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  Jeff Bailey   2/18/200,  9:33:09 PM
Nikkei-225 ($NIKK) 10,760.40 +0.78% Link in early trade. Session low/high so far has been 10,742.41-10,813.06.

As such, $NIKK's PnF chart would get an "X" right on its bearish resistance trend of 10,800.

  Jeff Bailey   2/18/200,  9:27:32 PM
U.S. Dollar Index (dx00y) with WEEKLY/MONTHLY pivot retracement. Link Dollar's rebound might not have been entirely based on Mr. Chirac's comments.

  Jeff Bailey   2/18/200,  9:08:11 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   2/18/200,  6:10:47 PM
Day trade long alert ... Novellus Systems (NVLS) $33.99 +0.68% .. here at $34.60 in after-hours, stop $33.65 (will adjust upward tomorrow morning), target $35.90.

  Jeff Bailey   2/18/200,  5:54:11 PM
Semiconductor HOLDRs (SMH) $42.72 +0.47% ... $43.32 in after-hours.

  Jeff Bailey   2/18/200,  5:44:30 PM
QQQ $37.50 ... $37.75 in after-hours.

  Jim Brown   2/18/200,  4:53:34 PM
AMAT saying revenues could be up +30% in Q1. AMAT trading up +1.25 in after hours.

  Jim Brown   2/18/200,  4:50:13 PM
BRCM - Conference Call - Revenues expected to be up +15% to +18% compared to +10% in the previous guidance. Also saying Q2 revenues could also be higher than the current quarter due to expansion in all product lines. BRCM trading at $43.65 in after hours from the $42.44 close.

  Jeff Bailey   2/18/200,  4:39:39 PM
Closing Internals at this Link

  Jeff Bailey   2/18/200,  4:17:27 PM
Semiconductor HOLDRs (SMH) $42.72 +0.47% .... trading $43.00 after AMAT

  Jim Brown   2/18/200,  4:00:03 PM
Earnings after the close:

AAP est +0.41, act = +0.41
UHS est +0.73, act = +0.75
CEC est +0.45, act = +0.45
ADCT est +0.00, act = +0.00 inline, rev below est
AMAT est +0.08, act = +0.12 rev higher than est
INTU est +0.70, act = +0.77 beat
IPMT est +0.32, act = +0.58 BIG beat
CCRN est +0.14, act = no release
OVTI est +0.42, act = +0.57
SERO est +0.20, act = +0.27

CEC announced 2:1 stock split
BRCM conference call at 4:45 tonight
KFT reaffirmed guidance
RJR reaffirmed guidance
EK to expense options

  Jeff Bailey   2/18/200,  3:59:18 PM
Bearish day trade close out alert for Randgold Res. (GOLD) here at offer of $22.06.

While stock most likely gets "garage saled" at tomorrow's open, will close out.

  Linda Piazza   2/18/200,  3:55:49 PM
The TRAN is doing its best to manage a close above its 10-dma, currently at 2901.65, and 2900, with the TRAN currently at 2900.86. Not sure if it's going to make it or not.

  Jeff Bailey   2/18/200,  3:54:13 PM
AMEX Gold Bugs ($HUI.X) 229.98 -4.97% ... session lows here and looks to lose important near-term support of 230.37, which now looks for further decline, perhaps tomorrow's open of 226.00.

  Linda Piazza   2/18/200,  3:53:00 PM
The OEX has worked its way back toward the 30-minute 21-pma at 569.11, with a study of the five-minute chart showing the OEX pressing toward that level. On that five-minute chart, the OEX is at the bottom support of its short-term rising regression channel, a channel that shows all the characteristics of a bear flag. The way that prices are flattening at the 569 level (flat top) and rising in the possible bear flag (rising bottom support) begins to look like a bullish right triangle on three-minute and under charts, however, but the upside target on a break above 569 would just send the OEX up to test mid-channel S/R on the nested Keltner channels, with that mid-channel S/R at 569.89 currently, but declining. In other words, even that short-term bullish formation fits within the context of a bear flag rising into resistance. Tomorrow's open could undo everything we're seeing here, however.

  James Brown   2/18/200,  3:50:31 PM
Internals are starting to look a little weak in AIG. Keep an eye on it for a pull back and bounce from the 71 region.

  James Brown   2/18/200,  3:47:41 PM
Morgan Stanley (MWD) was highlighted on the watch list last night for a move over the $61.00 level. That breakout occurred today with a 1.6% gain to $61.57. The stock looks good for a potential run to the $65 range.

  James Brown   2/18/200,  3:42:19 PM
SanDisk (SNDK) has been hugging the $50.00 level for the last two weeks. Coincidentally it also happens to be the 50% retracement of its 2003 bull-run and its 50-week ma. The stock is set to split 2-for-1 after the close tonight. I don't see any catalyst to produce any big moves but the recent consolidation has probably reduced the option volatility for any direction-neutral strategies.

  James Brown   2/18/200,  3:38:18 PM
The rebound in Lam Research (LRCX), a chip stock, looks tempting but the stock has resistance at $30 and its 50-dma still overhead. Meanwhile its P&F chart looks very bearish.

  James Brown   2/18/200,  3:36:29 PM
Software bulls may want to take a look at MERQ. The stock is breaking out over the 50-dma and the $50.00 level, up 4.3% today. Its MACD just produced a bullish buy signal and shares are bouncing off its long-term rising trendline. There is some resistance at 52.50 and again at 54.00 but it may not hold this time.

  Linda Piazza   2/18/200,  3:33:46 PM
So far the action on the OEX daily chart remains consistent with the idea of a double-top formation, with bearish divergence shown as the second top was formed just above 573. However, I recall typing early in February that the Dow's action was so far consistent with a H&S top, too, and that idea was soon debunked. An OEX double-top formation would not be confirmed until and unless the OEX dropped below 557.36.

Turning to the weekly chart shows a series of spiky weekly candles forming along the 38.2% retracement of the bear-market decline, with those candle shadows all spiking to the upside. That's sometimes a bearish sign, with those upper candle shadows showing failed attempts to pierce resistance, but we saw this same behavior just after the OEX had climbed above 487-488 and again in the fall when it was trying to pierce the 520-521 level. We're far from completing the 10-12 weeks of consolidation that we completed each of those two periods before the OEX moved again. Let's hope we don't have to wait out another 10-12 weeks, but actually, without a pullback to release some of that overbought energy that must have built up during December and January's steep climb, I'd expect it to take longer this time.

  Jeff Bailey   2/18/200,  3:08:30 PM
03:00 Internals at this Link

  Linda Piazza   2/18/200,  3:08:13 PM
Since falling beneath support, the BIX has been hugging its 15-minute 100-pma. I would next expect a retest of the broken support, now just over 354, but I'm not sure whether the BIX might first decline far enough to test is 130-pma on that chart at 352.77, or just rise from here.

  Linda Piazza   2/18/200,  3:06:01 PM
As the OEX rises from its 30-minute 100-pma and from the bottom Keltner support, it's doing so in a pattern that looks like a bear-flag climb into resistance. That resistance will most likely be strongest at central Keltner channel S/R, now at 570.09 but falling.

  Jeff Bailey   2/18/200,  2:57:43 PM
U.S. Dollar Index (dx00y) 85.89 +1.03% (30-min delayed) .. big move for the dollar today and just off its intra-day high of 86.01.

Euro vs. dollar 1.27 -1.05.

  Linda Piazza   2/18/200,  2:52:18 PM
The OEX dropped from mid-channel Keltner support to bottom support, so it's oversold on a short-term basis. At some point, we should see it rise toward mid-channel S/R, currently at 570.16 and declining, but it may not do so this afternoon. It's time now for those in bearish positions to start following the OEX down with stops, especially as the OEX now sits right above its 30-minute 100-pma at 567.97. This is potentially a strong bounce point, and the 130-pma just below at 567.32 is an even stronger potential bounce point.

  Linda Piazza   2/18/200,  2:46:56 PM
The SOX is attempting to find support now at mid-channel Keltner support and rise, but it's doing so in a pattern that looks like a bear-flag rise. If that's what it is, it should break to the downside before retracing much higher than about 523.80, near the 50% retracement of the quick drop.

  Jeff Bailey   2/18/200,  2:44:04 PM
02:00 Internals at this Link

I'm having some difficulty with data feeds.

  Jeff Bailey   2/18/200,  2:34:26 PM
Day trade short alert ... Randgold Res. (GOLD) $22.22 -2.37%... cross the bid at $22.19 to get the uptick, stop $22.40, target $21.51.

  Linda Piazza   2/18/200,  2:28:20 PM
No bounce yet on the SOX. If it does not even attempt a bounce at mid-channel Keltner support, now being minimally violated, then the SOX is showing real weakness. Next Keltner support shows up at 516.12.

  Linda Piazza   2/18/200,  2:26:01 PM
The TRAN is now beneath yesterday's low, continuing the decline predicted by last week's evening-star pattern, formed perfectly at the resistance offered by the 50% retracement of the recent plunge. Those who are bullish the Dow now will want to see the TRAN form a higher low, not violating the 2/04 low of 2815.66. They especially do not want to see the TRAN trade below 2800, creating a new P&F sell signal, but even without that action, the TRAN has offered a troubling contrast to Dow action lately.

  Linda Piazza   2/18/200,  2:20:36 PM
The SOX is testing mid-channel Keltner support now. There should be a bounce attempt soon.

  Linda Piazza   2/18/200,  2:19:12 PM
The BIX is dipping below its 15-minute 100/130-pma's. See my 12:17 post for a chart showing how the BIX has traded in accordance with those averages on that time frame over the last week. This shows a divergence in action with respect to these averages since the BIX climbed back above them on 2/11.

  Jeff Bailey   2/18/200,  2:18:25 PM
QQQ day trade bearish target alert here at $37.36.

Good gravy! Can't remember when I last had a QQQ winner.

  Linda Piazza   2/18/200,  2:15:49 PM
The TRAN is at its low of the day, dipping below 2900 but still within the range where it might be considered testing that level.

  Jeff Bailey   2/18/200,  2:15:36 PM
QQQ day trade bearish stop adjustment alert .... QQQ $37.43 -0.05%.. lower bearish day trade stop to $37.55.

  Linda Piazza   2/18/200,  2:11:05 PM
That sell program Jim mentioned apparently wasn't targeting the stocks in the BIX index. It hasn't moved, still stuck between support and resistance, still not breaking out either direction.

  Jeff Bailey   2/18/200,  2:09:27 PM
QQQ $37.50 +0.16% ... edging back to an afternoon low and its WEEKLY R1. SOX.X 522.81 +0.73% slipping back below its WEEKLY R1 of 525.70.

  Linda Piazza   2/18/200,  2:07:41 PM
The SOX has been declining since my 13:34 post, now at 523.27 and moving toward mid-channel Keltner support as I suggested it might do. As it's been declining, mid-channel Keltner support has been rising, and is now at 521.27. Before it dips all the way to that support, however, it will first hit support near 522.27.

  Jim Brown   2/18/200,  2:07:32 PM
When you look at all the huge point gainers today it is amazing we are not up strongly on the day. NTES, BIIB, RMBS, INTL, SINA, ADVP, CTRP, INSP, BRCM, IDSA, AGP, OSTK, ELN, ISG, ANF, MEG, MRVL, MICC, VIP, TKC, IPAR, PCOP, NVTL, MICC, ETN, SMTC, WFMI, DITC, BRKT, SPOT, MERQ

  Jeff Bailey   2/18/200,  2:05:45 PM
Newmont Mining (NEM) $44.07 -3.03% ... I missed a wonderful short opportunity this morning. After 10:00 AM EST, when stock traded $45, I wanted bounce back to $45.20. When stock fell to $45.57, wanted bounce back to $45.00. On down the scale it has been. Now at Red #4 of 5-MRT.

  Linda Piazza   2/18/200,  2:03:33 PM
The BIX is now positively mashed flat between support and resistance, with the 15-minute 100/130-pma's at 354.30 and 354 and with the descending trendline off this morning's high at 354.65, and with price at 354.56.

  Jonathan Levinson   2/18/200,  2:01:07 PM
Don't mess with Texas...

  Linda Piazza   2/18/200,  1:59:28 PM
If you're ever on death row in Texas, don't request lobster as your last meal. You'll likely get fish sticks instead, the closest match in the prison pantry. A new cookbook by a former prison inmate, a cook for many last meals, is drawing controversy from victims' rights groups, with the book listing recipes for frequently requested last meals. What does this have to do with financial reporting? Nothing except that the thought of fish sticks as a substitute for lobster for a last meal might help us stay awake.

  Linda Piazza   2/18/200,  1:51:34 PM
Definitive proof of a boring day: when there's not even a stop-running push during the typical 1:35-1:55 EST slot.

  James Brown   2/18/200,  1:48:45 PM
That's possible, Linda (concerning TOO). It just seems like a large move given the bad, company-specific earnings news.

  Linda Piazza   2/18/200,  1:46:11 PM
The BIX eased down just below the 15-minute 100-pma and then inched up to the descending trendline off yesterday morning's high, where it is now. It hasn't broken through either level as yet, but it's gotta do one or the other soon.

  Linda Piazza   2/18/200,  1:43:06 PM
Could the Wachovia upgrade of ANF and GPS be affecting TOO, too, James? Only you'd think that if it was a general buoyancy that lifted the whole sector, that BEBE and HOTT would have benefited, too. BEBE is down today, so far printing a bearish engulfing candle, and HOTT is up, but not showing the percentage gain that TOO did. A few months ago, I was reading some negative comparisons of TOO to HOTT, so perhaps the expectations were lower.

  Linda Piazza   2/18/200,  1:34:48 PM
The OEX came back to mid-channel Keltner support. Most of the day, it's been a little over or a little under that support, with the OEX and some other indices settling into an equilibrium position. Although the OEX can stay in that equilibrium position an hour or two, it's usually the prelude to a bigger breakout. There's been an upside breakout attempt, so far not successful, so we'll have to watch what's offered next. Be careful, as we're entering that typical stop-running time from 1:35-1:55.

The SOX is not one of the indices in an equilibrium position with regard to Keltner channels. On a Keltner-channel basis, the SOX is deeply overbought on a short-term basis, having violated the upper channel two separate periods today. Those in bullish semi-related positions should follow semi stocks higher with their stops, protecting profits. Usually, such a violation is not necessarily a sign that such positions should be exited (although sometimes it is), because Keltner channels can give valid breakout signals, too. Sometime or another, the SOX should retreat to mid-channel support, currently at 520.85 but rising, or even to lower channel support, currently at 515.73 but rising. We've already seen that 527 may offer resistance.

  James Brown   2/18/200,  1:32:39 PM
This is odd. Shares of TOO Inc (TOO), the retailer focused on 9-to-12 year olds, is up 11% after reporting earnings that missed by 2 cents. Net income dropped 40% from a year ago and same store sales dropped 6%. The company did reaffirm current guidance but I don't see anything here to push the stock higher.

  James Brown   2/18/200,  1:27:39 PM
E*Trade (ET) is breaking out to new 3-year highs (near $15) after announcing January trading volumes that were up 39% above December's run rate. ET also announced that new accounts hit 69.5K, up from 50K in December.

  Jeff Bailey   2/18/200,  1:25:45 PM
QQQ day trade bearish stop adjustment alert ... QQQ $37.56 +0.33% lower stop to $37.68.

  Ray Cummins   2/18/200,  1:22:44 PM
Spreads/Combos & Straddles -- A Big Winner!

Netease.com (NASDAQ:NTES) is one of today's "market movers" after the company announced that quarterly net profit doubled as online games overtook mobile phone text messaging to become its main growth driver. NetEase posted a net profit of $11.4 million in the fourth quarter of 2003, compared to $5.2 million a year earlier, well ahead of analysts' consensus estimates, and the stock jumped over 20% to a high near $50. Our new debit straddle in the issue offered up to a $5.25 profit on $3.75 invested in only two days. Now that's a "big winner!"

  James Brown   2/18/200,  1:22:35 PM
Shares of Genome Therapeutics (GENE) are breaking out to new 2 year highs (+10.6% to $7.06) after the FDA has approved GENE's Ramoplanin drug for fast-track approval status. The drug is nearing the end of its Phase II clinical trials and GENE expects to announce its preliminary data in the next couple of months. Ramoplanin is used to treat Clostridium difficile-associated diarrhea, which is a serious and sometimes life-threatening condition for over 400,000 patients a year. (GENE press release).

  Linda Piazza   2/18/200,  1:19:55 PM
While we're talking about P&F targets (well, I mentioned the SOX's, at least), want to guess the P&F target for the much-discussed TRAN, hovering just over 2900 and its 10-dma today? It's 4250. (That's not a typo.) However, it's currently in an "O" column, and a trade at 2800 would create a new P&F sell signal.

  Linda Piazza   2/18/200,  1:13:08 PM
The BIX is being squeezed tighter and tighter between the resistance at its 15-minute 21-pma and descending trendline off yesterday morning's high, and between the support at its 15-minute 100/130-pma's. It can't move above 355 or below 353.97 without violating either the support or the resistance. That sounds like a recipe for something to change soon.

  Jeff Bailey   2/18/200,  1:13:01 PM
Semiconductor Index (SOX.X) 527.08 +1.56% ... session high

  Jeff Bailey   2/18/200,  1:08:02 PM
01:00 Internals at this Link

  Linda Piazza   2/18/200,  1:01:25 PM
What does the P&F chart say about the SOX? The SOX is on a P&F sell signal, with a downside target of 432. However, it's currently in an "X" column and above the bullish support line, with a new buy signal given on a print of 535. A look at the January-February decline shows that the 50% retracement of that decline is at about 527. On Thursday, the SOX rose above that 527 level, but left only a candle shadow above that level before declining again, so I don't consider that 50% retracement level breached yet. Now the SOX comes back up to test that 50% retracement level, however, at 525.96 as I type. As with the $TRAN, we can't really consider the bounce over the last couple of weeks bullish until it retraces more than 50% of the decline, especially given that P&F sell signal. In the case of the SOX, I think we actually ought to give it a little extra room to possibly overshoot that 50% retracement and maybe even refrain from making judgments until after we see the reaction to AMAT's earnings.

  James Brown   2/18/200,  12:59:48 PM
One of the best performers in the retail sector today is Abercrombie & Fitch (ANF). The stock is up more than 10% after reporting earnings yesterday that beat estimates by a penny despite a drop in same-store sales. The company did announce that it will begin paying a quarterly cash dividend of 12.5 cents a share. In a surprise twist the company has decided to raise prices on select items in their stores to combat falling sales numbers. The move has raised a few eyebrows in the analyst community but the earnings report and its guidance has sparked several upgrades for the stock.

  Jim Brown   2/18/200,  12:59:34 PM
I am sure most investors would be very happy if we just closed right here. After the big gains yesterday and the recovery of the morning profit taking a close over 10700/2085 would be continuing bullish confirmation. The light volume today suggests we are not being manupulated by options expiration to any great extent. That could mean the buying is real. Of course that same low volume is a danger to these levels. It shows a lack of conviction and it is not creating a ground swell of additional support. Sideways consolidation at this level and right at resistance is far better than consolidation on support at the bottom ot the range. We can still go either way but I am not going to complain if we end up just clinging to 10700. (better than 10600 - grin)

  James Brown   2/18/200,  12:53:07 PM
RadioShack Corp (RSH) is currently struggling with resistance at $34 and has been for a month now. If it can break out it's only $1.50 away from its P&F price objective at $35.50. Incidentally Fulcrum has started RSH with a "sell" rating claiming the stock is too rich at current levels. Shares of RSH are not reacting much to the downgrade with a 38 cent decline.

  Jeff Bailey   2/18/200,  12:46:16 PM
Day trade short alert ... QQQ $37.61 here, stop $37.72, target $37.36

  James Brown   2/18/200,  12:45:54 PM
Hershey's Foods (HSY) is breaking out over resistance at $80.00 to a new all-time high after reaffirming 2004 sales and EPS growth rates.

  Linda Piazza   2/18/200,  12:42:57 PM
I'm watching the BIX as one indicator of OEX strength or weakness, looking for a move above the declining trendline off yesterday's 12:30 high and for a move above the 10:30 high this morning. A move above 355 would accomplish both. I'm also watching for signs of a rollover beneath 355. Currently, the BIX is at 354.49.

  James Brown   2/18/200,  12:42:36 PM
Jeff just mentioned the SOX. Driving the positive attitude for chips is BRCM's meeting tonight, positive expectations for AMAT's earnings* tonight, and comments from Intel yesterday. Intel's CEO said the chip industry is experiencing a period of sustainable growth (-CBSMW). It will be interesting to see what the Semi Book-to-Bill report is tomorrow night.

*AMAT's rival Tokyo Electron guided estimates substantially higher a couple of weeks ago.

  Jeff Bailey   2/18/200,  12:36:53 PM
Semiconductor Index (SOX.X) 526.77 +1.5% ... session highs and pressing above its WEEKLY R1 of 525.70.

  Jeff Bailey   2/18/200,  12:33:25 PM
Sun Communities (SUI) $40.99 +0.91% .... rather neutral looking again today after yesterday's trade was inside that of Friday's bar.

I'm seeing CHB $9.12 +3.75% catching bid too.

  Linda Piazza   2/18/200,  12:32:42 PM
The Dow appears to have found support at mid-channel Keltner support, and is now headed up. It faces resistance at the current 10,713 level and then at 10,723, with upper resistance at 10,747.64. (Note: It broke out as I typed.) I'm a little wary of false moves today, however.

  Jeff Bailey   2/18/200,  12:31:46 PM
Sears (S) $45.71 -0.13% .... slooooow move lower last three session. Hovering at trending lower 50-day SMA of $45.73 and flat 21-day SMA of $45.84.

  Jeff Bailey   2/18/200,  12:29:27 PM
Citigroup (C) $49.90 (unch) ... backfilled yesterday's gap higher in this morning's early trade.

  Linda Piazza   2/18/200,  12:28:31 PM
The advdec line keeps rising, but so does the $TRIN. Which will win out? Usually they're moving in opposition to each other, at least over the time period that I've been watching them closely. Maybe Jane has a different observation to make.

  James Brown   2/18/200,  12:23:30 PM
Our new call play in BRL has been triggered on this morning's rally to $80.99. Our suggested entry price was 80.61, above the recent resistance. BRL has a 3-for-2 stock split coming on March 15th.

  James Brown   2/18/200,  12:21:45 PM
Current OI call play AHC is hitting new highs today after a few sessions of consolidation above the $60 level. This morning's low was $60.50 and traders bought the dip.

  Linda Piazza   2/18/200,  12:17:55 PM
When watching how various indices or stocks perform in relationships to their 100-pma's, I've found that it's important to scan various time charts to find the one that seems to best define the trading pattern. If you find prices just seem to stop in the middle of space when looking at a chart, perhaps that's because it's another time period's 100-pma that's affecting it. Although the BIX appeared to trade in fairly close accordance with its 60-minute 100/130-pma's over the last few weeks, when I dialed down to the 30-minute chart, I did keep finding some of those turn-around-in-the-middle-of-space actions. Here's what I discovered when I dialed down to a 15-minute chart, with the 100-pma in blue and the 130-pma in mauve: Link Notice that the BIX is at the support that's held since February 11. A failure of that support to hold would be a change in tenor, then, but so far there hasn't yet been a failure.

  Jeff Bailey   2/18/200,  12:16:48 PM
12:00 Internals at this Link

  Linda Piazza   2/18/200,  12:00:26 PM
The OEX has been finding support on dips to the 30-minute 21-pma, and as it continues to do so, the 30-minute oscillators have begun turning up, too, but now the OEX comes back to test that average again. Like the situation with the Dow, the OEX Keltner channels have lined up in an equilibrium position, a position that can be maintained for a while, but usually predicts a breakout one direction or the other. The advdec line has been generally rising since about 10:45, but the TRIN has been generally rising since about 10:15, too, so it's difficult to know what to make of that. I think we just have to wait for the breakout, as one chart suggests a likely breakout one direction and another the opposite direction.

  Jim Brown   2/18/200,  11:59:59 AM
YHOO just announced that they are dropping Google as their search technology. This has been expected for some time.

  Linda Piazza   2/18/200,  11:52:01 AM
That Keltner resistance capped the last Dow push over 10,700, but now the Keltner channels have aligned themselves in an equilibrium position. Although such equilibrium can be continued for a period of time, it's usually a prelude to a big breakout. Upper Keltner resistance is at 10,747.41, and lower Keltner support is at 10,645.72.

  Gerald Melson   2/18/200,  11:39:31 AM
As Jeff reported folks, Overstock.com (NSD:OSTK) is on the move. The stock continues to see interest on rumors that the company is the target of Amazon.com (NAS: AMZN) takeover bid, even after the company's CEO refuted the market talk. Others cite that short covering may be the reason for the recent run up.

  Linda Piazza   2/18/200,  11:37:33 AM
The Dow is inching back above 10,700, facing Keltner resistance at 10,706.12.

  Jeff Bailey   2/18/200,  11:36:09 AM
11:00 Internals at this Link

  Jeff Bailey   2/18/200,  11:33:52 AM
Overstock.com (OSTK) $23.97 +13.7% ... stock moving to 52-week high on volume.

  Jonathan Levinson   2/18/200,  11:10:36 AM
The latest p/c ratio is .89, VXO flat at 15.52. This pullback in the p/c ratio is a good start, but it's a small correction of the substantial move higher to the high .90s this morning.

  Linda Piazza   2/18/200,  11:05:55 AM
The Dow looks to be trying for a retest of 10,700, with Keltner channels showing resistance at 10,696.23-10,697.81 and then at 10,704.19-10,705.61.

  Linda Piazza   2/18/200,  11:03:14 AM
The advdec line has been headed down most of the day. It's trying to steady now, at -773 now, but if it continues to decline, that supports a bearish outlook on the action. However, I can't keep Jonathan's warnings about that high put/call ratio out of mind, and I don't advise that anyone else does, either. Watch the advdec line, the TRIN, and Jonathan's updates on put/call ratios for clues.

  Jeff Bailey   2/18/200,  10:59:53 AM
Backfilling gaps ... seeing quite a few stocks backfilling yesterday's gaps higher.

  Linda Piazza   2/18/200,  10:56:45 AM
The TRAN continues to slip lower, now at 2904.32, and having edged ever closer to its first likely bounce point of the day. This isn't strength the TRAN is showing, however, despite my expectation that it will attempt at least a minimal bounce at the presumed 2900-2902 support. (Note: It's already hit a low of 2902.68.) The TRAN confirmed a bearish intraday pattern and now appears to be ready to meet the downside target.

  Jeff Bailey   2/18/200,  10:56:28 AM
Extreme Networks (EXTR) $8.84 +3.74% Link ... higher on chatter that Juniper Networks (JNPR) $26.39 -0.26% Link may be eyeing EXTR as takeover in further attempt to compete against Cisco Systems (CSCO) $24.21 -0.16% Link .

  Linda Piazza   2/18/200,  10:53:30 AM
For the first time today, the OEX is slipping below mid-channel Keltner support on a five-minute closing basis. However, it's still at a possible bounce point, at 569.80, with resistance now showing up at 570.33 and 570.80.

  Jeff Bailey   2/18/200,  10:51:13 AM
Stratasys (SSYS) $21.81 -11.4% Link ... testing December's relative lows after reporting Q4 (December) EPS of $0.20 per share, which was $0.02 below consensus. Revenues rose 34.5% year-over-year to $15.2 million versus consensus of $13.5 million.

  Jeff Bailey   2/18/200,  10:45:16 AM
Protein Design Labs (PDLI) $21.93 +2.95% Link ... 2-year high in today's trade. Company set to receive 3% royalty of BIIB/ELN multiple sclerosis drug.

  Jeff Bailey   2/18/200,  10:41:53 AM
Marvell Technology (MRVL) $45.49 +4.62% Link ... higher in sympathy with BRCM.

  Jeff Bailey   2/18/200,  10:40:46 AM
Broadcom (BRCM) $42.81 +8.26% Link ... percentage gainer in SOX and SMH after scheduling conference call for today to discuss "stronger business outlook." Call is scheduled for 04:45 PM EST.

  Linda Piazza   2/18/200,  10:39:24 AM
Jeff's 5MRT system shows that the OEX has not yet had a five-minute close below the bearish #2 level, at about 569.95. The downside target projected by that 5MRT system, should the OEX continue to move lower, would be 567.69, showing good correlation with the downside target projected by the Keltner channels.

  Jim Brown   2/18/200,  10:38:06 AM
PXLW is up on takeover rumors today

  Linda Piazza   2/18/200,  10:36:23 AM
The OEX comes down again for another test of central Keltner resistance. As I guessed would happen earlier, the first bounce allowed the lines to array themselves somewhat differently, so now further support shows up just below at 569.93, near the 569.45 site of the descending trendline off the 2/11 high and the 569.75 site of the 30-minute 21-pma. (Note: As I uploaded this comment, the OEX slipped down to test that lower support.) Below that, 567.61 shows up as next Keltner support, with that also being the location of the 30-minute 100-pma.

  Linda Piazza   2/18/200,  10:32:21 AM
The TRAN continues to drop toward the 2900 downside target predicted by the confirmed double-top on its five-minute chart this morning. It's currently at 2906.15, just points above the 10-dma at 2902.49. The TRAN's recent oversold bounce helped to defuse some of the worries about the divergence in the TRAN's and the Dow's behaviors, but today's TRAN behavior is making it harder to ignore that divergence. I do expect some kind of bounce attempt near 2900 and that 10-dma, but the TRAN's behavior last week and this week still fits the parameters of an expected oversold bounce, with the expected outcome being a rollover beneath the 50% retracement of the recent plunge. Should the TRAN continue to roll down over the next few days, I expect it to be more and more difficult to ignore the divergence and continue sending the Dow higher.

  Linda Piazza   2/18/200,  10:25:56 AM
The 30-minute and 60-minute OEX charts show candles that spring up from likely support near 570, indicating that the OEX could attempt a rise toward the 0.675% envelopes, at 573.95 and 572.91, respectively, but with 2/11's 573.20 high likely to be strong resistance. However, the 30- and 60-minute oscillators say the opposite, with the oscillators turning down on both charts. Whatcha going to believe? Lately, oscillators haven't been good predictors of market movement, and I'm keeping Jonathan's report of high put/call ratios in mind, but also keeping a close eye on the TRIN.

  Linda Piazza   2/18/200,  10:18:41 AM
The BIX did not obtain a new closing high yesterday, not able to close above the 2/11 closing high of 355.28. At 354.78 as I type, the BIX is still within striking distance today of a new closing high, but the daily oscillators are showing a troubling tendency to roll down, and to do so from a lower high that indicates bearish divergence when compared to the BIX's current equal high. We all know that in a strongly trending index, a descending oscillator can indicate nothing more than consolidation ahead, and that they can even be redrawn as if they never indicated anything troubling at all, but it's something to watch in comparison to the BIX behavior. ADX is at 25.24, so above the 20 measure that some use to indicate a trend in place, but below the 30 level that others use. Both buying and selling pressure lines have been decreasing.

  Jeff Bailey   2/18/200,  10:17:16 AM
Sector action mixed in early going.

Strength found in Biotech (BTK.X) 540.01 +1.27% and Semiconductor (SOX.X) 525.01 +1.15%

Weakness finds Natural Gas (XNG.X) 219.43 -1.17% and AMEX Gold Bugs ($HUI.X) 239.18 -1.2%.

  Linda Piazza   2/18/200,  10:12:06 AM
The OEX is breaking out of the descending regression channel on its five-minute chart, but it's not exactly zooming up after doing so. Keltner resistance shows up at 571.32, 572.07, and 572.90, as well as at the current (as I typed) 571.04 level. In fact, it was this level of Keltner S/R that kept supporting the OEX until the last fifteen minutes of trade yesterday, so it might be presumed to be at least slight resistance this morning.

  Jeff Bailey   2/18/200,  10:09:41 AM
10:00 Internals at this Link

Yesterday's internals at this Link

  Linda Piazza   2/18/200,  10:08:07 AM
Remaining as tentative as they were earlier this morning, many European markets hover near the flat-line level, with the FTSE 100 and DAX both now in negative territory. The FTSE 100 is down .11% and the DAX down 0.02%, while the CAC 40 remains positive, up 0.08%.

  Jonathan Levinson   2/18/200,  10:07:55 AM
Bear alert- the p/c ratio is .93, the highest we've seen in many sessions. VXO is down to 15.52, almost flat. A spiking p/c ratio can be an indication of either sudden unsustainable bearishness (contrarian buy signal) or a sign of smart money buying puts- but here, with the VXO low, it looks more like the former. Something to keep in mind.

  Linda Piazza   2/18/200,  10:04:21 AM
The TRAN completed a double-top formation on its five-minute chart this morning, with a downside projected to 2900. If that downside projection is met, the TRAN will retest that round-number support and also the 10-dma at 2902.90. It was that MA from which the TRAN bounced yesterday.

  Linda Piazza   2/18/200,  9:58:40 AM
The OEX pierced the central Keltner channel support on a five-minute candle shadow, but closed above it, and is now trying the bounce I expected to see from that level. It's a weak bounce so far, and the 30-minute MACD now shows negative histogram levels with MACD rolling down. Maybe that 567.56 level will get tested after all, although I still expect continued bounce attempts from 569.30-570.

  Jonathan Levinson   2/18/200,  9:54:21 AM
A 5.5B overnight repo replaces 10B expiring in overnights + 8.5B in 5 day repos, for a net drain of 13B.

  Jeff Bailey   2/18/200,  9:54:03 AM
Biogen Idec (BIIB) $51.35 +16.01% Link ...BIIB and Elan (ELN) $10.71 +21.8% Link higher after announcing they expect to submit to the FDA an application for approval of Antegren as a treatment for multiple sclerosis.

  Jim Brown   2/18/200,  9:52:11 AM
BRCM up +4, NTES +5, techs should be dowing well today.

  Linda Piazza   2/18/200,  9:40:42 AM
The OEX heads down toward central Keltner channel support, now at 570.15. Below that level, the Keltner channels suggest that next support lies at 567.56, with that level rising.

I see other levels that should be support, including the descending trendline off the 2/11 high, violated yesterday, now near the 30-minute 21-pma at 569.35. However, Keltner channels have surprised me before with their accuracy. First, however, the OEX should attempt a bounce from mid-channel support, and perhaps the lines will array themselves differently after that.

  Linda Piazza   2/18/200,  9:36:38 AM
During the first five minutes of trading, the OEX ranged from to 571.36 to 570.68.

  Jeff Bailey   2/18/200,  9:29:45 AM
Mortgage Bankers Assoc. said its Market Composite Index of mortgage loan applications rose by 4.9% to 837.1 from 797.8 one week earlier.

  Gerald Melson   2/18/200,  9:28:28 AM
Rumor .... regarding Extreme Networks (Nasdaq:EXTR) Juniper Networks (Nasdaq:JNPR) may be preparing to make a bid for enterprise switching vendor EXTR. It has also been stated that Foundry Networks (Nasdaq:FDRY) could be an alternate Juniper takeover target.

  Jane Fox   2/18/200,  9:22:45 AM
Dateline CNN Howard Dean to announce today that he will stop campaigning, but will leave his name on ballot, campaign source tells CNN.

  Jane Fox   2/18/200,  9:21:02 AM
The NYSE's five largest floor-trading firms have tentatively agreed to pay a total of about $240 million to settle civil charges stemming from an investigation that revealed specialists stepped ahead of customer orders. The agreement between the SEC and the NYSE's enforcement arm still requires approval of SEC commissioners and could unravel amid 11th-hour jockeying by the specialists and regulators, although they did agreed to the tentative terms late Tuesday, an hour before a predetermined 6 p.m. deadline.

If completed, the accord would remove a cloud that has hung over the New York Stock Exchange for nearly a year, as investors have called into question the 211-year-old "open outcry" system at the exchange. In a repudiation of the system, the SEC, in a confidential report, blasted the NYSE in October for failing to police its specialists and for ignoring blatant violations in which investors were shortchanged by at least $155 million over a three-year period. The NYSE is one of the last major exchanges in the world that still uses specialists to match buyers and sellers.

This investigation has triggered SEC investigations into the American Stock Exchange, the Boston Stock Exchange, the Philadelphia Stock Exchange and the Chicago Stock Exchange.

  Jeff Bailey   2/18/200,  9:19:15 AM
09:00 Update posted at this Link

  Linda Piazza   2/18/200,  9:05:09 AM
Yesterday, the OEX ended the day in limbo on the 30-minute chart: halfway between the 0.675% upper envelope boundary and the central 21-pma; halfway between a steeply ascending trendline from 2/05, violated last week, and a descending trendline from the 2/11 high, violated yesterday. The 30-minute oscillators appeared in the process of rolling over, but the action was far from conclusive as yet and could easily be redrawn by early trading this morning. A look at the five-minute chart shows the same situation, with the OEX about in the middle of the upper half of the Keltner channels, between presumed strong Keltner support at 570.22, and presumed strongest Keltner resistance, currently at 572.80, but this time with oscillators trying to turn up, but far from conclusively as yet. The daily chart confirms the confusion, with a bullish daily candle that nevertheless did not break out of a consolidation zone and with oscillators that look less than bullish. Pick a side or a preferred direction, and you could probably make a legitimate argument in support of your position or against it.

If I were watching for a downside break, I'd be watching the 30-dma, an average that seemed to support the OEX last week when it appeared to be breaking down out of that week's consolidation zone. An upside break would require a move above the 1/26 high of 573.44. Even with an upside break, however, gains may slow from here on out, as the OEX moves into a congestion zone from the weekly chart. Even with a downside break below the 30-dma, I would not consider the downside really underway until a break of 557.36, the confirmation level of the double-top formation on the daily chart. In fact, I would expect a bounce attempt at that level and would prepare for it if in a bearish position.

  Linda Piazza   2/18/200,  8:36:47 AM
RMBS: Yesterday, a reader asked about the decision due yesterday on the antitrust claims brought against Rambus. They were dismissed yesterday. Although trading had been halted, RMBS is currently scrolling across the CNBC crawl screen at $36.10 in pre-market trading, up $10.26.

  Jonathan Levinson   2/18/200,  8:33:35 AM
Building permits declined 2.8% to a seasonally adjusted annual rate of 1.90 million.

  Jonathan Levinson   2/18/200,  8:32:32 AM


  Jonathan Levinson   2/18/200,  7:56:51 AM
We await 8:30 data to include housing starts for Jan., est. 2M, and building permits est. 1.91M.

  Linda Piazza   2/18/200,  7:13:42 AM
Good morning. Japanese GDP growth in 2003 blew away estimates, with the growth at 7% rather than the 4.7% that was the median gain forecast by economists. Capital spending and exports grew, but the strengthening yen remains a concern to some. Companies announcing increases in capital spending lately include Matsushita, Sharp, and Toyota. GDP growth for the last quarter increased 1.7% from the previous quarter. Consumer spending increased more than expected, growing 0.8% in the fourth quarter, but some worry that rising medical costs and declining wages may cap future increases in consumer spending. Recent changes in government insurance required patients to up contributions beginning in April, and wages fell in December and for the full year.

Against that background, the Nikkei opened higher by almost 60 points, and climbed to within two points of 10,800 soon after opening. That was to be the high of the day, however. The Nikkei dived the rest of the day, closing on the low of the day, down 24.32 points or 0.23%, at 10,676.81, more than 120 points below the day's high. In some ways, the positive GDP number hurt more than it helped, because it raised concerns that the yen would strengthen due to the strength in the economy. Rumors abounded that the government intervened again after the release of the GDP number, propping up the dollar. However, exporters, such as auto and electronics manufacturers, and banks turned in a mixed performance. That mixed performance mostly included declining stocks with an occasional gainer. For example, only Toyota closed higher out of the major car manufacturers. Among banks, Mitsubishi Financial group gained 0.2% while Mizuho Financial Group and Sumitomo Mitsui Financial Group declined. The result was similar among techs described as mixed, too. NTT DoCoMo surged 3.2% on news that it would sell its stake in AT&T Wireless, although yesterday, the company's decline was blamed on speculation that it would do so.

"Mixed" appears to be the word of the day, as other Asian bourses turned in mixed performances, too. The Taiwan Weighted was flat, up 0.08%, but South Korea's Kospi traded lower by 0.87%. Singapore's Straits Times lost 0.26%, but Hong Kong's Hang Seng gained 0.82%. China's Shanghai Composite gained 0.78%.

European bourses also are mixed this morning, but the ones we usually watch are flat or slightly higher. In the overnight session, the euro hit a record high against the dollar. This week, a number of European financial officials have made statements that deplored too much volatility in currency exchange rates or further gains in the euro's strength, but have created the impression that EU officials will not be as likely to intervene as have Japanese officials. Most EU officials speaking this week have mentioned the eurozone's economic strength, saying that outweighs deleterious effects of the rising euro as long as the euro doesn't rise too far against the dollar. In stock-specific news, Volkswagen was reported as beating expectations in one report, but headlines in another mentioned its 60% drop in Q4 profit and the fact that it cut its dividend for the first time in 11 years. The euro's strength hurt Volkswagen's earnings, but earlier this morning, that earnings report was credited with sending DaimlerChrysler higher. I guess your outlook depends on what color glasses you're wearing when reading the report, whether they're dark glasses or rosy-tinted ones. Commerzbank disappointed with a higher-than-expected Q4 loss, although that loss was less than last year's. Commerzbank was leading decliners on the DAX in early trading.

As of this writing, the FTSE 100 is flat, up 3.90 points or 0.09%, at 4465.40. The CAC 40 is up 9.34 points or 0.25%, at 3713.16. The DAX is up 8.41 points or 0.21%, at 4104.27.

  OI Technical Staff   2/17/200,  8:22:34 PM
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