Option Investor
Printer friendly version
  Jeff Bailey   4/19/200,  6:24:50 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   4/19/200,  5:30:00 PM
Closing Internals at this Link

  Linda Piazza   4/19/200,  4:01:59 PM
I said in my first OEX-related post this morning that over the last few days, the 15-minute nested Keltner channel chart had been the most predictive of OEX action, but that wasn't true today. That's because those channels were busy today settling into an equilibrium position, with the OEX bouncing back and forth between Keltner support and resistance as those channels settled. Since March, the OEX hasn't tended to stay too long in an equilibrium position on the 15-minute chart, but it spent quite a bit of time near equilibrium (all the channels lined up, one within another) in March.

  Jeff Bailey   4/19/200,  3:56:26 PM
Day trade close out alert ... Will close out at least 1/2 of the BULLISH VCampus (VCMP) $5.45 +26% here, hold other 1/2 as swing trade into tomorrow's session.

  Linda Piazza   4/19/200,  3:48:29 PM
I keep studying the OEX daily chart, and I see a possible doji or near doji today with that doji forming within the possible bull flag. There's just not much that can be determined from that configuration, with the doji denoting confusion about direction. MACD flattens at the signal line, RSI flattens just above the neutral 50 mark, and 21(3)3 stochastics try to hook back up after declining. There's just not much that can be determined from that, either. As I speculated a couple of weeks ago and others have joined me in saying, this index in particular seems to be rattling around as it tries to firm up the support and resistance levels it failed to nail down in its climb from late November until early January.

  James Brown   4/19/200,  3:42:58 PM
President Bush currently speaking on Homeland Security...

  James Brown   4/19/200,  3:41:56 PM
Sector Losers...

XAU gold & silver: -1.46%
DJUSHB homebuilders: -1.37%
XAL airliners: -1.22%

  James Brown   4/19/200,  3:40:46 PM
Sector winners...

BTK biotechs: +2.59%
DDX disk drives: +1.80%
INX Internets: +1.66%
SOX semiconductors: +1.40%
GSO software: +1.36%
NWX networking: +0.94%
HMO healthcare: +0.84%

  James Brown   4/19/200,  3:39:06 PM
It is encouraging to see the NASDAQ Composite back above the 2000 level and its 50-dma at 2014.

  James Brown   4/19/200,  3:30:59 PM
Let's not forget that part of the market's reluctance to move is the first of Greenspan's two appearances this week will be tomorrow before the Senate Banking Committee.

  Linda Piazza   4/19/200,  3:30:31 PM
Yes, James, that breakout was beginning about the time I was completing that post agreeing with your assessment, just in time for me to note that the OEX was breaking above the top trendline depicted in my 14:35 post. (See James' 15:09 post and my 15:04 one.) I just wasn't sure the breakout would stick, but it looks as if it has. The TRIN still doesn't support long plays, however, unless you view its high level on a contrarian basis, although the advdec has traveled steadily higher since breaking out of its midday consolidation pattern.

  Jeff Bailey   4/19/200,  3:28:08 PM
C'mon VCMP .... $5.70 +32% ... show some bid to the close.

Ouija, Ouija, .... Need Jonathan to take down 500,000 into the close! Paint the tape at $6.00.

  Linda Piazza   4/19/200,  3:23:19 PM
The OEX has definitely broken out of the neutral triangle formation depicted on the chart linked to my 14:35 post. As I mentioned at that time, that formation at least allowed us to determine when the OEX had broken out one direction or the other. It's also now reached a new five-minute high, another confirmation of that breakout. It's pulled above the Keltner channel level that often stops it and if it can tug completely free of the gravitational pull of that resistance, then upper channel resistance on the OEX is at 556.91. First it's got to tug free of that resistance, though. The fifteen-minute chart shows why it's slowing down now, as it's at resistance on that chart, with 556.44 the next level above this one on the 15-minute chart. A break above 556.34 would constitute a break above the lip of the possible cup-and-handle formation I mentioned in my 12:22 post.

  Jeff Bailey   4/19/200,  3:21:07 PM
Express Scripts (ESRX) $78.58 +1.76% Link ... did make a new all-time high today. Bulls seem to defend on each 3-box reversal of late.

  Jeff Bailey   4/19/200,  3:11:19 PM
Russell 2000 (RUT.X) 585.55 +0.37% ... best levels of the session. Monitoring midpoint of our upward trending regression, which is currently higher at 588.

21-day SMA and 50-day SMA right here at 585. Link

  James Brown   4/19/200,  3:10:50 PM
Speaking of bucking the trend PDCO, an OI call play, came within 45 cents of our exit point at $79.95 this morning before fading back toward $78.00. We suggest traders cinch up their stop losses again.

  James Brown   4/19/200,  3:09:24 PM
Linda, looks like all we had to do was voice our opinion and suddenly we have a small bounce under way. Although I agree we could certainly be stuck in a trading range. As Jim mentioned in his wrap this could quickly become a stock picker's market as traders look for those equities that can buck the trend.

  Jeff Bailey   4/19/200,  3:08:21 PM
03:00 Internals at this Link

  Linda Piazza   4/19/200,  3:04:21 PM
James, I think I agree about the market falling asleep, or maybe it's just too confused to know what to do next. For readers who might not have had time yet to read the entire weekend newsletter word for word, here's something interesting from one of Mark Philips' columns that exactly pinpoints this confusion: The anomaly in this bearish parade -- believe it or not -- comes in the form of the DOW. The picture we see there is most interesting indeed. Take a look at the PnF chart of the DOW and you can see why I've been reticent to initiate a play on this index in either direction. We recently had a Sell signal with a price target of 9400. That was never approached before we got a Buy signal with a target of 11,600. Obviously we never got anywhere near there before last week's new Sell signal, now with a tentative target of 10,100. My thoughts of a rangebound market for the near to intermediate-term seems likely to come to fruition, and the standard scale INDU PnF chart is creating more confusion than it's worth.

If the normally helpful P&F charts are this confused, what are market participants supposed to think? Mark went on to discuss using a resized P&F chart, using 100-point boxes, and that chart gave the Dow an 800-point range that it could chop around within and not give off false signals. Here's a link to the entire article: Link

As I type, however, the OEX is attempting to break over the upper trendline depicted in the chart linked to my 14:35 post. I'm not sure the upside breakout will hold, however, so be careful.

  Jeff Bailey   4/19/200,  2:57:03 PM
Plug Power (PLUG) $9.41 -2.48% .... off its lows of $9.04 after pulling into that "zone of support" from $8.97-$9.22.

  James Brown   4/19/200,  2:54:26 PM
Is it just me or is the market falling asleep?

  Linda Piazza   4/19/200,  2:39:49 PM
That 583.70-583.75 resistance continues to hold on the Russell 2000, but it appears to be preparing to make another assault at that level.

  Jeff Bailey   4/19/200,  2:37:15 PM
VCampus (VCMP) $5.41 +16% .... Jeff, What does your inside day ouija board predict for the opening gap tomorrow for TCMP? (assuming of course that it closes today as an inside day) I.e. is it likely to gap up or down or is such a gap totally unpredictable based on your analysis style. Thanks in advance...RAV

The Ouija (TM) (wee-jee) board said to hold overnight on close above $6.00.

Disclosure: In 5th grade, Ouija say I was supposed to wed Dana Gettler (she was also at the board), but Dana and I broke up that summer, and couldn't stand each other when reunited in high school.

Seriously though; I do like today's volume (9.7 million so far), which rivals Friday's 11.5 million, and shows interest. The $6.00 level would be 1/2 of today's range, and I'd like to see the stock prove some type of bullish bias on a daily basis, and close above midpoint of session.

  Linda Piazza   4/19/200,  2:35:36 PM
The OEX has been settling into this formation today, so at least we have something to watch for an upward or downward break: Link

  Jeff Bailey   4/19/200,  2:29:16 PM
Digital River (DRIV) $28.46 +25.4% ... tried to break free from morning congestion of $28.00 after gap higher from Friday's close near $23.00.

Volume comes in last 5-minutes.

  James Brown   4/19/200,  2:27:53 PM
The action in the housing sector doesn't look good...

TOL is struggling under resistance at its 10 & 100-dma's and if it breaks $40.00 bears could try and capture a drop toward its 200-dma.

HOV is slipping lower towards the 200-dma and support near $37.50.

RYL looks very bearish with the consolidation under support/resistance at $80.00 and its 200-dma. A drop under the recent low at $75.85 and traders could try and ride this one toward support near $70.00.

  Jeff Bailey   4/19/200,  2:25:45 PM
Digital Recorders (TBUS) $15.60 +134% ... don't know where/why the bullishness came from, but showed up from "nowhere."

  Jeff Bailey   4/19/200,  2:21:20 PM
Taser Intl. (TASR) $119.34 +4.59% ... sure seems like our retracement brackets are in play. Get the feeling this one is going to "gap" one way or another tomorrow morning, where either $136 or $107 is going to be traded quickly. Link

  Linda Piazza   4/19/200,  2:13:17 PM
The OEX is dropping to the downside target predicted by this morning's miniature H&S on the five-minute chart, so that we now have a confirmed bearish formation with a fulfilled downside target. That fits with the bearishness predicted by the $TRIN. Unfortunately, the OEX still hasn't gone much of anywhere because this wasn't a big drop. It's possible, if one squints just right, to even see an inverse H&S (continuation type) forming with a neckline formed from a descending trendline. The OEX is just chopping around.

  Jeff Bailey   4/19/200,  2:11:18 PM
VCampus (VCMP) $5.25 +22% ... back to test the $5.25 area for a 3rd time this session.

Not getting a lot of help from the Russell 2000 Index (RUT.X) 582.67 -0.11%, which has been relatively unchanged for the better part of today's trade.

  Linda Piazza   4/19/200,  2:03:53 PM
The OEX has not quite met the 553.45 downside target predicted when it formed and confirmed the miniature H&S on its five-minute chart, but it's come close. That test has brought it down below mid-channel Keltner support on both the 5- and 15-minute charts, but actually, not much is happening as the OEX chops around near important S/R levels.

  James Brown   4/19/200,  1:50:46 PM
CRR, also on the OI watch list, is up 3.34% after its bullish breakout on Friday. Earnings are due out on Wednesday.

  James Brown   4/19/200,  1:49:35 PM
AVID, on the OI watch list this weekend, is up another 2.96% as a follow through move on Friday's earnings-fueled rally over resistance at $50.00 and its 200-dma.

  Linda Piazza   4/19/200,  1:37:23 PM
I don't see any information about IPO's today, so I don't think there are any that we might follow using Jeff's 5MRT system. I did track Friday's IPO, Immunicon Corp or IMMC, this morning using that system. It would have triggered a bullish trade today at about $9.78, but that trade would have been stopped out midday with a trade below $8.78. Currently at $8.55, it would trigger a bearish play on a drop through $8.28 with a downside target of $6.67, but I wonder about the possibility of a bearish play on an IPO. An option play is not available, of course, and in the days when I used to daytrade a lot, I was of course always entering long plays on IPO's rather than short ones. I'm not sure whether brokerages would have any stock available for shorting. However, since we're following these plays on a paper-trading basis only, it doesn't matter whether that stock is available or not. We don't have enough evidence to be sure that this is a good way of triggering trades on IPO's, and that's what we're doing, is gathering that evidence.

  Jane Fox   4/19/200,  1:36:05 PM
Dateline WSJ Computer Associates International Inc. fired nine employees Monday in an attempt to purge its ranks in the face of a gathering federal probe of its accounting practices.

The Islandia, N.Y., company said in a statement that the employees came from the finance and legal departments, but declined to give their names.

Earlier this month, CA's chief financial officer, Ira Zar, pleaded guilty to securities fraud and other charges. He is cooperating with federal investigators. Mr. Zar was forced out by the company's audit committee, which conducted an internal inquiry, in October. Also earlier this month, CA fired Steven Woghin, its general counsel.

  James Brown   4/19/200,  1:34:28 PM
A reader also reminded me that today is the 10-year anniversary of the Branch Davidian fire in Waco, Texas. The April 19th fire ended a 51-day standoff where 76 people were killed in the blaze (not including the four ATF agents and six Branch Davidians who died in a shootout at the beginning of the conflict).

  Jeff Bailey   4/19/200,  1:33:21 PM
Teradyne (TER) $22.73 -0.91% ... Dow Jones reports that company's CEO will resign on May 27.

  Jeff Bailey   4/19/200,  1:28:01 PM
Digital Recorders (TBUS) $12.86 +94% ...

  James Brown   4/19/200,  1:27:43 PM
If you like the new design on the U.S. $20 bill get ready for the new $50 bills that will be unveiled next week. They're due to roll out next fall.

  James Brown   4/19/200,  1:22:54 PM
... you know I'm not sure, Jon. Sometimes it doesn't and sometimes it does. I remember hearing it on the radio on my way to work and thinking it was a prank.

  Jonathan Levinson   4/19/200,  1:21:33 PM
Doesn't seem that long ago, does it James?

  Jeff Bailey   4/19/200,  1:20:57 PM
01:00 Internals at this Link

  Linda Piazza   4/19/200,  1:20:36 PM
So far, what's happened today is that the OEX has been oscillating around bunched-up 100/130-pma's over the 30-, 60-, and 120-minute time frames. It's traded either side of those averages today.

  James Brown   4/19/200,  1:19:22 PM
Nine years ago today... April 19, 1995 -- Oklahoma City was rocked by a 4,000-pound ammonium-nitrate and fuel oil bomb packed in the back of a Ryder truck by Timothy McVeigh and Terry Nichols. 168 people lost their lives.

  Linda Piazza   4/19/200,  1:17:30 PM
The OEX is back at central Keltner support on the fifteen-minute chart and is dropping below that support as I type.

  James Brown   4/19/200,  1:13:40 PM
stock split announcements today...

FBTC 2-for-1
RBA 2-for-1
LACO 2-for-1

  Linda Piazza   4/19/200,  1:11:28 PM
I'm watching the Russell 2000 using the same nested Keltner chart setup I use on the OEX. In the Russell's case, that strong resistance at about 583.70-583.75 appears to be more important than what's happening on the Keltner's. Keltner channel lines are gathering at that level, but it's more a case of the indicators following the price than the indicators being indicative of what price action will do. At least in this single case.

  Linda Piazza   4/19/200,  1:08:21 PM
The OEX is testing the neckline of its possible miniature H&S on the five-minute chart: Link

  Jeff Bailey   4/19/200,  1:08:00 PM
VCampus (VCMP) $5.54 +29.13% ... just placed a "conventional" retracement on VCMP from $1.19 low to Friday's high of $10.00.

Pretty good trade within this more conventional retracement too. 50% is right here at $5.60, while session's high 5-minute close pretty close to 61.8% $6.64.

For some sign of intra-day strength, then begin to think $6.65 or more.

  Jeff Bailey   4/19/200,  1:03:17 PM
Digital Recorders (TBUS) $11.98 +80% ... back to session highs. Looking $12.86. Traded 1.14 million shares on move up from $10.61-$12.50 in 5-minutes.

  Linda Piazza   4/19/200,  1:00:42 PM
The OEX just hasn't been able to draw far above the descending trendline on its 5-minute chart or the mid-channel Keltner support. Now that 5-minute chart sports a possible miniature H&S formation. The downside target would be around 553.50, depending on the neckline level if/when hit.

  Linda Piazza   4/19/200,  12:56:52 PM
Reader Question: What are your thoughts on SIRI? Looks like a cup and handle on the daily chart.

Response: That does look like a possible cup-and-handle formation, and volume dropped appropriately as SIRI dropped back to form the handle: Link The only problem with this theory, though, is that I'm not sure if cup-and-handle formations are commonly seen as continuation patterns. They're more commonly seen as bottoming formations. Whether this is a cup-and-handle or not, SIRI faces two important resistance levels, one just above $4.00 and the other at the January high. Volume needs to explode as SIRI moves above those resistance levels. As many of you know, I've been watching SIRI for a long while with conjunction with the 72-ema. It seems to have an uncanny way finding support at that moving average over the last year. Now it's drawn rather far away from the 72-ema, so may be liable to turn down toward that MA again. May is the operative word here, however, as SIRI, like TASR, sometimes appears to defy gravity.

  James Brown   4/19/200,  12:51:08 PM
Sector update...

BTK biotech index: +2.21%
DDX disk drives: +1.36%
GSO software: +0.85%
INX Internet: +0.72%
SOX semiconductors: +0.79%

XAU gold & silver: -1.46%
XAL airlines: -1.19%
DJUSHB homebuilders: -1.05%

  Jeff Bailey   4/19/200,  12:43:33 PM
Volume/% gain/loss at this Link

Not a lot of "euphoria" among the percentage gainers today.

  James Brown   4/19/200,  12:34:39 PM
Current OI call play ESRX is extending its rebound from the $75 level and hitting a new all-time high over resistance at $78.50.

  James Brown   4/19/200,  12:32:13 PM
Current OI put play PD is down just 12 cents but off more than $1.50 from its highs for the session. This could be the failed rally traders were looking for to consider new positions. PD has resistance at its 10 & 100-dma just above today's high of $76.50.

  James Brown   4/19/200,  12:29:41 PM
Newly added OI put play AMG is down another 2.47% and breaking support at $52.00 and its 100-dma.

  James Brown   4/19/200,  12:24:49 PM
Dow component Wal-Mart (WMT) is virtually unchanged at $58.41 despite its announcement this morning that April same-store sales will be at the low end of its $4-6% growth guidance.

  Jeff Bailey   4/19/200,  12:22:49 PM
VCampus (VCMP) $5.41 +26% ... continue to fades after morning high of $6.96.

Day trade long now willing to sell at least 1/2 on anything higher into the $7.51-$7.74 area today.

  Linda Piazza   4/19/200,  12:22:32 PM
Here's a possible cup-and-handle formation I'm watching on the OEX intraday charts: Link

  Jeff Bailey   4/19/200,  12:21:06 PM
Metal Storm (MTSX) $9.43 +13.4% ... chart per trader's request at this Link

  James Brown   4/19/200,  12:20:52 PM
A downgrade to "reduce" from SunTrust has sent shares of Jefferson Pilot Corp (JP) down 1.75% to $53.69. This isn't necessarily noteworthy except JP has broken down through support at $54 and its simple 50-dma.

  James Brown   4/19/200,  12:17:39 PM
HomeStore Inc (HOMS), better known as HomeStore.com, Realtor.com and HomeBuilder.com, is up 7.27% to $5.31 after AmTech Research initiated coverage with a "buy" rating.

HOMS is rebounding strongly from a test of its 10-dma and a breakout over resistance at $5.50 might be a worthwhile entry point for more aggressive traders.

  James Brown   4/19/200,  12:10:30 PM
Just a tidbit I heard on CNBC, shares of Coca-Cola (KO) are hitting new 18-month highs. A quick glance at the chart shows KO up 2.52% to $53.22 and breaking out over its February highs. Earnings are expected tomorrow morning before the opening bell. Estimates are 44 cents a share.

  Linda Piazza   4/19/200,  12:08:16 PM
The Russell has made a strong move all the way from the bottom Keltner support, up through the mid-channel resistance on the five-minute chart. It didn't pause much at those levels I had benchmarked earlier, shooting up quickly once it cleared the 580.50 level. Upper channel resistance is at 584.94, and there's little resistance on a Keltner basis between the current Russell level and that level.

  Jeff Bailey   4/19/200,  12:08:08 PM
Taser Intl. (TASR) $117.00 +2.3% ... here's a chart I put together this morning with a BLUE newly fitted retracement, as well as the prior existing PINK. Link

  James Brown   4/19/200,  12:07:51 PM
One of the few oil refiners in the U.S. Valero Energy (VLO) has been started with coverage at an "overweight" by J.P. Morgan this morning but the stock is not reacting much. Shares are up 53 cents to $58.84.

  James Brown   4/19/200,  12:05:49 PM
Boston Scientific (BSX) is reporting this morning that the company has received approval from the FDA for a new stent system to treat gallbladder related tumors. The product is called the Express Biliary SD Monorail Premounted Stent System.

Shares of BSX were up earlier in the session but are currently down 40 cents to $43.20.

  Linda Piazza   4/19/200,  12:04:53 PM
The OEX is trying to break above that descending trendline off the Friday 12:30 high, but it's still within "testing" range rather having definitively cleared it. Still, it's above the mid-channel resistance on both the 5- and 15-minute Keltner channels, and above the 30-, 60-, and 120-minute 100/130-pma's. However, weren't we noting just the opposite a little earlier this morning? This seems part of the chop. So far, however, the advdec line (steadily rising since about 10:10) has been a better predictor of price action than the TRIN, but I'm not confident that the OEX is yet ready to stop chopping around and instead make a strong directional move.

  James Brown   4/19/200,  12:02:57 PM
Anthem (ATH) is up 1.17% to $88.38 and bouncing from its simple 50-dma after Wachovia upgraded the stock from "market perform" to "out perform" this morning. Their price "target" is the $102-109 range. Currently ATH has resistance in the $90-91 level and its recent high near $95.

  Linda Piazza   4/19/200,  11:48:54 AM
The OEX hit that descending trendline off the 12:50 high from Friday and turned down. So far, the downturn looks as if it could be a bull flag forming, although it's too soon be certain. Some five-minute oscillators are turning down again.

  Linda Piazza   4/19/200,  11:44:34 AM

Response: The easiest questions first: Q-charts symbols for TRIN and advdec are $TRIN and advdec. Actually, I also like to look at the ratios of advancing versus declining volume, because it's my feeling that looking at a ratio cuts down on the vagaries seen with volume dips during the lunchtime lull or during similar situations. Unless more bulls than bears go to lunch or vice versa, the ratio should stay fairly steady, while advdec which is calculated using a subtraction method may show a change that's due more to the lower volume during the lunchtime lull than to a change in outlook. However, the only data I can find that allows me to calculate this ratio is delayed, so I don't follow it here on these pages. Here's the raw data, but you'll have to refresh the page to get more up-to-date information: Link

Now for the rest. An inverse (or reverse) H&S is a formation that suggests a bullish outlook, but we can't assume that these formations will complete or confirm, or even meet their predicted upside targets once confirmed. They're a guideline, letting traders know that a bullish move is possible, but that bullish move doesn't always materialize. My 9:13 post included a couple of mentions of indices that had been forming inverse H&S's, but then prices fell below the right-shoulder level, unraveling the formation. The BIX was one: Link So, although H&S or inverse H&S's used to be so reliable that you could begin trading as the right shoulder began to round over, assuming that you were going to see a neckline break and then the target fulfilled, that's no longer a sound assumption or hasn't been over the last year. What would I do if I were seeing a potentially bullish formation, but a bearish TRIN and bearish advdec levels? Unfortunately, there's no easy answer to that question but most often I'd be cautious of entering a bullish trade and would probably pass up the opportunity. If I did enter, I might enter with a smaller than usual size position, and be prepared to exit at the first sign of weakness.

Of course, this is complicated by those cases when an index is near rock-solid support and advdec levels are so bearish and TRIN so extreme that these levels are actually a contrarian indicator. You know that the market can't bear (pun intended) that level of bearishness for long and that there should be at least a countertrend bounce. If you're then seeing a bullish formation, should you jump in? That depends on your style of trading. I wouldn't. In that case, I would probably wait for a move up to resistance while the oversold pressure was relieved and then enter a bearish position on a rollover. In my daytrading days, however, I would definitely have entered, but would have been prepared to jump out quickly against at the first hesitation. Note: We're not seeing advdec and TRIN levels that bearish.

  Linda Piazza   4/19/200,  11:27:50 AM
The OEX is jumping above mid-channel Keltner resistance and the gathered 30-, 60-, and 120-minute 100/130-pma's, but the charge higher stopped at next resistance. Those who might have entered a bearish trade based on a break below those levels should now have some idea in mind of a stop that fits your account management style. One possibility is a move above the descending trendline that began forming off Friday's high, with that trendline now crossing at just under 555. Other possibilities exist, too, such as a move above the 15:50 Friday afternoon high. TRIN still looks bearish, but I wouldn't let that keep me in a bearish trade if price is acting any way other than bearish. Let price be the arbiter.

  Linda Piazza   4/19/200,  11:19:43 AM
The advdec line is still generally rising off this morning's low, while TRIN is doing more than generally rising! They're working at cross purposes.

  Linda Piazza   4/19/200,  11:17:59 AM
The OEX has moved back to test the mid-channel Keltner resistance on both the 5- and 15-minute charts as well as the 30-, 60-, and 120-minute 100/120-pma's, with the highest of those numbers being at 554.28.

  Jeff Bailey   4/19/200,  11:17:48 AM
11:00 Internals at this Link

Friday's Internals at this Link

  Linda Piazza   4/19/200,  11:14:47 AM
Let's bookmark some Russell 2000 levels according to the Keltner channel S/R on the five-minute chart, to see how well these channels work on the Russell. I'm seeing next resistance near 580.56, with that resistance rising slightly as the Russell rises to test it.

Above that resistance lies resistance at 581.68 and stronger resistance at 582.11 and 582.82. Support lies at 580.28, 579.90, and 579.28.

  Jeff Bailey   4/19/200,  11:11:50 AM
Digital Records (TBUS) $10.42 +55% ... jumped to our 50% $10.96, but backs off. Bullish traders that may have been holding and "took too much heat" to $6.63 might cut back here.

  Linda Piazza   4/19/200,  11:08:35 AM
Just noted Jeff's post about TASR's current price. I'm speechless. Congratulations to those longs who had faith and held on. Guess you wouldn't listen if I told you to be careful and protect profits, right? My sympathies to shorts.

  Jeff Bailey   4/19/200,  11:04:04 AM
Taser Intl. (TASR) $128.10 +12% ... trades the upper-end (100%) of our fitted retracement.

Trader's that quickly make another fitted retracement from the 04/05/04 low of $77.80, then "fit" your 38.2% at the 04/15/04 close of $100.18, will like the tie in to recent trade. Gives 61.8% at $114.01 (Friday's close), 80.9% at $125.20 with upside 100% at $136.39.

  Linda Piazza   4/19/200,  11:03:42 AM
I've been following a possible inverse H&S on the TRAN for a while now. That formation is still possible. Here's the formation I've been watching, as seen on a line chart: Link

  Linda Piazza   4/19/200,  11:00:57 AM
The fifteen-minute Russell 2000 Keltner channel chart is showing tentative bullish divergence. As the Russell approaches one channel line, that channel has moved higher within a wider channel than on the last approach. However, I haven't watched the Russell's behavior with respect to Keltner channels previously, so I'm not sure how closely it tends to track Keltner channel levels, and this divergence is tentative as of now.

  Jeff Bailey   4/19/200,  10:58:20 AM
VCampus (VCMP) $5.88 +37% ... updateded 5-minute chart at this Link

  Linda Piazza   4/19/200,  10:57:50 AM
As the OEX continues to test broken support, the advdec line tries to steady, too. Volume can be a leading indicator, so keep a watch on this. The TRIN level leads only one direction so far, though, and that's in a bearish one.

  Linda Piazza   4/19/200,  10:36:43 AM
So far, so good for those who heeded the TRIN and advdec levels and chose a bearish bias, entering on another OEX drop below all those gathered MA's and Keltner support levels. The OEX has just risen to test the 5- to 15-minute mid-channel Keltner resistance, and so far has not been able to break back above that resistance. The 15-minute oscillators are trying to turn up again now, though, with both advdec and the TRIN climbing in the last few minutes, offering conflicting evidence. Since we expected chop this morning, anyone in any play should be prepared for some whipsaws.

  Linda Piazza   4/19/200,  10:27:13 AM
Did everyone read Mark Philip's article this weekend comparing the various indices and the way the indicators work in conjunction with the indices? Mark makes a point that anyone tuning into the Futures side of the Monitor has long noted, that the Russell may be a better trading vehicle, at least for futures traders. Mark's comments address some of the reasons why technical traders everywhere might find the Russell less choppy and unpredictable than the S&P's have been over the last year: Link We have a lot of loyal OEX traders, and I know the OEX better than I do the Russell, but perhaps it's time that we began gradually working in a few more comments about the Russell here on this side of the Monitor, too. As I'm looking at the Russell this morning on a five-minute chart, I note that it's now touched bottom Keltner support, a point at which bearish Russell traders should begin following the Russell down with their stops. Over the last few days, the Russell has tended to rebound rather quickly after breaching or touching that support, but this can be a valid breakout signal, too.

  Linda Piazza   4/19/200,  10:20:20 AM
The OEX looks to be headed back up for another test of mid-channel Keltner support on both the 5- and 15-minute charts, and to test the 30-, 60-, and 120-minute 100/130-pma's.

  Linda Piazza   4/19/200,  10:10:28 AM
If a trader had a bearish bias and entered a bearish trade on a move back below the gathered 30-, 60-, and 120-minute 100/130-pma's, that trader should be basing an exit on a move back above those averages. Right now, the OEX has reached a Keltner channel support line, a point from which there might be another bounce attempt. The advdec line isn't predicting any bounce, however.

  Jeff Bailey   4/19/200,  10:09:51 AM
VCampus (VCMP) $6.24 +44% ... here's intra-day chart of VCMP. Link

  Jonathan Levinson   4/19/200,  10:03:11 AM
A 3.25B overnight repo has been added by the Fed with no expiries today.

  Linda Piazza   4/19/200,  10:01:45 AM
Okay, so what do we see this morning? Negative advdec levels. Bearish TRIN levels (if we can trust those.) OEX testing mid-channel Keltner support on both the 5- and 15-minute charts, and slipping below that support on both, but now coming back to test them from the underside. The OEX testing 30- to 120-minute 100/130-pma's, and slipping beneath them, but now coming back to test them from the underside. If a trader had a strong bias one way or the other, that trader could base an entry on a move above or below those various levels, using a tight stop just on the other side of them. If a trader had a bias to the long side, however, that trader sure would want to see that TRIN and advdec be at different levels before considering an entry. As they stand now, they give the nod to the bearish side.

  Jonathan Levinson   4/19/200,  10:01:40 AM


  Jeff Bailey   4/19/200,  9:58:52 AM
Day trade long alert .... VCampus (VCMP) $6.19 +43% .... go long on trade at $6.35, stop $5.09, target $9.00.

In addition to today's 5-MRT (opening 5-minute bar was $5.10-$6.30, I've placed a 38.2% fitted from $1.20, and fit at Friday's close of $4.29. Has 50% at $5.24, 61.8% at $6.20 (right in here), 80.9% at $7.74, and 100% at $9.28.

  Linda Piazza   4/19/200,  9:56:55 AM
The OEX has also now fallen beneath the 30-, 60-, and 120-pma's, not something that bulls want to see. Unless there's a quick rebound back above these averages, now grouped from 553.72 to 554.17, this would be considered by some to be a sell signal. This is a time when we expected some volatility, however, so it's difficult to trust anything we're seeing.

  Linda Piazza   4/19/200,  9:54:00 AM
The OEX is tentatively breaking below mid-channel Keltner support on both the 5- and 15-minute charts, but it does have support just below that level. Still, this is not what the bulls want to see early today. This may be just part of the chop predicted by the battling 5- and 15-minute oscillators, but we'll soon know if the OEX is going to rebound from next Keltner support or continue falling.

  Jeff Bailey   4/19/200,  9:53:10 AM
VCampus (VCMP) $5.87 +36.8% Link ... stock had this news on Friday. See news at this Link

Compelling from the bullish/long side in my opinion.

  Linda Piazza   4/19/200,  9:51:06 AM
The OEX is currently testing mid-channel Keltner support on the 5- and 15-minute chart, as well as the 30-, 60-, and 120-minute 100/130-pma's. They're all grouped rather closely together. Oscillator evidence is mixed in the 30- to 120-minute charts, but the 5-minute chart sports oscillators looking as if they want to turn up while the 15-minute ones sport oscillators in full bearish roll. That still predicts some possible choppiness to me. The best possible scenario for bulls, I think, would be for the OEX to chop around and establish support just above mid-channel Keltner support and those MA's while the 15-minute oscillators cycle down and relieve some overbought pressure, and then for all the oscillators to turn up. The worst possible outcome is for the OEX to break significantly below mid-channel Keltner support and to get downside traction during the downward cycle on those 15-minute Keltners.

  Jeff Bailey   4/19/200,  9:48:17 AM
Early actives/gainers/losers at this Link

  Jeff Bailey   4/19/200,  9:44:08 AM
S&P 500 Index (SPX.X) 1134.07 -0.04% .... with new weekly pivot retracement at this Link

  Linda Piazza   4/19/200,  9:43:24 AM
This weekend, Spanish Prime Minister Jose Luis Rodriguez Zapatero took office and surprised the U.S. by announcing only a day later that Spain's troops would be withdrawn from Iraq within the one to two months. Spain currently has 1400 troops in Iraq. Zapatero's campaign had been at least partially based on a vow to pull Spain's troops out of Iraq if the U.N. had not assumed control over the Iraqi situation by June 30, so it probably wasn't the announcement itself that was a surprise, but the timing. Prior to taking office, Zapatero had satisfied himself that condition would not be met.

  Linda Piazza   4/19/200,  9:37:49 AM
During the first five minutes of trading, the OEX spanned a range from 554.94 to 554.35.

  Linda Piazza   4/19/200,  9:33:32 AM
The OEX heads down to test mid-channel support on the 15-minute Keltner charts, currently at 554.07, but with other support just beneath that, down to 553.61.

  Jeff Bailey   4/19/200,  9:29:35 AM
Nokia (NOK) $14.61 Link ... higher at $15.09 after Prudential downgrades to "underweight" from "overweight" based on firm's view that competition is intensifying and NOK's lack of visibility in its core handset business brings uncertainty. Prudential reduced its fiscal 2004 revenue estimate to $28.7 billion from $31.7 billion and lowered its fiscal 2004 EPS estimate to $0.64 from $0.84.

UBS also downgrading to "neutral" from "buy", while JP Morgan downgrades to "neutral" from "overweight."

  Jeff Bailey   4/19/200,  9:25:17 AM
Digitial River (DRIV) $22.69 Link ... higher at $25.19 after reporting Q1 (March) EPS of $0.22, which was 2-cent better than consensus. For Q2, DRIV sees pro forma EPS of $0.22 versus consensus of $0.19.

Craig-Hallum upgrades to "buy" from "neutral" with target upped to $29.

  Jeff Bailey   4/19/200,  9:13:53 AM
09:00 Update at this Link

  Linda Piazza   4/19/200,  9:13:49 AM
First, please excuse the length of this post. By the time I'd completed it, I realized I'd written a tome and not a post. Over the last month or two, we've seen a lot of inverse H&S's try to form on charts for the indices, both on daily and intraday charts. We've documented some that shot up through the neckline area before the right shoulder could even form, showing some remaining bullishness in the markets. Here's an example: Link We had been watching a similar possible inverse H&S on the OEX at the time, but when some other indices, such as the Dow, shot above the neckline level, that suggested that the OEX might do so, too. It did.

Now, we're beginning to see some larger possible inverse H&S's appear on some indices. Here's an example: Link However, just as some indices broke above their neckline levels ahead of some of the other indices, serving as leading indicators, another index now breaks below the right-shoulder level, suggesting that the current set of possible inverse H&S on some indices might fail. Here's one leading index that's beginning to fall beneath the right-shoulder level: Link The BIX failed even sooner, with the BIX also sometimes serving as a leading indicator for other indices, particularly for the OEX. And that's where this long discussion of other indices is heading: into a discussion of the OEX. Despite the SOX bounce from just above its 200-ema on Friday (470.78), daily oscillators for the SOX still look as if there's more downside to go. However, MACD only now makes a bearish cross, and makes it from above signal, so that it doesn't seem yet fully committed to the downside despite the evidence of the stochastics and RSI. The BIX also bounced from its 200-ema last week, actually touching it on Thursday. Now RSI hooks up and stochastics produced a bullish kiss although they have not yet moved above signal. MACD has not made a bullish cross. Still, it looks as if the BIX may be trying to make at least a countertrend bounce effort up to test resistance. So, we have semi-related stocks looking vulnerable to the downside despite Friday's bounce from the 200-ema, and BIX looking as if it's going to try for a several-day bounce, although oscillators haven't yet fully committed to the upside. What does that suggest? To me, it suggests a possibility of choppy trading, with several sectors important to the OEX possibly working at counter purposes.

What does the OEX chart show? The OEX trades within a formation that could still be a bull flag, with that formation not quite having retraced half the flagpole climb. It hasn't yet broken to the upside or downside. That 50% retracement occurs near 547.40. The OEX appeared to be steadying at the 100-dma or perhaps even at the 72-ema I frequently watch: Link Oscillator evidence is mixed, however, with the steadying and Friday's climb hooking RSI and stochastics back up within the context of a descending path. Another troubling feature is the shape of that possible bull flag. On intraday charts, it looks more like a broadening formation than a flag with parallel sides, and broadening formations are more bearish than bullish. Countering those trouble signs are some more bullish ones: late last week, the OEX climbed above the 60- and 120-minute 100/130-pmas and consolidated just above them, with those averages now grouped from 553.73-554.18 in a tight knot. Even here, though, the 120-minute candles sport spikes or upper shadows that make that support look more tentative than it would otherwise.

Because the intraday formation looks a bit like a broadening formation to me, it's difficult to assess the breakout point for either an upside or downside break. The 60-minute oscillators look inconclusive. On an intraday basis, OEX 555.35-555.60 looks important as recent historical horizontal resistance while 549.50-549.75 looks important as recent historical horizontal support, but both those levels were breached by candle shadows over the last week only to have the OEX turn soon afterwards. However, it's the 15-minute nested Keltner channel chart that seems to be the best predictor of OEX behavior over the last couple of days, so I'm turning to that chart for more clarity. Mid-channel support on that chart is gathering from 553.57-554.08, with the OEX closing just above that mid-channel support on Friday. Futures this morning indicate that it's possible to see another test of that mid-channel support his morning. Above that lies a level of Keltner resistance that usually stops the OEX, with that resistance from 556.21-556.60 as trading ended on Friday. If the OEX can first steady at the mid-channel support and then break above that resistance (which may change slightly as trading opens this morning), then upper channel resistance on that chart lies at 560.95. If the OEX falls beneath 553.58 (with that level also perhaps changing slightly as trading opens this morning), the Keltner's suggest a fall first to 551, and then perhaps to 547.16, if that levels falls.

  Jane Fox   4/19/200,  8:47:57 AM
Dateline WSJ OAK BROOK, Ill. - McDonald's Corp. Chairman and Chief Executive Officer Jim Cantalupo was struck by an apparent heart attack early on Monday and died, the company said.

  Jonathan Levinson   4/19/200,  8:16:57 AM
We await the 10 AM release of Leading economic indicators for March, est. .3%.

  Linda Piazza   4/19/200,  7:19:26 AM
Good morning. The Nikkei traded about 40 points either side of the flat-line level during the earliest portion of the morning session then started diving. By the close of the morning session, it was down more than 179 points. During the afternoon session, it recouped some of those losses, closing down 60.35 points or 0.51%, at 11,764.21. It did, however, close just beneath a descending trendline that has been forming since midday on Thursday. The Nikkei has historical support below near 10,640, but it may soon be testing that support. It's generally traveling lower within an ascending regression channel, with the bottom support of that channel near 11,200. Midline support is currently from 11,640-11,690.

Banks appeared to be responsible for starting the slide, with a report about UFJ Holdings sending the sector lower. That report speculated that loans a regulator insisted should be reclassified bad loans would force the bank to set aside more money and perhaps cause it to miss the FY estimated profit. Banks plunged during the morning session, but some investors bought banks after the morning dip. They erased some of their losses, too. For example, UFJ closed lower by 8.3%, according to one report, but it had traded as much as 14.1% lower during intraday trading.

As banks were beginning their decline in the early session, many techs had begun to climb. Hitachi rose in early trading after a newspaper speculated that the company would beat expectations, but by the end of trading it had eased 0.1%. Some techs did close higher, however, as investors bought the afternoon dip. Sony, Canon, and Toshiba all closed higher, with Toshiba announcing plans to double PC production at a plant in China. Autos were mixed. Trend Micro, an antivirus software developer, soared 9.5% higher after the company said that better-than-expected quarterly sales will lead to earnings 50% higher than previously forecast. Some retailers closed lower.

Other Asian bourses were mixed, but more appeared to close down than up. The Taiwan Weighted lost 0.57%. An article this weekend speculated that any slowdown in the sizzling Chinese economy could impact South Korea, with most exported South Korean goods sent to China. However, South Korea's Kospi gained 0.36% despite that report. Singapore's Straits Times declined by 0.50%. Hong Kong's Hang Seng was flat, lower by only 0.07%, but China's Shanghai Composite lost 1.06%.

Most European bourses currently trade lower as many investors focus on downgrades, accounting or other irregularities, and corporate shakeups. It's an M&A day in the U.K., however, with retailers Canary Wharf, Marks & Spencer, and WH Smith all reacting to real offers or speculation about offers to come. Of the three, only Canary Wharf was declining in early trading, with WH Smith jumping more than 34% on news of an offer by a private equity investor. In the U.K. and elsewhere in Europe, stocks react to the news that Shell will further downgrade its oil reserves and that its CFO would leave the company. Adecco again postponed the release of its 2003 earnings report, sending its stock lower in early European trading. The company added that Q1 operating income before amortization, excluding the costs of the audit delay, would come in below last year's result. Royal Ahold declined in early trading after it released figures showing sales that declined 10.6% but a narrowing loss. The company revealed that currency and goodwill issues will hit 2004's net income but not the equity and that the various investigations will hit 2004's operating expenses. Several brokers downgraded Nokia, sending that stock lower in early trading, but Ericsson was gaining after the release of the earnings statement of its joint venture with Sony. The joint venture raised its estimate for 2004's global market for handsets.

As of this writing, the FTSE 100 was lower by 11.90 points or 0.26%, to 4525.40. The CAC 40 was lower by 20.59 points or 0.55%, to 3731.00. The DAX was lower by 18.62 points or 0.46%, to 4015.36.

  Jeff Bailey   4/18/200,  11:30:16 AM
Pivot Matrix for Monday at this Link

  Jonathan Levinson   4/16/200,  10:01:06 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.


Market Monitor Archives