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  Jeff Bailey   3/4/2004,  9:36:30 PM
Final ticks .... INTC $29.11, SMH $41.38, QQQ $36.69, SNDK $29.40, SUI $41.20, SPY $116.01, DIA $105.96.

  Jeff Bailey   3/4/2004,  9:21:19 PM
Pivot Matrix for tomorrow at this Link

  James Brown   3/4/2004,  5:48:37 PM
Banking Index (BKX) splitting 10:1

  Jeff Bailey   3/4/2004,  5:31:38 PM
Closing Internals at this Link

  Jeff Bailey   3/4/2004,  4:57:39 PM
QQQ ... $36.70

  Jeff Bailey   3/4/2004,  4:57:02 PM
Semi HOLDRS (SMH) ... $41.35

  Jeff Bailey   3/4/2004,  4:56:36 PM
Intel (INTC) ... $29.30

  Jeff Bailey   3/4/2004,  4:37:44 PM
Now that Intel (INTC) is over and done, it will be tomorrow's Nonfarm Payrolls for February (forecast is for +125,000) that traders and investors focus on.

  Jeff Bailey   3/4/2004,  4:35:22 PM
QQQ $36.76 +0.93% .... $36.66

  Jim Brown   3/4/2004,  4:35:05 PM
FLEX Update - NO CHANGE to previous guidance.

  Jeff Bailey   3/4/2004,  4:29:36 PM
Advanced Micro Devices (AMD) $15.39 +4.69% ... trades $15.10 in after-hours, which is above yesterday's close of $14.70.

  Jeff Bailey   3/4/2004,  4:28:11 PM
Semiconductor HOLDRs (SMH) $41.66 +1.65% Link .... $41.10 in after-hours, which is $0.12 above yesterday's close.

  Jim Brown   3/4/2004,  4:27:56 PM
TQNT has changed their update to next week.

  Jeff Bailey   3/4/2004,  4:27:24 PM
Intel (INTC) $29.65 +2.10% Link ... lower at $29.05, which is just about yesterday's close.

  Keene Little   3/4/2004,  4:21:47 PM
Now we'll get to see how the Masters of Spin show how this INTC update is actually very good news.

  Jim Brown   3/4/2004,  4:14:39 PM
Intel update - $8.0-$8.2 billion (lowered range !!!!)
Prior range was $7.9 to $8.5 billion (avg $8.2B)
Margins 59-61%, prior guidance was 60%
Demand consistent with LOWER END of seasonal patterns.

Looks a lot like LOWERED guidance.

  Jim Brown   3/4/2004,  4:03:51 PM
TACT announced 3:2 split

  Jim Brown   3/4/2004,  3:54:51 PM
We also have updates from FLEX and TQNT after the close.

  Jeff Bailey   3/4/2004,  3:51:17 PM
Day trade exit alert in SanDisk (SNDK) $39.37 or break even before the close.

  Jane Fox   3/4/2004,  3:40:57 PM
The SEC has subpoenaed as many as 65 former NYSE directors going back to 1995 for records about former NYSE Chairman Richard Grasso's pay package. Investigators are seeking information on how directors approved three contracts that resulted in a payment last year of $140 million to Grasso.

New York Attorney General Eliot Spitzer may go to court next month to seek the return of $120 million from Grasso and is considering suing former NYSE directors who approved the compensation.

  James Brown   3/4/2004,  3:32:09 PM
The trend of higher lows finally sent ASD to a new all-time high at $111.60 today above recent resistance. The company has announced a 3-for-1 split last month but it needs to be approved at the May 4th shareholder meeting.

  James Brown   3/4/2004,  3:28:14 PM
sorry guys.. you're absolutely right on that patient trader!

  James Brown   3/4/2004,  3:27:50 PM
One bank that is drastically under performing its peers is Synovus Financial (SNV). The stock has been consolidating sideways in a narrow range for five weeks straight and looks ready to challenge support at $24.00. This is crucial support at its daily and weekly charts. A breakdown here could lead to $22-21-20....

  Jim Brown   3/4/2004,  3:27:14 PM

  Jane Fox   3/4/2004,  3:26:28 PM
James patient trader is an oxymoron.

  James Brown   3/4/2004,  3:24:37 PM
If you're a patient trader keep an eye on Starwood Hotels (HOT). The stock doesn't move that fast but shares are approaching long-term resistance at $40.00. Actually a move over $41.00 would send it to new multi-year highs not seen since the late 90's.

  Jeff Bailey   3/4/2004,  3:21:27 PM
03:00 Internals at this Link

  James Brown   3/4/2004,  3:19:00 PM
For anyone expecting a big move in Intel (INTC) tomorrow you can probably get a straddle at the March $30's for about $2.00.

  James Brown   3/4/2004,  3:15:48 PM
Shorts have to be gasping for air in shares of conglomerate Loews (LTR). The stock just broke out to a new 2 1/2 year high above resistance at $62.30 (from Jan '02 and Apr '02). LTR has been up 16 out of the last 17 weeks (15 in a row).

  James Brown   3/4/2004,  3:11:23 PM
Symantec (SYMC) is hitting new all-time highs, which isn't a surprise considering that February was the worst month on record for viruses and worm attacks.

  Jeff Bailey   3/4/2004,  3:10:17 PM
Day trade short alert ... SanDisk (SNDK) $29.40 here, stop $29.51, target $29.05.

  James Brown   3/4/2004,  3:08:59 PM
French telecom Alltel Corp (AT) is breaking out over short-term resistance at $52.00 and hitting new one-year highs but approaching resistance at its 200-week moving average.

  James Brown   3/4/2004,  3:06:27 PM
The channel between $50-55 appears to be holding for BBY, which is rolling over again and headed towards support near $50 and its 200-dma.

  James Brown   3/4/2004,  3:01:58 PM
Cendant Corp (CD) is enjoying some strength today hitting new 4 year highs above resistance at $23.50.

  James Brown   3/4/2004,  2:55:50 PM
Both Merrill Lynch (MER) and Goldman Sachs (GS) are breaking out to new highs over recent resistance. These look like tempting bullish candidates with MER over $63.00 and GS over $108.

  Jeff Bailey   3/4/2004,  2:33:37 PM
Dow Industrials "inchworm" ... the head looks like its face is red. Link

  Jeff Bailey   3/4/2004,  2:28:14 PM
02:00 Internals at this Link

Afternoon lows came right at 02:00 PM ESt.

  James Brown   3/4/2004,  2:19:16 PM
Clothing maker Guess Inc (GES) is up 5% to new highs ($16.80) not seen since September of 2000. The company reported February same-store sales were up 14.8% this morning. Today's move has extended its P&F chart buy signal and points to a $27.00 price target.

  James Brown   3/4/2004,  2:15:12 PM
That's interesting...the Internet index is up 2.15% on gains in AMZN and YHOO but EBAY (+15 cents) is still trading in a tight $1 range for the last two sessions (EBAY is also sitting just on its simple 40-dma).

  James Brown   3/4/2004,  2:05:21 PM
Bebe Stores Inc (BEBE) is also higher (+5.34% to $30.57) after reporting that February same-store sales rose 24%. BEBE's P&F chart is bullish again and pointing to a $48 price target but the stock appears to have overhead resistance at $32.00.

  James Brown   3/4/2004,  2:00:12 PM
Hitting new all-time highs at $36.63 today is The Finish Line (FINL). FINL reported that same-store sales soared 19% last quarter.

  James Brown   3/4/2004,  1:55:57 PM
Barnes & Noble (BKS) reports same-store sales are up 10.1% in February but the stock is not reacting and continues to churn in a tight range above it 50-dma.

  James Brown   3/4/2004,  1:54:08 PM
Kohls Corp (KSS) is up 3% and back above its 200-dma after announcing that same-store sales are up 6.6% and total sales are up 22%

  Jim Brown   3/4/2004,  1:33:38 PM
On Dec-4th Intel announced a positive midquarter update with strong follow on sales on top of a strong Q3. The market had closed up from its lows on a late afternoon rally in front of the news. On Friday the 5th Intel gapped down nearly -5% and the markets began a slide that lasted more than a week. This was on good news. It shows that great expectations are normally priced into the market regardless of the news. When the news fails to blowout any reasonable expectation profits are taken. It is a typical sell the news event.

However, with Intel near multi month lows already and several analysts urging caution there could be less of a negative reaction. It is always a guessing game with a coin toss having about the same odds.

  James Brown   3/4/2004,  1:31:37 PM
Traders should take note of the bullish breakout in shares of Wal-Mart (WMT), a Dow component. The stock is breaking out over long-term resistance at $60.00 and hitting levels not seen since April 2002.

- The rally is being fueled by news that February sales are up 22% to $3.9 billion.
- U.S. same-store sales are up 6.2%
- WMT Estimates that March same-store sales will be 4%-6%
- Yesterday the company boosted its annual dividend by 44%
- And last but not least the company got approval yesterday to open its first supercenter store in California to include produce and discount goods.

  James Brown   3/4/2004,  1:24:43 PM
Copper mining outfit Phelps Dodge (PD) is holding near the $85 level and its 10-dma supported by a 1.46% bounce in copper futures after yesterday's big drop.

  James Brown   3/4/2004,  1:23:45 PM
Commodity stocks like Weyerhaeuser (WY), a lumber/paper producer, are still strong. WY is trying to breakout over resistance at the $67.00 level. The stock received an upgrade to "accumulate" earlier this morning.

  Jane Fox   3/4/2004,  1:22:17 PM
The Fed's quarterly "flow of funds" report showed fourth quarter household wealth jumped to a record $44.41 trillion from $42.25 trillion in the third quarter. It was the fifth straight quarter the measure has increased.

In my best Dirty Harry voice. "Let me ask you now do you feel wealthy?"

  James Brown   3/4/2004,  1:21:34 PM
The real culprit pulling down the Defense sector today is Northrop Gruman (NOC). The stock is down 2.04% and breaking technical support at its rising 50-dma. This comes on top of the earlier breakdown this week below the $100 level.

  James Brown   3/4/2004,  1:19:51 PM
Hershey Foods (HSY) is down 1.26% and headed for the $80.00 level after Deutsche Bank cut it to a "hold" this morning. Just yesterday JPMorgan initiated coverage of HSY with an "over weight" rating. Bulls might want to watch HSY for a pull back to $80.00 and consider buying a bounce, given its out performance recently.

  Jeff Bailey   3/4/2004,  1:19:27 PM
01:00 Internals at this Link

  Jane Fox   3/4/2004,  1:16:47 PM
Dell (dell) has named the current president and COE, Kevin B. Rollins as its new CEO, succeeding founder Michael S. Dell, who will remain chairman.

  James Brown   3/4/2004,  1:10:33 PM
General Dynamics is putting some pressure on the defense sector with a multi-day trend of lower highs. The stock is fading toward support at $90.00 and it's already under its 50-dma. A breakdown of $90.00 would be bad news for the DFX defense index although GD does appear to have support at both 87.50 and 85.00.

  James Brown   3/4/2004,  12:57:48 PM
P.F.Chang's China Bistro (PFCB) sounds really good right now during the lunch hour but I'm commenting on it because of its 5.5% jump today after Smith Barney raised it to a "buy" from a "hold" and lifted their price target from $54 to $60.00. The move today is a nice breakout on its P&F chart.

  Jeff Bailey   3/4/2004,  12:52:03 PM
Small caps I like to follow.... and have a bullish bias for ... Ciber CBR) $10.34 +3.19% Link ... S1 Corp. (SONE) $7.85 +4.11% Link

SONE has been under some selling pressure of late. Will the point and figure saying of "the first sell signal in the upward trend is often the buying opportunity" hold on this one? I'm liking what I'm seeing as the stock begins to see a sharp, or quick reversal. A trade at $10 is a triple-top buy signal, and could be the trade that catapults the stock up toward $13.50. If we extend that old bearish resistance trend lower, SONE has been hovering at that $7.00 box.

  Jeff Bailey   3/4/2004,  12:46:41 PM
12:00 Internals at this Link

  Linda Piazza   3/4/2004,  12:45:18 PM
I have another family emergency, and must leave to head to Houston. Good luck to everyone watching for a breakout. I hope you get it, one direction or another. Here's the updated OEX daily chart: Link

  Jeff Bailey   3/4/2004,  12:37:13 PM
Banks and Transports ... at opposite ends of today's inchworm. I get the feeling that one of them will be the key index if we're going to get a meaningfull move from the SPX/OEX.

  James Brown   3/4/2004,  12:35:08 PM
The recent dip to $90.00 in current OI call play CFC was an entry point as suspected. The stock is bouncing higher to $92.73.

  James Brown   3/4/2004,  12:33:40 PM
Other big movers in the homebuilder group...

HOV +2.72% to $87. Up more than $13 in the past two weeks.

BZH +1.48% to $108.81. Up more than $10 from its test of the 50-dma last week. Trying to breakout over resistance at $110.00.

CTX +2.45% to $111.64. Up more than $14 from its recent low on Feb. 25th and challenging resistance at $112.50. Splits 2-for-1 on March 15th.

TOL +2.74% to $46.71. Breaking out to new all-time highs.

LEN +1.95% to $53.07. Breaking out to new all-time highs.

SPF +2.15% to $56.32. Breaking out to new all-time highs.

PHM +2.70 to $55.15. Breaking out to new highs.

KBH +1.81% to $76.87. Recently broke out over resistance at $75.

  Linda Piazza   3/4/2004,  12:28:04 PM
Jim and I were just discussing the strange coherence of many indices to those strange ema's, such as the 72-ema I've been watching on some daily charts and the 78-ema Jim has been watching on the OEX daily chart. When I speculated that my only conclusion, since I couldn't find a Fib number or other number that should explain that behavior other than the possibility that buy bots had programmed in some odd ema's and were buying on touches of those ema's, Jim answered that Some big fund group has chosen that number or something very close to it as a buy signal and they are inadvertently impacting the market as others doing research find the same level. "Inadvertent" would certainly explain my discovery of that MA. It certainly looks as if SIRI is being bought on touches of that ema, doesn't it? When I look at SIRI's daily chart, I see that it pulled back a little lower than I had expected it to when questioned about SIRI a couple of months ago, back below $3.00, to touch that 72-ema. If I'd only known then what I know now, right? A move above $3.31 will confirm a double-bottom formation on the daily chart, with SIRI pausing now just below the $3.03 level that marks a 50% retracement of the climb from the November low to the January high. A breakout above the 2/26 high of $3.07 suggests a climb toward next resistance at that 38.2% retracement of the climb, at $3.31, where I would expect SIRI to again find resistance, at least temporarily.

  James Brown   3/4/2004,  12:26:51 PM
With the homebuilders on fire again and the DJUSHB hitting new all-time highs our two OI call plays in the sector are doing pretty well. D.R.Horton (DHI) is up another 3.73% to $34.18 and is quickly approaching our profit target of $35.00. Meanwhile Ryland Homes (RYL) is up +3.48% to $90.88. This is beyond our short-term target of $90.00 and approaching our secondary target of $91-92.00. Traders can be planning their exits on both - or raising their stop losses substantially.

  Jeff Bailey   3/4/2004,  12:26:26 PM
Swing trade bearish update alert .... Here is a Semiconductor HOLDRs (AMEX:SMH) $41.36 +0.92% chart Link where I've tried to approximate, or duplicate as it relates to this weekend's Index Trader Wrap, and this chart of the SOX.X Link

You can see that the "right shoulder" in the SMH a little lower than that of the SOX.X, while the recent SMH low, also lower than the 02/04/04 attach point of the ascending neckline.

I think the stock that has SMH a little weaker technically has been SNDK Link

  James Brown   3/4/2004,  12:08:33 PM
12 noon lunch time sector update

DJUSHB homebuilders: +2.66%
XAU gold & silver: +1.76%
INX Internets: +1.93%
SOX semiconductors: +0.94%

DFI defense index: -0.80%
OIX Oil index: -0.26%
XNG natural gas: -0.19%

  Linda Piazza   3/4/2004,  12:07:15 PM
Isn't it, Jane? (In reference to SIRI's trading pattern in relationship to its 72-ema.) Jim suggested also checking out the OEX in reference to a 78-ema, which also shows some correspondence, particularly last fall.

  Jane Fox   3/4/2004,  12:05:40 PM
Whoa Linda that is uncanny. (12:03 post)

  Jim Brown   3/4/2004,  12:05:16 PM
I don't know if you caught it this morning but the highest jobs estimate I have heard so far at 210,000 was made by Brian Wesbury, a guest on CNBC. Most commentators have been reluctant to quote a number after missing it so badly for the last couple months.

  Linda Piazza   3/4/2004,  12:03:34 PM
I'm on a kick now. Here's SIRI with the 72-ema on the daily chart: Link

  Jeff Bailey   3/4/2004,  12:03:01 PM
Swing trade update alert ... Sun Communities (SUI) $41.00 +0.24% ... lowering bullish target to $42.40, raising bullish stop to $40.30 .... Here is a 60-minute interval chart of SUI. Link

  Linda Piazza   3/4/2004,  11:43:38 AM
I'm rethinking the neckline of that possible inverse H&S on the OEX 15-minute chart. The repeated rollovers just below 567.75 have me thinking that a horizontal neckline might be more appropriate although the neckline fit had looked perfect this morning for a descending neckline. Whatever that neckline might be, I still hold the same belief I did this morning: I wouldn't trade this to the long side because it's a trade inside that narrowing triangle on the daily chart. That's likely to be as choppy a trade as you can get. This formation is still useful to watch because a rejection of the neckline shows us that the bulls just can't muster enough strength to confirm the bullish formation, and the likely disappointment might send the index lower. Conversely, a confirmation that sticks shows that the bears couldn't send the index lower, either, and a relief bounce might ensue.

  Linda Piazza   3/4/2004,  11:36:21 AM
Remember that 72-ema that I've been puzzling over lately? Jonathan had included a 72-sma on his intraday charts, and I somehow mistakenly included it as a 72-ema on my daily charts, then found that some tech stocks and the TRAN sometimes seemed to trade in relationship to that average. I've been testing and testing it, trying to find if there's some hidden average or a Fib level or something else that's instead accounting for the apparent turn-arounds at this average. Is there a 100-ema or 100-sma that's near it on some charts, for example? Sometimes the 72-ema has converged with another important and often-watched MA or some Fib level, but often there's nothing else there to explain a turn-around other than the 72-ema. Here's a daily chart of the $DRG, the pharmaceutical index, showing how the index behaved yesterday with respect to that 72-ema: Link Sure looks as if it had something to do with the index's trading behavior, doesn't it?

  Jeff Bailey   3/4/2004,  11:18:53 AM
Dow Jones Home Construction (DJUSHB) 668.40 +2.26% ... lurches to new all-time high.

Leadership group showing something.

  Jeff Bailey   3/4/2004,  11:17:33 AM
11:00 Internals at this Link

  Linda Piazza   3/4/2004,  11:16:16 AM
KO: Yesterday I speculated on whether KO might be getting ready to bounce from support between $48.48 (100-dma) and $49.00, despite the lack of any upturn in the oscillators. The weekly chart showed a possibility that KO might be forming a H&S at a long-term descending trendline, in place since 1999. KO's candle yesterday was a small-bodied candle that tried to move up from $49.00, but today KO is slipping further toward the 100-dma, and trades at $48.82 as I type. If it's going to bounce to form that right shoulder, it's going to need to do it before falling much below that 100-dma. Oscillator evidence still doesn't indicate any such bounce in the making. I mention this possible formation for the benefit of both bears and bulls. Bears should be forewarned that KO may be ready to bounce from that support, and bulls should be forewarned that unless KO moves significantly above $51.00 on any bounce, it could just be bouncing up to form a right shoulder.

  Jeff Bailey   3/4/2004,  11:11:47 AM
Russell 2000 (RUT.X) 592.56 +0.21% ... back to challenge morning high and downward trend.

  Linda Piazza   3/4/2004,  11:08:51 AM
I'm looking at a 30-minute OEX chart with 12(26)9 MACD headed up through the signal line, 5(3)3 stochastics headed down, already having rolled through the line indicating overbought conditions, and 21(3)3 stochastics not yet having completed a bearish kiss. These mixed-up oscillators typify the confusion we're seeing as the OEX chops around, along with the other indices.

  Linda Piazza   3/4/2004,  10:56:30 AM
The OEX is lining candles up just under the 60-minute 18/21-pma's, at 566.96 and 567.15, and just above the 60-minute 100/130-pma's, at 566.25 and 565.84. It's trapped again, due for a breakout above one or the other. Oscillator evidence is leaning more toward the bearish side than the bullish side, but we know how much we trust that evidence, don't we? This is just a choppy zone, and there's nothing to do but wait it out, but the rewards for waiting it out can be strong for those who are patient.

  Linda Piazza   3/4/2004,  10:43:29 AM
Both the advdec line and the TRIN have been headed generally up since about 10:20 (longer for the TRIN), so that's not giving me a strong clue as to final market direction, as they usually move in opposite directions.

  Jeff Bailey   3/4/2004,  10:41:40 AM
Russell 2000 Index (RUT.X) 590.76 -0.09% .... still finding some selling at our downward trend. Morning high of 592.57 was just shy of yesterday's high of 592.93.

I'm looking for some signs of strength/leadership, but not finding it at this point, more anchoring type action. Gains are coming from the "tail" at this point.

  Jeff Bailey   3/4/2004,  10:35:15 AM
Sun Communities (SUN) $40.80 -0.24% Link ... starting to look like the S&P 100 Index (OEX.X) with big triangle/pennant forming on the daily interval bar chart.

  Jeff Bailey   3/4/2004,  10:31:59 AM
Dow Jones Home Construction (DJUSHB) 660.65 +1.08% ... challenging Monday's all-time high of 662.16.

  Jeff Bailey   3/4/2004,  10:24:58 AM
Semiconductor Index (SOX.X) 503.03 +0.49% ... KLAC $53.05 +1.84%, AMD $14.91 +1.42%, NVLS $31.49 +1.12% .... ALTR $22.51 -0.39%, TER $32.76 -0.29%

Breadth positive at 15:3

Semiconductor HOLDRs (SMH) 504.28 +0.74% ... SNDK $29.17 +2.17%, KLAC $53.05 +1.84%, AMD $14.91 +1.42% .... VTSS $7.97 -0.87%, ATML $6.51 -0.91%, ALTR $22.51 -0.39%

  Jeff Bailey   3/4/2004,  10:21:48 AM
S&P Banks Index (BIX.X) 355.77 -0.21% .... morning high of 356.73 came just shy of new 52-weeker (357.11)

  Jeff Bailey   3/4/2004,  10:19:28 AM
Dow Transports (TRAN) 2,868 -0.69% ... approaching yesterday's lows (2,865) here.

  Linda Piazza   3/4/2004,  10:18:28 AM
The OEX falls back below the confirmation level for the neckline of the H&S, perhaps rejecting that neckline or perhaps to form a second right shoulder. Here's a picture: Link

  Jeff Bailey   3/4/2004,  10:13:58 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

  Jim Brown   3/4/2004,  9:59:18 AM
Factory Orders = -0.5% (est -0.3%, last +1.1%)

  Jonathan Levinson   3/4/2004,  9:58:24 AM
Overnight repo of 7.25B for a 500M net drain.

  Linda Piazza   3/4/2004,  9:51:45 AM
The OEX hesitates just above the neckline of its inverse H&S on the 15-minute chart, reinforcing my concerns about the setup. Five-minute Keltner resistance is just overhead, but strong support gathers at 566.40.

  Linda Piazza   3/4/2004,  9:45:48 AM
The OEX is again at the neckline of the possible inverse H&S on the 15-minute chart. I'm a little leery of this formation because the right shoulder is truncated and because a confirmation now would come just ahead of an economic release, because it's forming in the middle of that narrowing triangle . . . you get the picture. Still, as I type, the OEX looks to be breaking above the neckline, suggesting a rise slightly above 571. I wouldn't trade it myself, though.

  Linda Piazza   3/4/2004,  9:40:34 AM
The TRAN again heads down this morning, but it's trying to find support near its 10-dma, at 2885.02, with the TRAN currently at 2884.38.

  Linda Piazza   3/4/2004,  9:37:09 AM
During the first five minutes of trade, the OEX ranged from 566.16 to 566.92. It opened above the weekly pivot, on the 15-minute mid-channel Keltner S/R, between the 60-minute 21-pma and 100-pma, and just inside the narrowing triangle on the daily chart. Right now, it's looking as if it's possible that it might reach up toward resistance, at 569.30, if you use the steepest descending trendline off the 2/11 high, or at 571.40 if you use the top descending trendline off the 1/26 high. A move above 567.25 or so will confirm an inverse H&S on the 15-minute chart, setting up an upside target near the higher of those two lines. Still, I wouldn't draw too many conclusions this early in the morning, ahead of 10:00 economic numbers, and while the OEX is in the middle of a churn zone.

  Jonathan Levinson   3/4/2004,  9:34:25 AM
15.75B in various repos expire today. The Fed has added the 770.1M from yesterday's coupon pass, plus 7B in 14-day repos just announced. We await the word on the remaining 8B at 10AM.

  Jeff Bailey   3/4/2004,  9:17:28 AM
09:00 Update at this Link

  Jane Fox   3/4/2004,  9:16:44 AM
After Disney (DIS) shareholders delivered a powerful rebuke of top management, Michael Eisner has agreed to step down as chairman of the company he has led for nearly 20 years although he will remain chief executive as Disney tries to handle a shareholder revolt and an unsolicited acquisition offer from Comcast Corp. George Mitchell, the current presiding director, was named chairman. The shakeup, which has been brewing for days as shareholder dissent against Mr. Eisner gained momentum, came after investors withheld 43% of voted Disney shares from Mr. Eisner at a marathon annual meeting in Philadelphia Wednesday.

  Jane Fox   3/4/2004,  9:12:56 AM
The NYSE has notified about two dozen individual "specialists" that they are under investigation for potential trading abuses and escalates an investigation into whether exchange specialists have inappropriately traded ahead of customer orders. As part of the investigation, the NYSE and the SEC plan to reveal approximately 24 stocks in which specialists allegedly violated exchange rules and to investigate the individual specialists who trade those stocks.

Once the SEC signs off on this agreement, regulators will likely move forward with charges against individual specialists and at that time, SEC officials will decide whether to bring charges against the NYSE for failure to enforce its rules and set down new surveillance parameters for specialists' trading to help spot problems in the future.

The SEC has already imposed a 10-second guideline in its review of specialist trading during the past year's investigation, zeroing in on trades that took longer than 10 seconds to execute. The firms have countered that finding the best price for an investor can often take much longer than that. In any case, SEC officials are leaning toward establishing a guideline of 10 seconds or less as a surveillance parameter for the future.

  Linda Piazza   3/4/2004,  8:59:28 AM
Comments by ECB President Trichet in the press conference following the ECB decision include the following: He believes that exports will grow significantly, that 2004-2005 will see a gradual recovery, and that little inflationary pressure exists. Since the release of the ECB decision to leave rates steady and then since the press conference began, the FTSE 100, CAC 40, and DAX have been inching upward, although the CAC has pulled back slightly from its high achieved a few minutes ago. The DAX is just under 4100 resistance, at 4094.10 as I type, also pulling back slightly from its high of a few minutes ago.

For the introductory statement to President Trichet's press conference, go to this site: Link On the right sidebar, click on "Key speeches," then in small black type about 1/4 of the way down the page, you'll find "For introductory statements to press conferences . . ." with a clickable link. Click there. For some reason, I can't find an URL that will send you directly to the introductory statements, so you have to work a little for this.

  Linda Piazza   3/4/2004,  8:45:40 AM
Yesterday, the OEX managed another day of trade above support and below resistance as top and bottom lines of a triangle narrow around it, moving toward their apex. Daily MACD was flat as was RSI, with stochastics moving up, but hesitantly. By other measures, the OEX was caught between support and resistance, too. The last 60-minute period spanned the distance between the 60-minute 100/130-pma's, serving as support, and the 60-minute 21-pma, serving as resistance. The last fifteen-minute candle straddles the mid-channel Keltner support on the 15-minute chart.

The OEX did end the day above its weekly pivot at 565.02, however, and as the day ended, it had begun forming a possible inverse H&S on that 15-minute chart. The head of that inverse H&S was composed of a confirmed inverse H&S on the five-minute chart. The neckline of the bigger, 15-minute possible inverse H&S descends and currently crosses at about 567.20, but it may be lower before the OEX could complete the right shoulder, already forming at yesterday's close. Currently, such a H&S, if confirmed, would have an upside target near 571.63, but as that neckline descends, so will the upside target. Such an upside target would bring the OEX up to or slightly above the descending trendline off the 1/26 high. In other words, it would bring the OEX to the top of that narrowing triangle on its daily chart.

That slightly more than 4-point range, if the inverse H&S on the 15-minute chart should be confirmed, should be a tradable range on the OEX, but I have a warning. As I've mentioned, I wouldn't advise trading the OEX in the inside of that narrowing triangle, but would wait for a breakout of that triangle, if not a breakout above recent highs or below 557.36. In fact, since the top of the triangle is so near recent highs, I definitely would not go long on a breakout above the top of the triangle. A downside break of that triangle, perhaps waiting until a confirming move below 563 gives a little more leeway, but not much. Although spreads are now tighter than they once were on the OEX, an OEX trader still needs several points of possible movement in order to capitalize, and this narrowing triangle means that it's possible you'd have to be sure of getting in and out at the exact turnings of each movement to hope to capitalize on a directional play. Of course, it's possible that this could be the move that starts an upside break of that triangle and then of recent highs, but the presumption has to be first that proven resistance will continue to be resistance. Unless we know in advance that the formation is going to break this time, there's no room for error and no room for the OEX to stop a point or so away from a likely target and turn around unexpectedly. Mike Parnos includes plays each month that are perfect for the type of churning market we've had lately. When the markets stop churning and start trending again, directional plays might be profitable (if you guess correctly), but until then, be careful. The last couple of times the OEX has churned in a congestion zone before trending again, it's done so for 11 or 12 weeks, and we're still short of that length by several weeks. Trading profitably means knowing what type of trade to consider under what type of trading conditions.

  Jonathan Levinson   3/4/2004,  8:31:21 AM
Initial claims 345K.

  Jonathan Levinson   3/4/2004,  8:30:36 AM
8:30am U.S. 4-WEEK AVG. JOBLESS CLAIMS DOWN 3,000 TO 352,250


  Jonathan Levinson   3/4/2004,  8:14:32 AM
We await initial claims at 8:30AM, est. 345K, the GDP revision for Q4, est 2.7%, and at 10AM, January factory orders, est. -.6%.

  Linda Piazza   3/4/2004,  7:53:30 AM
The ECB leaves rates steady.

  Linda Piazza   3/4/2004,  7:27:20 AM
Good morning. On Thursday, the Japanese Ministry of Finance released figures showing business confidence for the January-March quarter at a positive 5.1, down slightly from the previous quarter's 5.3, but positive for only the second quarter in the last three years. The positive number confirms that optimists outnumber pessimists, and the survey included companies with at least 1 billion yen in capital. This number reportedly serves as a leading indicator of the closely watched Tankan survey, due to be released on April 1. Expectations are for an even bigger increase in the next quarter. Another number revealed that Q4 business spending saw its biggest increase in three years, up 4.5% from the Q3 level and 5.1% from the year-ago level. One component of this number showed spending on plants and equipment increasing 15%. This capital spending number might lead to an upward revision of Q4 GDP. Also of note, the first-ever inflation-linked government bond sale resulted in bids 4.84 times the number sold. Bond prices rose.

The Nikkei climbed throughout the morning session and early part of the afternoon session, but then drifted off those highs throughout the rest of the afternoon. It still closed higher by 49.87 points or 0.44%, at 11,401.79, its highest close since the summer of 2002. Mizuho rose in early trading as it and other banks work to repay taxpayer money. The growth in the economy has decreased bad loans to 14.4 trillion yen as of the end of September, down from the 20.4 trillion level seen a year ago, thereby trimming costs banks must pay to clear bad loans. Like Mizuho earlier in the week, Bank of Yokohama was the subject of a report on its efforts to pay back public funds, although this report came from an unnamed source and not from the bank. The banking sector closed higher, leading gains. Techs proved mostly higher, although gains were nominal in some cases. Canon slipped by 2% despite Standard & Poor's raising its credit rating on Wednesday. After announcing a joint broadband-based service with NTT West, electronics maker Sharp gained 0.2%. Automakers ended lower.

Most other Asian bourses traded higher. The Taiwan Weighted gained 1.47%. With South Korea's central bank announcing an increase to 91 in February's manufacturer's confidence number, from January's 87, the Kospi gained 1.30%. Singapore's Straits Times gained 0.66%. Hong Kong's Hang Seng was flat, however, down 0.02%. China's Shanghai Composite gained 0.42%.

As Europe awaits an ECB decision, European bourses mostly trade higher. Over the last two weeks, EU member nations' political chiefs have put pressure on the ECB to lower rates, but many feel that the recent strength in the dollar against the euro and other factors will lessen that pressure. It's widely believed that the ECB will keep rates steady, although that may be viewed as a disappointment, but all eyes will focus on the bias statement. The Bank of England has already announced its decision this morning, with that decision being to keep the rate unchanged, as expected, but the Bank of England would be more likely to raise than lower rates, due to the overheated housing sector in England. Today, a German economic release showed February's unemployment rising to 11.1%. Germany's Chancellor Schroeder has been one of the political figures calling on the ECB to lower rates over the last couple of weeks, as reported on these pages.

Techs generally traded higher in Europe, but much attention focused on specific stocks reporting earnings or reacting to news. Telefonica, a Spanish telecom, announced talks to buy BellSouth's Latin American mobile phone assets, with that announcement sending Telefonica lower. French retailer Pinault-Printemps-Redoute announced a higher-than-expected loss in operating profits and sales down 11% in 2003, but raised its divident and said that retail sales rose in the first two months of this year, and the stock erased earlier losses.

As of this writing, the FTSE 100 has gained 9.10 points or 0.20%, to trade at 4534.20. The CAC 40 has gained 3.76 points or 0.10%, to trade at 3762.27. The DAX has gained 10.76 points or 0.26%, to trade at 4082.46.

  Jeff Bailey   3/3/2004,  10:51:21 PM
Pivot Matrix for tomorrow at this Link

  OI Technical Staff   3/3/2004,  10:51:11 PM
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