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  Keene Little   4/29/200,  4:42:02 PM
We've been following XAU and NEM in particular in the Futures Monitor, but I thought I'd put an update on Market Monitor side for those who may not follow the FM. For those who might be interested in playing the gold stocks, here's a daily NEM chart showing why I think we're at a level where a long play could work out well. There's additional downside potential as I show on the chart so any attempt here must be done with the knowledge we're attempting to pick a bottom here. So use a small position or an appropriate stop level and see if it works. If it does, scale into a larger position. Good luck. Link

 
 
  Jim Brown   4/29/200,  4:05:44 PM
Earnings After the Close - Reduced List:

IM est = +0.24, actual = +0.24 guided lower
GTW est = -0.20, actual = -0.22
MCK est = +0.66, actual = +0.73
MRX est = +0.31, actual = +0.33
PHS est = +0.63, actual = +0.71
ADPT est = +0.05, actual = +0.06
APCC est = +0.19, actual = +0.17
AZPN est = +0.05, actual = +0.06
CELL est = +0.20, actual = +0.16 rev light
BOBJ est = +0.15, actual = +0.10 miss, guide lower
CHPC est = +0.02, actual = +0.03
ERTS est = +0.21, actual = +0.29
FDRY est = +0.17, actual = +0.14 guided lower
GNSS est = +0.03, actual = +0.21
NEWP est = +0.01, actual = +0.03
NTES est = +0.37, actual = +0.40
SAPE est = +0.01, actual = +0.01
TERN est = -0.08, actual = -0.14
VSEA est = +0.37, actual = +0.38

 
 
  Linda Piazza   4/29/200,  3:57:51 PM
The BIX hit the bottom of its rising regression channel, a possible bear flag, before it began to bounce today, and it's inability to maintain today's highs doesn't look good.

 
 
  Linda Piazza   4/29/200,  3:47:46 PM
Several people have mentioned CSCO today and its violation of the 200-dma. When I'm looking at longer-term moving averages such as the 200-dma, I like to look at the -ema, the exponential moving average. The 200-ema is somewhat lower than the 200-sma, and is currently at $22.05. What's the difference? The -ema gives more weight to recent days than to the ones 200 days away while the -sma gives all 200 days equal weight. Sometimes watching that average, especially on tech stocks, gives a different picture of the action. For example, on 4/20, CSCO closed a few cents below the 200-sma, but it bounced from the 200-ema. On 4/22, CSCO's daily candle shadow pierced the 200-sma, but bounced from the 200-ema. Now, CSCO has a better chance of moving up to close above the 200-ema than the 200-sma.

 
 
  Linda Piazza   4/29/200,  3:38:01 PM
The OEX hit the trendline off the August low and began the current bounce from that trendline.

 
 
  James Brown   4/29/200,  3:24:43 PM
QCOM breaking support at $65.00 and 50-dma.

 
 
  James Brown   4/29/200,  3:24:17 PM
CSCO now at new five-month lows...

 
 
  Linda Piazza   4/29/200,  3:23:08 PM
Where she stops, nobody knows, but the OEX is now descending to the ascending trendline off the August low. That should provide at least minimal bounce potential, although once this kind of downward momentum begins, who knows?

 
 
  James Brown   4/29/200,  3:18:53 PM
IBM is extending its losses... down 2.34% to $88.32.

 
 
  James Brown   4/29/200,  3:17:54 PM
The Dow Industrials are now under last week's low at 10,250.

 
 
  James Brown   4/29/200,  3:14:11 PM
The 3:15 PM update is posted. Link

 
 
  Linda Piazza   4/29/200,  3:14:10 PM
I've got an ascending trendline drawn on my daily OEX chart that I began off the 8/06/03 low. The OEX last touched that trendline in late March, but it's approaching it again. The trendline crosses today at about 541.60. In late March, the OEX violated it intraday a couple of times but did not close beneath it.

 
 
  Jane Fox   4/29/200,  3:12:01 PM
Dateline WSJ Google Inc. filed to go public today, setting plans to raise as much as $2.7 billion in an initial public offering and giving investors their first look at the secretive company's revenue and earnings.

The deal's lead underwriters are Credit Suisse First Boston and Morgan Stanley. Unlike a traditional initial public offering, Google plans to sell the shares through an unusual auction conducted by its underwriters on the company's behalf.

 
 
  Jim Brown   4/29/200,  3:11:53 PM
Russell IShares - IWN - The Russell IShares have just made a triple bottom on support at 163. They are optionable and while I admit it is a strong risk here when the market is looking anything but bullish this may be a buying opportunity. Conversely, a break of the 163 level would be very bearish.

 
 
  Linda Piazza   4/29/200,  3:04:48 PM
The BIX is near its low of the day, close to breaking down out of the possible bear flag on its daily chart.

 
 
  James Brown   4/29/200,  2:56:47 PM
JWN is breaking down under support at the 100-dma and under support at $36.50.

 
 
  James Brown   4/29/200,  2:52:39 PM
ASD is breaking down under support at its 100-dma and under the $105 level.

 
 
  Linda Piazza   4/29/200,  2:47:57 PM
So much for the shortest-length OEX Keltner channel trying to turn up and the OEX perhaps zig-zagging up toward mid-channel resistance. At least the Keltner's were right about predicting that it was time for a pullback when I wrote about the OEX testing 548 Keltner resistance, but that pullback wasn't a "small" one at all. I have to offer another warning, however, that the OEX is looking oversold on a short-term basis, and the longer and further it violates the Keltner channels, the more likely it is that it will get slung all the way to the top channel. That's currently at 553.53, so it's descended close to the clustered 30-, 60-, and 120-minute 100/130-pma's. At this point, a test of one will be a test of all. Bears should protect profits, but shouldn't necessarily exit their plays if not already stopped out.

 
 
  Linda Piazza   4/29/200,  2:35:23 PM
XAU: A reader asks for my thoughts on the XAU. Although I used to trade XAU options, I didn't like their thin trade and so have not watched this chart as closely lately as Jonathan and some others have done. However, here are some points I noted when studying the chart: Link Miners have been taking a pounding lately and I'm certainly not one who likes to step in front of a falling knife, but I note that the XAU is approaching round-number support at $80.00, which also happens to be near the downside target predicted by its H&S formation. Therefore, I don't believe this is necessarily a good place for a bearish entry, either. Rather, it might be nearing the time for an oversold bounce on the XAU. It's fallen far from its diving averages, also suggesting some vulnerability to an oversold bounce. The 5- and 15-minute Keltner charts are beginning to show some bullish divergence, suggesting that bearish traders should begin taking steps to guard profits. Since the daily oscillators show no hint of a turnaround and since unpredictable news out of China at least partially drives the trading in miners these days, and since any bounce should be deemed a countertrend one at this point, I don't know that I'd want to consider any bullish trade right now. The 50% retracement of the flagpole drop is near $93.75, so bears wanting new entries might watch for a bounce up to and rollover from that level, making sure there's a rollover. However, it's also possible that the XAU could try to rise high enough to retest that neckline or that it could find resistance near $86-87 or $90. Of course, with a P&F chart price objective of $56, it's also possible that the knife could just keep falling. Right now, although I may be very wrong, I don't see a good entry, either bullish or bearish.

 
 
  James Brown   4/29/200,  2:30:23 PM
Keep your eye on Avon Products (AVP) tomorrow. The stock has been consolidating under resistance at $80.00 for two weeks and looks poised to breakout. Earnings are tomorrow morning before the opening bell with estimates set at 59 cents. AVP pre-announced stronger earnings a month ago... and no we're not suggesting any bullish positions ahead of the announcement.

Don't forget AVP has a 2:1 split set for June 1st.

 
 
  James Brown   4/29/200,  2:25:11 PM
Deere Co (DE) has confirmed its breakdown under $70.00 and nearing support at 50-dma with additional support near $67.50 (neckline from its previous reverse H&S pattern).

 
 
  James Brown   4/29/200,  2:21:43 PM
Nike (NKE) is looking pretty weak here and struggling to hold support at its 100-dma.

 
 
  James Brown   4/29/200,  2:19:42 PM
Analog Devices Inc (ADI) is also weighing on chip stocks with a 3% breakdown below support at $45.00 and its 200-dma. Earnings are due out on or around May 13th.

 
 
  James Brown   4/29/200,  2:15:38 PM
Texas Instruments (TXN) appears to be the main culprit for the SOX weakness. Yesterday TXN broke down below its simple 200-dma. Today TXN is down 6.7% and breaking support at $26 and $25. Volume is strong at 22.6 million vs. 11.8 average.

 
 
  James Brown   4/29/200,  2:13:17 PM
QCOM is testing support at its rising 50-dma near $65.00.

 
 
  James Brown   4/29/200,  2:11:36 PM
Schlumberger (SLB) is down 1.88% and breaking support at the $60.0 mark trying to break support at its 100-dma (59.71). This could be a bearish candidate with a target near $55.

 
 
  James Brown   4/29/200,  2:09:16 PM
Like CSCO, shares of Intel (INTC) are hovering near support. A breakdown under last week's low could be very bearish.

 
 
  Linda Piazza   4/29/200,  2:05:43 PM
How are those two IPO's doing according to the 5MRT system we're using to watch them? After triggering a bearish play on a move below $14.32, BTRX steadied and then rose. It's finding resistance now (just before 2:00 EST) just below the low of the first five minutes of trade, at least demonstrating the importance of these first five-minute levels. Still, so far those who entered on the bearish trigger would be underwater right now, but the stop would not have been triggered. (Remember that we're talking about these trades hypothetically, as we're just paper-trading these to gather evidence as to whether this method works well with IPO's.)

After triggering a bullish play according to this system, CYTK then retreated, so that play participants would also be underwater here, too, but the stop would not have been triggered. I don't know. Although at first when we began watching these 5MRT trades with IPO's, we were finding that a lot of them did not trigger trades, but the ones that triggered seemed to perform well enough that it was worth testing them. Lately, the trades haven't seemed to perform consistently. This is why it's important to do that grunt work. Perhaps the 5MRT system works well for IPO's when the markets are trending and perhaps it doesn't work as well when market action is choppy, so that IPO's get whipped around, too. Perhaps IPO's just behave too unpredictably and we just hit on an early spate of good performers. We just have to watch longer to be sure. One benefit: clear-cut entries and exits, something that's hard to determine when you don't have historical S/R levels or trendlines or MA's for IPO's.

 
 
  James Brown   4/29/200,  2:05:33 PM
IBM is breaking support at the $90.00 mark today but be careful considering new bearish plays. Its P&F chart, while bearish, is testing support.

 
 
  James Brown   4/29/200,  2:02:35 PM
CSCO is back under support at its 200-dma and the $22.00 mark but I would be cautious about initiating bearish plays and probably look for a drop under last week's low near $21.80. The stock has faked out the bears before and earnings are coming up on May 11th.

 
 
  James Brown   4/29/200,  2:00:07 PM
Google just filed for a $2.7 billion IPO with the SEC.

 
 
  James Brown   4/29/200,  1:59:50 PM
observation.. the four-day sell off in ORCL is approaching strong support in the $11.15-11.40 range.

 
 
  James Brown   4/29/200,  1:58:39 PM
MWD, UBS and LEH were all on the OI watch list last night. These might be decent bearish candidates with a trigger under today's lows. Yet I would consider a tight stop on all of them since the down trend is maturing.

 
 
  Linda Piazza   4/29/200,  1:41:22 PM
The OEX is butting up against Keltner resistance just under 548, but it's looking as if the shortest-length channel is trying to turn up again and push up toward mid-channel resistance. That mid-channel resistance is currently at 549.82, but the OEX would likely have to zig-zag its way up there past this other resistance first. Unless the move is going to be one of the kind that Keene often labels impulsive, it's about time for a small pullback.

 
 
  James Brown   4/29/200,  1:35:18 PM
A reader asked what's happening to Apache Corp (APA). Besides the sell-off in the oil and oil services sector today it would appear that investors are not reacting positively to news out late last night.

APA issued a press release last night stating that 1,900 of its employees will share an award of restricted stock totaling $59 million. The stock-incentive plan, approved by shareholders back in 1997, never reached its milestones in 1999 but the Board renewed the program back in 2000. The payout will negatively impact APA's 2004 earnings by 5 cents per share.

OI's stop loss is under the 50-dma at $42.00 but APA is quickly approaching this level, currently down 3% to $42.25.

 
 
  Linda Piazza   4/29/200,  1:23:28 PM
In my 10:10 post, I mentioned that the BIX was trying to rise within a rising regression channel that might be a bear flag rising into resistance. That resistance in part comes from the neckline of a H&S formation. Since that time, the BIX did rise above the midline resistance of that rising regression channel, but it was bumped back. So far, there's been no downside break out of that regression channel, and the BIX could actually retreat another couple of points without breaking out of the channel to the downside.

 
 
  James Brown   4/29/200,  1:19:18 PM
The 01:15 update is posted. Link

 
 
  Linda Piazza   4/29/200,  1:04:52 PM
QCharts finally consented to give me a chart of IPO CYTK, just in time to see it moving above the bullish trigger according to Jeff's 5MRT system, with that trigger at $16.32. It's immediately turned around after hitting that trigger and showing a five-minute close above it. (Remember, this is a paper-trading, evidence-gathering exercise only.) The first five-minute range was 14.48-15.40, also a big percentage move. The stop would now be at that 14.48 low for the first five-minute range, and the target would be near 19.30, a huge move in my opinion.

 
 
  James Brown   4/29/200,  1:01:02 PM
FYI... the SOX is down 3.38% and has broken significant support at the 450 level...

 
 
  James Brown   4/29/200,  12:49:37 PM
Sector update...

Winners:
XAU gold/silver index: +1.51%
IUX insurance index: +0.41%
DRG drug index: +0.06%
and...Copper futures: +1.23%

(Biggest) Losers:
DJUSHB homebuilders: -4.5%
SOX semiconductors: -3.57%
NWX networking: -2.67%
DDX disk drives: -2.76%
GSO software: -2.06%
...also strongly lower oil services, natural gas, airlines, and hardware stocks.

 
 
  Linda Piazza   4/29/200,  12:49:25 PM
Jim may have mentioned the Wilshire 5000 already today, but this morning, it tried to push back above the 100-dma, managing to push up through 11,000, too, but it's now fallen back below both benchmarks. Although there's some support near 10,800, it sure looks as if it's headed down to test the 3/24 low of 10,629.20. I'm not suggesting that it will fall that far today, of course. One concern to that bearish outlook, however, is that MACD lines are just on the point of pushing below signal, and I've frequently found that's a tricky point for bearish players. Just as it looks as if the bearishness is about to be confirmed, those MACD lines sometimes flatten and turn up again at signal.

 
 
  James Brown   4/29/200,  12:45:17 PM
Will the third time be a charm? The "Donald" will find out soon as Trump plans to marry his fashion-model girlfriend Melanie Knauss making this his third wife.

 
 
  James Brown   4/29/200,  12:39:10 PM
... 30-year mortgage rates have climbed back above 6% marking a six-week climb for rates.

 
 
  Linda Piazza   4/29/200,  12:28:03 PM
Ever since yesterday, the OEX has been striving mightily to reach lower support on the 15-minute Keltner channels, but that support kept diving faster than the OEX was traveling. That lower support is now at 545.33, near the historical support I noted earlier. It's turning lower again, however.

 
 
  James Brown   4/29/200,  12:21:15 PM
Aetna Inc (AET) is down 3.47% and breaking down through support at $85 and its 50-dma after reporting earnings this morning. Analysts were looking for profits of $1.72 per share on revenues of $4.67 billion. AET managed to beat those numbers with $1.75 and $4.82 billion in revenues. Management then guided its full year numbers higher but investors are choosing to sell the news anyway.

Looking closer at AET one can see the bounce on the intraday chart from its lows this morning at $83.40 back to $86.25 but this rebound is fading and the move back under $85 makes this look like a bearish candidate. We don't like to play stocks this close to earnings but more aggressive bears could target a move to $80.00.

 
 
  Linda Piazza   4/29/200,  12:15:21 PM
IPO BRTX did trigger a bearish (paper-trade only, remember) play according to Jeff's 5MRT system with a drop below $14.32. It's consolidating below that level now in a rectangular pattern that could be part of a "b" distribution pattern, but could also be an effort to steady and climb higher. The stop would be just above that first five-minute high at $15.75 and the target would be just above $12.00, which seems a bit of a far-fetched target. This had a relatively large (percentage-wise) first five-minute range, so that makes the stop placed at a tough loss percentage-wise, but gains if the profit target were reached rather hefty, percentage-wise, too. We have few tools by which to watch such issues, and that first big range would have made this even riskier than other IPO's if we were actually trading it rather than watching it to gain anecdotal evidence.

 
 
  James Brown   4/29/200,  12:14:36 PM
Ikon Office Solutions (IKN) is down 11.3% and breaking numerous support levels after reporting earnings this morning that beat estimates by 2 cents. The negative impact is investor reaction to IKN guiding future earnings lower due to its sales of assets for IOS Capital to GE.

 
 
  Linda Piazza   4/29/200,  11:47:46 AM
The OEX fell below the right-shoulder level of a possible inverse H&S. I think I mentioned earlier that formation being on the five-minute chart, but it was actually on the 15-minute chart that the formation had been visible. I'd consider it defunct now, with the failure to complete this potentially bullish formation being itself a confirmation of continuing weakness.

 
 
  Linda Piazza   4/29/200,  11:39:56 AM
We have two IPO's today, BRTX and CYTK. BRTX has begun trading, with a first five minutes of trade producing a range from 15.03 to 15.75. BRTX would not yet have triggered either a bullish or a bearish trade according to Jeff's 5MRT model. My charting service is being cantankerous this morning, so I can't tell whether it's telling the truth when it says that CYTK is "not found." It said the same thing about the Wilshire 5000 a few minutes ago. Remember that we're only paper trading these issues according to Jeff's 5MRT system so that we can see how well it works on IPO's. We have few others technical analysis tools that might help with an IPO on the first day of trade. I encourage you to always put in the grunt work on any system you're considering using, because it's possible to have a good run for a while that still turns out to be an aberration when more tests are made.

 
 
  Linda Piazza   4/29/200,  11:30:37 AM
On the OEX mid-channel Keltner resistance held, but this pullback preserves the possibility of an inverse H&S forming on that 5-minute chart. A drop much below 548.80 will negate that possibility.

 
 
  James Brown   4/29/200,  11:19:37 AM
The 11:00 AM update is posted. Link

 
 
  Jane Fox   4/29/200,  11:13:41 AM
Dateline Bloomberg Crude oil futures fell as inventories soared to a 20-month high, signaling refiners may have adequate supplies to meet demand for petroleum products. Link

 
 
  Linda Piazza   4/29/200,  11:02:30 AM
The OEX is showing the possibility of an inverse H&S building on its five-minute chart. If so, it probably needs to pull back a little further to finish building that right shoulder before it rounds up again. That would also give those Keltner channel lines time to separate, so that they're not clumped together in a tight formation that prevents the OEX from breaking through.

 
 
  Linda Piazza   4/29/200,  10:52:09 AM
The OEX is trying to break out of the bull flag, but that's going to be tough, because doing so requires breaking above mid-channel Keltner resistance, from the current OEX 550.88 level up to 551.54.

 
 
  James Brown   4/29/200,  10:49:35 AM
Macromedia (MACR) is up 20.3% to $21.95 on strong volume. The move is a significant breakout from its six-month trading range and above its simple 200-dma. The company reported earnings last night and beat estimates by 7 cents. Management then raised its guidance for the current quarter and the year. Merrill Lynch came out this morning with an upgrade to a "buy".

 
 
  James Brown   4/29/200,  10:46:20 AM
Nortel Networks (NT) has bounced from the $3.80 mark for the second day in a row.

 
 
  James Brown   4/29/200,  10:42:29 AM
FYI: Very late last night the Associated Press published an article reporting that the FBI was warning LAPD about a potential terrorist threat against one of the local malls.

 
 
  Linda Piazza   4/29/200,  10:39:02 AM
I was having difficulties with my charting service earlier today, but I note now that the bounce was predicted, at least in the OEX, but a series of bullish divergences signaled on the OEX five-minute chart.

 
 
  Linda Piazza   4/29/200,  10:36:41 AM
The current OEX pattern on a two-minute chart looks like a bull flag.

 
 
  James Brown   4/29/200,  10:33:33 AM
FYI: President Bush and VP Cheney are currently answering questions by the 9/11 Commission in the White House.

 
 
  Linda Piazza   4/29/200,  10:32:41 AM
The OEX currently challenges the mid-channel Keltner resistance on the five-minute chart. I'm not certain whether this level of resistance will stop the OEX, as it was oversold for a long time on that Keltner chart, which sometimes predicts that it will get slung all the way toward the top of the channel. However, I still think the gathered 30-, 60-, and 120-minute 100/130-pma's should prove formidable, particularly since yesterday saw a gap down right at the level of those moving averages. Those averages now cross beginning at about 553.60 and are in a tight clump.

 
 
  James Brown   4/29/200,  10:21:33 AM
Estee Lauder (EL) is breaking out over resistance at $45.00 and hitting new three-year highs as investors respond to its earnings report last night and an upgrade to "over weight" by Prudential this morning. EL reported profits of 43 cents per share, ex-items, which was 8 cents better than estimates. Management raised its 2004 earnings guidance.

 
 
  James Brown   4/29/200,  10:18:02 AM
Nokia (NOK) is slipping lower toward support at $14.00 after its news this morning on the drop in its global market share and a downgrade from CSFB to "under perform".

 
 
  James Brown   4/29/200,  10:16:15 AM
Gillette (G) is up 3.15% and breaking out over resistance at $40.00 after beating earnings estimates by 8 cents this morning. Profits came in at 37 cents per share on revenues of $2.23 billion, which were also above analysts' expectations.

 
 
  James Brown   4/29/200,  10:14:07 AM
Sector Update...

Winners:
XAU gold & silver: +2.73%
IUX insurance: +1.08%
BIX banking index: +1.07%

Losers:
DJUSHB homebuilders: -2.5%
SOX semiconductors: -0.72%
GSO software index: -0.59%

 
 
  James Brown   4/29/200,  10:12:18 AM
TimeWarner (TWX) is up 4.5% to $17.25 after beating estimates by 6 cents last night. Revenues came in at $10.09 billion versus estimates of $9.53 billion.

 
 
  Jonathan Levinson   4/29/200,  10:11:56 AM
The Fed had 21.5B in expiring short term repos expiring today, and just replaced it with a 13.5B overnight repo for a net 8B short term drain. I'm ignoring the longer 14-day money as it remains more or less constant and is unreadable for day-to-day impact.

 
 
  James Brown   4/29/200,  10:10:29 AM
ON Semiconductor (ONNN) is down 7.16% and breaking down through key support at the $6.00 level and its simple 200-dma after reporting earnings last night. Traders are reacting to its earnings miss last night even though the company raised its revenue guidance for the second quarter. Needham has come out this morning with an upgrade to a "buy" but it's not helping the stock at the moment.

 
 
  Linda Piazza   4/29/200,  10:10:24 AM
The BIX has been trading in a rising regression channel on its daily chart since 4/15. That regression channel may be a bear flag. As QCharts automatically draws the regression channel, QCharts still has another point and half before it reaches the bottom of that channel. Hand-drawing a supporting trendline off that 4/15 low shows that the BIX is either breaking or threatening to break below that rising trendline, but is currently rising. What does that suggest? To me, it suggests that the BIX is trying to rise again within its rising regression channel. The top of that channel now crosses just above 342, which is itself just below the neckline of the big H&S that the BIX built from December to April. Therefore, another rise through the regression channel would constitute a test of that neckline. Link However, we should note that H&S formations have not been particularly reliable over the last months, so that we should watch for the possibility that the BIX could break back through that neckline.

 
 
  James Brown   4/29/200,  10:05:24 AM
Coca-Cola Enterprises (CCE) is on the rise after reporting earnings last night of 22 cents per share. This was 15 cents better than expected and the company raised its 2004 earnings guidance. In response UBS has upgraded the stock from "neutral" to a "buy" and pushed their price target to $32. CCE is up 1.94% to $25.14.

 
 
  James Brown   4/29/200,  10:02:11 AM
Centurytel Inc (CTL) is up 3.89% and breaking out over resistance at $28.00 and its 50-dma after beating earnings this morning by 5 cents and raising its full year guidance.

 
 
  Jim Brown   4/29/200,  10:00:04 AM
Help Wanted Index = 39, (est 41, last 40)

 
 
  Linda Piazza   4/29/200,  9:56:09 AM
The 4/21 OEX swing low was 545.38.

 
 
  Linda Piazza   4/29/200,  9:53:51 AM
If a trader had carried over a bearish play from yesterday, these Keltner channel breakouts we're getting still suggest that stops be lowered somewhat aggressively as the OEX drops lower but not necessarily that the play be exited or a long be entered. I'd definitely be cautious about entering any longs, although the OEX is approaching levels that have provided bounces in the recent past and although it's possible that the OEX could bounce all the way up to the upper-channel Keltner resistance. I expect that upper-channel resistance to decline fast enough that it perhaps approaches the level of the 30-, 60-, and 120-minute 100/130-pma's and known historical S/R near 553.50-554 by the time the OEX could rise high enough to test those averages. Since those breakout signals can be valid, however, bears should just be cautious and not let a bounce get out of hand and cut too deeply into a profitable play.

 
 
  Linda Piazza   4/29/200,  9:48:06 AM
The OEX 30-, 60-, and 120-minute 100/130-pma's clump closely together, beginning near 553.80. While those averages sometimes serve as a price magnet once the OEX drops too far from them, they also should now serve as formidable resistance on a retest, if the OEX should bounce either from the equal low level just hit this morning or from those support levels I mentioned earlier. The current level of the upper-channel Keltner resistance on the five-minute chart is higher than that, just above 555, and when the OEX has become as oversold as it has on that Keltner channel, it sometimes tests that upper line, but that line is dropping quickly.

 
 
  Linda Piazza   4/29/200,  9:41:46 AM
The OEX nested five-minute Keltner channels show resistance gathering near the historical S/R level at 549.50 and near the mid-channel resistance, currently at 551.68 but still dropping.

 
 
  Linda Piazza   4/29/200,  9:36:53 AM
During the first five minutes of trading, the OEX spanned a range from 547.84 to 549.03, continuing the bounce that began yesterday off the 50% retracement of the rally off the March 24 low.

Remember that, for now, such a bounce will be considered a countertrend or oversold bounce.

 
 
  Linda Piazza   4/29/200,  9:35:52 AM
This is why I don't like to speculate on where the OEX will open based on the SPX futures. There's not always a strong correlation, both because the big caps that compose the OEX might be acting differently than the bulk of stocks composing the SPX, and because sometimes the cash market opens slightly differently than you'd expect, based on the futures.

 
 
  Linda Piazza   4/29/200,  9:23:56 AM
Yesterday's OEX hit the 50% retracement of the rally off the 3/24 low, with that level only a few cents below yesterday's low of the day. It's natural for a 50% retracement to provide bounce potential, but yesterday's action didn't show much of a bounce, and futures this morning suggest that the OEX could open back near that retracement level or even slightly below it. The OEX closed the day beneath the steepest of the two ascending trendlines that mark the two versions of symmetrical triangles on the daily chart, which also showed weakness: Link The big question is whether the OEX will drop straight to test the bottom trendline defining the symmetrical triangle or whether it will first rise to test broken resistance or drop slightly, then bounce. Anything discovered in a study of intraday charts has to be tempered by the knowledge that the OEX's behavior could well become more and more volatile as the symmetrical triangle narrows. A study of the daily chart shows support nearing at 545.80-547, with the futures indicating the possibility that the OEX could open within that zone. MACD across the 30-, 60-, and 120-minute charts does not yet show a propensity to turn up, although the 30-minute does show a slight slowing of its descent if one squints just right when studying it. The five-minute Keltner charts show that the OEX is growing extremely oversold on a short-term basis, and vulnerable to a bounce up toward mid-channel resistance, currently at 553.90 but descending quickly. My best guess is that the OEX might attempt a bounce beginning anywhere from the current level to 543.75, but that the bounce might roll down again beneath resistance, perhaps somewhere near 552-554. That's just a guess, however, and worth little ahead of a look at how the market performs on the open.

 
 
  James Brown   4/29/200,  9:03:41 AM
I don't believe it. Yesterday it felt like summer here in Colorado. This morning it's snowing.

 
 
  Jonathan Levinson   4/29/200,  8:33:21 AM
GDP 4.2%, est. 5%, initial claims 338K, Chain deflator 2.5%, employment cost index 1.1%.

 
 
  Jonathan Levinson   4/29/200,  8:06:18 AM
We await the 8:30 release of the Q1 chain deflator, est. 2%, Q1 employment cost index, est. .9%, and initial claims, est. 343K.

 
 
  Linda Piazza   4/29/200,  7:21:57 AM
Good morning. The Nikkei was closed for a holiday Thursday, as it will be next Monday through Wednesday. With China reportedly deciding to tighten controls on lending, a report the country later denied, and South Korea's March industrial production unexpectedly declining, market participants found plenty to watch, with most Asian bourses declining. Whether or not the Chinese government issued an order or a suggestion that banks suspend lending until May 1, it's certainly true that the Chinese premier noted that the country's growth needed to be slowed. China's steel producers declined with some of those tightening measures reportedly directed at their industry. Throughout the region, commodity stocks and exporters generally declined. In addition, some stocks reacted to specific news. Hyundai Motor fell after its earnings report, a report that beat forecasts. I guess that U.S. news report yesterday that Hyundai was topping the list of least repairs here in the U.S. didn't help.

The Taiwan Weighted fell 2.62% and South Korea's Kospi declined 2.93%. Singapore's Straits Times declined 1.93% and Hong Kong's Hang Seng declined 1.31%. China's Shanghai Composite fell 1.70%.

Most European bourses currently trade lower, too, ahead of the release of our GDP number. China's news hit European miners and commodity-related issues just as they had their Asian counterparts. Steel stocks fell, and these stocks were joined by other stocks getting hit after their earnings announcements. One was German bank HVB, tumbling lower by more than 8% at one point this morning after it missed forecasts. ABB, a Swedish-Swiss engineering group, also missed forecasts and was declining in early trading, as was France Telecom after its earnings report. Subsidiary Equant saw a decline in revenue for the first quarter due to the pressure network services are seeing from cheaper IP-based connections, and Equant tumbled, too. Nokia reportedly lost market share and fell in early trading. Some reports sent stocks higher, however, as did DaimlerChrysler's, with the company's operating profits surprising to the upside. Net income and revenue declined, with the company mentioning the euro's weakness as contributing at least in part. Bayer raised expectations, and was climbing in early trading.

As of this writing, the FTSE 100 has lost 15.20 points or 0.34%, to trade at 4509.30. The CAC 40 has lost 38.22 points or 1.03%, to trade at 3684.37. The DAX has fallen 49.05 points or 1.21%, to trade at 4016.69.

 
 
  OI Technical Staff   4/28/200,  7:31:10 PM
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