive volatility" of exchange rates is undesirable, no direct threat of intervention was offered, so many feel that the dollar will decline again. Others attributed the profit taking that ensued to a massive IPO to be offered by Shinsei Bank next week. Other bank stocks were mixed ahead of that IPO. Investors also had to mull over a number of economic releases. According to the Japan Society of Industrial Machinery Manufacturers, full year 2003 industrial machinery imports rose 62.5% over the previous year's on a contract basis. The diffusion index of economic confidence for the non-manufacturing sector fell to 48.6, below the boom-or-bust 50 mark. January's Japanese bank lending fell 5.1% from the year-ago level. Money supply rose 1.6 from the year-ago level.

Other Asian bourses mostly traded higher as tech stocks gained throughout Asia. The Taiwan Weighted gained 1.73%, with Taiwan Semiconductor rising. South Korea's Kospi gained 1.71%. In South Korea, LG Electronics reported a net loss smaller than expected, sending the stock higher. Samsung Electronics also gained. Singapore's Straits Times gained 1.82%. Hong Kong's Hang Seng gained 2.01% and China's Shanghai Composite climbed 1.45%.

Almost all European bourses trade higher, too. Early risers grabbing headlines included Ericsson, boosted by its own earnings report last week and a Morgan Stanley upgrade today to neutral from underweight; Nokia, rising after it said it would buy Psion's stake in Symbian, a wireless operating systems developer; British Airways, reporting profits higher than expectations; and Philips Electronics, gaining after talking about a Chinese joint venture with Neusoft Group to produce medical-imaging equipment. Sectors improving included airliners and oil majors. When Morgan Stanley upgraded Ericsson, it downgraded Alcatel to an underweight rating from its former equal weight, but Alcatel was gaining, too. Morgan Stanley listed its new preference for wireless over wireline equipment making when deciding on new ratings.

As of this writing, the FTSE 100 had gained 30 points or 0.68%, to trade at 4432.70. The CAC 40 had gained 45.37 points or 1.25%, to trade at 3670.09. The DAX had traded higher by 52.64 points or 1.30%, to 4097.63. The DAX has been trending just under 4100 for almost four hours now, not yet able to maintain levels above 4100, but not falling back from that resistance level, either.

 
 
  OI Technical Staff   2/8/2004,  5:23:26 PM
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