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  Jeff Bailey   3/22/200,  4:59:18 PM
Closing Internals at this Link

 
 
  Jim Brown   3/22/200,  4:26:09 PM
GE CEO will be on CNBC before the open and you can bet he will pump the outlook or he would not go on air.

 
 
  Jim Brown   3/22/200,  4:25:07 PM
LTD Upgraded earnings guidance after the close from 9 cents to 11-13 cents.

 
 
  Jim Brown   3/22/200,  3:31:33 PM
CWP halted news pending

 
 
  Jeff Bailey   3/22/200,  3:12:42 PM
03:00 Internals at this Link

 
 
  Jeff Bailey   3/22/200,  3:03:23 PM
Microsoft (MSFT) $24.75 +0.44% ... most active at over 100.6 million shares.

 
 
  Jeff Bailey   3/22/200,  3:00:20 PM
Microsoft (MSFT) $24.63 (unch) ...

 
 
  Jeff Bailey   3/22/200,  2:52:58 PM
Red Hat (RHAT) $18.29 -4.83% Link .... not much of a reaction at this point to EU news on Microsoft (MSFT) $24.41 -0.89% Link .

 
 
  Jeff Bailey   3/22/200,  2:48:42 PM
Per Jim's 02:37:53 If Europe thinks they have high unemployment now, I wonder what happens to their unemployment rate when corporations outsource to India? That news yet to come.

 
 
  Jim Brown   3/22/200,  2:37:53 PM
Microsoft to be fined $600-$700 million. Oh shucks! Considering they have $50 billion in cash this is a no brainer but the real killer is the potential for a sanction that prevents them from continuing to do business in the EU without serious changes to Windows. That news is still to come.

 
 
  Jim Brown   3/22/200,  2:27:51 PM
Al Qaeda story claiming they have nuclear weapons: Link

 
 
  Jeff Bailey   3/22/200,  2:21:09 PM
02:00 Internals at this Link

 
 
  Jeff Bailey   3/22/200,  2:08:44 PM
Swing trade short alert .... IBM (IBM) $90.35 -1.4% here, stop $92.25, target $88.05.

 
 
  Jeff Bailey   3/22/200,  2:02:19 PM
Sell Prog. Premium

 
 
  Jeff Bailey   3/22/200,  2:00:25 PM
Broker/Dealer Index (XBD.X) 667.39 -3.17% .... testing its rising 120-day SMA here, with 200-day SMA below at 627.

 
 
  Jeff Bailey   3/22/200,  1:54:03 PM
AMEX Gold Bugs ($HUI.X) 228.19 -0.14% ... fills morning gap ... Freeport McMoran (FCX) $40.30 -3.93% weak after $1 billion convertible.

 
 
  Jeff Bailey   3/22/200,  1:47:49 PM
Impax Laboratories (IPXL) $20.96 -2.73% ... has seen heavy volume since 01:00 PM EST and volatile intra-day swing. Company announced at 01:00 PM EST that it received FDA approval for generic version of Wellbutrin.

 
 
  Jeff Bailey   3/22/200,  1:07:25 PM
01:00 Internals at this Link

 
 
  Jeff Bailey   3/22/200,  12:54:26 PM
Cisco Systems (CSCO) $22.34 -0.71% ... announces acquisition of privately-held Riverhead Networks for $39 million in cash.

 
 
  Jane Fox   3/22/200,  12:53:07 PM
The cost of oil approaches 20-year highs and Global demand is straining the world's ability to produce and deliver crude oil and gasoline. OPEC Countries are hitting their limits as are refineries that refine the oil into oil products and gasoline. Some estimate, global refining capacity could fall behind world demand as early as this year.

On Friday, April Oil settled at $38.08 a barrel after trading as high as $38.50 a barrel, the highest since oil futures began trading on the Nymex in 1983. The current record of $35.92 a barrel was set in October 1990, two months after Iraq invaded Kuwait.

 
 
  Jeff Bailey   3/22/200,  12:51:59 PM
Preliminary MONTHLY SPX pivot levels based on current March H/L and trade would have S2= 1,047.81, S1 = 1,072.01, P = 1,117.62, R1 = 1,141.82 and R2 = 1,187.43.

 
 
  Jonathan Levinson   3/22/200,  12:51:17 PM
Another alternative for your reader asking about puts on treasuries might be the iShares Lehman 20+ year Treasury Bond Fund (TLT) or the Lehman 7-10 year T-Bond Fund (IEF), both are optionable and probably not as thinly traded as TNX or TYX.

Thanks, Brian!

 
 
  Jeff Bailey   3/22/200,  12:38:22 PM
Feb/March/April 2003 Monthly Pivot and trade at this Link

 
 
  Jonathan Levinson   3/22/200,  12:33:00 PM
Is there a way to buy a put on the treasuries betting that the prices will fall drastically after the election in November if not earlier?

There are a few ways to accomplish this. You can buy calls on the TNX or TYX (ten year or thirty year yield), but when I last checked, liquidity was very thin and spreads very wide. You can sell puts on TNX or TYX, but again, liquidity's a problem. You can, alternatively, buy an inverse bond fund such as RYJUX (Rydex Juno) or RRPIX (Profunds Rising Rates Opp), both of which I have positions in, or you can use treasury futures, which are very liquid and very highly leveraged. Shorting ZN (ten year bond futures) would be the play there, but with leverage very high, it's not something to dabble in- time it wrong and you can lose hundreds within minutes on a single contract (been there & done that).

 
 
  Jeff Bailey   3/22/200,  12:32:11 PM
S&P 500 Index (SPX.X) with new weekly pivot retracement overlaid at this Link

We won't get new MONTHLY pivots until early next week, but I would begin to estimate that April MONTHLY R1 very close to SPX 1,136. Will follow some of these observations up with MONTHLY Pivot history dating back to March 2003, where it wasn't until a trade at MONTHLY R1 for strength.

 
 
  Linda Piazza   3/22/200,  12:12:58 PM
The OEX looks to be dropping out of the bear-flag formation it was forming this morning. Sometimes, however, these formations just reform into a wider one that's capable of climbing higher, so look for a new daily low as confirmation that's not what's happening. If the OEX should make it past mid-channel Keltner resistance, currently at 543.93 but still descending, the 100-dma is at 545.92, and that should provide next firm resistance. These might be places that market participants could look for a rollover entry, but pay attention to Jane's posts about TRIN levels and other signs of market strength or weakness to help decide that you're seeing a rollover. When a lower Keltner band has been violated, there's always the possibility that the OEX could travel all the way up to the upper Keltner resistance, currently just above 548, but descending, before stopping its oversold bounce. For those already in bearish positions, a move above the midpoint of this morning's first five-minute candle might be one first sign that a bounce will continue and a move past the mid-channel Keltner resistance might be another, if the two are not hit at the same time.

I'm taking off now to head back to Dallas (and my desperately missed multiple monitors and Comcast connection). I hope markets participate and give clear signals today. I'll see you again bright and early tomorrow morning.

 
 
  Jeff Bailey   3/22/200,  12:10:22 PM
12:00 Internals at this Link

 
 
  Ray Cummins   3/22/200,  12:07:25 PM
Spreads/Combos & Covered-Calls -- E-mail Replies: LEAPS - Part V

For traders who are considering LEAPS instead of stock in the long-term portfolios, there is an advantage to selling monthly time-premium against the LEAPS to improve the overall performance of the position. Since most LEAPS have over a year remaining until expiration, it is likely they will be completely paid for (risk-free) by the time they expire. For the investor who is not familiar with spread trading, this strategy also offers an excellent opportunity to learn the basics in a low-risk environment. The concept of the calendar spread is easy to understand and once established, the position can be managed with little difficulty. The occasional adjustments also provide the necessary background for more advanced techniques and those who enjoy directional trading can construct positions to fit their personal style. Although the potential for profit is lower than some of the more popular trading strategies, the limited downside exposure and relatively consistent returns from "time-selling" positions offers an attractive approach to the options market for many conservative participants. Hope that helps!

 
 
  Linda Piazza   3/22/200,  12:01:20 PM
The TRAN continues to bounce from its 200-dma, but hasn't yet risen above 2780-2790 resistance. A bounce on a first touch of the 200-dma (or near touch, in this case) is expected, but it's the strength of that bounce that will tell us about the possibility that a bounce could have legs or will soon weaken.

 
 
  Ray Cummins   3/22/200,  12:00:05 PM
Spreads/Combos & Covered-Calls -- E-mail Replies: LEAPS - Part IV

One way to reduce the negative effects of a volatile stock is to construct the spread with LEAPS as the long position, capitalizing on the ability to sell a second, third, and fourth, etc., option against the longer-term option, thus reducing the overall cost basis of the position as each short-term option expires. In addition, the strategy is best initiated when the front-month options are trading at a premium with respect to longer-term volatility. After the position is established, the trader would ideally like to have the stock finish just below the sold strike when the short-term option expires. However, if the short-term position is "in-the-money" on the last day of the strike period, you must buy it back so that you don't have to exercise the LEAPS to cover your obligation; that would defeat the purpose of the strategy. Of course, there is always a risk of early exercise in a calendar spread, especially when the sold option is "in-the-money." The degree of risk depends on which options are bought and sold and the distance to the underlying stock price. The greater the time-value in the sold option, the lower the probability of it being exercised. If an early assignment occurs, a trader can always fulfill the obligation by simply purchasing the underlying stock or an offsetting option. The more important issue is to be notified by the broker in a timely manner, so that the appropriate action can be taken before the stock price changes significantly.

 
 
  Jeff Bailey   3/22/200,  11:54:20 AM
Taser Intl. (TASR) $61.76 +3.77% Link .... On Friday, TASR was listed on NASDAQ National Market and begins trading with options today. Here is a link of an option montage with call and put symbols at this Link

A couple of thoughts I have is ... 1) should allow for some greater institutional interest (long and short) as options now allow for potential hedging of positions. 2) I would think that options will have TASR trading more "normal" and maybe not as volatile as it has in past. 3) Stock has been prone to short squeeze, where offering of call options may not see as euophoric rise, where in past, shorts had little choice but to cover, when stock broke to new highs.

TASR option most actives are May $65 call 591, April $60 put 278, April 55 put 168.

 
 
  Ray Cummins   3/22/200,  11:50:51 AM
Spreads/Combos & Covered-Calls -- E-mail Replies: LEAPS - Part III

To most people, it appears that a long-term calendar spread is a "win-win" situation that can't possibly lose money. A trader would simply buy the longer-term option and sell the shorter-term option. As both time values decayed, the overall position would gain value. In reality, it's not that easy because the underlying stock does not remain constant, thus it can negatively affect the profitability of this strategy (which is determined by the relative behavior of time-value decay in each of the option positions). Obviously, it is important for the underlying issue to remain near the strike price, where time premium is theoretically the highest. If the stock price is at a high or low extreme, the time values of both options will be relatively small and the position will likely incur a loss; the remaining credit will be less than the opening debit.

 
 
  Linda Piazza   3/22/200,  11:47:57 AM
This morning, the TRAN came within 3.5 points of its 200-dma, and is now about 10 points above that MA at 2750.38.

 
 
  Linda Piazza   3/22/200,  11:43:59 AM
I'd expected a rise that overlapped more than this one has, in the typical bear-flag type rise, but that overlapping action may be beginning now. Mid-Keltner resistance is now at 544.49, still descending, but now descending at a slower rate. Top Keltner resistance is at 548.80.

 
 
  Ray Cummins   3/22/200,  11:38:45 AM
Spreads/Combos & Covered-Calls -- E-mail Replies: LEAPS - Part II

Covered-calls can be written against LEAPS, which take the place of shares of the underlying stock. The technique is similar to a calendar spread (or time spread); a position that consists of the sale of one call and the simultaneous purchase of another call, both on the same underlying stock, with the same strike price, but with one option near-term and the other option further out. Traders who use calendar spreads are simply "selling time" because time erodes the value of the near-term option at a faster rate than the longer-term option. Using LEAPS in a calendar spread can make the strategy even more productive because the premium in extremely distant options is less affected by time-value erosion and any near-term volatility in the underlying issue can increase the price of the sold (short) options.

In order to be effective with this strategy, it is important to understand how a (neutral-outlook) calendar spread profits from the passage of time. When opening a horizontal spread, a long-term option is purchased and a short-term option is sold. Both options have the same exercise price, thus they have the same intrinsic value. Regardless of the movement of the stock, time value will always be less in the near term option. As long as the underlying stock price remains relatively close to the exercise price, the value of the spread will be determined by the time premium of each option. As the short-term position approaches expiration, its remaining time value will be very low (zero at expiration) relative to that of the long-term option.

 
 
  Ray Cummins   3/22/200,  11:30:15 AM
Spreads/Combos & Covered-Calls -- E-mail Replies

Attn: Covered-Calls Editor (condensed)...and it's obvious the market is in a funk right now but I think it will eventually bounce back. Instead of buying stock for my portfolio, I have also invested in a few leap options (costs less anyway). Now I am thinking about selling covered-calls on the leaps. I know I can lower my basis with the right plays and yet if there is a big rebound, I might be exercised on my short options. Any suggestions on this approach would be appreciated. Thanks RT

One of the most popular techniques among conservative investors that participate in the options market is the strategy of writing "covered" calls on LEAPS. Currently, LEAPS are available for the year 2006 and, as with other standard equity and index derivatives, these unique instruments allow investors to establish bullish, bearish and neutral-outlook positions using the most popular trading techniques and combinations. In fact, strategies involving LEAPS do not differ much from those utilizing shorter-term options and LEAPS can also be an ideal investment tool for the option trader who expects future growth in an underlying stock but does not want to make the substantial capital outlay required for entering an outright position in the issue. Since the expiration dates for LEAPS are months or even years in the future, time decay occurs very slowly with these options and they are much less affected by premium erosion; the fundamental drawback in the use of derivatives to stock positions. This unique quality allows these instruments to offer an effective way to benefit from a stock's appreciation without incurring the higher costs associated with the actual purchase of shares.

 
 
  Linda Piazza   3/22/200,  11:27:17 AM
We didn't see our OEX retracement all the way back to 537.80, but the OEX did come within a few cents of that level, at least keeping alive the possibility that it's building a bear-flag formation. I'm still not seeing as much back-and-forth trading or overlapping trading, as Keene labels it, as I'd like in order to feel more certain that this is a distribution pattern and not a buy-the-dip pattern.

 
 
  Jeff Bailey   3/22/200,  11:17:30 AM
11:00 Internals at this Link

Making note of NASDAQ NH/NL at 24:24. Would have to go back to March 2003 to find NH/NL breadth even at NASDAQ. At that time, internals were improving from low level of bullish risk.

 
 
  Linda Piazza   3/22/200,  11:15:35 AM
So far, this bounce isn't retracing much distance, in the back-and-forth pattern that's usually typical of a bear-flag rise. We'll have to see, but right now, I'd feel more comfortable about this being a bear-flag formation if we were seeing a bit more of that back-and-forth action, as in a drop back to Keltner support at 537.80 or 537.10. Sometimes as a bounce is beginning, it's difficult to tell what form it will take until it's given a little time to shape itself.

 
 
  Linda Piazza   3/22/200,  10:58:06 AM
The OEX looks to be rising within a possible bear flag formation, perhaps as a prelude to rising toward mid-Keltner channel resistance again. That resistance is currently at 545.49, but is dropping quickly, and I wouldn't be surprised to see it at about 541.50 or at least within that 540-542 zone by the time the OEX reaches it. It's uncanny the way that Keltner S/R sometimes lines up with historical S/R, but my supposition is also drawn from an extrapolation of the mid-channel line into the future.

 
 
  Linda Piazza   3/22/200,  10:48:07 AM
I wanted to let readers know that I'm working from out-of-town today, and so remain unable to access my email. If you have an urgent question, be sure to address it to another of the writers.

 
 
  Linda Piazza   3/22/200,  10:45:36 AM
Like the OEX, the BIX shows a new MACD sell signal on its 120-minute chart, but unlike the OEX, the BIX sometimes travels further away from its 120-minute 100-pma than its current distance away from that average. When it moves to the upside at least, the BIX has traveled 10 and 14 points above the 100-pma during the last 30 days alone. By that measure, the current 8 points below the 100-pma shows the possibility of more downside before the BIX is slung up to test that average again. That's if we consider all downside moves to be symmetrical to all upside moves, and we can't always make that assumption.

 
 
  Jeff Bailey   3/22/200,  10:41:29 AM
Market Volatility Index (VIX.X) 21.70 +13.31% ... above the 21.22 level as the S&P 500 Index (SPX.X) 1,096.89 -1.16% breaks back below 1,108. This action quite BEARISH as discussed in Thursday evening's Index Trader Wrap at this Link

 
 
  Jeff Bailey   3/22/200,  10:35:56 AM
Foundry Networks (FDRY) $15.95 -5.39% Link ... Lower after Merrill Lynch comments suggest earnings estimates may need to come down. Merrill notes that with FDRY's stock down 50% from its year-to-date highs of $33, stock remains expensive. Merrill says FDRY's federal revenue nearly tripled in 2003, but is expected to remain flat, or decline slightly in 2004. This leaves consensus revenue estimates unreasonably high, possibly leading to downward revisions. With no positive near-term catalysts and shares trading at 2005E P/E of 27.9-times, Merrill maintains their "neutral" rating.

 
 
  Jeff Bailey   3/22/200,  10:22:17 AM
Expeditors Intl. (EXPD) $36.80 +1.48% Link ... Stock bucks broader market trend after Baird upgraded to "outperform" from "neutral," saying its contacts continue to point to strong volumes out of Asia (27% of EXPD's net revenue, 47% of EBIT), with backlogs common in both air and ocean.

I (Jeff Bailey) will stand by Friday's late afternoon put profile of May $35 puts (URPQG). The August $35 put (URPTG) offered at $1.95.

 
 
  Linda Piazza   3/22/200,  10:21:09 AM
With this morning's OEX break below 540 and the likely "b" or bear-flag distribution formation, the daily chart makes it appear inevitable that the OEX will test the 527-530 historical support or even the 200-dma, which is rising to meet that historical support. However, what seems inevitable often isn't, and we must also discover the path the OEX might take as it comes down to retest that support and re-establish it as support. This morning, it looks as if the path might be straight down, but I would continue to counsel bearish OEX traders to follow the OEX down with their stops, being aware of bounce potential in the current 534-536 range. If stopped out, it's time to start thinking in terms of searching for rollover bearish entries. I don't think I'd be buying any dips today, no matter how oversold the OEX might look. Such a play might be wonderfully profitable, but as Jonathan reminded us a couple of weeks ago, there's that old saying about "not trying to catch a falling knife."

 
 
  Jeff Bailey   3/22/200,  10:12:03 AM
10:00 Internals at this Link

Friday's Internals at this Link

 
 
  Linda Piazza   3/22/200,  10:07:48 AM
I see conflicting evidence on this OEX 120-minute chart, including a strong possibility for a bounce up to test the 120-minute 100/130-pma's, with MACD suggesting that's a possibility that will not be fulfilled in the short-term: Link

 
 
  Linda Piazza   3/22/200,  10:00:11 AM
Those bearish OEX traders who have been following the OEX down with their stops, based on the breakout signal given by the Keltner channels, should continue to do so. Keltner resistance drops lower, with resistance at 539, 540.60, 542.10, and 543.25. When studying the weekly charts a while ago, I noted some possible support between 534-536, so be careful as that level is approached. Nearest recent strong support on the daily chart is between 527-530. Your goal now is to retain profits and not lose them on a bounce, but as of now, any such bounce does look to be a countertrend bounce or oversold bounce.

 
 
  Jeff Bailey   3/22/200,  9:58:37 AM
Freeport McMoran (FCX) $40.88 -2.55% .... offering $1 billion of convertible perpetual preferred stock.

 
 
  Jonathan Levinson   3/22/200,  9:52:10 AM
A 5.5B overnight repo replaces the 2.5B expiring, for a net add of 3B.

 
 
  Linda Piazza   3/22/200,  9:46:17 AM
Candlestick theory says that when we see a taller-than-normal white or red candlestick, we should then expect support (white) or resistance (red) at the midpoint of any such candle. The midpoint of this morning's taller-than-normal first five-minute candle would come at 541.50, so I wouldn't expect to consider a bounce underway until and unless the OEX could retrace higher than that amount. As of yet, there's no bounce to measure, by candlestick or other measures.

 
 
  Linda Piazza   3/22/200,  9:36:13 AM
Obviously, the OEX is dropping below what might have been deemed first support, but we need to see what happens as the first reversal hits in a few minutes since it could be just overshooting the first possible bounce zone a bit during early-morning volatility. First strong Keltner resistance has now lowered to between 544-545. During the first five minutes of trading, the OEX spanned a range from 543.68 to 539.31.

 
 
  Jane Fox   3/22/200,  9:26:14 AM
Quote from Palestinians in response to the killing of the spiritual leader of the Islamic militant group Hamas. "Dozens of people came to us this morning volunteering to be suicide bombers," said one masked militant. "We will send them in the right time." How will this all end? Will everyone have to die over there before it stops?

 
 
  Jeff Bailey   3/22/200,  9:16:10 AM
09:00 Update at this Link

 
 
  Linda Piazza   3/22/200,  9:04:50 AM
Having been unable to watch the ebb and flow of the markets for the last week, I feel handicapped, but perhaps that time away from the markets also allows me to take a look at the OEX with fresher eyes than I might otherwise be able to do. Unfortunately, that fresher look has to be tempered by the knowledge that the end-of-week trading pattern might have been driven by factors that will have changed this week.

Here's what I see now, however. The recent decline began on March 5 and then steadied into what at first appeared to be a likely "b" distribution formation. Over the last seven trading days, that formation has broadened and risen into a possible bear flag formation. If that's what it is, it should probably break to the downside before retracing more than 50% of the recent decline. A 50% retracement from the 3/05 high to the 3/16 low lies near 555.50. This is within a range bounded by the 60-minute 100/130-pma's at 554.28 and 555.63, respectively, so a strength/weakness test at level makes sense from another perspective, too. That same 60-minute chart shows a bottom 0.675% envelope surrounding the 21-dma at 540.83, hinting at the possibility of immediate downside to that area.

Will the OEX continue rising in a possible bear flag or drop first to the 540.80-542 zone? It remains somewhat difficult to assess that possibility with Friday's late-day trading activity perhaps due to a combination of options-related activity, rebalancing of the S&P, and reaction to rumors about an impending al-Qaeda capture, but futures suggest that the downside test will come ahead of the upside one. The five-minute Keltner charts show the OEX breaking out to the downside again during Friday's action. Keltners can give valid breakout signals, but such breakouts also show vulnerability to a bounce. I usually counsel bearish traders to follow the OEX down with their stops in such an instance since the breakout signal could be valid. If there's a gap down this morning toward the 540.50-542 zone, readers might be aware that a bounce possibly becomes more likely. Any such bounce should find first moderate Keltner resistance between 545.80-546.20, with stronger resistance at 547.25 and 548.30, and with next Keltner resistance not showing up until just below 552. In addition, a violated trendline that began forming on Thursday now crosses near 548, and that violated trendline might now provide resistance.

A move down to 540-542, a rise up to mid-Keltner channel S/R now near 548, even a rise to test the 60-minute 100/130-pma's: all seem possible. It's just the order that seems unclear after Friday's last-minute volatility, but this morning's futures suggest that downside test comes first.

A break above 555.50 would be a break above the 60-minute 100/130-pma's, and would ostensibly be a buy signal. A break below 540 would confirm a breakdown out of the bear flag formation and would ostensibly set up a retest of stronger support, possibly down to the 527-530 zone, although the 534-536 zone might provide possible support on the way down. What about between 540-555? How should that be played? I'm not sure at this point, ahead of a look at volume patterns. I wouldn't be surprised to see a bounce attempt mounted near 540-542, especially if the Dow, SPX, and COMPX are hitting some of those numbers Jim mentioned this weekend in his wrap, but I'm not sure how far it would carry. Keltner channels show oversold conditions, but those conditions have not been prolonged, so it's possible that the OEX wouldn't get slung far on any bounce attempt, but I have been studying the SOX chart, one of the indicator indices I watch. I've noted that the SOX daily chart looks a lot like a possible H&S trying to form, with the SOX now being primed for a bounce up into a right shoulder level. The TRAN's early-year plummet from the neckline area of a similar setup, without ever rising into a right shoulder, suggests that potential H&S's sometimes fail before that right shoulder could be formed. I'd expect such a SOX bounce, and OEX bounce, to be choppy, but would have to see how conditions looked as such a bounce began before making a decision about risking a long play. At this point, it feels like that might be a countertrend bounce.

 
 
  Jonathan Levinson   3/22/200,  8:14:43 AM
There are no major economic reports scheduled for today.

 
 
  Linda Piazza   3/22/200,  7:30:49 AM
Good morning. The Nikkei opened more than 80 points in the red on Monday morning and twice dropped below 10,300. During the afternoon session, the Nikkei traded in a less-than-50-point range within the morning's range, closing down 100 points or 0.88 percent, at 10,318.51. The Nikkei is rounding over into a possible double-top formation, but confirmation would not come until a move below the trough between the two peaks, with that trough just above 11,000.

Exporters dropped in early trading, with auto stocks leading the early decliners but with some tech stocks hit hard, too. Merrill Lynch recommended that investors lower their holdings in automakers because of currency-related issues, cutting the automakers to a neutral rather than an overweight rating. The sector ended lower. Citing lower sales and investment losses, Sanyo Electric on Friday lowered its 2003 net income forecast by almost 90 percent, and the stock dove in early trading on Monday. Managing to climb slightly off its low, the stock still closed 5.3 percent lower. Mitsubishi Electric bucked that trend, however, closing higher by more than 3 percent after raising its net income forecast. Many chip-related stocks closed lower, both in Japan and throughout Asia. In other news, the Land, Infrastructure and Transport Ministry reported that land prices fell again in 2003, for the 13th year in a row. Residential properties lost 5.7 percent and commercial properties fell 7.4 percent in value. Some urban locations did see a steadying or even a rise in property values, however, the Ministry reported. Real estate issues had been trading lower before the number was released and closed lower, too. Banking stocks were mixed in early trading, with most of the big banking issues closing lower. Out of the top four banking stocks, only Mitsubishi Tokyo Financial group closed higher, by 0.5 percent. Not all equities lost ground, however. Kawasaki Heavy Industry soared after Deutsche Bank raised its rating to a buy rating from its previous hold rating and some other machinery stocks rose, too.

Other Asian bourses were mixed, but mostly lower. After the opposition leader survived an assassination attempt and called for a recount after this weekend's election in Taiwan, equities plummeted in Taiwan. Although officials had pledged this weekend that the National Stabilization Fund would be used to prop up the markets, the Taiwan Weighted headed down early and closed down, too, by 6.7 percent. A decision on the recount will be made within 6 months, officials in Taiwan reported. China has reportedly decided to put its troops on alert in case of further turmoil in Taiwan. South Korea's Kospi fell 2.2 percent. However, a report that Hynix Semiconductor and STMicroelectronics might be discussing building a plant in China sent Hynix higher. Singapore's Straits Times closed lower by 1.47 percent and Hong Kong's Hang Seng dropped 1.87 percent. China's Shanghai Composite closed higher, however, by 0.45%.

Most European bourses trade lower, too, with some headlines mentioning some bourses had touched new lows for the year. Political and stock-specific news drive trading today, with political news concerning the unrest in Taiwan, the news that that Israel had killed the Hamas leader, and a statement by Pakistan that the al Qaeda official they had cornered was probably not the second-in-command. Stock-specific news included the introduction of two telecom-related IPO's, with mixed results. Belgacom, partly owned by SBC, was rising while Irish telecom IPO Eircom was dropping. In other telecom-related news, both Ericcson and Nokia were dropping, on news that Ericcson would seek to raise its stake in Symbian, a company that develops operating systems for mobile phones, with the goal of preventing Nokia from gaining control of the company. Of note, French telecom Alcatel was one of the leaders to the downside in European trading this morning, perhaps hit by sector weakness, but also declining as a result of a report that Siemen's had denied interest in the company. Germany's pharmaceutical and chemicals company Bayer was another downside leader in early trading. Other stock-specific news sent Aventis higher again on speculation that Novartis would make a bid for the company

As of this writing, the FTSE 100 is down 72 points or 1.63 percent, to 4345.70. The CAC 40 was down 58.95 points or 1.63 percent, to 3554.33. The DAX had plummeted 90.37 points or 2.37 percent, to 3728.73, bringing the DAX to a low not seen since November.

 
 
  Jeff Bailey   3/21/200,  8:36:35 PM
Pivot Matrix for Monday at this Link

 
 
  OI Technical Staff   3/21/200,  8:36:23 PM
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