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  Jeff Bailey   4/2/2004,  8:20:21 PM
Per 10:47:38 question .... Could well have been an day trade, maybe a hedge, but they sure didn't see volume today (185).

A hedge? Or a speculative bet?

Thinking from the winning side of the trade ... If I were SHORT the long bond, or the TLT into the nonfarm data and was unsure and wanted a near-term hedge, then Thursday's buying of the call call might be an explanation.

My thought here is that the sharp move, and I mean SHARP MOVE HIGHER on the nonfarm payroll data had the calls going "poof" and today's 185 contracts traded on the TLTDL may show there were no buyers to close any calls out to.

The hedger short the bond that now doesn't think they need the hedge? Might offset the speculative long off with the selling of puts. April 90 puts (TLTPL) (now has trader OBLIGATED to buy $90 less the $3.18 premiume received so $86.82), and also see June $85 put (TLTRG) traded 5,500 contracts (OI was 5,515) and sell some of those which obligates to buy TLT at $85 less $1.50 premium recieved, and also see the April $89 puts (TLTPK) traded 5,181 (OI was 8,685) which obligates to buy TLT at $89 less $2.28.

If really interested, what might be telling is to try and look at time/sales to see if you can match up any type of big size among the three put contracts.

My "conclusion" what that a big bet may have been made on a nonfarm coming in below.

While the nonfarm came in above, then the WINNING side of the analysis would have a long bond short buying those calls simply as insurance into the number. If I were short the TLT, or the long bond with size from above $90, then buying some call insurance with TLT sitting right on its 50-day SMA might have been a good risk management trade.

 
 
  James Brown   4/2/2004,  5:24:27 PM
Just looking over the flood of candidates for the weekend newsletter and it would appear that we'll have a pretty hefty watch list for next week!

 
 
  Jeff Bailey   4/2/2004,  5:22:42 PM
Closing Internals at this Link

Internals were much strong. NASDAQ stronger, but NYSE doesn't look as bullish as I would have thought, especially at the new lows on some very positive jobs data.

 
 
  Jeff Bailey   4/2/2004,  5:16:49 PM
Daylight Saving times alert! Don't forget to turn your clocks forward this weekend for daylight savings time ... spring forward!

 
 
  Jeff Bailey   4/2/2004,  4:50:32 PM
Weekly MM trade table at this Link

 
 
  Jeff Bailey   4/2/2004,  4:20:53 PM
Monster trade review at this Link

Will have to keep in mind that Help Wanted Index report in the future. Was perhaps a "good tip" for Monster Worldwide (MNST). Got a short-term profit, but boy did this baby rock this week.

 
 
  Jeff Bailey   4/2/2004,  3:55:58 PM
Day trade close out alert for Intel (INTC) $28.07 here. 5-minutes to close.

Might still get a spike to $28.22 by the close, but just 5-minutes left.

 
 
  Linda Piazza   4/2/2004,  3:52:28 PM
Still checking other indices with respect to their 200-week moving averages, I note that the Russell 2000 has moved much further away from that MA than is customary, currently being more than 133 points above that average. Other than recent weeks, the last time the Russell was this far away from that average was in October, 2002, when it traded 128 points below the average. The last time it traded this far above that average was . . . you guess it. . . March, 2000, when the Russell was extended more than 181 points above that average. Obviously, too extended can become even more extended.

 
 
  James Brown   4/2/2004,  3:44:42 PM
To be honest I've not followed silver that closely. That's Jon's baby but I did hear that silver hit 17-year highs. Checking out Pan American Silver Corp (PAAS) I noticed the huge volume two-day rally and breakout over resistance at $18.50. Not to mention the new MACD buy signal and its quadruple-top breakout buy signal on its P&F chart.

 
 
  Linda Piazza   4/2/2004,  3:42:39 PM
Checking the performance of other indices in comparison to their 200-week SMA's, I note that while the COMPX also found support this week at that average, the NDX is not yet above that average, having found resistance there early this year after a one-week close above that average. Obviously, the big caps need to play catch-up here.

 
 
  Linda Piazza   4/2/2004,  3:39:04 PM
Here's something interesting I noticed when I looked at the OEX weekly chart, regarding the 200-week exponential moving average: Link

 
 
  Jeff Bailey   4/2/2004,  3:30:02 PM
Intel (INTC) $28.06 alert ... raise the day trade stop.

 
 
  Linda Piazza   4/2/2004,  3:28:42 PM
The OEX is reaching toward next resistance on the five-minute nested Keltner channel chart, with that resistance at 557.05. The OEX has been overshooting Keltner levels by a little or a lot all day long today, however.

 
 
  Jeff Bailey   4/2/2004,  3:27:58 PM
03:00 Internals at this Link

 
 
  James Brown   4/2/2004,  3:27:20 PM
A couple of telecom stocks on the move today are TIWI...breaking out over the $12.00 mark and its 50-dma and DITC...challenging its 50-dma.

 
 
  Linda Piazza   4/2/2004,  3:22:20 PM
Has anyone mentioned the $DJU, the Dow Jones Utility Index? It reached a new high today not seen since the summer of 2002, but it's reaching toward the lip of a possible rounding-bottom or cup-and-handle formation, without having yet formed the handle. The daily chart shows bearish price/MACD divergence forming since early January, when MACD began sloping downward while price continued to climb. As should be apparent from that three-month period of divergence, seeing such bearish divergence doesn't mean one should assume that a market is going to turn down immediately or maybe even at all, but that bearish divergence does alert us that there might be more underlying weakness than is apparent on the bar chart in these interest-rate-sensitive issues. RSI also shows bearish divergence.

Watch for a possible pullback to form a handle or for a deeper pullback that signals that there is some weakness. As Mark P. and others have reminded us, it's important to watch the Dow, the transports, and the utilities as a group.

 
 
  Jeff Bailey   4/2/2004,  3:15:13 PM
Intel (INTC) ... see that volume build in the last 5-minutes (1.2 million)? Hopeful for a press higher to the close.

For every buyer there's a seller. Bulls want the seller to be a market maker that was accumulating around that $27.74 level, and providing building demand to the close. We'll see. "Neckline just ahead."

 
 
  Jeff Bailey   4/2/2004,  3:13:15 PM
Looky there.... INTC $27.93 +2.0% ... its a Dow component.

 
 
  Jeff Bailey   4/2/2004,  3:12:23 PM
Dow Industrials (INDU) just off afternoon low after testing WEEKLY R2.

If bulls are going to ramp to the close, this would be the place to be looking.

 
 
  Linda Piazza   4/2/2004,  3:02:46 PM
The SOX stopped its ascent just shy of a move above the bearish resistance line on its P&F chart, but it remains above the former descending trendline (off the January high) on its bar chart and above the 100-sma on the daily chart. Mixed evidence.

 
 
  Jeff Bailey   4/2/2004,  3:01:08 PM
Day trade update alert ... for Intel (INTC) I've got to get started on the 03:00 update.

IF INTC trades $28.00, THEN raise stop to break-even, ELSE keep stop at $27.70.

See intra-day chart at 14:34:27 post.

 
 
  Jeff Bailey   4/2/2004,  2:58:42 PM
2-minutes... 2-minutes until bond market closes. Be alert!

INTC back to press that $27.90 and RED #1.

 
 
  Jeff Bailey   4/2/2004,  2:57:04 PM
S&P Banks (BIX.X) 343.33 -1.66% ... session low has been 343.28. Now noting WEEKLY Pivot at 343.09.

 
 
  Linda Piazza   4/2/2004,  2:56:32 PM
While the 5MRT system certainly didn't guarantee a winning daytrade on IPO NABC once the bullish signal was triggered, it certainly gave a trader a concrete place at which to exit. There was no room for interpretation since there were no historical S/R levels or long-term MA's or other information to sway a trader away from exiting when it was appropriate to do so.

NABC is finally seeing that explosion of volume, but it didn't happen until the stock hit an equal low, or actually violated that by a little.

 
 
  Jeff Bailey   4/2/2004,  2:52:44 PM
S&P 100 Index (OEX.X) 556.03 +0.42% ... for first time today... slips back under its WEEKLY R2 of 556.63. See how OEX kissed this level for support early this morning? Didn't go on to make a new high though did it?

 
 
  James Brown   4/2/2004,  2:52:30 PM
A trigger over resistance at $70.00 might work as an entry point for bulls in Teekay Shipping (TK).

 
 
  Jeff Bailey   4/2/2004,  2:50:14 PM
10-minute until bond market closes. Equity traders should be alert for volatility!

 
 
  James Brown   4/2/2004,  2:47:16 PM
If you don't mind the VERY low volume ScanSource Inc (SCSC) Link is breaking out over resistance at $50.00 and could run toward the $55 mark where it topped out in January. It is optionable.

 
 
  Jeff Bailey   4/2/2004,  2:45:47 PM
SOX.X 508.83 +2.72% ... fading a bit .... INTC $27.77 +1.42% is fading a bit.

The culprit???? ... you got it... S&P Banks Index (BIX.X) 343.31 -1.66% adn new session lows.

 
 
  Linda Piazza   4/2/2004,  2:39:54 PM
The OEX hit the mid-channel Keltner support, which should now produce a bounce attempt. The OEX appears to be rising in a back-and-forth pattern reminiscent of a flag pattern, however, and in this case, that would be a likely bear flag. It's too early to be sure, but be watchful. (Not too early now--the OEX fell through as I typed.) I priced, but didn't trade (sick husband who might have needed a ride to the doctor's office), an OEX 560 April put at 9:43 this morning, with an ask of $6.90 at that time. That 560 put is now 7.90 x 8.60.

 
 
  Jeff Bailey   4/2/2004,  2:36:34 PM
Speaking of Forest Labs... .... Neurobiological (NTII) $5.17 +8.38%, which manaufactures the Namenda drug for FRX, just now busting a move higher. Link

 
 
  Linda Piazza   4/2/2004,  2:34:48 PM
There went NABC! It hit the paper-trading stop. This is the fourth IPO I've followed this week using the 5MRT method on the first day it traded. One never triggered a trade. One would have been exited at the end of the day for a minimal loss (a few cents). Yesterday's would have been profitable at an end-of-day exit, with a hefty percentage gain. This one would have resulted in at least a $0.08 loss, and perhaps more since it was dropping fast and there might have been some slippage. Still, however, that wouldn't have been a huge loss, either. So, our record this week using the 5MRT system is two small losses and one hefty percentage gain. Not bad, if one is disciplined about exiting when the stops are hit and if one can exit quickly when a trigger was hit, not always possible with an IPO.

 
 
  Jeff Bailey   4/2/2004,  2:34:27 PM
Day trade raise bullish stop alert for Intel (INTC) $27.86 +1.75% to $27.70. Here's intra-day chart. What to monitor for into the close. Link

 
 
  Jim Brown   4/2/2004,  2:32:14 PM
I hope everybody took my EBAY suggestion on March-23rd. I posted in the monitor then that my $65 alarm had triggered and that was a good spot to buy the dip. $74 today and a new high.

 
 
  James Brown   4/2/2004,  2:29:35 PM
observation: Metlife Inc (MET) is trading above resistance at $36.00 but just below its all-time highs at $36.75 from December 2000.

 
 
  Jim Brown   4/2/2004,  2:29:18 PM
Rumor hitting the wires that KLAC is going to lower their guidance.

 
 
  Ray Cummins   4/2/2004,  2:27:25 PM
Spreads/Combos & Premium-Selling -- On the "watch" list

One of the obvious "bearish" groups in the market today is the homebuilding segment and our new "bull-put" spread in KB Home (NYSE:KBH) may be in jeopardy if the sector moves much lower. Shares of companies in the mortgage and home building industries tumbled after the government said the U.S. economy added 308,000 jobs in March, creating concerns about a future increase in home financing costs. Our (short) put in the KBH play is at $75 and the issue is trading down over $3 at $77.18, slightly above the bottom of a recent trading range, so it is definitely one to "watch" in the coming sessions. Another stock in this category is mortgage company Countrywide Financial (NYSE:CFC) and with the issue trading less than $2 above the sold (put) strike, it also has a place on our "early-exit" list.

 
 
  James Brown   4/2/2004,  2:26:24 PM
Prudential downgraded three oil refiners today. FTO, SUN and VLO. All of them were reduced from "neutral" to "under weight". If you're looking for a short check out SUN and VLO. SUN looks good with the breakdown under $60.00 and today's breakdown under its simple 50-dma. This was technical support that had held for seven months. The easy target would be a move toward $55 and its 100-dma. VLO is just now breaking its 50-dma but bears might want to wait for the stock to trade under support at $55 before considering positions.

 
 
  Linda Piazza   4/2/2004,  2:23:35 PM
It's about time for another small bounce on the OEX, but this time it might not do so, since it's so close to mid-channel support.

Oops, began happening as I typed. Couldn't type fast enough. Mid-channel support is at 556.08.

 
 
  Jeff Bailey   4/2/2004,  2:22:34 PM
Forest Labs (FRX) $73.57 +0.98% Link ... "X" gets the square at $73.

More of a "specialty drug" company. Not as broad line as MRK Link or PFE Link

 
 
  James Brown   4/2/2004,  2:21:46 PM
If you're bullish on transports check out Old Dominion Freight Line (ODFL). The stock is breaking out over resistance at $36.25 to a new all-time high today. It's P&F chart is showing a new triple-top breakout buy signal.

 
 
  Jeff Bailey   4/2/2004,  2:20:23 PM
Pharmaceutical Index (DRG.X) 325.57 +0.52% .... not overly impressive, but seeing some gain. Often times we'll see a very broad rally leave healthcare and drug in the dust, I think this group should show strength in sessions ahead, when we see some profit taking from the broader market if/when this rebound ever runs its course.

 
 
  Linda Piazza   4/2/2004,  2:20:14 PM
Here's a chart for NABC today (a new IPO released today), showing what I'm following: Link The reason I wanted to try out Jeff's 5MRT is because with a new IPO, you won't have oscillators or historical S/R to help you plan a trade. Pure price movement, and perhaps some information from volume patterns and new trendlines, would be all the information a trader would have.

If I were using fundamental information today, I would have been reluctant to consider such a paper trade viable, as financials are not performing particularly strongly today, and this is a financial stock.

 
 
  James Brown   4/2/2004,  2:18:29 PM
Aggressive bears might be considering shorts in Potash Corp (POT). The stock is up 7 days in a row and very short-term overbought at $87.75 versus its low last week at $76.25. POT is quickly approaching its January 2004 resistance near $89.00.

 
 
  Jeff Bailey   4/2/2004,  2:16:47 PM
S1 Corporation (SONE) $8.18 +4.20% ... you'd better get a move on you little bugger.... Annual renewal update just a week away.

 
 
  Jeff Bailey   4/2/2004,  2:16:00 PM
S&P Banks (BIX.X) 344.24 -1.4% ... back to challenge morning low of 343.96.

 
 
  Jeff Bailey   4/2/2004,  2:13:08 PM
Junk bonds ... What is your thoughts on the selloff on corporate junk bonds today. If hiring is picking up, would not one expect better corporate profits thus higher prices for their bonds? You use PHF which is also down. Tks for your great comments including day trades. Jim

Funny you should ask this question today. Here is some work I was doing on Pacholder (AMEX:PHF) last night. I too was wondering the same thing ahead of today's nonfarm payroll. What if we saw a strong nonfarm. What would be the impact of junk bonds? Link

 
 
  James Brown   4/2/2004,  2:11:56 PM
Micron Technology (MU) was on the watch list last night for a move over resistance near $17.00. We got that tonight with a 4.49% rally to $17.66. The stock is short-term overbought so bulls should probably look for a dip but the next overhead resistance looks like $20.00.

 
 
  Linda Piazza   4/2/2004,  2:08:45 PM
Reader Question about the hypothetical, test trade in IPO NABC: I have question about hypothetical trade of NABC. On intraday chart I did not find five min hi, lo & close. How did you figure it using 5mrt?

Response: I'm showing the first trade at 11:10 at 15.23, with a first five-minute low of 15.20, high of 15.28, and close at 15.19. I should have mentioned these figures when I mentioned tracking the play since I know some readers don't have access to this information.

As I type, NABC is moving above the bullish #2 again, reaching a new high of the day. Volume had been dropping off (appropriately) as it consolidated in that rectangular band I mentioned in an earlier post, but those watching this for hypothetical purposes would want to see volume being to pick up now as NABC breaks through that consolidation band. It's picking up a little, but needs to pick up more.

 
 
  James Brown   4/2/2004,  2:08:20 PM
Current OI call play CAT has been triggered on the move over $80.05. Shares are up 2.34% to $80.85.

 
 
  James Brown   4/2/2004,  2:06:18 PM
It would appear that Dow component UTX has put in a significant bottom after basing along its 200-dma during the last two weeks. This looks like a tempting entry point for new bullish positions but the stock does have overhead resistance at the $90 level and its 50-dma. Coincidentally the recent bottom formed just above its P&F chart support.

 
 
  James Brown   4/2/2004,  2:02:58 PM
CSCO is in breakout mode. This morning's gap up put it above resistance at $24.00 and its 50 & 100-dma's. The early morning strength faded but traders bought the dip and the stock is near session highs.

 
 
  Ray Cummins   4/2/2004,  2:02:42 PM
Spreads/Combos & Premium-Selling -- Portfolio Leaders

Some of strongest (bullish) issues in our portfolio today are: Broadcom (NASDAQ:BRCM), Monster Worldwide (NASDAQ:MNST), Overstock.com (NASDAQ:OSTK), palmOne (NASDAQ:PLMO), and PDI Inc. (NASDAQ:PDII). Among the larger-cap stocks, Federal Express (NYSE:FDX) and Genetech (NYSE:DNA) are the best performers. In the straddles group, MKS Instruments (NASDAQ:MKSI) is rallying in advance of its upcoming earnings report.

 
 
  Linda Piazza   4/2/2004,  1:58:38 PM
IPO NABC hasn't done much of anything since triggering a hypothetical bullish trade with a move (and five-minute close) over $15.36. It's at that level again as I type, and it's been trading in a consolidation band from $15.33 to $15.37.

 
 
  Linda Piazza   4/2/2004,  1:56:23 PM
The shortest-length of the five-minute nested Keltner channels that I watch has begun to turn down, indicating that the OEX may be headed down to test mid-channel support from 555.94-556.21, but those same channels indicate that it's likely the OEX will mount a small bounce before it heads down again.

 
 
  Ray Cummins   4/2/2004,  1:52:40 PM
Spreads/Combos & Premium-Selling -- Market Movers: Sierra Wireless (NASDAQ:SWIR)

One of the leading percentage gainers on the NASDAQ today is SWIR, up $4.48 at $40.62 after the company cited stronger-than-expected demand and operating results in its key product lines. SWIR has been a popular issue for momentum traders in recent weeks and the stock is also in our "premium-selling" portfolio. Readers who like the outlook for this issue might consider selling APR-$35 puts or, for a longer-term play, MAY-$30 puts. Both positions have reasonable risk/reward for conservative option traders.

 
 
  Linda Piazza   4/2/2004,  1:36:13 PM
We're moving into a time of day when we often see a stop-running push on the indices and some stocks. Be careful, as the reaction to such a push may tell us more than the initial push itself.

 
 
  Linda Piazza   4/2/2004,  1:34:28 PM
The OEX is reaching a minor bounce point on the five-minute Keltner chart, but below this, there's not much support until the 555.81-556.06 level on a Keltner basis. Resistance lies overhead from 558.67-559.30 on a Keltner basis.

 
 
  Linda Piazza   4/2/2004,  1:32:32 PM
A lower fifteen-minute high on the OEX? It's possible. The OEX has dropped below the ascending trendline that had been supporting prices since about 10:15 this morning.

 
 
  James Brown   4/2/2004,  1:28:21 PM
Computer Sciences Corp (CSC) is up 2.62% and breaking out over resistance at its 40-dma and 200-dma after announcing that it signed 93 contracts in the first quarter (CSC's Q4) for $327 million. (-Reuters)

 
 
  James Brown   4/2/2004,  1:25:07 PM
There has been little reaction in shares of Walgreens (WAG) after the company announced that March same-store sales rose 16.5%. Total March sales were up 17.4% to $3.22 billion. The stock tried to breakout over resistance at its 200-dma but failed.

We can expect same-store sales numbers from rivals CVS and LDG in the next few days.

 
 
  Jeff Bailey   4/2/2004,  1:16:40 PM
01:00 Internals at this Link

 
 
  Linda Piazza   4/2/2004,  1:14:12 PM
The OEX just can't seem to stay above that 50-sma, currently at 558.70, with the OEX at 557.93 as I type.

 
 
  Linda Piazza   4/2/2004,  1:11:05 PM
Those following along with me on a hypothetical trade of today's IPO NABC, for the purposes of testing (by paper trading) whether Jeff's 5MRT system would be our best method of tracking daytrades in IPO's might note that NABC has just moved above the bullish #2 on Jeff's system. The upside target on such a trade would be $15.62, with a current stop at $15.20. Remember that this is for testing purposes only as a couple of cases doesn't give definitive proof of how well this works.

 
 
  Jeff Bailey   4/2/2004,  1:09:46 PM
NYSE Composite (NYA.X) 6684.69 +0.60% ... just tried to challenge morning high of 6,689.60 10-minutes ago.

 
 
  Jeff Bailey   4/2/2004,  1:08:12 PM
Good observation Linda .... might tie in somewhat with the 2.5-box chart of OEX.

Might tie with RUT.X somewhat hesitant at 52-week high.

Touch and go right now. Market digesting the news. I'm sure a lot of market participants are looking for some type of "let go higher," or "I'm not sure, I'm bailing out" type of signal.

 
 
  Linda Piazza   4/2/2004,  1:05:55 PM
Scanning P&F charts, I note that the SOX has a 622 upside price objective, but it's currently right at the bearish resistance line. On the bar chart, by contrast, it's broken above the descending trendline that's been in place since early January, doing so when it broke above its 100-sma at 506.85. Those in bullish semi-related plays want to see the SOX close above that 100-sma, then, and maybe even climb above that bearish resistance line on the P&F chart.

 
 
  Jeff Bailey   4/2/2004,  1:02:28 PM
U.S. Market Watch at this Link

Really don't see anything that would signal weakness at this point. BIX.X has eased off its lows.

 
 
  Linda Piazza   4/2/2004,  1:00:51 PM
What will it take to cancel the TRAN's P&F sell signal? A 3100 print.

 
 
  Jeff Bailey   4/2/2004,  12:53:10 PM
Per Jim's 12:50:50 .... I'd note that while SOX.X made a new session high just minutes ago at 512.05, I'm also monitoring the RUT.X 602.34, which was only major index to trade a 52-week high, and has really been sideways ever since.

 
 
  Linda Piazza   4/2/2004,  12:51:59 PM
The TRAN has now moved up to challenge the 2/12 high of 2960.52, with the current TRAN high of the day at 2966.30, but with the TRAN currently slightly below that 2/12 high. Although some round-number resistance could be expected at 3000, it's actually the 2990 level that looks more important as historical resistance on the TRAN's chart, but before the TRAN can think about the 2990-3000 level, it has to get past the current resistance.

 
 
  Jeff Bailey   4/2/2004,  12:48:33 PM
QQQ $36.91 +2.07% ... should have taken a shot at day trade bull on that pullback near WEEKLY R2, but didn't. Now looking to INTC from the long side after observing QQQ action.

QQQ daily bar looking like one of the "doji's"

 
 
  Ray Cummins   4/2/2004,  12:47:02 PM
Spreads/Combos & Premium-Selling -- E-mail Replies: "Simple Yield" Formula

Dear Ray, I am confused by your definition of simple yield. "The 'Simple Yield' is based on the cost of the underlying issue (in the event of assignment), including the premium from the sold option, thus it reflects the maximum potential loss in the trade." Isn't the maximum potential loss equal to the cost of the underlying issue in the event of assignment (since the stock could theoretically go to zero)? In other words, the loss is actually the assigned price (minus the put premium) of the stock minus the current stock price at assignment. There is no loss (not counting commissions) if the stock price is equal to the assigned price minus the premium. (This assumes no early exits.) What am I missing? Thanks for your column. It is one of my favorite parts of OIN. MG

Hello MG, You are not missing anything...you are simply saying the same thing in a different way. And, based on your expression of the terms, you can see why it is so difficult to explain "simple yield" without going into a multi-sentence narrative. But, it really is as simple as you make it sound in your E-mail:

"The maximum potential loss is equal to the cost of the underlying issue -- in the event of assignment (since the stock could theoretically go to zero) -- minus the put premium..."

I'll take it one step further: Simple yield is equal to the [put premium] divided by the [assigned price minus the put premium]. The only reason we print this data is because it equates to a position without margin. The maximum yield formula is based on minimum margin requirements -- the simple yield formula does not include margin. Hope that helps...

P.S. Maybe I should use your explanation...it makes as much or more sense. To be honest, we didn't think anybody even considered that information. (As you said, a stock can always go to zero -- and I have at least one in my past that did :-)

 
 
  Jeff Bailey   4/2/2004,  12:46:15 PM
Semiconductor Bullish % (BPSEMI) .... while the NASDAQ-100 bullish % ($BPNDX)Link did reverse up to "bear correction" status after yesterday's trade, the BPSEMI from Dorsey/Wright is still "bear confirmed" at 38.93%, where it would take a reversal higher reading of 42% to turn up to "bear correction status.

I'm thinking this little reverse head/shoulder pattern might get INTC a couple of week rally to the objective near $29.87, or perhaps at least a test of the 200-day and 50-day SMA near $30.

 
 
  Jane Fox   4/2/2004,  12:45:50 PM
DAteline WSJ NEW YORK -- A judge declared a mistrial Friday in the trial of two former Tyco International Ltd. executives accused of looting the company of $600 million, citing intense outside pressure placed on one of the jurors.

The decision came on the 12th day of deliberations in the case against former Chief Executive L. Dennis Kozlowski and former Chief Financial Officer Mark Swartz. "It is certainly a shame that this has to be done at this time," state Supreme Court Justice Michael Obus told jurors after announcing his decision.

A courthouse source, speaking to the Associated Press on condition of anonymity, said that Juror No. 4 had received a threatening or coercive letter within the past 24 hours.

 
 
  Jane Fox   4/2/2004,  12:42:57 PM
Dateline CNN Judge declares mistrial in Tyco case.

 
 
  James Brown   4/2/2004,  12:36:50 PM
Zimmer Holdings (ZMH) is up 5.69% and gapping up above resistance at its 50-dma on news that the company is pre-announcing better than expected revenues for the first quarter. Analysts consensus estimates were $704 million. ZMH now sees $740 million. First Albany responded by upgrading ZMH from a "neutral" to a "buy". The next resistance level for ZMH is the $80.00 mark.

Rival Stryker Corp (SYK) is up 3.48% to $93.14 on the expectation that if the quarter is good for ZMH it will probably be strong for SYK too. Bulls might want to look for a pull back in SYK and target a move to the $100 level.

 
 
  Jeff Bailey   4/2/2004,  12:36:26 PM
Pattern observations... IBM Link and INTC Link

Both showing some reverse head/shoulder pattern.

 
 
  Linda Piazza   4/2/2004,  12:35:39 PM
The OEX broke out of that neutral triangle to the upside, as standard technical analysis suggested it would do. It didn't look classic enough for me to feel confident about that upside breakout, and since the OEX is immdiately turning back down, I'm wondering if it couldn't be a fake-out move. So far, so good for the bulls, however, but they now need to see a higher high.

Note: The OEX is right at its 50-dma, at 558.73, which might explain why it keeps getting knocked back every time it tries to move above this level.

 
 
  Jeff Bailey   4/2/2004,  12:34:27 PM
10-year YIELD ($TNX.X) .... other than MONTHLY R2 of 43.20, or 4.32%, there's a downward trend at 42.00, or 4.2% just above. This downward trend has held as YIELD resistance on two prior tests.

 
 
  James Brown   4/2/2004,  12:30:50 PM
In spite of the big drop in copper futures today shares of Phelps Dodge (PD) are up 2.73% with the general market bullishness. The stock is strongly rebounding from its third test of support at $81.00 in the last three days. A move over minor resistance at $85.00 and PD would probably be a tempting call play for a run toward the $90 mark. Its MACD indicator has just produced a new buy signal.

Keep in mind that copper futures may be lower today but they've not broken their trend of higher lows yet.

 
 
  Jeff Bailey   4/2/2004,  12:28:16 PM
Day trade long alert .... Intel (INTC) $27.80 here, stop $27.60, target $28.31.

 
 
  James Brown   4/2/2004,  12:27:02 PM
Sector update @ 12:30 ET

(Biggest) Winners:
XAL airline index: +3.32%
SOX semiconductors: +2.97%
INX Internet index: +2.58%
GHA hardware index: +2.38%
BTK biotech index: +2.06%

Losers:
DJUSHB homebuilders: -3.36%
XAU gold & silver: -2.22%
BIX bank index: -1.11%

Noteworthy... Copper futures: -2.18%

 
 
  Linda Piazza   4/2/2004,  12:24:46 PM
Here's that neutral triangle on the OEX, as seen on a 10-minute chart: Link

 
 
  Jeff Bailey   4/2/2004,  12:24:00 PM
Semiconductor Index (SOX.X) 509.95 +2.95% ... back to test morning high of 510.41 here.

Sessiion low on intra-day chart has been 504.97, which was really the gap higher opening low.

 
 
  James Brown   4/2/2004,  12:23:11 PM
Clorox Co (CLX) is up 1.58% to $50.00 and near 4-year highs on an upgrade from Prudential. The broker raised its outlook to "over weight" and lifted its price target to $60.

 
 
  Linda Piazza   4/2/2004,  12:21:09 PM
Yesterday I mentioned that I was using Jeff's 5MRT system to watch for opportunities to daytrade recent IPO's. Yesterday I mentioned several, following a hypothetical bullish trade that was triggered in SNTS, an IPO released yesterday. A breakout above $9.66 had triggered a bullish play, with an upside target of $11.18. That upside target wasn't hit yesterday, and I mentioned yesterday afternoon at 3:49 when the stock was trading at $10.32 that if I had been actually trading that upside breakout on a daytrading basis, I'd be exiting it there, happy with what was a hefty percentage gain. This morning, SNTS did meet that upside target, trading as high as $11.45, but I sure wouldn't have wanted to hold onto an IPO overnight with important economic numbers the next day. I still would have been happy with that daytrade.

One case is far from conclusive evidence that this is the best method by which to daytrade IPO's, but I intend to watch more of these by this system, testing it out for the benefit of readers. Today sees another IPO, NABC, a company formed after a merger of SBMC and ANE. So far, the stock has not triggered either a bullish or bearish play by the 5MRT system.

 
 
  Jeff Bailey   4/2/2004,  12:19:40 PM
TASER Intl. (TASR) $84.60 +2.10% Link ... session high was $87.80.

 
 
  Jeff Bailey   4/2/2004,  12:18:02 PM
June Palladium futures (pa04m) $307.50 +2.09% ... traded a tiple-top buy signal at $294 yesterday, traded a contract high of $318.00 today.

Will note that on conventional $2-box scale, this contract has now exceeded its bullish vertical count of $290.

SWC $17.65 +9.96% Link ... PAL $11.89 +2.94% Link

 
 
  Jim Brown   4/2/2004,  12:16:03 PM
Judge declares a mistrial in TYCO trial

 
 
  Jeff Bailey   4/2/2004,  12:13:23 PM
June Unleaded Gasoling futures (hu04m) ... $1.055 -1.16% .... looks similar to the June oil futures. 50-day sma trending higher at $1.058.

Contract high was $1.1505 on Wednesday.

 
 
  Linda Piazza   4/2/2004,  12:12:26 PM
James, it looks as if we were seeing some of the same things on SIRI.

 
 
  Jeff Bailey   4/2/2004,  12:11:27 PM
June Light, Sweet Crude futures (cl04m) $33.40 -1.03% ... extended yesterday's decline to a session low of $32.75. Technicals have price below a rising 50-day SMA of $33.71.

 
 
  James Brown   4/2/2004,  12:10:42 PM
Another note on SIRI... some of our readers may not have noticed but your OptionInvestor.com subscription includes the PremierInvestor plays and we publish them on the OI website (look for the links down the left side of the OI website). We added SIRI to the bullish play list on March 28th at $3.24 with a target of $4.00.

 
 
  James Brown   4/2/2004,  12:07:14 PM
If you missed it on CNBC about 10 minutes ago MSFT's President Steve Ballmer and SUNW's President Steve McNealy were in a joint interview on how the two companies are signing a 10-year joint technology agreement and settled the antitrust and patent lawsuits between the two (which cost MSFT about $1.6 billion).

Considering the animosity that McNealy was known to have for MSFT I would have thought this to be a late April fool's joke but he seemed rather cheerful in the interview. Of course I'd be cheerful too if I just negotiated a deal with my biggest rival to keep my company alive for the next 10 years.

 
 
  Jeff Bailey   4/2/2004,  12:06:33 PM
NASDAQ-100 Heatmap at this Link

SUNW ... settlement with MSFT.

 
 
  Jeff Bailey   4/2/2004,  11:58:59 AM
Newmont Mining (NEM) $45.94 -1.73% .... session low was $45.15.

thinking about that trader comment (Yesterday or day prior) regarding large open interest at $45 calls. Question is... "is it covered call writing, or big bull and $45 support?"

 
 
  Linda Piazza   4/2/2004,  11:58:02 AM
Reader Request Regarding SIRI: Stock SIRI is priced at 3.58 [at the time of the email] up .10 cents, high 3.65, low 3.52. What changes do you see if any at the present time?

Response: I mentioned last week that SIRI was breaking out of its neutral triangle, and then mentioned a couple of days ago that it was breaking above important resistance near $3.32. Since then, it's charged higher, up toward the next Fib level at $3.76. Link (Note: when my annotations on the chart mention a hesitation and pullback to establish support somewhere betwen the current level and 3.76, I meant that I thought the hesitation might begin there, not that support might form there.) Although the upside break out of the neutral triangle sets up a possible upside target just under $4.00, it's possible that SIRI could pause anywhere from the current level to $3.76, and either pull back or consolidate to establish a new support level. Five-minute nested Keltner channels suggest that such a pullback could take SIRI back to mid-channel support currently at $3.50, but the Keltner channels haven't turned down yet, indicating that SIRI might first make another charge toward today's high. They began flattening a little as I typed, after SIRI had moved up toward, but not to, that previous high. MACD remains strong, but SIRI's in danger of printing a possible reversal signal today.

I don't know whether the writer has a bullish or bearish play in SIRI or is contemplating a play, but if I had been in a bullish play from a breakout over the top of the neutral triangle or even on the breakout over $3.32, I think I'd be considering taking partial profits at least sometime today, watching to see what happened as SIRI pulled back or consolidated. While volume hasn't been increasing, OBV has been climbing since about the middle of February, so it's possible that SIRI will continue to climb toward $4.00. The current climb looks a bit unsupported, however, and it's possible that SIRI could pull all the way back to that $3.32 Fib level before finding support again. I sure wouldn't let a winning position turn into a losing position with this stock. Right in the middle between a breakout and a possible upside target, I don't see an opportunity for a new entry, either bullish or bearish.

 
 
  Jeff Bailey   4/2/2004,  11:56:50 AM
Positive news from Jonathan's 11:47:05 post. Looks like corporations getting some price stability and able to start nudging prices higher. Good for bottom line.

I wonder if that decision, or timing of its release has anything to do with today's jobs data? Raise prices on strong jobs data.

 
 
  Jeff Bailey   4/2/2004,  11:52:45 AM
IBM $94.21 +1.99% Link .... yesterday I made comment regarding what looked to be reverse h/s pattern for IBM. Today's trade above $93.77 would be break above the neckline, where bulls can target an upside objective of $97.28.

If achieved, would have to think bullish implications for tech, INDU/SPX and OEX.

 
 
  Jeff Bailey   4/2/2004,  11:47:10 AM
Preliminary WEEKLY PIVOT analysis calculation for QQQ based on current week's H/L, with current level of trade $36.75 close would have...

s2= 34.78, s1=35.77 , p= 36.47, r1 = 37.46, r2 = 38.16.

 
 
  Linda Piazza   4/2/2004,  11:16:06 AM
The OEX 30-minute pattern is beginning to take on a little of a look of a neutral triangle. Often these break in the direction the underlying was traveling at the time the triangle formed, so that would be upside in this case. However, this one isn't as well-formed as I would like to see and it's not forming as near the top of today's rise as I would like to see in order to be more confident of that prognosis. It's nearing its apex, and so should break one direction or the other soon. I continue to urge caution for all play participants, whether bearish or bullish. Such a strong breakout this morning reveals an index that's deeply overbought on a short-term basis, but such breakouts can result in strong continuation movements, too, so there's danger both directions.

 
 
  Jeff Bailey   4/2/2004,  11:14:34 AM
11:00 Internals at this Link

 
 
  Linda Piazza   4/2/2004,  10:57:33 AM
The OEX bounced at one cent above yesterday's high, one feather in the cap of the bulls, but the bounce hasn't been impressive so far and the five-minute 5(3)3 stochastics have cycled into territory indicating overbought conditions and are trying to hook over again. That's a possible feather in the cap of the bulls. (Does that qualify as mixing metaphors, with feathers, caps, and bulls and bears?)

 
 
  Jeff Bailey   4/2/2004,  10:52:27 AM
S&P Banks Index (BIX.X) 345.27 -1.10% .... Intra-day traders might want to set an upside al_rt at 346.20 on their trading platform. I am, as I want to measure any type of response if that level is traded back to upside.

 
 
  Jeff Bailey   4/2/2004,  10:47:38 AM
TLT trader notes .... Jeff,

Ref. your column from last night on the large bet made on the TLT calls. I see that the current OI is 59,330, so over 30K of those contracts were opened and closed yesterday. Could you please comment on this as it relates to your conclusions in the column. I don't understand, unless those 30K contracts were just a day trade. The price range was $.30, so I suppose that could have been it.

Thanks for your help,

Jim

Will comment later (need to get 11:00 Update written), but good observation.

 
 
  Jeff Bailey   4/2/2004,  10:42:38 AM
U.S. Market Watch at this Link

Boxed in red are groups I generally feel will reflect market psychology toward interest rates.

 
 
  Linda Piazza   4/2/2004,  10:35:12 AM
Yesterday, in my 1:31 post (see the archived MM posts), I detailed a (20,2) Donchian channel upside breakout signal that was given on the 11:00 thirty-minute candle on 3/25, on a close above the Donchian channel. That close was at 539.78, so the entry would have been made there (hypothetically, due to the slippage from the time the signal was given and the trade entered). I mentioned that I had last year backtested two types of exits, and was now adding a PSAR-based exit to the other two. One exit, on a close below a shorter-term (5,2) channel would have taken place on 3/26 and would have resulted in a 4.19-point gain (hypothetical). The PSAR exit would have taken place on 3/16, also, but would have netted 5.29 points (also hypothetical).

I mentioned yesterday that the third exit would not yet have been triggered. That exit was on a thirty-minute candle close that was two points below the previous thirty-minute candle's close, with a maximum 4-point loss allowed. That close would just have been triggered at 556.33, for a 13.55-point hypothetical OEX gain. As I mentioned yesterday, this type of exit has the benefit of allowing a trader to benefit more fully in the big runs, but it has the handicap of sometimes hitting many maximum losses in a row. Those losses occur in a range-bound market. Now, if only I could find a foolproof way to weed out those trades that aren't going to be profitable! I've been studying ADX and other oscillators to weed out range-bound from trending markets, but so far, they're not working as well as I'd like.

 
 
  Jeff Bailey   4/2/2004,  10:34:39 AM
S&P Retail Index (RLX.X) 398.46 -0.07% ... ... just slipping red.

 
 
  Jeff Bailey   4/2/2004,  10:33:32 AM
QQQ $36.59 +1.19% ..... session low has been... $36.52, where WEEKLY R2 is $36.51.

 
 
  Jeff Bailey   4/2/2004,  10:31:17 AM
Market Volatility Index (VIX.X) 16.38 -1.62% .... low/high has been 15.21-16.46.

 
 
  Jeff Bailey   4/2/2004,  10:29:47 AM
S&P Banks Index (BIX.X) 344.01 -1.44% ....

OEX 556.51 +0.51% ...

 
 
  Jeff Bailey   4/2/2004,  10:28:11 AM
Buy prog. premium

 
 
  Jeff Bailey   4/2/2004,  10:26:03 AM
Dow Industrials (INDU) 10,427. +0.51% Link session high was 10,496.

 
 
  Jeff Bailey   4/2/2004,  10:23:27 AM
QQQ $36.63 +1.26% ... session lows and RED #4 here.

Would look for a bounce if WEEKLY R2 of $36.51 tested.

 
 
  Linda Piazza   4/2/2004,  10:22:48 AM
The OEX 61.8% retracement of this morning's climb lies near yesterday's high, so a drop beneath yesterday's high would be even stronger confirmation of a pop-and-drop day in progress.

 
 
  Jeff Bailey   4/2/2004,  10:21:58 AM
S&P Banks (BIX.X) ... 344.74 -1.25% ...

OEX 556.70 +0.54% ... PnF chart Link on conventional 5-point scale.

Unconventional 2.5 box at this Link

 
 
  Linda Piazza   4/2/2004,  10:21:31 AM
The OEX just dropped below a 50% retracement of this morning's climb. That's another sign of weakness to go with the lower highs, but the breach of that 50% level is minimal as yet and could still be turned around. Still, this is the reason for my constant harping on OEX traders to guard profits today.

 
 
  Jeff Bailey   4/2/2004,  10:19:42 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

 
 
  Linda Piazza   4/2/2004,  10:19:33 AM
From the best I can tell, it's Q-charts that is lagging IB on OEX quotes, not the other way around.

 
 
  Linda Piazza   4/2/2004,  10:18:11 AM
CAREFUL, OEX traders. I'm getting different quotes on IB and Q-charts.

 
 
  Linda Piazza   4/2/2004,  10:16:13 AM
The OEX is beginning now to do some of the backing and filling that characterizes a measured accumulation pattern such as a bull flag or a bullish falling wedge. It's holding above the 50% retracement of this morning's climb. So, the jury is still out, but this could still be a bullish pullback. There's danger, though, to those in bullish positions, now that the OEX is so overextended on a short-term basis, so guard your profits. There's danger, too, to those who might have entered bearish positions on this morning's first pullback, as this could be a day when each dip is met with buying, so guard your positions, too.

 
 
  Jeff Bailey   4/2/2004,  10:14:32 AM
Buy prog. premium

 
 
  Jeff Bailey   4/2/2004,  10:12:01 AM
Sector gainers ... Airlines (XAL.X) 58.21 +2.44% and Semiconductors (SOX.X) 507.35 +2.42% ...

 
 
  Jeff Bailey   4/2/2004,  10:10:21 AM
Buy prog. premium

 
 
  Linda Piazza   4/2/2004,  10:09:20 AM
We have a confirmed lower high on the OEX, a first sign of potential weakness, but the OEX remains above a 50% retracement of this morning's zoom higher, too, a contrasting sign of strength.

 
 
  Jeff Bailey   4/2/2004,  10:08:54 AM
S&P Banks Index (BIX.X) 345.68 -0.99% ... sell program has BIX.X sessiion lows.

S&P 100 (OEX.X) .... 557.70 +0.73% .... back under its trending lower 50-day SMA (558.69) at this point.

 
 
  Jeff Bailey   4/2/2004,  10:08:07 AM
Sell Prog. Prem.

 
 
  Jeff Bailey   4/2/2004,  10:07:54 AM
Pharmaceutical Index (DRG.X) 326.76 +0.88% ... back above its just starting to round lower 200-day SMA, and breaks back above steeper declining 21-day SMA.

 
 
  Linda Piazza   4/2/2004,  10:06:58 AM
It looks as if we may have a lower high on the OEX, to be confirmed by a fall beneath 557.51. I continue to caution those who might be in bullish plays to be careful. Don't let a winning play turn into a losing one.

 
 
  Jim Brown   4/2/2004,  10:04:21 AM
Job Table for last 10 months: Link

 
 
  Linda Piazza   4/2/2004,  10:04:17 AM
I know Jeff will give you a perspective of the BIX based on the evidence he studies. Here's another, based on the BIX behavior surrounding the 120-minute 100/130-pma's: Link

 
 
  Jeff Bailey   4/2/2004,  10:04:17 AM
Russell 2000 Index ($RUT.X) 603.42 +1.36% Link ... a bit tentative at the highs right now. Session high as been 604.22.

 
 
  Jeff Bailey   4/2/2004,  10:03:20 AM
Dow Jones Home Construction (DJUSHB) 654.19 -2.81% .... is sector loser in rather broad sector gains.

10-year YIELD ($TNX.X) up 21.4 basis points to 4.112%. 30-year YIELD ($TYX.X) higher by 15.4 basis points to 4.972%.

Flattening YIELD curve ... big time today.

 
 
  Jeff Bailey   4/2/2004,  10:01:07 AM
S&P Banks Index (BIX.X) 346.95 -0.62% .... session low was 346.15, where early support found at WEEKLY R1 of 346.20.

Trader note: If break to new session low, might see some "weakness" in OEX/SPX.

 
 
  Linda Piazza   4/2/2004,  10:00:18 AM
Jeff has mentioned the weakness in the BIX. How long can the OEX continue to climb without the help of the financials that are components of both?

 
 
  Jeff Bailey   4/2/2004,  9:58:16 AM
Stillwater Mining (SWC) $16.50 +2.80% .... industrial metals seeing much stronger response that precious metals.

 
 
  Jeff Bailey   4/2/2004,  9:56:55 AM
S&P Banks (BIX.X) 346.19 -0.84% ...

OEX.X 557.78 +0.74% ... session high 560.36

SPX.X 1,140.70 +0.75% ... session high 1,144.81.

 
 
  Linda Piazza   4/2/2004,  9:56:31 AM
Five- and fifteen-minute OEX oscillators are either just now beginning to turn down or haven't yet turned down, while this steep decline is taking place. The TRIN is moving steadily higher, although still within bullish range, and the OEX is moving toward a more-than-50% retracement of the climb, on a move below 557, if that should happen. There's danger here, as this move down is not of the back-and-forth type that usually characterizes a flag or other type of measured accumulation pattern. Still, the OEX does appear to be finding momentary support near the 557.60 level. I thought there was a chance today that the OEX could move up toward the 561 level, but didn't expect it in the first few minutes of trading. Now I'm wary of a possible pop-and-drop day or even a key reversal day, although no evidence exists as yet to say that's going to happen.

 
 
  Jonathan Levinson   4/2/2004,  9:53:58 AM
A measly 3.25B just announced against 11.25B for an 8B net drain.

 
 
  Jeff Bailey   4/2/2004,  9:53:58 AM
Nextel Communications (NXTL) $23.49 -3.26% Link .... defensive, not participating. Sharp drop in last 5-minutes from $24.20.

 
 
  Jeff Bailey   4/2/2004,  9:51:55 AM
QQQ $36.78 +1.71% .... coming back into morning gap and sesson low here. Opening 5-minute bar was $36.96-36.85.

5-MRT would show RED #5 at $36.50 correlative with WEEKLY R2.

 
 
  Jeff Bailey   4/2/2004,  9:49:11 AM
Microsoft (MSFT) $25.60 +2.11% ... NDX/QQQ heavyweight strong break above its 21-day SMA, which had been serving resistance last 5 sessions.

 
 
  Linda Piazza   4/2/2004,  9:48:31 AM
Bullish OEX players: Even if the OEX is going to climb all day, we could see a retracement now of some sort, perhaps in the form of a bullish bull flag. A 38.2% pullback of this zoom up will take the OEX down to 557.80 to so, just above the 557.60 level that I'd identified as first possible resistance earlier. It didn't prove to be strong resistance, but the first Keltner line has now zoomed up to that level, perhaps suggesting that it could provide at least momentary support. A 50% retracement of the zoom is just below 557, and many flags do retrace that far. Another Keltner line has risen to this level. Be very careful, though, as this is either going to be a buying-crescendo day, in which case we probably won't see even a minimal 38.2% retracement, or there's a chance that we're headed for a pop-and-drop. I've never seen the Keltner bands so distended to the upside, suggesting a possibility that the OEX is going to get slung down pretty quickly, too, but also suggesting a buying-crescendo taking place.

 
 
  Jeff Bailey   4/2/2004,  9:47:48 AM
Newmont Mining (NEM) $45.71 -2.22% ... session low/high has been $45.15-$46.01.

 
 
  Jeff Bailey   4/2/2004,  9:45:07 AM
S&P Banks (BIX.X) components at this Link

Thinking gains in Bank of NY (BK) tied to some of its business derived from various financial products and services.

 
 
  Jeff Bailey   4/2/2004,  9:42:03 AM
S&P Banks Index (BIX.X) alert 349.01 -0.03% .... this may be notable sign of some thought from equity market of Fed tightening. Will check to see if any particular stock is weak.

 
 
  Jonathan Levinson   4/2/2004,  9:41:53 AM
There are 11.25B in repos expiring today. We await the 10AM announcement to see whether the Fed is going to add or drain liquidity via its open market desk.

 
 
  Jeff Bailey   4/2/2004,  9:40:23 AM
Russell-2000 Index ($RUT.X) 604.19 +1.48% .... 52-week high. Just above its 03/05/04 prior high of 603.16.

 
 
  Linda Piazza   4/2/2004,  9:39:26 AM
In all my months of watching the Keltner channels, I have never seen them so distended to the upside. Be so, so careful, those of you in bullish OEX plays. Today has the capacity to be a key reversal day, with this big gain encompassing the usual total day's gain in the first few minutes. Be so, so careful, those of you thinking of shorting into this.

 
 
  Jeff Bailey   4/2/2004,  9:38:56 AM
Dow Transports (TRAN) 2,966.03 +1.62% ... breaks above 02/12/04 relative high of 2,960.52.

 
 
  Linda Piazza   4/2/2004,  9:37:30 AM
The OEX is now hitting the bottom of the consolidation band from late January to early February and is nearest the first strong resistance. The TRIN is hitting an obscenely low number. I don't know how Jonathan and Jane feel about this, but I'm wondering if it doesn't signal either a buying crescendo at hand or a likely contrarian signal? Like Keene, though, I'd be careful shorting into this even if I thought it a contrarian signal.

 
 
  Jeff Bailey   4/2/2004,  9:35:33 AM
S&P 100 Index (OEX.X) 559.57 +1.07% .... above its 50-day SMA of 558.89. MONTHLY 38.2% pivot retracement higher at 561.20. Might look for early resistance there, but early bull target.

 
 
  Jeff Bailey   4/2/2004,  9:33:49 AM
Newmont Mining (NEM) ... not open yet, but looks to be indicated lower at $46.00.

Gold stocks may take a hit today.

 
 
  Jeff Bailey   4/2/2004,  9:32:56 AM
Monster Worldwide (MNST) $28.74 +9.43% ... surges out of the gate.

 
 
  Jonathan Levinson   4/2/2004,  9:32:27 AM
Can't believe my daughter's mortgage broker told her two weeks ago not to lock in rates, that they were going to go lower. If my daughter hadn't casually mentioned it to me earlier this week, and if I hadn't taken a look at charts and studied your Wrap to make sure that your outlook was the same as mine, they still wouldn't have locked in! They might have been priced out of that house by today. They got a great deal on it, but the mortgage was already a few hundred more per month by early this week than it had been last week.

 
 
  Linda Piazza   4/2/2004,  9:32:09 AM
The OEX is above yesterday's high, moving toward 557.50-557.60, a Fib level that might provide some resistance, might being the operative word.

 
 
  Jeff Bailey   4/2/2004,  9:26:51 AM
Keep eye on drug stocks today for gains ... this might seem a little obscure, but March's nonfarm gains may give confidence to a Bush victory later this year, which might have bulls flipping the buy switch in the sector.

 
 
  Jeff Bailey   4/2/2004,  9:21:37 AM
QQQ $36.16 .... is trading $36.91 in pre-market. This is just about smack in the middle of WEEKLY R1 (36.51), which would most likely be an intra-day support level, and MONTHLY R1 of $37.34, which is in play as a bullish target early next week.

 
 
  Linda Piazza   4/2/2004,  9:20:27 AM
The jobs market will likely gap the OEX up this morning, answering the question of whether the OEX will turn down to form a right shoulder of a potential inverse H&S or just zoom up instead without pausing to form that right shoulder. The behavior of some of the other indices earlier in the week hinted that the OEX could do that, but it lagged those other indices in moving over the neckline area. A bullish trader would have had to have been nimble-fingered to have benefited from the brief climb above the neckline area yesterday or prescient to have held on to a bullish play overnight. As I mentioned at the close of trading yesterday, it was possible that the OEX and other indices could gap up this morning, but it was just as possible that they could gap down, too, depending on what that jobs number showed. People more in tune with companies' hiring practices than I am questioned the estimates and especially the whisper numbers. We heard some questioning the number on CNBC yesterday. Little did they know, right?

I'm not good at estimating where the OEX will open based on S&P 500 futures action pre-market, but it's pretty safe to say that the OEX will probably gap higher unless something else intervenes. There's news this morning that an unexploded bomb has been found on train rails in Spain, but I think the fact that's happening in Spain and that the bomb was found and disarmed is going to lessen any deleterious impact that might have. I'm not going to hazard a guess as to where the OEX will open, as I'm sure to be wrong. However, we have to question now whether the OEX is likely to see a pop-and-drop day. I think we have to watch market behavior, TRIN levels, advdec behavior, and other such measures to gauge what's going to happen and whether big-money people will use any such gap higher to sell into the rally. At this moment, I'm inclined to think there might be a rush for the exits by shorts, too, so depending on which group's wishes proves strongest, it's possible that the OEX could push past yesterday's high to test the 557.58 level, the 61.8% retracement of the most recent fall [on the daily chart]; the 561.50-563 level that is next historical resistance above that; or the 569 level that marks the current location of the former supporting trendline that supported the OEX from early January to early March. A rollover, particularly if it took the OEX back below 551.54, the location of the 120-minute 100-pma, might mean that the OEX is indeed forming a right shoulder of an inverse H&S, with an ascending neckline instead of a horizontal one. In that case, we'd look for a decline toward the 541-542 area.

 
 
  Jeff Bailey   4/2/2004,  9:17:55 AM
09:00 Update at this Link

 
 
  Jonathan Levinson   4/2/2004,  8:46:35 AM
I'm glad my mortgage is fixed!!! Hate to have an ARM right now.

Oh yes. And remember Al Green telling us how much US borrowers would have saved had they used ARMs instead of fixed rate mortgages for the past decade or so? Well timed, that one.

The lesson that comes from this stuff is that you must read the papers and consume public messages critically. It's just my opinion, but Al Green, CNBC, etc. are not your friends. The herd is seen as a thing to be manipulated, everyone with their own agenda. For my part, I'm trying to learn and report, and have my limitations, but at least we're honest here. What was Al Green thinking when he hyped ARMs less than a month ago?

 
 
  Jonathan Levinson   4/2/2004,  8:42:08 AM
Bulls in the chatrooms are gleeful like it was Feb. 2000, and the spike is a beautiful thing. But rising rates are going to be almost as big a problem for equities as rising oil prices, unless something changes dramatically. As I type, the TNX is pulling back, now up 18.3 bps at 4.081%.

 
 
  Jonathan Levinson   4/2/2004,  8:32:57 AM
U.S. March payrolls grow 308,000

 
 
  Jonathan Levinson   4/2/2004,  8:31:56 AM
8:30am U.S. MARCH PAYROLL GROWTH LARGEST IN 4 YEARS

 
 
  Jonathan Levinson   4/2/2004,  8:30:53 AM
8:30am U.S. MARCH UNEMPLOYMENT RATE RISES A TENTH TO 5.7%

 
 
  Jonathan Levinson   4/2/2004,  8:30:40 AM
8:30am U.S. JAN., FEB. PAYROLLS REVISED HIGHER BY 86,000 TOTAL

 
 
  Jonathan Levinson   4/2/2004,  8:10:46 AM
We await nonfarm payrolls, est. 123K, the unemployment rate, est. 5.6%, hourly earnings, est. .2% and average workweek, est. 33.9. Imagine a 33.9 hour workweek! All are scheduled for 8:30AM.

 
 
  Linda Piazza   4/2/2004,  7:02:49 AM
Good morning. The Nikkei gapped up by more than 40 points and climbed above 11,800 in early trading. After retreating and forming a higher low, it climbed again, closing higher by 132.53 points or 1.13%, at 11,815.95. The Nikkei tried to climb above 11,850, a level that's served as resistance in the past, but couldn't quite manage it. Still, Friday's close was the Nikkei's highest close in 22 months. Weekly data showed a seventh straight week when overseas investors were net buyers of Japanese issues for the week ending March 26, and monthly data showed that the country's monetary base grew 11.9% in March from the year-ago levels.

Auto makers headed up early Friday and closed higher, too. Mitsubishi soared 11.2% after further newspaper speculation about steps the Development Bank of Japan could take to help the troubled auto maker, including taking a stake in the company. In addition, the company announced that an executive vice president in charge of international sales and marketing would be leaving. An Autodata Corporation report showed that Nissan and Toyota had led sales gains in the U.S., sending those two stocks higher, but there also appeared to be some rotation back into previous favorites as a factor in the gains seen among auto makers. Auto stocks had been down recently. Computer-related stocks had declined recently, too, and they gained Friday. Advantest helped boost optimism in the tech sector, gaining after a newspaper report that it would double operating profit in fiscal 2004 over the year-ago period. Even Nintendo gained strongly after cutting its earnings estimate. Banking issues turned in a mixed performance.

Most other Asian bourses closed higher, and all of the ones we typically watch did. The Taiwan Weighted gained 0.34% and South Korea's Kospi gained 0.11%. Singapore's Straits Times climbed 0.52% and Hong Kong's Hang Seng gained 0.44%. China's Shanghai Composite gained 0.60%.

All European bourses that are open trade higher. This morning, U.K. mortgage lenders and builders gave upbeat analyses of the hot British housing market, not indicating any signs that it could be cooling off. In other U.K. news, Reuters gained in early trading after revealing a loss in market share, with one commentator noting that the loss in market share was anticipated.

In Europe, Aventis will hold a board meeting today and is expected to invite a bid by Novartis. It's unclear how Novartis might react to this invitation as company spokespersons have said previously that the company wants the French government to adopt a neutral stance toward any offer rather than the present hostile stance before it tenders an offer. Also, Aventis announced FDA approval for Ketek, an antibiotic. Aventis and Novartis both traded slightly higher in early trading. In sector news, auto makers were mixed. Although Japanese auto makers had gained and French automaker Renault climbed, perhaps partly due to its connection to Nissan, German automakers traded near the flat-line level in early trading.

As of this writing, the FTSE 100 trades higher by 9.60 points or 0.22%, at 4420.30. The CAC 40 trades higher by 21.08 points or 0.57%, at 3691.06. The DAX has gained 21.08 points or 0.57%, to trade at 3934.04.

 
 
  Jeff Bailey   4/1/2004,  9:59:23 PM
Pivot Matrix for Friday at this Link

 
 
  OI Technical Staff   4/1/2004,  8:10:50 PM
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