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  James Brown   4/26/200,  4:05:01 PM
The action in the XAU gold & silver index looks like a failed rally. I'd be tempted to find a bearish candidate here but I'd worry more about today's weakness in the dollar continuing; which should drive gold higher. The candlestick on the dollar is almost a bearish engulfing pattern and is a definite failure from the 200-dma.

Here's an interesting intraday chart of the XAU. Link

  Jim Brown   4/26/200,  4:03:38 PM
Earnings After the Close - Reduced List:

CB est = +1.42, actual = +1.61
EDS est = -0.01, actual = -0.01
PHM est = +0.86, actual = +1.02
EPNY est = -0.05, actual = -0.04
FWHT est = +0.13, actual = +0.16
SLAB est = +0.34, actual = +0.38
VRTX est = -0.51, actual = -0.52

  Linda Piazza   4/26/200,  4:02:16 PM
The OEX is now in the bottom half of the nested Keltner channels on the five-minute chart, below mid-channel support, but there's a potential roughly formed inverse H&S at the bottom of that decline, too. It will be the battle of the 30-minute H&S vs. the smaller and less significant five-minute inverse H&S tomorrow morning, to see whether the OEX heads up or down on the short term. On the 15-minute chart, the OEX clings to mid-channel support, but from the underside.

  James Brown   4/26/200,  3:54:30 PM
Correction... Jordan decided to air the confessional of some of the suspects captured in this story. The capture took place earlier in the month.. AFP news is reporting that Jordan authorities have captured/killed a local terrorist network associated with Al-Qaeda. The group of men had planned to load trucks with 20 tons of explosives and chemicals that would have killed upwards of 80,000 people and injured twice as many due to the chemical compounds affecting the eyes and lungs.

  Linda Piazza   4/26/200,  3:51:32 PM
I tried hard to find a trade that might be a good daytrade today, in a humble attempt to fill at least one of Jeff's shoes while he was away, searching lists of upgraded and downgraded stocks, stocks raising and lowering guidance, stocks perhaps impacted by articles this weekend. I'm sure some good daytrades existed, but I didn't find anything I'd have felt comfortable recommending to our subscribers. XCYT had been one I'd checked, looking as if it were on the verge of initiating a bearish daytrade when I was scanning charts this morning. A bearish trade would have performed well, but the predicted downside wouldn't have been big and volume was so low that it just wasn't a viable trade for our readership. That stock was initiated with a buy rating by Wells Fargo with a $10.00 upside target, which is what had brought the stock to my attention, but it was a bearish daytrade that was initiated. This stock has been trading only since the middle of March. All the ducks would have to line up in a row before I would consider suggesting daytrading something, and with the indices rambling around, that just wasn't likely to happen anyway.

  Linda Piazza   4/26/200,  3:28:26 PM
In my 10:45 post today, I speculated that the OEX might find support at 554 and then bounce up, possibly to the 556.75-557.25 level. At the time, the OEX appeared to be settling into a symmetrical triangle. So how did I come up with those numbers? First, I knew that the 30-, 60-, and 120-minute 100/130-pma's all crossed just over and under 554, and there was historical support at that level, so it made sense that there might be a bounce attempt from that level. Second, the OEX had risen, then come down to touch 554, then risen this morning into a higher high, and was headed down again. If the OEX did find support near 554, that set up the possibility of a left shoulder and head being formed. Link That suggested the possibility of a bounce from 554 taking the OEX up to but no further than the shoulder level, if the H&S was to be confirmed, with that shoulder level at about 556.75-557.25. However, it looks as if market participants could read the bearishness of that forming-up pattern as well as I could, making the OEX vulnerable to a descent at any moment. Someone bought that 554 level, however, bouncing the OEX back up through those important moving averages, so we may get that right shoulder after all. If so, we have to watch for a move above the shoulder level to show that the formation is being rejected.

Being able to extrapolate lines and imagine the formations that might be set up in the future used to be a great skill to have, and one that I possess in a reasonable amount (hence my interest in that geometric computer game--keep trying, James, and I'll get caught up to speed on my game terminology), but unfortunately, a lot of market participants have caught up to speed on this skill, too, and formations now sometimes abort early. It's no longer enough to be able to imagine which formation might set up. Inverse H&S's never form a right shoulder but zoom up as soon as the head is formed, or other such events happen. We all need to keep learning. Jane gave us a great article on the CCI indicator this weekend, so if you want to learn about that new technical tool, check out the article.

  James Brown   4/26/200,  3:20:08 PM
potential play -- Phelps Dodge (PD) is failing under its simple 10-dma and has now broken back below the $70.00 level. This looks like a potential bearish entry point, although I would use a tight stop!

  James Brown   4/26/200,  3:13:58 PM
The 3:15 PM ET update: Link

  James Brown   4/26/200,  3:08:49 PM
A quick note... the SOX is now down 3.09% and under its simple 200-dma.

  James Brown   4/26/200,  3:01:37 PM
Okay... I can't find any news on the move in BWA. The stock is trying to bounce from the $87.00 level this afternoon and if it doesn't rebound back above $88.00 and its 50-dma I'd be extremely cautious about initiating or keeping bullish positions.

We had used a trigger to try and capture any breakout over the $90.00 level but this morning's strength is proving to be a bull trap if BWA doesn't improve soon. Currently our stop is under technical support at the 40-dma but more conservative traders may not want to give the stock that much room. Here's a chart: Link

  Linda Piazza   4/26/200,  3:00:48 PM
Here's why I prefer to watch the 100/130-pma's on the 120-minute chart on the OEX: Link On other indices, the 30-minute versions might have more correlation with how those indices might move, but I find the OEX 120-minute versions to be particularly instructive.

  Linda Piazza   4/26/200,  2:51:45 PM
The OEX fell through the mid-channel Keltner support, but like an elastic netting, the next line of Keltner support sagged beneath the OEX, so that the OEX still hasn't fall beneath that last level of defense before the lower-channel support, now at 552.70. When the OEX is trying to push up through these Keltner lines, I sometimes suggest they have a kind of gravitational pull that tends to tug the OEX prices back unless the OEX can get past that gravitational pull, either by moving quickly through a level or by moving far enough away from it. I'll have to think of some other description for times when the OEX is trying to move down through Keltner support. The same thing happens, though: unless the OEX drops through quickly or travels far enough, those lines sag down and catch it again, bouncing it up again.

  James Brown   4/26/200,  2:46:34 PM
Just a quick heads up -- Our new BWA call isn't doing so hot. Shares just broke down below its simple 50-dma after piercing the $90 level this morning. I'm trying to find out what's moving the stock if anything. I would note that the breakdown under $88.00 is discouraging. This was previous resistance and the $88 mark should have held up as support. I would expect the simple 40-dma, which was resistance through the first part of April and support last week should still act as support this week but BWA would need to dip towards $86 before hitting its 40-dma.

I'll upload a chart in just a minute.

  Linda Piazza   4/26/200,  2:44:57 PM
One day last week, a reader asked how one might go about determining analogous levels of support or resistance across the various indices. One way shows up today, as several indices test their 100/130-pma's on several interval charts. For example, the OEX just hit the 30-minute 100/130-pma's and bounced back up through them, with the 100-pma at 554.19. On the Russell 2000, that average is at 588.04, with the Russell holding well above that average so far. The DJX (as a proxy for the Dow) has held above the 100-pma, too, with that average at 104.25. The Nasdaq has held well above that average, too, with that at 2025.25 for that index.

  James Brown   4/26/200,  2:40:47 PM
Food for thought... you've no doubt heard that refining capacity here in the U.S. and abroad is very tight. Even if OPEC and other oil producers pumped more it would not necessarily lower gasoline prices because there aren't enough refiners. The U.S. hasn't seen a new refinery built in the last 20 years. The International Energy Agency expects global demand to hit 114 million barrels per day by 2030, which would require a huge (close to 50%) jump in refining capacity just to keep up.

With this kind of demand analysts believe that corporations will eventually build out to meet it but it could take a couple of years. Now that China has become the second biggest energy consumer behind the U.S. there's going to be big undercurrent pulling oil costs higher than their traditional averages.

  James Brown   4/26/200,  2:40:24 PM
That's a great example, Linda. Most of the time when someone says video games images of Sony playstations, Microsoft X-boxes, and Nintendo gamecubes with their incredible graphics and generally violent, combat-oriented themes come to mind first. Yet it's the Internet-based mind/intellectual/strategy games like the ones you describe that have seen the biggest surge in players. I couldn't tell you what they are though since I don't play them but portals like Yahoo and MSN have whole sections dedicated to them.

  Linda Piazza   4/26/200,  2:34:18 PM
Yes, I guess I'm showing my age when board games was the first example that came to mind, rather than video games, James. (This is in reference to my comment about James' notation of rising costs of typical summer activities.) I once had to remove all the game icons from my computer, however, because I'd start playing a video game and not realize that hours had passed. I'm not much of a drinker (a necessary qualifier ahead of the next part of this sentence), but once I fell out of my chair, dizzied when I finally lifted my eyes from the screen. I guess I fit your description of women playing the most video games, although I now can't even remember the name of the game I favored, one that featured geometric shapes that you had to fit into the right section as they fell across the screen. Trading is more fun than playing video games. Some days.

  James Brown   4/26/200,  2:25:44 PM
That's funny, Linda. Maybe it's time to breakdown and buy a video game console. That way we could avoid paying for sun screen. FYI... Who spends more time playing online games, men or women? The answer is women!

  James Brown   4/26/200,  2:23:30 PM
A Fortune article accurately states that "Only men will be surprised to learn that women are the primary buyers of consumer electronics in the U.S...". I know I am surprised to hear that. I certainly mean no offense to our women readers but I would have thought that the purchase of high-tech gadgets was still one of the last remaining male-dominated arenas.

I've seen a couple of articles focus on this issue lately as retailers and manufacturers begin their Mother's day marketing push.

What are you going to get your mom this year? I'm open to any suggestions if you care to email me.

  Linda Piazza   4/26/200,  2:22:08 PM
James, perhaps we ought to be checking out the stocks of the board games manufacturers, because it sounds as if we won't be able to afford to do anything else. (See James' 14:17 post.)

  Linda Piazza   4/26/200,  2:18:46 PM
In retrospect, it seems so easy, doesn't it? The OEX plunged, retraced higher in a bearish distribution pattern, and then broke to a new low before it retraced more than 50% of the flagpole plunge. That 554 support looms, however, and the OEX is now back inside that narrowing symmetrical triangle on its daily chart, so be careful if in bearish positions. I've been tracking an OEX May 560 put since 9:27 this morning, however, when the OEX was at 556.97, with that put then at 9.30 x 10.00. Now, with the OEX at 554.55, that put is 10.40 x 11.70, so you would have had to have gotten between the bid and the ask to have gained much on the OEX's move. These spreads have gotten way too wide again.

  James Brown   4/26/200,  2:17:22 PM
Hmm... CNN has an interesting article on how the price of our favorite summer pleasures like icecream, BBQ and baseball are all going to be higher this summer. A few excerpts...

Ice cream is expected to be 10-15% higher this summer due to milk shortages pushing prices up 24%, vanilla shortages tripling prices over the last year, and chocolate hitting 17-year highs.

Your summer BBQ could be more costly as beef prices are on the rise due to the mad cow scare, cattle import bans and smaller herds this year.

Plus, prices for major league baseball games and theme park tickets are on the rise.

Ah.. and let's not forget movie tickets that have broken $10 a ticket in some cities and the price of gasoline is making the summer road trip more expensive.

  Linda Piazza   4/26/200,  2:13:44 PM
I guess that break out of the triangle the OEX had been forming is going to take after all. There's been a new low of the day. Bears, remember that the OEX is now approaching presumed strong support from 553.80-554.20, with that zone containing the 30-, 60-, and 120-minute 100/130-pma's.

  James Brown   4/26/200,  2:11:06 PM
With Jeff on vacation we don't have his views on TASER Intl (TASR) today. The stock has traded in a very narrow range between $80-85 today (at least that's a narrow range for TASR). That range has narrowed in the last couple of hours to just $81.50-83.00 and volume is light at 3.7 million shares.

  Linda Piazza   4/26/200,  2:09:09 PM
For what it's worth, we've just had a lower five-minute low on the OEX. A drop through a triangle's support sometimes reforms the pattern into a rectangle, so a possible "b" distribution form on that five-minute chart, and we may see if that's what's happening as the OEX approaches the previous low of the day.

  Jim Brown   4/26/200,  2:02:31 PM
About 30 companies report after the close today. It is a light schedule considering 26% of the S&P reports this week. These are the most well known.

Earnings After the Close - Reduced List:

EDS est = -0.01, actual =
PHM est = +0.86, actual =
EPNY est = -0.05, actual =
FWHT est = +0.13, actual =
SLAB est = +0.34, actual =
VRTX est = -0.51, actual =

  James Brown   4/26/200,  2:02:03 PM
Holy Cow, OSIP hit an intraday high of $98.70 about 30 minutes ago.

  Linda Piazza   4/26/200,  1:47:03 PM
I know there's a banking conference today, because I know that Fed Governor Bies was speaking at one, as I announced earlier this morning. However, I'm not sure whether the attendees would be most representative of the stocks composing the BKX or the BIX. However, both indices are behaving similarly today, with tiny candles with both upper and lower shadows. In both cases, those candles form near the top of recent consolidation zones after steep falls. It appears to me that there's some hesitancy to drive the stocks composing these indices higher and break them out of the consolidation zones. The BKX has confirmed a H&S on its daily chart and hasn't yet met the downside target, so that one possible interpretation of the current consolidation pattern is that it's a "b" distribution pattern.

  Linda Piazza   4/26/200,  1:38:23 PM
With a move below 551.71, the OEX will have confirmed a lower low on the five-minute chart. However, I suspect that the OEX may be settling into some sort of triangle formation on its five-minute chart, too, with lower highs and higher lows. It's a bit lopsided at the moment, if that's what it is.

  Linda Piazza   4/26/200,  1:18:10 PM
The OEX rolled down ahead of a confirmation of a higher low produced on the five-minute chart. So far, it's just bouncing from its mid-channel Keltner support on that five-minute chart, but not bouncing far when it does bounce.

  James Brown   4/26/200,  1:13:27 PM
The 1:00 PM update... Link

  Linda Piazza   4/26/200,  1:07:34 PM
With a move above 556.94, the OEX will have confirmed a higher low on the five-minute chart, for whatever that might be worth. There has been no bullish divergence on the five-minute chart, however.

  James Brown   4/26/200,  12:50:29 PM
a few facts about the $50 bill...

The $50 debuted in 1862.

Ulysses S. Grant has been on the $50 since 1913.

The average lifespan of a $50 bill is five years.

There 1.2 billion bills or $58.2 billion worth of $50 bills in circulation.
- source: CNN

  James Brown   4/26/200,  12:46:53 PM
The bullish breakout over the 3000 level in the Dow Transports last week is fading. The index jumped to 3020 this morning but the ensuing pull back to 2978 is starting to look like a failed rally (a.k.a. bearish entry point). A move under minor support at 2950 would be discouraging.

  Linda Piazza   4/26/200,  12:45:30 PM
For reference, the current OEX low-of-the-day is 555.11. Bears want to see a break below that low. As I type, the OEX again challenges its 50-dma, now at 555.85.

  James Brown   4/26/200,  12:41:37 PM
OI call play BBY dipped to $54.60 this morning but the stock has rebounded back over the pivotal $55 level.

  Linda Piazza   4/26/200,  12:38:49 PM
If the last year taught me anything, it taught me not to trust these supposed breakdowns out of bearish formations that don't result in an immediate fall. The OEX supposedly broke down out of the bear flag formation on its five-minute chart, but it refused to fall far, and now it's climbing again. It's back above the mid-channel Keltner resistance again, too. So far, this could just be a reformation into a broader flag, but it's dangerous to assume you know too much about direction today. I hate this point just before the real break out of a symmetrical triangle, because we get all this kind of zooming around as the triangle begins to narrow toward the point that prices can span the entire width of the triangle in a single day's trading. They often do at that point and there are often false breaks out of the formation, such as this morning's.

  James Brown   4/26/200,  12:20:32 PM
Airline stocks appear to be holding up relatively well in spite of the 1.2% climb in crude oil this morning. The recent suicide boat attacks against the Iraq oil infrastructure has heightened concerns over the oil supply and will likely keep crude prices high even though Iraq's contribution to the global oil market is still very small at this point.

  Linda Piazza   4/26/200,  12:18:08 PM
Headed back to test its gap? Perhaps despite being raised to a buy rating by UBS today, Hilton Hotels, HLT, may doing just that, but the outcome isn't known yet. Friday's trade produced an inside-day candle, and today's open was exactly at Friday's high. So far today, the candle being produced is a second inside-day candle. A break below Friday's $17.50 low would supposedly trigger a bearish play using inside-day theory, but there's gap support just below, with that gap spanning from $17.00 to $17.34. That gap appeared to be a breakaway gap as HLT broke above the descending trendline off last October's low, looking as if that pattern produced since October was probably a bull flag. Such breakaway gaps are not always filled, so there's extra danger that gap support would hold if HLT did break to the downside. Supposedly, a break above $17.80 would trigger a bullish play based on inside-day theory, although such a break would soon face Thursday's high of $17.95.

Many of you know that I'm not a particular fan of inside-day trades, as I've seen too many stopped out, so why did I even mention this chart? First, Jeff's 5MRT system again triggered a bearish trade in a stock that was upgraded, with prices almost meeting their bearish target in the five-minute period in which the trade was triggered. HLT came within a few cents of that target, but the play would have been stopped at breakeven, then triggered again about 10:30 with another push through $17.70, again setting a downside target of $17.54. So, although there has been some volatility and although the stock's rating was raised today, Jeff's system would have accurately suggested that short-term direction was down rather than up.

There's a second point to be made here, though. Even before I would suggest a daytrade, I would check many chart intervals. I just believe in overkill. When I checked that daily chart, I saw that breakaway gap over a possible bull flag and some other bullish signs. So, I was thinking that while a bearish daytrade had triggered, that stock was perhaps just headed down this morning to test that gap, and then that it might show more bullish behavior. The P&F chart shows an upside target of $22.00. However, when I got to the monthly chart, I noted a big gap on that chart in late 98 to early 99, with $18.81 marking the top of that gap. So, although I was thinking bullish after HLT got through testing gap support and although HLT might still gain strongly and achieve that $22.00 upside target, I'd probably rather find another stock to trade bullish rather than risk that gap resistance holding.

  James Brown   4/26/200,  12:10:09 PM
Sector losers....

HMO healthcare: -2.24%
SOX semiconductors: -2.12%
DJUSHB homebuilders: -1.23%
GHA hardware index: -0.79%

  James Brown   4/26/200,  12:09:02 PM
Sector winners...

BTK biotech index: +2.35%
XAU gold & silver: +2.03%
OSX oil services: +1.34%
INX Internet index: +0.86%

  Jim Brown   4/26/200,  11:56:38 AM
Kinkos is changing its name to FedEX Kinkos Office and Print Center. In a move to compete with the UPS takeover of Mail Boxes Etc FedEx bought Kinkos for $2.4B and will be adding some more office services to each Kinkos location. Packing? Shipping? Mail boxes? Since Kinkos deals with a higher priced clientel I doubt there will be mail boxes but FedEx has said they will produce sites with everything the remote office customer needs.

  Linda Piazza   4/26/200,  11:49:29 AM
I no sooner had that last entry about the OEX needing to break to the downside if the bear-flag thesis was to stay intact than the OEX appeared to do just that, on the two-minute chart. However, it's come right back up to retest that broken support, putting the "break" into some doubt. Perhaps the OEX is just widening into a broader flag formation.

  Linda Piazza   4/26/200,  11:46:11 AM
The OEX is now approaching the 50% retracement of its flagpole drop, with that level at about 557.35. If this climb is a bearish distribution pattern such as a bear flag, then it shouldn't retrace much higher than that before it breaks to the downside.

  Linda Piazza   4/26/200,  11:36:51 AM
I've been checking Jeff's 5MRT system against some of the stocks receiving upgrades or downgrades today, seeing if I can find a daytrade I'd feel comfortable suggesting. So far, I haven't found any. UHS was one of the stocks receiving an upgrade, to a sector perform by CIBC. However, using Jeff's 5MRT system, we would have seen a bearish trade triggered instead. Unfortunately, we'd have been stopped out of the play a few minutes later on a strong bounce, a bounce that ultimately failed. UHS then gave another bearish signal, and has since met the downside target and continued much lower. That upgrade didn't help the company much as many healthcare-related issues moved lower today. UHS is now reaching possible gap support, however.

  Jim Brown   4/26/200,  11:26:42 AM
One of the biggest factors in today's weakness is the SOX. It is trading only a couple points above its 200 dma at 476 and in danger of a breakdown. A breakdown this week could be critical since it would occur from a lower high. Link

  James Brown   4/26/200,  11:23:57 AM
The weakness in the semis is still taking its toll on OI put play QLGC. The stock is down 2.9% to $26.35.

  James Brown   4/26/200,  11:22:29 AM
Recently added OI put play COF has been triggered with this morning's 1.5% drop under support at 68.00 and its 100-dma.

  James Brown   4/26/200,  11:21:37 AM
OI put play AMG is still fading from its early morning strength and once again slipping toward support at $50.00.

  Linda Piazza   4/26/200,  11:20:00 AM
Five-minute oscillators have now turned higher as the OEX rises slightly from mid-channel Keltner support. Bulls want to see the OEX rise higher and faster than it appears to be doing now, however, on this upward cycle. The fifteen-minute oscillators have not yet begun to turn higher, while 30- and 60-minute ones continue their bearish outlook. So far, this looks like a short-term bounce, probably into some type of distribution pattern, within the context of a downturn on the 30- and 60-minute charts. Such a mixture of outlooks across several time intervals sometimes just results in choppy behavior, though.

  James Brown   4/26/200,  11:16:32 AM
K-Mart (KMRT) and Marth Stewart Living Omnimedia (MSO) are both up marginally after announcing that the two companies would cooperate together. The new agreement announced today will allow Kmart to sell the Martha Stewart Everyday line of products through 2009. KMRT withdrew its lawsuit claiming it was overcharged for royalties on MSO goods sold through its outlets.

  Jim Brown   4/26/200,  11:15:14 AM
I keep looking at OSIP and thinking about a short term trade. I do not think the news this morning warranted an 85% jump in the price. Buying puts on it could be expensive due to the morning volatility. The $80 put is just over $7 and the $70 put just over $3. I would think we should see some pullback in the stock but -$10, -$20 ?? The best option other than just shorting the stock at this level would be to sell a naked call with a tight stop. The $80 call is $5.50 and $75 call $8.10. (May) Selling either could result in a decent profit. I would think all the overnight shorts have already covered and jumped out the nearest window.

  Jim Brown   4/26/200,  11:09:44 AM
Speech by Governor Susan Schmidt Bies
Current Issues in Corporate Governance Link

  James Brown   4/26/200,  11:08:53 AM
The 11:00 update is posted: Link

  Linda Piazza   4/26/200,  10:58:58 AM
As the OEX consolidates at mid-channel support on the five-minute nested Keltner channels, the five-minute 21(3)3 stochastic look as if they might trend below signal. The five-minute MACD turns down through the signal line, although the histogram is actually less negative than it was a few minutes ago. The OEX is at last-ditch support near 555 before it falls down toward lower Keltner support at 552.04. Although I see historical support at 554, the Keltner chart isn't currently showing any there, and the Keltner's can be uncanny at showing support and resistance. One thought, though: those Keltner lines aren't static, and Keltner support can snake below the current OEX position if it consolidates there for a while.

  Linda Piazza   4/26/200,  10:51:40 AM
The TRAN is now back below 3000. It's testing support near 2985, with the TRAN at 2986.99 as I type. It's important to watch the TRAN since it often leads the Dow the way the SOX often leads the Nasdaq.

  Linda Piazza   4/26/200,  10:50:16 AM
I note that in addition to the intraday historical horizontal support seen at today's OEX low, the OEX is also in the process of testing the mid-channel support on the five-minute Keltner channels. This should be a bounce point, and it will look bearish if the OEX instead builds some sort of distribution pattern such as a "b" distribution pattern at the mid-channel support.

  Linda Piazza   4/26/200,  10:48:17 AM
IPO's haven't been particularly cooperative lately in our quest to paper trade them and test out Jeff's 5MRT system as a way to time entries and exits. Today, I don't see mention of any IPO's to begin trading.

  Linda Piazza   4/26/200,  10:45:16 AM
The OEX approaches strong intraday support near 555-555.25, and even stronger intraday support near 554, as seen on the 10-minute chart. Based on the appearance of that 10-minute chart, I wouldn't be surprised to see a rather strong bounce attempt at 554, if the OEX should get that low, with that bounce attempt possibly taking the OEX up to 556.50-557. First, though, the OEX may bounce from the current low up to test the gap created on its 2-minute chart when it fell from 556.97 to 555.94.

  Linda Piazza   4/26/200,  10:39:51 AM
We have several Fed Governors speaking this morning, including Fed Governor Bies speaking at a banking conference in Vegas at 11 EST.

  James Brown   4/26/200,  10:35:52 AM
Lehman Brothers has upgraded the major automakers. General Motors (GM) gets raised from "equal-weight" to "over weight". Ford (F) is moved from "under weight" to "equal-weight". DiamlerChrysler (DCX) is lifted from "under weight" to "equal-weight".

Looking at the charts GM is up 1.36% but still under major resistance at $50.00. F is up 1.65% and trying to breakout over the $16 level but shares look very overbought. DCX is up 0.92% but above resistance at $45.

  Linda Piazza   4/26/200,  10:29:22 AM
The OEX now tests its 50-dma. Bottom support from the neutral triangle is near 548, but this current test is important. This fake-out move should be troubling for OEX bulls, however, as it showed market participants that sellers were lurking overhead. They can still be overcome, but that's a troubling development.

  James Brown   4/26/200,  10:28:06 AM
Harley Davidson Inc (HDI) is not moving much today despite announcing a 25% jump in its quarterly cash dividend to 10 cents a share and a stock buyback program of up to 20 million shares.

  Jane Fox   4/26/200,  10:27:33 AM
Dateline WSJ Internet-search pioneer Google Inc. has tapped Credit Suisse First Boston and Morgan Stanley to lead an eagerly anticipated initial public offering that likely will be announced this week, according to people familiar with the situation.

Google's selection of the two big securities firms ends months of intense speculation over who on Wall Street would snag an assignment that is expected to generate investment-banking fees of nearly $100 million and huge bragging rights. An IPO of Google likely will be one of the biggest U.S. public offerings ever and, if successful, could trigger a new wave of IPO filings among other technology companies.

  James Brown   4/26/200,  10:25:11 AM
Sector update...

BTK biotech index: +2.32%
XAU gold & silver: +1.67%
OSX oil services: +1.25%
UTY utilities: +0.80% XNG natural gas: +0.74%

HMO healthcare: -2.11%
SOX semiconductors: -1.48%

  James Brown   4/26/200,  10:22:06 AM
Genentech Inc (DNA) is a partner with OSIP on the Tarceva treatment and shares are up $15.89 to $134.09 on the news. A couple of brokers have reiterated their positive outlooks for DNA but UBS has raised its price target from $150 to $180.

  Linda Piazza   4/26/200,  10:19:57 AM
This morning, I mentioned in my first OEX-related post that when a triangle narrowed toward its apex, we often saw fake breakouts, and this one is sure looking like a fake right now. However, the 50-dma is just below the current level, at 555.87, so that could provide support. I warned this morning that bullish traders should be prepared to bail on any hesitation and warned of the importance of that 559.50-559.60 area, and so far, that resistance has held. Support may, too, as moves often get volatile as a triangle narrows.

  James Brown   4/26/200,  10:19:26 AM
OSI Pharmaceuticals is up $39.94 to $78.14 on the positive Phase III trial results for its lung cancer treatment Tarceva.

  James Brown   4/26/200,  10:16:25 AM
Dow-component Wal-Mart (WMT) announced that April same-store sales are likely to come in at the low end of its 4-6% growth forecasts. The company is blaming fewer shopping days ahead of the Easter holiday. Shares are down 22 cents to $58.76 and struggling with its simple 50-dma.

  Linda Piazza   4/26/200,  10:15:49 AM
Here's the deal: The Russell 2000 and the S&P's appear to be breaking out and/or testing analogous descending trendlines off various spring highs. The Dow is not. The COMPX tested its analogous trendline and is falling back. The TRAN, although not testing an analogous trendline, broke out this morning and got knocked right back. I'm getting mixed evidence here, so the potential rollover thesis is gaining more strength. These various indices have got to get in gear together.

  Jim Brown   4/26/200,  10:13:47 AM
Speech by Governor Mark W. Olson
Preview of the Redesigned Series 2004 U.S. $50 Note Link

  James Brown   4/26/200,  10:12:58 AM
Ryder Systems (R) reported Q1 earnings this morning of 53 cents per share, a penny above estimates, on rising commercial vehicle rentals. The stock broke out above resistance at $40.00 on Friday and has already tested that level as support this morning. R is down 21 cents to $40.54.

  Jonathan Levinson   4/26/200,  10:11:17 AM
A 4B overnight repo has just been announced, with no expiries for a net addition of 4B from the Fed.

  Linda Piazza   4/26/200,  10:09:46 AM
The TRAN hit that 3018-3020 resistance zone and bounced back, with the TRAN currently at 3007.14.

  Linda Piazza   4/26/200,  10:07:37 AM
I would think that the OEX might need to come back and test support near the midline of the last 30-minute candle, near 557.86, also near the breakout zone. It's possible to describe an oddly positioned inverse H&S on the OEX with a neckline somewhere near that level and down to 556.30, too. I don't give that particular formation much credence, however, but if that midline candlestick support holds, then the bullish thesis has more strength. If it doesn't, then the rollover thesis gains more strength.

  Jim Brown   4/26/200,  10:05:25 AM
The April Index of Investor Optimism came out at 73 today and the lowest level since October. The index hit a 22 month high in January at 108. The drop to 73 in April is below the 85 number in March and 97 in February.

  Linda Piazza   4/26/200,  10:02:56 AM
We have an OEX breakout signaled on the basis of the symmetrical triangle on the daily chart, on the basis of a Donchian channel breakout on the 30-minute chart, and on the basis of a Keltner-channel breakout on the five-minute chart. The advdec line is positive and still climbing. True to form, the OEX did not completely fill that breakaway gap on the two-minute chart. So far, this is looking just like bullish action should look, but anyone participating in a bullish OEX play should be aware of that 559.50 resistance, too, and just manage position size and stops. That resistance worries me.

As it should . . . as I began uploading this, the OEX began retreating. It's testing that two-minute gap again, but so far holding above the gap level.

  Jim Brown   4/26/200,  10:00:15 AM
March New Home Sales 1.23 million (est 1.175M, last 1.163M)

  James Brown   4/26/200,  9:58:45 AM
UBS also upgraded a few hotel chains this morning. Starwood Hotels (HOT) and Hilton Hotels (HLT) were upped to a "buy". Host Marriot (HMT) was raised to a "neutral". Unfortunately, stocks aren't moving much on the news.

  Linda Piazza   4/26/200,  9:56:39 AM
The OEX 2-minute chart shows us a gap higher as the OEX broke above the ascending regression channel I just mentioned in a previous post. Such gaps can be breakaway gaps--gaps that occur as prices break out of a formation, and you can't always count on them being filled, but the OEX sure looks as if it's about to come down to retest that gap level on that 2-minute chart.

  James Brown   4/26/200,  9:56:33 AM
VeriSign (VRSN) is up 1.33% on an upgrade from UBS this morning. Bulls can be happy to see some follow through on Friday's earnings-inspired rally but watch for resistance at the $18.00 level.

  Linda Piazza   4/26/200,  9:54:27 AM
Here's another way of looking at the current OEX action, as seen on the 10-minute chart, with the OEX traveling up inside an ascending regression channel since about midday on Friday. The OEX is reaching a breakout zone or rollover zone in that configuration, too, with a rollover sending it down to test support near 557: Link

  James Brown   4/26/200,  9:49:19 AM
Bluegreen Corp (BXG) is up 6.96% and rallying strongly off the bottom of its rising channel to $13.66 after reporting Q1 earnings this morning. Profits jumped 121% to 17 cents a share with revenues soaring 33% to $107.2 million.

  Linda Piazza   4/26/200,  9:48:51 AM
In addition to being pressed up against the top trendline on its neutral triangle, the OEX also approached the top Keltner resistance this morning. This tells us the same thing that its position on the neutral triangle tells us--the OEX is either at a breakout level or at a rollover level. Big help, huh? The five-minute stochastics begin to tip over, but haven't even completed a bearish kiss yet, much less been tugged out of territory indicating short-term overbought conditions, so they could still begin trending in this territory, as would be consistent with a breakout.

  Linda Piazza   4/26/200,  9:46:12 AM
While the Dow might be hesitant this morning, the TRAN isn't. It's adding to its gains from Friday, but it's soon going to face strong resistance near 3018, with the TRAN currently at 3015.68.

  James Brown   4/26/200,  9:45:10 AM
John Hancock Financial (JHF) is up 1.88% and close to challenging resistance at $47.00-47.50 after reporting earnings this morning. Analysts' estimates were 77 cents a share. JHF is reporting 87 cents. Readers may remember that JHF is being removed from the S&P 500 once Manulife Financial Corp completes its acquisition.

  Linda Piazza   4/26/200,  9:40:47 AM
During the first five minutes of trading, the OEX spanned a range from 556.61 to 557.76. On the daily chart, it's still pressed right up against one version of the descending trendline off the March high--the top trendline of its neutral triangle--or may have broken through minimally. Be careful if inclined to participate in a bullish play on a supposed breakout. We haven't yet had the usual first retracement of the day, to see whether that retracement does any damage and how much damage it does, if any. While the OEX could just zoom right up all day, this is possible rollover territory, too.

  James Brown   4/26/200,  9:39:23 AM
Hershey Foods Corp (HSY) is hitting new highs after Friday's big gain. Fueling today's move is a new upgrade from Merrill Lynch to "buy". Remember that HSY announced a 2-for-1 split last Thursday when it reported earnings.

  James Brown   4/26/200,  9:36:10 AM
Evidently the 50-plane order for Boeing's (BA) new 7E7 airlines from Japan's All Nippon airlines is BA's biggest order for planes ever.

BA hasn't disclosed how much it costs to develop the new 7E7 but Reuters is reporting that estimates run in the $10 billion range. The ANA order is reported worth $6 billion.

  Linda Piazza   4/26/200,  9:34:23 AM
The OEX started the day pressed up against one version of the descending trendline off the March high. Let's see what happens as the first reversal of the day begins in a little less than 10 minutes.

  Jim Brown   4/26/200,  9:30:45 AM
Jeff Bailey is on vacation this week.

  James Brown   4/26/200,  9:20:51 AM
The pre-market update is posted. Link

  Linda Piazza   4/26/200,  9:04:53 AM
Last week, I posted a graph showing the current symmetrical triangle on the OEX, and mentioned that trades inside such triangles are always iffy trades since prices tend to rattle around inside them in an unpredictable manner. Particularly as such triangles narrow toward their apex, prices sometimes zoom from resistance to support and back again. They sometimes break out, only to turn around again soon afterward in a stop-running move.

Now a breakout might be imminent. We waited all day Friday for a possible upside break or rollover beneath the descending trendline: Link Anyone buying a breakout play should be aware of the possibility that the move could be a fake-out move and of the multiple resistance zones just ahead. Such traders should remain ready to bail or take steps to protect profits on any hesitancy. OEX 559.50-559.60 is the first such resistance to be faced after a breakout. The 38.2% retracement of the bear-market decline lies at 561.23, and known historical resistance lies at 563. A player entering a bearish play on an apparent rollover should be just as careful, as multiple support zones exist, too. Unfortunately, as is almost always true when markets enter a consolidation pattern, oscillators don't provide conclusive evidence as to likely direction.

  Jonathan Levinson   4/26/200,  8:21:55 AM
We await the 10AM release of New Home Sales for March, est. 1.168M.

  Linda Piazza   4/26/200,  7:19:00 AM
Good morning. The Nikkei opened slightly in the green, with exporters gaining in early trading. Mitsubishi Group wasn't one of the early gainers, however, with the company garnering at least one downgrade after DaimlerChrysler's surprise decision not to participate in the company's revitalization. After a couple of dips into negative territory, the Nikkei moved in wide 60-point swings through the afternoon, posting higher highs and lows with each swing. It closed up 43.29 points or 0.36%, at 12,163.89, with that close constituting an almost-three-year high. One warning was seen in the lower volume and internals, however, with those not being as strong as the climb might suggest they would have been.

Exporters and banks closed higher. Many techs gained after recent positive statements or speculations about their earnings, with that group including Sony and Toshiba. Advantest, Fujitsu, and Tokyo Electron also gained. Although Mitsubishi Motors' troubles dragged down all stocks within the group, including Bank of Tokyo-Mitsubishi, many other banking issues gained. The auto sector was mixed with Mitsubishi Motors and Toyota closing lower, Honda closing flat, and Nissan climbing.

Other Asian bourses turned in mixed performances, but most of the ones we commonly watch traded lower. The Taiwan Weighted lost 0.55%. DaimlerChrysler's surprise decision last week prompted many to worry that it would pull out of its alliance with Hyundai Motor, sending that stock lower by almost 6%. Some important tech stocks also lost ground in South Korea as the Kospi fell 1.74%. Singapore's Straits Times lost 0.98%, and Hong Kong's Hang Seng lost 2.03%. China's Shanghai Composite was flat, down only 0.002 points or 0.00%

European bourses also turn in mixed performances, but the ones we watch in this report each morning currently trade higher. The big news today is that Aventis has accepted a bid from Sanofi-Synthelabo, the bidder that the French government favored all along. The current deal is reportedly worth $64 billion, up considerably from Sanofi's first hostile bid. Other news includes economic news from Germany, with April's German business confidence number surprising to the upside and rising to 96.3 against expectations for a drop to 95.2. The euro's decline against the dollar since February contributed to that upside surprise, some speculate, as exports gained a reprieve. Delving into this report released by the Ifo Institute showed that future expectations fell while current conditions achieved a three-year high. Still, news issuing out of the G-7 meeting this weekend wasn't all positive with some attendees worrying about consumer demand and unemployment in parts of Europe and urging ECB's President Trichet to lower interest rates. Germany's finance ministers joined in that call, with Germany's recovery seen as more hesitant than that in some other countries.

In stock-specific news, Vodafone is the most actively traded stock on the FTSE, gaining more than 2%. Germany's Commerzbank reported earnings for a quarter it termed the strongest since the fall of 2000, with the shares gaining in early trading. DaimlerChrysler traded flat early Monday after strong gains made Friday since its surprise decision to withdraw from a plan to revitalize Mitsubishi Motors. Today, Lehman Brothers upgraded the stock to an equal-weight rating. In other stock-specific news, French company Total SA jumped ahead of American companies ChevronTexaco and ExxonMobil in the bid to take a stake in Russian oil group Sibneft, winning the backing of the Russian government.

As of this writing, the FTSE 100 has gained 6.10 points or 0.13%, to trade at 4576.10. The CAC 40 has gained 13.37 points or 0.35%, to trade at 3824.80. The DAX has gained 44.16 points or 1.08%, to trade at 4147.78.

  Jeff Bailey   4/24/200,  6:23:49 AM
Pivot Matrix traders Please read this weekend's Ask the Analyst column. Any input welcome, ideas, thoughts.

  OI Technical Staff   4/23/200,  12:08:35 AM
The Market Monitor has been archived. You may view it and any previous days here: Link

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