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  Jeff Bailey   5/7/2004,  6:36:57 PM
Closing Internals at this Link

  Jeff Bailey   5/7/2004,  4:26:02 PM
U.S. Market Watch benchmark after nonfarm payrolls showed economy added 288,000 jobs in April. Link

U.S. Market Watch benchmark after the Fed left if target for fed funds unchanged at 1%. Link

  Jeff Bailey   5/7/2004,  4:18:00 PM
Semiconductor HOLDRs (SMH) $36.45 +1.25% ...

  Jim Brown   5/7/2004,  4:11:20 PM
QQQ calls based on the relative strength in the Nasdaq might be the plan for Monday

  Jeff Bailey   5/7/2004,  4:10:25 PM
S&P 500 (SPX.X) initial calculation for next week's pivot gives some correlation to a test of March lows.

s2= 1,079.24 s1= 1,088.97 p = 1,108.35, r1 = 1,118.08, r2= 1,137.46.

WEEKLY S2 may tie to the rising 200-day SMA (1,076.69)

With BIX.X closing below its 200-day SMA, this may bring some chatter over the weekend and find weakness early next week.

It will be interesting to see how many, if any, stocks gave PnF sell signals in the SPX today. Link

  Jeff Bailey   5/7/2004,  3:57:30 PM
Day trade alert for SMH ... I have not had charts for the past 30-minutes. If SMH has not stopped out my day trade short or hit target, I would want to hold this trade over the weekend.

  Linda Piazza   5/7/2004,  3:49:55 PM
That price/MACD divergence was telling the truth after all on the OEX five-minute chart, but this higher low won't be confirmed until there's a higher high, too. (Note: The OEX started turning down again as I typed.) Those in bearish OEX plays have a decision to make now. The OEX looks to close the day below the long-term ascending trendline on its daily chart, but above the 200-dma. MACD remains bearish. It's been a long time, however, since the OEX has touched upper channel Keltner resistance, currently at 546.53 but descending quickly, so there's vulnerability to a bounce up to that Keltner resistance to relieve some of this oversold pressure.

  Jim Brown   5/7/2004,  3:46:13 PM
We only have one economic report on Monday and that is the Kansas City Fed Manufacturing Survey at 11:00.

  Linda Piazza   5/7/2004,  3:36:08 PM
Tentative price/MACD divergence shows up on the OEX five-minute chart.

  Jeff Bailey   5/7/2004,  3:25:28 PM
QQQ $35.05 -0.55% ... trades session low.

  Jeff Bailey   5/7/2004,  3:21:41 PM
03:00 Internals at this Link

getting uglier

  Linda Piazza   5/7/2004,  3:18:50 PM
The OEX threatens to break out of the current pattern on its five-minute chart. Lower Keltner support is at 538.14, but the OEX has been overshooting that support since yesterday. It's still a time for bearish traders to keep lowering stops.

  Linda Piazza   5/7/2004,  3:11:52 PM
OI PUT PLAY BZH: After triggering this play this morning on a fall through $95.49, BZH has continued to decline. It's currently at $92.85, and trying to slow its descent as it nears the $90.50-92.00 support zone. We'll be looking at lowering the stop this weekend, initially set quite wide in case BZH saw a reflexive bounce after falling through the 200-dma, but conservative traders might want to set a breakeven stop now, not letting a profitable play turn unprofitable. Our official stop will probably be wider than that, but certainly narrower than the 10-point stop that's resulted from BZH's quick drop today.

  Jim Brown   5/7/2004,  3:02:08 PM
Consumer Credit = $5.7B, last month revised down (est $7.3B, last $4.2B)

  Linda Piazza   5/7/2004,  3:00:40 PM
How did European markets end the day today? The FTSE 100 closed at 4498.40, down 17.80 points or 0.39%. The CAC 40 closed at 3653.18, down 1.96 points or 0.05%, holding the flat-line level during the morning, dropping a quick 40 points--probably about the time our jobs number was released--and then rebounding just as quickly, and closing near the flat-line level. The DAX showed a similar pattern, but closed at 3895.64, down 13.82 points or 0.35%. None of these three is testing its 200-dma, with the DAX the closest, since the 200-dma is at 3768.57.

  Jeff Bailey   5/7/2004,  2:59:36 PM
Sell Program Premium SPX 1,102.13

  Jeff Bailey   5/7/2004,  2:59:09 PM
Bond market closes in 3 minutes YIELDS were higher yesterday and stocks managed to see a slight bounce to their close.

Will a rather SHARP rise in YIELD today be the difference? Where stocks see decline in last hour?

QQQ $35.25 -0.04% might hold the answer as it has refused to give up its DAILY Pivot.

  Jim Brown   5/7/2004,  2:56:14 PM
About 5 min until Consumer Credit

Consumer Credit (est $7.3B, last $4.2B)

  Jeff Bailey   5/7/2004,  2:55:17 PM
Day trade stop alert ... for BGO $2.33

  Keene Little   5/7/2004,  2:54:42 PM
XAU is getting a serious bop on the head today, currently down 4.00, or nearly 5%. At 78.34, we're rapidly approaching an area that has multiple levels of support. The 200-week average is around 76-77 (depending on simple or exponential moving average), there is an uptrend line from November 2001 that currently sits at about 73 and I have a fib support at the same 73 (where the 2nd leg down from the April 1st high is equal to 162% of the first leg down in January). For these reasons I don't like the reward/risk ratio to try a short here. We should be due for that bounce soon and I'm watching the pattern of this move down to tell me when to step back in long. Could be several days though.

  Jeff Bailey   5/7/2004,  2:54:21 PM
Buy program premium ... SPX 1,104.79

  Jeff Bailey   5/7/2004,  2:53:20 PM
AMEX Gold bugs ($HUI.X) 168.78 -5.39% ... session lows and now takes over today's sector loser.

Homebuilders (DJUSHB) 554.19 -4.78% ....

How BGO $2.31 -6.09%

  Linda Piazza   5/7/2004,  2:49:54 PM
The OEX has again hit bottom Keltner support, which again signals a time that bearish players should be following the OEX lower with their stops. This is especially true since the OEX hit that broadening channel support and is so close to the 200-dma, the OEX has dropped so strongly since Wednesday's close, and since this is a Friday afternoon. That doesn't mean that this current suspected bear flag will progress far, but only that bearish traders should be prepared if it should.

  Jeff Bailey   5/7/2004,  2:49:27 PM
Volatility Divergence .... VIX.X 18.04 +5.63%, VNX.X -1.5% and VXO 18.97 +7.47%.

VIX.X jumped from $17.20 to 18.15 during those 2 sell program premiums.

  Jeff Bailey   5/7/2004,  2:44:23 PM
Buy Program Premium SPX 1,102.30

  Jeff Bailey   5/7/2004,  2:38:12 PM
Semiconductor Index (SOX.X) 459.32 +1.51% ... those sell programs had the SOX slippling back below its DAILY S2 (460.21). SOX.X come back to test and I'm looking for resistance here. If QQQ $35.21 will crack back below its DAILY Pivot, then I'm thinking any short-term bulls in the semiconductors that played the nonfarm as a near-term positive, might let go to the downside.

  Jeff Bailey   5/7/2004,  2:32:15 PM
Sell program premiums ... there were two sell program premiums from 02:00-2:05 and then 02:05-02:10

Had SPX falling from then session low of 1,105 to its current session low of 1,100.13.

  Linda Piazza   5/7/2004,  2:26:02 PM
Here's the first OEX-related chart I posted today, complete with the original annotations, showing why that 537.60 level appeared to be support. Link I missed by a 30-minute bar my estimate of when the OEX would hit that descending trendline of the broadening formation, and it would have been a bit closer to that 537.60 estimate. However, the OEX is hitting that support now.

Oops. I cut off part of the annotations. The rest read "support near 540, and support from the 200-dma soon to coincide with support from the broadening formation."

  Linda Piazza   5/7/2004,  2:22:12 PM
What a time to have to answer the door. As per my comments in my first OEX-related post, those in profitable bearish plays should have a plan in mind as the OEX approaches possible support near 537.60. The 200-dma looks like an inevitable target, but looks can be deceiving, too.

  Jeff Bailey   5/7/2004,  2:18:05 PM
HL Camp & Company has their computers set for program buying at $-0.02 and selling at $-2.22.

  Jeff Bailey   5/7/2004,  2:16:29 PM
Day trade short alert .... for the Semi HOLDRs $36.56 here, stop $36.90, target $35.84.

  Jeff Bailey   5/7/2004,  2:15:21 PM
QQQ $35.21 -0.11% ... while not a bank in the bunch, pulls back to DAILY Pivot here.

  Jeff Bailey   5/7/2004,  2:13:58 PM
S&P Banks Index (BIX.X) 329.34 -2.14% ... breaking below its WEEKLY S1.

  Linda Piazza   5/7/2004,  1:47:09 PM
Next Keltner support for the OEX lies at 541.54 and then at 539.62 below that.

  Linda Piazza   5/7/2004,  1:37:06 PM
Once earlier today I noted that the OEX had formed a doji and was sitting right on the long-term ascending trendline, and that's just about where it is now, too. It does have a small body now, rather than being a pure doji, but there sure hasn't been much movement from the time of that earlier post.

By the way, 30-minute RSI again rolled down after testing its reverse H&S neckline.

  Jim Brown   5/7/2004,  1:16:15 PM
Jeff, great chart!

  Jeff Bailey   5/7/2004,  1:11:57 PM
Per Jim's 12:43:45 and Jonathan's Market Monitor post from yesterday.

Here's a chart of the SPX that covers the 1994 period Jim mentions and why gold's action could be critical key to future market direction. Link

  Linda Piazza   5/7/2004,  1:09:42 PM
That reverse RSI H&S on the OEX 30-minute chart is now challenging its neckline level again, so perhaps that pullback was just a deeper right-shoulder pullback. We'll soon see.

  Jeff Bailey   5/7/2004,  12:50:27 PM
U.S. Dollar Index (dx00y) 91.13 +1.39% ... while 30-minute delayed, back to test its still trending lower 200-day SMA. WEEKLY R1 (91.32) has not yet been tested after session high has been 91.27.

A squeeze in the dollar could be trouble for gold is my thinking.

  Linda Piazza   5/7/2004,  12:48:03 PM
The OEX is making another push for the mid-channel resistance on the Keltner charts, with that resistance at 543.50 and with further resistance at 544.39.

  Jim Brown   5/7/2004,  12:43:45 PM
Fed Funds Futures don't lie
The Fed Funds futures have nearly a 100% success rate in predicting future rate hikes. As of noon today the Fed funds futures are now calling for a 92% chance of a +25 point hike at the June meeting and successive hikes of +25 points at each of the Aug, Sept and Nov meetings. The Fed target is showing as 2.0% by the end of November. There is already a 76% chance of another +25 point hike in December. If this comes to pass it will be eerily similar to the rate of hikes in 1994 that I posted this morning.

  Jeff Bailey   5/7/2004,  12:42:40 PM
Day trade short alert ... Bema Gold (BGO) $2.29 here (cross the bid), stop $2.33, target $2.21 by the close.

10-year YIELD ($TNX.X) just at session high of 47.82, or 4.782%.

  Linda Piazza   5/7/2004,  12:36:45 PM
Here's a chart on the BIX that I've been posting periodically, with updates to the annotations: Link The BIX sits at its 200-dma today.

  Jim Brown   5/7/2004,  12:33:45 PM
Wanted to chime in on the job situation. I'm an engineer, have been in Houston for over 15 years, 6 at NASA and 9 in the medical device industry. As of last sunday's paper, there were zero listings for engineers, QA, regulatory, etc in either industry. One of my former medical device employers, a Fortune 500 co., recently gave pink slips to their Houston division - the last major medical company here (several minor ones, though), so we can add another 40 or so tech folks to the list in the near future. You can just imagine how enthusiastic my NASA buddies are about continued employment there... Even though we have a huge petrochem industry here, there were less than two 1-sided pages listed for engineer/technical - and that includes low-level temp drafters for oil & petrochem. Very few high-end technical jobs here; lots in the service sector(s).

Receiving several of these. I did receive an email from one reader who said his friend went to work out of high school at McDonalds and while everybody made fun of him then he had the last laugh and ended up owning two stores only 12 years later. I suggested that was probably a very rare case.

  Jeff Bailey   5/7/2004,  12:30:35 PM
Internals look terrible, and just how/why the QQQ finds any bid is a bit beyond me at this point.

It just continues to feel like money makes these very short-term rotations from here to there, eventual result is slow step lower, with intermediate pops up.

  Jeff Bailey   5/7/2004,  12:27:24 PM
12:00 Internals at this Link

Yesterday's internals at this Link

  Linda Piazza   5/7/2004,  12:18:43 PM
The OEX 30-minute RSI pulled back from the neckline of the possible reverse RSI H&S I mentioned in my 11:04 post. While the RSI may be just pulling back for another shoulder, it doesn't look that way at the moment. As I mentioned in that post and a later one, when the RSI had begun hinting that it was going to rollover at the neckline, watching these RSI trendlines can provide much insight into OEX behavior. While RSI can be fickle, trendline behavior is usually more reliable. The strong benefit, too, is that RSI behavior usually leads the index, so you get that hint of what may happen and can prepare. That's why I was watching to see whether it would break through that neckline or rollover under it.

  Jane Fox   5/7/2004,  12:14:12 PM
Linda how sad.

  Linda Piazza   5/7/2004,  12:11:33 PM
In regard to Jim's 11:56 post, I can offer two anecdotes with differing outlooks. My son-in-law also works in a high-tech job, was laid off during the dot.com bust when his company went under, was without work for many months as were all his highly-educated poker buddies, and finally found work with a hanging-on-by-the-fingernails-with-little-cash-flow high tech company. A few months ago, they began hiring again, with my son-in-law bringing in some of his former co-workers. That company was just bought out last week by a bigger company, and he says things appear to be looking up.

Another young adult I know, however, has recently moved to Dallas after suffering through the changes brought about by the changing economy. His educational level is not the same as my son-in-law's, but he does have some post-high school education, he's a hard worker and had pulled down decent wages for a while before being laid off in two mass layoffs in the bear-market days, one after the other. In despair, he began his own company--weren't we hearing that was happening?-- but that business went predictably belly up since he had no capital to weather a slow spell. Now he's diligently looking for work, calling, interviewing (at least he's getting interviews), sending resumes, visiting staffing agencies. The staffing agencies laugh at him and send him away. What he's finding is that his lack of steady employment is impacting even the $8-10 jobs, as they want people with . . . well, with everything. With no more than two jobs in the last three years, spotless credit history, degree if they can get it. He's applying for work with Halliburton in Iraq or Afghanistan. No joking.

  Jeff Bailey   5/7/2004,  11:57:25 AM
American Elec. Power $29.45 -3.37% .... looking around for a utility short. Setting this one up for a potential short entry point back near $27.75 intra-day. Falling below RED #4 here.

  Jim Brown   5/7/2004,  11:56:31 AM
Sure would like to know where those jobs are! I was laid off a high tech sales job 25 months ago, and have several friends who have met the same fate since. None of them has found a comperable job, and prospects are still slim. My wife works at the local Home Depot, which does have openings fairly regularly (in the $8 to $10/hr. range), but most are to replace employees who have quit, not an increase in overall employment. Also the want ads in the local papers are not showing any improvement. I'm wondering if all these jobs are at McDonalds, or am I totally out of the loop? Would like to hear from folks in other parts of the country for their opinions.

I hear you loud and clear. With the fast food places, Wal-Mart and others opening locations as fast as they can build them it appears they are fueling our job growth. According to today's report nearly one half of the April jobs were in service businesses. (low dollar)

  Linda Piazza   5/7/2004,  11:53:14 AM
OI Put Play BZH triggered today with a drop below its 200-dma and through $95.49. We've kept a wide stop on this play because of the possibility that BZH might see a reflexive bounce after dropping below the 200-dma. We'd like to see BZH close below that important moving average. It's tested it but hasn't been able to climb back above it, with volume rising today. Those who want a closer stop could consider one just above historical resistance at $99.00 or just above the top of January's gap down, at $97.00, or could even set a stop based on the fall below the 200-dma, and so plan an exit just a little above it. We'll be re-evaluating the stop in the weekend newsletter, but each of these has benefits and drawbacks, including the possibility of being whipsawed out of a trade that might end up being profitable. If we could see into the future, we'd know exactly what to do, but for now, don't feel compelled to hold to that wide stop at $100.36 if your personal trading plan does not include such wide stops. Another possibility is to set a stop based on the option price, opting to exit if that declines by 1/3 to 1/2.

  Jim Brown   5/7/2004,  11:42:58 AM
2004 has been mentioned numerous times as being economically identical to 1994. The Fed had been on hold for three years and suddenly found themselves behind the curve with the economy exploding out of the post gulf war recession. They launched a series of seven rate hikes beginning in February-94 and ending in Feb-95. Two of those seven hikes were outside of regular Fed meetings. Note the severity of the hikes when the Fed is behind the curve.

- Date - Day - Hike
02/04/94 Fri +0.25 post Jobs surprise
03/22/94 Tue +0.25
04/18/94 Mon +0.25 surprise
05/17/94 Tue +0.50
08/16/94 Tue +0.50
11/15/94 Tue +0.75
02/01/95 Wed +0.50

This sudden race to catch up with the economy caused a period of stagnation for two years as the economy went into shock.

  Linda Piazza   5/7/2004,  11:33:53 AM
A look at the OEX daily chart shows a doji sitting right on that long-term ascending trendline. MACD still says more downside. The 30-minute MACD suggests no more downside until we try the upside first. On the 30-minute chart, that RSI reverse H&S has not yet been able to break above its neckline level, and in fact is hinting at a rollover (don't trust these hints on RSI, however) below it instead. I'm not so sure that much headway will be made, despite the 30-minute MACD bullish cross (from below signal, however).

  Jim Brown   5/7/2004,  11:27:18 AM
I was researching rate hike dates and found that the first rate hike in 1994, after three years of cuts and low rates around the first gulf war, was on a Friday after the Jobs report. (2/4/1994) This was the first of six rate hikes for that year totalling +2.50%. The Fed was behind the curve and raced to catch up. Sound familar?

  Linda Piazza   5/7/2004,  11:18:00 AM
OI Play AU: The weakness in the miners hit OI call play AU, sending it below its stop. The play will be closed this weekend.

  Jeff Bailey   5/7/2004,  11:15:48 AM
10-year YIELD ($TNX.X) that little tick above morning congestion at 47.55 just seconds ago sent the $HUI.X to new session low, and also has SPX seeing a quick little dip lower to 1,109.86.

  Jim Brown   5/7/2004,  11:09:08 AM
The A/D volume is in a dead heat at 655m to 616m in favor of advancers. however, the decliners across all markets are leading advancers 2:1 at 3922 to 1978. The tide is turning in the favor of of the sellers.

  Linda Piazza   5/7/2004,  11:04:51 AM
We haven't checked the 30-, 60-, and 120-minute 100/130-pma's in a while as the OEX has been trading so far below them. This morning's first push, on the 9:30 thirty-minute candle, sent the OEX up toward the 30-minute 100-pma at 546.89, but the OEX fell back quickly. To help me decide if the OEX is likely to retest that average or roll down again, I'm watching a reverse H&S seen on 30-minute RSI. An upside break of a similar reverse RSI H&S on 4/22 preceded by that big swoop higher on that date, serving as advance warning. Link That's not a foolproof guide, as RSI can be fickle, but generally RSI trendline breaks are more reliable that the actual number registering on RSI. They can also show us when the OEX is likely to roll down when RSI first does so at a trendline, so watch that RSI behavior as one guide to help prepare for OEX price action, but let the price action determine your decisions.

  Jim Brown   5/7/2004,  11:02:20 AM
The Jobs numbers were much stronger than they appear on the surface. The +288K for April was in addition to upward revisions for Feb and March. February was revised up from 46K to 83K and March was revised up from 308K to 337K. These revisions add +66K to the +288K for April for a net increase of +354K over last months numbers.

Various major brokers like JPM and Merrill have already issued a warning that a June +25 point increase is almost a sure thing and the Fed funds futures are now showing better than 100% chance for an increase before August and moving toward +50 points before August.

The Fed has been known to react to stronger than expected numbers on the Monday after a Jobs report in a rising economy, rising rate environment. That wildcard for Monday could keep a lid on any gains today.

  Jeff Bailey   5/7/2004,  11:01:36 AM
QQQ $35.48 +0.62% ... as I look at the drag from interest sensitive and gain from tech, I get the feeling that QQQ is going to see a range-bound trade from its DAILY Pivot and WEEKLY Pivot at this point.

SPX 1,111.72 -0.2% really shows the stretch, or pull at both ends from tech/financial.

  Linda Piazza   5/7/2004,  10:49:38 AM
On April 28, I noted that SIRI was testing the 72-ema again. For a year, tests of that 72-ema have sent SIRI higher and have been good buying opportunities. However, on that day, I questioned whether that would happen again. Here's part of that post: This time, oscillators show the possibility of more downside to go and the last bounce was into a lower high. I'm not as certain that SIRI will bounce this time or bounce as strongly. It's been in a downtrend since early April. It's hitting the downside support on that descending regression channel as I type. That means SIRI is at a make-or-break point today, with a downside break out of that channel and below the 72-ema (particularly a close below it) signifying a change in trend, while a bounce would preserve the trend. SIRI will face upside resistance from that channel at about $3.70, so will not break out to the upside until above that point, confirmed by a move above gap resistance at $3.80.

SIRI closed below the 72-ema the next day, and then rose into a lower high, not meeting that standard for breaking out to the upside. Today, it again closed below that average and is just below it as I type. Why is this important? SIRI isn't a market-moving stock. However, I've been watching bounces from this average for a while on many indices and many stocks. Those bounces occurred so frequently last year and early this year that it's one benchmark I've been watching for a change in market behavior. I consider SIRI's behavior an early warning signal, sort of like one of the oscillators that reacts quickly, but may not be reliable. We shouldn't make market decisions based on SIRI's behavior, but its behavior and that of some others are something I like to observe from time to time, just as a check of how things are going.

  Jeff Bailey   5/7/2004,  10:45:19 AM
Day trade stop alert for QQQ $35.52 +0.63% ... shorted the DAILY Pivot and lost. (terrible)

Daily R1 here.

  Jeff Bailey   5/7/2004,  10:43:43 AM
10-year YIELD ($TNX.X) .... 47.47 or 4.474% is just at some morning congestion highs. I've set an al_rt just above congestion high of 4.754% to see if a break higher from there might bring any type of equity response.

Other than interest rate sensitive sectors like Financials, Housing and Gold, most sectors holding in there.

  Jeff Bailey   5/7/2004,  10:39:37 AM
Semiconductor Index (SOX.X) 460.99 +1.88% ... trying to make a move above DAILY R2.

QQQ $35.42 +0.45%.

For my day trade short in the QQQ, I need a seller in the SOX.X pretty darned quick.

  Linda Piazza   5/7/2004,  10:31:16 AM
The OEX is hugging that trendline that defines lower triangle support. Just doesn't want to give it up.

  Linda Piazza   5/7/2004,  10:29:22 AM
We haven't talked much about the TRAN lately. What's it doing today? It's trying its best to maintain the 2900 level and the 50-dma, now at 2890.04, barely holding onto the 50-dma and but not able to stay above the 2900 level. The daily chart pattern looks like a H&S with the right shoulder truncated. Matters are looking precarious for the TRAN here, but it hasn't yet broken through that neckline that's about at the level of today's low, at 2883.55. The 200-dma may soon catch the TRAN, however, if it falls, with the 200-dma located at 2856.52.

  Jeff Bailey   5/7/2004,  10:24:28 AM
U.S. Market Watch at this Link

  Linda Piazza   5/7/2004,  10:21:08 AM
The OEX five-minute chart shows the possibility for a H&S to form, with the left shoulder and head formed and with the neckline declining steeply. Before that can happen, however, the OEX has to bounce up into a right shoulder, and the bounce is tentative as yet. Weighed against that bearish possibility is some tentative bullish divergence beginning to show up on a Keltner chart basis. That may be showing nothing more than a possible bounce up into a right shoulder, however.

  Keene Little   5/7/2004,  10:17:29 AM
XAU just made a new low below the low on May 3rd, which obviously negates any potential impulse leg up from that date, making it just a corrective bounce. Any long plays in NEM can be closed out here or wait for the next bounce which is a little tougher to do since you don't know how low this will drop before the next bounce. Thinking long the gold stocks is no longer the right idea. I'll be waiting to see where the next potential support level comes in since I think it's risky trying to short these stocks, but too early to try a long.

  Jeff Bailey   5/7/2004,  10:15:08 AM
Day trade short alert .... for the QQQ $35.30 here, stop $35.52 (to beging), target $34.92.

  Jonathan Levinson   5/7/2004,  10:04:02 AM
The expiring overnight repo in the amount of 3.5B has been rolled over by a 3.5B 6-day repo in the same amount- no net gain or drain today.

  Jeff Bailey   5/7/2004,  10:03:49 AM
S&P 500 Index (SPX.X) 1,110.79 -0.28% .... holding at our overlap WEEKLY/MONTHLY level of 1,111 right now.

BIX.X 333.07 -1.02%

  Jeff Bailey   5/7/2004,  9:59:33 AM
OSI Pharma (OSIP) $76.55 -0.89% ... hanging around at our fitted 38.2% retracement right now.

Biotechnology Index (BTK.X) 524.51 +0.55% ...

  Jeff Bailey   5/7/2004,  9:58:07 AM
10-year YIELD ($TNX.X) jumped sharply on selling to 47.23, or 4.723%, and has been bound between a high yield of 47.75 and 47.12.

  Jeff Bailey   5/7/2004,  9:56:28 AM
Sector action is mixed with SOX.X +1.11%, Disk Drive (DDX.X) +0.92%, Networking (NWX.X) +0.95%.

Weakness is Gold Bugs ($HUI.X) 176.22 -1.22% and PHLX Housing (HGX.X) -1.04%. Not getting quotes for DJUSHB at this point.

  Jeff Bailey   5/7/2004,  9:53:04 AM
SOX.X 458.43 +1.31% ... coming back to test WEEKLY Pivot here, and will monitor closely for either a kick higher or softness at this pivot.

Regarding last Ask the Analyst column, we may find the QQQ and the SOX just sitting around their WEEKLY Pivots (based on early morning action), but I'm looking for QQQ short opportunity back near it WEEKLY Pivot, which did see trade 10-minutes ago.

  Linda Piazza   5/7/2004,  9:38:56 AM
During the first five minutes of trading, the OEX spanned a range from 543.43 to 542.82.

  Linda Piazza   5/7/2004,  9:36:24 AM
The OEX's ascending trendline is holding so far.

  Jeff Bailey   5/7/2004,  9:36:11 AM
Semiconductor Index (SOX.X) 458.40 +1.3% .... trades WEEKLY Pivot here.

  Linda Piazza   5/7/2004,  9:35:35 AM
The OEX opened back below mid-channel S/R on the Keltner charts I watch, and now is testing the ascending trendline that began building about 12:30 yesterday.

  Jeff Bailey   5/7/2004,  9:34:53 AM
Buy/Sell program premiums ... I'll update today's buy/sell program premium levels when HL Camp updates them.

  Linda Piazza   5/7/2004,  9:19:11 AM
Remember our discussion the other day about the 200-sma vs. the 200-ema, and my saying that I preferred to watch the -ema on tech-related indices? Here's the view of what's been happening on the Nasdaq with respect to these two averages, with those averages in red: the 200-sma Link and the 200-ema Link . While it's always important to watch what market gurus are watching, these results convince me, as they have for a while, that's someone is watching those -ema's on tech-related indices.

  Jane Fox   5/7/2004,  9:18:47 AM
After the US payroll data was released, Fed-funds futures has priced in nearly a 100% chance of a quarter-point rate increase at the Fed's June meeting.

  Jane Fox   5/7/2004,  9:13:47 AM
Dateline WSJ A confidential and previously undisclosed Red Cross report delivered to the Bush administration earlier this year concluded that abuse of prisoners in Iraq in custody of U.S. military intelligence was widespread and in some cases "tantamount to torture."

Among other allegations, the report says prisoners were kept naked in empty cells at Baghdad's Abu Ghraib prison; that prisoners were beaten by coalition forces, in one case leading to death; that coalition forces fired on unarmed prisoners multiple times from watchtowers, killing some of them; and that coalition forces committed "serious violations" of the Geneva Conventions governing treatment of prisoners of war.

Overall, the 24-page report, based on International Committee of the Red Cross inspections and interviews in Iraq from March to November 2003, alleges that prisoners in intelligence interrogations were subjected to harsh and often brutal treatment as part of a regular practice of trying to "obtain confessions and extract information."

  Linda Piazza   5/7/2004,  9:10:25 AM
The OEX daily chart sure looks as if this index prepares for a slide down to test its 200-dma, but appearances can be deceiving. It looked as if it would do so yesterday, too, breaking below the recent support near 540.90. The problem is that there's a broadening formation on this chart, with the breakdown level difficult to discern because support descends. Link However, from this pre-market perspective, it looks as if the slide has actually begun. If in bearish positions, guard profits near 537.60, the level of the descending support from the broadening formation. Have a plan in mind in advance as that level and then the 200-dma are approached, if they are. If deciding to go long today on the possibility of a bounce, make plans in advance for handling the 72-ema, as that average turned back the OEX advance on Tuesday and last Thursday. What about a new bearish position? That's difficult, because of that sliding-lower support. Some might enter on a break below 540, but, if so, should be prepared for a possible quick exit just a few points below that, at 537.60, if that level should stop the OEX. The 200-dma should be a price magnet, but since the 200-dma is at 534.01 now, 537.60 may be close enough to consider that average tested.

  Jonathan Levinson   5/7/2004,  8:31:03 AM
05/07/2004 08:29 +DJ US April Nonfarm Payrolls +288K; Consensus +150K

Unemploymnent rate 5.6%

  Jonathan Levinson   5/7/2004,  8:16:47 AM
We await nonfarm payrolls, est. 165K, unemployment rate, est. 5.7%, hourly earnings, est. .2% and average workweek, est. 33.8. Imagine an average workweek of 33.8 hours!

  Linda Piazza   5/7/2004,  7:20:44 AM
Good morning. The Nikkei opened more than 70 points in the red Friday morning, then slipped lower in early trading, with big caps such as Toyota Motor and Mizuho Financial leading the early declines. Then the Nikkei climbed through the rest of the morning and much of the afternoon, twice making it above the flat-line level. After the second, equal high, the Nikkei plunged through the rest of the afternoon, closing down 132.52 points or 1.15%, at 11,438.82. That was its lowest close since March 24 when it closed at 11,364.99. One article notes that the Nikkei has lost 6 percent since April 26, when it closed at a 33-month high.

Mizuho Financial had paced declines in early trading and financials continued to lead declines throughout the day. With the exception of Honda, the auto sector mostly traded lower, with Mitsubishi Motors leading the declines in that sector's stocks. The company's president announced plans for a quality-control team after yesterday's arrest of seven of its executives. Those arrests related to a fatal accident involving a truck manufactured by one of its units. Exporters mostly traded lower, although one report noted that the weaker yen helped a few post gains, including Fujitsu and Honda. Musical instrument manufacturer Yamaha lost more than 10% after its earnings report and a forecast that net profit would fall for the fiscal year ending in March 2005. One sector posting gains at the end of the day was the steelmakers. Earlier in the day, a report that steel exports from Japan had decreased 2% in the last business year had sent the steelmakers lower.

Other Asian bourses turned in mixed performances. Taiwan Semiconductor reported record sales for April and climbed 2.7%. The Taiwan Weighted gained 2.21%. In South Korea, Samsung Electronics and Hynix Semiconductor posted strong gains of 2.3 and 6.9%, respectively, but the Kospi gained only 0.13%. Singapore's Straits Times saw a loss of 1.23%, with Chartered Manufacturing and Singapore Telecom down 1.4 and 1.3%, respectively. Hong Kong's Hang Seng declined 0.83%. China's Shanghai Composite remains closed for the May holidays.

Most European bourses trade cautiously lower, with the CAC 40 holding onto slight gains as I type. Weakness in U.S. markets, fear of a strong non-farm payroll number today, and a new Bin Laden tape all make European markets jittery. Some oil majors traded lower, with France's Total slipping slightly below the flat-line level after reporting earnings that showed Q1 net income and sales hit by higher costs, a weaker dollar, and lower European refining margins. In the U.K., however, oil majors were mixed. Other stocks in the news included Germany chipmaker Infineon Technologies and Italian airline Alitalia, both posting gains in early trading. Alitalia was suspended from trading twice as the company hammers out a plan to avoid bankruptcy. After being opened again for trading this morning, it zoomed up 24%, but was then suspended again. Infineon rose at least in part due to the rise of spot prices of benchmark memory chips, with that information coming from DRAMexchange.com. Infineon has chosen a new CEO, with that choice to be confirmed in next week's board meeting. Perhaps of interest to those watching the transports, a U.K. shipping, ports, and ferries group noted that strength in Asia and Europe prompted a 17% rise in Q1 container volume in ports. However, passengers on ferries declined as did freight rates.

As of this writing, the FTSE 100 had fallen 18.20 points or 0.40%. The CAC 40 had added 2.39 points or 0.07%. The DAX had fallen 9.86 points or 0.25%.

  Jeff Bailey   5/6/2004,  12:46:47 AM
QCharts pivot retracement caution .... One thing I want to caution about at this time is the following.

One thing I really need to backtest, or check, is if, or how QCharts' pivot analysis may or may not fix any "bad ticks."

Each night, when I update the cash indices I track in the pivot matrix, I try and make sure to check that there were not any "bad ticks" during the session, where the bad tick would create an innacurate HIGH or LOW session trade (QQQ does it alot and did today to $35.52), which would throw off the the next day's pivot matrix.

As such, traders might want to quickly review any intra-day bad ticks from the session prior.

  Jeff Bailey   5/6/2004,  12:34:45 AM
e-mini S&P (es04m) with DAILY pivot retracement, all sessions, 10-minute intervals. Link

Once QCharts enables some capability to turn on, or show a more limited number of (WEEKLY or DAILY) pivot levels, we will be able to look at a lot of charts more quickly, without a cluttered look of 1000 study periods.

Do futures trade pivot levels with any significance? You be the judge.

I'm very excited about this feature in QCharts, and it really comes down to my recent Ask the Analyst column. Remember all the hard work we did in trying to study just the QQQ and SOX, and how they were trading within their WEEKLY Pivots? Trying to pick up on the pattern? Now it can become much quicker, where we should be able to place the actual Pivot levels in a series of patterns, to actually better pick up on the pattern of trade, then assign simple if, then, else trade rules.

  Jeff Bailey   5/6/2004,  12:21:01 AM
e-mini S&P (es04m) .... here's a 60-minute interval chart (all sessions) with QCharts' WEEKLY pivot levels turned on. Link

  Jeff Bailey   5/6/2004,  11:25:35 PM
Pivot Matrix for tomorrow at this Link

It's 11:28 PM EDT and the U.S. Dollar Index (dx00y) 90.13 has been extending Thursday's gains (30-minute delayed, so dx00y trading 90.13 at 10:58 PM EDT), and now trades its DAILY R1. To me, this would have to suggest an overseas anticipatory trade for a stronger than expected nonfarm payroll number. This action would also have the dx00y back above its MONTHLY S1, which was violated to the downside AFTER the Fed decided to leave its Fed funds rate unchanged on Tuesday.

Spot Gold as I type is trading 385.90 in Hong Kong, down $1.90 from its New York close of $387.80.

This action would have to begin to suggest that Treasury YIELD moving higher at the open of tomorrow's trade.

If so, then this would have to suggest a stronger than expected nonfarm payroll number.

If so, then this would have to suggest that based on recent action, stocks will open lower in the morning.

If so, then DAILY R1 levels in the Pivot Matrix, which find suspicious correlatiion with the WEEKLY/MONTHLY Pivots, should hold resistance, should we see a knee-jerk reaction to a stronger than expected nonfarm payroll number.

And this will be the test for current market psychology that HIGHER YIELDS at this stage of the economic recovery, or expansion, might damage economic recover, only because the Fed has been too easy with its monetary policy. However, gold trade at this point, as noted in Thursday's Market Monitor, may not make sense, and perhaps the MARKET does see the Fed's current stance on interest rates as accurate.

If so, conviction among equity traders of positive Fed policy would be enough to see a break above noted correlative resistance level, where special note in Friday's trade would be the MONTHLY Pivot, which we will carry over to next week's trade.

How could stocks open lower, but still trade back to or above the WEEKLY/MONTHLY correlation?

The 10-year YIELD ($TNX.X) is entering some YIELD territory, where WEEKLY R2 46.53, or 4.653% is VERY close to the August 14, 2003 YIELD high of 46.68, or 4.668%, and one would have to be alert to YIELD selling (treasury buying) on a purely technical level. For this reason, I have made note in the 10-year YIELD, just above WEEKLY R1, to monitor closely, the RATE OF CHANGE.

Trader's can watch bond YIELD early, BEFORE the nonfarm and then just after the nonfarm numbers are released. You can bet stock futures traders will.

Traders/investors following Jonathan Levinson's scenario for current Fed policy disaster may rely on Jonathan's early morning analysis and any trade recommendation he might have for traders with his expertise in gold/bond/dollar relationship and scenario he noted in Thursday's Market Monitor, which I discussed and provided some tests for in Thursday's Index Trader Wrap. Link

  OI Technical Staff   5/6/2004,  7:23:54 PM
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