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  Jeff Bailey   4/12/200,  6:18:00 PM
Mace Security (MACE) $8.00 +162% ... remains rather active in after-hours. Currently ticking by at $10.60.

  Jeff Bailey   4/12/200,  6:15:30 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   4/12/200,  6:08:09 PM
Novellus Systems (NVLS) $34.65 +0.81% .... $35.13 in after-hours on earnings and guidance (see Jim's 17:48:28).

AMAT $22.84 +1.42% quiet at $22.85, while KLAC $53.30 +1.46% flat at $53.30 in extended hours.

  Jim Brown   4/12/200,  5:48:28 PM
NVLS raising guidance to +12% growth for next quarter. Earnings 18-20 cents. Current extimates are 18 cents.

  Jeff Bailey   4/12/200,  5:40:36 PM
MACE $10.04 ... after Cramer mentioned stock in same breath as TASR.

  Jeff Bailey   4/12/200,  5:22:08 PM
Closing Internals at this Link

  Jeff Bailey   4/12/200,  4:59:10 PM
Mace Security (MACE) here's a "stacked" retracement for additional higher levels. Link

I've turned on "extended hours" so you can see what has taken place. MACE at $9.35 as I type, where extended hours high has been $9.68.

  Jeff Bailey   4/12/200,  4:23:29 PM
Mace Security (MACE) closed at $8.00. Some after-hours action at $8.30-$8.35.

  Jim Brown   4/12/200,  4:05:44 PM
Earnings after the close:

MDC est = +1.52, actual =
IFIN est = +0.45, actual = +0.52 rev beat
NVLS est = +0.10, actual = +0.12, rev beat
TSCO est = +0.05, actual = +0.09

NVTL raising guidance

Earnings before the bell on Thursday

DJ est = +0.20
JNJ est = +0.80
MER est = +1.06
PBG est = +0.17
STT est = +0.66
INFY est = +0.56

  Linda Piazza   4/12/200,  3:58:21 PM
As the day ends today, it looks as if the OEX will end up with a white candle today, but a white candle formed within a consolidation formation that may or may not be a bull flag. Unless the OEX zooms up in the last few minutes of trading, there will not have yet been an upside break out of that formation. There's been no downside break, either, although the OEX earlier appeared to begin the rounding-down process from below resistance, confirming that resistance's importance. I thought earlier today that it was too early and far too easy for the OEX to just round down right where we thought it should, and that gut feeling appears to have been confirmed by the rest of the day's action.

  Jeff Bailey   4/12/200,  3:56:40 PM
Forest Labs (FRX) $75.31 +1.42% ... strong move into the close. Break above $75.25 has 52-week highs in play.

"Fitted retracement" from 0% $41.95 and 38.2% "fit" at $62.53. Resultant 50% ($68.90), 61.8% ($75.25), 80.9% ($85.55) and 100% ($95.84).

I had a retracement al_rt set at $75.25.

  Linda Piazza   4/12/200,  3:52:12 PM
The OEX is hitting Keltner resistance again, although the strongest resistance lies overhead at 560.95.

  Linda Piazza   4/12/200,  3:50:35 PM
The OEX is going to test that 559.50-562 zone again, it appears.

  Linda Piazza   4/12/200,  3:48:10 PM
Although our greatest concern must go to the safety of any hostages in Iraq, here on these pages we must also consider the impact that the taking of hostages might have on markets. Since our markets are sometimes impacted by those in other countries, particularly in Japan, it might be important to note that there's as yet no news about the condition of the three Japanese citizens taken hostage last week. The taking of those hostages led to the tanking of the Nikkei in Friday's trading (the Nikkei was open on Friday), while rumors last night that the hostages would be released led at least in part to the recouping of some of those losses in last night's trade. The impact on Prime Minister Koizumi's government and the likely impact on Japan's relationship with the U.S. all must be factored into the Nikkei's performance. The Nikkei closed Monday above 12,000, with MACD looking as if it's on the verge of a bearish cross from above signal as the Nikkei pulls back into what could be a bull flag--mixed signals there. Although some analysts speculated last night that news about the hostage situation wouldn't be likely to impact the Nikkei at this point, I'm not so sure about that myself.

  Jane Fox   4/12/200,  3:39:39 PM
Dateline Bloomberg New York gasoline futures rose to an all-time high after the International Energy Agency increased its forecast for global petroleum demand for the sixth consecutive month.

  Linda Piazza   4/12/200,  3:32:24 PM
Mid-channel Keltner support has held on the OEX, but so far, it hasn't gone much of anywhere yet, either. It hasn't broken out of the tight range in which it's traded most of the day.

  Jeff Bailey   4/12/200,  3:18:16 PM
MACE $7.55 +147% ... after seeing a 5-minute bar high close of $8.31, little pullback and kiss of $7.01 finds support. Our fitted retracement seems to be in play by market makers. Doesn't it?

Think it might close out at $9.60?

  Jeff Bailey   4/12/200,  3:14:35 PM
Citigroup (C) $51.99 +0.89% ... after small gap higher from Thursday's close of $51.53, has been sideways from $51.77-$52.09 all session.

  Jeff Bailey   4/12/200,  3:12:45 PM
03:00 Internals at this Link

  Linda Piazza   4/12/200,  3:12:07 PM
Careful, OEX bears and bulls alike. The OEX now tests mid-channel support again. This should be a bounce point. If it's not or if the 558.14 Keltner support doesn't hold the OEX, it could be setting up for a retest of lower-channel support, now at 556.11.

  Jane Fox   4/12/200,  3:11:11 PM
Dateline CNN - Two U.S. troops, 7 U.S. civilian contract workers missing in Iraq, according to U.S. military official.

  Linda Piazza   4/12/200,  3:06:22 PM
The OEX has broken below the ascending trendline off this morning's 9:50 five-minute candle and now heads down to test mid-channel Keltner support on the five-minute nested Keltner channels, with that support now having risen to 558.50.

  Jane Fox   4/12/200,  3:04:30 PM
Novastar Financial -$16.00 (-29.51%) - this could be the end of the run in REITs.

  Jim Brown   4/12/200,  3:00:24 PM
The Kansas City Fed Manufacturing Survey rose to 31 this morning from 27 in Feb and 24 in Jan. It is back at the 4Q levels but still under the six year high of 35 posted in December. Shipments and export orders rose. Unfortunately so did prices for raw materials, which jumped to 64 from 50. Prices received rose to 19 from 11.

  Jeff Bailey   4/12/200,  2:53:03 PM
QQQ $37.11 +0.46% .... hasn't done all that much today.

  Linda Piazza   4/12/200,  2:51:51 PM
The OEX currently tests the ascending trendline it began forming off the 9:50 five-minute candle this morning. A drop beneath 558.60 or so would represent a drop below that supporting trendline. Since 558.48 is mid-channel Keltner support, I wouldn't assume that the OEX is breaking down below today's intraday support until it moved below that level.

  Jeff Bailey   4/12/200,  2:48:59 PM
Bullish Swing trade cancel target alert .... Since traders may have taken 1/2 position gains in Mace Security (MACE) $8.30 +170% earlier at $7.25, let's cancel the swing trade target of $9.00 right now. Let's see what tomorrow morning holds. Might get a gap higher. If gap open above $9.60, I would simply "stack" the current retracement, and could then raise a bullish stop in other half to break-even on the remaining 1/2 bullish.

The RISK is a gap lower of course.

  Jeff Bailey   4/12/200,  2:45:34 PM
MACE $8.30 +170% .... here's new intra-day chart I was working on. MACE session high now has been $8.80!!!! Link

  Jeff Bailey   4/12/200,  2:37:25 PM
MACE $7.80 +153% ... session highs on volume of 543 this 5-minutes.

  Linda Piazza   4/12/200,  2:35:48 PM
The OEX settles into an equilibrium position on the five-minute Keltner charts, in preparation for a breakout. Often it can maintain that equilibrium position through an hour or two, occasionally even for a day or two although that's rare, but it can't hold that equilibrium forever. Such a settling usually portends a breakout. Unfortunately, it doesn't forecast the direction of the breakout.

  Jeff Bailey   4/12/200,  2:33:01 PM
Digital Video Systems (DVID) $2.41 +28.8% ... what's in a name?

  James Brown   4/12/200,  2:28:17 PM
Sector Update...

(biggest) Winners:
OSX oil services: +2.63%
OIX oil index: +1.71%
DFI defense: +0.88%
CYC cyclicals: +0.76%
HMO healthcare: +0.75%
BTK biotech index: +0.99%

DJUSHB homebuilders: -1.56%
UTY utilities: -1.47%
XAL airlines: -0.58%
INX Internet: -0.55%

  Jeff Bailey   4/12/200,  2:23:51 PM
IPIX Corp. (IPIX) $24.31 +56% .... here's updated chart (10-minute intervals), which I'm just noticing now. Link

This is what IPIX looked like on 04/08/04 using same retracement as shown in MM at 11:55 AM EST. Link

Using same "fitted" 38.2% on MACE right now.

  Jim Brown   4/12/200,  2:17:17 PM
The Kansas City Fed Manufacturing Survey rose to 31 this morning from 27 in Feb and 24 in Jan. It is back at the 4Q levels but still under the six year high of 35 posted in December. Shipments and export orders rose. Unfortunately so did prices for raw materials, which jumped to 64 from 50. Prices received rose to 19 from 11.

  Ray Cummins   4/12/200,  2:15:03 PM
Spreads/Combos/Premium Selling -- E-mail Replies: Position Management

Regarding Overstock.com (NASDAQ:OSTK)...Thanks! Got a great lead on that OSTK trade several weeks back. Bought June 40C and sold 25P for net credit 0.20. Closed out today for +2.30 total profit. Question is how to deal with huge gap on play like this. Specifically with today's move, on no news, do you like to close out and take the profit, like I did. Follow with a trailing stop-which has big potential to gap back down to close down and lose it all. Sell most and keep cost free call riding? I know the options, just hypothetically thinking what you would have done. I'm already closed out, so trying to learn from the situation. Thanks again for the profit. MA

Hello MA, I am a big proponent of taking gains early and often in directional plays...especially when they are handed to me in the form of an unexpected "gap-up" rally. Since your option was out-of-the-money, with no intrinsic value, that approach would be even more appropriate. I think you did a great job with the OSTK position and if you manage future plays in that manner, you will likely enjoy much success!

  Linda Piazza   4/12/200,  2:14:57 PM
The BIX's daily chart depicts the BIX having settled into a symmetrical triangle, with the BIX currently sitting just beneath the 100-dma. As almost always happens with a symmetrical triangle, the oscillators have flattened, not giving clear clues as to the next direction.

  Linda Piazza   4/12/200,  2:08:53 PM
The TRAN has been finding support today at its 100-dma at 2925.07, but it hasn't been able to make much progress in an attempt to move higher and is off its high of the day.

  Linda Piazza   4/12/200,  2:05:22 PM
I'm still wondering if the OEX will rattle around between 552 and 559.50-562, establishing a consolidation zone. We could find out soon. On the 30-minute chart, the pullback looks as if it could be a bull flag pullback, but it's beginning to get a little long in the tooth. It needs to break to the upside soon if that's what it is, or else the OEX might keel over of its own weight and complete the rollover. The 30-, 60-, and 120-minute 100/130-pma's cross from 554.12 to 556.37, perhaps ready to provide support if the OEX should decline.

  James Brown   4/12/200,  1:59:02 PM
Wal-Mart (WMT) dipped strongly on Thursday but held support at its 200-dma. The stock bounced from support this morning but it appears to be rolling over again even though the company reiterated that sales were on track for their 4-6% growth forecasts.

  James Brown   4/12/200,  1:52:22 PM
Gannett (GCI) and the NY Times (NYT) both announced strong March ad sales. GCI saw a 10% jump and the NYT had a 8.6% jump.

  James Brown   4/12/200,  1:49:42 PM
CACI Intl (CAI) is up 1.14% and breaking out over resistance at its 100-dma after announcing a $45 million contract to provide tech support to Social Security Administration.

  James Brown   4/12/200,  1:32:02 PM
J.P.Morgan issued coverage on a number of oil stocks and most of them were initiated with a "neutral" or an "under weight" rating but that hasn't stopped the OIX and OSX indices from being today's biggest winners.

  Linda Piazza   4/12/200,  1:31:39 PM
The OEX confirmed a lower low on the five-minute chart, but has now hit mid-channel Keltner support, a level from which it should attempt a bounce. Those who may have entered bearish plays on a possible rollover beneath resistance this morning should now be careful as this possible bounce point is hit. A failure here should mean that the OEX will head toward lower-channel support, but I would expect some attempt at a bounce.

  James Brown   4/12/200,  1:28:28 PM
PDI Inc (PDII) is down more than 10% to $24.68 (just above its 200-dma) after Jeffries downgraded the stock from "buy" to "hold" on valuation concerns.

  Jeff Bailey   4/12/200,  1:22:50 PM
News on MACE at this Link

  Jeff Bailey   4/12/200,  1:19:39 PM
MACE $7.30 +140% ... threatens a 5-minute close above $7.03.

  Jeff Bailey   4/12/200,  1:16:13 PM
MACE $7.05 ... (see 12:51:12) intra-day chart.

  Jeff Bailey   4/12/200,  1:13:14 PM
01:00 Internals at this Link

  Ray Cummins   4/12/200,  1:12:52 PM
Spreads/Combos/Premium Selling -- More E-mail Replies: Track Record?

(condensed) Attn: Spreads Editor...and although I just started reading your section, the success rate seems impressive. Since the market has been going up for some time, the put-credit plays would do well, but what about your other picks? Do you have some type of historical profit/loss ratio or track record that combines the past gains and losses into one report. Then I can see how well this stuff works in the long run. KM

Hello KM, A summary of previous spreads offered in the Combos/Straddles section is included in each edition of the OIN. However, there is no "track record" associated with the candidates because without physically trading the positions, there is no way to know whether they would (could?) have been initiated at the suggested prices and when they might have been closed early (to lock-in profits or limit potential losses). In addition, a wide variety of plays -- both bullish and bearish -- are provided in the newsletter, regardless of the primary market trend. This process allows each individual trader to participate in only those candidates which meet their personal criteria for favorable positions, based on the current (technical) trend, overall risk/reward outlook, etc.

In short, the "New Plays" sections of the newsletter are designed to produce the best possible candidates in a variety of strategies, so that you can focus on in-depth research and profitable trading, rather than searching through thousands of optionable stocks for a few viable issues. If that is the type of service you are interested in, the OIN offers one of the best values among online information providers for option traders.

  James Brown   4/12/200,  1:11:21 PM
Jim reports that he's having Internet connection problems...(-James)

  Linda Piazza   4/12/200,  12:57:16 PM
If the OEX doesn't fall low enough to form a lower low on the five-minute chart, it may instead be setting up to form a symmetrical triangle, with a breakout perhaps occurring this afternoon some time. It looks as if it would narrow to its apex fairly quickly.

  Jeff Bailey   4/12/200,  12:54:59 PM
Intra-day Pennant on Rediff.com (REDF) $14.96 +6% ...

  Ray Cummins   4/12/200,  12:54:34 PM
Spreads/Combos/Premium Selling -- E-mail Replies: Position Selection - Part II

After the spread is in place, the goal is for the stock to finish the expiration period above the sold strike price. You can also make money if the stock trades much higher than the sold strike because both options will be deep-in-the-money (lots of intrinsic value) and you can close the position early. Remember, the main purpose to this type of play is to lower your risk exposure, so don't hesitate to exit the spread with a smaller (favorable) profit prior to the option expiration date.

Obviously, there is a downside. In option trading, there is always the risk of losing everything you invest. That's why it is so important to develop a strict stop-loss strategy for each position in your portfolio. I can't tell you what method to use, but it should be based on your trading style (conservative, aggressive, etc), risk/reward outlook and experience level. You may decide to use a percentage of the debit or a specific dollar amount. In any case, don't try to convince yourself that the position will "come back" if it moves beyond the desired stop loss. Remember, we use trading stops because they take the "human element" out of the equation -- don't take the stop out of the equation as well. Hope that helps!

  Jeff Bailey   4/12/200,  12:51:12 PM
Mace Security (MACE) $6.62 +117% .... quick intra-day chart of MACE, but using the 38.2% fitted retracement at this point. Link

  Ray Cummins   4/12/200,  12:48:36 PM
Spreads/Combos/Premium Selling -- E-mail Replies: Position Selection

(condensed/edited) Subject: Placing a Bull Call Spread

Your newsletters are wonderful! Thanks. I have been trying to figure out what is the best strategy to use for JBLU (JetBlue Airways). I thought the [bull-call debit spread] combination would be good. What are your thoughts [on this technique]? TB

Thanks for your question about spreads and a bull-call position in JetBlue (NASDAQ:JBLU). For many traders, the idea of using spread strategies is too complex or too boring and some people say that holding a position more than a few days is way too long. I admit, spreads are usually slow to profit, however I have learned that "slow and steady" often wins the race.

Specifically, the bull-call (debit) spread is achieved by purchasing a lower strike-price call and selling a higher strike-price call with the same expiration date. As the name suggests, you should pick a stock/index which you are "bullish" on and then initiate the spread with a net-debit order to guarantee an acceptable price for the position. Of course, it doesn't hurt to bid a little lower than the market price, in order to decrease the debit, and many market-makers will fill the order for $0.10-$0.20 less on $5 spreads.

  Linda Piazza   4/12/200,  12:41:00 PM
The last 60-minute OEX candle produced another doji rather than the required tall red candle needed to produce an evening-star reversal formation at resistance. While a doji is also indicative of indecision and can serve as a reversal signal itself, the OEX nevertheless failed in one opportunity to confirm that reversal signal by producing a tall red candle moving down from resistance. Bulls aren't giving up yet. I thought an hour ago that it appeared too easy and too soon for the OEX to just roll down from resistance the moment it was touched. If that rollover was going to happen, I would have said early this morning that I wouldn't have expected it to happen until later today or even tomorrow, giving some intraday oscillators time to cycle up a while.

  James Brown   4/12/200,  12:39:59 PM
OI put play CFC is down another 1.82% and trading near what could be round-number support at $85.00. Although given the trend on the intraday chart I don't expect it to hold. I am watching the 100-dma at $83.50 as a potential support level and a possible exit point for short-term traders. Officially we're targeting the $81.50-82.50 region to exit this put play. However, don't forget that CFC is due to split 3-for-2 tomorrow, which will adjust these levels.

  Jeff Bailey   4/12/200,  12:36:59 PM
International Electronics (IEIB) $10.45 +100% ... in last 20-minutes, jumped from an intra-day pennant and apex of $7.50 on some volume.

#3 percentage gainer behind MSGI and MACE.

  James Brown   4/12/200,  12:35:34 PM
OI call play PDCO is making progress on its very short-term trend of higher lows. The bullish sentiment is lifting the stock through (or at least to) resistance at $76.00 (today's high is 76.15)

  Jeff Bailey   4/12/200,  12:33:35 PM
Swing trade sell partial alert .... Mace Security (MACE) $7.25 +137% ... sell 1/2 of position here, keep stop on remainder as outlined.

  James Brown   4/12/200,  12:32:49 PM
OI call play ESRX is also bouncing strongly today after retesting old resistance at $76 as support. Shares are up 1.81% to $77.88 and still looks like a bullish entry point.

  Ray Cummins   4/12/200,  12:31:18 PM
Spreads/Combos/Premium Selling -- On The "Watch" List

A number of portfolio stocks are making moves today and should be monitored for potential "early-exit" trades. Some of the most obvious candidates include: PDI Inc. (NASDAQ:PDII) -$2.83 at $24.72; New Century Financial (NASDAQ:NCEN) -$2.30 at $46.55; KB Home (NYSE:KBH) -$1.20 at $73.40; and in the bearish section, Applied Films (NASDAQ:AFCO) up $0.70 at $29.61; and Sandisk (NASDAQ:SNDK), which is trading right at our sold (call) strike of $32.50.

  James Brown   4/12/200,  12:31:01 PM
OI call play CAT is up another 1.89% to $83.53 and we're within $1.50 of our profit target at $85.00. Traders can be inching up their stops.

  James Brown   4/12/200,  12:29:40 PM
Intel (INTC) isn't doing much ahead of its earnings announcement tomorrow night. The stock is actually trading unchanged at $27.37 but technical oscillators look bearish. Earnings estimates are for net profits to be 27 cents a share.

  Jeff Bailey   4/12/200,  12:29:13 PM
Blinded by the light! .... Mace Security (MACE) $7.21 +137% ...

  Jeff Bailey   4/12/200,  12:26:29 PM
Until you can't stand it! ... I am still in TBUS as sell order did not fill. How do I determine a sell tasrget now? Tks for your great commentaries. JM

I think I showed a "fitted" retracement on TBUS from $2.93 to $19.00, where 38.2% at $9.06, 50% at $10.96, 61.8% at $12.86, 80.9% at $15.93 and 100% $19.00.

About all a trader/investor can really do is raise a stop to try and protect gains. Another strategy is to sell part of the position, book a gain, reduce some bullish risk, then keep a stop on the rest at a lower level. Obviously these "protection/safety" stocks, especially the smaller caps are under some speculative buying and momentum. Nearly impossible to tell when they play out.

  Linda Piazza   4/12/200,  12:25:53 PM
The OEX did bounce from above 557.50-558, but that bounce has not carried far. A fall below 558.63 will confirm a lower high on the OEX five-minute chart, however.

  James Brown   4/12/200,  12:23:17 PM
One way to play the corn/soybean back up that Jim mentioned on the Futures Monitor is Bunge Ltd (BG), who is a major players in Brazil's largest grain port. BG is at new all-time highs and recently broke out above resistance at $40.00.

  James Brown   4/12/200,  12:17:26 PM
Sector Update...

(Biggest) Winners:
OSX oil services: +2.78%
OIX oil index: +1.74%
BTK biotech index: +1.11%
XBD broker-dealer: +1.01%
CYC cyclicals: +0.95%
DFI defense: +0.91%

DJUSHB home builders: -1.33%
UTY utilities: -1.66%
XAU gold & silver: -0.58%
Copper futures -2.22%

  Ray Cummins   4/12/200,  12:16:36 PM
Spreads/Combos/Premium Selling -- Market Movers: SS&C Technologies (NASDAQ:SSNC)

One of the new (bullish) candidates in our premium selling group is "on the move" today. Shares of SSNC are up $1.26 at $29.13 as investors speculate on the company's upcoming earnings report, due on Monday, April 19. SS&C Technologies provides investment and financial management software and application outsourcing services so it's not necessarily in a "hot" sector, however the technical indications suggest further upside activity in the coming sessions. Option premiums are robust, due to the recent volatility in the issue, thus traders who favor put-selling can establish a relatively low ($22) cost basis in the stock with a favorable profit outlook.

  Jeff Bailey   4/12/200,  12:15:41 PM
NASDAQ's ETF Heatmap at this Link

  Jeff Bailey   4/12/200,  12:14:33 PM
Utility Sector Index (UTY.X) 314.21 -1.6% ... takes over sector loser and breaks below its 50-day SMA (317.61) for first time since move above on 11/26/03.

Utilities HOLDRs (AMEX:UTH) $80.55 -1.39%. Link

  Jeff Bailey   4/12/200,  12:04:15 PM
Swing trade long alert ... Mace Security Intl. (MACE) $5.71 here, 10% stop loss, target $9.00.

  Jeff Bailey   4/12/200,  12:02:00 PM
Mace Security Intl. (MACE) $5.45 +78% Link .... another IPIX Link , or TBUS Link ?

  Jeff Bailey   4/12/200,  11:57:49 AM
IPIX Corp. (IPIX) $25.04 +61.9% Link ... a percentage gainer again today, but notably the most actively traded stock at the NASDAQ at just over 38.2 million. Never heard of IPIX until last week!

  Ray Cummins   4/12/200,  11:57:29 AM
Spreads/Combos/Premium Selling -- Market Movers: Overstock.com (NASDAQ:OSTK)

Internet-related stocks have been among the best performers in recent weeks and today the king of "wholesale" online retailers is up another $3.61 at $36.39, despite a lack of public news. "Short-covering" is obviously one catalyst but it will be interesting to see if any other reasons -- for the buying binge -- emerge in the coming sessions. Conservative (bullish) traders might consider selling a May-$25 Put on any pullback and more aggressive players could establish a vertical spread with the sold option at $30.

  Linda Piazza   4/12/200,  11:55:50 AM
I'm still thinking OEX bounce attempt from 557.50-558, if not earlier.

  Linda Piazza   4/12/200,  11:46:37 AM
The OEX is turning down, beginning to form the needed red candle on the 60-minute chart, so perhaps this move that seemed to follow the script so closely isn't "too easy" after all. However, I would urge all who might have entered a bearish trade based on a perceived rollover beneath resistance to adhere to their stops. Watch for a possible bounce attempt as the OEX approaches 558, the current level of mid-channel support on the five-minute Keltner channels.

  Linda Piazza   4/12/200,  11:40:15 AM
The last 60-minute OEX candle was a doji, setting up the possibility for a potential reversal signal to be completed this hour's trading, with the needed candle being a red candle moving down from the current level. So far this morning, the OEX moved up to test resistance, as those intraday charts had suggested it would do this morning and that resistance has held, with a potential rollover in progress from the very levels at which charts indicated such a rollover might begin. I don't know, though. This just seems too easy, doesn't it? Something feels wrong, as if that resistance hasn't been tested long enough, but perhaps I'm just letting some bias get in my way. Plus, there's that potential bull flag on the daily chart, and today's trading has in no way negated the possibility that the noted formation could still be a bull flag.

  Linda Piazza   4/12/200,  11:35:38 AM
An OEX move below 558.95 would appear to confirm that H&S on its five-minute chart, but that formation has a downside target only 1 point below the breakout level, so it's not a tradable formation. However, a fall beneath the neckline level would set up that downside target that happens to be near mid-channel support on the Keltner channels, so we'd possibly get another test of that mid-channel support.

  Jane Fox   4/12/200,  11:25:42 AM
I'm not sure if there is an index for REITs but they seem to taking a shellacking today. The one I trade is Novastar (NFI) and it is down -13.41 24%.

  Linda Piazza   4/12/200,  11:21:58 AM
We now have a bearish MACD cross on the OEX five-minute chart as the OEX rolls down to test 559 again. As the OEX approaches that historical S/R, it also approaches Keltner support, so I wouldn't be surprised to see it bounce up slightly again. Be watchful, as there's now the possibility of a regular H&S on that five-minute chart. Just as the OEX has been breaking through the necklines of inverse H&S's before they can form a right shoulder, it may decide to break through the neckline of a regular H&S before forming that right shoulder, too, as technical analysts read the tea leaves and decide that a deeper retracement is in store. I would be watchful of that 557.80-557.90 level that we were watching earlier today as one level of possible support if any pullback should occur. A move over today's high will undo the bearish divergence and negate this potential H&S formation, too.

  Linda Piazza   4/12/200,  11:09:39 AM
Some bearish divergences are beginning to show up on the OEX five-minute chart. For example, the MACD makes a higher high than it did when price made its 4/08 high at 9:35 of 561.48, while price has so far made a lower high. While that divergence can be erased by an OEX move above 561.48, be cautious, if in a bullish play. I would not act on bearish divergence alone such as by entering a bearish play on that evidence alone, but I would use it to warn me of possible weakness.

  Jeff Bailey   4/12/200,  11:05:57 AM
11:00 Internals at this Link

  Linda Piazza   4/12/200,  10:56:16 AM
One of my last posts last Thursday warned of a possible inverse H&S on the OEX, but I mentioned that I didn't think the formation would have time to pull back into a right shoulder before the close. It didn't. This morning's first five-minute climb omitted the right-shoulder formation entirely, zooming up. This is at least the second potential inverse H&S on the OEX that has performed similarly over the last couple of weeks, one on the daily chart and now this one on the five-minute chart. Others spot these formations as easily as we do, and are buying ahead of the completion of the formation. The 559.30-559.50 upside target that would have been in effect if that formation had confirmed has been met.

  Linda Piazza   4/12/200,  10:49:41 AM
As the OEX challenges resistance, some intraday oscillators attempt to move into more bullish mode, but the moves at tentative. For example, the 60-minute MACD makes a tentative bullish cross at the signal line.

  Linda Piazza   4/12/200,  10:36:19 AM
Is the SOX settling into a symmetrical triangle on its 60-minute chart or was that a rare diamond-shaped formation in which the SOX's pattern first broadened and then narrowed? The two have different implications, with the diamond at the top of a climb having a bearish connotation. Whatever formation it is, the SOX's pattern is narrowing to an apex again, and we should soon see a breakout one direction or the other.

  Linda Piazza   4/12/200,  10:28:07 AM
Five- and fifteen-minute Keltner channels suggest a downturn from somewhere near 560.65-561.00, with a move much over that zone constituting a breakout in Keltner terms. That downturn may be only down to mid-channel support, currently at 557.60 on the five-minute chart.

  Linda Piazza   4/12/200,  10:19:24 AM
Is this an OEX breakout or rollover in the making? Link

  Linda Piazza   4/12/200,  10:09:55 AM
The OEX has now moved to the bottom of the next resistance zone and is testing it. So far, the advdec line still advances, although there's a possibility that the TRIN is steadying, too. Keep an eye on these for signs of a possible downturn, although I'm not expecting any such downturn to happen soon. Famous last words?

  Jeff Bailey   4/12/200,  10:06:53 AM
10:00 Internals at this Link

  Jeff Bailey   4/12/200,  10:02:49 AM
Swing trade bearish stop alert ... QQQ $37.12.

  Linda Piazza   4/12/200,  10:01:04 AM
So far, it's looking as if the OEX could push up to test the 559.50 level that marks historical resistance and the site of one version of a descending trendline off the 4/05 high. Keltner channels suggest that the OEX will push higher within that 559.50-561 range, closer to 561.

  Jonathan Levinson   4/12/200,  10:00:12 AM
A 7.2B repo has been announced to replace 4.5B in expiring repos for a net 3.7B addition.

  Jeff Bailey   4/12/200,  9:54:16 AM
QQQ $37.00 +0.16% .... just off morning high of $37.11, which came within a penny of my swing trade bearish stop of $37.12 from late Thursday.

SOX.X 508.91 -0.56% either side of its DAILY S1 (508.29) right now. AMD $17.12 +0.70%, TSM $10.55 +0.66%, INTC $27.51 +0.51% are gainers. LSI $9.62 -1.43%, BRCM $42.27 -1.26%, AMAT $22.29 -1.02% are percentage losers in SOX.X.

  Jeff Bailey   4/12/200,  9:50:47 AM
Dow Jones Home Construction (DJUSHB) 618.75 -2.22% ... falls below its rising 50-day SMA of 630 for first time since moving above on February 6.

  Linda Piazza   4/12/200,  9:48:25 AM
Although the OEX has moved above mid-channel Keltner resistance, it's perhaps getting trapped by another level of Keltner resistance, currently at 558.21, with the OEX unable so far to pull free of the tug of that resistance. Bulls would like to see central Keltner levels, currently at 557.37, hold as support now on this first pullback of the day.

  Jeff Bailey   4/12/200,  9:47:04 AM
Percentage gainers and losers at this Link

  Jeff Bailey   4/12/200,  9:43:18 AM
Semiconductor Index (SOX.X) 510.36 -0.27% ... slips red after morning high of 514.31.

  Jim Brown   4/12/200,  9:37:32 AM
ICTS Trading up +100% this morning.

  Linda Piazza   4/12/200,  9:36:44 AM
During the first five minutes of trading, the OEX spanned a range from 556.12 to 558.41, with the OEX climbing above mid-channel Keltner resistance.

  Linda Piazza   4/12/200,  9:35:22 AM
Watch OEX 559.50, the site of one version of the descending trendline off the 4/05 high.

  Jim Brown   4/12/200,  9:34:53 AM
Earnings after the close today include NVLS, RMBS, TSCO, MDC, IFIN. This will be the last day of light reporting with hundreds due to announce before Friday including IBM, INTC, MSFT. Over the weekend Barron's made negative comments on memory chip makers STX, MU and IFX.

  Jeff Bailey   4/12/200,  9:28:26 AM
Comcast (CMCSA) $29.24 Link .. higher at $29.55 after Bank of America Securities upgraded to "buy" from "neutral" as the firm becomes more convinced that the company will abandon its bid for Disney as the bid/ask spread is unlikely to close. BofA's price target is $41.

  Jeff Bailey   4/12/200,  9:20:48 AM
Advanced Micro Devices (AMD) $17.00 Link .... higher at $17.20 after JMP Securities raised their Q1 revenue/GAAP EPS estimates and their 2004 EPS estimates above consensus. JMP cited their belief that AMD is seeing higher gross margins on its processor business as well as margin improvements in its flash memory business. Reiterated its "outperform" rating and $20 price target.

  Jeff Bailey   4/12/200,  9:13:57 AM
09:00 Update at this Link

  Linda Piazza   4/12/200,  9:03:08 AM
From late January until early March, the OEX traded in a rectangular consolidation band that gradually narrowed into a symmetrical triangle. The OEX broke below that triangle, signaling that it was headed down to test the bottom support of the rectangular consolidation pattern. It broke through that bottom support, too, starting March's decline. That bottom support line lay at about 557.60. Last week, the OEX popped back above that line long enough to retest an extension of one of the triangle's lines: Link

Thursday's close below both lines appears bearish. If we try to keep any bias from our outlook, however, that rollover could be something more bullish than bearish: a bull flag pullback beneath resistance. The three red candles in a row argue against that conclusion, as this isn't the typical back-and-forth action of a flag, but Thursday's bounce from the 30-dma argues in favor of a bullish interpretation of the action, so only if one holds a bias about which direction the OEX should go is it possible to say definitively whether the pullback is a rollover or a bull flag in progress. Historical support lies near 552.50-553, and a host of other averages now cycle up underneath that level to add their support. The 551-553 zone becomes important, then, as a holding of support at that level suggests another push higher to test resistance.

Futures suggest that push higher this morning, but so did Thursday's ending levels. Thursday saw the OEX test and bounce from the 30-, 60-, and 120-minute 100/130-pma's, although the bounce from the 30-minute 100-pma was tentative, with that average at 555.75. If the OEX can pull free of the tug of this average, too, that bounce up to test the resistance levels from various trendlines might be in order again, with resistance at 557.60, 559.50, and 562.50.

Although price action suggests a climb, oscillators haven't yet turned bullish across those time intervals, introducing some doubt into the OEX's ability to sustain a climb, and particularly into its ability to climb above that resistance. Five-minute nested Keltner channels also suggest that the OEX will move up to test mid-channel resistance before it moves down to test support, however, with 557.32-557.80 representing mid-channel resistance. That mid-channel resistance matches the bottom support of the consolidation zone from earlier this year, so has significance other than on Keltner channels. Those in bullish plays should be particularly vigilant if that level should be tested unless the OEX zooms right above it. Any hesitation may be a sign that the OEX could turn down at that resistance. Upper channel resistance currently crosses at 560.66, about a point under the descending trendline that turned the OEX back last week. In the event of a climb this morning, bullish traders should be similarly vigilant as the 559.50-560.70 zone is approached, remaining watchful of a possible rollover from that level.

A breakout above 562.50 might send the OEX up to test resistance in the 569-571.50 zone, but such a breakout might be difficult to produce. Keltner channels suggest that it might be more likely to expect a downturn from either mid-channel resistance near 557.30-557.80 or from 559-561, but if I were considering a bearish play at the higher of those two levels, I'd be willing to exit if the OEX broke above the descending trendline.

Is the OEX going to settle into a consolidation zone again? That's possible as the OEX hammers out the resistance and support zones that it failed to firm up during the late November to early January climb. Perhaps 552-559 marks one possible boundary for that consolidation zone, but that remains to be seen. For early this week, I do hope we get that test of 559-562, however, as a rollover from there or a breakthrough that level would give traders the clearest signals for either bearish or bullish plays.

  Jonathan Levinson   4/12/200,  8:03:21 AM
There are no major economic reports due today.

  Linda Piazza   4/12/200,  7:33:31 AM
Although our markets were closed on Friday, several Asian markets were not. The Nikkei had a bad day Friday, gapping lower and moving lower after the opening. It closed down 195.08 points or 1.61 percent, at 11,897.51, and most other Asian bourses that were open traded lower, too. The Taiwan Weighted dropped 0.79 percent, and South Korea's Kospi lost 1.25 percent. With China's industrial output climbing 17.7 in the first quarter and 19.4 percent in March, China's Shanghai Composite nevertheless lost 2.43 percent. All the other Asian bourses we typically watch were closed. During the day Friday on OptionInvestor's Market Monitor, I had speculated that the news that Japanese citizens were among the hostages taken in Iraq might impact the Nikkei, and that appears to have happened. Friday saw an upgrade by the Bank of Japan of its outlook on the Japanese economy, accompanied by a decision to leave monetary policy unchanged, but that announcement came after the market's close according to one report and so might have been too late to impact sentiment. Other economic news that may have been released during the trading day included February's core private-sector machinery orders, with those orders rising a much-smaller-than-expected 4.9 percent against expectations of an 8.1 percent rise.

Japan's Prime Minister rejected the demand of the insurgents that Japanese troops be withdrawn, a demand accompanied by a threat of violence against the hostages. The news hit airliners in Friday's trading, but tech stocks and automakers declined, too.

Monday, the Nikkei did its best to erase Friday's losses. Over the weekend, some assurances appear to have been made that the captives would be released. With no news about the captives as trading opened Monday morning and with Japan's current-account surplus growing a greater-than-expected amount, the Nikkei gapped higher by almost 30 points and then climbed into the middle of the afternoon. It almost achieved the April 8 closing level of 12,092, but found resistance there and pulled back the rest of the afternoon. The Nikkei closed higher by 145.19 points or 1.22 percent, at 12042.70. Other economic data included the news that foreign investors had been net buyers of Japanese stock for the last fiscal year, and that lending by Japanese banks had dropped, but that the percentage drop had slowed over previous years'. Financial stocks gained in early trading and led the gainers throughout the day. Exporters gained, too. The autos mostly gained, with Mitsubishi Motors climbing a solid 3.5 percent after speculation that DaimlerChrysler might make it a wholly owned subsidiary. Many techs gained, with Toshiba being one after the company announced its intention to double operating profit within the next three years.

Other Asian bourses were mixed. The Taiwan Weighted gained 2.38%. South Korea's Kospi performed strongly, moving higher ahead of Thursday's elections, with Samsung helping after a Reuter's report that its flat screen sales would increase by 65 percent this year. The Kospi gained 1.48 percent. Singapore's Straits Times traded lower by 0.19 percent. Hong Kong's Hang Seng was closed. China tightened monetary policy Monday, raising the required percentage of deposits banks must reserve, with that decision being made in an effort to cool the surging economy. The Shanghai Composite dropped 0.45 percent. Trading on the bourse might also have been impacted by the news that Chinese citizens were abducted in Iraq this weekend.

Most European bourses remain closed this morning, including the FTSE 100, the CAC 40, and the DAX. According to one report, Sanofi-Synthelabo has begun the U.S. offer for its larger competitor Aventis after the SEC declared its filings effective.

  Jim Brown   4/9/2004,  6:00:22 PM
Apprentice Comment
If you watched the show on Thursday then you will understand my comment.

Kwame, fire her!

  Jeff Bailey   4/9/2004,  5:58:05 PM
Pivot Matrix for Monday at this Link

Note today's DIA and SPY High/Low was High/Low for this week, which is used for calculating next week's WEEKLY Pivot levels.

  OI Technical Staff   4/9/2004,  5:57:55 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

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