Option Investor
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  Jeff Bailey   3/8/2004,  6:06:14 PM
Texas Instruments (TXN) $30.60 -2.76% ... $30.35 extended hours.

  Jim Brown   3/8/2004,  4:31:06 PM
TXN Update - EPS $.19 to .22 Rev 2.85-2.95B (est was already .22 cents by analysts) Rev was at the high end of guidance (prior $2.72-$2.95B).

  Jim Brown   3/8/2004,  4:28:29 PM
TXN halted ahead of its update

  Jeff Bailey   3/8/2004,  4:27:08 PM
Closing Internals at this Link

  Jeff Bailey   3/8/2004,  4:18:37 PM
TriQuint Semiconductor (TQNT) $8.12 -3.21% .... $8.20 in extended hours

  Jeff Bailey   3/8/2004,  4:17:39 PM
Texas Instruments (TXN) $30.60 -2.76% ... $30.65 in extended hours

  Jim Brown   3/8/2004,  4:05:28 PM
TQNT - Update Raised guidance to $85-$87M

  Jim Brown   3/8/2004,  4:03:51 PM
TXN guided higher with their last guidance. Earnings of .16-.22, rev $2.72-$2.95B

TQNT raised guidance for revenue to $81-$83M on their last update.

We are waiting for their updates in the next 15 min.

  Linda Piazza   3/8/2004,  4:03:18 PM
The OEX ended the day resting on or slightly below the supporting trendline for the narrowing triangle on its daily chart. Did it break down or not? We'll see tomorrow.

  Linda Piazza   3/8/2004,  4:00:57 PM
If our theory with relationship to that 72-ema is that it might be a fund buying on dips to that hidden (because it's not commonly watched) average that's causing the strange coherence of some indices to the 72-ema, what about looking at an index set up by Prudential, perhaps? Here's a chart of the PXS, the Prudents Underlying Basket Index. This is an index of twenty publicly traded common stocks, including DRYR, WMT, TXN, AMGN, COP, NBR, AMAT, GD, C, FNM, AIG, CL, GE, WYE, GM, AC, DUK, TWX, EP, TAPb, TAPa, ENRNQ, set up by Prudential Securities Equity Research Committee: Link (I assume there was a bad tick in December, accounting for the spike up toward 120.) I'm just playing around with several theories here, trying to see what might be happening, and certainly not suggesting that I've found the definitive answer.

  Jeff Bailey   3/8/2004,  3:53:40 PM
Bearish day trade exit alert .... exit Martha Stewart Living (MSO) at offer of $9.91. 5-minutes until close.

  Jim Brown   3/8/2004,  3:51:56 PM
Midquarter updates after the close include TXN and TQNT

  Linda Piazza   3/8/2004,  3:39:08 PM
Keene mentioned earlier today that I like to use days like today to experiment with indicators. I've been mentioning over the last couple of weeks my accidental discovery of the possible importance of the 72-ema on some tech stocks, the TRAN, and a couple of other indices. I've become intrigued by the fact that there might be some hidden average that funds have programmed into their computers, and that might be accounting for the fact that some indices seemed to turn around in mid-space, not particularly near any known support, perhaps just after breaking through what we thought was support. That 72-ema didn't seem to have the same congruence with the trading pattern on the Dow, however, so I've been trying to find one that would, supporting pullbacks since last spring. The best I've been able to do so far is the 65-ema, although I'm not convinced that I've found the magic average for the Dow, if such an average exists. Here's the 65-ema, however, using the DJX.X as a substitute for the Dow since my charting service is having difficulties with the Dow's daily chart today: Link

  James Brown   3/8/2004,  3:24:34 PM
Sector update into the last half hour of trading...

The ONLY sector in the green is the OIX oil index although the OSX services index is unchanged.

The HEAVIEST losses are seen in the...
SOX semiconductor index: -3.59%
GHA hardware index: -2.38%
DDX disk drive index: -2.64%
NWX networking index: -2.01%

BTK biotech index: -1.52%
DFI defense index: -1.42%
XAL airlines index: -1.61%

  Linda Piazza   3/8/2004,  3:17:00 PM
The OEX is now slightly below the 120-minute 100-pma, following the five-minute Keltner channel lower, with the 120-minute MACD histogram now showing negative values and with MACD lines moving down toward the signal line. I find that this is an iffy time for the MACD, as this is the time when it appears that all is bearish, but at which point the MACD lines sometimes turn back up again. Remember that the OEX has not violated its 120-minute 130-pma, currently at 563.72, since November, so this is certainly a strong possible bounce point through here. The TRIN isn't yet predicting a bounce, however. If the OEX instead falls through that MA, I might expect a bounce at another support level, back up to test the 120-minute 100/130-pma's, but with more bearish implications at that time.

This current action is the reason that I suggested that bearish players follow the OEX lower with their stops rather than exit the play or enter bullish ones. Those Keltner channels can signal a downside breakout. Be careful, though. The OEX is still within that narrowing triangle on its daily chart, and moves, when they occur, are becoming more volatile, sometimes spanning the entire breadth of that narrowing triangle. It would be just as possible and valid to make a case for a bullish play as the OEX tests the bottom of that triangle, as every other touch of that bottom support since January has resulted in a climb toward the top of the triangle.

  Jeff Bailey   3/8/2004,  3:07:14 PM
03:00 Internals at this Link

  Linda Piazza   3/8/2004,  2:59:03 PM
You've heard this before, but if the current rise in the OEX is a bear-flag rise (tight regression channel formed of higher highs and higher lows after a plummet), it should break to the downside before retracing more than 50% of the plunge. There's a bit of a problem deciding where the plunge began, but the Fib bracket fits nicely if it's placed so that the 50% retracement lies just under 567. Those in bearish trades probably want to see the OEX break down before retracing much higher than 567, then, but remember that the OEX is one of those indices that sometimes overshoots targets by a bit.

  Linda Piazza   3/8/2004,  2:37:40 PM
Jim is suggesting a momentum long on the futures side at the same time I'm suggesting that the OEX has hit a point with strong bounce potential. Why isn't this a good place for a long on the OEX? It may be, but trading futures and trading options are different matters entirely. Because of options pricing models and the presence of the top of that descending triangle so close overhead, the risk/reward doesn't feel the same. Watch the OEX 563.50-563.75 level for a potential bounce or breakdown, but whichever direction you play this, if you choose to enter, be sure to set an appropriate stop and adhere to it.

  Linda Piazza   3/8/2004,  2:31:24 PM
The OEX hits lower Keltner support on the five-minute charts, near 565. It's also hitting the 120-minute 100-pma. In my 11:29 post, I mentioned that the Keltner channels I watch had been in an equilibrium position for a long time, ever since the volatility Friday morning and that it was time for a breakout within the next few hours. We certainly had that. Now it's time to protect profits by following the OEX down with stops if in bearish trades, because we've hit a possible strong bounce point. Keltner channels also give valid breakout signals, too, but I'd use a break below the 120-minute 130-pma at 563.73 or below 563-563.50 historical support for confirmation of such a breakdown.

  Jeff Bailey   3/8/2004,  2:29:35 PM
NASDAQ Composite (COMPX) 2,015.98 -1.45% ... downside al_ert here, which I set below the 03/03/04 session low of 2,020.29. Current trade is right at my upward trend from the 08/26/03 session low, which I attached to 09/30/03 closing low. This upward trend has been holding support, but I wanted traders to be al_ert at this level.

  Jeff Bailey   3/8/2004,  2:25:29 PM
Day trade short alert .... Martha Stewart Living (MSO) $9.96 (bid) here, stop $10.10, target $9.66.

  Linda Piazza   3/8/2004,  2:23:40 PM
The TRAN did fall below Friday's low, seeming to confirm the breakdown out of its triangle, also falling beneath the 19.1% retracement of the recent plunge. However, after hitting lower Keltner channel support, it's rising again. Such a rise could be a bear-flag rise into resistance.

  Jeff Bailey   3/8/2004,  2:11:55 PM
Semiconductor Index (SOX.X) .... bar chart with new WEEKLY pivot retracement at this Link

Also monitoring against the work we did in the 02/29/04 Ask the Analyst column at this Link

  Linda Piazza   3/8/2004,  2:09:44 PM
It's interesting that the 120-minute 130-pma is near the 563.75 level that marks the bottom support of the OEX's narrowing triangle on the daily chart. I mentioned last week that I had migrated from watching these averages on the 30-minute to the 60-minute to the 120-minute chart, as the OEX's lowered volatility made its trade more relevant to these averages on a longer-period chart than previously. We can expect a bounce attempt from the 120-minute 100/130-pma's, especially as the OEX has not violated both since November (although it's occasionally violated the 100-pma on that chart), but if the OEX should instead break down beneath the 130-pma, it would also be violating that ascending triangle. I've been reluctant to suggest a bearish trade on a breakdown below that triangle, if such a breakdown should occur, because of the massed support levels layered all the way down to 557. However, a simultaneous break of both might be particularly important. Traders should sure be aware of the support just lower at 563-563.50, however, if inclined to take such a trade.

Those who instead decide to take a long on a touch of those averages should also be aware of the narrowing of that triangle, with resistance now just over today's high.

  Linda Piazza   3/8/2004,  2:02:06 PM
It looks as if we're going to once again have another day when the OEX spans the width of that narrowing triangle on the daily chart. Check my 9:17 post for the chart, to see the triangle to which I'm referring.

  Linda Piazza   3/8/2004,  1:59:01 PM
The OEX 120-minute 100/130-pma's are at 565.38 and 563.76, with those averages being important in trading throughout February. You can probably expect a bounce attempt from one or the other of those averages if the OEX should decline far enough to touch them.

  Linda Piazza   3/8/2004,  1:57:05 PM
Now the OEX is falling below that mid-channel Keltner support on the 15-minute chart as well. I mentioned in an earlier post that the five-minute chart predicted a fall toward the bottom Keltner support near 565 while the 15-minute chart predicted a rise toward top Keltner resistance near 572. Looks as if the 5-minutes were more predictive.

  Linda Piazza   3/8/2004,  1:52:33 PM
In reference to Jim's 13:39 post, I don't think the labels matter, either, as long as you know what to expect from a particular formation (and maybe then do the opposite since nothing works as it should this year!).

  James Brown   3/8/2004,  1:49:39 PM
We came VERY close to adding ZMH to the OI call play this weekend and Joe Kernen on CNBC is talking about ZMH-rival SYK, which was upgraded by Bank of America today. Shares of ZMH are breaking out over $80.00 with a fresh buy signal on its MACD this morning and it looks like an entry point. SYI gapped up on the BAC upgrade and is trading at $93.39 (+3.22%).

  James Brown   3/8/2004,  1:40:26 PM

  Linda Piazza   3/8/2004,  1:40:11 PM
James, I think both Pring and Meyers would agree totally with your labels on your 13:37 post.

  Jim Brown   3/8/2004,  1:39:53 PM
Call those triangles what you want they are still wedges to me. (grin)

  Linda Piazza   3/8/2004,  1:37:20 PM
James, isn't it interesting to see the different nomenclature used by different technical analysts? (See James' 13:22 post.) Pring and Meyers would call those middle two triangles, not wedges. Pring would call the left-hand one a bearish right triangle and the right-hand one a bullish right triangle. Meyers calls the left-handle one a descending triangle and the other an ascending one.

  James Brown   3/8/2004,  1:37:18 PM
Okay, I've added rising and falling wedges and renamed the triangles correctly. Diagram: Link

  Linda Piazza   3/8/2004,  1:28:16 PM
The OEX is falling beneath mid-Keltner channel support again, but is still in that narrowing triangle on the daily chart. In fact, it's right between triangle support and triangle resistance. Still in a chop zone.

  James Brown   3/8/2004,  1:26:59 PM
Thanks, Jim. -- That makes sense Jon. I am familiar with those patterns as well.

  James Brown   3/8/2004,  1:26:07 PM
I neglected to mention the bullish breakout on EBAY this morning. Volume has been pretty strong the last two sessions and today's move over $70.00 triggered us at $70.05. This is a new all-time (split-adjusted) high for EBAY.

  Jonathan Levinson   3/8/2004,  1:26:05 PM
I always treated James' bullish and bearish wedges as rising and falling triangles- I use Bulkowski's definition of rising and falling wedges as being triangles with both trendlines rising or falling. The other patterns fit mine.

  Jeff Bailey   3/8/2004,  1:24:55 PM
Placer Dome (PDG) $17.34 +1.28% ... moving above its downward trend from the January 06, 2004 high to February 11, 2004 relative high of $18.00.

  Jim Brown   3/8/2004,  1:23:48 PM
James, I think you did a great job!

  James Brown   3/8/2004,  1:22:21 PM
Thank you for the 13:12 post. Do you agree with this diagram of bullish and bearish wedges? If not, feel free to correct it. Diagram: Link
Pardon my rough artistic skills.

  Jeff Bailey   3/8/2004,  1:20:20 PM
01:00 Internals at this Link

  Linda Piazza   3/8/2004,  1:12:10 PM
The reader who asked the question in my 12:01 post wrote back saying that at least one technical text uses the terms "pennant," "flag," "triangle," and "wedge" interchangeably. You know, it doesn't really matter what we call these formations. As I mentioned in my post, I'm a real rule-follower, so I tend to be a stickler in my own posts, but that doesn't mean that I believe that everyone else has to follow every "rule" I do. A lot of my co-writers use the term "wedge" differently than I do. I've seen different texts talk about them differently than Pring and Meyers do, too, but since those were the first technical texts I owned and since Pring is such an authority, I usually adhere to their nomenclature.

Here's my understanding of a flag: A flag forms usually after a steep drop or a steep climb. It moves in opposition to the direction that the market had been moving. So after a steep drop, you'd expect to see a flag that moves up as a period of more measured distribution takes place. It usually moves up in a tight formation of higher highs and higher lows, usually in a tight regression channel and it's implication is counterintuitive. Higher highs and higher lows should mean a market that's improving, right? Not always. Be leery when such a move occurs just after a steep drop. That tightness is important, because if it's instead moving up in bigger, looser swings, it may not be a distribution pattern after all. Usually such a flag would retrace no more than half the previous move before it broke down again. A bullish flag is just the opposite. After a steep climb, there's a period of measured accumulation, with that period forming a flag that's a tight pattern of lower highs and lowers lows.

What matters more than nomenclature is the action. I mentioned last week that these formations haven't been as important in the last year as they were previously. I'm pretty good at spotting formations, but right now, I wouldn't trade based on a formation alone. It used to be possible, for example, to enter a bearish trade as you saw prices rounding over into the right shoulder of a H&S formation, but you were likely to have your (bearish) head handed to you if you blindly did that this last year, as prices shot past the right-shoulder level. As I've been noting recently, there's a strange behavior around the 72-78-ema's, as many stocks appear to have been being bought on touches of those MA's, despite what's happening on any of these formations. I'm not sure if that's going to continue or if some new parameter is even now being decided in the workrooms on the big funds, but let these technical tools warn you to risks without blindly following them.

  James Brown   3/8/2004,  1:05:49 PM
First Albany upped a handful of semiconductor stocks to a "buy" this morning but it's not helping the SOX or even those being upgraded. On the list...AMAT, ATML, EXAR, KLAC, SMTC

  James Brown   3/8/2004,  1:02:11 PM
Considering the quiet Monday it's no surprise to see Lucent (LU) on the most active list with 20.2 million shares already trading. LU has been consolidating its early January gains for the last seven weeks in a wedge-like pattern of lower highs. The stock is approaching its simple 50-dma while its MACD is starting to suggest that the consolidation may be over soon. At $4.00 you really can't play options on it very successfully but stock traders can watch it for a breakout as the stock coils tighter and tighter into the wedge.

  James Brown   3/8/2004,  12:52:23 PM
Depressing the markets today are comments from both Smith Barney and Merrill Lynch.

Various financial news sources are reporting that Smith Barney is lowering their end of year target on the S&P 500 to 1,025, which is an 11% drop from last week's close. They also downgraded the banking sector from "market weight" to "under weight". Currently the S&P BIX banking index is approaching its all-time highs near 367 hit back in July of 1998. The BKX banking index is actually trading at new all-time highs near 1029.

Meanwhile a Merrill analyst is also turning more defensive on stocks and upgrading healthcare and drugs. I mentioned the DRG drug index appeared to create a nice short-term bottom last week with a hammer-candlestick on its daily chart. It was also a hammer on its weekly chart. "Hammers" tend to be one-day reversal patterns at the end of a trend but it's usually a good bet to look for some confirmation and we're seeing that in the DRG rebound.

  Linda Piazza   3/8/2004,  12:51:41 PM
Currently at 497.36, the SOX is breaking down below the 498.50 support, but is still above the February low of 491.26. Today's action isn't looking great, however, as it continues the possibility that a bearish right triangle (flat bottom near 491.50, descending top trendline) could be forming on the daily chart. As I mentioned earlier with relationship to the SPX, though, both Pring and Meyers warn that triangles aren't particularly reliable formations.

  Jeff Bailey   3/8/2004,  12:50:42 PM
Semiconductor HOLDRs (SMH) $40.69 -1.4% ... testing Friday's lows.

  Linda Piazza   3/8/2004,  12:41:55 PM
I somehow missed Jonathan's 11:59 post (perhaps on the Futures side) when it first appeared. Thanks, Jonathan, for providing a little levity to keep up awake on days like this.

  James Brown   3/8/2004,  12:38:51 PM
Early afternoon sector update

Out performing today...
OIX oil index: +0.82%
OSX oil services: +0.68%
GSO software index: +0.36%
INX Internet index: +0.45%
XNG natural gas: +0.22%

Under performing today...
SOX semiconductors: -1.19%
GHA hardware index: -0.97%
DFI defense index: -0.64%
XAL airlines index: -0.59%

  James Brown   3/8/2004,  12:36:08 PM
This sideways chop in the major indices isn't doing anything for our play lists. Everything is essentially churning sideways although I will note that our few remaining puts are slowly fading lower and I do mean slowly.

  Linda Piazza   3/8/2004,  12:35:23 PM
The TRAN is in danger of breaking down out of the symmetrical triangle at the bottom of its recent plunge, but it's holding above Friday's low and the 2866.50 level that's the 19.1% retracement of the recent plunge. I'd use a move below Friday's low as confirmation that a downside breakout was beginning, although it's likely that the TRAN will again find at least minimal support at its two February swing lows. I'm not watching this because I want to trade transportation-related stocks but because Dow theory says that it's bearish to see the divergence that's been occurring between the Dow Industrials (Dow) and Transports (TRAN). We've seen a disjoint of theory and action on a lot of fronts over the last year, however, and I wouldn't discount the possibility that we could be seeing one here, too. The theory is based on the fact that an improving economy should see an improving transportation sector as goods are shipped.

  Jeff Bailey   3/8/2004,  12:27:15 PM
St. Jude Medical (STJ) $77.70 +1.56% Link ... released for trade.

  Jeff Bailey   3/8/2004,  12:25:21 PM
Wilson Greatbatch Tech (GB) $42.01 +8.69% Link ... released for trade.

  Jeff Bailey   3/8/2004,  12:24:40 PM
Medtronic (MDT) $50.10 +3.19% Link ... released for trade.

  Jeff Bailey   3/8/2004,  12:24:01 PM
Guidant (GDT) $73.01 +2% Link ... released for trade.

  Jeff Bailey   3/8/2004,  12:19:48 PM
Petro Canada (NYSE:PCZ) $45.95 +2.11% ... Jeff, Just wanted to confirm that PCZ is not optionable ....Please advise.

No options on the NYSE listed shares. I'm not sure about the Canadian shares though. I wish PCZ had options here in the U.S. as I would much prefer the options than the underlying stock, as I think good money to be made on the call options.

  Jeff Bailey   3/8/2004,  12:15:54 PM
12:00 Internals at this Link

Friday's Internals at this Link

  Linda Piazza   3/8/2004,  12:01:35 PM
Reader Question: Re: your note on the monitor at 10:25 you spoke about a R flag pattern where the top was flat and bottom moving upward. I thought that a R, bullish flag pattern was an ascending pattern where the bottom was flat (support) and the top was coming down (to meet support). Then you want to find a breakout 2/3 to 3/4 down the bottom line when measured from the apex of the chart to where the two lines meet. Also you will need two line touches on both the top and bottom as well to trigger a flag. You said the bottom needs to be flat but that would make it bearish wouldn't it? I thought that was a descending pattern and the breakout 2/3 to 3/4 down would be a break lower or a continuation of the pattern just like a bullish move.

I thought that was the definition of a flag but is yours an interpretation? i am not sure and you confused me just now....hahahah can you please help me with this one.

Response: Well, I've been known to confuse people before, so you're not alone. It's certainly not my aim, though, so let's try to clear up the confusion. First, I don't believe I mentioned anything about needing to see a flat bottom or anything about a flag. Perhaps that was a mix-up with someone else's post?

That post mentioned triangles and wedges rather than flags. I mentioned in that 10:25 post that originally I had thought the SPX was building a bullish right triangle (Pring's definition) or ascending triangle (Thomas A. Meyers' definition). This type of formation has a flat top and an ascending lower trendline. Usually prices break through the flat top which had served as resistance and head up, so it's usually a bullish formation. Both Pring and Meyers warn that triangles are among the least reliable of formations, however. A triangle with a flat bottom and a descending top would be a bearish right triangle or a descending triangle (Pring, Meyers) and would be bearish, but that wasn't what I was seeing on the SPX.

After Friday's trade, however, it was possible to draw a new top trendline, the one that was included in my 10:25 post. That trendline was an ascending one, too, so that both the top one and the bottom one were ascending. Perhaps because the top one ascended at a less steep angle than the bottom one, it was difficult to see that they, too, will narrow to an apex, but here's a chart showing the extension: Link

Although people use the terms differently, both Pring and Meyers say that the difference between a wedge and a triangle is that, in wedges, the lines move the same direction. Both are rising or both are falling. I'm such a rule-follower, so if you see me using the term "wedge" that will always mean that both lines are either both slanting up or both slanting down. I hope this clears up the confusion. I'm so glad you asked, because if I'm confusing you, I'm probably confusing others, too.

  Jim Brown   3/8/2004,  11:54:14 AM
GE getting killed and now at a two month low after saying it was going to issue 118 million new shares ($3.8 billion) of stock to fund the Vivendi deal.

  Linda Piazza   3/8/2004,  11:29:41 AM
The OEX five-minute Keltner channels have been traveling in an equilibrium position for a long while now, ever since Friday morning's volatility. It's about time for a breakout one direction or the other sometime within the next several hours, either up toward the top channel line at 572.00 or down toward the bottom line at 565.08. Five-minute oscillators suggest the downside is more likely: 15-minute oscillators suggest the opposite. Trades in the middle of that narrowing triangle on the daily chart don't suggest anything, one way or the other.

  Jeff Bailey   3/8/2004,  11:26:51 AM
11:00 Internals at this Link

  Linda Piazza   3/8/2004,  11:24:58 AM
On Friday, KO moved up strongly on strong volume. The move was bullish, with Friday's close above the close of 2/27, presenting the possibility of a double-bottom in the making. A couple of concerns present themselves. First, such a move will soon face resistance at a long-term descending trendline currently at about $50.75. There's also horizontal historical resistance at $51.00 to be considered. In addition, the weekly chart presents the possibility that a H&S could be forming, so that possible resistance near $51.00 becomes even more important to watch, as that would be the right-shoulder level. Daily indicators are moving up, with 21(3)3 stochastics having kissed and moved up through the line delineating oversold conditions. MACD has not yet made a bullish cross, however. Weekly oscillators look more bearish. So, although the action looked bullish on Friday and was confirmed by strong volume, I'm leery as yet. We've seen a lot of potential H&S's that never confirm and instead see prices shoot past the right-shoulder level, so I'd watch for that possibility on a breakout above $51.00, or for a confirmation of the H&S on a breakdown below $48.45, although the downside might get started with a break below the 200-week MA at 49.09. That would be a riskier bearish entry, however, as there have been some intraweek violations of that MA, although no weekly closes below it. Please note, however, that the 200-dma is at 46.70, with KO likely to find support on that MA, far above the downside target of any confirmed H&S. If such a H&S is forming, it might be a long time yet before it's confirmed, however, as that would likely require consolidation at the right shoulder area for a long while, while oscillators cycled up. That would fit the formation, too, as it took a long time for the left shoulder to form.

  Jeff Bailey   3/8/2004,  11:08:56 AM
March Palladium futures (pa04h) 265.00 +6.06% ... upside alert.

Stillwater Mining (SWC) $13.38 +5.27% Link ... North American Palladium (PAL) $10.96 +7.55% Link

  Jonathan Levinson   3/8/2004,  11:08:32 AM
The put to call ratio is above neutral now, printing .90. The VXO has gone positive, showing that the put buyers are paying extra premium- this is generally a bullish contrarian signal.

  Jim Brown   3/8/2004,  10:59:45 AM
Corrected number

Kansas City Fed Manufacturing Survey = 27, (Jan was 24, Dec 35)

Text of release: Link

  Jeff Bailey   3/8/2004,  10:54:43 AM
Last week's MM trades and current open trades I've profiled in the Market Monitor at this Link

  Linda Piazza   3/8/2004,  10:42:11 AM
Careful, TASR bears. While I'm not guiding either a bullish or bearish play on TASR (wouldn't touch the thing myself), I do look in on it every now and then for the benefit of some readers who do have plays. Here's what I see today: Link Be careful, as today's move could just as easily be a trap, although the heavy short interest makes it risky business to hang on to bearish positions.

  Jonathan Levinson   3/8/2004,  10:41:19 AM
Bloomberg journalists on their way to the Kansas Fed for the upcoming report: Link

  Jonathan Levinson   3/8/2004,  10:37:25 AM
The put to call ratio started at .8 today and is up to .81, at the high end of neutral. VXO is down .04 to 14.76.

  Jonathan Levinson   3/8/2004,  10:29:11 AM
re Linda's 10:25:09- Looks like a short at 1164 with a tight stop just above, or wait for an upside breakout to go long. Cover/go long at 1142, tight stop/reverse short just below it. 1115-25 SPX is key support now from which any move should bounce. A break below 1115 would confirm a change in trend.

  Linda Piazza   3/8/2004,  10:25:09 AM
The SPX's daily chart had been looking pretty bullish to me, but here's a question I have today: Link

  Jeff Bailey   3/8/2004,  10:23:56 AM
10:00 Internals at this Link

  Linda Piazza   3/8/2004,  10:19:07 AM
I mentioned earlier this morning in my 9:35 post that the last three touches of the central Keltner channel support have resulted in rises toward the 570 level, and that we could watch now for signs of strength and weakness by comparing today's action to recent action. The OEX again rose to that same range, to 569.98, but could not break out above that range, showing congruence with recent action. While that didn't show weakness, it didn't show strength, either, as the OEX could not break above that resistance. Now it has moved slightly below mid-channel support. It's trying to bounce again, but if it doesn't succeed in maintaining levels above 568.58, that mid-channel support, that shows divergence from recent action relating to these Keltner channels. I'm watching these little signs, but not making too much of them as yet, as this morning's trading pattern has so far just kept the OEX within that narrowing triangle on the daily chart.

  Linda Piazza   3/8/2004,  10:09:32 AM
The SOX tested its 100-dma today, at 508.69, but hasn't yet been able to maintain levels above that MA. Currently, the SOX measures 505.32 and is near the low of the day. RSI is coiling and MACD is flat. Stochs are trying for a bullish kiss from above signal. With ADX an "in the pits" 10.21, those stochs should be more trustworthy on the SOX than on the trending BIX, but I don't trust them too much with the SOX still under both the 50- and 100-dma's.

  Linda Piazza   3/8/2004,  10:05:52 AM
The BIX is moving up again, with the stochs un-kissing and RSI unhooking that downward hook.

  Linda Piazza   3/8/2004,  10:04:11 AM
The Russell 2000's high of the day so far was 603.12, just below Friday's 603.16 intraday high. Currently, the Russell 2000 is at 601.91, retreating a bit from that high of the day, but it's still early. Keep a watch, though. Bulls want to see first support in the 598-599.50 region hold.

  Jeff Bailey   3/8/2004,  10:02:15 AM
Petro Canada (PCZ) $45.59 +1.31% ... here's a bar chart I've been monitoring on PCZ. Link

The "tie" or "test" with the PNF chart, was that I didn't want to see a 3-box reversal after trade at $46.00.

I'll show the other retracement work (lower left corner of above chart) in a minute. I'll post it back here.

Here is PCZ chart dating back to "test period" of April-May 2003. Link

  Jonathan Levinson   3/8/2004,  9:55:09 AM
A 6.5B overnight repo has just been announced, which is a net add with no expirations today.

  Linda Piazza   3/8/2004,  9:54:00 AM
Here's what's happening today with the TRAN with respect to the triangle at the bottom of its recent plunge: Link The Fib retracements bracket the recent plunge and show some relevance in recent trading. Note that the TRAN was not able to maintain levels above a 50% retracement of the plunge. Note also that oscillators are inconclusive, as often happens with a consolidation pattern. We don't know about direction until there's a breakout. Because triangles sometimes reform themselves as rectangles, I don't think we'll really know about direction until the TRAN either violates the February low or the February high, but a break out of the triangle will certainly give us a hint.

  Jim Brown   3/8/2004,  9:49:42 AM
MTLM announced a 2:1 split

  Jeff Bailey   3/8/2004,  9:45:31 AM
Swing trade long alert ... Petro Canada (NYSE:PCZ) $45.53 +1.17% Link ... here, stop $43.25, target $50.00.

Study the PnF chart current, but also look back at April (red 4) and May (red 5) of last year.

I'll also show some work I did with retracement during that time, and current, where reverse head/shoulder pattern looks almost identical now, as then. I've been monitoring stock via trader e-mail for last two weeks when stock was down in the "head" of current pattern. Wanted to see PCZ rally to $46.00, then test for right shoulder between $43.38-$43.87. Link

  Linda Piazza   3/8/2004,  9:43:25 AM
Congratulations, Jeff, on that Martha Stewart trade. You got that one in just in the nick of time ahead of that judgment last week. Great timing.

  Jeff Bailey   3/8/2004,  9:41:53 AM
S&P 500 (SPX.X) 1,157.78 +0.07% .... chart with new WEEKLY pivot retracement. Link

  Linda Piazza   3/8/2004,  9:41:08 AM
The BIX is pulling back slightly today, currently at 360.66. I'm in no hurry to rush to a judgment on the BIX's trading pattern today, especially based on oscillator evidence since the BIX has been strongly trending, but the 21(3)3 stochastics have made a bearish kiss within territory indicating overbought conditions and RSI has hooked down. Those can change again in an instant, and we shouldn't trust bearish signals in a stock or index that trends strongly upward, but keep on the watch for a possible tweezer top for this index.

  Linda Piazza   3/8/2004,  9:35:45 AM
During the first five minutes of trading, the OEX traded in a range from 568.16 to 568.79. It bounced from central Keltner support on the five-minute chart, with such bounces leading to highs in the 570 range over the last three touches of the support. We can now watch for divergence or congruence with today's action, as a sign of strength or weakness.

  Linda Piazza   3/8/2004,  9:32:53 AM
The OEX is sitting right on central Keltner channel support on the five-minute chart, right on the 30-minute 21-pma.

  Jeff Bailey   3/8/2004,  9:30:03 AM
Marthat Stewart Living (MSO) $9.50 -12.52% ... Those traders that might have taken a SPECULATIVE position in the March 10 puts (MSOOB) for $0.15 on Friday can close out here at $1.10 bid.

  Jim Brown   3/8/2004,  9:23:15 AM
HOV - has announced a 2:1 split

  Jeff Bailey   3/8/2004,  9:20:04 AM
09:00 update at this Link

  Linda Piazza   3/8/2004,  9:17:59 AM
Friday's trade didn't answer many questions for OEX traders waiting for a directional trade, although it continued the type of range-bound trading helpful to those trading spreads and spread combinations. No breakout occurred. On the weekly chart, the OEX continues its sideways consolidation just above the 38.2% retracement of the bear-market decline. Typical sideways consolidations for the OEX have comprised 10-12 weeks over the last year before the next leg up, so the OEX has another 2-3 weeks of sideways consolidation to conform to this usual pattern. Friday's trade spanned the width of this narrowing triangle on the daily chart, not confirming a breakout either direction, but certainly indicating that a breakout may be near: Link The 30- and 60-minute charts show flattening oscillators with a final candle that threatened to roll down toward next support, but nevertheless held above that support (the 21-pma's in each case). The five-minute Keltner channels showed the OEX ending the day just above mid-channel support, so that the OEX is above mid-channel support on both the 5- and 15-minute Keltner charts, showing strength, however tenuous, on this basis.

If the OEX charts aren't definitive, what about extrapolating what may happen from a view of other indices, especially some of our indicator indices? That produces a mixed picture, too. The BIX posted strong gains, ending the day Friday at 361.23 and moving toward the all-time high of 367.75. Of course, that means it's also moving toward resistance that's likely to be strong. As Jim has pointed out, the Wilshire hints at a potential breakout. The TRAN is still caught within its own triangle at the bottom of its recent plunge, not exactly a picture of strength, although, as with all triangles, we have to wait for a breakout to be sure of final direction. The SOX ended the week below its 50- and 100-dma's. The Russell 2000 broke above a recent descending trendline off the recent highs, but printed a doji or near-doji. What does it all mean? For OEX traders, the same thing it's meant for several weeks. We have to be patient and wait for that breakout. Fortunately, the time is growing shorter until we have that breakout, I believe. Today, a breakdown below 564 would constitute a downside breakout of the triangle, although such a breakout soon faces 563-563.50 support, then 559.50-561.25 support before hitting 557.36. Along the way, various MA's also could provide support at various close intervals, too. An upside breakout of the triangle would occur at 571, but I've said all along that I wouldn't play an upside breakout of that triangle until the OEX got above the recent highs, as that strong resistance is just ahead. Friday's trade only confirmed my caution because an upside breakout was turned back ahead of those recent highs. All throughout February, the only OEX plays have been buying the triangle's support and selling the triangle's resistance, but that's been an iffy proposition at best because of the choppy trading within that triangle. I'd leave it alone myself, at least for directional plays. Spreads outside the range have been good bets, and I've been suggesting that readers turn to Mike Parnos' pages for suggestions until now. Don't get too close in with any spreads now, though, as a breakout might be imminent without us being sure of the direction of that breakout.

  Jonathan Levinson   3/8/2004,  8:38:12 AM
How bad can that PPI report be? From the BLS website:

"As announced on February 17, the release of the Producer Price Index (PPI) for January 2004 has been delayed from the originally scheduled date of February 19, 2004. The length of that delay now means that the release of February data originally scheduled for Friday, March 12, must also be postponed."

  Jonathan Levinson   3/8/2004,  8:00:55 AM
There are no major economic reports scheduled for today.

  Linda Piazza   3/8/2004,  7:14:56 AM
Good morning. The Nikkei is beginning to make a habit out of gapping higher in the mornings, as it did in Monday morning's trading. It seems in a hurry to head up to its 12,000 P&F target, but it got ahead of itself on Monday after it hit yet another new intraday high not seen since the summer of 2002. After confirming an intraday H&S pattern in the late morning and another, lower and rougher one in the afternoon, the Nikkei moved down steeply in late afternoon trade. It closed down 34.43 points or 0.30%, at 11,502.86, closing about 140 points off its high of the day. Economic numbers released on Monday included the economy-watchers index, sent higher by increasing sales at department stores. Rising above the benchmark 50 level for the first time in four months, the diffusion index of economic confidence for those in the services trade was reported at 50.1, rising 1.5 points from the previous month. February's money supply rose 1.7% from the year-ago period. However, if I'm reading the report correctly, that figure was down slightly from January's money supply figure.

With the yen lower against the dollar after Friday's intervention efforts by the Bank of Japan, exporters led the early gains and the sector maintained at least some of its gains into the close. Memory-chip testing equipment manufacturer Advantest raised its Q2 dividend, perhaps also adding to enthusiasm for tech stocks in early trading, but although many techs closed higher, Advantest wasn't one of them. Some car makers gained in early trading, including Mazda Motor Corp, reacting to Daiwa Institute's raising of the company's rating from a neutral to an outperform rating. While Mazda closed higher by 3.2%, the sector was mixed, as was the banking sector.

Other Asian bourses were mixed, with many trading lower. The Taiwan Weighted lost 0.61% and South Korea's Kospi lost 0.58%. Singapore's Straits Times dropped only 0.17%. Hong Kong's Hang Seng gained 0.88%, one of the few gainers. China's Shanghai Composite declined 1.50%.

European bourses are mixed this morning, too, with many trading tentatively higher. As happened with Asian trading, car makers have been higher in early trading. With M&A talk continuing to swirl around Deutsche Bank, the banking sector has been higher this morning, too. This time, a media report indicates that JP Morgan Chase has contacted the German government about buying Deutsche Bank. Last week, it was reportedly Citibank that was interested, a report that Citibank then denied. Also boosting the European banking sector was Swiss banking giant UBS, rising slightly after beginning a new share buyback plan.

Other stock-specific news included a Deutsche Bank report on Nokia, raising the 2004 earnings estimate and stock price target, with Nokia gaining in early trading as a result. Aerospace and defense group EADS reported earnings, seeing a net profit, reiterating 2004 revenue expectations, raising the EBIT forecast, and mentioning growth in major defense programs and a turnaround in the space division. The stock was declining in early trading. French electronics group Thomson may benefit from a new deal with the China Audio Association and the China Chamber of Commerce of Machinery and Electronics for Import and Export that would see Chinese manufacturers paying licenses for use of DVD technology.

As of this writing, the FTSE 100 is down 1.60 points or 0.04%, to 4545.50. The CAC 40 was up 20.35 points or 0.54%, to 3781.46. The DAX was up 26.26 points or 0.64%, to 4152.40.

  Jeff Bailey   3/7/2004,  10:52:13 PM
Pivot Matrix for Monday and next week at this Link

  OI Technical Staff   3/7/2004,  10:52:04 PM
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