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  Jeff Bailey   3/5/2004,  4:52:55 PM
Running total NYSE and NASDAQ internals at this Link

 
 
  Jeff Bailey   3/5/2004,  4:43:59 PM
Closing Internals at this Link

 
 
  Jim Brown   3/5/2004,  4:16:12 PM
ABC is reporting that charge #1 Conspiracy to obstruct carries a MINIMUM 3yr sentence under Federal sentencing guidlines. 5-Year max but 3-YEAR MINIMUM.

 
 
  Linda Piazza   3/5/2004,  3:59:39 PM
Have a great weekend, everyone.

 
 
  James Brown   3/5/2004,  3:55:57 PM
I'm surprised to see Hershey Foods (HSY) bouncing strongly from its simple 21-dma. The stock is up 2.89% to another new all-time high.

 
 
  Jeff Bailey   3/5/2004,  3:55:54 PM
Martha Stewart (MSO) $10.80 -23.02% Link ... trade at $10.50 would have point and figure chart currently building a bearish vertical count of $5.50.

I don't think the stock will trade $5.50 by March expiration, but $8.90 should have the March $10 puts around $1.10.

 
 
  Linda Piazza   3/5/2004,  3:50:30 PM
Although currently off its high of the day, it looks as if the $HMO, the Morgan Stanley Healthcare Index, may close at a new all-time high today. Today's high was a close match to the upside target predicted by the continuation, inverse H&S on daily chart. A fitted retracement bracket has a best fit with the 127% level overhead at 968.83, but with the 100% Fib level near 800. On the monthly chart, there's not much to provide either support or resistance between $800-$900, but the weekly chart turns up some interim support levels.

 
 
  James Brown   3/5/2004,  3:32:16 PM
MSO now trading near $11.00.. -21%

It is EXTREMELY volatile - jumping 30-50 cents

 
 
  Jeff Bailey   3/5/2004,  3:31:35 PM
03:00 Internals at this Link

 
 
  James Brown   3/5/2004,  3:26:15 PM
A few candidates I'm looking over for the weekend are: NAV, ETN, GPN, ONNN, CERN, GYI, UTX...

 
 
  Jim Brown   3/5/2004,  3:23:30 PM
Dept of Labor is now saying they will be delaying the Feb PPI previously scheduled for March 12th. They still have not reported the January PPI.

 
 
  Jim Brown   3/5/2004,  3:19:58 PM
Now they are talking about breaking trades on MSO on the news bounce before the verdict. Absolutely amazing!

 
 
  Jeff Bailey   3/5/2004,  3:19:00 PM
Martha Stewart Living (MSO) $16.27 .... CNBC reporting that shares are indicated at bid $8.00 and offer $10.00.

Traders that took the SPECULATIVE March $10 put trade, I would put be happy with a $1.10.

 
 
  Linda Piazza   3/5/2004,  3:17:54 PM
A couple of weeks ago, KO formed the first four days of a five-day pattern known as a rising three methods pattern. In this pattern, the first day produces a tall white candle. The next three days, small-bodied candles, each lower than the previous one, are produced, all within the range of the first tall white candle. The fifth day, another tall white candle closes above the close of the first tall white candle. It was that higher close that KO missed that day, and it subsequently fell when it failed to confirm this bullish formation. I wonder if there's a rising four methods, because KO's trading over the past five days fit that pattern again except that there were four small candles whose bodies were within the range of that tall white candle produced last Friday. I don't know if there is such a pattern. If so, KO would need a close over $49.96 to fulfill the pattern, with KO currently at $49.83. A problem with this whole theory, however, is that a rising-three-methods pattern is a continuation pattern formed at the top of a rise, not a reversal pattern formed at the bottom of a decline, short-term or otherwise. Whatever the pattern, be careful with KO, because the weekly chart shows a possible H&S forming at resistance, with the current rise possibly being a rise to form a right shoulder, perhaps at or below $51.00.

 
 
  Jim Brown   3/5/2004,  3:16:23 PM
Indications are now $8-$10 on MSO. Whoever bought puts on the spike earlier to $16.27 gets to buy lunch.

 
 
  James Brown   3/5/2004,  3:12:04 PM
Martha's sentencing date is June 17th. Maximum sentence would be 20 years but she could get probation.

 
 
  Jim Brown   3/5/2004,  3:09:48 PM
What a circus. Bet all those traders that covered their shorts for up to +2.50 from the price an hour ago are really upset.

 
 
  Jim Brown   3/5/2004,  3:07:48 PM
All of them carry 5-year sentences (max) She could get probation

 
 
  James Brown   3/5/2004,  3:06:36 PM
Don't a couple of those charges carry 5 year sentences???

 
 
  Jeff Bailey   3/5/2004,  3:01:47 PM
Martha Steward (MSO) $16.27 +15.9% ... halted for trade

 
 
  James Brown   3/5/2004,  3:01:24 PM
Correction...

count 1, guilty for Martha Stewart (conspiracy)

Count 2, guilty(false statements on $60 sell order)

Count 4, guilty(false statements)

Count 8, guilty(obstruction of justice)

 
 
  Jim Brown   3/5/2004,  3:01:16 PM
Martha Stewart - guilty on all charges

 
 
  Jeff Bailey   3/5/2004,  3:01:10 PM
MSO $16.15

 
 
  Jim Brown   3/5/2004,  2:59:52 PM
Consumer Credit $14.3 B Estimates were for $5B

 
 
  James Brown   3/5/2004,  2:57:42 PM
Software stock Microstrategy (MSTR) looks tempting with its strong bullish trend and its MACD about to produce a new buy signal. A trigger above $65.00-65.50 might work for bullish positions.

 
 
  Jeff Bailey   3/5/2004,  2:55:49 PM
Risk capital only profile .... Martha Stewart Living (MSO) .... March $10 puts (MSOOB) $0.15 offer.

In no way is this to be interpreted as my view of Martha Stewart, her innocence or guilt. Stock is nearing its bullish vertical count of $17.50, with today's high trade of $17.00, and maybe, just maybe the MARKET has already factored in her innocence.

 
 
  James Brown   3/5/2004,  2:52:06 PM
Shares of Martha Stewart Omni Living (MSO) are up 17.6% to $16.30.. it is VERY volatile right now as they wait for the verdict.

 
 
  Linda Piazza   3/5/2004,  2:50:17 PM
I can't stop thinking about the speculating Jim and I were doing yesterday about the likelihood that some fund had picked some moving average--something likely between the 72-ema and 78-ema--and then bought on touches of that average. I keep remembering all those times over this last year that some bearish formation was violated, only to see the stock or index being watched turn around, seemingly in mid-air, and head up again. I wonder how many times that average was being hit and that hit was responsible for the mid-air turn? I sure wish I'd mistakenly translated that sma to an ema and then mistakenly put it on my daily rather than intraday charts a bit sooner. If Jim and I (me, with Jonathan's assistance, because he'd discovered a correspondence with the 72-sma on intraday charts) have discovered this correspondence, I imagine others have, too. I wonder if it's going to stop being effective soon, and if those funds aren't even now retooling their computers to buy or sell according to some new moving average or Keltner line or other hidden measure.

 
 
  Jonathan Levinson   3/5/2004,  2:49:50 PM
Bre-X was a disaster that ruined countless lives, a great market tragedy. No matter what you buy, due diligence is a must. Where in doubt, safest is to trade the indices.

 
 
  James Brown   3/5/2004,  2:49:21 PM
Indian-software firm Infosys Technologies (INFY) is looking more and more like a short candidate and aggressive traders might want to evaluate new positions on a drop below $82.00. More conservative traders can wait for a breakdown under $80.00.

Take note of its P&F chart. INFY has been holding at its P&F support near $82.00 although the sell signal points to a $72 price target.

 
 
  Jeff Bailey   3/5/2004,  2:47:03 PM
Per Jonathan's 14:38:41 ... It might hint of that Jonathan. Have really been seeing it in micro-cap gold stocks. Some which claim to have gold in the ground, but have yet to see any production of silver and gold. What was than Canadian-based gold mining company? Breex or something like that?

AMEX Composite (XAX.X) 1,263.06 +0.79% Link is loaded with small gold miners and energy producers. Good Gravy!

 
 
  Linda Piazza   3/5/2004,  2:37:47 PM
The OEX is back at the descending trendline off the 2/11 high, trying to edge above it again. It's still got the longer-term descending trendline off the 1/26-1/27 highs as well as the recent double-top level to get through, however, even if it makes it above this trendline.

 
 
  Jeff Bailey   3/5/2004,  2:35:51 PM
Per Keene's 14:20 ... that's what is so perplexing about how strong the small caps of the Russell 2000 are and have been trading. At 52-week highs, there's no need to "hold things up" if bulls wanted to unload.

 
 
  James Brown   3/5/2004,  2:32:41 PM
If you care CNBC is reporting that a verdict has been reached on the Martha Stewart case and police are preparing for it by setting up road blocks. Honestly, that doesn't make sense.. are they expecting a riot?

 
 
  James Brown   3/5/2004,  2:30:24 PM
Bulls will want to take another look at Johnson Controls Inc (JCI). The stock pulled back toward its 100-dma (and 21-week ma) late last month and investors bought the dip. After several days of consolidation under its simple 50-dma shares are breaking out to the upside today. Its MACD has produced a fresh buy signal but the rebound has not yet reversed the P&F sell signal. There is overhead resistance at $62.00 and conservative traders might want to watch for a move over $60.00 (or 62.00) before evaluating positions.

 
 
  James Brown   3/5/2004,  2:26:32 PM
For those of following shares of TASER Intl (TASR) the stock is breaking support at $50.00 and is close to breaking support its simple 30-dma, where shares found support in December and January.

 
 
  Jeff Bailey   3/5/2004,  2:26:30 PM
Maytag (MYG) $30.47 +4.81% Link .... I like a longer-term call option play Jan 05 $30 calls (ZMYAF) $3.40 offer. No stop, target $40.00.

It has 3 letters in the stock symbol, and might be a benefactor for what looks to be lower rates for a "considerable period of time."

 
 
  Linda Piazza   3/5/2004,  2:26:25 PM
I know that Jeff has probably mentioned the strength in the BIX several times today, but today it's moving up off the support offered by its former ascending regression channel on its daily chart. After coming back to touch that support on Wednesday, it began climbing again. A steeper and new regression channel now tops out at about 365, with the BIX at 361.09 as I type and with MACD tentatively making a bullish cross from above signal. With an ATR of 3.51 points, the BIX is within a day of hitting the top of that channel. With another day or so for a reversal or consolidating candle to be printed, the BIX may be ready for another breakout or a pullback to the bottom of the channel by early to mid-week. By that time, the 21- and 30-dma's may have risen toward next horizontal support, near 355, an area where I would look for first support on any pullback.

 
 
  Jeff Bailey   3/5/2004,  2:18:06 PM
02:00 Internals at this Link

 
 
  Linda Piazza   3/5/2004,  2:02:25 PM
Unfortunately, if the OEX follows the pattern established over the last months, it may have another 2-4 weeks of consolidation left before it breaks out of this latest consolidation zone. I don't know about the next 2-4 weeks, but it certainly seems to making Herculean efforts to maintain that trading range today. It was veering to one side and then the other today like a new driver hitting an icy patch on a road, overcorrecting first one direction and then another, but it's steadied now, and I suspect that driver is going to be very careful the rest of the afternoon. We'll just have to see if there are more icy patches.

 
 
  James Brown   3/5/2004,  1:56:35 PM
The bounce in copper is giving PD some strength and it just looks tempting enough to try for another run at $90.00 but use a tight stop if you're aggressive enough to try it.

 
 
  Linda Piazza   3/5/2004,  1:30:33 PM
Triangles everywhere. The neutral triangle on the OEX five-minute chart (and on the charts for other indices, according to my co-writers) is now narrowing to an apex, signaling that it's time for a breakout. The Keltner channels are trying to settle into an equilibrium position, too, with such an equilibrium not always possible to maintain for long (although the OEX does an admirable job of that recently). These signal the possibility for another breakout just as the stop-running time of day from 1:35-1:55 approaches. We all know that the OEX can just march a series of small-bodied candles out the apex of such a triangle, however. The OEX is heading up now to test top resistance, but it's squeezed so tightly between resistance and support that almost any move now will constitute a breakout.

 
 
  Linda Piazza   3/5/2004,  1:16:54 PM
The OEX is headed down again to test today's short-term ascending trendline, with that trendline now at about 568.43.

 
 
  James Brown   3/5/2004,  1:16:13 PM
No weakness in American Standard Cos (ASD) as it continues to inch higher to a new high at $112.21. Its 3-for-1 split is awaiting approval at its May 4th annual shareholder meeting.

 
 
  Jim Brown   3/5/2004,  1:14:52 PM
The 50dma on the Dow has risen to 10551 and now combined with the already strong horizontal support at that level the strength should increase significantly. We did hit that average at the open this morning for the first time since Nov-24th.

 
 
  Jeff Bailey   3/5/2004,  1:14:28 PM
01:00 Internals at this Link

 
 
  James Brown   3/5/2004,  1:13:58 PM
After weeks of consolidation between $80-85 shares of Progressive (PGR) are breaking out to new all-time highs (+2.34%) to $86.88. Traders can look to buy a dip back to $85.00-85.50 and then target $90.00 but be aware that its P&F chart only points to an $88 price target.

 
 
  James Brown   3/5/2004,  1:10:03 PM
an observation... Telecom stocks ERICY is up 3.11% to new 18 month highs while NOK is up 2.06% to new 2-year highs.

 
 
  Linda Piazza   3/5/2004,  1:01:26 PM
As Jim noted in last night's wrap, the COMPX's move higher today challenged both a descending trendline off the January high and the 50-dma. So far, the COMPX has not yet been able to sustain a move above the two. The 50-dma is 2061.06.

 
 
  James Brown   3/5/2004,  12:53:09 PM
Current OI call play QCOM managed to trade toward short-term resistance near $64 this morning on an upgrade from Deutsche Bank but traders appear to be taking some profits ahead of the weekend. The analyst upgraded QCOM from "hold" to a "buy" and raised their price target from $58 to $70. Short-term technicals are still bullish but QCOM may test the $62 level again if the afternoon fade continues.

 
 
  Linda Piazza   3/5/2004,  12:53:06 PM
Today's OEX trade has established an ascending trendline off the first 10-minute low. The OEX just hit that trendline and is trying to bounce from it. It's at about 568, but you guessed it, a break will still keep the OEX inside that narrowing triangle on the daily chart.

 
 
  James Brown   3/5/2004,  12:49:20 PM
Dow component McDonald's (MCD) is soaring 3.32% to new 20-month highs after reporting that February sales rose a record 22.6%. Same-store sales rose 14% and the extra day in February (for Leap year) helped boost results. Compared to last year's 4.7% decline in February same-store sales these results are impressive. Investors are rejoicing that the turnaround appears to be working as is its MCD's recently launched "I'm lovin' it" advertising campaign.

 
 
  Linda Piazza   3/5/2004,  12:45:21 PM
If you're looking at new highs and new lows today, OII, is one of the stocks making new all-time highs. Its P&F chart predicts an upside of $48.50 and it's currently at just under $36.00, so I took a look at the charts, from daily to monthly. A few factors made me quickly decide that now may not be the time to jump in long on this, despite that P&F target. One is that from weekly to monthly, the climb has been a straight-up climb with little pausing for breath. Here are the other two reasons: Link In addition, weekly volume has been decreasing as it climbed.

 
 
  Jonathan Levinson   3/5/2004,  12:43:46 PM
I suspect that it's many of those who have attained the holy grail of the employment landscape: public sector/government and para-government employment.

 
 
  James Brown   3/5/2004,  12:42:16 PM
If the average work week is just 33.8 hours a week... I want to know what jobs fall under that mark. I don't know anyone who works less than 30 hours a week (unless they're unemployed).

 
 
  James Brown   3/5/2004,  12:39:56 PM
I agree. I am not suggesting bullish positions in EAT.

 
 
  Jonathan Levinson   3/5/2004,  12:38:09 PM
Not hungry enough for that, James :)

 
 
  James Brown   3/5/2004,  12:37:10 PM
Hungry yet?

Brinker Intl Inc (EAT) better known as Chili's, Romano's Macaroni Gill, Maggiano's Little Italy, On the Border Mexican Grill, Coyzmel's Coastal Grill, Corner Bakery Cafe and the Big Bowl Asian restaurants, has seen its stock rise almost 40% from its October 2003 lows. The recent rally from testing support at $36.00 has been almost non-stop and EAT is approaching resistance at $40.00 and the top of its long-term rising channel.

EAT raised its earnings guidance to the top of its range yesterday and brokers have been reiterating the outlooks. UBS says "buy". BAC says "buy". CSFB is "neutral". Raymond James says "out perform". Stephens says "over weight".

 
 
  James Brown   3/5/2004,  12:29:28 PM
Sector update....

(biggest) Winners:
DJUSHB homebuilders: +5.19%
XAU gold & silver: +1.88%
XNG natural gas: +1.51%
OIX oil index: +1.18%
BIX banking: +1.13%

Noteworthy is the 1.32% gain in Copper futures

Losers:
GSO software: -0.26%
SOX semiconductors: -0.60%
INX Internet index: -0.20%

Fractionally lower...insurance, airlines, networking

 
 
  Ray Cummins   3/5/2004,  12:27:08 PM
Spreads/Combos/Premium Selling -- Reversal In Progress: Cintas (NASDAQ:CTAS)

It was nice to see shares of CTAS in a strong downtrend today after almost a week of gains. There is no obvious reason for the trend reversal but it is likely related to the recent litigation against UNITE, the Union of Needletrades, Industrial & Textile Employees, for defamation, illegal use of trade secrets and other actions that the union has taken in its year-long campaign against Cintas. Regardless of the reason, the move is beneficial to our bearish spread position and for now, the issue is officially off the "watch" list.

 
 
  Jeff Bailey   3/5/2004,  12:26:30 PM
12:00 Internals at this Link

 
 
  Linda Piazza   3/5/2004,  12:23:56 PM
I had turned to the Keltner charts across several time frames for the OEX because this morning's violent moves have made the 5-minute Keltner channel lines unreliable. They're still trying to smooth out.

 
 
  Jeff Bailey   3/5/2004,  12:22:22 PM
Bema Gold (BGO) $3.50 +2.94% .... has been stuck now from $3.48-$3.50. I'm a bit surprised that after backfilling just 1/2 of its morning gap higher to a session low of $3.45, it didn't "sling shot" higher than $3.55.

Spot Gold might be the answer as it is pinned under the $400.00 level.

 
 
  Linda Piazza   3/5/2004,  12:12:08 PM
I've been taking a look at Keltner channels across several time frames. Here's what I discovered when looking at the weekly chart: Link Note, however, that the OEX is above central Keltner channel support on this chart (524.15), and until and unless the OEX were to fall below that central support, it's traveling in the upper half of the Keltner channels, so showing strength on that basis. However, we should be watchful of that divergence seen on this touch of the black resistance line. The OEX may need to cycle down to the bottom of its shortest-term channel, the dark blue one, to gain strength before pushing higher.

 
 
  James Brown   3/5/2004,  12:06:30 PM
Mortgage lenders are soaring after the jobs report sent bond yields crashing thus dropping mortgage rates. Current OI call play CFC is up 3.6% to $95.98. Last week saw a surge in mortgage applications and refi's and we'll probably see another surge this coming week with today's drop in rates.

 
 
  James Brown   3/5/2004,  12:00:11 PM
Another success is OI call play Anthem Inc (ATH). Today's run to $92.15 is above our initial target of $90.00 (picked price was 85.37). It also happens to be above both rising trendlines of resistance on its weekly chart. Traders should probably take profits at current levels...especially as ATH pulls back toward the $90 mark.

 
 
  James Brown   3/5/2004,  11:57:34 AM
Current OI call play AHC is up another 2.7% to $66.85 as crude oil trades above the $37 a barrel today.

 
 
  Ray Cummins   3/5/2004,  11:57:01 AM
Spreads/Combos/Premium Selling -- "Early-Exit" Candidate: Icos Corporation (NASDAQ:ICOS)

Shares of the maker of Cialis, one of two new drugs challenging Viagra's dominance of the multibillion-dollar anti-impotence market, are in "rally mode" today after a CSFB analyst issued some positive comments on the outlook for impotence drugs. The report suggested higher potential revenues for U.S. sales of Cialis, based on Eli Lilly's (Icos' Partner) target of a 40% market share. CSFB noted that any increased market share over their own 26% estimate makes Icos earnings go up dramatically, and investors responded to that bullish observation. Currently, the stock is trading $2.10 higher at $40.92 and the move above the sold (call) strike is our signal for a timely "early-exit" in the bearish position.

 
 
  James Brown   3/5/2004,  11:55:36 AM
Following up on our homebuilder call plays DHI and RYL...Both stocks have hit our profit targets and we'll close the plays in the upcoming newsletter and wait for the next pull back.

DHI ran from $30.00 to our exit at $34.75 for us, hitting an intraday high of $35.74 a couple of hours ago.

RYL ran from $83.96 to our exit at $92.00, hitting an intraday high of $93.15.

 
 
  Jeff Bailey   3/5/2004,  11:52:03 AM
Semiconductor Index (SOX.X) 504.29 -0.86% .. sitting right on the 503.89 level from our head/shoulder top retracement. For days has been either side of ascending neckline. Just can't make up its mind which way to go.

 
 
  Jeff Bailey   3/5/2004,  11:46:12 AM
Semiconductor HOLDRs $41.16 -1.2% .... correction to 11:00 update.... session high was $41.80, not $41.84 (bad tick).

 
 
  Linda Piazza   3/5/2004,  11:44:23 AM
The SOX is holding above its 100-dma, but looking at the chart, it's possible that the 100-dma is roughly describing bottom support of a bearish right triangle, with a roughly flat supporting trendline and a descending top trendline off the 1/12 high. Oscillator evidence is inconclusive.

 
 
  Jeff Bailey   3/5/2004,  11:43:34 AM
NASDAQ Composite (COMPX) 2,047.03 -0.39% .... right at its 21-day SMA.

 
 
  Ray Cummins   3/5/2004,  11:41:42 AM
Spreads/Combos/Premium Selling -- Market Movers: VimpelCom (NYSE:VIP)

Wireless communications stocks have been among the best performers in recent months and one of the leaders among overseas providers is VimpelCom. The company's primary market is the Moscow region in Russia and they are the "top dog" in that area with 5.9 million subscribers. In addition, the number of mobile phone subscribers in Russia is growing at a brisk pace, rising 5.1% to 40.14 million in February, a monthly increase in new users of 1.95 million, compared with 1.7 million additions in January. That's great news for VIP investors and the stock is up over $2 at $90.91 amid a morning buying spree. Our bullish (put-credit) position in the issue is at maximum profit but we are monitoring the stock for a new (spread) entry point, possibly at the $75/$80 strike in April.

 
 
  Linda Piazza   3/5/2004,  11:33:20 AM
The TRAN remains within its own narrowing triangle, too, having bounced from bottom support but not able to sustain levels above 2900.

 
 
  Ray Cummins   3/5/2004,  11:28:19 AM
Spreads/Combos/Premium Selling -- Market Movers: Overstock.com (NASDAQ:OSTK)

This issue has been a popular candidate for momentum traders in recent weeks and today the stock soared to another all-time high near $35. Our bullish positions in the issue are at maximum profit, however there are additional opportunities for aggressive "premium-selling" using a (short) $30 put in March or a (short) $25 put in April.

 
 
  Ray Cummins   3/5/2004,  11:22:24 AM
Spreads/Combos/Premium Selling -- Market Movers: Homebuilders!

Jim mentioned Toll Brothers (NYSE:TOL) in his earlier post and indeed, stocks in the residential construction group are in "rally mode" today. Among the bullish issues in our portfolio are Meritage (NYSE:MTH), Ryland Group (NYES:RYL), Standard Pacific (NYSE:SPF) and Hovananian (NYSE:HOV), which has quickly become the outstanding play of the month, offering up to a $8 profit on $7 invested in the neutral-outlook debit straddle.

 
 
  Linda Piazza   3/5/2004,  11:18:42 AM
This morning, the OEX hit the bottom support of the 5-minute Keltner channels, zoomed up to the top resistance, and then hit the mid-channel S/R again. It's back at that mid-channel S/R again, at 567.76, falling through it as I type. As the OEX approaches a breakout of the triangle, the trading is getting more volatile.

 
 
  Linda Piazza   3/5/2004,  11:09:48 AM
The OEX remains within the narrowing triangle on the daily chart. What can I say other than that? This is choppy trading within a choppy zone. Futures are one vehicle that can benefit from short moves, but the OEX is not one of those vehicles, unless you're particularly adept at getting in and out at just the right moment.

 
 
  Jeff Bailey   3/5/2004,  11:07:03 AM
11:00 Internals at this Link

 
 
  Linda Piazza   3/5/2004,  10:59:27 AM
Remember yesterday when I mentioned that I had gradually migrated from watching the OEX on the basis of its 30-minute 100/130-pma to the 60-minute versions, and then recently to the 120-minute versions? Here's a chart showing what happened today in relationship to the 120-minute 100-pma, with that average being the bold blue line: Link

 
 
  Jeff Bailey   3/5/2004,  10:52:57 AM
Semiconductor HOLDRs components at this Link captured at 10:52 AM EST.

 
 
  Linda Piazza   3/5/2004,  10:49:23 AM
Yesterday, I posted a chart of SIRI, showing how unerringly it had tracked its 72-ema over the last six months. Having recently touched it again, it was moving up. I mentioned yesterday that if it popped above the recent high at $3.07, it might then head up toward the $3.29-3.31 level that will confirm the double bottom on its daily chart. It's currently at $3.19, having moved up quickly after breaking above the $3.00 level. With it being between $3.07 and $3.30, this probably wouldn't be a good place to enter a long position, but a break above $3.31, with oscillators and volume patterns supporting that break, would confirm that double-bottom and suggest another leg higher. I've been intrigued by that 72-ema and the way it and the 78-ema that Jim pointed out have been such good predictors of recent action in some stocks and indices.

 
 
  Jeff Bailey   3/5/2004,  10:48:09 AM
Day trade long stop alert .... Bema Gold (BGO) $3.49

 
 
  Jeff Bailey   3/5/2004,  10:47:24 AM
Semiconductor HOLDRs (SMH) 41.65 -0.02% .... session high has been $41.84. swing trade bearish stop firm at $41.85.

 
 
  Jeff Bailey   3/5/2004,  10:46:16 AM
S&P Retail Index (RLX.X) 402.84 +0.87% ... new 52-weeker

 
 
  Jeff Bailey   3/5/2004,  10:45:39 AM
S&P 500 Index (SPX.X) 1,162.45 +0.65% ... new 52-weeker

 
 
  Jeff Bailey   3/5/2004,  10:45:02 AM
Russell 2000 Index (RUT.X) 603.03 +0.77% ... new 52-weeker

 
 
  Jeff Bailey   3/5/2004,  10:44:16 AM
NYSE Composite (NYA.X) 6,796.91 +0.8% ... new 52-weeker

 
 
  Jeff Bailey   3/5/2004,  10:43:09 AM
Bombarded with upside alerts .... problem is, I'm not getting any bars on my charts, but think there's a lot of new highs being hit.

 
 
  Jeff Bailey   3/5/2004,  10:38:12 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

 
 
  Linda Piazza   3/5/2004,  10:37:46 AM
Careful, OEX longs. The OEX has not breached the top Keltner channel boundary. While such a break can give a valid breakout signal, it's also a sign that the OEX is deeply overbought on a short-term basis, and that it may retreat down to mid-channel support. Today, almost anything can happen, right? This may be particularly significant since the OEX is approaching known resistance. This is a time to protect profits by following the OEX higher with your stops and then adhering to those stops, but not always a reason to automatically exit a long position since the breakout could be valid.

 
 
  Linda Piazza   3/5/2004,  10:34:31 AM
Wow. The OEX is now back at the top of the triangle on its daily chart. Today's trade has spanned the entire breadth of that narrowing triangle. A breakout over this level should next see a test of the recent highs.

 
 
  Linda Piazza   3/5/2004,  10:30:13 AM
The OEX has hit the level that was predicted by the Keltner channels at the end of trading yesterday, but today's volatility has pushed that upper Keltner channel line up to 570.27 and it's still rising. It's currently testing the most recent descending trendline (off the 2/11 high) of its narrowing triangle formation, but still below the 571.68 level of the topmost descending trendline off the 1/26 high. In other words, it's still churning around inside that narrowing triangle.

 
 
  Jeff Bailey   3/5/2004,  10:26:02 AM
The market loves it! .... S&P Banks Index (BIX.X) 361.28 +1.24%

 
 
  Linda Piazza   3/5/2004,  10:19:03 AM
The OEX isn't the only index adhering to a triangle formation. The TRAN is another. Today it once again bounced from bottom support of the triangle forming at the bottom of its recent plunge.

 
 
  Jeff Bailey   3/5/2004,  10:12:31 AM
Sun Communities (SUI) $41.46 +0.7% .... above my 60-minute intervals chart's reverse h/s neckline of $41.20.

 
 
  Linda Piazza   3/5/2004,  10:11:58 AM
Sometimes I think indices need a "do over" when they plunge or soar at the opening, working their way back to the previous day's closing level and starting over, seeing what they really want to do.

 
 
  Jeff Bailey   3/5/2004,  10:08:44 AM
Day trade long alert ... Bema Gold (BGO) $3.54 here, stop $3.49, target $3.65.

 
 
  Jeff Bailey   3/5/2004,  10:03:52 AM
S&P 500 Index (SPX.X) 1,155.45 +0.05% ... bids positive

 
 
  Jeff Bailey   3/5/2004,  10:03:11 AM
How wrong can I be?.... .... Indices now mixed. That buy program really had some impact.

 
 
  Jeff Bailey   3/5/2004,  10:02:29 AM
S&P Banks (BIX.X) 359.64 +0.78% ... new highs.

 
 
  Jeff Bailey   3/5/2004,  10:01:45 AM
Buy Prog. Prem. Alert

 
 
  Jim Brown   3/5/2004,  9:59:18 AM
TOL new 52-week high as home builders explode on the possibility for continued low rates.

 
 
  Linda Piazza   3/5/2004,  9:59:02 AM
No matter how fast a laptop and how great the setup, it's sure difficult to work from a laptop when you're used to having more than one monitor. By the time I study the charts, write a post, and check the charts again, the OEX has had the audacity to move around again!

I'm working from out of town today, on my laptop, without an ability to check reader email. I'll get to your email as soon as possible on my return home, but if you have urgent questions in the meantime, you might refer them to another writer on staff.

 
 
  Jim Brown   3/5/2004,  9:57:44 AM
AAPL New 52-week high at $26.75. Amazing bounce

 
 
  Linda Piazza   3/5/2004,  9:56:41 AM
The OEX bounced above a 50% retracement level of this morning's plunge. Did the OEX just overshoot that 50% level? With the OEX within the narrowing triangle, it's just difficult to tell. The TRIN is dropping and the advdec line is climbing (although still deeply negative).

 
 
  Jonathan Levinson   3/5/2004,  9:53:09 AM
The Fed announces that it's taking no action today, for a net drain of 7.25B. Looks like we guessed right.

 
 
  Jeff Bailey   3/5/2004,  9:51:51 AM
NYSE Composite ($NYA.X) 6,743.53 +0.01% ... what the ???? This equity market is not looking NEARLY as defensive as I had thought before the open.

 
 
  Linda Piazza   3/5/2004,  9:48:29 AM
The OEX fell through the 60-minute 100/130-pma's this morning, and now has bounced back through the 130-pma, to test the 100-pma again. That's at 566.41. Technically, a move back through the 100-pma should be a buy signal, but I sure wouldn't jump on that with the TRIN where it is and with that level not even accounting for a 50% retracement of this morning's plunge.

 
 
  Jeff Bailey   3/5/2004,  9:48:07 AM
Intel (INTC) $28.81 -2.83% .... most actively traded at just over 16 million. Rising 200-day SMA just below at $28.28. Session low has been $28.58 at the opening 5-minutes, unless that was a bad tick.

 
 
  Linda Piazza   3/5/2004,  9:43:23 AM
The OEX hit the bottom of the five-minute Keltner channel on that first five-minute downthrust. It also hit the bottom of a "best fit" trendline drawn off the 1/29 low (a trendline that cuts off some shadows), so it's still within that narrowing triangle on the daily chart. That doesn't mean it's showing strength, however. It's begun a bounce, as might be expected, and we should now watch the 50% retracement level of this morning's plunge to measure strength or weakness. If this is a bearish formation, as we should suspect that it is, it shouldn't retrace more than 50% of the plunge, with that level near 566.80.

 
 
  Jeff Bailey   3/5/2004,  9:42:14 AM
Semiconductor HOLDRs (AMEX:SMH) $40.86 -1.92% ....

 
 
  Jonathan Levinson   3/5/2004,  9:41:56 AM
The Fed has a 7.25B overnight repo expiring today, and given the huge upward move in treasuries, I wouldn't be surprised to see a drain for the 10AM announcement.

 
 
  Jeff Bailey   3/5/2004,  9:41:36 AM
Dow Jones Home Construction (DJUSHB) 679.94 +1.42% ...

 
 
  Jeff Bailey   3/5/2004,  9:40:55 AM
S&P Banks (BIX.X) 357.09 +0.07% ...

 
 
  Jeff Bailey   3/5/2004,  9:40:27 AM
Semiconductor Index (SOX.X) 499.93 -1.72% ...

 
 
  Linda Piazza   3/5/2004,  9:36:34 AM
During the first five minutes of trading, the OEX spanned a range from 568.32 to 565.17. For those using Jeff's MRT system, but unable to obtain quotes for intraday intervals, the first one-minute range was from 568.32 to 566.39. This might be useful if you feel the first five-minute range was too large to use. Today, it seems we ought to be using the first 30-second range, doesn't it?

 
 
  Jeff Bailey   3/5/2004,  9:34:04 AM
S&P Banks (BIX.X) 355.83 -0.28% .... not sure that all NYSE-listed are open for trade.

 
 
  Jeff Bailey   3/5/2004,  9:27:46 AM
Pacholder High Yield (PHF) $9.62 ... will want to monitor "junk bonds" today. My thinking is that if MARKET begins to think economic slowing, then junk bonds are going to get hit. A break much below PHF $9.40 would begin to have me concerned for junk bonds. I do see a potential head/shoulder top pattern forming in the PHF. Link

 
 
  Jeff Bailey   3/5/2004,  9:20:32 AM
10-year YIELD ($TNX.X) Link ... now down 21.6 basis points at 3.813%. This is a BIG and SHARP move of defensive buying. I would have to view this as a rather negative alert toward equities.

It looks like there were a lot of bond traders on the WRONG side of this nonfarm payroll number, and the correction is now being made. I would have to expect a similar near-term correction in equities. While this last comment may be stating the obvious, I don't think there will be a lot of "dip buyers" in today's session.

 
 
  Jeff Bailey   3/5/2004,  9:19:18 AM
nem U.S. Dollar Index (dx00y) 88.38 -0.85% ... In this morning's 09:00 Update, I forgot that my dollar index quotes are 30-minute delayed, and at time of writing, had not gotten the falling dollar response.

 
 
  Jane Fox   3/5/2004,  9:17:46 AM
The SEC and the National Association of Securities Dealers (NASD) have separately notified the Knight Trading Group (NITE) that the regulators are considering bringing a case that stems from allegations that Knight traded in front of client orders, to profit at the customers' expense. The two notices were in the form of the so-called Wells notices. Wells notices are sent to firms and individuals to give them a chance to present a defense to regulators before disciplinary actions proceed.

 
 
  Linda Piazza   3/5/2004,  9:17:10 AM
That narrowing triangle on the OEX daily chart narrows even further, with a breakout beginning to look more significant, as if it could be the beginning of a bigger move. The longer the OEX trades according to the S/R of that triangle, the more significant it appears. However, I remain concerned about trades taken within the rectangle defined by the recent double highs and the confirming level of a double-top formation, at 557.36. A breakdown below the triangle that's encased by that rectangle, with the bottom support now at about 563.50, would suggest a fall toward the confirming level of the double-top formation, at 557.36, but there's a problem. The important 50-dma has now risen to 561.80, just above the 38.2% retracement of the bear-market decline, at 561.23. The congruence of those two certainly suggests that support might be found there, too. An upside break of the triangle hits the double-top level so quickly that I wouldn't feel comfortable suggesting a long trade just ahead of that proven resistance.

Short-term, the OEX five-minute Keltner channels show the OEX continuing to find support at the mid-channel level, suggesting an eventual climb to the top channel line, now at 569.41, but it was a bout of late-day short-covering that turned those channels up again late yesterday, so I'm distrustful of what they're showing. In short, I'm distrustful of any action within the narrowing triangle on the daily chart, and, to a slightly lesser degree, of any action within the double-top and double-top confirmation zone. This is a wide congestion zone building multiple levels of S/R, any one of which could turn the OEX on its tracks. The patient OEX trader might instead make plans for the time when the OEX breaks out of that zone (and hope any such break isn't a fake-out move), or else continue to trade the congestion zone with Mike Parnos style plays.

 
 
  Jeff Bailey   3/5/2004,  9:16:15 AM
09:00 Update at this Link

 
 
  Jim Brown   3/5/2004,  8:29:23 AM
Employment Report = +21,000 , (est +125,000, last +112,000)
January was revised down to only +97,000 from +112,000
December revised down to +8,000 from +16,000

 
 
  Jonathan Levinson   3/5/2004,  8:06:12 AM
We await the 8:30 nonfarm payrolls, est. 125K, unemployment rate, est. 5.6%, hourly earnings, est. .2% and average workweek, est. 33.8.

 
 
  Linda Piazza   3/5/2004,  7:21:19 AM
Good morning. With lenders and exporters pacing the gains, the Nikkei opened higher by 75 points. After a swing down almost to the flat-line level at the end of the morning session, perhaps prompted by a sharp decline in the lenders, the Nikkei climbed throughout the afternoon, closing at another new high not seen since the summer of 2002. It closed up 135.50 points or 1.19%, at 11,537.29. As the day started out, the yen eased against the dollar, recent economic numbers still cheered investors, and statisticians reported an influx of foreign capital into Japanese stocks. Several measures of economic health were released Friday. January's index of coincident economic indicators rose to 77.8, above the make-it-or-break it 50 level, and the index of leading indicators was at 55.6, with neither number felt to have moved the market. Foreign reserves hit another record high.

In earliest trading, the banks added to gains made recently after Mizuho's and Bank of Yokohama's announcements of plans to repay taxpayer money used to help bail out the lenders, but this sector reportedly fell sharply during the day, with many of the stocks recovering by the close. Inspectors discovered insufficient loan-loss reserves at Mizuho's Mizuho Bank unit and recommended a change in management, sending the stock lower by more than 4% at one point, although the stock managed a close higher by 0.5%. Bank of Yokohama closed sharply higher. Automakers were among the exporters gaining, both as a result of expected improving sales and the weaker yen. Semi-related stocks were weak after Intel's report. Chemical and cosmetics company Kanebo soared after a media report that the company might receive financial assistance for all of its units, not just the cosmetics unit, from a state-run agency.

Other Asian bourses were mixed. The Taiwan Weighted lost 1.29% and South Korea's Kospi lost 0.23%. Singapore's Straits Times was flat, down 0.08%. Hong Kong's Hang Seng was flat, up 0.02%, but China's Shanghai Composite was down 0.41%.

Many European bourses trade tentatively on either side of the flat-line level this morning. Chip-related stocks were turning in a mixed performance in early trading, but much attention focused on the unraveling of a rumor that Citibank would acquire Deutsche Bank. Deutsche Bank had climbed as a result of the rumor, but was reversing as it unraveled, with the rumor being attributed to comments coming out of an investor presentation in Germany, according to one source. In other stock-specific news, Aventis filed a formal defense document protesting Sanofi-Synthelabo's hostile bid and outlining the reasons it objects. Swiss staffing firm Adecco announced a date for the release of its 2003 earnings and Q1 2004 earnings, saying that it found no evidence of major wrongdoing in its study of its earnings report and that sales are healthy. The stock posted strong gains in early trading. Commerzbank recommended Germany utility RWE along with several other companies on the basis of their dividend yields and possible dividend growth, sending the stock soaring and helping to keep the DAX in positive territory.

As of this writing, the FTSE 100 was down 12.40 points or 0.27%, to 4546.70. The CAC 40 was up 4.60 points or 0.12%, to 3781.54. The DAX gained 16.02 points or 0.39%, to 4149.80.

 
 
  Jeff Bailey   3/4/2004,  11:04:25 PM
FEI Company (FEIC) $23.27 +3.33% Link .... Stock has found strong support at the $21.00 level. Bar chartist might find it interesting to take a retracement bracket from the recent high of $28.55 and take the other end of your retracement to the current bearish vertical count of $13.00. See how 50% marks the lows at $20.77?

 
 
  Jeff Bailey   3/4/2004,  10:54:32 PM
Semiconductor Bullish % (BPSEMI) ... Dorsey/Wright's semiconductor bullish % fell 0.3% to 60.31 in Thursday's trade.

 
 
  Jeff Bailey   3/4/2004,  10:35:29 PM
Nikkei-225 ($NIKK) 11,425.81 +0.21% ... low/high has been 11,411.66-11,517.91. "X" gets the square at 11,500. Closing in on its bullish vertical count of 12,000.

If the Nikkei-225 reaches 12,000 or its reverse head/shoulder pattern objective of 12,670, then I'm thinking U.S. markets are going to be considerably higher in the future.

Tomorrow's U.S. Nonfarm payroll numbers are probably as important to Japan's Nikkei-225 as they are to U.S. equity markets. A weak payroll number most likely finds dollar selling, which would probably find a negative reaction in Japan's markets on Monday. Problem for bears right now, in my opinion, is that Japan's Nikkei seems to have markets thinking stronger dollar right now.

 
 
  OI Technical Staff   3/4/2004,  9:48:31 PM
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