Option Investor
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  Jeff Bailey   5/13/200,  6:12:20 PM
Closing Internals at this Link

  Jeff Bailey   5/13/200,  6:03:48 PM
Current Trade Table at this Link

Targets for options are based on underlying stock. Will most likely look to close out the CSCO May $22.50 calls tomorrow unless CSCO declines early in session and broader market weakness.

MACE and MAMA showed some sign I thought of short covering, but if so, then shorts not overly eager as major indices gave little reason to press. (Have been seeing a few more percentage gainers among the smaller priced stocks past couple of sessions, but nothing like the 60% to 100% gainers we had a few weeks back)

TASR $29.10 +3.19%, which I didn't profile as a long, but thought might be a bullish trade candidate in last night's monitor, did see a session high of $31.24, but slipped back to its close.

OSIP $78.19 +0.38%, which had a nice bounce yesterday, traded session high of $79.50 in latter half of session, but here too, I sense any shorts didn't feel overly pressed.

  Jim Brown   5/13/200,  4:10:14 PM
Dell down nearly -$1 from the close on some perceived earnings weakness

  Jim Brown   5/13/200,  4:00:18 PM
Earnings After the Close - Reduced List:

ADI est = +0.35, actual = +0.39
KSS est = +0.33, actual = +0.33
ADIC est = +0.09, actual = -0.02 miss
BEAS est = +0.08, actual = +0.08 rev light
DELL est = +0.28, actual = +0.28
Dell earnings guidance was inline,
rev slightly higher

  Linda Piazza   5/13/200,  3:55:48 PM
What an awful day, right? Lots of gyrations, none of which meant much, but there sure wasn't much follow-through on yesterday's gains, was there?

  Linda Piazza   5/13/200,  3:34:43 PM
I've been trying to think of something to say about current OEX behavior, something that won't lure players into a play (so trying not to sound either bullish or bearish). Here's what I can come up with: maybe tomorrow will be better.

  Jeff Bailey   5/13/200,  3:33:38 PM
Sell Program Premium SPX 1,095.05 -0.20% .... active today

  Linda Piazza   5/13/200,  3:26:01 PM
OI Put Play LTR: LTR blew through our lowered $57.75 stop today. We were worried when LTR refused to fall, finding support on its 100-dma. Although MO was hit hard by the decisions soon to be made in the government's tobacco case, LTR didn't budge. We accordingly lowered the stop last night to take play participants out at a lower level if LTR bounced, as it's doing today.

  Linda Piazza   5/13/200,  3:21:28 PM
OI Put Play AMZN: Today, AMZN challenges its 50-dma. It's rising strongly, but volume has begun decreasing as it rises. That's good when we're in a bearish play, but what would be better is if it doesn't rise at all! Stochastics are beginning to turn up through the signal line as AMZN faces next resistance. That resistance needs to hold--as it might--or the play will soon be stopped.

  Jeff Bailey   5/13/200,  3:19:15 PM
Buy Program Premium SPX 1,096.28.

  Jeff Bailey   5/13/200,  3:17:32 PM
Day trade raise bullish stop alert ... for MAMA $13.92 to $13.65.

Very nice trade in MAMA against a 2-MRT. Take the first 2-minute interval using your 5-MRT technique. Very nice indeed. See the overlap up at $14.75?

If bulls will press above $14.30, then that's still an achievable target.

  Jeff Bailey   5/13/200,  3:13:04 PM
MAMA $14.05 ... day trader might flip to 2-minute intervals. Note the 21-pd SMA has shown some SMA support (currently at $13.65).

  Jeff Bailey   5/13/200,  3:12:18 PM
Day trade raise bullish stop alert .... for Mama.com (MAMA) $13.88 +33% to $13.45.

Did see some nice volume come in on the break to session high, but tentative at this point. Session high now $13.97.

  Keene Little   5/13/200,  3:08:59 PM
Linda and Jane, I'm in complete agreement about writing a journal of your trades. I've seen Jeff mention it often, and he often refers back to his journal to help him gauge current actions in the market. What I find extremely helpful is to get it out of my right brain into my left brain, the logical part of your brain. You need to either voice your observations/intentions to someone like a trading partner, or write it down. It forces you to think logically about what you are seeing and what you want to do. Highly highly recommended.

  Jeff Bailey   5/13/200,  3:04:44 PM
Mamma.com (MAMA) $13.86 +33% ... session high... looking for volume and want to see follow through.

  Linda Piazza   5/13/200,  3:04:37 PM
I'm glad I had a bias toward a choppy day today, as did some others, because otherwise, it sure would have been tempting to jump on the bullish or bearish bandwagon a couple of times, but that bias helped keep me skeptical.

Although Jane sometimes mentions her trading journal, it's been a while since some of the rest of us have mentioned such a thing and some of the newer readers might not have heard us talk about those journals. One thing I've learned about myself through such a journal and through writing for this site is that I'm much better at deciding on likely market action when I'm actually out of the heat of that action--so either post- or pre-market. That doesn't mean that I can't or don't react to what I'm seeing and then adjust my viewpoint accordingly, but only that I'm better at deciding on a general scenario against which I can test that action when I do it either before or after the market hours. Maybe you're the opposite. That's the kind of thing you find out when you keep a trading journal.

  Linda Piazza   5/13/200,  2:58:16 PM
We have another triangle setting up on the OEX five-minute chart, this one a small one at the bottom of the decline since noon.

  Jeff Bailey   5/13/200,  2:57:23 PM
Mamma.com (MAMA) $13.55 +29.7% Link ... just doing this, but want traders to be alert. Here's a daily interval bar chart, where I'm using my fitted 38.2% retracement technique.

From the 5-MRT and the resultant fitted 61.8%, day trader most likely facing resistance at $14.11-$14.17.

In essence, my 5-MRT target alert of $14.75 may not be achievable.

Will stick with the trade, but should MAMA trade above $14.00, then lets get aggressive with the moving higher of a stop.

I saw the stock pop this morning, slapped a 5-MRT on it, and then later set an upside alert at $13.40. I hadn't worked on a daily interval with fitted at that point.

  Linda Piazza   5/13/200,  2:47:25 PM
The OEX is headed down for another test of the 200-dma, or rather, is actually testing it now. On the five-minute chart, the mid-channel support has moved to 534.62, with the 15-minute now above the current OEX position, at 535.60.

  Jeff Bailey   5/13/200,  2:42:36 PM
Mamma.com (MAMA) $13.58 +30% .... here's intra-day chart on 5-minute intervals with upper 5-MRT. Link

  Jeff Bailey   5/13/200,  2:38:17 PM
Day trade long alert .... Mamma.com (MAMA) $13.50 here, stop $13.20, target $14.70.

Traders... I have a doctor's appointment this afternoon and may not be able to follow this trade to the close. YOU may not want to trade if you do not have live charts.

  Linda Piazza   5/13/200,  2:33:21 PM
That small regular H&S from my 14:05 post is now settling into a formation with a probable horizontal neckline at 534, rather than the ascending one I showed earlier. It looks as if the OEX is headed up now, either to form a right shoulder on that formation or else to zoom above the shoulder level and retest the neckline on the bigger reverse H&S. This is just more zooming around. Over the last few minutes, the OEX has been testing and retesting its 200-dma.

  Jeff Bailey   5/13/200,  2:28:46 PM
S&P Banks Index (BIX.X) 333.77 +0.38% ... has been fading. Session high came at 337.27 and that might have been it for the day. (DAILY R2 337.20)

  Jim Brown   5/13/200,  2:21:39 PM
Anybody heard from the Arch Crawford lately? I have not seen him on CNBC

  Jim Brown   5/13/200,  2:20:40 PM
I did not want to admit it but it was really Mars moving in conjunction with Venus. (grin)

  Jeff Bailey   5/13/200,  2:19:58 PM
OK... it was Barton Biggs

That way, it can't be disproved.

  Jeff Bailey   5/13/200,  2:17:40 PM
I disagree Jim! the bounce clearly came on the "trap" below the SPX MONTHLY S2 (grin) and QQQ test of of its WEEKLY S2!!!!

  Jim Brown   5/13/200,  2:14:01 PM
I got a kick out of the notion that his interview produced a +175 point bounce in the market. Anybody looking under the hood clearly saw it was a technical bounce off the 200dma on the S&P futures. Two buy programs triggered a big short squeeze and the rocket was launched. The constant CNBC reference to the interview probably helped. Link

  Jeff Bailey   5/13/200,  2:11:29 PM
Sell Program Premium ... SPX 1,092.55 -0.43% ... (MONTHLY S1 1,092.92)

  Jeff Bailey   5/13/200,  2:10:40 PM
I kind of like Barton's stodgy demeanor. He definately brings a chuckle to me when he's giving an interview.

  Linda Piazza   5/13/200,  2:07:37 PM
Did anyone notice that both Jeff and I led off last night with that Barton Biggs interview, and now Jim is picking up on it on the Futures side? It's just too much fun to ignore, isn't it?

  Jeff Bailey   5/13/200,  2:07:03 PM
CRB Index (cr00y) 269.88 -0.12% ... (30-min delayed) ... I think that was a "bad tick" to 260.54.

  Linda Piazza   5/13/200,  2:05:56 PM
Dueling H&S/reverse H&S formations. The OEX 15-minute chart shows a potential H&S currently developing, with the OEX high-of-the-day the head formation, with the OEX currently at the neckline, and with it yet to have formed a right shoulder. Currently, the neckline appears to be at about 534.90. A competing view is that yesterday's drop formed the head of a bigger reverse H&S formation, with the current pullback beginning to form the right shoulder of that, with a possible drop down to 532 or so still keeping within the parameters of a shoulder for that formation. Pick your viewpoint and watch your H&S. (Watch the other viewpoint's version, too.) Link My viewpoint? This is just more evidence that the markets can't make up their minds.

  Linda Piazza   5/13/200,  1:47:17 PM
With this action, that formation on the OEX daily chart is looking more and more like a possible bear flag, although a bit of a ragged one with yesterday's long tail. That's why I made the point this morning that yesterday's hammer hadn't come precisely at the bottom of a long decline, but after the OEX had traded sideways a day, perhaps on the way to establishing some sort of consolidation pattern. A hammer that occurs within a consolidation pattern doesn't always have the same bullish implications or at least to the same degree. However, that hammer now questions exactly where we'd say that the OEX had broken down out of the bear flag, if that's what it is. Is it instead another broadening formation shaping up, so that we'll see higher highs and higher lows until it finally breaks one way or the other? Hard to say, although continued breaks below the 200-dma would begin to weigh on bullish sentiment. We should have always expected the first tests of the 200-dma to have produced some bounce attempts, perhaps even bigger ones that we've yet gotten, so just because we've been seeing them doesn't mean everything is rosy. It was expected. Now we have to see what else develops. Could be rosy, could not be, but these bounces sure aren't proving anything yet.

  Linda Piazza   5/13/200,  1:14:11 PM
The fifteen-minute OEX mid-channel Keltner support is now at 535.63, with other support down to 535.43. As I mentioned this morning, the 200-dma's are just below that. It's possible that the OEX could be building a H&S on the 15-minute chart, one with the head at today's high and with a right shoulder yet to be formed, but I hesitate to mention this potential formation. That's because since early this morning, I've thought we might see the kind of trading when potential formations set up, and then markets zoom somewhere else entirely than the expected direction.

  Jeff Bailey   5/13/200,  1:11:25 PM
01:06 Market Watch at this Link

Futures quotes at the bottom as well as Dollar Index (dx00y) are 30-minute delayed.

Intra-day chart of CRB shows session low came between 11:40-11:45 AM EDT.

  Jeff Bailey   5/13/200,  1:05:00 PM
Mace Security (MACE) $5.18 +3.76% ... updated intra-day chart, with my day trader's logic. Link

  Jeff Bailey   5/13/200,  12:56:14 PM
Day trade exit alert for Mace Security (MACE) $5.17 +3.56% into this bounce from $5.11.

  Linda Piazza   5/13/200,  12:55:59 PM
The BIX is now once again moving back to test the former supporting trendline from the regression channel in which it traded for about a month. This is what I meant by expecting choppy conditions that are difficult to trade and looking at all movements today with a jaundiced eye. That move back above that broken support should have been a bullish development, but now it's possibly being reversed. (It's in the process of retesting it as I type.)

On the OEX, here's where we stand: The OEX is above its 200-dma, but failed at its test of the 30-minute 100/130-pma's, so it's still between support and resistance. I was suspicious of yesterday's late-day push, but if the powers-that-be could do it once, maybe they can do it again, and I'm not discounting that possibility.

  Jeff Bailey   5/13/200,  12:54:57 PM
QQQ $35.18 -0.19% ... back to trade WEEKLY Pivot.

  Jeff Bailey   5/13/200,  12:54:09 PM
Dorsey/Wright Sector Bull curve at this Link

  Jane Fox   5/13/200,  12:50:48 PM
The TLT iShare for the Lehman 20 year bond started trading in July of 2002. Since then its all time low was 80.91 made on August 14th 2003. TLT today is 80.58 a new all time low.

  Jeff Bailey   5/13/200,  12:44:15 PM
I'm tapped out for any new trade profiles at this time. I can only track so many. Should some drop off my list, then I can add.

  Jim Brown   5/13/200,  12:39:45 PM
I agree with you Linda. We had a nice relief bounce off the 200dma on the SPX and strong resistance overhead. Odds are weighted to the downside rather than breaking overhead resistance. However, if both of us are looking for downside potential that is a sure sign there is a rally ahead. (grin)

  Linda Piazza   5/13/200,  12:31:31 PM
If I had to choose a direction today, I think I'd be keeping the Nikkei's example in mind: after many days of sharp declines, it approached the 200-dma and bounced reflexively for two days, straight up into next resistance, then began reversing those gains in Thursday's trading. It closed at a several month closing low (although Tuesday's intraday low was lower), possibly headed down for another test of that 200-dma.

  Jeff Bailey   5/13/200,  12:24:14 PM
June crude oil futures (cl04m) $40.30 -1.15% ... (30-minute delayed quote)

  Linda Piazza   5/13/200,  12:24:04 PM
Although I'm having to rely on a 720-minute chart (see earlier discussion in 9:40 post), and so there might be small differences from the actual 200-dma, the TRAN appears to be challenging its 200-dma at about 2860.80, as I type, doing so from the underside and inching just above it. The TRAN is currently at 2863.31. The pattern on the daily chart looks suspiciously like a bear flag rising into resistance, but this test may confirm whether it is or isn't.

  Linda Piazza   5/13/200,  12:20:14 PM
The OEX moved up through the 30-minute 100-pma and tested the 130-minute, and now has turned down through both, but I'm not convinced it's through testing those averages just yet. As another writer just mentioned, the pullback needs to gain some steam here. I'm coming into today with a bias toward choppy trading conditions, so I'm viewing all this zooming around with a bit of a jaundiced eye, including the zooms higher as well as the small pullbacks. I'm thinking that the markets could be trying to set up consolidation zones, choppy areas that make trading difficult. My bias may be completely wrong, of course.

  Linda Piazza   5/13/200,  12:15:36 PM
IPO Nuvasive (NUVA) began trading today. It makes products to treat spine disorders. Its first five-minute range was from 11.00 to 11.55, for those who want to track it using Jeff's 5MRT system. So far, it's within a neutral range, not triggering any trade, either bullish or bearish.

Another IPO, Shanda Interactive (SNDA), an online gaming company in China pressured by outstanding lawsuits, also began trading today. Its first five-minute range was from $11.11 to $11.73. SNDA moved momentarily above the $12.35 level that would have triggered a bullish trade, but didn't show a five-minute close above it, and now trades at $11.70.

  Jeff Bailey   5/13/200,  12:09:51 PM
No Stops on Options I profile ... Yesterday on you Ebay put you had no stop. Could you explain? Thanks

The way I was taught to buy options and trade them (put or call) was to assess risk in the underlying stock, measure that risk, then take it to the options market, where options are designed to lessen risk.

So... yesterday I profiled a put in eBay (EBAY) Link based on recent breakdown at $79.00 and using Professor Davis' probability study. Stock was trading $78.48 at the time, and if I assess risk to a reversing upward buy signal ($84) in the underlying stock, my risk would have been $5.50 per share. That's $550.00 on 100 shares.

The option trade I profiled in the July $75 puts has me risking approximately $3.10 per contract (at time of profile) or $310.00 (plus commiss), but allows me just over 2 months time exposure to the trade.

In essence, I've assessed risk in the underlying stock, where I would most likely have to honor a stop with trade at $84, close out. However, the option has me already limiting that risk, but giving the trade time to work, in what I hope will be my favor.

For greater detail on how I (Jeff Bailey) prefer to trade options, I wrote an article based on this trader's question in the "Ask the Analyst" section at this Link

  Linda Piazza   5/13/200,  12:04:06 PM
The OEX is above the 30-minute 100-pma, testing the 130-pma, at 539.88. The 60- and 120-minute versions of these averages are layered overhead, not bunched closely together and providing a solid and united front as they were on previous tests. Sometimes that makes it easier for the OEX to pass through each one separately, but sometimes it also means the OEX gets trapped between one set of supporting 100/130-pma's and another set of resistance ones. Before we start worrying about that, however, we have to see the OEX above both 30-minute averages.

  Linda Piazza   5/13/200,  11:58:20 AM
Reader Question: According to some Internet sites CPN has a Short Interest of more than 10 days. Is there anywhere on the Internet where one can access that info. on a daily basis?

Response: I'm not sure about a daily basis. Do any of the other writers know of a site that might offer a daily update?

  Jeff Bailey   5/13/200,  11:54:56 AM
Taser Intl. (TASR) $30.94 +9.74% ... one of my "short-cover" candidates. Again... testing for any short-covering with individual stocks. Seeing it too.

  Jeff Bailey   5/13/200,  11:53:38 AM
OSI Pharma (OSIP) $79.28 +1.83% Link ... traded $79.00 earlier this morning, but session high here

  Linda Piazza   5/13/200,  11:53:20 AM
U.S. 30-year mortgages are at an eight-month high today, at 6.34%, according to one headline.

  Jeff Bailey   5/13/200,  11:52:18 AM
11:45 Market Watch at this Link

I wanted to benchmark trade as the CRB traded what may become VERY IMPORTANT support to the bearish scenario outlined Link

  Linda Piazza   5/13/200,  11:51:35 AM
The TNX rises, too. Instead of the doji it presented in the chart linked to my 10:06 post, it's not a small candle springing up from the reverse H&S neckline.

  Linda Piazza   5/13/200,  11:50:11 AM
The BIX continues to rise back into its former ascending regression channel.

  Jeff Bailey   5/13/200,  11:46:44 AM
Buy Program Premium SPX 1,101.75 +0.4% ....

  Linda Piazza   5/13/200,  11:46:02 AM
Now the OEX tests the 30-minute 100-pma, at 538.21, with the 130-pma currently at 539.88. The OEX is moving toward the 538.50-541 zone that I mentioned yesterday morning and this morning as being important to watch.

  Jeff Bailey   5/13/200,  11:45:55 AM
Market Volatility Index (VIX.X) 18.25 ... had a downside al_rt set here to be aware of potential put option unravel.

  Linda Piazza   5/13/200,  11:43:30 AM
The OEX is testing that likely reverse H&S neckline again, having again broken to the topside through the triangle on the 15-minute chart. (Trendlines shown in chart linked to my 10:57 post.) It's doing so without having yet fallen back to form a right shoulder, however, which could mean one of three things: either the bullishness is extreme enough that the OEX is moving up without forming a right shoulder; this is just another test, likely to be reversed; or I've drawn the neckline the wrong place. Don't know yet which it is, but as I mentioned earlier today, don't get married to positions. Prepare to be whipsawed if you want to enter, either bullish or bearish positions.

  Jeff Bailey   5/13/200,  11:39:23 AM
Continous CRB (cr00y) I'm 30-minute delayed, but getting downside alert at my 38.2% retracement of 269.28.

Per prior bearish scenario mentioned in Market Monitor and Index Trader Wrap, might bring in some short covering to banks, homebuilders, and buyers to Treasuries.

  Linda Piazza   5/13/200,  11:29:40 AM
The OEX broke out of the triangle on its 15-minute chart, tested one version of the neckline on the reverse H&S (all these trendlines are depicted in the chart linked to my 10:57 post), and now has moved back within the triangle again. As I mentioned when I first noted that triangle developing, we could have expected a false breakout or two and some zooming around as the triangle narrowed.

  Jeff Bailey   5/13/200,  11:17:38 AM
11:00 Internals at this Link

  Jim Brown   5/13/200,  11:06:43 AM
Speech by Chairman Greenspan on financial literacy Link

  Linda Piazza   5/13/200,  11:00:43 AM
Laughing. I'm just catching up to Jonathan and Jane's posts. Actually, I'm not too scared of twisters. Once outraced one on a Pearson 26 sailboat (hint, they don't go too fast) in the middle of a lake, so facing one down in the house doesn't seem like a big deal. So far, I think it's just a warning without actual twisters being spotted.

  Jeff Bailey   5/13/200,  10:57:52 AM
Buy Program Premium .... here they come.

  Linda Piazza   5/13/200,  10:57:45 AM
Here are a couple of things I'm watching on the OEX 15-minute chart: Link Questions, questions.

  Jeff Bailey   5/13/200,  10:57:30 AM
QQQ $35.26 (unch) ... "here we go" .... here's intra-day taken just minutes ago. Link

  Jane Fox   5/13/200,  10:53:59 AM
Jonathan you have described our mutual friend quite accurately. Heh Linda how are you doing anyway?

  Jonathan Levinson   5/13/200,  10:50:25 AM
Jane, so kind is our mutual friend's disposition that I'd expect the posts to be something like:

I apologize for the late post, but I'm airborne over Dallas right now and my wireless router is clicking on and off. The OEX five minute chart pictured here is showing...

  Jeff Bailey   5/13/200,  10:49:15 AM
Buy Program Premium SPX 1,095.70

  Jane Fox   5/13/200,  10:46:58 AM
I second that Jonathan, about the be careful stuff not the flying through the air. Do you all think Jonathan as seen Twister.

  Linda Piazza   5/13/200,  10:46:55 AM
Uh-oh. Looking at the OEX five-minute chart, we can now see that a triangle formation has been setting up, with a downside break currently at about 534.56 and an upside one currently at about 537.03. The defining lines narrow, of course. Expect some zooming around as the triangle narrows and maybe a false break or two.

  Jeff Bailey   5/13/200,  10:46:28 AM
Semiconductor Index (SOX.X) 461.70 -0.04% .... nice little bounce back from session low of 455.08, but yesterday's close not broken to upside.

  Jonathan Levinson   5/13/200,  10:45:01 AM
I just had a vision of Linda flying through air amidst airborne cows and cars and backyard appliances, typing on her laptop. Do be careful, Linda!

  Linda Piazza   5/13/200,  10:44:28 AM
The BIX now pulls back below that resistance depicted in the chart linked to my 10:25 post, after first piercing it.

  Linda Piazza   5/13/200,  10:42:01 AM
You just heard it from CNBC travel weather advisory. We've got tornado alerts here in the Dallas area, with thunderstorms looming. If I disappear for a while, it will be because the tornado alarms have sounded and sent me to my safe place, but I'll try to grab the laptop along the way. I won't go unless the alarms sound, though, as mere thunderstorms don't bother me a bit.

  Jeff Bailey   5/13/200,  10:41:32 AM
MACE $5.31 +6.2% .... I added addition info to 10:30:19 post

  Linda Piazza   5/13/200,  10:34:50 AM
The DOW tests its 200-dma, slipping minimally below it.

  Jeff Bailey   5/13/200,  10:33:17 AM
S&P Banks (BIX.X) 335.08 +0.77% ....

SPX 1,097 -0.02%

OEX 536.57 -0.11%

QQQ $35.18 -0.22% (not a bank in the bunch)

  Linda Piazza   5/13/200,  10:32:40 AM
Resistance tests are popping out all over. I mentioned last night in the Market Wrap that I'd be watching the Russell 2000 this morning, as it perhaps rose to test the trendline of lower lows that marked the bottom of its large broadening formation. Those formations are typically bearish, topping formations, but the outcomes of these retests are always important to watch. Some market watchers don't jump into a play on the original break of formations, but instead wait for a retest and the outcome of that retest. Here's the chart I posted last night, complete with last night's annotations: Link

  Jeff Bailey   5/13/200,  10:30:19 AM
MACE here's intra-day with stacked 5-MRT. Link

BLUE #6 holds early resistance on 5-minute bar closes.

Weekly Pivot levels from QCharts are Pivot $4.56, R1 $6.16, R2 $7.52.

Daily Pivot levels are Pivot $4.63, R1 $5.33, R2 $5.67.

  Linda Piazza   5/13/200,  10:28:08 AM
Keene, thanks for your 10:17 comments. I appreciate the input and I'm sure readers do, too. That doji perched up there above that trendline looks a little suspicious, doesn't it? Sure wish these markets would produce a "this is it" or "don't trust this" sure-thing signal.

  Linda Piazza   5/13/200,  10:25:44 AM
Here's a BIX chart I've been posting periodically over the last few weeks, showing where the BIX is in relationship to some formations we've been watching: Link Sure looks as if it's trying to break back through that former supporting trendline. About this time yesterday, I began noting that the BIX's behavior was diverging from that of many other indices, with the BIX not headed down to test the previous day's low but instead congregating near the top of the previous day's range. That gave a heads-up that the BIX might be trying to lead the other indices higher, and it bears watching again today.

  Jeff Bailey   5/13/200,  10:21:08 AM
Day trade raise bullish stop alert .... for Mace Security (MACE) $5.49 +9.5% to $5.10.

  Linda Piazza   5/13/200,  10:20:06 AM
Studying the 15-minute chart on the OEX, I see that the pattern could be a bull-flag pullback after yesterday's climb. If so, the OEX should find support and climb again to a new high before it has retraced more than 50% of that flagpole climb from yesterday. That 50% retracement is just under 532, with the five-minute mid-channel Keltner support at 532.15.

  Keene Little   5/13/200,  10:17:46 AM
Linda, great observation on TNX (10:06). I noticed Jeff's referal to 4.886% as the potential upside resistance level (in his 9:00 commentary). I have a 4.91% fib target as an end to the TNX run before we get a deeper correction. It would be just like this market to see a jump across that neckline you drew as a headfake and then collapse back below it. That would certainly make for a good short signal on the yields (long signal on the bonds). I don't follow short-interest ratios closely but I've heard there is a very high short-interest in bonds--many many players betting lower prices in the bonds. So if we make a spike lower in the bonds (TNX spikes up to hit around 4.9%) and then TNX drops back down below that neckline, the short covering in bonds (drop in yields) could really ignite a move. Something I'm watching for anyway.

  Jeff Bailey   5/13/200,  10:14:59 AM
S&P Banks (BIX.X) 333.19 +0.23% ... session high and get trade at WEEKLY Pivot.

First sign of any strength from al_rts I have set today.

SPX 1,093.69 -0.32%

  Jeff Bailey   5/13/200,  10:13:36 AM
Day trade raise stop alert for Mace Security (MACE) $5.43 +8.2% to $5.05.

  Jeff Bailey   5/13/200,  10:08:34 AM
Dow Industrials (INDU) 9,975 -0.69% ... slips below DAILY Pivot. Usually give INDU +/- 10 points based on higher value.

SPX 1,091.84 -0.49% (daily p at 1,090.39)

NDX 1,405.74 -0.64% (daily p at 1,403.26)

  Linda Piazza   5/13/200,  10:08:18 AM
Now we're getting the OEX test of both 200-dma's.

  Jeff Bailey   5/13/200,  10:06:54 AM
10:04 AM EDT Market Watch at this Link

  Linda Piazza   5/13/200,  10:06:23 AM
I mentioned that I was watching the TNX this morning, to see if it turned down below the inverse H&S neckline from its weekly chart or pushed above it. Here's what I see, shown on the daily chart so that it's more visible. The red trendline is the neckline and the formation seen here is actually the right shoulder only of that potential inverse H&S. Link TNX has had some minor violations of this trendline before, so we shouldn't take this (current doji) push above it as definitive evidence, but it's certainly something we should continue to watch today. Jonathan knows much more about the yield/dollar/equity relationships than I do, but I'm watching to see whether yields continue to rise and to see how that might pressure equities in the current environment.

  Jeff Bailey   5/13/200,  10:02:35 AM
Not seeing any indication for stregnth at this point from various levels I'm watching.

  Jonathan Levinson   5/13/200,  9:59:40 AM
In short term money, the fed has added 6B in overnight repos, allowing the 6.75B from yesterday to expire for a net drain of 750M.

  Jeff Bailey   5/13/200,  9:59:12 AM
S&P Banks (BIX.X) 332.49 (unch) .... would have thought some giveback of yesterday afternoon's gains considering higher YIELD from Treasuries.

Session high for BIX.X has been 332.89, just under its WEEKLY Pivot of 332.91, which has not been traded yet this week.

  Linda Piazza   5/13/200,  9:57:07 AM
Here's our first test of important Keltner support, at the mid-channel Keltner support on the 15-minute chart. The OEX pierced it, but has now bounced back and is trying to hold that level. Moving to the five-minute chart, I see that MACD has made a bearish cross with the first tentative negative values on the histogram, but that cross was made from above signal, and could soon be reversed.

  Linda Piazza   5/13/200,  9:51:30 AM
That mid-channel Keltner support mentioned in my 9:50 post was for the 15-minute chart, not the five-minute.

  Jeff Bailey   5/13/200,  9:51:27 AM
Day trade long alert for Mace Security (MACE) $5.12 here, stop $4.85, target $6.00.

Don't go overboard on this one. I'd certainly prefer to see the major indices in the green at this point, but decent volume came in above $5.00.

  Linda Piazza   5/13/200,  9:50:04 AM
I'm not ignoring the markets, but rather waiting for something to happen. The OEX is turning down now into its first retracement of the day, and that may show us what the bias should be for the early trading. It's turned down into next Keltner support, with support below that at the important mid-channel Keltner support at 535.31, with the 200-dma's (-sma and -ema) at 534.22 and 534.01, respectively. These should combine to provide strong support, with a move below these support levels being a first sign of possible weakness and a holding there being a first sign of possible continued strength. As a caution, however, the OEX could just churn around these levels a while before it decides on direction.

  Jeff Bailey   5/13/200,  9:45:37 AM
OSI Pharma (OSIP) $78.01 +0.14% ....

  Jeff Bailey   5/13/200,  9:45:08 AM
eBay (EBAY) $79.12 -2.05% ...

  Jeff Bailey   5/13/200,  9:42:33 AM
Dow Industrials (INDU) 10,008.47 -0.36% .... all components are now open for trade.

Breadth negative at 26 to 4.

DIS $23.49 +2.17%, MSFT $26.06 +0.49%

MO $49.00 -1.6%, AA $29.75 -1.35%, HD $33.16 -1.1%, WMT $54.48 -1.01%

  Linda Piazza   5/13/200,  9:40:59 AM
Reader Question: Can't watch market all day noticed. Someone talking about 720 ema or 720 min. chart could someone explain how to use ? Thanks.

Response: I sometimes use a 720-minute chart as a substitute for a daily chart, particularly on the TRAN. For some reason, QCharts sometimes leaves off bars on the daily TRAN chart, among others, and Jeff once taught me that the 720-minute was a good substitute for the daily, although the averages can be a little off.

I also sometimes watch the 72-ema (not 720-ema, though). I found through accident that some stocks and indices tended to bounce from that average through most of 2003. However, that trend is beginning to fail, showing me that perhaps 2003's trend is, too.

  Jeff Bailey   5/13/200,  9:39:26 AM
Semiconductor Index (SOX.X) 459.76 -0.46% ... at its DAILY Pivot of 459.03.

  Jeff Bailey   5/13/200,  9:38:38 AM
QQQ $35.09 -0.48% ... opening 5-minute bar was from $35.02-$35.14.

  Jeff Bailey   5/13/200,  9:37:26 AM
Based on early morning 10-year YIELD ($TNX.X) where yield is up 3.6 basis points at 4.833%, I've got to think the major indices are vulnerable early back lower to their daily pivots.

  Linda Piazza   5/13/200,  9:36:50 AM
During the first five minutes of trading, the OEX traded in a range from 535.24 to 536.61.

  Linda Piazza   5/13/200,  9:02:05 AM
Yesterday, the late-day push sent the OEX back above its 200-dma and the trendline of descending lows that had supported it until this week. The trade created a hammer, although that hammer formation for the OEX was from within a building congestion zone rather than at the very bottom of the decline, as should happen when a classic reversal signal forms. It also shouldn't go without notice that the OEX ended the day a few cents below Monday's 535.35 high of the day, not able to move completely above that resistance. The exact location of the hammer and the cents-lower close may be quibbling over details, but I'm trying to maintain an objective viewpoint of what has happened and might happen.

As yesterday opened, the OEX looked to be headed up toward the 30-minute 100-pma, historical S/R and the 19.1 retracement off the March 2003 low, all located at that time within the 540-541 area. Yesterday morning, however, the action of the futures led me to question whether that suggested action would come to pass. As the OEX ended the day, it had broken through upper-level Keltner support, giving a breakout signal, but one I tend to distrust when it comes in the last few minutes of the day. That's especially true when we realize all along that there might be an effort to hold the SPX above that 200-dma, if possible.

Still, as one of the other writers mentioned late yesterday, we must acknowledge the breakout and the possibility that those higher numbers could be reached. I also think we must acknowledge the effort made to keep the SPX above that 200-dma and the future efforts that might be made. Earlier in the week, the Nikkei saw much the same reaction, with a near approach of the 200-dma resulting in an end to the six-day losing streak and producing a two-day bounce. Last night, however, the Nikkei headed down again, perhaps for another test of the 200-dma, although that remains to be seen. The Nikkei hit a three-month closing low. It's now about 100 points above that key average.

So, psychological factors may play into the market action, as well as other factors. I want to keep an eye on crude oil prices, headed yesterday into the zone that has turned it back for 30 years, as Jane told us yesterday, and the TNX, perhaps testing a inverse H&S neckline on the weekly chart as the day ended. If crude oil prices and the TNX turn back from their respective trendlines, perhaps it's possible that the relief might propel indices up to test next resistance, and then perhaps beyond that next resistance. Last night in my Wrap, I posted a chart showing how rising interest rates had been impacting the $DJUSHB, the Dow Jones US Home Construction Index, but it's not just the homebuilders that suffer. It's also retailers such as S, HD, LOW, BBY, and others who furnish the goods with which to equip all those new homes and newly renovated ones that resulted from those low interest rates. I see that Jeff added his own thoughts on the DJUSHB in the wee hours of this morning, so readers might also turn to his chart.

The economic numbers this morning turned the futures lower. As a first sign that OEX weakness is resuming, we'll look for a downturn back through the OEX 200-dma and then through 532, the 50% retracement of yesterday's flagpole rally, and then a move through the weekly mid-channel Keltner support, currently at 528.45. If we see a gap-down-and-bounce reaction instead, I'll watch for a test of the 30-minute 100/130-pma's, just ahead at 538.36 and 540.14, respectively. However, as it was clear earlier in the week that the OEX was headed down to test the mid-channel Keltner support on the weekly chart, something that was suggested as far back as February when I first began posting a weekly Keltner chart showing bearish divergence, I noted that in the last few touches of that channel support, it had been common for the OEX to churn around near that channel line for at least two to three weeks, and sometimes longer, before it resumed directional trade. That presents the possibility that we could again see markets churn over the next couple of weeks, trying to hold onto their 200-dma's. Of course, as I've been saying over the last few days, weekly churn can be broad enough to give OEX players room to trade.

The trouble is that churn is difficult to trade, not particularly amenable to technical analysis. If it's possible that might happen, I'd be careful about marrying any one position, either bearish or bullish. Determine your bias, set appropriate stops, be prepared for whipsaws and do not participate if your account size is such that it can't withstand a number of whipsaws before a directional movement gets going, and then adhere to those stops. We may be on the verge of a strong directional movement or we may be about to mired in a several-week churn.

  Jane Fox   5/13/200,  8:51:49 AM
Dateline WSJ U.S. Defense Secretary Donald Rumsfeld, making a surprise visit to Iraq aimed at containing the prisoner-abuse scandal, said Thursday that U.S. administration lawyers are advising the Defense Department not to publicly release any more photographs of Iraqi prisoners being abused by U.S. soldiers.

"As far as I'm concerned, I'd be happy to release them all to the public and to get it behind us," Mr. Rumsfeld told reporters traveling with him from Washington. "But at the present time I don't know anyone in the legal shop in any element of the government that is recommending that."

  Jonathan Levinson   5/13/200,  8:32:18 AM
Initial claims 331K

  Jonathan Levinson   5/13/200,  8:31:54 AM
Retail sales -.5%

Retail sales ex auto -.1%

  Jonathan Levinson   5/13/200,  8:31:09 AM
Core PPI .2%

  Jonathan Levinson   5/13/200,  8:30:44 AM
PPI .7%

  Jonathan Levinson   5/13/200,  8:13:47 AM
We await the 8:30 releases of:

PPI for April, est. .3%

Core PPI, est .2%

Initial claims, est. 325K

Retail sales, est. -.2%

Retail sales ex auto, est. -.2%

  Linda Piazza   5/13/200,  7:18:02 AM
Good morning. The Nikkei traded lower Thursday morning, with some of the same techs and autos that had gained in Wednesday's session leading the decliners in Thursday's. Embattled Mitsubishi Motors bucked that trend, posting strong gains after speculation that U.S. investment firm Ripplewood Holdings might be interested in investing in the automaker. The selling accelerated in the afternoon session after core machinery orders for March were released, showing an unexpected 3.2% decrease month-over-month. Economists had predicted a 6% rise. Although the intraday low did not equal the 10,791 intraday low reached just a couple of days ago on May 11, the Nikkei closed at a reported three-month low, down 328.48 points or 2.95%, at 10,825.10.

Bank Resona declined 5.3%. Game software maker Konami had risen yesterday ahead of its after-the-close earnings report, but more than erased those gains Thursday when it said that net profit might fall 25% next year. Canon and Fujitsu were among the exporters dropping in Thursday's trading, with Fujitsu declining 5.7%.

Other Asian bourses mostly traded lower, too. The Taiwan Weighted lost 0.68% but South Korea's Kospi lost a heftier 3.30%. Singapore's Straits Times dropped 1.31% and Hong Kong's Hang Seng lost 1.14%. China's Shanghai Composite lost only 0.39%, a more moderate loss than in many Asian bourses.

Most European bourses currently trade higher, however, with reporting banks leading the bourses higher, while telecoms head lower. Germany's Q1 GDP rose 0.4% quarter-over-quarter, better than the expected 0.3%. However, a study of the numbers revealed that the GDP growth was driven by a growth in exports, with domestic consumption falling. In another number, April's Western European passenger registrations rose 4.1%, with France's and the U.K.'s auto sales declining and Spain, Italy, and Germany's rising. European automakers mostly rose.

Dutch bank and insurer ING and French bank Societe General were among the banks gaining after reporting earnings, while German telecom Deutsche Telekom was among the telecoms declining after it posted earnings. Deutsche Telekom's earnings were labeled as being at the low end of the forecast range. Analysts mentioned disappointment with some elements of the report, including domestic fixed and mobile results. In stock-specific news, Credit Suisse First Boston raised Germany pharmaceutical and chemicals group Bayer to an outperform rating from its former neutral rating. Bayer was gaining in early trading.

As of this writing, the FTSE 100 has gained 29.50 points or 0.67%, to trade at 4442.40. The CAC 40 has gained 36.66 points or 1.03%, to trade at 3601.00. The DAX has gained 41.71 points or 1.10%, to trade at 3817.95. Each of these is battling resistance at the current levels, however, with each now entering or approaching the bottom of Monday's gap down from Friday's close.

  Jeff Bailey   5/12/200,  1:24:00 AM
10-year YIELD Chart ($TNX.X) shown only with current MONTHLY and WEEKLY Pivot retracement. Link

Here's Link to the Dow Jones Home Construction ($DJUSHB) chart. Note the March highs (compare to 10-year YIELD Low), but also the recent 3-days of consolidation in the DJUSBH, and 3-day YIELD consolidation after Friday's nonfarm payroll.

Check out chart of TOL Link

Recent Observations: Have been rising YIELD negative for gold, banks, homebuilders. Thus, falling YIELD might become near-term positive for gold, banks and homebuilders.

On Wednesday, YIELD finished higher, gold reversed gains, but homebuilder and banks reversed losses. Thinking.... just some short covering in homebuilders and banks.

This may be where the CRB becomes important. In the great bull market of the late 1990's, YIELD was able to rise as well as broader equities as INFLATION was low and economic growth strong. Gold suffered.

If gold and CRB were to fall, but YIELD still rise, need to HONOR stocks on own merrit as the great bull market of the late 1990's could unfold again.

  Jeff Bailey   5/12/200,  12:47:58 AM
NYSE NH/NL Bullish % at this Link

Discussed briefly in Wednesday night's Index Trader Wrap. This is the 10-day average ratio of NH vs. NL.

NASDAQ Comp. NH/NL Bullish % at this Link

  Jeff Bailey   5/12/200,  11:08:49 PM
Pivot Matrix for Thursday at this Link

With such large S2-R2 ranges going into today's trade, I go in with a mindset of a trading range from DAILY S1 to DAILY R1, where the near-term support is at the DAILY Pivots.

QQQ DAILY Pivot resides just below that little sliver of overlapping support from the WEEKLY/MONTHLY pivot retracement, and should we find futures lower in the morning, then I've got to think QQQ vulnerable to pullback there.

This may have me quickly closing out the SWING TRADE long from $35.07 on Wednesday afternoon. Take the scalp profit, then wait.

See all the correlation at DAILY R1 and various places in the WEEKLY and MONTHLY?

Think of this as the dividing point on Thursday, where if broken to the upside, then we might then expect computer have been set for gravitation back toward their MONTHLY Pivots by NEXT Thursday's index expiration. Why the MONTHLY Pivots? After Friday's close, we'll get new WEEKLY Pivot levels.

Sticking in my mind is the work we did in the April 25 "Ask the Analyst" column and "Tendency to gravitate towar the pivot," where we might find the major indices closing out this week's trade, somewhere close to their weekly pivots.

In Wednesday's night's Index Trader wrap, I showed little GREEN and RED arrows as I tried to envision near-term trade. Here's the SPX chart Link

Maybe I should have started out with little red arrows to Thursday's DAILY Pivots, then a green arrow back up to the Friday close and WEEKLY Pivots?

We'll find out tomorrow.

  Jeff Bailey   5/12/200,  10:44:48 PM
Early Monday resistance for SPX.X ... Just noticing that the SPX DAILY R1 is 1,104.44 tomorrow.

That's SMACK ON my fitted retracement chart of the e-mini S&P (es04m) I showed in Wednesday afternoon's Market Monitor Link

My thinking is that this 1,104 is a major near-term decision point. The es04m suggests a sell biase below 1,104, and bullish bias above 1,091.75.

  Jeff Bailey   5/12/200,  10:05:39 PM
Short cover rally? ... often times when I sense, or observe what may be the making of a short cover rally, I'll review some stocks that may have benefited from short cover, and may still benefit from near-term short covering.

Remember this one? Link

How about this one? Link

And this one, where overhead supply should be limited, and uncertainty HIGH. Link

  OI Technical Staff   5/12/200,  8:02:19 PM
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