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  Jeff Bailey   3/19/200,  10:00:47 PM
This week's Market Monitor trades at this Link

 
 
  Jeff Bailey   3/19/200,  9:52:08 PM
Closing Internals at this Link

 
 
  Jeff Bailey   3/19/200,  5:38:47 PM
Listening to this currency trader on CNBC (alert)

Notes: Euro 123.50 ceiling of resistance right now. U.S. not as bad as some may have thought when compared to Europe. U.S. deficite not as worrisome as some traders may have thought.

 
 
  Jeff Bailey   3/19/200,  5:30:00 PM
What happened? .... I'm not certain, but today's late afternoon trade may be somewhat telling as to what might be the general direction of trade in the months to come. Lots of e-mail questions, and I'll address in this weekend's Ask the Analyst column.

While there was VERY GOOD REASON to look for a QQQ trend higher today, obviously, that went into the tank, and instead of QQQ finishing $35.25, it finished $34.75.

You might begin looking at this.... Look at the March Calls by themselves, but leave them sorted in descending order by strike March $45 to March $20 calls should be fine. Then do the same with the March Puts.

Just got an e-mail from Jim, where he thinks he has discovered the "reason" why today's trade took place.

Read his wrap, think about the BULLISH Intel (INTC) trade I profiled today, then the reader e-mail (see 01:16) regarding the volume SPIKE at the open, then my thoughts as to what that spike in volume might have come from as it relates to OPTION EXPIRATION.

Jim's weekend wrap may WELL explain the Intel (INTC) trade this morning. I think it hints that there was a LOT of IN THE MONEY closing out of calls today, where in the final HOUR of trade, there was NO BID to the market.

That Intl Paper (IP) short was the EASIEST trade I made this week. Look at the volume on the 5-minute bar chart. Look at the opening bar, then look what took place in the final hour of trade, and not the volume. There was simply a mass PULLING of bids.

 
 
  James Brown   3/19/200,  4:23:57 PM
The SOX closed right on its simple 200-dma.

 
 
  Jeff Bailey   3/19/200,  4:03:05 PM
During the afternoon decline ... didn't get one sell program premium alert.

 
 
  Linda Piazza   3/19/200,  4:02:27 PM
They weren't able to hold the OEX above the 100-dma after all, that struggle proving to be as difficult as it looked as if it might be. I'm looking forward to grabbing a few hours this weekend to study the charts, however, and see what I see.

Have a great weekend, everyone.

 
 
  Linda Piazza   3/19/200,  4:00:24 PM
FWIW: SIRI did bounce again from its 72-ema, an average I've been watching in relationship to some tech and other stocks and indices. SIRI's trading pattern in relationship to the 72-ema has been uncanny over the last year, but this last first bounce off the 72-ema looked tepid as it began. Today's rise doesn't inspire great confidence, either, with SIRI creating a doji at the top of the rise, just after clearing a short-term descending trendline on the daily chart. However, I think we have to see what happens next week to draw many conclusions. I'm only noting that so far, the 72-ema remains resonant for at least this indicator stock.

 
 
  Jeff Bailey   3/19/200,  3:58:54 PM
Expeditors Intl. (EXPD) $36.29 ... Profiling the May $35 puts (URPQG) $1.35 offer if you can get in before the close.

 
 
  James Brown   3/19/200,  3:55:34 PM
ZMH is breaking support at its 50-dma, which has held on a closing basis for the last several days in a row. The stock is approaching its Monday intraday low at $74.66. The stock looks vulnerable here.

 
 
  James Brown   3/19/200,  3:53:03 PM
RKY, brewer for Coors, Killians and other brands, has been pretty strong today with a 2% gain after yesterday's intraday rebound. The stock has longer-term resistance at the $70.00 level.

 
 
  Linda Piazza   3/19/200,  3:50:57 PM
I note that the TRAN is also about to violate the right-shoulder level (2783) of a possible inverse H&S on its 60-minute chart, but it hasn't quite done that yet. On a daily chart, the TRAN rose up earlier in the week to test broken support (a rising trendline) and that former support held as resistance. Since then, it has fallen back, with the pattern being part of a consolidation pattern, just above the 200-dma near 2750. So far, resistance held, but so has support. Daily oscillators aren't going to tell us anything, as their evidence is inconclusive.

 
 
  Jeff Bailey   3/19/200,  3:48:14 PM
VXN.X 25.61 +4.19%

 
 
  Linda Piazza   3/19/200,  3:44:23 PM
That bounce didn't carry the OEX far, as I suspected it wouldn't, and now the OEX is hitting the lower five-minute support again. Actually, it's not hitting it: it's violating it. If this were any other day, I'd be cautioning bearish OEX traders to follow the OEX down with their stops, but being that this is an opex Friday, some decisions need to be made soon, especially if in front-month options expiring in a few minutes. If you want to exit those options ahead of the last-minute volatility, better do it soon. Some may decide to stick it out and take their chances into the close, but make the decision that's right for you.

 
 
  Jeff Bailey   3/19/200,  3:43:56 PM
IP ... $41.41 -0.12% ... back at morning lows! Where did all the bids go?

 
 
  James Brown   3/19/200,  3:43:52 PM
PMCS, a chip stock, has broken its 200-dma in the last few minutes...the stock is down 2.45%.

 
 
  James Brown   3/19/200,  3:41:27 PM
Anybody here expecting the SOX to bounce at its 200-dma?

 
 
  Jeff Bailey   3/19/200,  3:40:23 PM
Day Trade Bearish Target Alert ... IP $41.52

 
 
  Linda Piazza   3/19/200,  3:38:31 PM
It looks as if Jim is offering good advice about end-of-market activity this afternoon and what might be driving it, so those of you options traders not accustomed to watching the Futures side, too, might click over for a look. It looks as if some effort might be made to close the OEX above the 100-dma, at 546.15, but it looks as if it might be an effort to do so.

 
 
  Jim Brown   3/19/200,  3:28:58 PM
Looking at the top market cap stocks besides GE we have PFE at the lows of the day. INTC at the lows of the day. MSFT flat. CSCO at the lows.

 
 
  Linda Piazza   3/19/200,  3:24:57 PM
No bounce yet on the OEX. It is trying to steady at bottom support on the five-minute Keltner channels. If it does steady and bounce, first resistance is just ahead, then at 546.63-546.80, at 567.37, 548.04, and stronger at 548.69.

 
 
  James Brown   3/19/200,  3:19:08 PM
Diebold (DBD) is looking pretty weak here. The recent consolidation has failed at its 10-dma and the stock is down strongly two days in a row and heading toward support at $46-45.

 
 
  Jeff Bailey   3/19/200,  3:16:31 PM
Bearish day trade lower stop alert ... Lower stop to break even for Intl. Paper (IP) . IP is trading $41.73 here.

 
 
  Linda Piazza   3/19/200,  3:15:22 PM
Five- and fifteen-minute Keltner charts show that it's time for an OEX bounce, but they hint that this would now be a bounce within an overall weak outlook: the OEX is below the mid-channel S/R on both time intervals.

 
 
  James Brown   3/19/200,  3:13:51 PM
UTX is one of the Dow's worst performers down 2.5% and approaching support at the $85.00 mark. Its 200-dma should also be support at $83.75.

 
 
  Linda Piazza   3/19/200,  3:12:21 PM
The OEX is in danger of breaking through the shoulder level of the possible inverse H&S on its 60-minute chart. I'd say that a fall much below 546, which may be happening as I type, would pretty well negate the inverse H&S formation. That would show a potential bullish formation that did not confirm, instead confirming weakness.

 
 
  Jeff Bailey   3/19/200,  3:09:59 PM
BIG volume in the QQQ April $35 puts ... VXN.X 25.09 +2.07% really jumped at approx. 02:50 PM EST.

 
 
  Linda Piazza   3/19/200,  3:07:03 PM
Thanks, James, and thanks to the readers and writers who wished everyone well. It's great to be back.

 
 
  James Brown   3/19/200,  3:06:27 PM
Keep an eye on Take-Two Interactive (TTWO) the stock is trying to breakout over resistance at the $35.00 level.

 
 
  James Brown   3/19/200,  3:05:27 PM
agreed. we're happy to have you back, Linda!

 
 
  Jonathan Levinson   3/19/200,  3:05:05 PM
Welcome back, Linda. You've been missed.

 
 
  James Brown   3/19/200,  3:02:10 PM
Gtech Holdings (GTK) is offering another buy the dip opportunity. The stock has consistently bounced from its simple 50-dma and has pulled back to this technical support. The bounce has been a little weak so I'd wait for a move back over $58 or $59. Bears can look for a breakdown below the late February low at $54.40.

 
 
  Jeff Bailey   3/19/200,  3:01:49 PM
Day trade short alert .... Intl. Paper (IP) $41.88 here, stop $42.05, target $41.55.

 
 
  Jane Fox   3/19/200,  3:01:26 PM
Linda how are you - you're back

 
 
  Linda Piazza   3/19/200,  2:59:37 PM
I'm signing on for the first time since I left Monday to head to Houston, with the news that I was becoming a grandmother for the third time. Emmi Paige was born Tuesday morning. She had a few difficulties early on and has spent some time in the neonatal intensive care unit, but is progressing so fast today that she will probably be coming out of the NICU this evening.

I've just now signed on and haven't watched the flow of the markets, so have few insights to offer those of you trading the OEX. I do note that five-minute Keltner channels have flattened into an equilibrium position, usually denoting a likely breakout, but I wonder if that will happen on an opex Friday, with the known tendency to pin the markets to a number and keep them there through the afternoon. On the daily chart, I notice the OEX rising into what appears to be a bear flag, but on a 60-minute chart, that bear flag is taking the form of a possible inverse H&S with a neckline near the 60-minute 100-pma, currently near 554.50. That's giving me a mixed picture, but that may be only because I haven't watched the ebb and flow of the markets.

As I typed, that breakout predicted by the Keltner channels began, so perhaps we do have a breakout in the making. I'd be careful on an opex Friday, however.

 
 
  James Brown   3/19/200,  2:58:28 PM
Video game giant ERTS broke out above trendline resistance today but the rally is fading quickly. This may be a watch list candidate for a move back over the $50.00-50.50 levels. FYI: it was also a P&F bullish breakout.

 
 
  Jeff Bailey   3/19/200,  2:56:31 PM
Intel (INTC) $26.78 -1.5% ... session lows on rather quick move from $26.95.

 
 
  Jeff Bailey   3/19/200,  2:51:03 PM
Taser Intl. (TASR) $60.05 -3.6% ... comes back to fitted 38.2% retracement.

Could yesterday's rally been all about the company's CEO ringing the opening bell at the NASDAQ?

 
 
  James Brown   3/19/200,  2:49:05 PM
The longer-term bullish trend in FMC is still intact and the stock has been bouncing along its simple 40-dma. Traders have been successful in the past buying dips to the 40 or 50-dma on this stock. There is some resistance at $40.00 but the top of the channel is probably closer to long-term resistance at $42.50.

 
 
  Jeff Bailey   3/19/200,  2:48:17 PM
Pacholder High YIELD Fund (PHF) $9.92 +1.63% ... the junk bond portion of the "Beetle's Balanced" continues to suggest growth in the economy, and no inflation.

 
 
  Jim Brown   3/19/200,  2:40:53 PM
Art Cashin brought up an interesting point. They are rebalancing the entire S&P-500 at the close based on the addition of $3.8 billion in GE shares. Funds will have to buy more GE and sell smaller quantities of the other 499 stocks. This could supply a lot of volume at the close but I am not sure how it will impact the indexes. You would think it would create a negative bias with 499 stocks being sold but the offset is a lot of stock being bought in the largest capitalization stock in the index.

 
 
  Jeff Bailey   3/19/200,  2:39:37 PM
02:00 Internals at this Link

 
 
  James Brown   3/19/200,  2:38:51 PM
The Wednesday bounce in both GM and F are fading and both stocks are headed back toward recent support. A breakdown there and both will head toward their simple 200-dma's.

 
 
  James Brown   3/19/200,  2:36:00 PM
The defense sector (DFI.X) is up today but shares of Engineered Support Systems (EASI) continue to slide with a trend of lower highs. If shares close at current levels it will be the second day in a row to close under the $50.00 mark. This may be a bearish play for a run toward the $45.00 level. Its simple 200-dma is at $42.50.

 
 
  Mark Wnetrzak   3/19/200,  2:29:29 PM
Covered-Calls -- Reader E-mail Replies

Hi Mark, I have been a subscriber for over a year and much of the time I am using your picks as candidates for longer-term covered calls. In your CCs plays, you suggest that an average return of 5-6% per month is possible on various covered calls. I prefer to use margin, so the returns are better, but I also sell at-the-money options with an idea to lower the cost basis on the stock every month. My goal would be to have "free" stock with 16-24 months and even if the price does fall, I can eventually have a very low basis with the purchase of additional shares. Then any further premium is all profit. How does this compare to your approach in the long-term? BF

The strategy we use in selecting newsletter candidates is based on a conservative covered-write using in-the-money options. With this approach, an investor considers the covered write as a single entity and is not interested so much in stock ownership or bullish movement, but in obtaining a consistent (monthly) return on investment. If the stock doesn't move or even drops slightly, the stock will be called away, thus this approach offers less risk than outright stock ownership (with limited reward potential). As with any trading strategy, it still requires a disciplined approach and sound money management techniques, as there is risk of loss in all trading. "McMillan On Options" is an excellent resource for option traders, covering all aspects of the "covered write" strategy, and it should be available at your local library or in the OIN bookstore. For investors who prefer stock ownership, McMillan covers in detail the strategy of selling calls on long-term portfolio holdings and all the potential adjustment strategies. Regardless of which approach you favor, it is important to completely understand any strategy you intend to use before you begin trading with hard-earned cash.

 
 
  Jeff Bailey   3/19/200,  2:21:55 PM
What the heck....

 
 
  Jeff Bailey   3/19/200,  2:21:11 PM
Comparison ... INTC $26.93 -0.99% near its session lows... and QQQ $35.19 -0.43% near its lows.

INTC became my alternative trade for QQQ, but get the feeling my entry point for INTC was smack in the middle of the range.

 
 
  Jeff Bailey   3/19/200,  2:17:41 PM
Buy/Sell Program Premiums ... Two sell program premiums earlier this morning at 10:10 and 10:25, and that's been it.

Will have to take a plethora of buy programs late to get the QQQ $35.15 anywhere close to "Max Pain" of $36.00 is my thinking. Might have been a shot earlier this morning at 11:40 when QQQ was pressing high of the session, but didn't happen.

1/2 of today's range is $35.25.

 
 
  Jeff Bailey   3/19/200,  2:08:05 PM
Intel (INTC) $26.92 -1.02% .... humph! ... session low has been $26.88.

Still... if INTC was going to trade anywhere close to $27.50 today, I didn't think it would trade down here.

 
 
  Ray Cummins   3/19/200,  2:05:37 PM
Spreads/Combos & Premium-Selling -- E-mail Replies: Option Selling Strategies

Attn: Naked-Puts Editor (condensed) Hi Ray, Your strategy, if I understand you correctly, is [to achieve] small, consistent gains on selling naked puts while trying to avoid a major loss. But, that one loss can often be a large percentage of the portfolio. Isn't that too much risk for too little reward? RS

Indeed, the strategy of writing deep-out-of-the-money options is based on a high probability of achieving a small profit. With that approach, there will always be a few large losers, thus one requirement for success is to prevent them from being "catastrophic" to your portfolio. The best way to accomplish that task is through diversity, both in the number of contracts per position and in the underlying industries/sectors selected for each position. Another key to consistent profits with "premium selling" strategies is to understand the statistical nature of the strategy, which suggests that careful play selection and diligent position management can produce (over time) a reasonable return on investment. However, this technique is not for everyone and most professional traders admit that it is one of the most difficult strategies to master (due to human emotions) in the options market. Fortunately, there are plenty of other ways to trade and I hope you find one that works for your specific style and risk-reward outlook. I wish you much success!

 
 
  Jeff Bailey   3/19/200,  1:48:34 PM
Bullish day trade stop alert ... INTC $26.88

 
 
  Ray Cummins   3/19/200,  1:37:05 PM
Spreads/Combos & Premium-Selling -- E-mail Replies: Option Pricing

questions@optioninvestor: Hello OIN, I started with the newsletter a few months ago and although I like the trading information, I have hit some bumps in the road. My first effort was with call options but both times your picks were correct and I barely broke even. The last play I tried should have been profitable with the stock up $1.10 after earnings but the call moved very little. This seems strange since the option was almost at the price ($25 call/$26 stock) of the stock. I am looking more at conservative spreads now but I was wondering if someone could help with this question. Thanks! PW

You have encountered an option buyer's fundamental problem: options are a wasting asset and sometimes their prices, which are based on future potential, can quickly erode when the activity in the underlying does not live up to the market's expectations. Consider the earnings report you mentioned. If there is a large discrepancy between the markets' expectations and the final results (either better or worse), the stock's price may fluctuate significantly. When that type of risk exists, the higher uncertainty in the market translates into bigger option premiums, because options help reduce or eliminate that risk. After the earnings are announced, the potential uncertainty disappears and market conditions return to "normal." As a result, the "premium" in the options (which had increased because of the chance of an earnings "surprise") will decrease when the report becomes public. Even if the stock price does not move much in either direction after the results are announced, the option prices will almost certainly decline. That's why it's so important to focus on fairly-priced (or discounted) options in option buying strategies. Good Luck!

 
 
  Jeff Bailey   3/19/200,  1:34:02 PM
Intel (INTC) $26.97 ... ok... see that bad tick back at BLUE #1? I think INTC now trends back to that level. BEST DAY TRADE LONG entry point is here, stop just below at $26.88. I don't want to sound like I'm "pumping my prior trade..." just an observation.

 
 
  Jeff Bailey   3/19/200,  1:29:59 PM
Intel (INTC) $26.93 -0.99% ... post-profile low cam at $26.90. 5-minute Stochs trying to turn up from "oversold", but MACD still trends lower below the zero level. Day trade bulls needs the bidders/buyers here.

 
 
  James Brown   3/19/200,  1:28:28 PM
Afternoon sector update

Winners:
GSO software index: +0.49%
BTK biotech index: +0.24%
DFI defense index: +0.15%
...
Copper futures: +0.40%

(Biggest) Losers:
SOX semiconductors: -1.88%
NWX networking index: -1.33%
XAL airlines index: -1.11%
OSX oil services: -0.97%

 
 
  Jeff Bailey   3/19/200,  1:24:26 PM
Not good... Intel (INTC) $26.93 -0.95% ... RED #2 and very short-term upward trend here.

 
 
  Jeff Bailey   3/19/200,  1:16:00 PM
Excellent question .... Jeff: I noticed on you're intra-day chart of INTC that there was a rather large volume spike at the open on the gap lower, does that imply a negative bias to today's trade?

I'm not sure if implies a negative biase, but it may well have come from the exercise of a $27.50 put. I was thinking there might have been a big bull in INTC, that bought a $27.50 as protection. Then exercised that RIGHT to sell at $27.50 at the open of today's trade.

Now... let's say the MARKET MAKER was OBLIGATED to buy that stock. What might you do? See the heavier volume in the INTC April $27.50 calls? Options market maker that might have taken in 2,000,000 shares of INTC at the open, turns and sells premium in the Apr. $27.50 call.

Excellent question, which gets me thinking. If we day trade bulls get an INTC anwhere CLOSE to $27.50 in today's trade, we're probably not licking our chops thinking $28.00, $28.25, etc.

 
 
  Jeff Bailey   3/19/200,  1:05:22 PM
01:00 Internals at this Link

 
 
  Jane Fox   3/19/200,  12:59:37 PM
Stock Trader's Almanac has an interesting bearish indicator called the December Low Indicator. If the Dow closes below its December low (9785) in the first quarter of the following year you have a warning sign of further downside. I'm not looking for the DOW to close below 9785 but beware if it does.

 
 
  Ray Cummins   3/19/200,  12:54:57 PM
Spreads/Combos & Premium-Selling -- E-mail Replies: Strategy Selection

Attn: Spreads Editor (condensed) ...I write uncovered calls regularly but I noticed you generally use out of the money options in your option selling plays. I thought most of the premium in options was "at the money" so why sell the cheaper options? BR

Hello BR, Most writers of naked calls prefer to use out-of-the-money options because the probability of the stock reaching the sold strike is relatively low. The strategy of writing at-the-money calls, where the stock price is initially near the strike price of the sold option, is not widely used however it can be a successful "premium-selling" technique for astute traders. This approach is sometimes called "rolling for credits" and the major drawbacks are: [1] there may be an accumulation of losses before profits are achieved, and [2] it often requires substantial portfolio collateral. In short, the trader tries to sell the most time "premium" that he can in a reasonable period. This would generally be a 3-6 month, at-the-money call. If the stock price declines, the trader keeps the time premium that he sold in the initial position. But, if the stock price rises, the trader must roll up and out for a credit by repurchasing the calls that were originally sold and selling enough longer-term calls at the next higher strike price to generate a credit. In this way, no debits are incurred, although a realized loss occurs in the interim position adjustment. If the stock continues to rise, the process is repeated. Eventually, the stock will stop rising, even if only for a short time, and the last set of written options will expire. At that point, the trader's overall profit consists of the sum total of credits received and the underlying portfolio (collateral) is unchanged because no stock has been purchased or sold.

 
 
  Jeff Bailey   3/19/200,  12:54:38 PM
Taser (TASR) $63.11 +1.13% .... here's updated intra-day chart. Link

Just looks like a bull didn't get the broader market bullishness after the open to really send shorts into "panic mode" does it?

 
 
  Jim Brown   3/19/200,  12:52:42 PM
The wound was 4inches long and 1 inch deep according to press reports

 
 
  Jonathan Levinson   3/19/200,  12:48:10 PM
Re: 12:43:48, here's a photo, James: Link

 
 
  James Brown   3/19/200,  12:47:23 PM
This morning Hot Topic, Inc (HOTT) announced a 2 million share buyback program to be completed by January 2005. The buyback amounts to about 4% of its 47.8 million shares outstanding. Shares of HOTT are bouncing from its 200-dma.

 
 
  Jeff Bailey   3/19/200,  12:45:30 PM
Intel (INTC) $27.12 -0.25% ... slips below BLUE #1.... really want to see that $27.05, or RED #1 become support.

 
 
  James Brown   3/19/200,  12:43:48 PM
Not sure if the news mentioned it but the Taiwan President and Vice President were shot and wounded this morning in an assassination attempt ahead of tomorrow's general election. Both are alive and the President has already been checked out of the hospital.

 
 
  Jeff Bailey   3/19/200,  12:43:32 PM
12:00 Internals at this Link

 
 
  James Brown   3/19/200,  12:39:24 PM
Adobe Systems (ADBE), a software maker, is up 9.56% on huge volume of 12.7 million (4x the average) after reporting earnings last night that beat estimates by 10 cents. Revenues soared more than 42% to $423 million, well above analysts' estimates. The company guided higher for the current quarter. In response to the positive report a crowd of analysts have come out to reiterate their bullish outlooks for the stock.

 
 
  James Brown   3/19/200,  12:33:23 PM
CIENA Corp (CIEN) is up 3.42% after UBS upgraded the stock from "reduce" to "neutral" on valuation. The stock is down almost 40% from its January 2004 highs and is down nearly 10% in the last five days.

 
 
  Jeff Bailey   3/19/200,  12:33:22 PM
Day trade bullish target adjustment .... Intel (INTC) $27.17 -0.11% ... after looking at the option chain on INTC (see 12:25:05), will lower bullish target to that BLUE #5 of $27.47. How about Bullish Target of $27.45.

 
 
  Jeff Bailey   3/19/200,  12:25:06 PM
Intel (INTC) $27.16 -0.14% ... here's intra-day chart of INTC with upper and lower 5-MRTS Link

Quick glance at INTC's option chain show March 27.50 puts (INQOY) had open interest of 50,119 as of yesterday's close, 3,469 have traded today. The March $27.50 calls (INQCY) had 30,506 OI.

Similar to work we've done with QQQ option chain, an INTC options market maker might not mind a little rally to $27.50 today, and still come out of things OK.

 
 
  James Brown   3/19/200,  12:22:45 PM
Heads up for the software bulls! India-based Infosys Technologies (INFY) is up 3.66% and breaking out from its trend of lower highs. Its MACD just produced a new buy signal a couple of days ago. This could be a (somewhat aggressive) bullish entry point. Chart: Link

 
 
  Jeff Bailey   3/19/200,  12:18:44 PM
Day trade bull entry alert ... INTC $27.15

 
 
  Jeff Bailey   3/19/200,  12:17:50 PM
Intel (INTC) .... Starting to pull back a little $27.19 ... Blue #1 at $27.15, BLUE #0 at $27.05 even better entry if you can watch it.

 
 
  James Brown   3/19/200,  12:16:54 PM
Lehman Brothers has upgraded Progressive Corp (PGR) to "over weight" and raised its price target from $78 to $105. The stock has been relatively strong the last few days and today's 1.69% rally puts PGR at a new all-time high ($88.89).

 
 
  Jonathan Levinson   3/19/200,  12:14:25 PM
The Fed has announced a coupon pass of $824M, which alleviates a small part of the 7B net drained today via temporary open market operations. The coupon pass is a permanent market operation, adding 824M in permanent reserves.

 
 
  James Brown   3/19/200,  12:13:50 PM
The weakness in the semiconductors (SOX) is disappointing but traders can keep Maxim Integrated Products (MXIM) on their radar screen. The stock is trying to build a bottom at the $46 support level, just above its simple 200-dma. If you're feeling bearish I'd look for a breakdown under $45 (below its 200-dma). If you're feeling bullish look for a move over the recent trading range (about $48).

 
 
  James Brown   3/19/200,  12:11:45 PM
Some of the larger oil stocks still look bullish given the recent bounce from their 50-dma's. CVX, COP and TLM were on the watch list last night due to their relative strength over the past week and their trend of higher lows.

 
 
  Jeff Bailey   3/19/200,  12:11:45 PM
Day trade long alert .... Intel (INTC) $27.29 +0.33% for pullback entry of $27.15, stop $26.88 to begin, with target at $27.55.

I don't think INTC gravitates all the way toward "max pain" of $30, but a stock in the NDX.X that has a max pain higher than current trade.

 
 
  James Brown   3/19/200,  12:08:41 PM
In an early morning dip shares of AET, an OI call play, came within 2 cents of our stop loss. If we're not stopped out in an afternoon pull back we may close the play anyway after such a big run up.

 
 
  James Brown   3/19/200,  12:06:02 PM
Paychex Inc (PAYX) is up 5.67% on decent volume of 2.88 million after reporting earnings last night that were inline but on higher than expected revenues. The rally today puts the stock above price resistance at $34.50 and its 21, 30 and 40-dma's. The stock is still climbing and is challenging resistance at its 50 & 200-dma's.

 
 
  James Brown   3/19/200,  12:02:40 PM
Sector Update...

Winners:
GSO software index: +0.96%
BTK biotech index: +0.92%
INX Internet index: +0.46%
DFI defense index: +0.38%

Losers:
SOX semiconductors: -0.89%
OIX oil index: -0.72%
XAL airlines index: -1.00%
XAU gold & silver: -0.62%

 
 
  Jane Fox   3/19/200,  11:45:58 AM
With the March 15 spike, the VIX has once again come back into importance. A close below resistance could signal that the spike was a buy signal. Link

 
 
  Keene Little   3/19/200,  11:38:15 AM
A typical option expiration Friday today. The market seems to be on hold waiting for something (more al Qaeda news?). All markets seem very subdued this morning--bonds, equities, currencies, metals. For those looking for options plays today, it doesn't appear we have the volatility one would like to see in order to cover slippage on the play.

As for expectations of market movement today, based on Elliott Wave interpretation, I'm looking for consolidation today to finish a correction down before we get the next leg up. At the rate this market is moving, that could take all day. I'm then looking for a rally to start possibly this afternoon into Monday that takes us up to DOW 10,400/SPX 1136 area.

The risk here is carrying a position over the weekend. So it sounds like it might be a good day to do what Linda often recommends--play with some different technical indicators, set up some scenarios you'd like to see in order to trade it, etc.

 
 
  Jeff Bailey   3/19/200,  11:37:31 AM
Cancel day trade entry alert for QQQ bullish entry at $34.95. (QQQ is trading $35.37 right now)

 
 
  Jim Brown   3/19/200,  11:26:14 AM
Crude oil futures surged 1.5 percent Friday morning, hitting their highest in nearly 13 months, in a rebound from yesterday's drop. Prices hit $38.30 per barrel in the April contract. This is likely to erode before the close as traders take profits before the weekend but next week we could see a continued rise without any news on the horizon. Time for Bush to turn up the heat on Saudi Arabia to open the spigots now or face a problem later. With Iraq having huge untouched reserves and needing money badly the odds are good wells will be sprouting like weeds soon.

 
 
  Jane Fox   3/19/200,  11:15:41 AM
Dateline WSJ The Securities and Exchange Commission, suspecting that numerous corporate insiders may have sold stock in the past six years without proper disclosure to investors, has asked financial firms for data on their transactions with such executives, according to people familiar with the inquiry.

In a "Street sweep," the agency's enforcement division has asked more than a dozen Wall Street securities firms for details on exotic derivatives contracts used since the start of 1998. These contracts were used to hedge or sell the stock positions of the corporate insiders such as corporate officers, directors and holders of more than 10% of a stock.

At issue is how corporate insiders use derivatives -- which are contracts whose value rises or falls based on an underlying stock, bond, currency or index -- to allow them to take gains on their holdings of company stock without immediately selling their shares in the open market.

 
 
  Jim Brown   3/19/200,  11:14:26 AM
The Russell is struggling to move higher in light of the nearly -$1 billion that flowed out of small cap equity funds over the last week. The 100dma at 564 is a critical support level. Link

 
 
  Jim Brown   3/19/200,  11:07:46 AM
The SOX continues to barely hold above the 475 support level despite a strong book to bill, rising orders and an upgrade of the entire sector by Merrill Lynch. If the 475 level breaks the Nasdaq will drop like a rock. Link

 
 
  Jeff Bailey   3/19/200,  11:05:17 AM
11:00 Internals at this Link

Yesterday's Internals at this Link

 
 
  Jim Brown   3/19/200,  11:00:22 AM
CBOE to list options on the VIX Link

 
 
  Jim Brown   3/19/200,  10:57:41 AM
Bush will be speaking shortly on the anniversary of the war in Iraq.

 
 
  Jeff Bailey   3/19/200,  10:46:51 AM
QQQ $35.24 -0.28% ... trader's might note that today's BLUE #6 on 5-MRT is $35.94. If the QQQ were to gravitate back toward "Max Pain" $36.00, there might just be a chance by the close.

 
 
  Jeff Bailey   3/19/200,  10:28:59 AM
Taser Intl. TASR $64.18 +2.82% ... worked its way back above that "zone" from $63.70-$63.90. Session low was $62.81, which wasn't quite a full backfill of this morning's gap higher.

 
 
  Jeff Bailey   3/19/200,  10:17:55 AM
Day trade long alert ... QQQ $35.11 -0.67% .... look for bullish entry at $34.95, stop $34.79, target $35.45.

 
 
  Jeff Bailey   3/19/200,  10:14:38 AM
Taser Intl. (TASR) $63.71 +2.08% ... I've been monitoring this stock for three weeks, rather closely. Expect some more trade profiles.

 
 
  Jeff Bailey   3/19/200,  10:09:19 AM
Bullish Swing trade stop alert TASR $63.

 
 
  Jim Brown   3/19/200,  10:09:03 AM
Semi Book-to-Bill
The Semiconductor Book-to-Bill number fell slightly in February to 1.14 from 1.19. This is slightly misleading as bookings actually rose +6.5% for the month but rising shipments (+11%) from the prior two months of strong bookings skewed the ratio. This suggests the chip revival is still progressing as current orders are at a three year high. On a year over year basis orders are up +72%. Capacity utilization is also rising as the breadth of the orders increases.

 
 
  Jeff Bailey   3/19/200,  10:08:12 AM
Taser Intl. (TASR) $63.90 +2.25% ... moves lower into intra-day "zone of support" from $63.70-$63.90.

not getting any help from the broader market

 
 
  Jeff Bailey   3/19/200,  10:04:25 AM
edging green is Software (GSO.X) 147.98 +0.29% ... Adobe Systems (ADBE) $39.25 +8.18%.

 
 
  Jonathan Levinson   3/19/200,  9:55:45 AM
Al Green, clearly concerned about the evident inflation igniting the CRB, has drained again, with a 2.5B repo to replace the 9.5B expiring, net drain 7B.

 
 
  Jeff Bailey   3/19/200,  9:53:49 AM
Sector Action is broadly lower with only the AMEX Gold Bugs ($HUI.X) 229.57 +0.41% and Drugs ($DRG.X) 323.45 +0.02% showing gains.

 
 
  Jeff Bailey   3/19/200,  9:51:21 AM
Taser Intl. (TASR) $64.93 +4% ... here's intra-day chart with "fitted" along with today's 5-MRTS. I changed the color of the "fitted" retracement to a dark purple. Link

 
 
  Jim Brown   3/19/200,  9:47:35 AM
Linda is still out on grandmother leave today

 
 
  Jonathan Levinson   3/19/200,  9:40:31 AM
Following Jim's comments, I'm hearing that Bloomberg is reporting that the first 10 weeks of the year saw a record high value of mutual fund inflows- 153B.

 
 
  Jim Brown   3/19/200,  9:38:19 AM
Fund Flows - Equity funds saw their first week of outflows for 2004 with equity funds in general losing -22 million for the week ended on Wednesday. Small cap funds lost -$922 million and that was the largest loss since July-2002. Not a good sign for market sentiment.

 
 
  Jonathan Levinson   3/19/200,  9:37:08 AM
The Fed has 9.5B in overnight repos expiring today- looking forward to the 10AM announcement to see whether the Fed will continue its recent trend of tightening.

 
 
  Jeff Bailey   3/19/200,  9:33:13 AM
Swing trade raise bullish stop alert ... Taser Intl. (TASR) $65.40 +4.7% ... raise bullish stop to $63.00-$62.00

The reason I'm placing a $63-$62 stop on TASR is this... IF the stock trades $63, then a trader can place a sell order to sell TASR long at $63 to $62, where I/you am using the $63 price as the trigger. This stock can move VERY QUICK on an intra-day basis.

 
 
  Jeff Bailey   3/19/200,  9:31:44 AM
Taser Intl. (TASR) $64.20 +2.94% ... stock opened right on our fitted 80.9% retracement. This type of open may well have market makers using this retracement for managing the trade.

 
 
  Jeff Bailey   3/19/200,  9:28:08 AM
09:00 Update at this Link

 
 
  Jim Brown   3/19/200,  9:12:10 AM
Washington DC police racing to schools now due to credible bomb threat.

 
 
  Jeff Bailey   3/19/200,  8:44:11 AM
Taser (TASR) $62.40 ... trading $64.10 pre-market.

 
 
  Jonathan Levinson   3/19/200,  8:04:40 AM
There are no major economic reports due today.

 
 
  Jeff Bailey   3/18/200,  1:49:54 AM
TASR swing trade bulls ... here's some work I did tonight on TASR intra-day chart, dating back to 11/19/2003, then 11/20/03, 11/21/03, 11/24/03. Link

The BLUE retracement, is actually a zoomed in version of the "fitted" retracement, where we anchor at a low, the "fit" the 38.2% at a congestion high, to then give ourselves "result" levels higher, should a stock break to new highs. Now... the PINK retracement is the upside of a 5-MRT. I used PINK only because the BLUE was used for the "fitted retracement."

I don't think I'm "out of my mind" for trading TASR bullish. I will admit, that I'm a bit jittery trading a stock like TASR from the long side, but I'd be even more jitter if I were short! Tomorrow, I'll be using the above observation as somewhat of a test for Friday's trade.

Now... here's the same chart I showed of TASR in yesterday's Market Monitor, but on a daily basis, with just our "fitted retracement" and trends. Link

 
 
  Jeff Bailey   3/18/200,  1:13:47 AM
QQQ Option Chain ... sorted by Open Interest (OI as of Wednesday close) at this Link

Can try and count the cards when compared to QQQ option chain I showed Wednesday evening. Link

Bulk of risk into tomorrow's expiration looks to be in the March $36 and $37 puts. Might remind me to check open interest tomorrow morning, and if OI really fell in the March $35 calls again today (Thursday), but March $36 puts stayed steady, and March $37 puts steady also, then it would benefit options market maker if he/she can get the QQQ as close to $36 as possible.

 
 
  OI Technical Staff   3/18/200,  8:35:59 PM
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