Option Investor
Printer friendly version
  Jeff Bailey   2/20/200,  7:13:59 PM
Pivot Matrix for Monday and next week at this Link

One trade scenario I would be looking for is a nice pop back higher on Monday after today's option expiration, which might allow institutions to get some relief rally in underlying positions for some covered call writing.

I'll try and spend some time later tonight taking a look at an unusual, or heavy option volume in some of the indices where at the March expiration.

Here is the last 3 week's WEEKLY Pivot matrix and levels of trade. Link

  Jeff Bailey   2/20/200,  5:24:58 PM
Weekly Market Monitor trades at this Link

Current OPEN trades with stop and target levels at this Link

  Jeff Bailey   2/20/200,  5:06:09 PM
Closing Internals at this Link

  Linda Piazza   2/20/200,  3:58:09 PM
Have a good weekend, everyone.

  Jeff Bailey   2/20/200,  3:58:08 PM
Day trade bullish exit alert .... Alcoa (AA) $36.83 here.

  Jeff Bailey   2/20/200,  3:53:31 PM
.... not on the offer!

  Jeff Bailey   2/20/200,  3:52:44 PM
Alcoa (AA) $37.00 -1.96% ... getting some volume, but need a CBOE trader to come in strong here.

  Linda Piazza   2/20/200,  3:51:24 PM
The OEX broke through mid-channel Keltner resistance momentarily, but it couldn't maintain levels above its weekly pivot or its 60-minute 100-pma. It's slipping back below its 60-minute 100/130-pma's, but only minimally so, and it sure does look as if there's going to be an effort to steer it right into 565 at the close, doesn't it?

  James Brown   2/20/200,  3:49:45 PM
Shares of Instinet Group (INGP) are hitting new highs with a 6.65% breakout over resistance at $7.00. Volume has been pretty strong the last couple of sessions. This could be an aggressive bullish play for stock traders.

  Jeff Bailey   2/20/200,  3:47:38 PM
Good Gravy! that was a bad tick in AA at $35.94, but woke me up!

  Jeff Bailey   2/20/200,  3:45:31 PM
Day trade raise bullish stop alert ... AA $36.95 -2.09% .... let's raise bullish stop to $36.83.

  Jeff Bailey   2/20/200,  3:43:48 PM
Day trade bearish cancel alert ... Cancel QQQ day trade bearish for $38.25 entry (from 14:20:28 profile).

  Jonathan Levinson   2/20/200,  3:33:55 PM
Huge volume on the Qubes- 120.8M by my count.

  Linda Piazza   2/20/200,  3:27:39 PM
Didn't Jim mention yesterday that OEX 565 was max pain? That's another reason to believe it's possible they'll park it near here into the close. MOC order may present a different picture, however.

  Jeff Bailey   2/20/200,  3:17:31 PM
03:00 Internals at this Link

  Linda Piazza   2/20/200,  3:11:20 PM
The TRAN has risen to retest 2900, this time from below. Although that daily candle can change in the last hour, at this time, it's a doji, a possible reversal signal. That signal would need to be confirmed by Monday's action, however. Just Wednesday, the TRAN produced a similar candle but the potential reversal was not confirmed, with the TRAN continuing its rollover beneath the 50% retracement of the recent plunge. That present the possibility that the TRAN could form a higher low, but any potential strength would need to be confirmed by a push over 2952, the 50% retracement of the plunge.

  James Brown   2/20/200,  3:07:15 PM
Shares move a bit slow to play straight calls or puts on Anheuser Busch (BUD) but the stock is approaching long-term resistance in the $53.50-55.00 range with its 2.1% gain today.

Rival Adolph Coors Co (RKY) has really been out performing this month, up more than 16% to a new one-year high.

  Jeff Bailey   2/20/200,  3:06:01 PM
Alcoa (AA) $36.81 -2.46% ... AA afternoon high came to $37.00 and that was it, where there was some morning consolidation just below $37.00. To have a shot at $37.45 and max pain $37.50, any bounce back higher MUST take out $37.05 to have a shot at bullish day trade target.

  James Brown   2/20/200,  3:03:20 PM
Bulls can take another look at Merrill Lynch (MER). The broker-dealer group has been very strong and MER broke out over the $61.00 level three days ago. Shares have now pulled back to bounce off the $61.00 region.

  Linda Piazza   2/20/200,  2:55:29 PM
The OEX pierced the weekly pivot and almost touched the 30-minute 100-pma, but fell back again. A test of that moving average and then a subsequent drop below the 130-pma is normally considered a sell signal, but I also like to watch the 60-minute version. The push pierced that average, with the OEX currently sinking back to the average, still above the 130-pma on that chart. The OEX is maneuvering to the position that I thought might capture it, as the Keltner channels struggle to get into an equilibrium position. Today has been a wilder day than I expected, so I wouldn't be surprised to see anything happen the last hour, but this current position is about where I thought the OEX might end the day.

  James Brown   2/20/200,  2:45:46 PM
Sector Winners:
RLX retail index: +0.80%
INX Internet Index: +0.67%
OIX oil index: +0.58%
OSX oil services: +0.50%

Sector Losers:
XAU gold & silver: -2.60%
DJUSHB homebuilders: -1.34%
NWX networking index: -1.48%
GHA hardware index: -0.98%

  Jeff Bailey   2/20/200,  2:44:07 PM
02:00 Internals at this Link

  Linda Piazza   2/20/200,  2:35:21 PM
The OEX did slow its gains, for all of about 20 minutes. It's now approaching the weekly pivot at 567.45, for those of you who watch pivots, and it's also between the 30-minute and 60-minute 100-pma's. If I'd had to guess this morning where the OEX would end up today, it would have been jammed between those two moving averages.

  Jeff Bailey   2/20/200,  2:32:34 PM
Day trade long alert ... Aloca (AA) $36.92 here, stop $36.70, target $37.45.

Cancel prior (14:18:51) signal.

  Linda Piazza   2/20/200,  2:32:10 PM
That 504-506 level is proving to be strong support for the SOX, at least so far. Today's SOX low was 505.82. The SOX violated a supporting trendline that had held up throughout February and now is bouncing up to retest that trendline. Daily oscillators don't quite know what to make of the action, as many have flattened midway through a rise or fall. For the last week or so, the SOX has traded in a range from about 505 to 530.

  Jeff Bailey   2/20/200,  2:23:33 PM
Netflix (NFLX) $34.88 +2.13% ... rebounded from morning low of $32.55 to "max pain" $35.00.

  Linda Piazza   2/20/200,  2:23:13 PM
The OEX now faces its 30-minute and 60-minute 100-pma's, at 567.76 and 566.46, with the weekly pivot also within that range, at 567.45. Gains should be slower here, especially as the OEX also approaches mid-channel S/R on the Keltner channels, but the OEX doesn't always do what it should.

  Jeff Bailey   2/20/200,  2:22:20 PM
Electronic Arts (ERTS) $45.68 -0.86% ... bugger traded a session low of $45.00.

  Jeff Bailey   2/20/200,  2:18:51 PM
Day trade long alert .... Alcoa (AA) $36.79 -2.51% .... on a pullback to $36.70, stop $36.58, target $37.45 (max pain $37.50).

  Jeff Bailey   2/20/200,  2:10:28 PM
Day trade short alert .... QQQ $36.94 -0.13% ... coming back to $37.00 Max Pain. Go short QQQ should it trade $37.25, stop $37.46, target $36.85.

  Linda Piazza   2/20/200,  2:09:39 PM
There was a hesitation just below OEX 565, but no pullback. I should have relied totally on the Keltner channel lines, because they didn't show any resistance at 565, but I was looking at the previous five-minute high and the historical resistance presumed there. That previous five-minute high has now been exceeded, signaling a first change in tenor. The OEX is now reaching next Keltner resistance at 565.90, with strongest resistance now near 566.61.

  Jeff Bailey   2/20/200,  2:07:22 PM
April Gold futures (gc04h) ... here's quick look at the April Gold contract and critical support being tested in today's trade. Link

  Linda Piazza   2/20/200,  1:56:20 PM
I wouldn't be surprised to see the OEX hit 565 or so then pull back toward 563.50-564, before heading up again into the real bounce. Be cautious here, bears.

  Jonathan Levinson   2/20/200,  1:51:29 PM


  Jonathan Levinson   2/20/200,  1:51:01 PM
1:45 Greenspan says schooling answer to outsourcing

1:45 Greenspan makes no comments on interest rates

  Linda Piazza   2/20/200,  1:50:53 PM
That was a move that got slapped back! However, the OEX may not be through testing that resistance near 564.60 just yet.

  Jonathan Levinson   2/20/200,  1:49:01 PM
AL Green is back on the wire:



  James Brown   2/20/200,  1:46:48 PM
Winnebago Industries (WGO) is also trading lower today but Friday's decline breaks support at the $68.00 level and its 50-dma and that leaves the stock vulnerable to a drop towards support near $60.00.

  James Brown   2/20/200,  1:44:21 PM
The weakness today has prompted a technical breakdown in shares of JCI, which have broken their 50-dma. volume is stronger than normal and shares could test support at the $55 level.

  Linda Piazza   2/20/200,  1:43:21 PM
The bounce begins. The OEX has not had a higher high on the five-minute chart since about 12:30 yesterday afternoon, so a higher high will mean a definite change in trend. One big caution, however: we're entering the stop-running time of day when stops sometimes get run and then the prices get slapped right back down. The last high on the five-minute chart was at 565.07. The OEX is hitting Keltner channel resistance now (just under 564), and will see further resistance near 565.62 and 565.79.

  Linda Piazza   2/20/200,  1:40:04 PM
Commenting on Keene's 13:36 post: When I was back-testing breakout signals on the Donchian channels, I found that the most profitable breakout signals occurred when the 21(3)3 stochastics were already pinned in levels indicating overbought conditions (for a buy breakout signal) or oversold conditions (for a sell breakdown signal).

  Linda Piazza   2/20/200,  1:36:24 PM
Continuation of my 13:33 post: In fact, since the TRAN had plummeted the way it had, I had thought the Dow's possible H&S formation might confirm back in early February. That didn't happen, with the relief bounce instead sending the Dow to a new high.

  Linda Piazza   2/20/200,  1:33:08 PM
The TRAN continues to drop today, currently at 2877.40. The daily oscillators still have lots of room to run, giving the TRAN room to hit that 2800 level that will give a new sell signal, with the exception of the 5(3)3 stochastics. Those have cycled almost all the way back down toward oversold levels, not quite there yet. That suggests the possibility that the TRAN could try to steady ahead of the 2800 level, but we'll just have to see what happens next week. Ever since late January, the divergence of the TRAN with the Dow has been suggesting that the Dow might have difficulty maintaining recent gains, but it's sure not doing anything to equal the TRAN's plummet, is it? It has, however, dipped below 10,600, testing the waters just beneath the 60-minute 100/130-pma's.

  James Brown   2/20/200,  1:29:15 PM
I know a lot of investors will be looking at the NASDAQ breakdown under its simple 50-dma with apprehension and they should. Just keep in mind that the NASDAQ Composite has a tendency to overshoot the 50-dma for a couple of days before bouncing back. It happened in August, November and December last year. That's not a guarantee it will happen again today but with the 2000 level so close we could certainly see another bounce.

  Linda Piazza   2/20/200,  1:21:12 PM
So far, the OEX keeps rising into a series of bear flags and then breaking down, but as it does, it grows more grossly oversold. This morning, I mentioned that the train could sometimes build up steam on an opex day and get away from those trying to hold it to max-pain levels and prices could steam lower all day, but my advice is still to follow the OEX down with your stops due to the possibility of a bounce coming any time now.

  Jeff Bailey   2/20/200,  1:19:43 PM
Gold equities may try and firm up here as the commodity now looks to test its February 2nd relative lows of $396.

U.S. Dollar Index (dx00y) 87.14 +1.38% also testing its 50-day SMA, which provided resistance back on November 5 and 6 test.

  Ray Cummins   2/20/200,  1:18:32 PM
Spreads/Combos/Premium-Selling -- Momentum Plays?

With the selling pressure beginning to accelerate in a number of industry groups, traders who favor "premium-selling" strategies may want to consider some new bearish positions. Here are just a few candidates for short calls (and call-credit spreads) from our current portfolio: Imclone (NASDAQ:IMCL), Multimedia Games (NASDAQ:MGAM), Schnitzer Steel (NASDAQ:SCHN), Ultratech (NASDAQ:UTEK), and Varian Semiconductor (NASDAQ:VSEA).

  Jonathan Levinson   2/20/200,  1:12:40 PM
The put to call ratio has made it down to .93, which indicates a big move away from the put side of the boat since 11AM- but, remember, this is still a relatively high absolute level and, to mix things up further, we're still under the influence of opex antics today. So, we'll take it with a grain of sale, but with the VXO up 1.78% now, it looks like the naked call writers are buying to close from damaged call holders caught in the downdraft.

  Ray Cummins   2/20/200,  1:05:40 PM
Spreads/Combos/Premium-Selling -- Another Straddle Winner!

Today's activity in Serena (NASDAQ:SRNA) was unfavorable for investors but it brought our recent volatility play "into the green" as the issue fell to a recent low near $20. All three of our "expiration-week" straddles have yielded favorable profits, with NTES and SRNA providing gains in excess of 100% in only 4 days. In addition, today's dip in Monster Worldwide (NASDAQ:MNST) increased the gains in that delta-neutral position (for traders who did not take the "early-exit" profits last week).

  James Brown   2/20/200,  1:00:10 PM
Hitting new highs today is Dean Foods Co (DF). The stock is up 4.11% after CSFB upgraded shares to an "out perform". The stock has recently broken out above resistance in the 33.50-34.00 range and may be worth a look as a bullish candidate.

  Jeff Bailey   2/20/200,  12:59:45 PM
Swing trade bearish target alert ..... Randgold Res. (GOLD) $21.05.

  Linda Piazza   2/20/200,  12:58:53 PM
Time for another OEX bounce. We now have a five-minute OEX high at 565.07, so some in daytrade-type bearish positions might consider setting their stops just above that last five-minute high, giving the OEX room to overshoot that level a bit. OEX 565.80 also appeared to have been an important support level this morning, too, so a stop set just above that would make sense, too. That depends on your time frame and your pain threshold, too. The OEX is now edging below the trendline that had supported it throughout this year, and so the drop could accelerate, but the OEX is still in the "testing" range of that trendline, so still within the range where it could bounce more strongly.

  Ray Cummins   2/20/200,  12:55:10 PM
Spreads/Combos/Premium-Selling -- Portfolio Activity

A quick glance at the portfolio shows little notable activity as we pass the mid-day mark. Among the best performers are oil service shares such as Nabors (NYSE:NBR) and Smith International (NYSE:SII), while a few of the drug stocks; Aventis (NYSE:AVE), Merck (NYSE:MRK) and KOS Pharmaceuticals (NASDAQ:KOSP); and our basic materials blue-chip, Alcoa (NYSE:AA), are enduring renewed selling pressure. With the February options-expiration period coming to a close, it's important to evaluate the technical condition of your current plays and implement any necessary position adjustments. Fortunately, most of the front-month spreads in the portfolio have finished well beyond the sold strike and those that did not have already been closed or rolled forward to March options.

  Linda Piazza   2/20/200,  12:54:52 PM
Remember that OEX 561.23 is the 38.2% retracement of the bear-market decline. For some reason 559.50 seemed to be more pivotal than the 561.23 level, but keep it on your radar screen anyway.

  Jeff Bailey   2/20/200,  12:53:51 PM
Swing trade lower stop alert ... Randgold Res. (GOLD) $21.12 -4.52% .... with stock nearing bearish target of $21.05, lower stop to $21.17.

  Linda Piazza   2/20/200,  12:53:12 PM
That didn't take long. That's a lower low for the OEX. The 60-minute envelopes suggest the OEX could drop at low as 561.20, with that support headed down, but other charts show the OEX grossly oversold. Be careful. Continue to follow the OEX down with your stops if in bearish positions.

  Linda Piazza   2/20/200,  12:50:31 PM
Is the OEX in the process of making an equal low or double bottom on that five-minute chart? We'll soon know. Mid-channel Keltner OEX resistance has dropped to 567.54 and is still dropping. There's good correlation with the weekly pivot at 567.45. If you're in bearish positions and can't decide where to put your stops, I'd certainly consider setting one near these levels, if not lower.

  James Brown   2/20/200,  12:43:33 PM
Citrix Systems (CTXS) is breaking out of its two-week consolidation under the $20 level after being upgraded to "out perform" this morning. The stock is up 5.6% to $20.32 but remains under technical resistance at its 50-dma and 200-dma.

  Linda Piazza   2/20/200,  12:41:40 PM
As of a few minutes ago, total volume was 683 million for the NYSE-traded shares and 956 million for the Nasdaq-traded shares. Adv/dec ratios were 10:22 for the NYSE and 10:20 for the Nasdaq. Down volume was almost 4 times up volume on the NYSE and 2.7 times up volume on the Nasdaq.

  James Brown   2/20/200,  12:41:25 PM
Graco Inc (GGG) has announced 3-for-2 stock split and a 2 million share buyback. Unfortunately, shares are not reacting to the news. The stock is up 8 cents to $41.94.

  Jeff Bailey   2/20/200,  12:36:01 PM
Swing trade short alert ... Placer Dome (PDG) $16.31 here, stop $16.60, target $15.50.

  Jeff Bailey   2/20/200,  12:24:19 PM
Electronic Arts (ERTS) $45.17 -1.99% Link .... session low has been $45.09. February Max Pain Theory Value is $45.00.

A bear that may not have liked some of the fundamental notes made by UBS (see yesterday's MM at 02/18/2004 10:23:21 PM EST) Link might look to back out of bearish positions near-term.

  Linda Piazza   2/20/200,  12:21:33 PM
The configuration of Keltner channel support and resistance lines still makes it look as if the OEX would have an easier time falling than rising, but that must be measured against the fact that they're also showing the OEX to be grossly oversold on a short-term basis, and there's historical support here, too.

  Jeff Bailey   2/20/200,  12:18:28 PM
12:00 Internals at this Link

  Linda Piazza   2/20/200,  12:09:20 PM
Even with those Keltner lines separating, the OEX hasn't been able to sustain levels above 565. Strongest Keltner support is now at about 564.20-564.40, also the site of the 30-dma and just above the rising trendline from the last couple of months.

  James Brown   2/20/200,  12:06:23 PM
12:00 noon sector update...

Sector Winners:
OSX oil services: +0.41%
OIX oil index: +0.30%
DFI defense index: +0.00%

Sector (biggest) Losers:
XAU gold & silver index: -2.60%
NWX networking: -2.42%
DJUSHB homebuilders: -1.71%
XAL airlines index: -1.45%
GHA hardware index: -1.57%
DDX disk drives: -1.57%

  Linda Piazza   2/20/200,  12:03:01 PM
The OEX Keltner lines just over 565 are finally beginning to separate a little, perhaps allowing the OEX to slip a bit higher. It's still likely to run into resistance at about 565.20, however.

  James Brown   2/20/200,  12:02:43 PM
Current OI call play BRL has been stopped out. The stock has broken short-term support at the $78.00 level Shares looked headed lower to fill the gap near $76.75 and its 50-dma near $ 76.00. Short-term oscillators are now turning bearish and its MACD is hinting at a new sell signal soon. BRL does have a 3:2 split coming on March 15th.

  James Brown   2/20/200,  12:02:32 PM
Current OI put play AVID is trading under the $40.00 mark and has done so for most of the session, which is good news for the bears.

  James Brown   2/20/200,  11:59:29 AM
Current OI call play BRL has been stopped out. The stock has broken short-term support at the $78.00 level Shares looked headed lower to fill the gap near $76.75 and its 50-dma near $ 76.00. Short-term oscillators are now turning bearish and its MACD is hinting at a new sell signal soon. BRL does have a 3:2 split coming on March 15th.

  James Brown   2/20/200,  11:57:23 AM
Current OI call play AHC continues to stretch its string of new one-year highs with a move over the $62.00 level today.

  Jane Fox   2/20/200,  11:53:11 AM
Looks like Martha Stewart is having a hard time in court today. Her longtime friend Mariana Pasternak testified today that on Dec. 30, 2001, Stewart said she knew that Dr. Waksal had been selling or trying to sell their stock. Pasternak said the conversation took place on a terrace at a Mexican resort, where the women were vacationing. Pasternak also testified that Stewart said the stock was falling and so she sold. Ms. Pasternak also quoted Ms. Stewart in a separate conversation as saying: "Isn't it nice to have brokers who tell you those things?"

  Linda Piazza   2/20/200,  11:46:38 AM
So far, the OEX is finding resistance just over 565, where Keltner channels said there would be strongest resistance, but those Keltner resistance lines aren't really separating, but instead are remaining grouped together. As the five-minute 5(3)3 stochs turn down again, I'm wondering if the OEX has the strength to push through those resistance lines on this go-around. Maybe not.

  Jane Fox   2/20/200,  11:37:06 AM
Here is what the WSJ is saying about Japan raising its alert level. TOKYO -- Japan raised its terror alert to its highest level on Friday, mobilizing heavily armed police around airports, nuclear plants and government offices to guard against a possible attack, an official said.

It was the first time the government went on such a heightened alert since the U.S.-led military attack on Iraq in March 2003.

A National Police Agency official refused to discuss whether the government had new information about a possible terror strike.

The official said riot police armed with automatic rifles would guard Tokyo and Kansai international airports and nuclear power and reprocessing facilities, but wouldn't disclose how many officers were added.

  Linda Piazza   2/20/200,  11:36:04 AM
The OEX is now facing the first strong Keltner resistance, with several lines bundled together just over 565. I would expect a small retreat now while those lines had time to separate. OEX 566 and 566.85 look to be next historical resistance, but if the OEX makes it above 566, then I would expect a try for mid-channel Keltner S/R, now at 568.32 but descending.

  Jonathan Levinson   2/20/200,  11:12:20 AM
The put to call ratio has risen to 1.22 here, VXO down .77%. Following Linda's comment, the USD is extended to the upside and equities to the down, and the p/c ratio is further cause for caution in the bear camp.

  Jeff Bailey   2/20/200,  11:12:01 AM
11:00 Internals at this Link

  Linda Piazza   2/20/200,  11:10:01 AM
Those Keltner channels have been so far overstretched to the downside that I'm worried that the bounce may be a sizeable one now, when it does occur. Protect your profits, bears. If you've already met your profit goal, you might think about taking at least partial profits. At the same time, a fall through the two-month ascending trendline could get things really going to the downside, but I'm beginning to get that antsy feeling that a bounce might be coming.

  Linda Piazza   2/20/200,  11:05:42 AM
An OEX bounce is far overdue now. The Keltner channels show much resistance gathering now between 565.15-565.57, with resistance above that at 567.10 and then strongest resistance at 568.66, mid-channel S/R.

  Linda Piazza   2/20/200,  10:59:29 AM
Here's where the OEX is on the daily chart. Be careful, bears and bulls alike. This support has held for a couple of months, other than some candle shadows. This is another prime bounce point, but a fall through this H&S-ish formation would suggest a test of the 557.36 recent low, at the least: Link

  Jeff Bailey   2/20/200,  10:56:24 AM
Blue Coat Systems (BCSI) $36.01 +14.25% Link ... NASDAQ percentage gainer after last night's quarterly earnings report. Company reported Q3 (January) EPS of $0.22, which was 2-cents better than forecast. Revenues jumped 63.2% year-over-year to $19.1 million, which was well above consensus of $16.4 million.

  Jeff Bailey   2/20/200,  10:51:28 AM
Live Forex currency quotes at this Link

  Jeff Bailey   2/20/200,  10:50:28 AM
U.S. Dollar Index (dx00y) 86.61 +0.74% ... 30-minutes ago, trades MONTHLY Pivot.

  Linda Piazza   2/20/200,  10:41:33 AM
The OEX now falls beneath the 60-minute 100/130-pma's, although it's still close enough that it's within testing range. Those who elected to follow the OEX down with your stops on bearish positions can be feeling fairly good now, however, if the OEX maintains levels beneath these moving averages. Again, the OEX is within testing range, however, while deeply oversold on a short-term basis, so a bounce is possible at any time. Keep following the OEX down with those stops to protect profits.

  Jeff Bailey   2/20/200,  10:33:37 AM
Swing trade lower stop alert .... lowering stop in Randgold Res. (GOLD) $21.53 -2.66% to $22.00

  Linda Piazza   2/20/200,  10:27:54 AM
One reason that I suggested that those in bearish OEX positions follow the OEX down with stops rather than suggesting that those positions be closed or that long positions be entered is because Keltner channels sometimes give valid breakout signals. The OEX sometimes follows those channels down. The chart pattern has looked to me as if the OEX might be preparing for a bounce and it's at a level where we should see a bounce, but it's not happening yet. The moving-higher TRIN suggests that the bounce might not be forthcoming, either. Keep following the OEX down with your stops, setting them at points appropriate for your account management style.

One note of caution. If some of you have OTM front-month options, they're going to lose all value rapidly if the OEX should steady or flop around between this support and next resistance, as often happens on opex Friday. Be careful.

  Jeff Bailey   2/20/200,  10:15:05 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

  Jonathan Levinson   2/20/200,  10:08:20 AM
On Linda's 9:56 post, I recall having seen something to that effect, but forget the details. Political suicide it sounds like, unless they can spin it more effectively than has been done so far.

  Linda Piazza   2/20/200,  10:07:33 AM
The TRAN slips lower today, continuing the rollover beneath the 50% retracement of its recent plunge. It's also slipping back below 2900 and the 10-dma. Now market watchers will want to see if the TRAN matches the recent 2815.66 low or if it turns up into a higher low. Remember that 2800 marks a new sell signal for the $TRAN, erasing the current buy signal with the upside target of 4250.00.

  Jeff Bailey   2/20/200,  10:06:35 AM
Swing trade bullish stop alert .... Citigroup (C) $48.75

Max Pain Theory value for February is $47.50.

  Jonathan Levinson   2/20/200,  10:06:34 AM
Careful bears, everyone had the same idea: p/c ratio just printed at 1.06.

  Linda Piazza   2/20/200,  9:59:58 AM
The OEX now looks as if it's trying to firm into a measured distribution pattern that may result in a bear-flag climb into resistance. If so, it should probably break down again before retracing more than 50% of yesterday's plunge, at about 568.54. I'm not sure it's going to be able to firm up, however, but that's my impression of what it's attempting.

  Linda Piazza   2/20/200,  9:56:13 AM
Concerning Jonathan's 9:51 post: Didn't someone in the Bush administration say something similar last week, causing a lot of back-pedaling for a few days?

  Jonathan Levinson   2/20/200,  9:56:12 AM
A 3.25B weekend repo replaces 6B expiring, net drain 2.75B.

  Linda Piazza   2/20/200,  9:54:19 AM
The OEX is back to hug the lower Keltner channel support again. Those in bearish OEX positions should be following the OEX lower with stops, as this is a prime bounce zone. Since Keltner channels also provide breakout (or breakdown?) signals, it's possible for the OEX to follow those channels down all day. It's also sitting right on the 60-minute 100/130-pma's, also a possible strong bounce point or a possible point from which the OEX could fail.

  Linda Piazza   2/20/200,  9:52:48 AM
Careful, OEX traders. I'm not getting updated figures on my charting service.

  Jeff Bailey   2/20/200,  9:48:49 AM
Sector action mixed to broadly lower in early going.

Weakness has Gold Bugs ($HUI.X) 225.90 -1.7%, Networking (NWX.X) 283.49 -1.6%, Semiconductor (SOX.X) 508.61 -1.18%

Strength Oil (OIX.X) 329.98 +0.86%, Oil Service (OSX.X) 105.57 +0.78%.

  Linda Piazza   2/20/200,  9:48:22 AM
Reader Question concerning UTSI: With AWE in focus this week, is this stock which provides wireless and wireline access and Internet protocol ready to break out or fall further?

Response: The SEC doesn't allow us to comment on specific stocks in individual emails, but let's look at chart characteristics. This experienced trader that I tried hard to recruit to join us on the MM pages includes a couple of charts when posing his question. The weekly chart depicts a stock that's coiling into a symmetrical triangle at the top of a climb, with the presumed breakout direction to the upside since UTSI was traveling that direction when it began consolidating. However, on my own charts, I show that OBV, on-balance volume, has been declining since last fall, one hint that an upside breakout is not a given. In addition, the P&F chart shows a downside target of $23.00, also hinting that the upside break is far from a given. UTSI slips toward the lower support of that consolidation pattern, also slipping below many key moving averages, although today it's testing the 200-ema, an average that's just above the bottom support of the symmetrical triangle, ready to add its support to the rising trendline.

Oscillator evidence is inconclusive, as it often is as a stock coils. This is one of those times when one just has to wait for the breakout, I think. The chart formation suggests an upside break, while OBV and the P&F chart suggest something different. Here's my version of the daily chart, with annotations: Link

  Linda Piazza   2/20/200,  9:37:40 AM
If that formation on the daily SOX chart is a bearish rising wedge, the SOX is breaking below the wedge support now. It's early in the day, of course, but daily oscillators support the downturn. So far. I hate opex Fridays.

  Jeff Bailey   2/20/200,  9:36:57 AM
Swing trade short alert .... Newmont Mining (NEM) here $43.37, stop $44.50, target $41.35

  Linda Piazza   2/20/200,  9:35:46 AM
During the first five minutes of trading, the OEX did bounce, and spanned a range from 566.06 to 567.71. I still expect it to find resistance between 567.80-569.90.

  Jeff Bailey   2/20/200,  9:28:07 AM
Cell Genesys (CEGE) $12.87 Link ... active at $14.55 after positive Bloomberg story on the company's lung cancer vaccine study.

  Linda Piazza   2/20/200,  9:19:00 AM
Reader Question: What is your favored method of trading the OEX?

Response: That method changes depending on the market behavior. Once upon a time, directional plays on the OEX were a good choice, but they're not now, or at least they haven't been. Right now, I think I'd suggest checking out some of Mike Parnos's plays. Pure directional plays haven't been good plays on the OEX these days because of way the trading action occurs. We have had a lot of low-volatility days punctuated by moves that come out of nowhere, so that's it's difficult to impossible to profit from directional plays. That impression is backed up by my experiences and by those of many fallen-by-the-wayside OEX traders over this last year. Once you hop on a directional play, the action smoothes out again, volatility decreases, and so does your option premium. While time premium decay is the greatest enemy of option pricing in the last part of the opex cycle, it is decreasing volatility that will get you earlier in the opex cycle, and that's the tendency that has been a killer to directional OEX plays over the last year. Just take a look at any of the volatility indices and see what I mean.

Here's one caveat. If the OEX should fall below the 557.36 level that's the confirmation level for the double-top, then I'd expect a retreat down toward the 540-541 level that's the downside target, so make sure any positions you enter take that possibility into account.

  Jeff Bailey   2/20/200,  9:16:40 AM
09:00 Update posted at this Link

  Linda Piazza   2/20/200,  9:07:08 AM
Yesterday, the OEX ended the day only cents above its 21-dma, continuing the current pullback since reaching a roughly equal high on the daily chart a week ago. That pullback is taking the form of a possible bull-flag pullback. If that's all it is, it should break to the upside again before retracing much more than 50% of the climb, which would occur at 565.28. The OEX ended the day yesterday less than a point above that level, but it also ended the day oversold on a short-term basis. As the day ended, it was also testing the 60-minute 100/130-pma's, with that level almost guaranteed to produce at least some sort of bounce attempt. Those averages lie at 566.62 and 565.45.

Therefore, I wouldn't be surprised to see a bounce attempt from somewhere between the current level and 565. Where would that bounce take the OEX? The OEX might experience some difficulty moving above 567.80-569.90, with that zone marking the midpoint of yesterday's plummet, the 30-minute versions of the 100/130-pma's, historical resistance, and the weekly pivot at 567.94. Remember that today is opex Friday, and indices and stocks tend to get pegged at certain levels from about midday on, so be careful. I wouldn't be surprised to see the OEX pegged between the 30-minute and 60-minute versions of those 100/130-pma's through much of the day today, with the real action beginning next week. Sometimes those attempts to peg indices and stocks near max-pain levels fail, however, and the train starts building steam.

  Jonathan Levinson   2/20/200,  8:30:31 AM
8:30am U.S. JAN. CORE CPI UP 0.2% VS 0.1% EXPECTED

  Jonathan Levinson   2/20/200,  8:30:17 AM
8:30am U.S. JAN CPI UP 0.5% VS 0.3% EXPECTED

  Jonathan Levinson   2/20/200,  7:55:14 AM
CPI data will be released at 8:30 today, with the market expecting +.3% and +.1% for the Core CPI.

  Linda Piazza   2/20/200,  7:03:55 AM
Good morning. Today, Japanese investors needed to digest several bits of economic news, some of it disappointing. December's Japanese services industries index or tertiary-industry activity index gained 0.2% over November's number against expectations of a 0.3% gain, and the quarter's number gained 1.2%. Falling unemployment and stronger wages were credited with some of the gains, although some have expressed worry lately that wages might not continue to grow. December's unemployment rate fell to 4.9%. Spending by households headed by a salaried worker rose in December, too. However, December's Tokyo department store sales fell 4.7%.

The Nikkei climbed to its high of the session by midday, but then fell through most of the afternoon. A sharp last-hour bounce mitigated losses, with the Nikkei closing down 33.11 points or 0.31%, at 10,720.69. During the trading day, the dollar had reached a six-week high against the yen. While some exporters rose on a weaker yen, chip-related stocks tended to be lower in Japan and throughout Asia due to the U.S. Semiconductor Book-to-Bill data for January, data that was deemed disappointing in Asia, at least. This week's big story stock, Shinsea Bank, plummeted almost 10% a day after its IPO yesterday, but that trading yesterday had seen almost a 60% markup over its offering price. NTT DoCoMo gained after a newspaper report that it was considering marketing Nokia's low-priced handsets, although a company spokesperson said that the company had not yet made a decision. NTT DoCoMo had traded lower during the morning session before erasing those losses.

Other Asian bourses turned in mixed performances. In Taiwan, the central bank released Q4 current account surplus figures, showing that surplus at $7.8 billion and down from the $7.98 billion a year ago. The Taiwan Weighted lost 0.24%. South Korea's Kospi declined 0.47%, with Hynix Semiconductor, Samsung Electronics, Hyundai Motor, and Kia Motor all declining. Singapore's Straits Times climbed 0.10%, and Hong Kong's Hang Seng was flat, up 0.01% after Legend Group's disappointing Q4 earnings and outlook. The company said that competition was stiffer than expected in China's PC market. China's Shanghai Composite climbed 0.28%.

European bourses also show mixed performances, although many trade down. The FTSE is not one of those trading down, however, with the FTSE having reached a new 52-week high during intraday trading today. The sterling has been climbing steadily against the dollar over recent months, but the FTSE is not an export-heavy bourse. In France, the release of the Q4 GDP showed the expected 0.5% growth, in line with previous estimates. However, declining chip-related stocks are pressuring European bourses today. In addition to perceiving the U.S. book-to-bill data as disappointing, European semi equipment maker ASML announced that it would reduce its Dutch work force by 11%, adding those cuts to the ones already put into effect in Asia and the U.S.

Of possible interest to some U.S. investors, UBS upgraded Nokia to a "Buy 2" rating from its previous "Neutral 2" rating, citing a good chance of mid-single-digit revenue growth in the next six months. DaimlerChrysler wasn't so lucky, with JP Morgan cutting its operating profits forecast for 2004 and with Morgan Stanley also cutting its 2004 EPS estimates. DaimlerChrysler was declining in early European trading. L'Oreal beat operating profits when releasing its earnings report, but did not give earnings guidance for the coming year. The stock was down more than 1% in early European trading.

As of this writing, the FTSE 100 was up 20.10 points or 0.45%, to 4535.70, off its 4548.30 high of the day. The CAC 40 was flat, down 2.25 points or 0.06%, to 3757.07. The DAX was down 16.53 points or 0.40%, to 4125.00.

  OI Technical Staff   2/19/200,  8:42:52 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.


Market Monitor Archives