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  Jeff Bailey   2/17/200,  6:01:41 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   2/17/200,  5:36:17 PM
Rambus (RMBS) $25.84 +1.21% ... Wasn't the FTC ruling deadline today? I can't find anything on it. Anyone know the story?

There were reports that an FTC ruling was due out today, but I have not seen any real confirmation of a set in stone date or time line.

Late Friday, RMBS did say it may file a lawsuit as early as next quarter based on evidence it says indicates that computer memory makers worked in concert to deter market acceptance of RMBS' memory product.

  Jeff Bailey   2/17/200,  5:15:01 PM
Closing Internals at this Link

  Jim Brown   2/17/200,  4:25:47 PM
BRCM just announced a conference call at 1:45 PM tomorroe (Pacific time) to discuss a "stronger business outlook".

  Jeff Bailey   2/17/200,  4:19:14 PM
Yes Jane ... "good gravy" is substituted for other remarks I might make, which might be in violation of FCC rules and regulations.

  Jane Fox   2/17/200,  4:15:14 PM
Jeff Good gravy is that your granma talking again?

  Jeff Bailey   2/17/200,  4:12:06 PM
Reuters Group (RTRSY) $49.15 +21.4% Link ... good gravy... stock surged today after company warned that 2003 pre-tax profit was 49 million pounds, compared to a loss of 493 million pounds in 2002. This equals quarterly EPS of 3.1 pence compared to year-ago loss of 29 pence for 2002.

UBS estimated the consensus estimates for 2004 are likely to see upgrades of around 50% related to improved cost savings as well as the base effect of 2003.

  Linda Piazza   2/17/200,  4:01:46 PM
The OEX ended the day just above that central Keltner support, with the oscillators trying to turn up again. It did not make a lower five-minute low. It's ending the day at the bottom of the afternoon consolidation zone. Sigh. This is not a clear-cut victory for either bulls or bears, but it is exactly what I expected to see today: a continued test and retest of upper Keltner channel and 0.675% envelope resistance as the oversold pressure was relieved on 30- and 60-minute charts. That resistance was rising as the day progressed, and the OEX rose with it, but the OEX never could break out.

  Jim Brown   2/17/200,  3:58:53 PM
Earnings after the close:

AETH est -0.13, act = never released
BRKT est +0.04, act +0.15
DITC est +0.18, act = +0.20
KOPN est -0.01, act = -0.01
NTES est +0.32, act = +0.36
NTAP est +0.10, act = +0.11 beat
PLAB est +0.02, act = +0.07
SIMG est +0.02, act = +0.03
ANF est +0.95, act = +0.96 rev lower than est
CQB est +0.11, act = +0.19
OMM est +0.35, act = +0.34
A est +0.22, act = +0.21 miss

  Linda Piazza   2/17/200,  3:55:43 PM
The OEX does appear to be headed toward central Keltner channel support, currently from 570.15-570.24. Below that is the descending trendline off the 2/11 high, currently at 569.73, but descending, and then the 30-minute 18/21-pma's, at 569.64 and 569.07.

  Linda Piazza   2/17/200,  3:51:56 PM
How's the TRAN doing this afternoon? Currently, it's sitting slightly above the 38.2% retracement of the recent plunge, with that retracement level at 2919.27 and with the TRAN currently at 2920.92. The TRAN sprang up from its 10-dma today, and it appears to be trapped between the 38.2% and 50% retracement levels of that recent plunge. A host of moving averages course down toward that 50% retracement level, including the 21-dma, now at 2954.42 and just above the 2951.88 that constitutes the 50% retracement. So far, the TRAN has not been able to maintain a level above the 50% retracement of the recent plunge, so the bounce cannot be viewed as bullish as yet. Friday's candle completed a three-candle reversal signal known as an evening-star, indicating that the TRAN might head down again, but there's been little follow-through on that reversal today, and oscillators are as inconclusive as today's action has been.

  Linda Piazza   2/17/200,  3:42:56 PM
The OEX is hitting the Keltner support at which the last bull-flag pullback stopped its descent and began climbing. That particular Keltner support is near 571.16-571.57. If it's going to rise into the close, it should rise from this level. If not, the OEX may be headed down toward central Keltner channel support again, currently near 570.15-570.30.

  Linda Piazza   2/17/200,  3:39:17 PM
After touching the top 0.675% 30-minute envelope, as the OEX did this morning, and then pulling away from that envelope, the OEX usually either trades sideways until the 21-pma rises underneath the price or else shortcuts the process and dips down to the 21-pma. The OEX has begun pulling away since that touch of the envelope, but there's sometimes another thrust up toward that upper envelope before the OEX finally gives up the test. A last-minute short-covering or buying spree could push it up there again today, meeting the parameters of a renewed thrust up toward that resistance. That upper envelope is now at 573.48, just above the recent closing high, and the 21-pma is below at 569.11, near the current location of the descending trendline that had been capping prices since 2/11. A climb up toward the rising envelope and a close at that envelope might see the OEX hitting the new closing high desired by bullish traders. A slide down toward the 21-pma would constitute a retest of that trendline.

  Ray Cummins   2/17/200,  3:35:18 PM
Spreads/Combos/Premium Selling -- Monster Worldwide (NASDAQ:MNST)

Despite the market-wide rally, shares of the global provider of career solutions dipped to a low near $21.36 today after the issue was downgraded by Wachovia. The move was fortunate for our new straddle position, providing a gain of up to $0.90 on $2.60 invested in less than two weeks.

  James Brown   2/17/200,  3:31:48 PM
Previous OI call play ABK is finally showing some strength with a 1.9% gain. Unfortunately, the stock is still struggling with resistance near 77.50. FYI: we replaced ABK with RNR, which is currently up 2.38%.

  James Brown   2/17/200,  3:28:10 PM
There is no post-Valentines depression for shares of chocolate-maker Hershey's (HSY). The company announced its quarterly cash dividend will be 0.395 cents per share, payable in March, and the stock is up 1.12%, trading near all-time highs under resistance at $80.00.

  Ray Cummins   2/17/200,  3:27:19 PM
Spreads/Combos/Premium Selling -- Market Movers

A number of lower-priced technology stocks are enjoying continued buying pressure and among those issues, Interdigital (NASDAQ:IDCC), Laserscope (NASDAQ:LSCP) and Overstock.com (NASDAQ:OSTK) stand out as possible "premium-selling" positions. In the mid-cap group, Broadcom (NASDAQ:BRCM), Cerner (NASDAQ:CERN) and Intuit (NASDAQ:INTU) appear to be resuming their recent bullish trends. Solid performers in the "high-dollar" category include Bears Stearns (NYSE:BSC), Goldman Sachs (NYSE:GS), MDC Holdings (NYSE:MDC), Standard Pacific (NYSE:SPF), Teva Pharmaceuticals (NASDAQ:TEVA), and KOS Pharmaceuticals (NASDAQ:KOSP).

  James Brown   2/17/200,  3:19:54 PM
Hmmm... shares of Avon Products (AVP) are up 3.2% on no apparent catalyst. The stock has been consolidating sideways near the $68 mark over the last two weeks. Now shares are trading near all-time highs under resistance at $70.00.

  Ray Cummins   2/17/200,  3:12:50 PM
Spreads/Combos/Premium Selling -- Portfolio Activity

Among the new positions in our portfolio, Express Scripts (NASDAQ:ESRX), Nabors Industries (NYSE:NBR) and Alcoa (NYSE:AA) are participating in the bullish activity while Genetech (NYSE:DNA) and Neopharma (NASDAQ:NEOL) are languishing slightly "in the red." In contrast, Amkor (NASDAQ:AMKR), Novellus (NASDAQ:NVLS), Interactivecorp (NASDAQ:IACI) and KLA-Tencor (NASDAQ:KLAC) offered excellent entry opportunities for bearish traders as they moved higher in conjunction with the broader market. In the delta-neutral category, straddles in Credence Systems (NASDAQ:CMOS), Netease.com (NASDAQ:NTES) and Serena (NASDAQ:SRNS) were available at acceptable opening prices.

  Jeff Bailey   2/17/200,  3:12:19 PM
03:00 Internals at this Link

  Linda Piazza   2/17/200,  3:08:46 PM
OEX bulls will be aiming for a close above 573.44, the 1/26 closing level, and the highest close on this swing higher. Bears don't want to see a close above that level, but actually the OEX has moved into a congestion zone from the weekly chart that extends from about 572 all the way up to 615, with strongest resistance at about 572.50-591.50. It should be tough going for the OEX to zoom through this resistance zone without a prolonged period consolidating above the 38.2% retracement of the bear-market decline (at 561.23), but we've seen other stocks or indices that shot right from that retracement level straight to a 50% retracement level, which would be at just under 615 for the OEX.

  Jane Fox   2/17/200,  3:05:08 PM
DateLine Bloomberg U.S. students ranked 19th in a 1999 study of mathematical ability among eighth-graders in 38 countries. Four years earlier, as fourth-graders, the same cohort of U.S. students had ranked seventh. Students from Singapore, South Korea, Taiwan, Hong Kong and Japan completed the Top 5 list of 1999. China and India didn't participate in the study.

"What will ultimately determine standard of living of this country is the skill of the people," Alan Greenspan told the Senate Banking committee last week. "We do something wrong, which obviously people in Singapore, Hong Kong, Korea and Japan do far better. Teaching in these strange, exotic places seems for some reason to be far better than we can do it."

  Jeff Bailey   2/17/200,  3:01:57 PM
Gateway Inc. (GTW) $5.09 +12.8% ... strong session on heavy volume. No news I can find. Stock threatens to fill gap lower from 10/23/03-10/24/03 $6.06-$5.07.

I'm setting a downside alert at $4.75 for potential bullish entry, to then play a pop back higher to $5.50-$6.00.

  Jane Fox   2/17/200,  3:00:28 PM
A federal appeals court upheld the government's do-not-call registry and rejected telemarketer's claims that the registry treads on free speech rights. Under the law, a company that has an existing business relationship with an individual can continue to call for up to 18 months after the start of the relationship. And a company to which a consumer makes an inquiry can call for up to three months. In addition, political organizations, charities and telephone pollsters, as long as they aren't selling a product, are exempt from the list.

  Ray Cummins   2/17/200,  2:58:37 PM
Spreads/Combos -- E-mail Replies: Position Entry - PART II

As you mentioned, the problem comes when you don't get filled initially (do you try to chase the play?) or when the issue moves in opposition of the expected trend after just a few sessions (regardless of whether you have actually opened the spread). In short, every decision you make about trading should be based on your analysis of the underlying issue and your forecast for its future movement. That assessment is then factored into the risk-reward outlook for the strategy (or the position) you are pursuing. Of course, that's a very subjective task, thus the best suggestion I can offer is: if the current conditions dictate that the position is no longer viable (based on your personal criteria), then it should be closed (or avoided). For more information on trading strategies and entry/exit techniques, look in the "Education" section on the home page (left side) of the OIN website.

  Linda Piazza   2/17/200,  2:53:31 PM
The OEX hasn't gotten anywhere near central Keltner channel support today, but neither has it pierced upper Keltner channel resistance. (Actually, it may have done so in early trading this morning, on that first five-minute candle, but Keltner channels have a way of redrawing themselves after-the-fact, too, smoothing out angles.) With the OEX climbing steadily within the top half of the Keltner channels without piercing them, the climb looks a bit more sustainable than it would otherwise. Still, the OEX will need to come down to re-establish Keltner mid-channel support at some time, with that support now having risen to 569.86. Resistance has risen, too, to 572.52 on the Keltner channels, and to 572.84 on both the 30- and 60-minute 0.675% envelopes.

  Ray Cummins   2/17/200,  2:53:13 PM
Spreads/Combos -- E-mail Replies: Position Entry - PART I

(condensed) Hello Ray, I have some questions about trading the spread plays in the newsletter. My biggest problem is how long to leave an order open when trying to enter the play. If I don't get executed when I place the trade at the "target" price, how do I know when to pull the order? It seems that you could get into a play a day or more later, when the stock moves in the opposite direction. Are there any rules to help someone decide what to use as an opening price and how to determine when the position is no longer a good trade? I just don't want to leave the order active after the stock starts to go in the wrong direction because I could be getting into a losing spread. LI

Hello LI, Thank you for using the OIN to supplement your search for profitable trading positions. All of us on the newsletter staff pride ourselves in offering some of the best stock and option research available on the Internet. Indeed, spreads and combinations can be a challenging endeavor for new option traders and unfortunately, the ability to profit consistently with this approach is something that takes time to learn. Our goal at the OIN is to help you acquire the knowledge necessary to succeed in this difficult undertaking. Regarding the "target" prices: Obviously, you can't always achieve the target credit in these positions. That's why it's called a "target." It is simply a recommended entry point; just MY opinion of what a trader might use as an initial "limit" price for the spread order, and it usually a reasonable cost (or credit) to initiate the play even with small changes in the stock and option quotes.

  James Brown   2/17/200,  2:51:52 PM
Software bulls should take note of the bullish breakout in Infosys Technologies (INFY). The stock has been consolidating under the $90 level all month with a slow trend of higher lows that has finally blossomed into a breakout over the $90 level and its 50-dma. The next hurdle is probably $95-96 but the real target now is the January highs near $101.

  James Brown   2/17/200,  2:49:51 PM
News that Moscow authorities have dropped a licenses violations case against Vimpel Commmunications (VIP) has sent shares soaring (+8.54%) to a new high above resistance at the $80 level.

  Jonathan Levinson   2/17/200,  2:49:08 PM
Try this one, Jeff. 85 looks about right: Link

  Jeff Bailey   2/17/200,  2:48:16 PM
U.S. Dollar Index (dx00y) 85.00 -0.54% ... I don't have intra-day chart on dollar today, and this often happens on multiple data feeds when a U.S. Holiday is found the day prior. I'm showing intra-day low of 84.80, which would be close to this week's WEEKLY S1 of 84.77.

Newmont Mining (NEM) $45.34 +2.44% while higher remains rather tentative at that rounding lower 50-day SMA now at $45.57.

  Jeff Bailey   2/17/200,  2:43:44 PM
Buy/Sell program premium alerts other than the opening bell buy program premium of $0.44 being hit, I don't show any other buy or sell program premium levels being achieved.

  Linda Piazza   2/17/200,  2:41:19 PM
The last 30-minute OEX close was a few cents above the Donchian channel upper resistance, so officially a breakout signal, but not much of one. By "few cents," I mean 5 cents. So far, the OEX was turned back within that zone predicted by Keltner channels and 0.675% envelopes on the 30- and 60-minute charts, the zone that I thought would turn it back most of the day. Today to me was a kind of give-away day with the single purpose of expending that oversold energy, testing these levels most of the day. I wouldn't be surprised to see almost anything happen during the last hour of trading today, however.

  Jeff Bailey   2/17/200,  2:41:01 PM
HL Camp & Company has posted buy/sell program premium levels. Though they say they are for Monday, I think they are for today. Buying at $0.44 and selling at $-1.55.

  James Brown   2/17/200,  2:36:50 PM
Dow component Caterpillar (CAT) reported that machine sales rose 11% worldwide for the three months ending in January, "boosted by a strong 27% gain in N. America" (-Dow Jones).

The stock is up almost 3% and quickly approaching resistance at $80 and its 50-dma at 80.70. Its MACD just produced a fresh buy signal.

Bulls could use a trigger over the 50-dma and target resistance at $85.

  James Brown   2/17/200,  2:29:22 PM
Doing its best impression of a bottle rocket, shares of Timberland Co (TBL) have been in a non-stop rally since its early February earnings, where the company beat estimates by 15 cents. The stock is currently trading at new 3-year highs.

  Linda Piazza   2/17/200,  2:28:12 PM
Since the OEX traded such a big range during the first five minutes of trading today, I switched to the first one-minute OEX range (566.98 to 568.47) to watch the OEX today according to Jeff's MRT system. We've had our first five-minute close of the day above the bullish #2 predicted by that system, with a close over 571.80. The OEX has pierced that level on a five-minute basis a time or two today, but hasn't until now had a five-minute close above it. The upside target predicted by the 1MRT system is 574.78, which would be a breakout above the Donchian channels, the Keltner channels, and the 30-minute 0.675% envelopes. The 1.35% envelopes predict upside to 576-577 if the 0.675% envelopes can be surpassed. There's not good correlation there with the 1MRT target and the 1.35% envelope targets, so I'm not sure about that predicted 1MRT upside, but that's what that system suggests. I'm still wondering whether the 572.50-572.80 zone won't stop the OEX.

  Jeff Bailey   2/17/200,  2:25:15 PM
Lifeway Foods (LWAY) $28.58 +30.5% Link ... on Friday, company announced 2:1 stock split. This maker of cultured dairy products known as kefir, has been on the move after the company said early last week that it is poised to grow as it targets products to the Hispanic community in the U.S.

  James Brown   2/17/200,  2:24:53 PM
Another bullish candidate is Harman Intl Industries (HAR). The stock is breaking out over short-term resistance in the 75.00-75.50 range and looks poised to make a run towards $80.00 again.

  James Brown   2/17/200,  2:19:21 PM
Bulls may want to keep an eye on Barr Pharmaceuticals (BRL). The stock broke out over recent resistance at 80.50 earlier today but has since pulled back under this level while remaining above the $80 mark. Shares have been consolidating sideways the last several days between $78 and 80.50. Last week BRL announced a 3:2 stock split but shares didn't react. A trigger over the current high at 80.60 might be a worthwhile entry point. Target the December highs near $85.00. Currently its P&F chart points to a $97 price target.

  Linda Piazza   2/17/200,  2:14:44 PM
On the OEX five-minute chart, the current pullback looks a bit like a bull-flag pullback. If that's so, we should look for a breakout to the upside, but Keltner channel resistance shows that the OEX will hit strong resistance again at about 572.28. That's within the same zone that the 30-minute and 60-minute 0.675% envelopes predict at upside targets, too. Of course, any of these envelopes or channels can be used to identify breakouts, too, but any time there's a breakout, you're also looking at a short-term overbought condition. If I had to guess, I'd guess just as I have been all day: a continued testing of this zone while 30-minute and 60-minute oscillators work off last week's oversold pressures. I'm just not sure what happens next.

  Jeff Bailey   2/17/200,  2:08:21 PM
02:00 Internals at this Link

  Linda Piazza   2/17/200,  1:47:27 PM
Shortly after I wrote my 13:07 post about where Donchian channels were showing upper resistance, and said that the OEX was likely to close that 30-minute period below 571.97, the OEX headed up. About 10 minutes later, it was at 571.97, and it certainly didn't look as if it was going to stop there, but it then headed down and indeed closed that 30-minute period where Donchian channels suggested it would--below 571.97. Of course, the OEX has to break out of those Donchian channels some direction or another, some time or another, or it would just trade in a tight range forever. However, Donchian channels are remarkably good at showing where the OEX won't close a 30-minute period.

  James Brown   2/17/200,  1:39:31 PM
Sector update on today's best performers...

DJUSHB homebuilder index (+2.74%) is extending its gains and looks like it will close over the 600 level for the first time this year.

XAU gold & silver index (+2.43%) is making headway in the battle for its 50-dma but remains under resistance at the 105 level. Gold futures are up over $5.00 to the $416 an ounce level.

XAL airline stocks (+2.7%) continue to rise in their new channel after bottoming on Feb. 4th. At least it looks like a new channel but its narrow range suggests it could be a bear flag. The XAL's MACD just printed a new buy signal.

XBD broker-deal index (+2.34%) is trading at a new all-time high today, above its January peak. Technical oscillators are positive. Shares of Merrill Lynch (MER) are really leading the group higher with a 3.96% gain today hitting new 2 1/2 year highs. MWD, LEH and LM all look bullish as well.

  Linda Piazza   2/17/200,  1:32:39 PM
The BIX did make it above Friday's high and also edged just above the 1/28 high, too. However, some oscillators are currently showing bearish price/oscillator action, with oscillators so far at lower highs while price was making that higher high. Actually, the BIX high of the day was in a range that might be considered an equal high with that 1/28 high, so readers should now be wary if the BIX should pull back below 352.50, as the 21(3)3 stochastics indicate it's possible it might do. Those stochastics are now in the process of making a bearish kiss. Of course, a strong whoosh higher in price would unkiss those two lines. The Keltner channels indicate that the BIX might be more likely to head down toward that mid-channel support rather than up, however, with that support just above 355. Below that, there's not much Keltner support showing up until 353, the support also offered from the current consolidation zone. The BIX is trying to steady ahead of that central Keltner-channel support, at the current 355.68 level, but it's not clear whether it will be able to do so or not.

  James Brown   2/17/200,  1:13:36 PM
Our aggressive new put in Sina Corp (SINA) has been triggered with its breakdown through support at its 50-dma and the $39.35 level.

  Jeff Bailey   2/17/200,  1:11:52 PM
01:00 Internals at this Link

  Jim Brown   2/17/200,  1:11:51 PM
That last spike was rumored to have been caused by comments from Intel at their developers conference today.

  James Brown   2/17/200,  1:09:52 PM
a few minutes ago CNBC mentioned another new high for Copper prices again. I'm a little surprised that Phelps Dodge (PD) isn't trading higher than its current 1.44% gain today.

  Linda Piazza   2/17/200,  1:07:52 PM
I haven't mentioned Donchian channels in a while, but they've been doing a fair job today of pinpointing OEX resistance (on a closing basis) for the 30-minute candles. That resistance now lies at 571.97, so it's likely that the current 30-minute period will see a close below that level. Although the OEX does break out of the 30-minute Donchian channels, it rarely does it on a closing basis. A close above 571.97 would constitute another upside breakout signal, then, but would also suggest how overbought the OEX was on a 30-minute basis, as predicted by this method. This would be another case when bullish traders would be well advised to follow the OEX up with stops without necessarily signaling that the positions should be exited. I'd keep a watch on the TRIN and the advdec line (flat since the first five minutes of trade, but flat at a high level) to help me make decisions about either bearish or bullish plays. Bullish players now have risk at least down to 568.30-569.50 or so, the site of central Keltner channel support and the 30- and 60-minute 21-pma's, as well as the site of the former descending trendline that was violated this morning.

  James Brown   2/17/200,  1:07:25 PM
Current OI call play, homebuilder D.R.Horton (DHI), is up 4.59% to a new high at $31.85. Volume appears to be running about average.

  Jim Brown   2/17/200,  1:05:28 PM
Up volume 4:1 over declining volume across all markets. Advancers 4635 to 2102 decliners. Pretty bullish if it holds.

  James Brown   2/17/200,  1:05:21 PM
Gapping slightly higher today (+2.35%) is Fluor Corp (FLR). The company announced that it is the winner of a $154 million Iraq power contract. The rebound above $40 may be worth following.

  Jim Brown   2/17/200,  12:59:37 PM
NAHB Housing Market Index = 65 (est 66 - 72, consensus 68)

  James Brown   2/17/200,  12:57:21 PM
Shares of Charles Schwab (SCH) are looking bullish today with a 2.46% gain. Its MACD is about to produce a new buy signal and the stock looks ready to retest resistance at the $14.00 level.

The company announced that its trading activity rose 26% in January over December's numbers, which also represents a 62% gain over last January (2003). Yet trading activity in February has slowed a bit.

  Jim Brown   2/17/200,  12:56:50 PM
NAHB Housing Market Index in 3 min

  James Brown   2/17/200,  12:47:34 PM
S.G.Cowen is taking advantage of the recent weakness in Medtronic (MDT) and upgrading the stock from "market perform" to "strong buy". The upgrade has given MDT a 2% boost to breakout over its simple 200-dma.

Rival Guidant (GDT) is also up today and approaching resistance at the $64 level.

Meanwhile, rival St. Jude Medical (STJ) is only up a modest amount but bouncing near its 10-dma.

  Jeff Bailey   2/17/200,  12:47:10 PM
Express Scripts (ESRX) $72.76 +3.08% ... big move today and stock looks to close in on 52-week highs of $75.00. Today's trade has ESRX moving above its MONTHLY R1 of $72.23 with MONTHLY R2 ahead at $75.27.

  James Brown   2/17/200,  12:42:11 PM
For those of you following the AT&T Wireless (AWE) bidding war. A.G.Edwards issued a "sell" rating on the stock after shares of AWE popped 15.7% to $13.68 on the latest bid from Vodaphone. (actually, AWE was trading up more than 18% earlier today)

  Jeff Bailey   2/17/200,  12:32:41 PM
Swing trade long alert ... Citigroup (C) $50.13 +1.29% ... long here, stop $48.75, target $53.00.

  Jeff Bailey   2/17/200,  12:29:38 PM
Dow Jones Transports (TRAN) 2,926.35 +0.33% ... edging into positive territory. All equity-based sectors now showing gains.

Airlines (XAL.X) 62.91 +2.65%, Combined Telecom (IXTCX) 194.25 +2.51%, Broker/Dealer (XBD.X) 740.77 +2.4% (new highs) leading advance.

  Linda Piazza   2/17/200,  12:29:35 PM
The OEX has just touched the upper Keltner channel resistance again and has hit the 30-minute upper 0.675% envelope. It may be headed up to test the upper 60-minute 0.675% envelope at 572.87 currently. As I mentioned in my 11:51 post, I expected to see this zone tested and retested as 30-minute and 60-minute oscillators moved from levels indicating oversold conditions, relieving some of that oversold pressure, but I'm still not sure whether to expect the OEX to charge much higher. Based on several studies, the OEX should have difficulties doing that, but OEX investors haven't consulted me. If the index does move higher than 572.87, it's in a breakout zone based on those studies. That means just what it did earlier this morning: bulls should protect their profits with stops that follow the OEX higher. The TRIN never did get high enough to endorse bearish plays, but those who might have entered bearish trades anyway, ignoring the TRIN but basing their entries on an apparent downturn below that descending trendline, should honor stops that were set in accordance with individual preferences.

  Jeff Bailey   2/17/200,  12:27:08 PM
Major indices at their highs of the session. Looks like economic data from industrial sectors outweighing recent declines in consumer confidence surveys.

  Jeff Bailey   2/17/200,  12:21:26 PM
Stillwater Mining (SWC) $13.78 +6% Link ... X gets the square at $14.00.

Big test of resistance just ahead at $15.00 and bearish resistance trend.

  Linda Piazza   2/17/200,  12:20:51 PM
And my favorite, the OEX. Here's how it looks with relationship to that 72-ema: Link Notice that it's pulled further away from that MA than it usually does?

  Jeff Bailey   2/17/200,  12:19:22 PM
S&P 500 Index (SPX.X) 1,157.09 +0.98% ... session high and WEEKLY R1 here.

  Linda Piazza   2/17/200,  12:17:11 PM
Also just for fun during the lunchtime lull, here's the airline index, the XAL, with the 72-ema: Link I'm not trying to promote an interest in this particular moving average, but just intrigued by what was essentially a mistake turning up some congruences. Perhaps you could pick out any average at random and find some times when an index or stock appears to trade in congruence with that average, but this effect appears limited to certain sectors or stocks, such as some tech-related stocks or indices and some transportation-related ones, so it doesn't appear coincidental. At least, that's what I've found so far.

  Jonathan Levinson   2/17/200,  12:16:57 PM
Good find, James.

  James Brown   2/17/200,  12:14:59 PM
State Street Bank (STT) is reporting that its February investor confidence readings have shown a steep decline since the beginning of the year. The State Street Investor Confidence index has fallen more than 14 points from December to 94.9 in February, which suggests a much greater sense of caution among institutional traders. This is the lowest level since March and April of last year during the Iraq war. (source: Reuters)

  Jonathan Levinson   2/17/200,  12:11:01 PM
The put to call ratio is up to .66 and the VXO has dropped back to unchanged territory. That looks like an increase in put-selling to me, which would be bullish, but the absolute levels are still quite low, both for the p/c ratio and the VXO.

  James Brown   2/17/200,  12:08:47 PM
One of today's best performers is London-based Reuters Group (RTRSY). The company issued earnings early this morning (London time), which prompted a wave of earnings upgrades from British firms. Reuters reports that the company is on its way to recovery. Evidently so is the stock price. RTRSY bottomed near the $10 level during the first quarter of 2003. Today's 21% gain has the stock trading at $49.

  Linda Piazza   2/17/200,  12:04:34 PM
Here's something to study during the lunchtime lull. Here's a tech stock with the 72-ema imposed on the daily chart: Link I don't know why this works sometimes, but it does. I haven't been able to find another hidden average that's coming into play to account for this pattern.

  James Brown   2/17/200,  12:02:52 PM
Smith Barney is upgrading News Corp Ltd (NWS) to a buy. The upgrade has given the stock a small lift this morning, approaching new 2 1/2 year highs, but shares remain under long-time resistance at $40.00. Its MACD is bullish and shares are in a strong rising channel but they look a little short-term overbought.

  Jeff Bailey   2/17/200,  11:58:15 AM
Sun Communities (SUI) $41.18 +0.56% Link ... recouping some of Friday's losses.

  Jeff Bailey   2/17/200,  11:55:13 AM
Sears (S) $45.84 -0.32% .... challenging its currently flat 21-day SMA of $45.84 after morning high of $46.48.

  James Brown   2/17/200,  11:52:36 AM
Sector update as we approach the east coast lunch hour...

Strongest performers:
DJUSHB homebuilders: +2.5%
XAU gold & silver: +2.27%
XAL airlines index: +2.12%
XBD broker-deales: +2.10%

Under performing sectors
Dow Transports: +0.00% (just turned green)
BTK biotech index: +0.09%
DFI defense index: +0.24%
DRG drug index: +0.43%
GHA hardware index: +0.47%

  Linda Piazza   2/17/200,  11:51:00 AM
The 30- and 60-minute OEX charts show the OEX having scrambled just above that descending trendline off the 2/11 high and to be perched there, forming a small-bodied candle just above that resistance. If we are to believe this evidence--and there's no real reason we shouldn't except for the continuing weakness in the TRAN, a disturbing clue that all is not right, and some flattening OEX intraday oscillators--then the OEX should retest the 571.61-572.82 zone that marks 0.675% upper envelopes on both charts and upper Keltner resistance. What I most expected to see today was this zone tested and retested while some of the oversold pressure was relieved, but I'm not sure whether to expect a move higher than that.

  Jeff Bailey   2/17/200,  11:49:13 AM
Dow Jones Home Construction 608.23 +2.5% ... strong gains among all sector components with DJUSHB kicking higher after 2-day consolidation at downward trend from all-time high of 622.21 set on December 12. Should look for retest of the 622 level with further upside target of 715 from fitted retracement. (Anchor low at recent low of 527.82, with fitting of 38.2% at 600, gives 50% at 621.84, 61.8% at 644.02, 80.9% at 679.94).

DJUSHB component gainers ... CHB $8.91 +4.82% Link , DHI $31.75 +4.26% Link , TOL $42.48 +3.81% Link and PHM $47.44 +3.13% Link .

  Jeff Bailey   2/17/200,  11:38:54 AM
Reuters reported that Comcast (CMCSA) $30.55 +2.17% has said it is not interested in Walt Disney (DIS) $26.78 -0.52% at current price.

  Jeff Bailey   2/17/200,  11:36:42 AM
11:00 Internals at this Link

  Linda Piazza   2/17/200,  11:34:38 AM
The TRAN bounced from its 10-dma and round-number support at 2900, and it's now back near its open level, which was also near that 72-ema that keeps coming into play with the TRAN. This isn't an "official" moving average that's frequently watched, but one I mistakenly converted to an ema and started watching on my daily charts after Jonathan mentioned watching the 72-sma on some intraday charts. Yet it has some resonance on the TRAN and some tech-related indices, or at least appears to do so. That average is now at 2916.58, with the TRAN currently at 2916.07. The 38.2% retracement of the recent plunge also lies at 2919.27, and could now provide resistance. As I mentioned last week, the TRAN's bounce won't be considered bullish until and unless it sustains levels above a 50% retracement of the recent plunge.

  Linda Piazza   2/17/200,  11:27:11 AM
Moments after my last post about the BIX, it did move higher, testing but not quite reaching Friday's 356.14 high. Was this "the" move higher I had expected? It may have been. While I felt that the BIX was going to try to drive higher, I wasn't sure of the outcome of that attempt. It's still difficult to tell if the BIX is through testing the highs from Friday and then from 1/28. On the five-minute Keltner channel, it's between upper level resistance (also historical resistance) and mid-channel support, with oscillators not conclusive, either.

  Linda Piazza   2/17/200,  11:08:09 AM
The BIX is one index showing strength today, although it hasn't yet pushed above Friday's high or the higher high produced on 1/28. That 1/28 high was 356.41, with the BIX currently at 355.72 as I type. Keltner charts show a possibility of the BIX reaching toward that 1/28 high, with upper Keltner resistance now at 356.37, but that also shows that the BIX will be overbought on a short-term basis if it touches that level. Five-minute indicators aren't clearly showing whether there's more likelihood for that touch to occur or for the BIX to roll over. Monthly resistance shows up at 356.67, but that was a one-month high only from 1998, so the BIX just doesn't have a lot of history or congestion at this level. Its all-time high was also achieved in 1998, and was 367.75. If I had to guess, I'd say that the BIX was going to try to drive higher, but after that, I'm not sure. This is make-it-or-break-it for this index, and we just have to see what happens, but as Jeff has pointed out in the past, stocks in this index impact the OEX, too.

  Jonathan Levinson   2/17/200,  11:04:37 AM
The p/c ratio has finally broken above .60, .63 currently, VXO down to 15.90.

  Linda Piazza   2/17/200,  10:55:42 AM
KO missed its opportunity last week to let us watch a bullish rising three methods candlestick formation confirm, with Friday's close far from the bullish confirmation level. That close and today's trading shows KO sliding lower along a former descending trendline that KO broke through last Monday, so it's possible that it's doing nothing more than establishing support along that trendline before it makes another attempt to push through gathered resistance just above last Monday's high. As it slid lower today, it came near a 50% retracement of its most recent climb, with that 50% retracement at about $50.74. Support from the former descending trendline, that 50% retracement and supposed round-number support at $50.00 all gather rather thickly now, so it's possible that KO could be preparing to move higher at any time, but if it instead rolls lower beneath that support, then the retracement is more than a bull flag pullback into support. So far, that looks like what's happening, although the failure last week to confirm that bullish formation adds some doubt. The weekly chart shows much resistance between about $52.65-54.00, so I'd be careful here if in a bullish play. It may be tough going from here. Actually, I'd be careful if in any play because KO has been known to act strangely during opex week and then to resume its normal course after opex week.

  Linda Piazza   2/17/200,  10:44:59 AM
Here's what's happening on the OEX 30-minute chart with respect to that descending trendline I've mentioned several times: Link

  Linda Piazza   2/17/200,  10:41:44 AM
Readers S.O'K. sent information that Bear Stearns had downgraded the railroad sector to a market-weight rating from a previous market-overweight rating, lowering estimates on CP, BNI, and UNP, and downgrading CP to peer perform from a previous outperform rating. Reader W.S. sent further information that CSFB had lowered the trucking sector. Thanks, everyone.

  Jonathan Levinson   2/17/200,  10:38:24 AM
The p/c ratio has risen to .56, VXO +2.43% at 15.63.

  Linda Piazza   2/17/200,  10:31:47 AM
A reader sent the following information about the transportation stocks: CNBC mentioned that one of the brokerage houses, didn't catch which one, downgraded the entire trucking sector due to a coming rising interest rate environment. Thanks, WS. I haven't been able to verify this information for myself after a search of several news sources, at least not yet, so I can't verify which brokerage firm it might have been.

  Linda Piazza   2/17/200,  10:21:02 AM
So far, the OEX continues to turn down at the descending trendline off the 2/11 high. The thirty-minute oscillators still indicate more upside, but that upside could take place while price bars consolidate below that trendline, too. Those in bullish plays should be considering where they should place stops, with the possibility that the OEX could reach back toward central Keltner support, now at 567.86, but that it could also break the current five-minute consolidation pattern to the upside and climb back toward upper Keltner resistance, now at 571.36. Those who wanted to enter bearish plays could look for further retests and rollovers below that descending trendline, but I'd sure like to see the TRIN higher before I considered a bearish entry, and I'd be considering a tight stop just above that trendline if I entered on that basis. We know what happens when bullish fervor propels the markets these days. Those 30-minute oscillators have a way to go before they've burned off all this oversold pressure, so that testing could go on quite a while and there could always be a move above the trendline, too.

  Jeff Bailey   2/17/200,  10:12:32 AM
10:00 Internals at this Link

Friday's Internals at this Link

  Jonathan Levinson   2/17/200,  10:08:26 AM
The current put to call ratio is .54, VXO flat at 15.63.

  Linda Piazza   2/17/200,  10:03:13 AM
Today's OEX high touched a descending trendline off the 2/11 high, with the OEX currently headed up again to retest that resistance.

  Jeff Bailey   2/17/200,  10:02:27 AM
S&P 500 Index (SPX.X) ... bar chart with new weekly pivot retracement. Link

  Linda Piazza   2/17/200,  10:00:48 AM
The TRAN is trying to steady now at its 10-dma and at 2900 S/R, but daily oscillators predict more downside. Conflicting evidence.

  Linda Piazza   2/17/200,  9:57:52 AM
Currently, the SOX challenges its 50-dma and 30-minute 100/130-pma's, with those averages at 514.19, 515.65, and 516.05, and the SOX at 515.55. The thirty-minute oscillators suggest that it might climb above those averages, but daily oscillators give no such indication. Overnight, the semiconductor sector in Asia received the good news that semi companies were increasing capital expenditures, but it was the semi-equipment companies in Asia that were the recipients of those capital expenditures, according to the report.

  Jonathan Levinson   2/17/200,  9:55:11 AM
A 10B overnight repo replaces 3B expiring, for a net add of 7B today from the Fed. That's a relatively large amount.

  Linda Piazza   2/17/200,  9:53:26 AM
The TRAN now tests 2900, currently slipping beneath that at 2899.30 as I type. Because of the TRAN's importance in Dow theory, it's important to watch what happens to the TRAN, too, as the TRAN's failure to confirm the Dow's strength is ominous if it continues.

  Linda Piazza   2/17/200,  9:48:02 AM
While many indices climbed this morning, the TRAN didn't. It continued its downturn from the 50% retracement of the recent plummet. It ended the day Friday at the 38.2% retracement, with that looking like temporary support, but that support is failing this morning, with the TRAN at 2906.47 as I type, just above the next round-number support at 2900.

  Jeff Bailey   2/17/200,  9:44:04 AM
Buy/sell program premiums I will post HL Camp & Company's buy/sell program premium levels when they are updated.

  Linda Piazza   2/17/200,  9:43:57 AM
The OEX opened at the 567-568 resistance range and soon moved above it. The first five-minute range spanned from 566.98 to 570.57, with that five-minute range popping the OEX all the way up to top Keltner resistance. The OEX also approached first envelope resistance at 570.43. Keltner support is climbing and is now at 569.04, 568.39, and stronger near 567.80. The OEX sometimes climbs the upper Keltner channel resistance for an hour or more, but now is the time when bullish traders should be careful, following the OEX up with stops.

  Jeff Bailey   2/17/200,  9:28:53 AM
January's Capacity Utilization jumped from December's 75.6% rate.

January's Industrial Production up from December's unchanged.

  Jeff Bailey   2/17/200,  9:23:38 AM
09:00 Update at this Link

  Jonathan Levinson   2/17/200,  9:17:09 AM
Capacity Utilization 76.2% vs 76.4% forecast, Industrial Production 0.8%, in line with consensus.

  Jim Brown   2/17/200,  9:16:34 AM
Industrial Production +0.8%, basically inline with estimates

  Linda Piazza   2/17/200,  9:12:43 AM
The OEX ended the day on Friday just above the 21-dma, having bounced minimally from that moving average. At the close of the day, the 21(3)3 daily stochastics were on the point of a bearish kiss, but hadn't quite made it there yet, while MACD and RSI had both flattened. The price chart showed a rounding over from a possible double-top formation, but that formation was far from being confirmed by a drop below 557.36.

The 30-minute chart shows oscillators on the verge of turning up again, but an index that was stuck just below the 30-minute 100-pma. If futures are predicting the open, then the OEX is likely to bound handily above Friday's resistance at the open. That may mean that the OEX will spend most of today working off oversold pressure on that 30-minute chart, either rising or consolidating. The 60-minute chart shows an index that was finding support just above the 100-pma on that time period, but oscillators that weren't yet turning up. Five minute Keltner resistance and other resistance appeared strongest from 567-568, with a move above those levels suggesting a rise to next Keltner resistance at 570.48 or to next 30-minute envelope resistance at 571.45. I'm never good at guessing where the OEX will open based on S&P futures, but it looks as if the OEX will open either above that resistance or in that resistance zone.

  Jonathan Levinson   2/17/200,  8:44:43 AM
Kudos to Linda, who correctly guessed that Al Green is the author of that statement.

  Linda Piazza   2/17/200,  8:39:46 AM
I know! I know! At least, I think I do, Jonathan.

  Jonathan Levinson   2/17/200,  8:37:51 AM
A little morning trivia: Try to guess who was quoted as saying this in 1962:

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holdings illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other goods, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and the government created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves."

  Jonathan Levinson   2/17/200,  8:34:57 AM
Prior Empire State Index is now 38.85 revised from 39.22

  Jonathan Levinson   2/17/200,  8:31:50 AM
DJ NY Fed's Manufacturing Survey Soars To 42.05 In Feb

  Jonathan Levinson   2/17/200,  8:02:19 AM
We await the NY Empire State Index for February at 8:30, est. 37, Industrial production for Jan. at 9:15, est. .8% and Capacity Utilization est. 76.2%.

  Linda Piazza   2/17/200,  7:19:36 AM
Good morning. Although our markets were closed yesterday, other global bourses were open. The Nikkei turned in a volatile session that saw the Nikkei open about 20 points above the flat-line level, zoom above 10,600, dive to just below 10,540, and then trade in a narrower range the rest of the day. The Nikkei closed just below the flat-line level, down 0.4%. Automakers mostly traded higher, but Mitsubishi Motors wasn't among the gainers. A newspaper reported that the company's poor North American sales would result in a loss more than twice the expected size, and investors reacted by sending the stock 1.2% lower. Banks turned in a mixed performance. Many techs declined, including Sony, NEC, and Canon. Other Asian bourses were mixed. A big gainer in Asian trading was Chinese multimedia company Tom.com, climbing 7.3% on Monday after the company's owner said that the company's global IPO would include a listing in the U.S.

European bourses were mostly higher on Monday, although the FTSE 100 closed flat, down 0.09%. The CAC 40 gained 0.79% and the DAX gained 0.33%. Germany's Bundesbank released a monthly report Monday, stating that the eurozone's economic recovery had not yet been upset by the euro's gains against the dollar. Story stocks included some of the pharmaceuticals. Sanofi-Synthelabo's earnings proved better than expected and its outlook was upbeat, with the company predicting sales and earnings growth of 15% this year. Aventis shares traded higher on speculation that it might be seeking a white knight to save it from a Sanofi takeover. Merck reported that it would sell its lab distribution business VWR to a private equity investors firm, and traded higher on that news.

In Tuesday's trading, the Nikkei again opened near the flat-line level, but climbed all day. The Nikkei closed higher by 152.41 points or 1.44%, at 10,701.13. Japan's GDP number will be reported tomorrow, and stocks gained on optimism that the number will be good. Also, although many tech stocks had declined in Monday's trading, most headed higher Tuesday, helping to send the bourse higher, too. Sony, Canon, Advantest, and Tokyo Electron gained. Many chip-related stocks rose throughout Asia as the Worldwide Semiconductor Equipment Market Statistics report indicated an increase in capital equipment billings across the globe, with Japanese, South Korean and Taiwanese chipmakers being credited with the increase in sales of chip-making equipment. Banks declined in early trading, but ended the day with a mixed performance, with some erasing early gains. Most automakers gained. On Monday, Honda had revealed that it would build business jet engines with GE. Mitsubishi Motors bounced after Monday's losses, this time on the report that its president might shoulder the blame for the poor performance, and might resign as early as April. NTT DoCoMo dropped after speculation that if Vodafone should be successful in its bid to acquire AT&T Wireless, NTT DoCoMo would be required to sell its stake, but parent company NTT gained. The biggest story stock on Tuesday was Kanebo after the company asked the state-run Industrial Revitalization Corp of Japan for help, with that needed help reported to be to the tune of 500 billion yen, according to a newspaper report. The company had planned to sell its cosmetics business, but it dropped that plan. The company's stock advanced 3.6% in Tuesday's trading. Other news that could impact trading later this week included the news of a second outbreak of avian flu in Japan, and Thursday's upcoming IPO for Shinsei Bank.

Other Asian bourses mostly closed higher. The Taiwan Weighted gained 0.53%. Taiwan Semiconductor was flat despite the upbeat news included in the Worldwide Semiconductor Equipment Market Statistics report. South Korea's Kospi rose 0.40% after the country announced a free-trade agreement with Chile, sending exporters higher. Singapore's Straits Times climbed 1.72%. Hong Kong's Hang Seng fell 0.12%, but China's Shanghai Composite gained 0.41%.

Most European bourses trade higher, despite the big news being the euro's climb against the dollar. A technical analyst spoke about currencies this morning. When asked when the dollar might hit $1.30 against the euro, he laughed and said that at the rate things were going this morning, that would occur in a few hours' time! His laughter made it clear that he intended his statement as an exaggeration, but not that much of one. Belgian Finance Minister Reynders this morning said that he would be concerned only if volatility were too high or if the euro advanced well above the current level. The big story stock has been Vodafone, with a report that the company had lost its opportunity to acquire AT&T, sending the stock higher. Too bad NTT DoCoMo investors didn't know that news before the Nikkei closed! European pharmaceuticals continued to attract attention on Tuesday, with Sanofi-Synthelabo again grabbing headlines, formally bidding for larger competitor Aventis.

As of this writing, the FTSE 100 has climbed 50.30 points or 1.14%, to 4458.40. The CAC 40 has climbed 30.21 points or 0.82%, to 3708.28. The DAX has climbed 20.96 points or 0.51%, to 4091.42.

  OI Technical Staff   2/16/200,  12:49:33 PM
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