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  Jeff Bailey   3/11/200,  10:32:48 PM
Dow Industrials (INDU) Chart at this Link Since the INDU is below both its MONTHLY and WEEKLY S2, I have to use my "fitted" retracement, and also use conventional retracement. What do you think?

Question.... where's tomorrow's DAILY S1 (10,058.70) and DAILY S2 (9,989.03). I think we're ready for battle.

If trading levels, the "fitted" 10,220.43 is near-term resistance, or DAILY Pivot of 10,190.

  Jeff Bailey   3/11/200,  10:30:34 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   3/11/200,  5:10:41 PM
Closing Internals at this Link

  Jim Brown   3/11/200,  4:29:14 PM
ALTR Update Expects revenue at the high end of prior estimates.

  Jim Brown   3/11/200,  4:23:04 PM
Reuters is reporting that the Al Queda letter claiming responsibility for the attack in Spain also claims there is an impending attack in the US.

  Jim Brown   3/11/200,  4:01:12 PM
Oracle reporting earnings of .12 cents with revenue in line with guidance

  Linda Piazza   3/11/200,  3:59:54 PM
When I was first learning to drive and applying for my driver's license (at 14!), my father used to put his foot over mine on the gas pedal, convinced that I drove so slowly that I was going to get us hit. The next time I post an OEX daily chart every day for weeks showing a breakdown level, a downside target of 541-542, and then suggest a bearish trade only for "gunslingers" when that breakdown level is finally hit, somebody press that accelerator for me so I broaden that suggestion a bit to include people other than the most aggressive traders.

  Linda Piazza   3/11/200,  3:55:15 PM
The 100-dma on the OEX is at 543.45. The downside target for the double-top formation is 541-542. An ascending trendline off the 8/06/03, 9/30/03, and 11/21/03 lows crosses at about 534. Why am I mentioning 534? Because once the OEX dropped below 550, a level of minimal S/R during December's climb, there really isn't much else other than that light support near 541-542 until the 528-530 region. We all mentioned our concerns with December's rapid rise as it was happening, and this was why. There was no pause to back and fill, establishing support that might hold on the way down again. The OEX needs to hold 540.

  Jeff Bailey   3/11/200,  3:54:51 PM
Bearish day trade target alert .... QQQ $34.88 (DAILY S1)

  Jeff Bailey   3/11/200,  3:47:49 PM
Bearish Day trade lower stop alert .... QQQ $34.94 ... lower stop to $35.07.

  Jeff Bailey   3/11/200,  3:45:55 PM
BIX.X 347.97 -1.16% ... session low here, starting to give up MONTHLY S1.

QQQ $34.95 -0.68% ...

  Linda Piazza   3/11/200,  3:41:27 PM
I've been watching the OEX 120-minute 100/130-pma's over the last several weeks, as the decreasing volatility had me migrating to longer-term charts. Over the end of February and early March, these averages seemed more important than their 30- and 60-minute versions. Here's what happened as the OEX broke through them this week: Link

  Jeff Bailey   3/11/200,  3:41:08 PM
S&P Banks (BIX.X) 349.05 -0.86% ... session low has been 348.44, which is right at correlative MONTHLY S1 of 348.45 and DAILY S2 of 348.44.

  Jeff Bailey   3/11/200,  3:37:08 PM
Bearish day trade lower stop alert .... QQQ $35.13 -0.17% ... lower stop to $35.22.

  Linda Piazza   3/11/200,  3:34:14 PM
Yesterday I commented that the downside target on the OEX confirmation of its double-top formation was 541-542, but that nothing traveled down in a straight line. Apparently something does. The OEX. It seems determined to hit that downside target as soon as possible. The bear flag came nowhere near to retracing 50% of the plunge that immediately preceded it.

  Linda Piazza   3/11/200,  3:30:45 PM
There had always been uncertainty about whether it was the Basque group (or more properly, Basque separatist group ETA, as many Basque separatists decry the methods used by the ETA) responsible for the bombing in Spain. The ETA usually warns before bombing. The materials used were apparently of the type used by the ETA, but the lack of warning and the multiple simultaneous bombings were not as typical for the ETA.

  James Brown   3/11/200,  3:26:17 PM
IVGN looks pretty bearish with the breakdown under $70.00 and the roll over in today's bounce. Traders might be able to target a move to the December lows near $62.50 or the 200-dma near $60.00.

  Jeff Bailey   3/11/200,  3:22:39 PM
03:00 Internals at this Link

  James Brown   3/11/200,  3:21:29 PM
Is this the market's reaction to the Al Queda letter taking responsibility for the bombings in Spain?

  Linda Piazza   3/11/200,  3:21:15 PM
As I mentioned in my 14:27 post, we would have exited the bearish OEX play based on the Donchian channel break out on 3/08, based on one type of exit, but would still be in the play based on the other. One trade I backtested ran for over 30 points before it triggered an exit by this method (a 30-minute close 2 points above the previous 30-minute close)! However, this method also took lots of maximum (4 points) losses when I was backtesting, too. During times when the OEX was settling into a trading range, it took hit after hit until the next trend began, but if you were basing trades only on Donchian channels, you'd have to take each one. From the middle of January until March 1, for example, while the OEX was range bound, six downside breakout signals were given, and most would have suffered 2-4 point losses.

  Jeff Bailey   3/11/200,  3:18:55 PM
BIX.X 349.60 -0.71% ... session low...

QQQ $35.13 -0.17% ... now looks to chase.

  James Brown   3/11/200,  3:17:58 PM
PCAR looks like a good candidate for the watch list. The recent sell-off broke support near $52.50 and its simple 200-dma but shares are bouncing today from historical support near $49.00 (from September & November last year). Do you buy the bounce that is already starting to fade a bit this afternoon? Or look for a breakdown under $49.00? If you're a P&F chart trader then you're looking for the breakdown because its current P&F price target is $43.

  Jeff Bailey   3/11/200,  3:14:17 PM
Day trade lower stop alert in QQQ $35.23 +0.14% to $35.41.

BIX.X made new session low, and if we're going to get some last-hour selling, I don't think the QQQ should get back above $35.41.

  James Brown   3/11/200,  3:09:33 PM
Adolph Coors Co (RKY) has been surprisingly strong recently. The stock was already consolidating last week but shares held support at the $65.00 mark this week with the rest of the market dropping. Today's 1.69% bounce looks bullish. It could be investor enthusiasm for Coor's recently launched low-carb beer called "Aspen Edge".

  Jeff Bailey   3/11/200,  3:04:25 PM
QQQ $35.35 .... BIX.X 351.00 ...

going wrong way for intra-day bears right now.

  James Brown   3/11/200,  3:01:56 PM
More aggressive traders can take another glance at Sunoco Inc (SUN). Shares have been climbing in a tight channel for months with bulls buying dips to the 21-dma. The stock pulled back to the 21-dma, which happens to coincide with support at $60.00 and is bouncing off its lows. This could be an entry point for the brave. Just use a tight stop.

  Jeff Bailey   3/11/200,  3:00:02 PM
S&P Banks (BIX.X) 350.75 -0.38% ... just sitting here.

  Linda Piazza   3/11/200,  2:59:02 PM
Sorry, James and readers. (See my 14:56 post.) I usually add a phrase on the Futures side and forgot it this time.

  James Brown   3/11/200,  2:57:46 PM
Jon's comment is on the FuturesMonitor side....

  Linda Piazza   3/11/200,  2:56:31 PM
Falling knives. Ah, Jonathan, that phrase brings back memories. (See Jonathan's 14:53 post.) It's been a long, long time since I've heard it applied to the markets.

  Jeff Bailey   3/11/200,  2:54:21 PM
S&P Banks (BIX.X) 350.42 -0.49% ... back to challenge morning low and WEEKLY S2.

  Linda Piazza   3/11/200,  2:53:00 PM
The OEX just broke through the bear flag that I portrayed in the chart linked to my 14:43 post. It has not yet made a new lower low, however, which bears want to see happen.

  James Brown   3/11/200,  2:50:47 PM
BDX has been stuck in a trading range between 47.75-50.00 for three weeks but today's 2.25% decline is a breakdown below the bottom of this range. A common 38.2% retracement of the November-February run up would put BDX near the $44.50 mark but watch out for support near its 50-dma (currently $46).

  Jeff Bailey   3/11/200,  2:50:30 PM
Day trade short alert ... QQQ $35.30 here, stop $35.50, target $34.88.

  James Brown   3/11/200,  2:46:32 PM
Both ROK and DHR, two companies who raised their earnings estimates on Wednesday morning, are still seeing traders sell into strength. Both traded higher on Wednesday morning only to fade as the markets dropped. We're seeing the same pattern today with a lower high and shares rolling over into the afternoon.

  James Brown   3/11/200,  2:44:12 PM
observation...virus-fighter Symantec (SYMC) is bouncing strongly today, up 3.05%, to $42.92.

  Jane Fox   3/11/200,  2:44:04 PM
Dateline WSJ Federal Reserve Chairman Alan Greenspan expressed confidence Thursday that the long-battered U.S. job market will perk up and warned Congress not to take "protectionist" steps to curb the movement of white-collar jobs abroad.

Mr. Greenspan said the outsourcing of U.S. jobs to countries like India and China has generated a "palpable unease" among Americans, who fear it foreshadows a long-term decline in their standard of living. Some U.S. lawmakers have responded with proposals to deny federal grants to companies that outsource U.S. jobs and to require "call center" workers in other countries to identify their location when they speak with U.S. customers.

But the Fed chairman told the House Committee on Education and the Workforce that such legislation could do more harm than good. "These alleged cures would make matters worse rather than better. They would do little to create jobs; and if foreigners were to retaliate we would surely lose jobs."

Instead, he said, Congress should focus on improving the U.S. education system and further opening markets in the U.S. and abroad.

  Linda Piazza   3/11/200,  2:43:56 PM
Here's what I'm noticing on an OEX intraday chart: Link

  Jim Brown   3/11/200,  2:41:35 PM
France just raised their terror alert

  Jeff Bailey   3/11/200,  2:40:47 PM
02:00 Internals at this Link

  James Brown   3/11/200,  2:33:17 PM
The XBD broker-dealer index isn't seeing that big of a bounce but Merrill Lynch (MER) is bouncing from its lows near $60.75, above round-number support at $60.00 and its rising 50-dma. Technicals are mixed.

Some of MER's peers aren't bouncing much at all but they aren't falling either.

  Linda Piazza   3/11/200,  2:27:51 PM
If we'd have been playing that Donchian channel breakout on the OEX that I mentioned earlier today, we would have exited about 12:30 on one of the exit types I backtested. (We'd still be in the trade on the other type of exit.) The bearish entry would have been made on 3/08 at 565.17, and exit would have been on the close of the 12:30 candle today at 554.03. Eleven points. That's on an "iffy" signal given by the Donchian channels. Of course, they gave another iffy signal on the 9:30 candle at 3/03, and that entry at 564.96 would have been stopped out that afternoon at 566.71 for a loss. That was from the same congestion zone in which the profitable signal would have been given, so Donchian channels are helpful to corroborate a choice you want to make, but perhaps not to initiate trades, at least as I've backtested them. Also, in my experience, Donchian channel breakout signals given on that first 9:30 candle are even more suspect than those given at other times.

  Jim Brown   3/11/200,  2:27:51 PM
Spain is now saying they found a van with explosives and an Arabic tape. The current thought is that the explosions were made by Basque separtists.

  James Brown   3/11/200,  2:27:30 PM
Heads up for traders looking for another entry in Phelps Dodge (PD)! Copper futures are up a very strong 4% today after the recent sell-off and shares of PD are following suit with a 3.68% gain. This looks like a tempting bounce back above the rising 50-dma and the $80.00 level for PD. I'd use a relatively tight stop.

  James Brown   3/11/200,  2:20:14 PM
Afternoon Sector Update

DJUSHB homebuilders: +1.23%
SOX semiconductors: +1.53%
DDX disk drives: +0.99%
RLX retail index: +0.81%
BTK biotech index: +0.74%

DRG Drug index: -0.77%
IUX Insurance: -0.52%
HMO healthcare: -0.42%
OIX oil index: -0.50%

  Jeff Bailey   3/11/200,  2:16:47 PM
Look at 5-minute bar chart of TRAN then look at 5-minute bar chart of EXPD.

  Jeff Bailey   3/11/200,  2:13:39 PM
Yellow Corp. (YELL) $32.97 +10.74% Link .... up on earnings. A note I would make here is that it was YELL (see following bar chart) Link that triggered the initial weakness in the Dow Transportation Average (TRAN) Link from the 3,050 level to its rising 50-day SMA, and now its YELL that gives a lift today.

  Linda Piazza   3/11/200,  2:10:42 PM
Tired of discussions about the various indices and the 72-ema (78-ema? 65-ema?). Here's the Russell 2000 with the 72-ema: Link

  Jeff Bailey   3/11/200,  2:05:13 PM
Terrible...terrible .... Martha Stewart (MSO) $10.21 +3.97% ... just now noting that today's session high of $10.50, which came after day trade profile stopped right where MSO's bar chart would have filled the gap from the 03/05/04 low. Evidently, somebody was waiting for that gap to be filled.

  Linda Piazza   3/11/200,  2:02:16 PM
Here's another reason why I fear that the 72-ema may not continue to support prices on some indices and charts (see my 13:44 and 13:47 posts): Link

  Linda Piazza   3/11/200,  1:47:28 PM
(Continuation of my 13:44 post.) Whether or not these various ema's continue to be important, I'm most encouraged to have found the correspondence between trading patterns and these averages. Why? All last year, technical analysis just did not seem to work. All of us technical analysts understand such simple tactics as "the trend is your friend," although I had a reader or two gently remind me of that axiom during the year, and how a trending market depends more on behavior around moving averages than on oscillators. We all know to make that switch, as easily understood as switching from two-wheel to four-wheel drive when the weather or terrain changes. What was unusual, however, was the tendency of well-recognized and time-tested (and I'm talking tested through centuries here, not just a few years) formations to set up, trigger an action point, and then to have the indices or stocks turn around in mid-space and head a different direction.

Those relying on technical analysis often got smoked. I did, a time or two. I'm a rule follower, but the rules just weren't working. It was discouraging, to say the least. However, what if the rules were working, but someone had just hidden the new play book? What if markets weren't turning around in mid-space, but rather at some average we weren't accustomed to watching? What if it was as simple as that? While I would have liked to have been given a copy of that play book sooner, or to have discovered it accidentally a bit sooner, I still feel much relieved that "rules" still work and maybe were working all last year after all.

  Linda Piazza   3/11/200,  1:44:55 PM
Reader Question: Recently you were talking about 78 day average, I would like to know whether you follow 78 Simple Moving Av. or Exponential Moving Av.?

Response: First, thanks for the compliment in another part of the email. Second, I'm glad you asked that question, because it brings up an important point I've wanted to make.

It's Jim who pointed out the 78-ema (exponential moving average) on the OEX chart after I'd been noting that the 72-ema might be important. Both are ema's, and I accidentally found about a month ago that some indices and stocks appeared to trade in relationship to that 72-ema, bouncing on touches of that average over the last year. If you put both on a chart, you'll find some instances when the 72-ema fits better and some when the 78-ema might, so perhaps the actual average we should be watching is somewhere in between the two. Anyway, I don't know why they would be important, but I theorize that perhaps some fund has been using this average as a "hidden" benchmark average, buying on dips to that average.

The important point I wanted to make? Unfortunately, I was accidentally discovering the importance of this moving average over the last year about the time that it may have become a moot issue. I'm not sure whether that MA's importance will carry through into this year, however, as profit-taking ensues. On the Dow, it seemed to me that the 65-ema might be a better fit, and the Dow violated that quite handily yesterday: Link Today, however, the OEX is trying to bounce above these averages. If it does, that will reinforce their importance, but will also mean that a violation of them should be viewed more seriously. (To be continued.)

  Jeff Bailey   3/11/200,  1:37:52 PM
Day trade stop alert .... MSO ... ticked lower at $10.27 ... exit here ... bid $10.30

  Jeff Bailey   3/11/200,  1:30:31 PM
Raise day trade bullish target alert ..... lets raise the day trade bullish target in Martha Stewart Living (MSO) to $10.75 (BLUE #5) from $10.55 (BLUE #4).

Seeing quite a bit of option action in the March 10 calls and puts. Not sure if they're selling $10 puts and buying $10 calls. Also some action in the April 10 puts/calls.

I checked "max pain" at $12.50.

  Linda Piazza   3/11/200,  1:25:37 PM
The OEX is now approaching mid-channel Keltner resistance, at 555.02 currently but descending, with other Keltner-channel resistance lines grouping just under that resistance. We've obviously seen a move above the previous five-minute low, but as the OEX approaches mid-channel resistance, it also approaches historical resistance. Still, I wouldn't be surprised, because of the length and degree to which the OEX violated the lower channel support, to see it slung all the way toward upper channel resistance, now at 559.22, but descending.

For those who carried over bearish plays from yesterday or today, the OEX has now passed up two possible profit exits, the 72- and 78-ema's on the daily chart. I watch the first of those two, and Jim the second. It's a tough decision to make as to where to exit since the OEX is just entering a congestion zone, but there's danger of a continued bounce. For those gunslingers among you who wanted to play a possible bounce, the OEX has moved above two possible entries, but if you were determined to play a bounce potential, be sure to set tight stops in case the bounce fails, as it could at any moment. I'd be pre-determining a profit exit, too, and would consider getting out, at least of part of the position, when it was hit, because this still could be nothing more than a countertrend, technical, oversold bounce. An OEX long is risky, risky.

  Jeff Bailey   3/11/200,  1:23:30 PM
01:00 Internals at this Link

  Jeff Bailey   3/11/200,  1:21:56 PM
Rick Santelli on CNBC discussing bond action, where 10-year Treasury didn't go all that well.

Helps explain jump in YIELD Jonathan and I noted.

  Jeff Bailey   3/11/200,  1:14:48 PM
Good eye Jonathan! just seeing your 13:12:41 post

  Jeff Bailey   3/11/200,  1:14:02 PM
Pretty good round of selling takiing hold in Treasuries.... 10-year YIELD ($TNX.X) now higher by 3.8 basis points at 3.775%. Was 3.680% in early going. May be a little asset allocation taking place.

  Jeff Bailey   3/11/200,  1:05:59 PM
Swing Trade Bearish stop alert ... Bristol Myers Squibb (BMY) $25.71 ...

  Jeff Bailey   3/11/200,  12:55:19 PM
Correction alert ... MSO day trade bullish stop is $10.29, not $10.19.

  Jeff Bailey   3/11/200,  12:51:42 PM
Day trade long alert ... Martha Stewart Living (MSO) $10.35 here, stop $10.29, target $10.55.

  Jeff Bailey   3/11/200,  12:43:08 PM
12:00 Internals at this Link

Having some trouble with intra-day charts.

  Linda Piazza   3/11/200,  12:41:11 PM
Despite my 12:32 post, this OEX climb sure looks like a bearish formation (rising wedge) to me. The two (possibility of a bounce, bearish formation) aren't incompatible as oversold bounces often take the form of a bearish pattern of some type. We'll just have to see, but that bearish-looking formation wouldn't encourage me to jump into long positions. However, I haven't been in favor of OEX long positions all day today even though a bounce is now long, long overdue. Those confused when you see the futures traders suggesting longs and those of us on the options side saying be careful shouldn't be too confused. On the OEX in particular, spreads and other pricing issues related to options (possibility that volatility will collapse on any climb, deflating options prices, etc.) mean you need a bigger swing to profit than you do when trading futures.

  Linda Piazza   3/11/200,  12:32:34 PM
The shortest-term OEX five-minute Keltner channel has turned up, looking as if the OEX is going to test mid-channel resistance (currently 555.31 but descending) if not upper channel resistance (currently 559.69 but descending). I've been expecting this to happen since yesterday afternoon, however, and those channels did slant up then, too, only to turn down again. However, when the lower channel has been breached as strongly and as long as this one has, the OEX is sometimes catapulted all the way back to the top resistance line.

  Jeff Bailey   3/11/200,  12:20:57 PM
Bristol Myers Squibb (BMY) $25.66 -1.64% ...

  Jeff Bailey   3/11/200,  12:18:34 PM
Taser Intl. (TASR) $56.63 +6.06% ... after gap lower open, stock really reversed.

Stock doesn't trade with option, and may be good pulse on bullish/bearish enthusiasm on a daily basis.

  Linda Piazza   3/11/200,  12:18:18 PM
The BIX achieved that new five-minute high, erasing the potential bearish price/oscillator divergence.

  Jim Brown   3/11/200,  12:12:09 PM
2004 Stock Traders Almanac
Those readers who did not sign up for the end of year special and would still like to get a 2004 Stock Traders Almanac, 2004 Option Expiration Mousepad and the Introduction to Options Trading Success Video can get a set at the link below. We have a few extra and they are $44.95 for the set. Link

  Linda Piazza   3/11/200,  12:08:53 PM
Bullish divergence or not, the BIX has not been able to produce a higher five-minute high as of yet. As I mentioned earlier, that higher five-minute high would bring the BIX right up to the 30-dma, so it may be too difficult a task for the BIX to produce that higher five-minute high. If it doesn't, however, it will now have signaled bearish divergence on that five-minute chart, because MACD and 21(3)3 stochs have already reached higher highs.

  Jeff Bailey   3/11/200,  12:06:49 PM
Stock Trader's Almanac .... Those trader that received their Stock Trader's Almanac might turn the page for next week and make some notes as to the bullish heads for Monday-Thursday. Very interesting notes on page 34 titled "How the Government Manipulates the Economy to Stay in Power"

Funny how history tends to repeat isn't it?

Notes are that federal spending during 1962-1973 showed the average increase was 29% higher in election years than in non-election years. Real disposable income accelerated in all but one election year between 1947 and 1973 (exluding the Eisenhower years).

  Jeff Bailey   3/11/200,  12:01:30 PM
Trader via e-mail makes note that QQQ saw BIG volume in first hour of trade at just over 39 million shares.

Difficult to say if MONTHLY S2 was a bear's target, or if there is this type of volume spike via futures rollover.

  Linda Piazza   3/11/200,  11:56:21 AM
The TRAN's five- through thirty-minute chart shows it making a V-shaped recovery off its low this morning, but even if it's going to continue its gains, it may be time as it approaches 2840 resistance for it to draw back into a handle to form a cup-and-handle formation or an inverse H&S formation.

  Jeff Bailey   3/11/200,  11:54:47 AM
Expeditors Intl. (EXPD) $36.60 +1.41% ... if you are holding this short as you believe (like I do) that this stock is lower over next couple of months, but now think stock has some upside to the $37.20, a trader short 1,000 shares at $36.25 might look to sell the March $35 puts, with just over one weak of expiration. Bid/offer is $0.10x$0.25

  Linda Piazza   3/11/200,  11:39:49 AM
If the TRAN could maintain today's gains (big if this early today), then it will be forming a tweezer-bottom pattern, a potential reversal pattern. Because of the breakdown out of its symmetrical triangle on the daily chart and the new P&F sell signal, the presumption would be that this would be a countertrend bounce up to test broken support, but it's always possible that even a countertrend bounce could continue over several days. RSI has already hooked up.

  Linda Piazza   3/11/200,  11:37:30 AM
The TRAN continues to climb and is now above the 2/04 low. It's now at 2829.01.

  Linda Piazza   3/11/200,  11:28:04 AM
Looking everywhere for signs of an impending bounce, I notice this: While the BIX made a lower five-minute low, MACD did not. That's bullish divergence if it continues. Of course, MACD could turn down and erase that divergence, but that's what's showing up now. Since the BIX is one of the indicator indices that Jeff has taught us to watch to help predict OEX behavior, this may be important to watch. I wouldn't leap into a bunch of bullish positions based on this tentative evidence alone, however!

  Jeff Bailey   3/11/200,  11:21:23 AM
Randgold Resources (GOLD) $18.83 -3.03% ... sudden plunge below recent support. This has been a leading weakness stock in the gold stocks.

  Jane Fox   3/11/200,  11:16:57 AM
The Association for Investment Management and Research, the leading trade organization for stock research analysts and investment managers, and the National Investor Relations Institute, a group of corporate financial representatives has released a set of "best practices" guidelines for ways to improve the integrity of stock research.

The guidelines focus on improper pressure that investment bankers put on their firms' analysts to tailor research to win business. The new guidelines address the underlying pressure that sometimes comes from the companies being covered, including the practice of denying analysts access to information when they hold bearish views on the company.

  Linda Piazza   3/11/200,  11:16:25 AM
The BIX hits a new five-minute low. Question answered: no equal lows.

  Linda Piazza   3/11/200,  11:13:36 AM
The BIX hit a slightly lower low on its five-minute chart, but by only a few cents. It was close enough that it might be tagged an equal low, but before we can label it that way, it has to confirm its double bottom on that chart by moving above the peak between the two troughs, with that peak at 353.30. With the 30-dma at 353.27, that's going to be tough going for the BIX, but will represent renewed strength if it happens. Until there's either a lower low or a higher five-minute high, though, we won't know for sure. That lower low may be about to form as I type.

  Linda Piazza   3/11/200,  11:08:23 AM
The TRAN did punch as high as 2820.11, just above the 2/04 low of 2815.66. It's fallen back a bit now, but is staying above the 2800 level. Is it above the neckline of the H&S on its daily chart? That depends on which of the three possible necklines depicted in my 9:49 post you consider most valid. It's right at the neckline of the slanting one, the one I originally thought most valid. If it is, then this should be strong resistance for the TRAN, from here up to 2821, and then to 2850.

  Jeff Bailey   3/11/200,  11:07:36 AM
11:00 Internals at this Link

  Linda Piazza   3/11/200,  11:03:53 AM
The OEX broke down out of its bear flag about 30 minutes ago, and now we need to watch for a higher, equal, or lower five-minute low. It's at Keltner support now, just under 559, but it can break through that support just as it can through a Donchian channel line.

  Linda Piazza   3/11/200,  11:01:22 AM
The OEX hasn't been able to get back over its 72-ema this morning, with that average at 553.03 currently.

  Linda Piazza   3/11/200,  10:57:37 AM
This would have made a nice OEX swing trade, as predicted by the Donchian channels as I've set them up and backtested them: Link Donchian channel breakouts tend to produce a lot of false signals in a range-bound market, however, and at the time this signal was given, the OEX was still inside that narrowing triangle on the daily chart, still in the middle of a consolidation zone. Shoulda, woulda, coulda.

  Jeff Bailey   3/11/200,  10:55:15 AM
Expeditors Intl. (EXPD) ... here's my bar chart of EXPD. Link

  Linda Piazza   3/11/200,  10:47:08 AM
The SOX was turned back at central Keltner channel resistance and now breaks down out of its bear-flag formation on the five-minute chart. These Keltner channels are so valuable to watch across many indices and stocks. Now, five-minute Keltner support can be found near 477.32, 474.99, and 473.17, with important central channel resistance at 481.45-482.12. The SOX has to sustain levels above that central channel resistance before it can reliably climb.

  Jonathan Levinson   3/11/200,  10:47:01 AM
The put to call ratio dropped to 1.10, still way high. VXO is up 2.82% at 19.33.

  Jeff Bailey   3/11/200,  10:41:43 AM
Bearish Swing trade stop alert .... Expeditors Intl. (EXPD) $36.25 +0.44% .... stopped at $36.25, but will be looking for new bearish entry back near $37.20.

  Jane Fox   3/11/200,  10:36:36 AM
Linda, I feel the same way, a TRIN at 1.31 these last few days is bullish LOL.

  Linda Piazza   3/11/200,  10:34:49 AM
The TRIN is at 1.31. After recent values, that feels downright bullish, doesn't it? (This is not serious investment advice to consider bullish trades!)

  Linda Piazza   3/11/200,  10:31:31 AM
Time for the SOX to bounce up into another (likely distribution) pattern? Perhaps, but I thought so yesterday, too. Although I mentioned yesterday that any bear flag pattern, if it should develop, would likely be overlapping, yesterday's candle overlapped a bit too much! That wasn't an overlapping bearish candle within a flag, but a just-plain-bearish candle. Anyway, the SOX tries to bounce again today, staying above yesterday's low, struggling to hold above the 12/16 low of 468.20. The SOX is at 480.90 as I type. It's facing Keltner resistance at just above 482 from the central five-minute resistance, but it's already made a new five-minute high. Yesterday's last fifteen-minute high at 489.41 could be expected to provide resistance, too, although the 15-minute central resistance is just above that, just above 490.

  Jeff Bailey   3/11/200,  10:30:54 AM
Swing trade lower stop alert .... Expeditors Intl. (EXPD) $36.09 (unch) ....

I don't like this bid in the QQQ right now, and think EXPD might get a bounce back higher to a better bearish entry than yesterday's $36.25.

Lower bearish stop to $36.25 (break even), which would be just above today's 5-MRT BLUE #1 of $36.21.

QQQ $35.42 +0.62% ... is at its DAILY Pivot in our pivot matrix.

  Jeff Bailey   3/11/200,  10:24:58 AM
10:00 Internals at this Link

  Linda Piazza   3/11/200,  10:21:39 AM
The TRAN has bounced back above 2800, but not back above the 2815.66 low from 2/04. It's at 2804.23 as I type, that bounce above 2800 still tentative.

  Linda Piazza   3/11/200,  10:18:57 AM
The OEX has met the downside target predicted by yesterday's "b" distribution form on the 120-minute chart. Such patterns usually form about halfway down a decline, projecting a downside to about 549.40.

  Jeff Bailey   3/11/200,  10:18:20 AM
Dow Industrials (INDU) 10,248.30 -0.47% ... just tested MONTHLY S2 of 10,271.78 after falling below at the open and turns back.

  Jeff Bailey   3/11/200,  10:15:30 AM
Swing Trade Lower Stop alert .... Bristol Myers Squibb (BMY) $25.38 -2.64% ... session lows and shouldn't come back above $25.70 (or I don't want it to come back above as target nears).

Lower stop to $25.71.

  Linda Piazza   3/11/200,  10:14:45 AM
Here's what I see on the OEX daily chart, perhaps useful for those considering exits on bearish plays and entries on long ones: Link

  Jeff Bailey   3/11/200,  10:07:17 AM
Expeditors Intl. (EXPD) $36.00 -0.24% ... current thoughts from yesterday's swing trade short at $36.25.

Transport and NASDAQ-100 component. What a swing trade bear needs to be cognizant of right now is if QQQ is going to bounce back to $36 on an option expiration trade, EXPD might find some bid, which could come as high at $37.25.

I have a retracement on EXPD from $40.83 (11/10/03 high) to $31.28 (05/20/03 close), which gives very nice 38.2% at $37.18, which was broken hard to the downside yesterday, with 50% at $36.05 and 61.8% at $34.92 (my target just above at $35.05)

EXPD's PnF chart gives double-bottom sell signal with trade at $36.00 today. Link

EXPD's relative strength chart vs. NDX very close to giving a sell signal too. Link

  Jim Brown   3/11/200,  10:05:35 AM
Testimony by Chairman Alan Greenspan
Before the Committee on Education and the Workforce, U.S. House of Representatives Link

  Jonathan Levinson   3/11/200,  10:05:33 AM
Opening p/c ratio 1.19, with the VXO up to 19.50. These do not look like safe readings at which to be initiating fresh shorts, but it's only a secondary indicator. Follow the price.

  Jim Brown   3/11/200,  10:00:18 AM
Greenspan saying that he is seeing increasing signals of an expanding recovery although job creation is lagging. Protectionism is a negative to further progress.

  Jeff Bailey   3/11/200,  9:54:24 AM
QQQ $35.29 +0.29% .... session low undercut the MONTHLY S2 of $35.06 with session low of $34.98.

  Jonathan Levinson   3/11/200,  9:53:46 AM
The Fed announces a 9B overnight repo. Don't mess with the Fed. That's a net 5.25B add for the day.

  Linda Piazza   3/11/200,  9:52:40 AM
Keltner channel resistances lines on the OEX five-minute chart have separated a bit now, layering out from 551.20, to 552.62-553.84, and then to 555.18, and to 557.43-558.20.

  Jeff Bailey   3/11/200,  9:51:56 AM
Sector action broadly lower with only the S&P Retail Index (RLX.X) 389.38 +0.28%, Oil Service (OSX.X) 104.21 +0.12% and Semiconductor Index (SOX.X) 476.37 +0.01% showing gains.

Airline (XAL.X) 55.14 -2.37%, Transportation (TRAN) 2,786.97 -1.66%, Internet (INX.X) 169.13 -1.26% early weakness.

  Linda Piazza   3/11/200,  9:49:57 AM
Here's a snapshot of a nicely formed H&S on the TRAN daily chart, one formed over several months, giving it more validity: Link

  Jeff Bailey   3/11/200,  9:42:14 AM
Swing Trade Bullish stop alert .... Petro Canada (PCZ) ... stopped at $43.25. Failure of reverse h/s pattern.

  Linda Piazza   3/11/200,  9:39:31 AM
The first retracement of the day is due to begin in a few minutes, so we'll see if the OEX bounces and how far it bounces. The OEX is deeply oversold on a five-minute Keltner basis, suggesting that when it does begin to bounce, it could be slung above mid-channel resistance, perhaps all the way to top-channel resistance. That mid-channel resistance is now at 558.63, but is descending. Before that, however, the OEX faces a river of Keltner resistance lines moving down toward 554, also a level of historical resistance, the top of the OEX's last rectangular consolidation pattern from yesterday. That bounce won't necessarily begin now or even today, but the longer this oversold condition continues, the more likely and more violent a bounce might be.

  Jeff Bailey   3/11/200,  9:38:37 AM
Bearish Swing Trade lower stop alert .... Bristol Myers Squibb (BMY) $25.54 -1.99% .... Lower bearish stop to $25.82.

  Linda Piazza   3/11/200,  9:35:48 AM
During the first five minutes of trading, the OEX spanned a range from 552.32 to 550.21. Remember to follow the OEX down with your stops today if in bearish trades.

  Linda Piazza   3/11/200,  9:22:43 AM
Jonathan's 8:58 post (perhaps on the Futures side) was a good one to study. Like Jonathan, I wrongly thought a bounce would begin yesterday. Jonathan notes many factors we must consider today when watching for such a bounce, including some you might not have considered. I wanted to add my reminder that some of our strongest breakout plays come when oscillators are indicating either deeply overbought conditions (upside breakout) or deeply oversold conditions (downside breakout). On an intraday basis, at least, these are trending markets now. Buy signals given by oscillators during a downward trending market are not reliable, so be careful if deciding to play a potential bounce because of an observed uptick in oscillators. My own study of breakout signals in Donchian channels showed that those breakout signals worked best when stochastics were already pinned in overbought or oversold levels, indicating that a trend was in place before the Donchian channel breakout signal was given. That indicated that the trend was likely to continue, despite oscillators that might then briefly hook, seeming to give a signal the opposite direction, a signal that often turned out to be false.

Those in bearish plays have a quandary on their hands when they observe any upticks in oscillators, too. Do they exit? Stay in? As I said late yesterday, I would not allow any bearish gains to become losses. Period. Beyond that, set your stops at points that are suitable for your trading style. Do you intend a position-type trade to be held for several weeks, and are you prepared to ride the OEX back up to retest broken support? Do you have front-month options that are going to rapidly lose value if the OEX decides to spend a few days rising to test that broken support? No one answer is right for all.

  Jeff Bailey   3/11/200,  9:21:16 AM
09:00 Update at this Link

  Jonathan Levinson   3/11/200,  9:12:46 AM
We have 11.75B in various repos expiring today. The Fed has added 8B in 14-day repos, and we await the 10AM announcement as regards the balance.

  Linda Piazza   3/11/200,  9:05:51 AM
Jonathan, I've been at that Atocha train station in Madrid many times (usually somehow getting on the wrong train). (See my and Jonathan's 6:57 and 8:11 posts.) Although the upcoming elections certainly center suspicion on Basque separatist group ETA, the group has denied responsibility, reminding that it always warns before striking. No warning of the Madrid explosions was given. However, others call preposterous the ETA's theory that Arab terrorists might be responsible.

  Linda Piazza   3/11/200,  8:56:29 AM
I've never been reluctant to admit that I usually have better ideas about intermediate market direction pre- or post-market, rather than in the heat of the market trading conditions. Each trader better know his or her strengths or weaknesses before embarking on trades. If I were a great scalper, but bad at guessing intermediate-term direction, for example, then I better not be putting on a lot of position trades.

During market hours, I often have a pretty good idea where the OEX will go on the very short-term, too, and over the last few months, the use of Keltner channels has helped me hone that ability. That means that I could probably scalp okay, too (used to be good at it, at least, when that was my preferred type of trade), but not on the OEX. Those one-to-three-point ranges are too small to profit consistently on OEX options plays for all but the most adept of scalpers.

I've been posting some of my ideas suitable for intermediate-term swing- or position-type OEX trades every day for several weeks: Link As noted on the graph, when the long-awaited break came, it of course came during the heat of the market day. I was studying intraday charts across many time frames showing deeply oversold conditions, so I limited my recommendations for a bearish play only to "gunslinger" types. Congratulations to you bearish traders who had held over from Tuesday's suggested trade and to you gunslingers out there entering yesterday, and perhaps especially to those of you who held over again yesterday. There's a reason behind that "perhaps," though. Futures are down as I type, but I have to add my concerns again about those deeply oversold markets across all intraday time frames. The OEX now has a downside target of 541-542 (from the double-top formation) and the breaking-out volatility indices hint that the downside target could be reached, but nothing goes straight down. (Admittedly, markets are more likely to plummet quickly to downside targets than to soar quickly to upside ones, at least until December came along.) Sometime or another the OEX needs a countertrend bounce to relieve some of that oversold pressure and retest broken support, and this morning could begin that bounce. Here's one reason why I suspect that could happen, although other indices had no trouble breaking below similar averages: Link

I don't usually suggest swing- or position-type trades on what I consider to be countertrend moves. I'm not going to do it today, either, by suggesting a long play although such a bounce could be a strong one, considering how quickly and far the OEX has fallen. I'd expect a bounce up to the 557-559 range, at least, and if that level is breached, up toward yesterday's high, and if that level is breached, up toward 563. However, on any such bounce, there might be constant vulnerability to the downside, and we've seen how quickly the markets can fall once a rollover begins. If you elect to enter such a trade, know your skills. Are you that adept? Do you tend to do the deer-in-the-headlights thing, holding on until the losses are so big you can't bear to take them?

  Jonathan Levinson   3/11/200,  8:31:02 AM

Initial claims 341K

  Jonathan Levinson   3/11/200,  8:13:32 AM
We await the 8:30 release of initial claims, est. 343K, export prices ex-agriculture and import prices ex-oil, retail sales est. .6%, and at 2PM, the treasury budget for Feb., est. -100B.

  Jonathan Levinson   3/11/200,  8:11:39 AM
At least 173 people have been killed and almost 600 wounded in a series of explosions on Madrid's railway network at the height of this morning's rush hour, rescue services say. There has been no claim of responsibility in the attacks, but Spanish officials are blaming terrorists from the Basque separatist group ETA.

From CNN.com.

  Linda Piazza   3/11/200,  6:57:30 AM
Good morning. In late February, the Nikkei shot up the charts after hitting 11,000 again, and it seems determined to shoot down them just as quickly, too. The Nikkei gapped lower by more than 100 points on Thursday morning and dropped all the way below 11,250 before starting to climb. A late-day sell-off took the index back near its opening level. It closed down 136.20 points or 1.19%, at 11,297.04. Ahead of Alan Greenspan's congressional testimony today, currency-related fears arose again, with the dollar slipping lower against the yen. Techs and autos traded lower, as did most sectors, but banks climbed. One article noted that two, Sumitomo Mitsui Financial Group and UFJ Holdings, hit new 52-week highs. Even the banking sector was not without its losses, however, with Mitsubishi Tokyo Financial Group declining 1.8%. In addition to the gains seen by some bank-related issues, another isolated early gainer among a sea of red was cosmetics company Kanebo, gaining after Wednesday's approval of a rescue package for the company. Kanebo couldn't hold onto those gains, however, and closed down 0.8%.

Trading proved mixed among other Asian bourses. The Taiwan Weighted was flat, gaining 0.06%. South Korea's Kospi lost 0.70% and Singapore's Straits Times lost 1.45%. Hong Kong's Hang Seng dropped 1.44%, but China's Shanghai Composite extended yesterday's gains, rising by 0.81%.

European bourses reel under the impact of U.S. and Asian market losses, and three explosions targeting rush-hour commuters at train stations in Madrid. Media sources claim more than 130 have been killed.

As was true in Japan, losses on those bourses are broad based. The auto sector fell after February's Western European auto sales showed a gain of 2%, but a gain that was produced in large part by sales of Japanese cars. BMW reported earnings a few minutes ago that were light on some measures, but had already been down 3% ahead of those earnings. As has been true of U.S. grocers this week, some European supermarkets or grocers are reporting earnings this week, and French retailer Casino and Belgian supermarket owner Delhaize dropped after their earnings reports. Those drops could be misleading, however, since Casino's initial small drop after reporting a rise in net income of 10.6% on a 3.2% rise in sales ranked it as one of the best-performing stocks in a market in which other stocks were tumbling. Delhaize's drop was deeper, after reporting sales falling 9% or 4.2% at constant exchange rates.

As of this writing, the FTSE 100 had dropped 105.40 points or 2.32%, to 4439.90. The CAC 40 had plummeted 127.68 points or 3.40%, to 3630.40. The DAX dove 149.23 points or 3.69%, to 3895.47, dropping below 4000 and 3900 in one day.

  Jeff Bailey   3/10/200,  9:29:36 PM
Pivot Matrix for tomorrow at this Link

  OI Technical Staff   3/10/200,  8:52:36 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

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