Option Investor
Printer friendly version
  Jeff Bailey   3/1/2004,  4:42:29 PM
Closing Internals at this Link

  Jeff Bailey   3/1/2004,  4:07:49 PM
NH/NL internals .... NYSE NH/NL for day does show 5-day average ratio of 96.6, just above 10-day of 96.5. Closing NASDAQ NH/NL would have 5-day average ratio at 92.9 and 10-day at 92.9.

Call it a draw, and not worth betting the farm on from the bullish side, but NH/NL indications do suggest mid-August scenario in play.

  Jeff Bailey   3/1/2004,  4:04:25 PM
QQQ $37.02 +1.23% .... looks to close right near its 21-day SMA of $36.92.

Bulls would like to see buyers aggressive enough for close above, which would be similar to 08/15/03 close of $31.17, where next session, QQQ traded closed near session high of $32.02 at $31.98.

WEEKLY R1 here at $37.03 too.

  Jeff Bailey   3/1/2004,  3:50:30 PM
Good gravy! .... NTES $57.51 +8.42% ...

  Jeff Bailey   3/1/2004,  3:32:14 PM
Day trade bullish target alert ... Netease.com (NTES) $56.61 +6.73% at target of $56.50.

  James Brown   3/1/2004,  3:29:22 PM
Another candidate from our watch list was Borg Warner (BWA) but instead of breaking down under support at $90.00 the rally today has reversed the stock and shares are up 2.53% - back above its 50-dma. This has sharply reversed its short-term technical oscillators.

  James Brown   3/1/2004,  3:26:58 PM
CNBC chatting about cyclical stock CAT. The stock may be up today (+1.3%) but the rally is quickly fading as we head toward the close. This looks like a failed rally and a new (very) short-term lower high.

  James Brown   3/1/2004,  3:25:10 PM
ASD was on our watch list this weekend and today's rally has helped boost shares above resistance near the $110 level. Its MACD has produced a new buy signal.

  Jeff Bailey   3/1/2004,  3:17:42 PM
03:00 Internals at this Link

  Jeff Bailey   3/1/2004,  3:13:05 PM
Day trade raise bullish stop alert .... Netease.com (NTES) $56.19 +5.95% ... Raise stop to $55.84

  Jeff Bailey   3/1/2004,  3:05:45 PM
Day trade raise stop alert .... Netease.com (NTES) $56.09 +5.75% ... raise stop to $55.74.

  Jeff Bailey   3/1/2004,  2:45:06 PM
Day trade raise bullish stop alert .... Netease.com (NTES) $55.85 +5.3% ... Raise stop to break-even

  Jeff Bailey   3/1/2004,  2:40:48 PM
Buy Prog. Prem. Alert

  Jeff Bailey   3/1/2004,  2:26:44 PM
Day trade entry alert ... Netease (NTES) $55.50.

  Jeff Bailey   3/1/2004,  2:24:58 PM
Day trade long alert .... Netease.com (NTES) $55.50 here, stop $55.20, target $56.50.

  Jeff Bailey   3/1/2004,  2:23:32 PM
02:00 Internals at this Link

  Jeff Bailey   3/1/2004,  2:11:41 PM
Semiconductor Index (SOX.X) 509.70 +1.48% ... just traded MONTHLY Pivot of 509.69 and DAILY R1 509.30. Short-term bears might be pressured here.

All SOX components with exception of AMD $14.91 -0.6% showing gains.

  Jeff Bailey   3/1/2004,  2:04:30 PM
QQQ $36.85 +0.73% ... just makes session high. Nice volume spike of 2.7 million shares this 5-minute interval.

  James Brown   3/1/2004,  2:01:50 PM
Traders following the PD call play...note that the stock has continued to climb and is trading at $89.44 (+3.68%). We're going to close the play tonight now that shares have exceeded our target. We originally picked it at $80.51 on Feb. 11th.

Odds are good PD may see a pull back toward the $85 level and traders can then choose to re-evaluate it for another bounce.

  Ray Cummins   3/1/2004,  2:01:41 PM
Spreads/Combos & Premium-Selling -- E-mail Replies: Trading Techniques Part II

Learning when to enter and exit specific issues is probably the most difficult step as it requires a solid understanding of technical analysis and market trends. The setup for a specific trade should indicate that market conditions have become favorable for entering a new position. It should also help determine what actions to consider, based on the character of the selected issue or instrument: trending or consolidating, stagnant or volatile. The appropriate trading strategy will profit from a correct forecast of the issue’s future price action thus, it is crucial to initiate new positions only in those situations where the probability of success is highest. The profit/loss targets (exit points) are also based on criteria established in pre-trade objectives and in most cases, they are determined prior to initiating the position.

Of course, you need to follow the rules once they have been established. It doesn't matter how well your system works if you can't follow the rules with perfect discipline on a daily basis. Most traders do not like to take losses, even small ones but the fact is, every investor, professional or novice will, at one time or another, participate in positions that turn out to be losers. It is very important to realize that anyone who trades, in any type of financial market, will end up with a percentage of losing positions. The difference between successful traders and those who eventually fail, is how they react to unfavorable plays and the manner in which they manage losses. For most of us, (and I am included in this group) that aspect of trading is usually learned the hard way! Good Luck!

  Ray Cummins   3/1/2004,  1:52:37 PM
Spreads/Combos & Premium-Selling -- E-mail Replies: Trading Techniques

(condensed)Hi Ray, I just started a trial subscription with the Option Investor and after looking through your picks, I was curious what kind of system is needed to use spreads. I am a familiar with stop orders and cost averaging, etc. and yet it seems as if these types of trades are much more complex. My success has always been greatest with a formal trading plan but since I am a bit new to this stuff, I need some help with the best way to approach spread plays. TY

Hello TY, Trading spreads and combinations is not much different than simply buying calls and puts. In most cases, the relationship (rather than the type) between each option defines the outlook for the play and the potential for profit and loss. But, before your try to construct a profitable system, you need to identify the proper risk/reward perspective and select a favorable trading strategy. Then you can develop a technique for managing the position that fits your experience level and portfolio outlook.

There are a number of factors necessary for a successful trading system but the most important components are: planning the trade (which includes establishing the initial exit points), entering the position, and closing the play -- or making adjustments to extend its timeframe and/or modify the outlook. Each of these phases should be created (and adjusted) to fit the needs of a particular situation, and they must all be present in order to achieve consistent results. In short, a successful system is one that will identify the most appropriate time to enter the market; when the potential for profit is most favorable, and exploit winning trades for maximum return while simultaneously limiting losses in those positions that don’t perform as expected.

  Jeff Bailey   3/1/2004,  1:46:29 PM
01:00 Internals at this Link

  James Brown   3/1/2004,  1:12:04 PM
If the RLX retail index closes at current levels (400.19) it would be a new all-time high.

  Jim Brown   3/1/2004,  12:57:20 PM
DNA - Now down -1.62 and threatening to break under $106. Looks like the short squeeze is over. When I was researching this for the editors play this weekend the numbers according to Multex showed 103% of the stock was owned by insiders or institutions. Obviously that is not correct and some number was stale but either way there was a very small amount of stock available for trading. Those shares were traded numerous times on Thr/Fri with daily volume several times normal volume as shorts scrambled to cover. Here is the link to the Editors Play and the explanations: Link

  James Brown   3/1/2004,  12:48:44 PM
The 1.8% jump in the OIX index to 340 puts it a levels not seen since June 2001.

  James Brown   3/1/2004,  12:47:34 PM
Today's rise in the BKX banking index appears to be a new all-time high for the sector.

  Jonathan Levinson   3/1/2004,  12:38:55 PM
Thanks, James.

  James Brown   3/1/2004,  12:38:00 PM
The author is Christopher Farrell.

  Jonathan Levinson   3/1/2004,  12:35:59 PM
Who is the author, James?

  James Brown   3/1/2004,  12:34:36 PM
There's an interesting article from BusinessWeek yesterday titled "Why The Bears Are Wrong". Part of the author's theory suggests that macroeconomic volatility has subsided and will allow stock valuations to rise above their historical norms (and stay there).

  Jeff Bailey   3/1/2004,  12:32:02 PM
S&P Banks (BIX.X) 355.74 +0.6% ... challenges recent 4-year highs of 356.72 found two weeks ago. All-time highs were set July 1998 at 367.75.

  Jeff Bailey   3/1/2004,  12:27:55 PM
NASDAQ-100 (NDX.X) 1,476.63 +0.42% saw session high at 1,481.28 and low of 1,467.57 (DAILY Piv/WEEKLY Piv 1,471), while its Tracking Stock (QQQ) $36.72 +0.41% saw session high of $36.83 and low of $36.47.

  Jeff Bailey   3/1/2004,  12:25:52 PM
Dow Industrials (INDU) 10,659.33 +0.71% ... session high above WEEKLY R1 (10,650.29) .... just about 10 points though.

S&P 500 (SPX.X) 1,152.85 +0.69% ... also a session high and WEEKLY R1 (1,152.94)

  Jeff Bailey   3/1/2004,  12:19:45 PM
Semiconductor ... here is quick table of both the Semiconductor Index (SOX.X) 504.52 +0.45% and Semiconductor HOLDRs (AMEX:SMH) $41.15 +0.61% components. Link

Sorted by stock symbold for comparison of similar components.

  Jeff Bailey   3/1/2004,  12:08:13 PM
12:00 Internals at this Link

Current NH/NL indications at the NYSE would have the 5-day ratio at 96.5 and 10-day ratio at 96.5, so very close to a bullish crossover.

NH/NL indications at NASDAQ would have 5-day ratio at 92.6 and 10-day at 92.8.

  Jeff Bailey   3/1/2004,  12:02:21 PM
Russell-2000 Index ($RUT.X) 590.18 +0.78% ... making new session high here. First major index to do so after 10:00 AM EST economic data.

  James Brown   3/1/2004,  11:59:14 AM
12:00 NOON sector update...

(Biggest) Winners:
DJUSHB homebuilders: +3.62%
XAL airlines: +1.39%
OIX oil index: +1.57%
XNG natural gas: +1.36%

BTK biotech: -0.93%
TRAN transports: -0.29%
SOX semiconductors: -0.01%

  James Brown   3/1/2004,  11:55:34 AM
A headline crossing the wires recently said that SG Cowen was eliminating their rating system. A quick check of their website did not reveal any details.

  James Brown   3/1/2004,  11:50:37 AM
The recent breakout over resistance at its 50-dma and the $24.00 level is seeing some follow through in XM Satellite Radio (XMSR). The stock is up 2% to $25.00.

  James Brown   3/1/2004,  11:47:48 AM
JPMorgan also upgraded Alliance Gaming (AGI) to an "over weight" and shares of AGI are up 10.26% to $26.75.

  James Brown   3/1/2004,  11:46:26 AM
It seems a bit over enthusiastic but Intl Game Technology (IGT), the slot machine maker, is up 6.7% to a new all-time high after JPMorgan upgraded the stock to an "over weight".

  James Brown   3/1/2004,  11:43:07 AM
Platinum futures surged to more than $900 an ounce earlier this morning before paring its gains toward $895. The move over $900 is a new 24-year high.

  James Brown   3/1/2004,  11:33:47 AM
Profit target alert! Shares of PD are currently trading in our suggested exit in the $88-89 range. We may close the play later this afternoon and look for a dip to consider new entries.

  James Brown   3/1/2004,  11:31:10 AM
As crude oil rises above $36.00 a barrel, current OI call play AHC rises another 1.3% to a new one-year high. OI call play SLB is up 1.39% hitting new 2 1/2 year highs.

  James Brown   3/1/2004,  11:28:49 AM
According to a Washington Times article February was the WORST month on record for computer viruses and worms. Global damages are estimated between $68 and $83 billion based on lost business, productivity, extra bandwidth expenses, virus software and salaries for workers to fight the infections.

  Jeff Bailey   3/1/2004,  11:04:48 AM
11:00 Internals at this Link

  Jim Brown   3/1/2004,  11:03:28 AM
YHOO saying 2003 stock options are going to cut earnings drastically.

  Jeff Bailey   3/1/2004,  10:54:19 AM
Biotechnology Index (BTK.X) and Biotech HOLDR (AMEX:BBH) components at this Link

Main difference for today's trade between the two is that Sepracor (SEPR) $41.35 +46.06% is component of BBH, but not BKT.X.

  James Brown   3/1/2004,  10:46:09 AM
Hmmm... Nebraska-based online broker Ameritrade (AMTD) has inked a deal to be the ONLY financial-services company to advertise on CNBC, Bloomberg and DirecTV between 3:30 and 4:00 PM Eastern in an effort to capture more "last hour" traders. The ad campaign begins tomorrow and will last four to six weeks. (DJ Business news)

I'm not holding out any hope that we'll see Stuart, the red-haired Gen X'er who helped millions "light this candle" during the late 90's.

  James Brown   3/1/2004,  10:40:52 AM
A WSJ article this morning says UPS has recently told Airbus to cut 20 of the 90 Airbus A300s it ordered between 1998 and 2001.

Shares of UPS are down 1.16% to $69.81 and look vulnerable to a test of its 200-dma near $68.00.

  James Brown   3/1/2004,  10:39:01 AM
Sector update...

(biggest) Winners:
DJUSHB homebuilders: +6.69%
XAL airlines: +1.52%
XNG natural gas: +1.18%

BTK biotech: -0.47%
TRAN transports: -0.16%
...these are the ONLY two sectors in the red this morning.

  Jeff Bailey   3/1/2004,  10:36:41 AM
10:00 Intenals at this Link

  James Brown   3/1/2004,  10:35:14 AM
Barry Diller's Internet empire InterActive Corp (IACI) is growing again. The company is buying ZeroDegrees, a business networking destination similar to a Friendster.com for executives. Terms were not disclosed.

  James Brown   3/1/2004,  10:28:54 AM
GTECH (GTK), known for its lottery design and systems, has signed a licensing agreement with Hasbro Inc. (HAS), the toy maker. GTK plans to create Monopoly and Battleship themed lottery games.

  James Brown   3/1/2004,  10:23:59 AM
Following up on Jeff's DJUSHB comments... current OI call play DHI is up 3.58% to a new all-time high. Recently added RYL is up 1.86%.

  James Brown   3/1/2004,  10:22:31 AM
NTES is continuing its bullish breakout from Friday with another 2.2% gain to $54.24. This is significant because it's a breakout above the bottom of the October gap down. The stock looks like a bullish candidate for a move toward $60.00.

  Jeff Bailey   3/1/2004,  10:20:08 AM
Dow Jones Home Construction (DJUSHB) 652.55 +3.10% ... continues to build further gains and new all-time high. Support should be solid back at 600.00, which was broken to upside on Thursday.

  James Brown   3/1/2004,  10:18:53 AM
Levinson is still suffering from an Internet outage in his part of the world but plans to be with us in a couple of hours as he moves to a new location.

  Jeff Bailey   3/1/2004,  10:17:37 AM
Semiconductor Index (SOX.X) 506.18 +0.78% ... shrugging off early weakness. Correlative resistance ahead at 509-510 in DAILY R1 and MONTHLY Pivot. Friday's lows found morning support.

  James Brown   3/1/2004,  10:16:31 AM
Shares of Coca-Cola Co (KO), a Dow component, are trading sideways in a very tight range as investors try and digest the recent news. A WSJ story is claiming that the Feds are investigating KO's relationship with Takasago International Corp, a Japanese company. The allegations are that KO shipped massive amounts of concentrate to Takasago in the early 1990's to meet their quarterly sales goals. Meanwhile an Atlanta grand jury is issuing subpoenas as they proceed with a fraud investigation.

  Jim Brown   3/1/2004,  10:12:19 AM
CNBC talking about the employment component in the ISM rising to 56 and the highest level since 1987. They are suggesting this could give a boost to the nonfarm payroll report on Friday.

  James Brown   3/1/2004,  10:07:26 AM
Sprint Corp (FON) has announced plans to reabsorb its Spring PCS tracking stock (PCS). The move has been expected and shares of PCS are up 2.77% to $9.25. A handful of brokers are downgrading PCS on the news.

  Jeff Bailey   3/1/2004,  10:06:39 AM
QQQ $36.74 +0.46% ... here updated WEEKLY (blue)/MONTHLY (red) pivot analysis bar chart. Link

Weekly Pivot of $36.57 held support early. MONTHLY Pivot of $36.86 is first real test for any bullish strength. This $36.86 leve was where we found some overlapping WEEKLY/MONTHLY resistance last week. March's MONTHLY Pivot does a good job marking that level this month.

  James Brown   3/1/2004,  10:03:24 AM
Chinese Internet stock Sina Corp (SINA) is up another 2.35% and continuing its bounce from support at $40.00 and its 50-dma after announcing a $125 million acquisition of Crillion Corp, a service provider for mobile phone users in China. SINA's MACD just produced a new buy signal and shares look free to run toward resistance at $50.00 (currently trading at $45.13, above recent resistance at $44.75).

  Jim Brown   3/1/2004,  10:01:25 AM
ISM prices paid component highest since 1994

  Jim Brown   3/1/2004,  10:00:56 AM
ISM New Orders component was lower that the prior month

  Jim Brown   3/1/2004,  10:00:22 AM
Construction Spending fell -0.3%, compared to estimates of +0.2%

  Jim Brown   3/1/2004,  9:59:29 AM
ISM Index = 61.4 (est 62.0, last 63.6)

  James Brown   3/1/2004,  9:58:51 AM
Pepsi Bottling Group (PBG) has been a very strong winner for investors the past four months and shares are extending their gains this morning, up another 1.93% to a new one-year high at $29.47 after Smith Barney upgrades it to a "buy". Its P&F chart suggests a $36.50 price target.

  James Brown   3/1/2004,  9:55:24 AM
Medimmune (MEDI) is down 9.26% and back under support at the $25 level and its 50-dma after announcing it would raise its R&D investment to 20% of sales. This reduces their earnings estimates for the first quarter to 40-43 cents per share, which is below current consensus estimates at 54 cents.

  Jim Brown   3/1/2004,  9:51:10 AM
FR Board: Speech by Governor Olson
U.S. Banking Industry Performance Highlights -- 2003 Link

  James Brown   3/1/2004,  9:51:04 AM
Current OI call play RNR, an insurance company, is up another 1.41% today and continuing its rally from late last week (also a new all-time high).

  James Brown   3/1/2004,  9:48:38 AM
Insurance stock Amerus Group Co (AMH) is up 4.5% and breaking out over resistance at $40.00 to a new all-time high after Smith Barney upgraded the stock to a "buy" this morning. This might be one to jot down on your watch list.

  James Brown   3/1/2004,  9:46:06 AM
Ouch! One of today's big losers is AAI Pharma Inc. (AAII), down 36% to $9.75. The company has hired an independent auditor to iron out some "sales abnormalities" in its recently launched asthma drug Brethine and pain killer Darvocet.

  James Brown   3/1/2004,  9:43:25 AM
chip stock Lattice Semiconductor (LSCC) was up strongly at the open but gains have already faded to just +1.06% (or 15 cents) and remains under its simple 50-dma. The company announced this morning that its Q1 revenues should rise 6-10% over its Q4 numbers but expects gross margins to be flat (Reuters).

  James Brown   3/1/2004,  9:39:49 AM
OI call play Phelps Dodge (PD) is gapping higher another 1% to $87.21 as copper futures rise another 2.15% to new multi-year highs. Remember that we considering an exit in the $88-89 level.

  Jeff Bailey   3/1/2004,  9:38:47 AM
Semiconductor Index (SOX.X) 501.67 -0.11% .... AMD $14.79 -1.4% and INTC $28.98 -0.78% both lower after JP Morgan downgrade.

Taiwan Semiconductor (TSM) $10.58 +1.82% and Teradyne (TER) $24.82 +0.68% help offset early losses.

SOX.X component breadth negative at 3:15

  James Brown   3/1/2004,  9:37:22 AM
This morning's big winner is Sepracor (SEPR). The stock is up 39% to $39.40 after the company announced receipt of an "approval" letter from the FDA for its insomnia drug Estorra. In response to the news Morgan Stanley upgraded SEPR to "equal weight" and Deutsche Securities upps it to a "buy".

This is almost a new 2-year high for SEPR and shares are stalling near its 200-week MA.

  James Brown   3/1/2004,  9:33:04 AM
More details on the semiconductor news...the Semiconductor Industry Association said that global chip sales rose more than 27% in January 2004 over January 2003 (to $15.6 billion) but fell 2.4% from December 2003.

Meanwhile JPM's analyst said they "believe Intel will not raise guidance during its mid-quarter update for the first time in almost a year"...

  James Brown   3/1/2004,  9:25:12 AM
Jon will be with us as soon as he can. He's experiencing technical difficulties.

  Jane Fox   3/1/2004,  9:22:49 AM
Although no final decision has been made, Attorney General Eliot Spitzer is preparing to sue members of the NYSE's former board who approved former NYSE Chief Dick Grasso's pay and is paving the way to sue him for the return of as much as $120 million in pay he received at the Big Board.

  Jim Brown   3/1/2004,  9:05:53 AM
The Nikkei soared overnight closing up +229 points and the S&P futures are up +4.25 on the strength in the overseas markets. In the US Semiconductor billings fell -2.4% for January and well below the -0.6% for the prior month. Personal income slowed to only +0.2% and lower than the +0.5% consensus estimates. Spending rose +0.4% and inline with estimates.

Still to come is the Construction Spending at 10:AM and the critical ISM also at 10:00. The estimate for the ISM is 62.0

JP Morgan downgraded the semiconductor sector and highlighted potential problems with Intel. JPM said channel checks show notebooks falling off sharply and they suggest Intel will not raise their guidance and will be cautious in their comments.

The Nasdaq futures are up less than the S&P futures and are showing far less strength. This is likely do to the Semiconductor news and downgrades. While the Dow is poised to open near the highs from Friday near 10640 the Nasdaq may barely make it to the green before failing.

  Jim Brown   3/1/2004,  8:46:10 AM
Linda is out today with a family emergency.

  Jeff Bailey   2/29/200,  12:21:34 AM
S&P 500 (SPX.X) chart with new weekly/monthly pivot levels at this Link

With Nikkei-225 ($NIKK) 11,293.77 +2.28% Link at new highs, may see SPX test of 1,161 tomorrow.

This 1,161 was also an overlap level in my fitted retracement on es04h Link

  Jeff Bailey   2/29/200,  11:44:25 PM
Pivot Matrix for Monday, next week, and March at this Link

  Jeff Bailey   2/28/200,  2:57:28 AM
Semiconductor Index (SOX.X) ... traders and investors may want to take some time and read this weekend's Ask the Analyst column.

We receive nothing but knowledge from Dorsey/Wright and Associates point and figure charting database. If you are interested in a FREE 2-week trial to their service, click this link. Please tell them that OptionInvestor.com sent you there. Link

  OI Technical Staff   2/27/200,  9:04:12 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