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  Jeff Bailey   3/26/200,  8:53:57 PM
Beetle's Balanced Benchmark after 3-months at this Link

What the heck is this? In late December, we discussed rebalancing. Not only for YOUR retirement accounts, maybe a 401k, but what many institutions will do at an end of their quarter. Here's the Link to that article, which gives some background. No strategy other than rebalancing had the "fund" buying dollars (dx00y), short-term (shy), intermediate term (ief), longer-term Treasury bonds (tlt). Also had us selling some corporat bonds (lqd) and junk bonds (phf), along with equity classes (dia, spy, qqq, hui.x).

Time to do another rebalance, and distribute the 12,119.47 equally among all asset classes. This will force some profit taking in the fixed income area, as well as the SPY, and buying some DIA, QQQ and HUI.X (gold) equities on the pullback.

Again... this is a non-strategic equal balancing of capital among various asset classes. The BIGGEST note one could make is how "junk bonds" vastly outperformed all asset classes represented in the portfolio. Junk bonds could only be outperforming (in my opinion) under a MARKET's scenario of steady economic growth in a low to moderate inflationary environment.

Why didn't stocks do better than they did? Read the 12/28/03 Ask the Analyst column at look at the Beetle's Balanced Benchmark BEFORE we rebalanced as a possible explanation for profit taking.

 
 
  Jeff Bailey   3/26/200,  8:31:19 PM
Ugh! Just flipped the page on my Stock Trader's Almanac. Monday's note is End of March terrible lately .... Today's late session dip to the close as a setup for weakness next week?

 
 
  Jeff Bailey   3/26/200,  8:27:48 PM
Closing Internals at this Link

 
 
  Jeff Bailey   3/26/200,  7:47:08 PM
This week's MM trades at this Link

I've raised the bullish stop for Monster Worldwide (MNST) to $22.65. OPEN positions are not included in the sum of columns.

 
 
  Jeff Bailey   3/26/200,  4:35:03 PM
Thanks to all that responded to my Day Trader's Poll from 14:32:33. Keep'm coming for those that still want to respond. It hase been very valuable and has been relayed to management.

I will try and accomodate all, but for the most part, we've got some pretty good hitters out there (maybe we'll throw in an SPY/DIA trade or two), tend to like stocks above $20.00 and less than $80 ($50 seems to be common) and tend to trade 1,000 per trade, which isn't all that unusual among active day traders.

Trader's will note that when I post my weekly trade blotter, you'll see how 1,000 share lots give BIGGER gains/losses, while using a set dollar amount gives SMALLER gains/losses. This is because a set dollar amount on each trade addresses RISK MANAGEMENT.

One trader's response was VERY SMART, as he understands the impact of commissions based on his/her capital, that NOT EVERY TRADE PROFILED is worth his/her time, or consideration, as PROFILED.

Another trader said he/she liked $10 stocks, but understood that a greater percentage loss might be found, but thought it worth it for the greater percentage move potential.

We've got a diverse bunch of traders that's for sure. I'll try and profile trades for all types, but would be difficult to find too many trades that fit everyone's liking.

One of my difficulties during a day is if I profile too many trade, and have them open at once, is following them all. I need, or really want to stay focused on my trade profiles, as not everyone has been day trading as long as others, and some are learning with real money and I'm dedicated toward trying to make sure that those traders, aren't getting "blown up," so I really try and stay focused on open trades as if it were MY MONEY at risk. I also take it PERSONALLY, or a reflection of my trading ability, when I post the WEEKLY trade blotter. I HATE LOSSES!

I'm working on getting Drake the dog up to speed on things, but who wants to trade PetSmart (PETM) $25.82 -0.27% day in and day out?

I've always thought OI and PI subscriber's were very smart!!!! And your response to today's poll was very helpful!

 
 
  Jeff Bailey   3/26/200,  4:25:42 PM
QQQ goes out at $35.22 -0.34% ...

 
 
  Jeff Bailey   3/26/200,  4:19:37 PM
One day trader poll response.... .... "Personally, I like to gain no less than 500% per trade. :-) "

Thanks for that one JR. Looks like you have set the bar fairly low. (grin)

 
 
  Jeff Bailey   3/26/200,  4:08:05 PM
Swing trade stop alert QQQ $35.21

 
 
  Jeff Bailey   3/26/200,  4:07:05 PM
QQQ ... session low here at $35.22

 
 
  Linda Piazza   3/26/200,  4:05:02 PM
In reference to Jeff's 15:56 post, according to Nison, that's a "shooting star" candle on the daily QQQ chart, with bearish implications. This one is kind of mixed up, though, because it has those bearish implications only if it comes after a climb, which it did, but that climb just brought the QQQ up into the previous consolidation zone, so it's kind of/sort of occurring in a consolidation zone, and it wouldn't have as strong a bearish connotation then.

 
 
  Jeff Bailey   3/26/200,  4:03:57 PM
Pacholder High Yield (PHF) $10.23 +3.02% .... closed its high. Oh good! Just in time for the Beetle's Balanced Fund to be rebalanced!!!!! We rebalanced it on December 26, 2003, so this weekend would be a good time to rebalance again.

Any guess as to what the best performing asset class was this quarter (related to Beetle's Balanced)?

 
 
  Jeff Bailey   3/26/200,  4:00:07 PM
Amex Gold Bugs ($HUI.X) 230.87 +0.12% ... not immune to selling either. Everything got hit with some selling into the close.

Newmont Mining (NEM) $46.15 +2.07% ... held in OK.

 
 
  Linda Piazza   3/26/200,  3:59:45 PM
Reader Question: Does it make sense to buy the dip in the SOX today?

Response: The weekly chart suggests that's possible, but the daily one doesn't yet say it's time to buy a semi-related stock or the SMH based on this chart, at least to me. Here's why: I've been pointing out the possibility of a inverse H&S forming on the OEX, and there's one on the SOX, too, with a possible neckline near 488. That neckline was tested today and the SOX has begun falling back. If the H&S theory has any validity, then the SOX might fall back to the 470 level and steady there for a week or so before rounding up to test the neckline. This is just pure speculation about a hypothetical formation that's far from fully formed, though, so study the charts and see if you agree.

 
 
  Jeff Bailey   3/26/200,  3:56:30 PM
QQQ $35.27 -0.20% ... maybe I shouldn't have reminded traders about the FBI warning from yesterday.

Now look at the QQQ DAILY Candle. What the heck is that one called?

 
 
  Linda Piazza   3/26/200,  3:55:46 PM
It is a doji, Jeff, (see Jeff's 15:52 post) a long-legged one, and it's a possible reversal signal, but one that must be confirmed by next week's action. In other words, we won't know until next Friday whether the reversal signal has been confirmed. The weekly oscillators are giving mixed signals, too.

 
 
  James Brown   3/26/200,  3:54:41 PM
Just a happy birthday ribbing.

 
 
  Jeff Bailey   3/26/200,  3:54:10 PM
Heee. heee heee.... boy... I'll never live that one down will I? (BIG grin, red face)

 
 
  James Brown   3/26/200,  3:53:39 PM
Do you mean those "Chinese" candlesticks, Jeff? *grin*

 
 
  Jeff Bailey   3/26/200,  3:52:46 PM
Linda alert .... Linda: You know a heck of a lot more than I do about candle stick patterns. Have you, or has anyone else commented on the SPX's WEEKLY candle? Is it some kind of doji or something?

 
 
  Linda Piazza   3/26/200,  3:50:45 PM
The OEX has retreated all the way to the central Keltner channel support on the five-minute chart where it's possible that it can find support, if it's regaining strength. Bottom Keltner channel support, which might well be tested (probably not today) because of the OEX's prolonged climb along the top channel at overbought levels, now resides at 541.23, but is now declining. I speculated earlier today that the OEX might get slung down to that lower support eventually because it had traveled at those short-term overbought levels for so long, but wondered if the OEX would hold off on that test until next week. I also have been worried about any long plays because of the possibility that a possibly countertrend long play could get turned around at any time. Of course, that didn't mean that a long play on either the Donchian channel breakout or the PSAR long signal on the simulated trades list that Q-charts provided wouldn't have been profitable. They would have been, and I've been saying that might be the case.

 
 
  Jeff Bailey   3/26/200,  3:50:06 PM
QQQ WEEKLY Pivot pre calculations using WEEKLY H/L and estimated close of $35.35 .... S2 = 33.40, S1 $34.37, P = $34.98, R1 $35.95, R2 $36.56.

Right now, I'm noting the WEEKLY R1 of $35.95. Pretty darned close to $36.00.

 
 
  Ray Cummins   3/26/200,  3:38:02 PM
Spreads/Premium-Selling -- E-mail Replies: More Position Management Techniques

Here's a great suggestion from one of our readers on covering strategies for short calls (in bear-call credit spreads).

Ray, I read your post in the MM. Good advice for the newbie. There other ways to cover your threatened (short) Call besides just buying the stock. You might consider selling an ITM Put (short). Here's an example: let's say that you put on a Bear-Call [credit] Spread; $50 (short) and $55 (long) when the underlying was trading at 45. Then the stock takes off and is approaching $50. You might want to sell the $55 Puts. They will profit all the way up to $55, then your long call at $55 starts doing the heavy lifting after that. The Put has one advantage over the stock in that it has some amount of time value in it which will decay to the advantage of the seller. I have found that the margin requirement for this is not much different that the margin requirement on the (long) stock. JG

 
 
  Linda Piazza   3/26/200,  3:35:25 PM
TASR: I'm far from an expert on TASR, but I do check it now and then. A cautionary note exists in the fact that I've had a descending trendline drawn on volume peaks from early February on. Despite the climb up to a new price high, that descending trendline on the volume continues to decline. If that continues, that's bearish divergence of the classic type. However, when I turn to OBV, I note that on-balance volume has been increasing, so these two volume patterns differ.

 
 
  Jeff Bailey   3/26/200,  3:33:30 PM
Good Gravy!!! Pacholder High Yield (PFH) $10.23 +3.02% ... new highs.

 
 
  Jeff Bailey   3/26/200,  3:30:55 PM
03:00 Internals at this Link

 
 
  James Brown   3/26/200,  3:30:40 PM
Interesting chart for TIN: Link

 
 
  Linda Piazza   3/26/200,  3:27:54 PM
It's still will-it-or-won't-it with reference to an OEX close above the 100-dma. It's now slightly below that average, less than 1/2 point.

 
 
  James Brown   3/26/200,  3:27:12 PM
Check out the bounce from technical support (200-dma) on paper stocks IP and MWV. This may be an entry point to target a run toward the top of their channels/trading ranges.

 
 
  Linda Piazza   3/26/200,  3:26:17 PM
For those who haven't yet tried the 5.0 build on Q-charts, take another look at the top of the Q-charts workspace in the link to my 14:59 post. That "D" and "W" at the far right-hand side are toggles for the daily and weekly pivots. They appear to work only on the intraday charts, however. While it's always a pain to download these new versions, this one has some good things to try. I'm not a trader who trades solely based on pivot analysis, but it's certainly handy to be able to click a button and check to see where those pivots are.

 
 
  Mark Phillips   3/26/200,  3:19:50 PM
Question: Mark, I read your post on NEM. I minute before that, there were news of NEM delaying a 30,000 shipment, which pulled the price back to around 46,2. Are we still bullish on NEM ?

Response This is a perfect example of why I think it is largely a waste of effort trying to decipher every bit of news that comes out on a given stock. First off, the pros get the news before we do and we can't ever hope to make a move prior to them. Next we have the issue of how the news should be interpreted. Is it bullish or bearish for the price of gold? Is it bullish or bearish for NEM. I honestly don't know, because not only is there the fundamental impact, there is the unknown of how it will effect investor sentiment, which is already an unknown.

There's a reason why I'm a technical trader and it is because the charts all boil down to actual price action. From my earlier post (13:43), I hope you can see that the technicals (price action) both for the price of gold and for shares of NEM is very bullish over the longer term, a fact which was solidified by today's breakout. An important issue that must fit into the discussion is what your timeframe is. Are you planning to trade NEM intraday, as a swing trade or a long term position trade?

The impact of the news release referenced in the reader's question appears to be insignificant, especially in light of the very mild pullback before the buyers stepped back in. Would I buy NEM here on the breakout? Probably not, as I don't normally like to buy strength -- I prefer to buy the pullbacks to support in stocks that have a bullish technical outlook. With the clear change in the supply/demand dynamic, I would definitely look to buy pullbacks near the $44-45 area, with an eye towards a rally back to $50 and then above. Understand though, that I view this as a longer-term trade, it is not one that will run to completion in a day or two or even a week or two. Well, it could happen in a couple weeks if everything fell into place, but such a rapid move would surprise me. If tempted to play the long side in NEM with options, I would strongly recommend buying lots of time, going out to at least the September strikes.

 
 
  Jeff Bailey   3/26/200,  3:18:45 PM
Traders that have been with us over the years.... have you ever noticed that on my birthday, we seem to get at least 1 good trade that day. I still remember that Adelphia short!!!! Put the trade on March 26, 2002, stock traded up the next morning, then some analyst asked the proverbial $20 million dollar question. The rest is, or was history for Adelphia.

 
 
  Jeff Bailey   3/26/200,  3:16:06 PM
Monster Worldwide (MNST) ... $24.72 ... session high, now lets watch and see if MARKET might be trading the BLUE fitted. Is this a "rest" or take some profit level?

Or is it a GOOD GRAVY I didn't expect the Help Wanted Index to be an upside surprise!!!!! Run for the doors and cover! Cover your shorts!!!!

 
 
  Jeff Bailey   3/26/200,  3:14:41 PM
QQQ thoughts .... $35.55 +0.58% ... be thinking about "hold over weekend" or not. Only think of current gain (for yourself, account management) against yesterday's FBI alert to refiners along the Gulf Coast. Don't let this be overriding thought, but assess, even if YOU have higher targets than the swing trade.

 
 
  James Brown   3/26/200,  3:10:08 PM
I've been watching Saytam Computer (SAY) and I think the stock may have put in a significant bottom. Although I'm a little concerned about the 50-dma being resistance. A trigger over this level might work.. or a bounce from $20.00 again.

 
 
  Jeff Bailey   3/26/200,  3:09:44 PM
Monster Worldwide (MNST) $24.59 +3.6% ... here's my "swing trade" chart of MNST. Link

Several questions regarding target of $26.25. Not shown on the chart (too hard to read) is if I take a regression channel from the recent low, on 60-minute chart, had upper end of regression just above $26.25.

Now... work to be done from the bullish side, but this is thought. I also liked MSNT's MACD moving above zero. Showed some strength against the NDX/QQQ perhaps, and if "oversold bounce" were to really take hold, then MNST might be a leader.

 
 
  Linda Piazza   3/26/200,  3:08:59 PM
If this keeps up, it's going to be "will it or won't it" until the end of the day, while we wait to see if there will be an OEX close above the 100-dma. This is what I expected today, but it doesn't make the action any less boring. That's why I'm glad to turn to some new indicators to watch. The 100-dma is currently at 546.35, less than a half point under the current OEX quote.

 
 
  Linda Piazza   3/26/200,  2:59:08 PM
Reader Question I have been using QCharts longer than I want to admit, but am not aware of any simulated trading programs available. Please tell me where to find these!

Response: I just discovered this option today myself, although I noticed that the 5.0.0.0 version had the PSAR when I first downloaded this new build. I just didn't know about the ability to check the simulated trades. It's only today that I was looking at the options available after right-clicking on a PSAR line on my chart that I found the "Report Simulated Trades" option. Here's the top of a Q-charts workpage: Link Note the "D," "W," and then candlesticks at the far right-hand side? The candlesticks with the blue dots underneath represent the Parabolic SAR option. Click on a chart, click on that, and then click on any PSAR line on the chart, and you'll have that option.

 
 
  James Brown   3/26/200,  2:53:41 PM
Just had one of my alerts go off... Office Depot (ODP) is breaking out over resistance at the $18.00 mark and continuing its recent rally.

 
 
  Linda Piazza   3/26/200,  2:45:07 PM
Yes, Jane, (Jane's 14:35 post) that's the good thing about days that we don't believe are tradable. We have time to research and that research sometimes turns up nifty tools or settings that we wouldn't have had time to find if markets always moved as swiftly as we liked.

 
 
  Ray Cummins   3/26/200,  2:44:05 PM
Spreads/Premium-Selling -- E-mail Replies: Position Management - Part II

The problem with this technique is the potential for loss if the share value of the underlying issue retreats below the initial "buy-to-cover" price and you do not sell the stock in a timely manner. If the issue remains below the strike price of the sold call, it will not be assigned and the trader will be forced to sell the stock in the open market, or hold it for a future trade (such as a "covered" call). The absolute necessity of protective trading stops is obvious in this strategy. With a sell-stop on the stock, the potential loss in the (recovery) position is much smaller when the stock finishes the expiration period significantly lower than the strike price of the sold call.

As far as more information on position adjustment strategies, I have written a number of narratives for the techniques used in the section and those are still listed in the web-site archives (Options 101, etc). Of course, there are also a plethora of great articles by other OIN writers, covering just about every imaginable option trading strategy commonly used by retail investors. Unfortunately, there is no way to produce a list of specific guidelines or step-by-step techniques on entering and exiting combination plays. The methods I use are much the same as those that Jim and the other writers discuss in daily strategy narratives and each is based on simple, proven money-management techniques; the most important of which is "keep the losses small!" Good Luck!

 
 
  Ray Cummins   3/26/200,  2:39:10 PM
Spreads/Premium-Selling -- E-mail Replies: Position Management

(condensed) ...also, you mentioned in the CECO post a strategy for covering a bearish credit spread with stock. Since I am new to your section and these trades, please explain - how does this work and is it really usable by less-experienced readers like me? WE

Hello WE, Thanks for your question concerning the conservative combination positions listed in the newsletter. Most of the credit-spreads offered in the Combos section are high probability/low profit positions. This strategy generally works well for new traders because the majority of plays are winners and the need for an adjustment (or exit) occurs on a limited basis. In addition, the issues we target usually have well defined price support (or resistance), trend-lines, and/or trading ranges to help identify any significant changes in technical character. Using that approach, we strive for capital preservation in any (potentially) losing position and try to minimize its impact on our overall portfolio balance. The actual ratio of winners to losers, while very favorable, is not as important as position management, which involves timely adjustments and when necessary, closing a play early for a (small but acceptable) loss.

The "covering" strategy I referred to earlier with a "bear-call" credit spread simply involves buying the stock (long) as the underlying issue moves past the sold strike price in the spread. This offsets the obligation (to deliver shares) in the short option and removes any further upside risk in the position. More...

 
 
  Jane Fox   3/26/200,  2:33:55 PM
Linda that is so cool about the Simulation of Trade Results in Qcharts I had no idea it was there. Thank you (14:18 post)

 
 
  Jeff Bailey   3/26/200,  2:32:33 PM
Day trader poll .... Day traders.... could you send me an e-mail and tell me a couple of things.....

1) What stock price ranges ($10-$20, $20-$40, $40-$60, $60-$80) would you prefer me profile during a day?

2) I (Jeff Bailey) tend to think of my account, and trades in percentage terms. On DAY TRADES, I've usually been HAPPY with a 0.6% gain or MORE, and you can probably sense that based on weekly market monitor trade table. What about YOU!!! What kind of percentage gain do YOU WANT to take a trade?

3)Do YOU tend to trade 1,000 shares, regardless of price of the stock, or do YOU trade the Dollar Amount, of say $5,000, $10,000, $20,000 per trade? I do NOT JUDGE ANYONE if they say $5,000, as being a "small hitter." No! When I (Jeff Bailey) get on a losing streak, as traders will, I will even cut things down to less than $5,000 per trade, until I get a winning streak going. Heck... I'll even subside from profiling stocks in the MM and "paper trade" some stocks on my own before I profile anymore. I had to do that earlier this week.

The purpose of this little survey is so that I don't waste MY TIME and YOURS on stuff nobody is trading. I'm sure I will get different responses, but I'm looking for an average.

My e-mail is jeff@OptionInvestor.com

 
 
  Jeff Bailey   3/26/200,  2:21:55 PM
3M (MMM) $80.08 -1.16% Link .... kind'a keep'n an eye on MMM and intra-day trade today. Thinking about a swing trade short. Today's low has been RED #6 of a 5-MRT.

In this weekend's Ask the Analyst column, I'm going to answer some questions regarding INDEX price direction, Bullish %, but to do so, will look at some of the INDU components, to try and get a feel for what stock's supply/demand charts look like, get a feel for what HAS BEEN happening, to then look forward.

Two INDU stocks that gave EARLY point and figure sell signals were UTX Link at $93 (see what happened as time progressed), and then INTC Link $29.

then MMM Link at $77 (stock falls, rallies back), and just recently IP Link at $40.

After such STRONG MARKETS, doesn't UTX's trade seem to exhibit marginal selling, then a rebound, then more selling, then a rebound, then more selling, then a rebound. We really aren't seeing the "garage sale" type of dumping, and right now, may be an important observation for not being OVERLY aggressive from the sell side.

 
 
  Linda Piazza   3/26/200,  2:18:56 PM
Did you know that Q-charts now offers a "Simulation of Trading Results" page for the Parabolic SAR? Basing entries on the PSAR, that breakout play would have been entered sooner than the Donchian channel breakout, at 538.13 instead of the Donchian channel's 539.78. Here's the simulated trades page: Link

 
 
  Jim Brown   3/26/200,  2:16:59 PM
Speech by Governor Edward M. Gramlich
The Board's Modeling Work in the 1960s Link

 
 
  Linda Piazza   3/26/200,  2:13:52 PM
If I were using the Parabolic SAR to choose an exit on the hypothetical OEX long entered on a Donchian channel breakout yesterday, at 539.78, that long would have been exited about ten minutes ago at 545.07. Not a bad capture of 5.29 hypothetical points. I'm wondering if this won't be a better exit system for those breakout trades than the two types of exits I had previously tested. Of course, I can't make judgments based on one trade alone. If I'd done that with the other types of exits rather than backtested over a year's worth of trades, I might have happened first on that +30-point run and thought I'd hit a goldmine.

 
 
  Jeff Bailey   3/26/200,  2:12:14 PM
02:00 Internals at this Link

 
 
  Linda Piazza   3/26/200,  2:06:08 PM
The downturn, coming at the tail end of the usual stop-running push that often comes between 1:35-1:55, has continued the downturn in the shortest-length Keltner channel, hinting that the OEX may indeed be beginning a cycle down to test mid-channel Keltner support (currently 543.49), if not lower-channel support (540.35). However, since this came at the stop-running time of day, it may be possible that this was just a push down to see if near-term support will hold.

 
 
  James Brown   3/26/200,  2:03:55 PM
Today's move over resistance at $32.00 for Bebe Stores (BEBE) looks like a new 2 1/2 year high for the stock. If you're into scalping a couple of points this could run toward its next long-term resistance level at $35.00.

 
 
  James Brown   3/26/200,  2:00:10 PM
Black & Decker (BDK) is seeing some follow through on yesterday's breakout over resistance at $55.00. These are new 4-year highs for the stock and the next resistance level is $60.00.

 
 
  James Brown   3/26/200,  1:52:52 PM
Last night we put TTWO on the watch list/radar screen for a breakout over resistance at $35.00. The stock delivered and is up 4.06% on better than average volume after rival THQI raised their earnings estimates this morning. A pull back toward $35.00 might be an entry point for bullish positions.

 
 
  James Brown   3/26/200,  1:47:36 PM
Aetna (AET) has been very strong the last couple of weeks. The worst profit taking sellers could do was to pull it back toward the $85 level. Now after four days of building support north of $85 we're seeing it rebound higher. If you think it can breakout over the $90.00 level then short-term traders might want to give it a closer look. Currently the stock is very overbought up 8 weeks in a row and up 12 out of the last 14 weeks (now that's relative strength!).

 
 
  Mark Phillips   3/26/200,  1:43:16 PM
While it has been an ostensibly boring day in the broad markets, there have been some very exciting developments for the gold bugs. Earlier this week, the April Futures contract (GC04J) broke out over its recent consolidation highs and closed at $420. That breakout wasn't confirmed by a breakout in any of the gold shares though and we saw a couple days of consolidation near those highs. That consolidation has been resolved in the bulls' favor today with the GC04J contract surging higher by more than $6/ounce and a continued rally back to test the highs near $430 from early January seems assured.

While the bullish action has been more subdued in the gold stocks, the XAU index is making a solid move higher today, pushing through the $102-103 resistance area that has been in place since the start of the month. In addition, the HUI index managed a close over its 3-month descending trendline yesterday and is adding to those gains today. My bellwether stock for the sector is Newmont Mining (NEM) and today it has produced a very significant breakout of its own. Resistance has been in place just below $46 for the past couple months and today the stock soared through that level on a gap open and is continuing to push to new highs for the day as I type. What makes this breakout significant is the altered picture on the PnF chart, as the trade at $46 issued a fresh Buy signal, along with a tentative price target of $55.

This bodes very well for our LEAPS play on the stock and traders that have already established a position should be smiling as we head into the weekend. With the fresh PnF Buy signal, it is clearly advisable to raise our coverage stop to $40, just under the recent lows and now below the 200-dma, which was never actually touched through the recent consolidation.

 
 
  James Brown   3/26/200,  1:41:02 PM
Has there been a new flood of virus attacks lately? Shares of Symantec (SYMC) are on the move again. We were looking at the breakout yesterday but the stock seemed a little overbought. Now shares are up $5.00 in just four days to $46.28 - a new all-time high.

 
 
  Jane Fox   3/26/200,  1:34:15 PM
Up until Linda's and my discussion I thought divergences were really quite a simple matter but I am beginning to see that they are not. (Linda's 13:22 post)

 
 
  Linda Piazza   3/26/200,  1:32:23 PM
The OEX has been traveling along the upper Keltner channel resistance line on its five-minute chart since just after noon yesterday. While I've seen the OEX do this for a couple of days, the longer it stays there, the more likely it will be that the OEX will get slung all the way to the bottom of the channel when it does retrace. I'm wondering if that will wait until Monday, however, with an effort being made to hold up the markets this afternoon? Currently, the mid-channel support is at 543.22 and still rising, and the lower channel support is at 540.04 and still rising.

 
 
  Jeff Bailey   3/26/200,  1:26:25 PM
01:00 Internals at this Link

 
 
  Linda Piazza   3/26/200,  1:22:28 PM
Did you know that there's some divergence in opinions about divergent theory? Jane and I were discussing divergence last night and this morning. Here's what Pring has to say: Divergence: A nonconfirmation that is not cleared up. Negative divergences occur at market peaks, while positive divergences develop at market bottoms. The significance of a divergence is a direct function of its size; i.e., over time, the question is whether there is a series of divergences between the indicators and the number of indicators that are diverging.

That's simple to remember, right? I've interpreted that to mean any divergence at market tops is bearish and any at market bottoms is bullish, but is that right? The definition doesn't specifically address the instance Jane and I were discussing: an equal price high with a higher oscillator high, a situation I would consider signaling bearish divergence. I'd remembered other articles specific to the situation we were discussing, but can't find them now. Pring does address a similar issue deeper in his book, when he mentions a historical instance when the A/D line peaked ahead of price, signaling bearish divergence (higher oscillator high diverging from price high), and it's always been my understanding garnered through other sources that any divergence at a price peak was bearish and any at a price low was bullish. I related my understanding of the phenomenon of a lower or equal price peak diverging from a higher oscillator peak to my study of physics. The oscillator was indicating more oomph (highly technical physics term) but the markets had too much mass on the second price high (i.e., they were too heavy) to move up as far. Another author, Barbara Star, calls this type of divergence "bearish hidden divergence," seeming to validate my impression. However, other writers don't tackle this type of divergence at all when discussing Class A, B, and C divergences, so now I'm wondering. Our own Leigh Stevens discusses several types of divergence in this article on RSI: Link Unfortunately, unless I missed the reference, Leigh doesn't discuss the particular situation Jane and I were discussing either, which is one in which prices make an equal high but an oscillator makes a higher high. Anyone have any different ideas?

 
 
  Jonathan Levinson   3/26/200,  1:12:58 PM
The Fed added a weekend repo of 4.75B, bring the daily total to a net 1.25B add.

 
 
  James Brown   3/26/200,  1:07:33 PM
Cardinal Health (CAH) is soaring 4.87% on an upgrade to "out perform" from Goldman Sachs today. The gap higher looks a bit dangerous to chase it but its weekly chart looks encouraging. Chart: Link

 
 
  Jeff Bailey   3/26/200,  1:03:47 PM
Swing trade long alert .... Newmont Mining (NEM) $46.39 here, stop $44.00 (to begin), target $51 (initial bullish vertical count) is $55.

 
 
  James Brown   3/26/200,  12:59:58 PM
Raymond James is turning bullish on the online brokers and market makers. The analyst there upgraded Ameritrade (AMTD), E*Trade (ET) and Knight Trading (NITE) to a "strong buy". Combine the positive comments with an XBD broker-dealer that is rebounding a positive 1.5% and you get AMTD +3.76%, NITE +7.05% and ET +4.17%.

ET is also trading higher due to it being added to the S&P 500 on March 31st. It is replacing FleetBoston Financial, which is/was bought by Bank of America.

 
 
  Linda Piazza   3/26/200,  12:56:03 PM
If a trader had entered a long OEX play based on a 30-minute Donchian channel breakout yesterday, that entry would have been made at 539.78, when the first 30-minute close outside the Donchian channel occurred. That play would still be open according to the two exit strategies I backtested. I was never comfortable with those exit strategies, however. One in particular allowed for traders to participate in big runs (one I backtested was in excess of 30 OEX points), but they were hampered by multiple instances of the largest allowable losses I allowed the system (4 points) so that the drawdowns were too prohibitive. Now that Q-charts offers Parabolic SAR (stop and reverse, I believe) studies, I'm watching to see when an exit would occur based on that new tool.

 
 
  James Brown   3/26/200,  12:54:46 PM
Genesis Microchip (GNSS), a chipmaker in the flat panel monitor/tv business, was upgraded this morning to "out perform" by Morgan Keegan. The stock has been in a downtrend since its highs in January and broke down below its simple 200-dma last week. After bouncing from the $14.00 mark this week (while the NASDAQ based at 1900) we're seeing a rebound back toward resistance at $15.50 and its 21-dma and 200-dma again. The stock is very oversold but yesterday's close actually broke through its trendline of descending highs. Now it just needs to clear all this technical resistance.

 
 
  James Brown   3/26/200,  12:42:47 PM
Stock traders can keep tabs on Service Corp (SRV), the funeral home and cemetery operator. The stock soared in mid-March after beating its earnings estimates. What was impressive about the rally was the huge volume numbers SRV was climbing with. Average volume is closer to 1 million a day and SRV was rallying on 4 to 6 million shares for three days straight. The subsequent pull back to support at $7.00 is close to a 50% retracement of the mid-March move from its lows and traders are buying the bounce from historical support/resistance at the $7.00 level.

In the news today SRV announced that is plans to sell $250 million in unsecured senior notes due 2016 and plans to use the proceeds to retire existing debt due in 2008 (Reuters).

 
 
  Jeff Bailey   3/26/200,  12:37:01 PM
QQQ intra-day chart with upper 5-MRT. Link

What I'm looking at in regards to 12:30:43 post.

 
 
  Jeff Bailey   3/26/200,  12:30:43 PM
Gosh I hate changing targets .... QQQ $35.42 +0.21% ... session high has been $35.58, and it gets a little frustrating sitting here wondering... did you have the right target all along, and the raising of the target was against one of your rules of "trade the target?"

This is what is going through my mind right now, and I do have difficulty with this morning's decision on a very personal basis.

However, I've tried to aggressively raise the swing trade stop.

 
 
  Jonathan Levinson   3/26/200,  12:27:13 PM
Good comments from Jeff at 12:21:40. I'd add only that gold and silver stocks are subject to margin selling, profit taking and panic selling in broader market downdrafts. We saw it at the 2002 lows, and it was seen with Homestake Mining in the Great Crash. After equity wipeouts of that calibre, metals shares often outperform the broader market on the way back up.

The current weakness could have to do with hedge fund strategies as well, as they go long the metal, either using futures, options or proxies such as CEF or ASA, and hedge with shorts on the miners. Yesterday, nearly half the day gains in the HUI and XAU came in the closing minutes before 4PM on expanding volume, and I have no doubt that there is a great deal of play with these generally lower-capitalized stocks currently.

 
 
  Linda Piazza   3/26/200,  12:26:28 PM
I'm including some "what if" speculations on this OEX daily chart, so please don't consider it gospel or a promise that the talked-about action will materialize, but I always like to take a look at the what-if's. Here's one: Link Actually, since I'm operating on the theory that the current bounce is most likely a technical or countertrend bounce, this action wouldn't have been the action I most expected to materialize, but it never pays to be blind to possibilities other than your original projections.

 
 
  Jeff Bailey   3/26/200,  12:21:40 PM
Gold equities lagging gold commodity ... Jeff: Have you noticed that gold equities, or the stocks themselves, seem to have lagged the stronger move in the commodity? Any thoughts as to why? It's usually the other way around, as you've noted in the past.

I have two thoughts, and would also welcome any thoughts from our resident gold expert Jonathan.

One thought is that the broader equity market has seen weakness of late, which might have gold STOCKS lagging the move in the commodity. The other thought is that higher gasoline prices may also have costs among gold producers increasing, thus lower margins despite the rise in gold itself.

I still haven't heard much on the World Gold Council's filing with the SEC to launch its Equity Gold Trust, which I think would be a great security for gold bugs to trade.

As discussed before, gold equities don't always trade like we think they might, as they are stocks, and aren't really the most accurate type of security for gold representation that we would like them to be.

 
 
  Ray Cummins   3/26/200,  12:21:05 PM
Spreads/Premium-Selling -- Market Movers: Sierra Wireless (NASDAQ:SWIR)

Here's a "hot" stock in a favorable sector that offers reasonable premium for bullish option traders. Shares of SWIR are at an "all-time" high, up $1.24 at $34.25 as new investors join the upside momentum. Aggressive traders who like the near-term outlook for the issue might consider a (short) APR-$30 put for a credit near 0.65-$0.70.

 
 
  Ray Cummins   3/26/200,  12:13:11 PM
Spreads/Premium-Selling -- On the "watch" list: Career Education (NASDAQ:CECO)

We identified this "reversal" on Wednesday and the new (bullish) trend has continued since that observation with the stock now testing long-term resistance at $55. Our initial "premium-selling" play was a short call near the current price ($55), thus it is still profitable. However, only the most aggressive traders should remain in the position; conservative traders should consider closing (or covering) the play to limit potential losses.

 
 
  Jeff Bailey   3/26/200,  12:10:20 PM
12:00 Internals at this Link

 
 
  Ray Cummins   3/26/200,  12:06:19 PM
Spreads/Premium-Selling -- On the "watch" list: Cognos (NASDAQ:COGN)

One of our recent bearish candidates is rallying today after a favorable earnings report. Shares of COGN are up $1.38 at $31.98 in the wake of the company's stronger than expected (56%) rise in fourth-quarter profits. Net earnings jumped to a record $46 million on revenue that climbed $202 million, up 23% from last year. Investors were obviously pleased with the news but our "bear-call" credit spread will be in jeopardy if the issue moves above the sold strike at $32.50. Traders should monitor the position closely in the coming sessions.

 
 
  Linda Piazza   3/26/200,  12:05:44 PM
The TRAN is trying to break to the upside out of the descending regression channel on the chart I linked to my 9:47 post. I actually would have hand-drawn that upper trendline a little differently than Q-charts did it automatically, and the TRAN wouldn't yet have broken over the top of my hand-drawn resistance line. The breakout is minimal, even on the Q-charts version.

 
 
  Jeff Bailey   3/26/200,  11:51:13 AM
Expeditors International (EXPD) $38.49 +1.93% Link .... stock has been rather strong the past two sessions, and may well be seeing gains based on the positive economic news regarding Japan's economy. At this point, bears will want to see resistance at $39, which would be a 3-box reversal up, get pushed back lower rather quickly. I would also think EXPD bears would want to see higher energy prices.

 
 
  Ray Cummins   3/26/200,  11:50:05 AM
Spreads/Premium-Selling -- Market Mover: Taser (NASDAQ:TASR)

This popular momentum stock broke through its March high this morning and is now up $3.38 at $67.65 as "shorts" try to cover the gains. Taser is a company with no real competition and this condition has led to exploding sales and a skyrocketing share value. But, even with the recent sharp ascent, the volatile issue is still offering excellent "out-of-the-money" premium for option sellers. Bullish traders might consider the (short) APR-$50 put for credit near $0.50, which yields a 5% monthly ROI based on the current price of the stock.

 
 
  Jeff Bailey   3/26/200,  11:42:47 AM
General Electric (GE) $30.85 +3.83% Link .... big move from the general. Makes me wonder if Merrill wasn't in there buying yesterday ahead of "focus list" addition.

Helps keep OEX 546.94 +0.47% at highs of session.

 
 
  Linda Piazza   3/26/200,  11:42:26 AM
The OEX has definitely pulled free of the 30-minute 130-pma, giving a buy signal on this basis. It's also edging above the 100-dma, confirming strength by that measure, too, if it can hold onto this level. However, the 550-550.40 (location of the 72-ema on the daily chart) level should provide some resistance, too, and the 552 level marks the approximate top of the recent consolidation zone and a likely location for the neckline of an inverse H&S. As I mentioned this morning in my first OEX-related post, I wouldn't be surprised to see the OEX turn down into a right shoulder at that level or lower.

 
 
  Jeff Bailey   3/26/200,  11:41:13 AM
Bema Gold (BGO) $3.61 -5.24% ... lower after quarterly earnings released last night. Link

 
 
  Linda Piazza   3/26/200,  11:40:22 AM
Reader Question: Your comments on the MM today at 10:16 regarding SIRI bounce off the 72-ema. What number would that be on your chart?

Response: Here's a chart showing how SIRI has behaved with reference to its 72-ema: Link That shows the 72-ema currently at 2.85, the thick green line on the chart. As I mentioned in that previous post, be wary of the 3.315 level if in a long play based on a break out of that neutral triangle, however, as that's both historical resistance and a Fib level.

 
 
  Ray Cummins   3/26/200,  11:37:35 AM
Spreads/Premium-Selling -- Market Movers: Askjeeves.com (NASDAQ:ASKJ)

One of our regular bullish candidates is rallying again today, even as the broader market consolidates yesterday's gains. Shares of ASKJ are up $2.20 at $33.48 and the issue continues to be one of the strongest internet-related stocks in recent sessions. Our positions (at $25) are comfortably profitable, however aggressive traders might consider a short (April) put at $30 or a longer-term diagonal spread with the short call at $35.

 
 
  Linda Piazza   3/26/200,  11:28:12 AM
The OEX came within two cents of making a new short-term high, but couldn't quite move above yesterday's high.

 
 
  Jeff Bailey   3/26/200,  11:07:14 AM
11:00 Internals at this Link

Yesterday's Internals at this Link

Observing some follow through at NH indications compared to yesterday.

NL indications at NYSE still suggest NASDAQ is more of a near-term relief bounce.

 
 
  Linda Piazza   3/26/200,  11:03:07 AM
The OEX is turning down again, but is so far remaining between the 30-minute 100- and 130-pma's. I've been trying to find a new and fresh observation to note, but this is just one of those days when we have to be patient and let the day play out. As Keene mentioned earlier (on the Futures side) and as I believed, too, this may be a consolidation day or choppy day when there's not much tradable action on the indices. A move below the 30-minute 100-pma might get some action going, however. I'm not sure that a move above yesterday's high would, to the long side.

 
 
  Jeff Bailey   3/26/200,  10:37:03 AM
Broker/Dealers (XBD.X) 686.89 +1.06% Link .... gets back on a "buy signal" with trade at 685. Would look for greater level of resistance at the 705 level, where both the 21-day (703.37) and rounding flat (710) SMAs reside.

 
 
  Jeff Bailey   3/26/200,  10:33:08 AM
Intl. Paper (IP) ... $40.99 +0.09% Link

 
 
  Jeff Bailey   3/26/200,  10:30:10 AM
Dow Industrials (INDU) 10,203.77 -0.14% Link ... Breadth shows gainers at 14, losers 16. Weakness is MCD $28.06 -1.37% Link and MMM $79.95 -1.32% Link.

 
 
  Linda Piazza   3/26/200,  10:25:31 AM
Here are a few observations on an OEX 30-minute chart: Link

 
 
  Jeff Bailey   3/26/200,  10:22:36 AM
General Electric (GE) $30.36 +2.22% .. highs of the session and made uncontested move above its 200-day SMA of $30.25.

 
 
  Jeff Bailey   3/26/200,  10:19:24 AM
QQQ $35.40 +0.13% .... either side of WEEKLY R1 for most part. Morning low of $35.24 found buyers at our WEEKLY 38.2% pivot retracement of $35.23. Swing trade bulls would like to see this 38.2% hold, but stop just underneath. Session high has been $35.55, where there's probably some sellers at the falling 21-day SMA.

 
 
  Linda Piazza   3/26/200,  10:16:23 AM
It looks as if James was better at prediction which direction SIRI would break out of that neutral triangle than I was. I'd noted the triangle in a post yesterday, but didn't have an opinion about which direction it would break, while James felt confident that it was about to break to the upside, which it did. It will soon face resistance at a Fib level at $3.315, so bullish traders need to be watchful at that level. Oscillator evidence remains mixed. SIRI's bounce off the 72-ema I've been watching was once again a decent place at which to enter a long position on SIRI, showing that the average continues to hold some strange relevance, at least for this particular stock.

 
 
  Jeff Bailey   3/26/200,  10:15:10 AM
Sector gainers .... Airline (XAL.X) 54.67 +3.32%, Internet (INX.X) 180.01 +1.56%, Gold Bugs ($HUI.X) 233.96 +1.46% and Homebuilders (DJUSHB) 661.85 +1.33%.

 
 
  Jeff Bailey   3/26/200,  10:10:13 AM
S&P Banks Index (BIX.X) 343.28 -0.34% ...

 
 
  Jeff Bailey   3/26/200,  10:07:22 AM
Monster Worldwide (MNST) $24.23 +2.06% Link .... Moving back above is 200-day SMA. This was a near-term hurdle to our bullish target.

 
 
  Linda Piazza   3/26/200,  10:05:08 AM
The OEX has now climbed back above the 30-minute 130-pma at 544.38, ostensibly giving a buy signal. The thirty-minute oscillators aren't looking bullish, however, and the OEX is now just below the 100-dma at 546.34. This move has fulfilled the upside target predicted by the break out of the rectangular consolidation pattern of the last few days.

 
 
  Jeff Bailey   3/26/200,  10:01:07 AM
Raise Swing Trade Bullish stop alert ... Raise bullish stop in the QQQ $35.47 +0.33% to just under the session low of $35.24 say ($35.21).

Like the SOX.X, QQQ challenging its 21-day SMA of $35.52, but see the GSTI Software Index (GSO.X) and Internet (INX.X) 180.01 +1.56% continuing above their 21-day SMA's, which were broken yesterday.

 
 
  Linda Piazza   3/26/200,  9:55:08 AM
Here are a couple of things I'm noting on the SOX daily chart: Link

 
 
  Jeff Bailey   3/26/200,  9:54:18 AM
Taser Intl. (TASR) $68.10 +6.45% Link ... new highs. Gives impression that buyers are aggressive, not only in TASR, but perhaps other stocks too.

 
 
  Jonathan Levinson   3/26/200,  9:53:18 AM
An 8.5B overnight repo expires today. The Fed has just announced a 5B 6-day repo for a net 3.5B drain, but the door has been left open for an overnight repo to be added later in the day should the Fed so desire.

 
 
  Jeff Bailey   3/26/200,  9:52:27 AM
Swing trade raise bullish target alert let's raise QQQ target to $34.75 right now. Will follow with a raising of stop

 
 
  Linda Piazza   3/26/200,  9:47:57 AM
Here's what I see on the TRAN's daily chart: Link

 
 
  Jim Brown   3/26/200,  9:46:20 AM
Michigan Consumer Sentiment = 95.8, (est 93.8, last 94.1)

 
 
  Linda Piazza   3/26/200,  9:41:42 AM
When I'm looking at a five-minute OEX chart using Keltner channels, I'm studying three channels, nested within each other. The shortest-length channel is now turning down, back inside the other channels, but this may be just one of those wiggles Keene mentioned that we shouldn't be so anxious to trade, in a post on the Futures side of the Monitor. I've been considering this bounce a countertrend bounce, until proven otherwise, and agree with Keene that today could be difficult to trade.

 
 
  Jeff Bailey   3/26/200,  9:39:22 AM
Newmont Mining (NEM) $45.85 +1.41% Link .... just misses $46.00 with an early high of $45.98.

 
 
  Linda Piazza   3/26/200,  9:35:33 AM
During the first five minutes of trading, the OEX spanned a range from 544.17 to 542.79. The OEX is currently below the 543.48 midpoint of that range, indicating weakness in the earliest trading, but we haven't yet seen the first reversal. The OEX remains above the 30-minute 100-pma so far.

 
 
  Jeff Bailey   3/26/200,  9:34:42 AM
Semiconductor Index (SOX.X) 481.88 -0.64% Link ... finds early resistance at its trending lower 21-day SMA (484.65)

 
 
  Linda Piazza   3/26/200,  9:33:00 AM
For reference, the OEX 30-minute 100-pma is at 542.59 currently.

 
 
  Linda Piazza   3/26/200,  8:58:29 AM
Yesterday, the OEX ended the day a tad under the 30-minute 130-pma. It had spent the day climbing toward the 100/130-pma's, pausing just above the 100-pma before climbing to the 130-pma and then falling back slightly. Jim's momentum model used these averages to generate buy and sell signals although I've translated them into time frames appropriate for the OEX, with a move above the 130-pma generating a buy signal and a roll down below the 100-pma again generating a sell signal. However, a move over the 130-pma is going to face the important 100-dma at 466.06 right away. Although the futures climbed from their lows as the Nikkei was zooming up in overnight trading, I wouldn't call the U.S. futures climb exactly exuberant, so that fact perhaps signals that there's still some caution about sending the markets too much higher, at least ahead of the cash open. We'll have to watchful of that possibility although perhaps the U.S. futures traders were just cautious ahead of this morning's economic releases.

A move above the 130-pma will also move the OEX into last week's consolidation zone where gains might be expected to slow. Like Jim in last night's wrap, I believe that the main goal of market participants will be the hold the markets steady today, fitting with a possible slowing of gains while daily oscillators try to cycle upward. Both Donchian and Keltner channels gave breakout signals yesterday, the Donchian's sooner than the Keltner's. That indicates that markets have moved into a time when it's best for bullish players to follow the OEX up with their stops, as vulnerability to the downside increases as the OEX becomes more overbought on a short-term basis. As I've often repeated, though, those breakout signals can be valid on both. A move up to test the 100-dma seems feasible, although that won't be much of a move at this point since the OEX is so near. A study of Bollinger bands on the daily chart even suggests a move up to the top of last week's consolidation band, near 552, but I'm going to want to see how fast the oscillators cycle up in comparison to price movement before I make too many suppositions about what might happen. We saw some bullish divergence on the last swing high on some of those daily oscillators (lower price low with higher or equal oscillator lows) and this bounce has been long overdue, so it's difficult to assess whether it's a technical bounce or a sign that interested buyers stepped in just ahead of the 527-530 support zone, shortcutting the fall all the way to the 200-ema.

I've been characterizing this as a likely technical or countertrend bounce, but as always happens when a deeply oversold market bounces strongly, that's not the way it feels now. I still want the markets to prove that it's something more, though. We talked yesterday about the retest by the VIX of its daily 100/130-pma combination. On the daily chart, the OEX shows an incipient inverse H&S developing, with the OEX just now rounding over into the inverse head shape, with a possible neckline in that 552 area. That bullish divergence that I mentioned formed as the possible head was forming. Even if the OEX does get past the 100-dma, I would then wonder about a turnaround in the 550-552 area as the OEX rounds down to form a right shoulder. Therefore, I see the potential for a rollover anywhere between the current level and 552, but would feel the OEX was demonstrating renewed strength on a move above 552.

 
 
  Jeff Bailey   3/26/200,  8:47:34 AM
Thanks for letting the old cat out of the bag Linda! (grin)..... Thank you for the birthday greeting.

 
 
  Jonathan Levinson   3/26/200,  8:29:35 AM
U.S. FEB. PERSONAL INCOMES UP 0.4% VS. 0.3%

8:30am U.S. FEB. CONSUMER SPENDING UP 0.2% VS. 0.5%

 
 
  Jonathan Levinson   3/26/200,  8:07:01 AM
8:07am FRANCE DETAINS 3 OVER BOMB THREATS - REUTERS

 
 
  Jonathan Levinson   3/26/200,  8:03:09 AM
The PPI and Core PPI for February are listed as simply "Date TBA", and so I presume that these key reports will be delayed. We await the 8:30 release of Personal Income for Feb., est. .3%, personal spending, est. .5% and at 9:45, UMich Sentiment, est. 93.5.

 
 
  Linda Piazza   3/26/200,  7:24:11 AM
Happy Birthday to Jeff today! I'm sure I speak for subscribers when I thank you for another year of hard work researching stocks and indices. Have a great day, Jeff!

 
 
  Linda Piazza   3/26/200,  7:17:59 AM
Good morning. With fresh evidence that consumers will do their part to boost the Japanese economy, the Nikkei gapped up again Friday morning. That evidence came in the form of surprise gains in Japanese retail sales and household spending for February. Retails sales rose 1.7% month-over-month against expectations for a 1% gain, and consumer spending in households headed by a salaried worker climbed 2.5% month-over-month against expectations for a 1.7% decline, and gained 6.9% over the year-ago level. Other economic news showed consumer prices excluding fresh food to have remained flat in February from the year-ago level.

Those numbers and the resultant raised expectations for a strong result from the much-watched tankan survey, to be released in about a week, sent equities higher and bond prices lower. Toward the end of the morning session, the Nikkei fell to the confirmation level of a H&S, near 11,700, but then saw strong buying at the beginning of the afternoon session that sent it higher again. It continued climbing, tacking on a remarkable 239.74 points or 2.08%, to close at 11,770.65, an almost two-year high. The Topix, a broader index, hit a more-than-two-year high.

Equities gaining in early trading included consumer electronics company Matsushita, semi-conductor company NEC Electronics, Yahoo Japan, Canon, and many semi-related stocks. There was a rotation out of the recently favored domestic issues back into the techs, a rotation that continued into the close. Automakers also gained, as did banking stocks. Retailers were mixed. Telecom stock NTT plummeted 5.1%, however, although I didn't find news that explained the drop.

Other Asian bourses turned in a mixed performance. The Taiwan Weighted fell 0.39%. With South Korea's Samsung Electronics posting strong gains in early trading, the Kospi headed higher in Friday's trading, and closed higher by 1.24%. Singapore's Straits Times declined by 0.18%, however, and Hong Kong's Hang Seng lost 0.30%. China's Shanghai Composite declined 0.14%.

European bourses reveal a mixed performance this morning, too. Friday saw the release of the Ifo Institute's important German business sentiment number for March, with that number revealing a mostly in-line with expectations decline to 95.4 from February's 96.4. Business sentiment did not appear to have been impacted by the Madrid bombs, as similar results were obtained by those surveyed before and after the terrorist attack, and market watchers interpret that fact pessimistically. They would have felt better about the number if sentiment had been momentarily worsened as a result of that event, but now it must be considered to reflect ongoing business sentiment.

Stock-specific news included early gains in chip maker Infineon after an extraordinary board meeting that resulted in the resignation of its chief executive for personal reasons that were rumored to be a result of the board's disapproval of his management style. No accounting irregularities accounted for those clashes with the board, however. Swiss bank Credit Suisse did note an accounting problem in a subsidiary of one of its groups due to an error in the input data. Credit Suisse said the error caused an overstating of Q4 profits by $156 million, and the stock was declining in early European trading. Aventis' CEO and the French prime minister hold a meeting, with the prime minister having already expressed his preference for Sanofi-Synthelabo's hostile bid over a bid by Novartis.

As of this writing, the FTSE 100 is down 21.50 points or 0.49%, to 4352.10. The CAC 40 was higher by 18.85 points or 0.53%, to 3589.25. The DAX was higher by 10.26 points or 0.27%, to 3822.18.

 
 
  Jeff Bailey   3/25/200,  8:34:08 PM
Pivot Matrix for tomorrow at this Link

 
 
  OI Technical Staff   3/25/200,  8:34:00 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

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