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  Jeff Bailey   2/25/200,  5:40:16 PM
April Gold Futures (gc04j) 396.70 +0.15% ... here's a fitted retracment chart of this gold futures contract. Link

Exact technique I've shown in the e-mini S&P futures where a futures trade simply anchors at a relative high settlement, and attaches to a relative low settlement. It has to "make sense" and I think it does.

 
 
  Jeff Bailey   2/25/200,  5:16:30 PM
Closing Internals at this Link

 
 
  Jeff Bailey   2/25/200,  3:59:27 PM
Day trade close out alert GE $32.97.

OEX 565.93 ... fade near the close

 
 
  Jeff Bailey   2/25/200,  3:58:59 PM
AMEX Gold Bugs ($HUI.X) 221.90 -1.08% ... erasing about 2/3 of today's losses.

Just as broader market bulls might be defending the lows, them gold bugs look to be doing the same.

 
 
  Jeff Bailey   2/25/200,  3:57:51 PM
Economic data due out before the open is weekly jobless claims and January durable goods.

 
 
  Linda Piazza   2/25/200,  3:50:03 PM
This time, the OEX temporarily climbed above the weekly pivot, but is back below it again. It also hit, exactly, the rising trendline of that inverse H&S that I pointed out earlier today, the one that I didn't think was a credible formation, before turning down. I still don't think that's a credible formation, but if I'm wrong, either a crossing of that neckline or a distinct turndown from it could result in a big move.

 
 
  Jeff Bailey   2/25/200,  3:49:06 PM
OEX ... 566.25 +0.45% ... stuck its head above WEEKLY Pivot (566.55) like a Prarie Dog, then went back in its hole.

Speaking of "dogs"..... GE $32.99 -0.87% just sitting here at $33.00. GE is LARGEST cap weighted stock in OEX.

Per trader's e-mail and him not wanting me to talk bad about GE after profiling it bullish...

Often times when I talk "bad" about a stock is seems to perform more to my liking.

 
 
  Linda Piazza   2/25/200,  3:47:14 PM
The TRAN is holding above 2850, perhaps suggesting that it will continue to climb for a short period, trying to put in that higher low on the daily chart. A host of moving averages are moving to place just above 2900, firming up the defense. The 100-dma, 21-dma, and 10-dma all converge there, as well as that 72-ema I've been watching, which sometimes appears to be instrumental in the TRAN's trading pattern, too, at least from a cursory inspection of the chart. RSI kicks up and the 21(3)3 stochastics are on the verge of a bullish kiss with that bullish kiss already accomplished on the 5(3)3's (although they're not yet moving out of territory indicating oversold conditions). MACD remains flat. To me, this accumulation of evidence suggests, but does not prove, that this two-day climb is some type of measured distribution pattern, perhaps a bear flag, and I'd also suspect that a lower high might be reached, with the TRAN turning down ahead of a 50% retracement of the recent plunge. If that's true, then the TRAN's rise could fail at any point, but another day at the ATR should get it up to that resistance and another two or three days of these small-bodied, less-than-ATR days. This latest rise could also be part of a movement to coil the TRAN into a neutral triangle at the bottom of the recent plunge. Of course, this could also be a true higher low preparatory to the TRAN climbing and retracing all those lost points. That seems the less likely interpretation right now, but it's certainly a possible one.

 
 
  Linda Piazza   2/25/200,  3:37:08 PM
The first BIX pullback today came as the BIX was approaching the 30-minute 21-pma. Now it looks like time for the BIX to pull back again or consolidate as it approaches the 30-minute 100/130-pma's. That pullback could take the form of a bull flag, however, and could find support in that 348.50-351 zone that has been providing support for so long, and maybe even higher at 351.90, so we won't know much as such a pullback begins, if it does. Today is just one of those days, but at least we knew to expect it this morning. It's always possible that the BIX could break out to the upside, too, moving above the 30-minute 100-pma, currently at 352.87.

 
 
  Jeff Bailey   2/25/200,  3:27:06 PM
Russell 2000 Index (RUT.X) 577.11 +0.91% ... new session high. With 24 minutes left to close, RUT.X does threaten to close back above its trending higher 50-day SMA of 574.59.

A little stronger perhaps that August 11, when RUT.X closed right on its 50-day SMA.

Starting to get a sense, based on observation that a rebound may indeed be in the making.

 
 
  Linda Piazza   2/25/200,  3:25:05 PM
I hate it when key resistance or support levels are breached in the last few minutes of trading. That always brings up the question of whether the level was just overshot in last-minute haste to sell or buy, depending on whether support or resistance was being overrun, and whether that level would have held otherwise. As the end of day approaches, the OEX is testing this morning's resistance, the weekly pivot, and the 567-568 level that the Keltner channels identify as next strong resistance.

 
 
  Jeff Bailey   2/25/200,  3:15:58 PM
03:00 Internals at this Link

 
 
  Jeff Bailey   2/25/200,  3:10:09 PM
Russell 2000 Index ($RUT.X) 576.08 +0.73% .... did make a new session high about 30-minutes ago at 576.33.

So did SOX.X

May have already been mentioned, but see this while updating the internals.

 
 
  Jeff Bailey   2/25/200,  3:02:07 PM
GE pretty big volume spike of 706,900 shares on that move lower from $33.02-$33.96.

Somebody's either getting out, or getting in for the last hour.

 
 
  Jeff Bailey   2/25/200,  2:57:30 PM
Newmont Mining (NEM) $42.75 -2.3% ... building an intra-day pennant on that 5-minute chart.

 
 
  Jeff Bailey   2/25/200,  2:55:55 PM
GE $32.99 -0.87% ... continues to slip lower.

4-minutes... 4-minutes to bond market close.

GE action might have to hint at a decline to the close for the indices if bears are picking on an intra-day weak stock.

 
 
  Linda Piazza   2/25/200,  2:54:55 PM
Here's a look at the OEX 60-minute chart, depicting the action as it relates to the 100/130-pma's on that chart: Link

 
 
  Jeff Bailey   2/25/200,  2:50:40 PM
QQQ ... 60-minute interval chart at this Link

Could see collision with MACD at zero should QQQ trade $36.78. Begin to make observation that $36.78 is BIG near-term resistance.

At same time, MACD's recent pullback low was higher than pullback low found when QQQ was higher at .... $36.78 level.

Might have to look for $36.78 in tomorrow's DAILY Pivot matrix.

 
 
  Linda Piazza   2/25/200,  2:40:55 PM
As the OEX rises, watch the weekly pivot level at 566.67, with this level being just above the high of the day. Of course, that's assuming that the OEX gets that far, which might not ever happen.

 
 
  Jeff Bailey   2/25/200,  2:40:09 PM
S&P Banks Index (BIX.X) 352.25 +0.32% ... session highs.

20-minutes... 20-minutes until bond market closes.

 
 
  Jeff Bailey   2/25/200,  2:38:41 PM
Microsoft (MSFT) $26.74 -0.52% ... almost and identical trade to GE on intra-day basis. Look at these 5-minute interval charts with 21, 50 and 200 pd SMA's.

 
 
  Linda Piazza   2/25/200,  2:37:25 PM
A reader would like to know about combining EW, Fib levels, and Keltner channels. Does anyone have experience combining these three techniques, establishing buy/sell signals using a combination, or know of an article that combines the techniques? Not being an EW person myself, I don't have information that might be helpful.

 
 
  Linda Piazza   2/25/200,  2:35:35 PM
About the only thing I can say definitively at this point is that the OEX is back above the 30-dma. That may change by the end of the day, of course. It's still below the 30-minute 100/130-pma's, still testing (and rising above as I type) the 60-minute 100-pma, still below the weekly pivot, still above the 559.50-561.25 support zone. If the improving advdec line is any indication, any move in the last part of the trading day will be move up, but resistance is still layered so thickly that any rise still appears to be a rise within a wide congestion zone.

 
 
  Jeff Bailey   2/25/200,  2:35:34 PM
02:00 Internals at this Link

 
 
  Jeff Bailey   2/25/200,  2:21:24 PM
GE $33.02 -0.78%...... definately a seller right now at $33.05 and RED #5.

 
 
  Jeff Bailey   2/25/200,  2:17:28 PM
Sun Communities (SUN) $40.69 +0.59% Link ... 21-day SMA looks to have served pull back support.

 
 
  Jeff Bailey   2/25/200,  2:16:07 PM
Never sure.... but today's last hour of trade could be a wild one.

 
 
  Jeff Bailey   2/25/200,  2:06:31 PM
General Electric (GE) ... intra-day chart and thoughts for day trade long. Link

Can become a "key stock" too as it relates to OEX and DAILY Pivot/DAILY R1.

A trader also asked good question.

If GE doesn't trade day trade target of $33.55 by the close, would I hold overnight.

Answer: Yes, but would want to see OEX close ABOVE its DAILY R1.

 
 
  Linda Piazza   2/25/200,  2:06:13 PM
The OEX inches above the central channel support on the 15-minute Keltner channels, a level I noticed as pivotal (not in the "pivot analysis" sense) yesterday. The neckline for that possible (but unlikely?) inverse H&S keeps getting tested, too. Both 5- and 15-minute Keltner channels show that 567.35-567.83 should prove tough to get through, with other studies showing tough resistance even lower. Still sounds like a recipe for more consolidation to me, with no clear signal as to what's going to happen next.

 
 
  James Brown   2/25/200,  2:00:23 PM
Recently added put play IR may have produced a bear trap with yesterday's breakdown through very long-term support. The stock is bouncing strongly, up 2.28%, and back over the $66 level.

 
 
  James Brown   2/25/200,  1:56:20 PM
Current OI call play QCOM is bouncing from yesterday's pull back after Monday's big gain.

 
 
  James Brown   2/25/200,  1:54:17 PM
Current OI call play DHR is bouncing from the $90.00 level with a 1.6% gain. This may be an entry point with its RSI and stochastics turning bullish from oversold levels.

 
 
  James Brown   2/25/200,  1:51:50 PM
Afternoon sector update

Winners:
NWX networking: +2.25%
SOX semiconductors: +1.45%
DDX disk drives: +1.7%
XBD broker-dealers: +1.37%
DFI defense index: +0.93%

Losers:
XAU gold & silver: -2.22%
DJUSHB homebuilders: -0.42%

 
 
  Jeff Bailey   2/25/200,  1:50:25 PM
U.S. Dollar Index (dx00y) chart (30-minute delayed) with WEEKLY/MONTHLY Pivot retracement overlay. Link

 
 
  James Brown   2/25/200,  1:50:03 PM
Crossing the wires is news that the FDA has approved BRL's latest Cyclessa oral contraceptive. The stock is not reacting much, up 49 cents to $76.74.

 
 
  Jeff Bailey   2/25/200,  1:40:10 PM
Day trade long alert .... General Electric (GE) $33.12 here, stop $32.90, target $33.55.

 
 
  Jeff Bailey   2/25/200,  1:39:22 PM
Buy Program Prem. Alert

 
 
  Ray Cummins   2/25/200,  1:38:46 PM
Spreads/Combos -- E-mail Replies: Straddle Strategies Part II

When a straddle play is listed in the OIN, should a trader buy an equal number of contracts (even though the price of the underlying may not be exactly at the target strike price) or should he/she buy a certain ratio of calls and puts in order to be "delta-neutral" in the position?

As far as the positions listed in the OIN, keep in mind they are simply candidates to reduce your search for potentially profitable option trades. Depending on the strategy, there are a number of ways to enter/exit the suggested plays and since the prices are always different the next day, there is no unconditionally "correct" answer to your question. Many traders use the "delta-neutral" (equal dollar amounts) approach while some simply buy the same number of (put/call) contracts when the issue moves close to the target strike price. Both techniques work in given situations, however each and every play is different so you will have to make that decision on an individual basis. Good Luck!

 
 
  Ray Cummins   2/25/200,  1:35:07 PM
Spreads/Combos -- E-mail Replies: Straddle Strategies

During yesterday's session, one of our readers asked two excellent questions concerning debit straddles. I accidentally "nuked" the original E-mail but the two primary questions were: [1] Are ATM straddles better than slightly OTM straddles (or strangles)? [2] When a straddle play is listed in the OIN, should a trader buy an equal number of contracts (even though the price of the underlying may not be exactly at the target strike price) or should he/she buy a certain ratio of calls and puts in order to be "delta-neutral" in the position?

Regarding the purchase of debit straddles (at the money options) or debit strangles (out of the money options): From a theoretical point of view, the symmetric, delta-neutral straddle (exactly at the strike price with equally priced options) is more favorable, but there may be occasions when an out of the money position has a superior profit/loss outlook, or better (relative) option prices, due to premium disparities caused by heavy volume/demand in a particular series, etc. Evaluating all of the nearby options series with pricing software, along with reviewing the underlying's historical volatility and each position's statistical probability of profit, should allow you to decide which approach is best from a theoretical standpoint. In all cases, determining the "best" strategy (straddle or strangle) must still be based in part on your personal trading style, experience level, and risk/reward attitude.

 
 
  Linda Piazza   2/25/200,  1:27:39 PM
Here was my guess for market action on the OEX this morning, pre-market: What I'd guess right now, without first having a look at the open or at $TRIN and advdec levels, is that we might see some continued chop today as the OEX expends energy testing overhead levels and establishing where strongest resistance will be found, perhaps punctuated by some quick moves that might be difficult to trade. That pretty much explains what's happened up until now. Since I'm better at gauging what the markets might do outside trading hours, when I can be more dispassionate about what I'm seeing on the charts, I sometimes go back to my first scenario and measure market action against that scenario. That sometimes keeps me out of trouble. Today, it kept me from thinking that every move was the move. Trouble is, it doesn't give me a clear idea of when the OEX might be through testing those overhead levels. The TRIN suggests that it's not yet through, but that's about all I have to go on. The collapsing volatility that Jim mentioned is going to collapse premiums on any directional OEX plays, too, eating away at any profitability when a move did finally occur.

 
 
  Ray Cummins   2/25/200,  1:13:29 PM
Spreads/Combos -- E-mail Replies: Strategy Selection

Hi Ray, Is there a section on the OIN website that defines the various combo plays and describes why you (me) would use them? I am new to options. Thanks, RS

Hello RS, Here is an article on the basic spreads: Link ...and, there are lots of articles (by myself and other OIN staff) about spread and combination trading on the website in the STRATEGIES section. Some excellent narratives are in the older portion of the Brokers Corner (Robert Ogilvie's stuff) and Mike Parnos, who produces the CPTI (Couch Potato Trading Institute) section, has also written lots of stuff about credit spreads and position management. Hope that helps! Ray

 
 
  Jeff Bailey   2/25/200,  1:11:59 PM
01:00 Internals at this Link

 
 
  Linda Piazza   2/25/200,  1:07:46 PM
The SOX fifteen-minute chart has now begun to take on the appearance of a bullish right triangle with a flat top at about 505.50 and with a rising lower supporting trendline. However, I'd wait for a break over the 15-minute 130-pma at 505.85 to verify any upside break, if it should occur. Because the SOX faces important and massive resistance soon after breaking above that 504-506 resistance level, however, I'd be reluctant to be feeling too bullish on semi-related stocks based on any such upward break alone. I'm watching it because it's such a bellwether index.

 
 
  Jeff Bailey   2/25/200,  1:04:00 PM
Placer Dome (PDG) $16.25 -3.21% ... session lows. Yesterday's bounce to trending lower 50-day SMA reversal.

 
 
  Jeff Bailey   2/25/200,  1:01:29 PM
Swing trade bearish alert ... Newmont Mining (NEM) $42.79 here, stop $43.40, target $41.55.

 
 
  Jeff Bailey   2/25/200,  12:52:27 PM
QQQ close up view of daily interval QQQ chart. Link

 
 
  Linda Piazza   2/25/200,  12:50:44 PM
The advdec line has changed direction since my last notation of its direction, and has been turning generally up since about 11:40, now positive by more than 800 issues. I can't imagine why Greenspan's testimony and other Fedspeak would be occasion for a bounce--maybe relief that he's stopped speaking?--but keep an eye on the advdec line along with the other indicators you favor.

There's an inverse H&S forming on the OEX 15-minute chart, forming just under resistance, but there was no bullish divergence as the head was formed and it's not at either a bottom (usual case) or top of a rise (continuation form, less common) but is rather right in the middle of consolidation. I wouldn't bet all my nickles on any outcome should it be confirmed because of that reason, but it looks as if the confirmation level would be between 566.20-566.90, depending on whether you include shadows in the neckline or not.

 
 
  James Brown   2/25/200,  12:49:43 PM
United Rentals Inc (URI) is down 15.7% to its 200-dma near $16.91 after reporting earnings this morning that missed by a penny. Analyst had been looking for 16 cents a share and URI reported 15 cents but also warned for the rest of 2004. The company now expects just $1.00-1.10/share for 2004 versus estimates for $1.15.

 
 
  Jeff Bailey   2/25/200,  12:49:15 PM
U.S. Dollar Index (dx00y) 87.33 +1.38% ... while 30-minute delayed, dollar challenging recent 02/19/04 high of 87.41.

 
 
  James Brown   2/25/200,  12:43:48 PM
Ingram Micro (IM) is up 14% to new two-year highs after reporting strong earnings last night. IM beat estimates of 23 cents with net income hitting 34 cents a share in the fourth quarter. Revenues soared almost 15% to $6.76 billion, well beyond analysts' revenue estimates. IM also raised its Q1 earnings guidance to 23-25 cents compared to current consensus at 19 cents per share.

 
 
  Linda Piazza   2/25/200,  12:41:54 PM
More in the saga of "Why Does the 72-ema Figure in the Trading Pattern of So Many Tech-Related Daily Charts?" Here's the NWX, the Networking Index, with the 72-ema applied to the chart: Link Note the action this week.

 
 
  James Brown   2/25/200,  12:38:28 PM
Ruby Tuesday Inc (RI) has broken out to new all-time highs over resistance at $30.00 after raising its Q3 same-store sales estimates and earnings growth targets based on positive sales momentum.

Same-store sales are expected to rise from +2% to +3.5% and RI expects earnings to rise 17.5% to 20%.

 
 
  Jeff Bailey   2/25/200,  12:27:31 PM
If day trading the QQQ I would have to think stops are at the highs for bears and lows for bulls on intra-day basis. Especially if using the 08/11/03 history.

 
 
  Linda Piazza   2/25/200,  12:27:18 PM
The BIX has been hovering just above support in the 348.75-351 range, currently at 350.77. So far, the bearish divergence that showed up as the BIX hit equal highs on that daily chart has not been followed by a confirming move to a new low, but the BIX did today find resistance at its 21-dma after closing below that moving average yesterday, for the first time since mid-January. Over the last six months, the BIX has sometimes had 2-5 days of closes beneath that moving average, usually but not always then dipping down to the 50-dma. That 50-dma is at 344.76, but the 5(3)3 stochastics are already trying to hook up again today as the BIX scrambles to hold above that support, so the decline to the 50-dma is far from assured.

 
 
  Jeff Bailey   2/25/200,  12:25:23 PM
U.S. Dollar Index (dx00y) 87.15 +1.01% .... has been holding above its DAILY R2 of 87.09.

The volatility in the dollar of late has really made for some good trading in gold stocks (long and short).

 
 
  James Brown   2/25/200,  12:20:37 PM
Lunchtime sector update

Winners:
NWX networking index: +1.93%
SOX semiconductors: +1.19%
DDX disk drives: +1.70%
DFI defense index: +0.79%

Losers:
XAU gold & silver: -2.51%
DJUSHB homebuilders: -0.98%

 
 
  James Brown   2/25/200,  12:20:27 PM
excellent, Thanks Jon!

 
 
  Jonathan Levinson   2/25/200,  12:18:27 PM
Here's the Gartner semi news, James: Link

 
 
  Jeff Bailey   2/25/200,  12:18:17 PM
12:00 Internals at this Link

On August 11, 2003, NYSE/NASDAQ internals looked like this at 12:00...

NYSE 1736:1294 and 81:10

NASDAQ 1755:1110 and 80:7

NYSE internals almost an exact match aren't they? NASDAQ looks weaker today than that found on 08/11/03.

 
 
  James Brown   2/25/200,  12:17:29 PM
Advanced Micro Devices (AMD) is up 2.9% on an upgrade to a "buy" from Oppenheimer.

 
 
  James Brown   2/25/200,  12:16:31 PM
I can't find any details but it looks like the Gartner research group is estimating a 23% rise for semiconductors in 2004, which looks like a rise from previous estimates from 20%. If I can find more I'll post the details.

 
 
  James Brown   2/25/200,  12:12:28 PM
After Monday night's Q1 earnings warning from Odyssey Healthcare (ODSY) the stock dropped 27% in Tuesday's session. At least one broker believes this is a buying opportunity and raised ODSY's rating to a "buy". The stock is up 10.48% from yesterday's close but this could just be a strong dead cat bounce.

 
 
  Linda Piazza   2/25/200,  12:11:51 PM
The trajectory of the advdec line has been generally down since shortly after 10:00 EST, but the advdec line is still positive by about 400 issues. If that trajectory continues, however, that supports the idea of weakness rather than strength.

I keep studying the OEX charts to find a definitive answer to when consolidation might be finished and what will happen then. So far, I'm seeing resistance where resistance should have been, supporting the idea that today's earlier rise was just what it could have been expected to be--a countertrend bounce to test and establish that resistance. However, with the OEX currently in the middle of a consolidation zone from the last few days, I don't see a clear answer now as to how long that testing period might continue.

 
 
  James Brown   2/25/200,  12:05:48 PM
Well that was a lame response from Greenspan on the question about repealing the Estate tax and how it would affect the economy.

He said he didn't know how he felt and wouldn't comment without any hard evidence.

 
 
  James Brown   2/25/200,  12:02:07 PM
ITT Educational Services Inc (ESI) has opened for trading and shares gapped down to $41.00 from yesterday's close at $57.40. The drop was fueled by news this morning that the U.S. District Court in Texas issued subpoenas and a search warrant to gather information on graduation rates, attendance numbers, recruitment, admissions and more. The company said it was unaware of any specific charges against it and mentioned that is corporate offices in Indianapolis were also searched by authorities.

 
 
  Jeff Bailey   2/25/200,  12:01:17 PM
Program trading alert ... HL Camp & Company has their computers set for program buying at $0.38 and program selling at $-1.88.

So far... would have gotten one buy program premium alert at approx. 10:20 AM EST.

SPX trade during that 5-minute interval was 1,142.11-1,143.45. That's right at that MONTHLY 38.2% (1,142.40) and WEEKLY 61.8% (1,142.64) overlap in the SPX Chart.

Here's the SPX chart from Monday's Index Trader Wrap.... Link

 
 
  Jeff Bailey   2/25/200,  11:58:30 AM
NASDAQ-100 Index (NDX.X) 1,463.68 +0.11% ... this is the index I actually back tested on, so concentrating here.

pullback low has been 1,461.26, where DAILY Pivot is 1,462.86.

 
 
  Jeff Bailey   2/25/200,  11:56:47 AM
SPX 1,139.81 +0.05% ... could be critical intra-day trade right here. SPX traded DAILY S1, comes back to DAILY Pivot. If it falters below the 1,138 level, this would be veiwed intra-day DIVERGENCE to the 08/11/03 trade discussion.

 
 
  Jane Fox   2/25/200,  11:39:14 AM
The first Mercedes-Benz SLR McLaren ever made, a silver coupe sold for 2.1 million, making it one of the most expensive new cars anyone has ever bought. The anyone, in this case, is Juliana Terian, who runs a luxury car dealership in Roslyn NY.

 
 
  Linda Piazza   2/25/200,  11:28:08 AM
That last OEX spike came within a few cents of the weekly pivot before the OEX fell again. I'm still not sure that the OEX is through testing overhead resistance, however, or that the outcome is yet known, although that's massive resistance grouped overhead. The OEX is also now back below its 100-pma's on both the 30- and 60-minute charts.

 
 
  Jeff Bailey   2/25/200,  11:24:44 AM
11:00 Internals at this Link

 
 
  Jeff Bailey   2/25/200,  11:22:41 AM
S&P Banks Index (BIX.X) 350.93 -0.05% ... edges to session low, but has been very flat.

 
 
  Jeff Bailey   2/25/200,  11:21:32 AM
NYSE Composite ($NYA.X) 6,652.46 -0.03% ... just turns fractions red.

 
 
  Jane Fox   2/25/200,  11:21:12 AM
WE knew this was coming though guys (comment on the Greenspan's SS comments).

 
 
  Jonathan Levinson   2/25/200,  11:18:43 AM
Linda, on behalf of the generation following yours, the Gen-X or -Y or whatever they're calling us this month, enjoy what little you've got- I see zero hope of receiving anything but debts out of my mandatory retirement and health care contributions.

 
 
  Jeff Bailey   2/25/200,  11:18:28 AM
Newmont Mining (NEM) $42.50 -2.86% .... critical support area between $42.37-$42.50. Spot gold also at critical support.

 
 
  Jane Fox   2/25/200,  11:13:34 AM
Dateline WSJ - WASHINGTON -- Federal Reserve Chairman Alan Greenspan urged Congress on Wednesday to deal with the country's escalating budget deficit by cutting benefits for future Social Security retirees rather than raising taxes.

In testimony before the House Budget Committee, Mr. Greenspan said the current deficit situation, with a projected record red ink of $521 billion this year, will worsen dramatically once the baby-boom generation starts becoming eligible for Social Security benefits in just four years.

He said the prospect of the retirement of 77 million baby boomers will radically change the mix of people working and paying into the Social Security retirement fund and those drawing benefits from the fund.

"This dramatic demographic change is certain to place enormous demands on our nation's resources ...demands we will almost surely be unable to meet unless action is taken," Mr. Greenspan said. "For a variety of reasons, that action is better taken as soon as possible."

Mr. Greenspan said that the benefits now received by current retirees should not be touched but he suggested trimming benefits for future retirees and doing it soon enough so that they could begin making adjustments to their own finances to better prepare for retirement.

 
 
  Linda Piazza   2/25/200,  11:13:01 AM
The OEX approaches its weekly pivot at 566.67, for those of you who watch pivot levels closely. It has now reached above its 30- and 60-minute 100-pma's.

 
 
  Linda Piazza   2/25/200,  11:10:31 AM
As of a few minutes ago (delayed data), the total volume today was only 312 million shares on the NYSE and 501 million on the Nasdaq. Advancers were strongly ahead of decliners on both exchanges, with adv/dec ratios at 17:12 for the NYSE and 17:11 for the Nasdaq. Up volume was 1.9 times down volume on the NYSE and 2.6 times down volume on the Nasdaq. The ratios are good, but the total volume levels aren't particularly great. They're typical of a consolidation day, which I consider this to be so far. Bulls would likely want to see higher volume on a day when the indices are rising after recent declines, because a light-volume climb after steep declines suggests the possibility of the slight advances being some sort of measured distribution pattern in the making. Watch for volume to pick up if the Dow can maintain 10,600 and other indices can reach and maintain key levels. A failure of volume to expand may be troublesome.

 
 
  Linda Piazza   2/25/200,  10:58:47 AM
The SOX currently challenges its 100-dma, with that average at 504.52 and the SOX at 503.70 as I type. The 504-506 zone is also known S/R. Yesterday, I speculated that the SOX was too far extended below its 30-minute 100/130-pma's and that it might need to rise toward those averages or else trade sideways while they descended toward the then-current SOX level. The SOX has been rising and those MA's have been dropping, but before the SOX can get to them, it has to get past the 15-minute versions, with the 15-minute candles spending this morning descending along the 15-minute 100-pma. That descent could be taking the form of a bull flag, but it's a rough one if it is, not a tight formation of lower highs and lower lows as would be expected with a bull flag. I think upward movements from here, if any, are going to punctuated by pauses at each of the layered resistance levels between here and the 50-dma at 515.67, and I'm not entirely sure the SOX will make it to or above that MA. I think we just have to see how things look as it's approached. This bounce was expected and so was the hesitation between 504-506, but beyond that, I'm not sure what's going to happen yet.

 
 
  Jeff Bailey   2/25/200,  10:56:53 AM
Newmont Mining (NEM) $42.73 -2.37% ... either you all are trading some size and coming into cover on lowering of stop alert, or I get feel that when I do issue a lowered stop alert, somebody is coming in and buying, then selling into bearish stop.

Probably just the paranoid side of me, but suspicious.

 
 
  Jeff Bailey   2/25/200,  10:51:15 AM
Swing trade bearish stop alert ..... Newmont Mining (NEM) $42.85

 
 
  Jim Brown   2/25/200,  10:48:58 AM
Note the rising trend in layoffs since the September low: Link

 
 
  Jeff Bailey   2/25/200,  10:46:42 AM
Lower bearish swing trade stop in Newmont Mining (NEM) $42.62 -2.58% to $42.85. Nearing initial target of $42.50.

 
 
  Jim Brown   2/25/200,  10:46:26 AM
According to the Monthly Mass Layoff report 239,000 people were laid off in January and this is the highest number since Dec-2002 when 263,000 people lost their jobs. Nearly 90,000 workers in the manufacturing sector lost their jobs in January. So far the market has ignored the news.

 
 
  Jeff Bailey   2/25/200,  10:44:17 AM
Swing trade long alert .... in QQQ $36.55 +0.52% on trade at $36.71, stop $36.15 (to begin), target $37.40.

 
 
  Linda Piazza   2/25/200,  10:40:23 AM
The OEX is also jammed just under the 60-minute 100-pma, currently at 565.82.

 
 
  Jeff Bailey   2/25/200,  10:40:10 AM
QQQ $36.53 +0.46% ... after trading DAILY R1, morning pullback low has been $36.45

 
 
  Linda Piazza   2/25/200,  10:37:15 AM
Although the TRIN didn't indicate that the OEX was likely to have any difficulties with the 566-568 level, it is slowing its gains here, as all those grouped resistance levels suggested it would do. The OEX climbed above the 15-minute central Keltner channel resistance, piercing it, but it hasn't been able to maintain levels above that central resistance. It also pierced the 30-minute 100-pma, perhaps a bigger factor in the current retreat, with that average now at 566.12. Although the OEX pierced it on a 30-minute basis, there have as yet been no 30-minute closes above it. It doesn't look to me as yet as if the OEX is through testing this overhead resistance, however.

 
 
  Jeff Bailey   2/25/200,  10:36:25 AM
Swing trade bearish stop alert ... Sears (S) $46.35 +0.82% (from 02/13/04 entry of $46.11)

 
 
  Jeff Bailey   2/25/200,  10:32:54 AM
Newmont Mining (NEM) $42.79 -2.26% ... sessiion lows.

 
 
  Jeff Bailey   2/25/200,  10:26:34 AM
10:00 Internals at this Link

Yesterday's internals at this Link

 
 
  Jane Fox   2/25/200,  10:19:18 AM
In the SEC's first attempt to address inconsistencies that have occurred between the electronic stock markets and the NYSE, it is recommending rules that, if adopted, could fuel competition among stock markets and allow investors to buy and sell stocks more rapidly. The current rules were adopted in the 1970s and changes are needed to respond to investor demand and revolutionary changes in technology, said Chairman William Donaldson. "The critical issue is how to capture the benefits of speed and certainty of execution, while maintaining the bedrock principle of assuring that all investors - large or small - are protected," he said. He warned, though, that achieving these important goals would involve "trade-offs" that won't satisfy everyone. Several commissioners expressed concern about the impact of rule changes on investors, including whether they would hurt overall market liquidity. Two Republican commissioners also criticized the proposals as lacking in scope, saying the SEC should be looking at market structure more broadly and not just tweaking rules.

At the core of the debate is a fundamental difference over what matters more: the speed with which a buy or sell order can be executed, or its price. The SEC says that while price matters, the desire of some investors to trade rapidly can't be ignored. Such a shift in thinking could come at the expense of the 200-year-old New York Stock Exchange and benefit newer, electronic markets.

 
 
  Linda Piazza   2/25/200,  10:18:06 AM
The TRAN is higher today, reaching higher than yesterday's high and perhaps setting up the higher low that was always a possibility. We won't know that higher low to be accomplished, however, until the TRAN sustains levels above the 50% retracement of the recent plunge, at 2951.88. We could expect a day or two of climbs on the way down toward retesting the recent low, so today's climb isn't conclusive except to say that so far, it supports the idea that the TRAN could be setting up a higher low on that daily chart.

 
 
  Jeff Bailey   2/25/200,  10:18:01 AM
Dow Jones Home Construction (DJUSHB) 575.56 -2.11% .... testing its still rounding lower 50-day SMA (575.56) from above, and back below its trending higher 21-day SMA of 580.57 after those weaker than forecasted existing home sales figures.

May be vulnerable to upwardtrend from the March lows at 566.50.

 
 
  Jeff Bailey   2/25/200,  10:10:59 AM
March Canadian dollar futures (cd04h) 0.7483 -0.43% nasty looking head/shoulder top formation presenting itself in the old maple leaf. Neckline at 0.74. Major league baseball players in Canada might look to be hedging their paychecks! Maybe get short a little gold too.

 
 
  Jonathan Levinson   2/25/200,  10:08:36 AM
The opening put to call ratio is .71, VXO -.08 at 15.74.

 
 
  Jeff Bailey   2/25/200,  10:07:38 AM
Will be looking for a QQQ pullback entry near the DAILY Pivot at this point. Will be monitoring internals quite closely.

From a bullish standpoint, I do NOT like the fact that both the NASDAQ Comp. Bullish % and NASDAQ-100 Bullish % are in columns of O and showing internals weakening.

This is one reason I quickly reviewed the stocks that recently gave NASDAQ-100 PnF sell signals.

 
 
  Jim Brown   2/25/200,  10:05:18 AM
Text of Greenspan's speech on the economy: Link

 
 
  Jeff Bailey   2/25/200,  10:04:42 AM
QQQ $36.60 +0.68% .... did see trade at DAILY R1 of $36.64 with session high of $36.67.

 
 
  Jim Brown   2/25/200,  10:00:25 AM
Greenspan says growth is accelerating, Fed remains highly accomodative, jobs growth is rising.

 
 
  Linda Piazza   2/25/200,  10:00:16 AM
Yesterday afternoon, I posted a fifteen-minute OEX Keltner chart, showing how the OEX had twice tested the central Keltner resistance on that chart and fallen back from that test. Today, the OEX has edged above that central Keltner channel resistance, currently at 565.60, but this chart, too, suggests that it should be difficult for the OEX to get much past the weekly pivot, perhaps to 567.20, but with that line rising on this chart. So far, this is just more chop in a congestion zone below what's likely to be strong resistance and above what's likely to be strong support. If we only knew that 561-568 range was going to be preserved as the OEX chopped around, we could play the range, but I'm not certain enough of that possibility to suggest it, especially with TRIN looking more bullish than bearish as the OEX approaches the top of that range. That TRIN makes it appear that the OEX is likely to spend some time hanging around the top of that range, if not break above it, but keep your eye on what happens with that and the advdec line, noting their trajectories.

 
 
  Jim Brown   2/25/200,  9:59:28 AM
Chicago Fed National Activity Index = 0.49 , (last 0.13)
Existing Home Sales = 6.04m , (est 6.28M, last 6.47M)
Monthly Mass Layoffs = 2,428 , (last 1,929)

 
 
  Jonathan Levinson   2/25/200,  9:55:18 AM
The Fed is taking no action today, allowing 2B in overnight repos to expire for a net drain in that amount.

 
 
  Linda Piazza   2/25/200,  9:49:26 AM
The OEX is charging right up to the 60-minute 100-pma, currently at 565.82, action I expected to see happen today, but not necessarily in the first few minutes. The 30-minute version is overhead at 566.14. I expect gains to slow in this area, especially with the weekly pivot at 566.67. Keltner channels suggest that level as one at which the OEX will be overbought on a short-term basis, too. Let's see, though.

 
 
  Jeff Bailey   2/25/200,  9:46:19 AM
Newmont Mining (NEM) $43.22 -1.25% ... ticked back to $43.50 then got hit with pretty good round of selling.

AMEX Gold Bugs ($HUI.X) 222.66 -0.74% sector loser early, with Oil Service (OSX.X) 105.62 -0.44% and Health Providers (RXH.X) 378.82 -0.32% just behind.

 
 
  Jeff Bailey   2/25/200,  9:43:06 AM
Express Scripts (ESRX) $70.21 +4.99% Link ... jumping higher on earnings.

 
 
  Linda Piazza   2/25/200,  9:42:43 AM
During the first five minutes of trading, the OEX had a high of 564.37 and a low of 563.69, with the OEX obviously above the midpoint of the first five-minute range. I apologize for the delay in getting this information to you, but my broadband service went down for a few minutes just as the market opened.

 
 
  Jeff Bailey   2/25/200,  9:35:51 AM
Newmont Mining (NEM) $43.42 -0.77% .... bearish day traders might get a short-entry on a upside gap fill.

 
 
  Jeff Bailey   2/25/200,  9:29:01 AM
Spot Gold $401.10 ... down $2.80 from yesterday's New York close of $403.90. Did find buyers overnight right at $400.00.

 
 
  Jim Brown   2/25/200,  9:25:22 AM
Just a reminder that Greenspan speaks again today only this time on the economy. This could provide some market movement if he is especially motivated.

 
 
  Jim Brown   2/25/200,  9:23:57 AM
Speech by Fed Governor Bies
Qualitative Aspects of Effective Risk Management Link

 
 
  Jim Brown   2/25/200,  9:23:08 AM
Speech by Governor Edward M. Gramlich
Budget and Trade Deficits: Linked,
Both Worrisome in the Long Run, but not Twins Link

 
 
  Linda Piazza   2/25/200,  8:36:05 AM
Yesterday morning, my best guess for the day's action on the OEX was a steadying or a slight rise to test the 30- and 60-minute 100/130-pma's. Although the intraday action didn't feel as if the OEX was seeing a steadying, that's in fact what happened, with the OEX ending the day less than a point beneath its opening value. It did, however, close beneath the 30-dma, with that being the first close beneath that average since November 21, if I'm not missing something. A look at the daily candles shows the real bodies growing smaller as the OEX approaches what should be strong support between 559.50-561.23 and then even stronger support near 557.30-557.50, with that latter number being the location of the 50-dma. I've been expecting a bounce somewhere through here, and like Jim in his wrap last night, I'm wondering if it's not about time for that bounce.

As yesterday ended, the OEX had retraced a little over half the day's range, and was positioned just under the mid-channel Keltner S/R, as well as just under that 30-dma. The 30- and 60-minute versions of the 100/130-pma's lie just overhead, too, in a zone from 565.14-566.21. It was those averages that kept stopping the OEX yesterday as it tried to rise, among other types of resistance. The 30- and 60-minute oscillators hint at more testing today, but I'm just not sure how successful the OEX will be at pushing much above those grouped averages and other types of resistance massed so closely together. The weekly pivot is at 566.67 and Keltner channels predict that the OEX will be overbought on a short-term basis by 567.51 or lower, since the line is descending. However, the daily 5(3)3 stochastics are printing a bullish kiss, without having yet rolled up through the line that delineates bullish action, hinting that it might be time for a bounce or consolidation of some length, possibly a few days.

I'm not sure what to expect, but what I'd guess right now, without first having a look at the open or at $TRIN and advdec levels, is that we might see some continued chop today as the OEX expends energy testing overhead levels and establishing where strongest resistance will be found, perhaps punctuated by some quick moves that might be difficult to trade. If the OEX can climb above the massed 30- and 60-minute 100/130-pma's and the weekly pivot, sure to be watched closely by those following pivot analysis, and can sustain that level for more than a couple of minutes, then the picture might change and we might see that several-day bounce, but a choppy, countertrend bounce that might be difficult to trade until and unless the OEX clears the double-top level. A fall below 557.36 would confirm the double-top formation, setting up a downside target near 541. As I mentioned in my subbing-for-Jim wrap this weekend, however, the last couple of times the OEX has consolidated sideways before climbing again, the weekly chart shows that it's done so for 11 or 12 weeks, and we're working on our 7th or so week here. It's possible that we're still in for a lot of sideways chop roughly above 557-559.50 before the OEX can gather enough steam to challenge a big congestion zone on the weekly chart beginning at the level of recent highs. I have thought, and still think, that we'd all feel a bit more comfortable if the markets would do the normal pullback thing that charts keep suggesting will happen before it attempts another climb, but I haven't been consulted about that.

 
 
  Jonathan Levinson   2/25/200,  7:37:41 AM
Another light day for economic reports- we await existing home sales for January at 10AM, with estimates ranging from 6.15M to 6.27M, prior month's reading 6.47M.

 
 
  Linda Piazza   2/25/200,  7:00:20 AM
Good morning. The Nikkei bounced above 10,700 again in early trading on Wednesday, but it couldn't hold all its gains. It closed up a modest 14.60 points or 0.14%, at 10,658.73. In early trading, techs, automakers, and banking stocks had started off weak, but some pharmaceuticals soared. Tuesday, Yamanouchi Pharmaceutical announced a plan to buy Fujisawa Pharmaceutical and form Japan's second-largest pharmaceutical company, a plan that one article labeled a done deal. Across Asia, health-related stocks accounted for much of any gains seen. The gains in the pharmaceuticals and transports, another sector in the green, could not make up for tech weakness, however. Banking stock ended up with mixed performances, but most were flat to down. Shinsea Bank, last week's IPO, soared again today, still shaking out the early volatility sometimes seen in such issues. In other stock-specific news, Softbank and Yahoo Japan each plunged 5.5% after an investigation into a data leak involving Yahoo Japan's Internet service clients. Four men were arrested. Yahoo Softbank is an affiliate of Internet investor Softbank.

Other Asian bourses turned in mixed performances. The Taiwan Weighted gained 0.84%. South Korea's Kospi traded higher by a modest 0.26%. With two of SK Telecom's executives resigning after their fraud convictions, SK Telecom was a strong gainer in early trading. Singapore's Straits Times fell 0.54% and Hong Kong's Hang Seng fell 1.14%. China's Shanghai Composite lost 2.08%.

European bourses also are mixed this morning. Both print articles and talk on CNBC Europe centers on telecom merger activity, with one television commentator mentioning that KPN was in danger of being labeled as "tarting" itself by expressing interest in so many deals, one after another. Today, KPN was bouncing from recent declines after last week's failed acquisition bid for Mmo2 as news circulated that it had talked to France Telecom about a possible merger. Vodafone apparently remains interested in Vivendi Universal's mobile phone unit SFR. Vivendi was gaining in early trading. In other stock-specific news, Royal Dutch announced the formally approved development of Kazakhstan's Kashangan oil field, with first oil targeted for 2008. That news sent the company's stock modestly higher in early trading.

As of this writing, the FTSE 100 was down 9 points or 0.20%, to 4487.80. The CAC 40 was flat, down 0.08 points or 0.00%, to 3683.36. The DAX was down another 17.68 points or 0.44%, to 3973.74.

 
 
  Jeff Bailey   2/24/200,  11:00:41 PM
NASDAQ-100 Bullish % (BPNDX) has fallen further to "Bear Confirmed" status at 63%. Link

The broader NASDAQ Composite Bullish % ($BPCOMPQ) reversed lower to "bull correction" status. Link

NASDAQ-100 components that have given reversing lower point and figure sell signals since Tuesday, February 17th. (in chronological order)...

02/18/04 CTAS Link

02/19/04 INTU Link

02/20/04 GENZ Link and PDCO Link

02/23/04 INTC Link and IVGN Link

02/24/04 LVLT Link , SNPS Link and YHOO Link

A review of these stock's supply/demand charts doesn't show "garage sale" type selling where full out selling has been seen after a sell signal. At the same time, quick 3-box reversals higher aren't being found like we may have witnessed late last year, where bears may not be as quick to cover, or bulls may be showing less aggressive type of buying despite some pullbacks to past support levels.

 
 
  Jeff Bailey   2/24/200,  9:15:52 PM
Pivot Matrix for tomorrow at this Link

 
 
  OI Technical Staff   2/24/200,  8:16:50 PM
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