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  Jeff Bailey   5/14/200,  7:21:29 PM
Pivot Matrix for next week at this Link

  Jeff Bailey   5/14/200,  6:37:54 PM
Good trade setup for the NDX/SOX for a bullish move should we see strength above the WEEKLY Pivots. NDX/SOX now look to be in unison, where this week's trade had the SOX.X stronger in its weekly pivot. Here's the chart I showed early Monday morning of NDX/SOX comparisons. Link

Here's an updated 60-minute chart of the SOX.X, with the QCharts' weekly pivot levels. SOX showed some strength vs. NDX in this week's pivot trade, but I must admit that I don't necessarily like the fade lower into today's close. What I think needs to happen for my BULLISH QQQ trade on Monday morning is a gap higher above next week's pivot, otherwise SOX.X and QQQ vulnerable again to WEEKLY S1. Link

Also, I don't know if I had mentioned this before, but you may wonder what is up with that 35-period SMA (PINK), and here's another thing that is rather bearish into today's close.

I played around with this setting and it would seem that if a trader is BULLISH the SOX.X above this 35-pd SMA, then the SOX had better darned well be above the WEEKLY Pivot. See how in past trade, when the SOX.X broke above this 35-pd SMA seller were just waiting to smack the SOX.X lower on any test of the pivot?

The more BULLISH moves have come when the SOX.X not only breaks above this 35-pd SMA, but also the WEEKLY Pivot.

  Jeff Bailey   5/14/200,  5:43:33 PM
PeopleSoft (PSFT) $17.32 -1.76% ... lower at $17.00 after Oracle (ORCL) $11.58 -1.69% slashes it takeover bid to $21 from $26 per share.

ORCL flat in after-hours at $11.58.

  Jeff Bailey   5/14/200,  4:50:14 PM
Closing Internals at this Link

Volume at the NYSE was lightest volume since April 12, while NASDAQ's 1.41 billion was lightest since December 26, 2003.

NYSE and NASDAQ NH/NL table at this link. Still very weak and shows bearish leadership. Slight improvement seen as the 5-day average ratios begin to turn up, while the 10-day average ratios now edge lower. Link

  Jeff Bailey   5/14/200,  4:16:40 PM
Pacholder High Yield (PHF) $8.36 +1.95% finished at high of session, where bid built to the close at $8.36.

  Jeff Bailey   5/14/200,  4:11:46 PM
Economic data Monday morning at 08:30 AM will have NY Empire State Index being released. Economists look for a decline reading of 34.8 versus April's 36.1.

how the bond market interprets the news may set tone for Monday's equity trade.

If inline with consensus is a decline "good news" or "bad news?"

  Jeff Bailey   5/14/200,  4:07:31 PM
NDX pivot levels for next WEEK are 1,354, 1,377, 1,401, 1,424, 1,448.

NDX closed 1,399.85 -1.21%

At 04:00, QQQ $34.76 -0.71% saw 04:00 tick at $34.80 but fades to close.

  Jeff Bailey   5/14/200,  4:04:32 PM
SPX pivot levels for next WEEK are ... 1066.12, 1,080.38, 1,091.57, 1106.83, 1,118.02.

SPX closed 1,095.63 -0.07%

  Linda Piazza   5/14/200,  3:59:22 PM
I think now we're just on watch to see how close/how far the OEX is from its 200-dma at the close. The formation still looks to me like a ragged bear flag. When I wrote the Market Wrap Wednesday, I thought there was room for some of the indices to run up for a day or two before they hit the most serious resistance and thought it wouldn't be until we saw how they acted at that resistance that we'd know what bias we ought to develop. The OEX did test next resistance, but barely, and the failure to extend on Wednesday's bounce makes that bounce look even more like nothing more than a technical bounce. We just have to see what develops next week since the OEX in still mired in a congestion zone and hasn't broken either direction.

I'll be gone Monday and Tuesday, accompanying my niece as she drives from Texas to California to spend the summer there. I'll probably miss all the fun, but am looking forward to some time away, to come back and look at the markets with fresh eyes.

  Linda Piazza   5/14/200,  3:47:47 PM
I forgot to add in my last post that we still have several minutes until the close, and all those relationships to the 200-dma's could change. The OEX heads down right now to test its 200-dma once again.

  Linda Piazza   5/14/200,  3:46:33 PM
So far, the OEX holds above its 200-dma, the Russell 2000 just below its, the Wilshire well above its, the DOW right on its, the BIX well above its, the NDX just below its, and the COMPX and SOX below theirs. A mixed picture.

  Jeff Bailey   5/14/200,  3:29:07 PM
Swing trade long the QQQ $34.92 here, stop 34.60, target $35.75.

  Linda Piazza   5/14/200,  3:21:02 PM
Keene mentioned on the futures side that trendline breaks had been the only thing that had worked for him today, but I saw a couple of those go wrong for me, too, with the SOX breaking through a supporting trendline I was watching only to head back up again and the BIX breaking above a trendline I was watching and then turning down again (although not much). I was watching the wrong trendlines.

I thought Keene brought up a good point. In different trading conditions, different tools work. I've been mentioning all day today my distrust of some of the formations that were setting up, and each one of them proved that it had earned that distrust. None fulfilled their upside or downside targets. Fortunately, I still had a bias toward choppy trading conditions, although I did, sadly, have a little hope that something directional would get going today. That bias did prompt some skepticism about what I was seeing. Fortunately.

Now what, though? I would think there would be a monumental effort on a Friday afternoon to hold indices to key levels, so I think that's one factor we might watch. If that effort fails, then perhaps that begins to give us a bias going into next week. Perhaps.

  Jeff Bailey   5/14/200,  3:20:28 PM
Semiconductor Index (SOX.X) 451.91 -1.66% ... back to test WEEKLY Pivot again.

That little "trap-like" pattern that Linda mentioned at 12:59:12 had the SOX just below the pivot, but above the MONTHLY 61.8% 449.53, as the SOX traded its current session low of 449.69.

I really begin to sense that Monday's bond YIELD action, and CRB action could dictate equity trade.

Didn't get a clear read from the 10-year YIELD as it closed right above MONTHLY R1.

  Linda Piazza   5/14/200,  3:14:44 PM
The OEX is just above its 200-dma once again.

  Jeff Bailey   5/14/200,  3:12:55 PM
Jim ... will you issue an alert today for buy or sell bias toward the close?

  Jeff Bailey   5/14/200,  3:12:03 PM
10-year YIELD ($TNX.X) fished down 6.3 basis points at 4.788%

  Jeff Bailey   5/14/200,  3:08:55 PM
03:00 Internals at this Link

  Linda Piazza   5/14/200,  3:04:00 PM
The OEX, like some of the other indices, approaches the confirmation level for the double-top formation---just hit it. Note that the confirmed reverse H&S from earlier did not meet its upside target (at least not yet) any more than did the confirmed regular H&S from earlier this morning. Under those conditions, it's difficult to trust anything we're seeing, especially ahead of another test of the 200-dma's. The OEX is now approaching mid-channel Keltner support on the 15-minute chart, where support lines begin to gather rather thickly. We'll see if they hold.

  Jeff Bailey   5/14/200,  2:55:19 PM
QQQ $35.09 +0.19% .... projecting a close at this week's pivot of $35.19 and thinking this week's high/low are in.

Next week's WEEKLY Pivot levels would be ... $33.79, $34.49, $34.97, 35.67, $36.15.

A bullish scenario based on technical might be....

IF crb breaks lower ... and IF Treasury YIELD fall back, THEN QQQ has potential to rally back to May Max Pain of $36.00, where WEEKLY R2 $36.15 gives technical room for the move as MARKET'S worry regarding inflation abates for a week.

  Linda Piazza   5/14/200,  2:54:14 PM
I'm probably just imagining it, but it seems that every time I glance at the CNBC screen today, the Dow is within 10 points of 10,040. Still, it's happened frequently enough that I know we're not seeing much happen when all is settled and done.

  Jim Brown   5/14/200,  2:50:08 PM
Max Pain for NDX is 1425. I left it out this morning.

  Keene Little   5/14/200,  2:48:04 PM
Wish I knew Jeff. I've given up figuring out what triggers this market. I bury my head in my charts and fly by following my instruments. Whenever I peak out the window (listen to CNBC) I crash. So I've learned to stop peaking.

  Jeff Bailey   5/14/200,  2:46:17 PM
Me too Keene ... but what's the trigger? Is it the CRB, or will it be a break below what looks to be an important level of near-term commodity price support that becomes the trigger?

  Keene Little   5/14/200,  2:41:33 PM
I agree Jeff. I think the high short interest ratio among the bond traders is what will likely ignite the coming bond rally.

  Jeff Bailey   5/14/200,  2:37:22 PM
Check out an intra-day chart of 10-year YIELD and the CRB .... Can almost see it now with YIELD finishing out here, and CRB at 269.28.

Would be interesting to get input from any bond traders that are short. I'm thinking 10-year YIELD of 4.75% is important level right now.

  Linda Piazza   5/14/200,  2:34:47 PM
Jane mentioned the double-tops with bearish price/MACD divergence on many charts on the Futures side of the Monitor. Although the OEX actually made a higher five-minute high, only a five-minute candle shadow and not a candle body achieved that five-minute high. MACD was lower on that higher high, so there's bearish divergence here, too. Still, I'm trying not to make too much of anything I'm seeing today unless there's a huge push one direction or the other.

  Jeff Bailey   5/14/200,  2:26:39 PM
QQQ $35.18 +0.54% .... bugger is right back at its WEEKLY Pivot ($35.19). Session low still $34.64 darned it anyway.

  Jeff Bailey   5/14/200,  2:21:47 PM
Keene... I'm seeing same thing! (14:17:53)

  Jeff Bailey   5/14/200,  2:17:53 PM
Linda... does this qualify as one of those BIG RED candles? 10-year YIELD ($TNX.X) at this Link

  Linda Piazza   5/14/200,  2:17:02 PM
The current pullback on the OEX 15-minute chart looks like a bull flag pullback, about to test resistance. (Note: Began breaking through as I typed.) On the Keltner chart, it appears that support may be gathering a bit more thickly than resistance, which sometimes means that the OEX will find it easier to move up than down, but it's got important 15-minute Keltner resistance that it rarely breaches by much or by long at 539.32. Perhaps could breach it through the rest of the afternoon, though.

  Jeff Bailey   5/14/200,  2:10:19 PM
China Productivity rates ... Jeff: Per your 12:57 post in the market monitor, do you or does anyone else know what China's productivity rate has been?

I don't know offhand, and I didn't see mention of it in the news article Jonathan posted. I'll look for it on the web, as it would be important. I'm thinking it is nowhere near the production growth rates though.

  Linda Piazza   5/14/200,  2:08:54 PM
So far, today's OEX candle is another small-bodied candle with both upper and lower shadows, with the candle bodies from the last few days sitting right along the 536 level. The congestion zone itself is indicative of indecision, as are the candle types. The day is far from over, but so far, no decision has been made since the OEX bumped lower this week. That's why we keep getting all these competing formations, all these false breaks of support.

  Linda Piazza   5/14/200,  1:48:50 PM
Remember that the OEX 540-541 historical S/R zone also contains the 19.1% retracement off the March 2003 low. Although this isn't the most-watched of retracement levels, it is watched and it also coincides with other types of resistance, so lends extra importance to that zone.

  Jim Brown   5/14/200,  1:47:12 PM
Speech by Governor Gramlich on budget and trade deficits Link

  Linda Piazza   5/14/200,  1:35:59 PM
The BIX is moving up again, too, currently challenging the trendline of lower highs established since May 5. That trendline is at about 336.40, with the BIX currently at 336.12.

As one guide (only one of many) to OEX strength/weakness, watch to see if the BIX pushes through or turns down again.

  Jeff Bailey   5/14/200,  1:24:55 PM
Per Jim's 13:13:17 ... which one is Ray? The one hanging fourth from the left? (grin)

  Jeff Bailey   5/14/200,  1:17:55 PM
Market Snapshot / Internals at this Link

I add the CRB, but since quotes are 30-min delayed, I don't get 01:00 data until 01:30

Yesterday's at this Link

and "Barton Biggs Bounce (Wednesday) at this Link

  Jim Brown   5/14/200,  1:13:17 PM
Ray Cummins
Most of you know Ray Cummins, the Combos/Spreads/Naked Puts editor. He took off last week for a day of fishing with his wife. Guess who caught the biggest one? His wife. I am afraid I would not get much work done if I had this kind of fishing where I lived. Ray lives in Alaska. Link

  Linda Piazza   5/14/200,  1:09:35 PM
The upside target for the now-confirmed (latest in a string) reverse H&S on the OEX 15-minute chart is just over 541, which happens to be historical resistance and the neckline of the larger reverse H&S we've been tracking, with this H&S actually forming the right shoulder of the larger formation. That's not an unusual occurrence. It doesn't happen all the time, but often enough that we see it fairly regularly. I'm not aware of any studies that that test whether H&S (or reverse H&S) that include other H&S as either a head or shoulder formation have any more or less likelihood of confirming.

By the way, I'm not any more certain that the current just-confirmed reverse H&S will meet its target any more than I was that the earlier regular H&S would meet its (it didn't), but the fact that the earlier one did not meet its target lets us know that there wasn't as much weakness as there appeared to be.

  Jeff Bailey   5/14/200,  1:07:50 PM
Rick Santelli talking about commodity prices / infation on CNBC. China was associated.

  Jeff Bailey   5/14/200,  1:01:16 PM
Swing trade long alert .... for Weyerhaeuser (WY) $58.35 here (missed that dip back into the gap), stop $57.25 to begin, target $59.90.

  Linda Piazza   5/14/200,  12:59:12 PM
The SOX moved immediately back above the ascending trendline off the 5/03 low that it broke through this morning. Was that break one of those bear trap moves Jeff likes to point out?

  Jeff Bailey   5/14/200,  12:57:34 PM
Good comment/note from Jonathan ... I saw that this morning too. Now that's a notable inflation rate for a month. Makes things in the U.S. seem like we're in a recession! Either that, or the U.S. productivity is much better.

No wonder the Chinese don't want to let their currency float.

  Linda Piazza   5/14/200,  12:53:54 PM
I'm back to see the OEX steadying above the descending trendline that began yesterday, having formed yet-another reverse H&S that comprises on the 15-minute chart. It's testing one version of a neckline now, with that version at about 536.50. This is the war of competing H&S, with maybe none of them meaning much of anything.

  Jeff Bailey   5/14/200,  12:29:23 PM
Buying some Pacholder High Yield (PHF) $8.21 +0.12% Link for the retirement account today. Sticking in here at $8.09, with overlapping support from both of our fitted retracement we did a couple of months ago.

If market psychology toward "slow inflation" rather than "hyper inflation" becomes the thought, then junk bonds should rally.

  Linda Piazza   5/14/200,  12:28:41 PM
The OEX is attempting an upside break through the descending trendline that began forming off the highs reached since about noon yesterday. Let's see if this attempt holds.

I need to be gone for about 20 minutes. That's probably a signal that something big is finally going to happen.

  Jeff Bailey   5/14/200,  12:25:03 PM
Yes it is notable ... Jeff: I would believe it if I wasn't seeing it intra-day. Something does seem important at your cr00y 269 level. If it breaks lower today, do you believe stocks will rally?

I can't be certain, but it is something I'm on the alert for.

I showed a trade pattern scenario in the QQQ, and what I'd want to be careful/alert to is this...

Should we see the QQQ dip to new session low and CRB (cr00y) fall back below 269, then be alert for the QQQ move back higher, but YOU HAVE TO MEASURE QQQ downside risk to that WEEKLY S2.

As such, I'd prefer to see the QQQ make new session low, ON LIGHT VOLUME, then look for the confirming move back up, maybe above DAILY S1.

  Jeff Bailey   5/14/200,  12:19:37 PM
Buy Program Prem. SPX 1,095.10 ... QQQ $34.85

  Linda Piazza   5/14/200,  12:11:56 PM
The SOX continues lower, having broken the 30-minute ascending trendline off the 5/03 low, but it's not falling far. The next test will be a break of the 5/12 low of 448.14, then of that 5/03 low, or else, if the SOX rises instead, a retest of the ascending trendline that it broke through this morning to see if it holds now as resistance. That trendline is currently at about 452.35 or so.

  Linda Piazza   5/14/200,  11:56:15 AM
In my 11:05 post, I mentioned that the OEX was testing the trendline formed off the descending highs since about noon yesterday. It did turn down from that trendline and now sinks back below the 200-dma. (Oops. Popped back above it while I typed.) I asked earlier if a certain test of the 200-dma could be the test that either breaks through to start a directional move or bounces to start one. Unfortunately, it's a question we have to keep asking ourselves. I'm noting that the BIX keeps turning down from tests of resistance, although it's flat on the day as I type, and the SOX continues its tests of the ascending trendline off the 5/03 low, looking as if it's falling below it when it's viewed on a 30-minute chart.

  Jeff Bailey   5/14/200,  11:54:21 AM
Capacity Utilization ... was up to 76.9% in May, and this ties in with some of last night's Index Trader wrap, or point I was trying to get across ass it relates to commodity prices.

We're starting to see some capacity begin to be utilized, where from LOW LEVELS of capacity utilization (everyone shut down production during economic slowing as demand fell and excess capacity was realized, and just now starting to see some type of meaningul increase in capacity utilization) where the shutdown most likely limited supply of product. Not only at the consumer product level, but also raw commodities. Who wanted to produce gold when it was going for less that $300/oz, copper below $0.80? you could go on and on.

The strong 0.8% gain in April's production number also ties in, where industry now starts turning things on. Why? Because they're finding not only stronger demand, but some price gains for goods under a recovering economy.

Now begin to think.... with production starting to ramp up, this supply will begin to eat away at the excees demand (after things were turned off) and as supply catches up with strong demand, what may happen to commodity prices? They'll fall.

Isn't this perhaps what gold has been saying?

Watch the CRB as a good test, to follow the price of gold.

Then watch.... the next "bad news" you'll hear, when the bullish % charts show risk for bulls is low, we'll hear from BEARS that the decline in the CRB is a NEGATIVE sign for the economy, as price declines in commodites are BAD and signal DEFLATION!!!!!

I think gold will tank, commodity prices will fall, but similar to the great bull markets of late 1990's, Treasury YIELDS will rise under the backdrop of sustainable pace of economic recovery, the current risk for equities will have been removed, and the second leg of the renewed bull market will take hold.

This too shall be tested!

  Jeff Bailey   5/14/200,  11:45:07 AM
CRB (cr00y) intra-day chart and trade at 11:05 AM EDT. Link

  Linda Piazza   5/14/200,  11:26:58 AM
This morning, the SOX has been testing support from an ascending trendline that began building off its 5/03 low. It pierced that trendline once (60-minute chart) on 5/12 and then bounced, and now we're going to see if it's going to do it again. This formation may be a bear flag rising into resistance, or it may be something more bullish, but we're sure about to see if the bearish interpretation will be the one that fulfills or not.

  Linda Piazza   5/14/200,  11:05:36 AM
Again, I'm reverting today to a mode when I hesitate to mention each little movement of the market, afraid that something I say will entice readers into a position when we're still just seeing chop so far. However . . . the OEX is currently testing the descending trendline off the high made just before noon yesterday. A downturn will confirm that resistance. A move above 536.50 will constitute a move above that trendline, but I'd sure give it a little leeway before I decided that the breakout above that resistance had been confirmed. Note recent 537-537.35 resistance, 538.50-539 resistance . . . and I could go on and on. Resistance is layered in regular close intervals.

  Jeff Bailey   5/14/200,  11:04:42 AM
11:00 Market Watch at this Link

  Jonathan Levinson   5/14/200,  11:01:59 AM
Still no update from the Fed as to today's repos, if any.

  Jeff Bailey   5/14/200,  10:59:44 AM
QQQ $35.00 -0.02% ... when I want it to come down it goes up, when I want it to go up it goes down.

  Jeff Bailey   5/14/200,  10:58:22 AM
Buy Prog. Premium SPX 1,097 +0.06%

  Jeff Bailey   5/14/200,  10:55:45 AM
Buy Program Premium SPX 1,094.69.

  Linda Piazza   5/14/200,  10:54:14 AM
The OEX has come back up to retest the neckline of the H&S formation that it broke through about an hour ago, but more, importantly, to retest its 200-dma's. A move much above 534.60, as it appears to be doing as I type, would put that confirmed H&S into doubt. As I mentioned earlier, as the OEX was breaking through that neckline, there was always some doubt because of the two competing H&S and reverse H&S formations. While I had hoped that today might see at least a short-term directional movement begin, I wasn't certain that it would, and those hopes are beginning to be squelched.

  Jeff Bailey   5/14/200,  10:52:12 AM
QQQ $34.82 -0.51% ... here's intra-day 5-minute intervals chart with my thoughts. Link

  Jane Fox   5/14/200,  10:48:44 AM
The 55 economists who participated in the latest WSJ survey believe the key fed-funds rate will climb 0.75 point to 1.75% by December. The economists believe that a year from now, rates will top 2.5%, and by the end of 2005 will be near 3.5%.

  Jeff Bailey   5/14/200,  10:44:09 AM
Bond yield/gold/bank trade action today "makes sense" as it relates to what we've been seeing in recent weeks.

A bit confusing is the broader equity market trade at this point. May suggest some positioning into next week's option expiration.

  Jeff Bailey   5/14/200,  10:41:42 AM
QQQ $34.85 -0.43% .... session low still $34.64.

I'm going to hang tight, but later this morning I'm going to look for a bullish trade setup where perhaps we see the QQQ come back lower again, get the trade at WEEKLY S1 and even DAILY S2 (34.61), the a little "swoosh" back higher to finish out near the WEEKLY Pivot.

  Jeff Bailey   5/14/200,  10:37:42 AM
Buy/Sell Premiums I see that I forgot to change (Thursday) to (Friday) in this morning's 09:00 PM EDT update. Those are the correct buy/sell premium levels for today buy = $0.42 and sell = -1.69.

So far this morning I count 4 buy premiums and 5 sell premiums if looking at 5-minute intervals.

  Jeff Bailey   5/14/200,  10:33:30 AM
Buy Program Premium ... SPX 1,091.92

  Jeff Bailey   5/14/200,  10:33:07 AM
Semiconductor Index (SOX.X) 453.42 -1.3% ... Jeff: Does the SOX.X look like it is setting up a bearish triangle?

Yes, on the 5-point box scale. Link

  Linda Piazza   5/14/200,  10:33:00 AM
OI Put Play WHR: Like AMZN, WHR is turning down within its possible bear flag, but unlike AMZN, WHR currently trades below its 10-dma. Play participants now want to see it move below the bear-flag support at $63.50 or so, and then confirm weakness with a move to a new 30-minute low, and then a move below the 5/10 low. As with AMZN, however, so far, so good.

  Linda Piazza   5/14/200,  10:29:07 AM
OI Put Play AMZN: Play participants will be relieved to see AMZN turning down today, although it has not yet broken through the support of the possible bear flag. It's also holding just above the 10-dma, and bears shouldn't relax too much until both those support levels are broken. So far, so good, however.

  Linda Piazza   5/14/200,  10:22:18 AM
The BIX has turned down again and is now negative for the day. It never equaled yesterday's high of the day.

  Linda Piazza   5/14/200,  10:18:46 AM
The OEX steadies at the right-shoulder level of the larger reverse H&S, at least temporarily, after having broken through the neckline of the smaller, regular H&S. That may be changing as I type.

  Jeff Bailey   5/14/200,  10:16:50 AM
eBay (EBAY) $78.26 -1.47% Link ... slips back below its WEEKLY S2 ($78.30)

  Jeff Bailey   5/14/200,  10:16:06 AM
Swing trade long cancel alert ..... cancel entry order for WY. Will monitor instead of open order entry.

WY $58.45 +1.08% ...

  Jonathan Levinson   5/14/200,  10:12:21 AM
The Fed's temporary market ops page is not updating, and their traditional news release channels are silent as well. I don't know what's happening with the 6B in overnight repos expiring today.

  Jeff Bailey   5/14/200,  10:08:15 AM
QQQ $34.70 -0.9% ... session low $34.64 right at WEEKLY S1. I'm a bit surprised we saw "this much" weakness considering the decline in YIELDS this morning.

  Jeff Bailey   5/14/200,  10:05:19 AM
U.S. Market Watch at this Link

  Linda Piazza   5/14/200,  10:04:44 AM
This H&S on the 15-minute chart is still worth watching. Note, however, that there's an opposing reverse H&S, too, with this pullback possibly being part of a right-shoulder formation. That would mean that we might not see the downside target of the formation that's just broken through the neckline. The contrasting bearishness and bullishness lent credence to the idea that markets might be choppy. Still, the confirmation of that H&S formation, as has happened now, is also a push below the 200-dma, so gains more importance. A push below 532 will further confirm the weakness. A failure to steady off near here would negate the possibility that the reverse H&S will complete. As I mentioned earlier today, I have a little more hope that markets will pick a direction today, and we may be seeing that happen, but may is still the operative word.

  Jeff Bailey   5/14/200,  10:01:05 AM
Swing trade stop alert ... QQQ $34.75 (-$0.26 on trade)

  Jeff Bailey   5/14/200,  9:59:57 AM
Weherhaesure (WY) $58.83 +1.74% Link .... back higher and session high.

  Jeff Bailey   5/14/200,  9:57:45 AM
QQQ $34.81 -0.62% ... DAILY S1 better hold here for swing trade long. Session low came at $34.76, a penny shy of our $34.75 stop.

  Jim Brown   5/14/200,  9:56:38 AM
If you need your daily fix of the "Money Honey" as Maria was called on the NYSE do not worry. She will be around. NBC has just signed her to a new 5-yr contract and given her a production company of her own. She will be doing "special" interviews for a long time to come. Link

  Linda Piazza   5/14/200,  9:54:26 AM
The OEX heads down for another test of the 200-dma. Is this the test?

  Linda Piazza   5/14/200,  9:50:27 AM
The BIX moves above yesterday's close, although it hasn't yet topped yesterday's high of the day. It's moving toward another test of the 30-dma, an average that has been stopping BIX advances since early in March, although there have been intraday piercings of that average. That average is at 336.70 with the BIX currently at 335.59.

  Jeff Bailey   5/14/200,  9:49:27 AM
Semiconductor Index (SOX.X) 457.40 -0.47% ...

  Jeff Bailey   5/14/200,  9:48:47 AM
QQQ $35.00 -0.02% .... ESRX $75.77 +2.35% , KLAC $44.32 +1.18% ... BEAS $8.62 -20%, DELL $34.62 -3.3%, SANM $10.02 -3.83%

  Linda Piazza   5/14/200,  9:47:49 AM
The comments about the TNX prompted me to take another look at this chart that I've posted a couple of times over the last couple of days. The red trendline is one version of a neckline for a large reverse H&S on the weekly chart. TNX popped above it yesterday, but the gap and the small-bodied candle made that pop suspicious. Now the TNX retests the breakout level: Link

  Jeff Bailey   5/14/200,  9:47:32 AM
10-year ($TNX.X) yield now down 6.1 basis point at 4.790%

  Jim Brown   5/14/200,  9:47:14 AM
Michigan Sentiment = 94.2 , (est 95.8, last 84.2)

  Jeff Bailey   5/14/200,  9:45:52 AM
Swing trade option exit alert for those CSCO May $22.50 calls (CYQEX) at $0.15 limit.

  Linda Piazza   5/14/200,  9:43:01 AM
The OEX is falling out of the five-minute ascending regression channel in which it had traded since about 2:00 yesterday afternoon. Those who are watching this happen want to see this tentative weakness confirmed by a move below the 200-dma and the 2:00 low of 533.91. The 200-dma is at 534.41, with the 200-ema at 534.02. None of those confirmations have occurred as yet.

  Jeff Bailey   5/14/200,  9:42:38 AM
Swing trade long alert for pullback entry in Weyerhaeuser (WY) $58.75 +1.6% at $58.10, stop $57.25 target $59.90.

Unlike my CSCO options trade, I've checked May "max pain" for WY and it is calculated at $60.00.

  Linda Piazza   5/14/200,  9:36:57 AM
During the first five minutes of trading, the OEX spanned a range from 535.57 to 537.35. We've seen that 535.35 number a lot over recent trading sessions, with it often serving as resistance. It is now, but is that only temporary? We'll see.

  Jeff Bailey   5/14/200,  9:36:44 AM
Intl. Paper (IP) $40.73 +0.19% Link .....

eyeballing Weherhaeuser (WY) $57.82 (not open yet) for a day/swing trade long. Link

  Jeff Bailey   5/14/200,  9:33:52 AM
OSI Pharma (OSIP) $79.00 +0.88% Link ...

  Jeff Bailey   5/14/200,  9:32:07 AM
QQQ $35.24 +0.58% ....

  Jeff Bailey   5/14/200,  9:29:38 AM
10-year YIELD ($TNX.X) similar to Jonathan's dollar chart, YIELDS backing off with 10-year now down 2.9 basis points. CPI data seemed to "shock" traders with inflation tame at consumer level.

Dollar action now had Dow futures back near unchanged.

  Linda Piazza   5/14/200,  9:23:32 AM
Yesterday's OEX test of the 30-minute 100/130-pma's failed, and should have created a sell signal when the OEX moved back down through the 100-dma again, but all were aware of the 200-dma lurking just beneath, providing support through the afternoon. Much of the day, the OEX ping-ponged from support to resistance and back, managing another close above the 200-dma. The daily chart pattern looks like a possible bear flag formation, but Wednesday's low and Thursday's high present the worrisome possibility that the OEX could be building another broadening formation. That's worrisome because it's difficult to tell where a breakout level should be in a broadening formation. The next break of the 200-dma could send the OEX lower to test the 528 level and then the 524-525 level if that one fails to hold, but then perhaps that expanding support will catch it again. A break above the 30-minute 100/130-pma's should send the OEX higher, at least to test the 540-542 level, but then perhaps that expanding resistance would instead catch it again.

Other contradictory evidence exists. A potential reverse H&S building since 5/10 sets up on intraday charts, but a smaller, regular H&S began building late Wednesday and early Thursday. The 15-minute nested Keltner charts are settling into an equilibrium position with the OEX just above mid-Keltner support, and I mean just above it, with that support at 535.62 and the OEX closing at 535.94. The five-minute nested Keltner channels are similarly trying to settle into an equilibrium position with the OEX a little further above the 534.87 mid-channel support there.

All these mixed-up conditions and others I've been noting on these pages have been pointing to choppy trading conditions, and that's what we've been getting. That's been my bias over the last couple of days as the markets needed to digest the recent deep losses before the next direction could be decided. Because of the shape of that recent consolidation pattern, I'm slightly favoring a likely downside breakdown, but far from certain about that possibility. It's still possible that the chop could continue through today, but I have slightly more hope today than yesterday that we'll see some kind of at least short-term directional movement begin. Just slightly more hope. Futures have been down, but have been trying to rise. As the cash markets open, I'll be watching first 538.50 and then the 540-542 level for signs of an upside breakout and the 200-dma, then 532.60 for signs of a downside breakdown in progress. If inclined to jump into plays today, be prepared to jump right back out because of the possibility of that broadening formation continuing to provide support or resistance at broadening levels, just when one thinks a breakout has begun. Remember, too, when choosing options that next week is opex week, and any May options are going to lose a hefty portion of their time premium over the weekend, if an options play doesn't work today.

  Jim Brown   5/14/200,  9:23:19 AM
Nasdaq Leaders Max Pain Values for May

INTC 27.50
MSFT 25.00
CSCO 22.50
TASR 37.50
EBAY 80.00
AMZN 45.00
YHOO 25.00
QCOM 65.00
JNPR 25.00

  Jim Brown   5/14/200,  9:23:09 AM
Max Pain Values for May

SPX 1125
DJX 103
DIA 103
OEX 540
RUT 580
SOX 470
QQQ 35
MMM 85
IBM 90
GE 30

  Jonathan Levinson   5/14/200,  9:18:32 AM
Industrial production up .8%

  Jonathan Levinson   5/14/200,  9:16:28 AM
DJ US April Capacity Use Up 0.4-Pt To 76.9%;Consensus 76.7%

  Keene Little   5/14/200,  9:13:54 AM
Quite the violent reaction this morning in bond land. Difficult to tell whether or not that spike low was it for bonds. Prices came within ticks of the fib targets and TNX came close to the 4.91% target (4.904 high, currently 4.844). It remains to be seen if bond/note prices will drop one more time to hit the exact fib targets, but the EW count can count complete to the downside at this point. We may be witnessing the turn in bonds today. What I'll be looking for is impulsive price action to the upside to tell me we've had a trend change.

  Jane Fox   5/14/200,  9:03:50 AM
Dateline WSJ More than 300 Iraqi detainees were released from Abu Ghraib prison on Friday, a day after U.S. Defense Secretary Donald Rumsfeld made a surprise visit and insisted the Pentagon didn't try to cover up abuses there.

The U.S. governor of Iraq, meanwhile, told regional officials Friday that the U.S. would leave Iraq if requested to do so by the new Iraqi government -- although he thinks such a move is unlikely. L. Paul Bremer told a delegation from Iraq's Diyala province that American forces would not stay where they were unwelcome.

"If the provisional government asks us to leave we will leave," Mr. Bremer said, referring to an Iraqi administration due to take power June 30. "I don't think that will happen, but obviously we don't stay in countries where we're not welcome," he said.

This is quite a turnaround in White House Policy.

  Jonathan Levinson   5/14/200,  8:32:07 AM
Business inventories .7%, upside surprise.

  Jonathan Levinson   5/14/200,  8:31:17 AM
CPI +0.2

Core CPI +.3%

  Jonathan Levinson   5/14/200,  8:08:45 AM
Awaiting March business inventories, est. .4%, April CPI est. .3%, core CPI est. .2%, at 9:15 Industrial production and capacity utilization, est. .5% and 76.7%, and at 9:45, UMich sentiment, est. 96.7.

  Linda Piazza   5/14/200,  7:27:06 AM
Good morning. Since Monday afternoon, the Nikkei has been testing support near 10,800 and bouncing from that support. In Friday's trading, 10,850 proved important. The Nikkei opened at 10,846.61, up from Thursday's close and bounced twice from 10,850 before reaching the high of the day and then diving to the low of the day at 10,739.49. The Nikkei climbed into the close, managing a 24.53-point or 0.23% gain, to close at 10,849.30, just below that 10,850 level.

Dell's earnings report was credited with sending techs and exporters higher in early trading, and many techs and exporters such as NEC and Matsushita Electric Industrial closed higher, too, with the yen easing against the dollar. Many autos traded higher, although Fuji Heavy Industries, manufacturer of Subaru cars, was flat ahead of an earnings report that showed net profit rising last year. The company predicted that net profit would fall 17% in the current fiscal year, however. Speculation about plans for financial assistance swirled around Mitsubishi Motors, helping it to join other gaining auto stocks. Many issues related to domestic demand also gained in early trading, but some reversed those gains later in the day. Kobe Steel was one company that reversed earlier gains. In stock-specific news related to earnings, NTT rose 0.2 percent ahead of its after-the-close earnings report, a report that showed net profit soaring almost 176% in the year just ended in March, but the company predicted only 1% growth for the year already underway. Yamato Transport climbed 1.5% ahead of its after-the-close report in which it reported net profit rising 2.6%. The company predicted a 44% decrease in net profit in the year currently underway.

Most other Asian bourses traded lower with tech weakness being noted. The Taiwan Weighted lost 2.38%. South Korea's Constitutional Court dismissed impeachment charges against the country's president, restoring his executive powers, but print articles and television reports all noted that the widely expected decision had little impact on the markets and likely wasn't responsible for the Kospi's 2.74% loss. Singapore's Straits Times declined by 1.33%. Hong Kong's Hang Seng lost 1.05% and China's Shanghai Composite declined by 2.18%. In China, April's consumer price index grew the fastest in seven years, according to one report.

Most European bourses also trade lower, with record highs in crude-oil prices pressuring the markets. Companies most impacted by higher crude-oil costs, such as BASF, Lufthansa, and British Airways, declined. Italy's Alitalia revealed that it wouldn't be able to continue operating without a loan. Market watchers also noted Germany's steelmaker ThyssenKrupp's statement that the company thought that the risks had escalated that the economy might weaken.

An economic number released today showed that in the Q1 period, the 12-nation eurozone's economy expanded a faster-than-expected 0.6%. Foreign demand accelerated that growth, with CNBC Europe commentators this morning discussing whether the eurozone economy had become too dependent on foreign demand, particularly on the U.S. Consumer demand from within the eurozone countries has remained problematic. This quarter, France's consumer spending increased 0.2% in the first quarter, but it was the only country among the dozen to see increasing consumer demand. The EU did not change its forecast for the second quarter, leaving that forecast at a 0.3-0.7% growth.

As of this writing, the FTSE 100 has lost 30.70 points or 0.69%, to trade at 4423.10. The CAC 40 has lost 26.14 points or 0.72%, to trade at 3588.10. The DAX has lost 38 points or 0.99%, to trade at 3786.93.

  Keene Little   5/13/200,  11:39:51 PM
Looking over the gold stocks this evening, I thought I'd share a chart of where I think price is going. I'm using NEM as a proxy for the gold stocks, though the XAU index looks the same. Here's a 120-min chart showing price projection based on what the EW pattern is telling me. Link

Prior to the latest bounce I was thinking the low on the 10th may have been the bottom and thought it worthwhile to test with a long play. But the following rally consisted of only 3 waves after the ensuing decline overlapped the first high on the 10th. Once that happened I knew the rally was only a correction to the decline, not the start of something bigger to the upside. Now the pullback from the high on the 12th is also corrective which leads me to believe we have another leg higher to make for a larger correction before the decline resumes. It's possible the larger correction will just go sideways for a little while. But regardless, we should see another drop to new lows after the correction is finished.

It seems the fib target of $31.51, which coincides with the H&S projection on the daily chart, is in store for this stock. I'll be watching the next move down as it develops to help zero in on a bottom.

Same analysis on XAU shows a downside target of about $73.00, which is also at an uptrend line from the end of 2001 (today's closing price $80.10). I'm expecting another bounce higher to finish the larger correction and then a drop to this price target. This is a 4th wave correction which are difficult to trade and figure out where they're going, so I would recommend staying flat these stocks until the pattern is finished.

  OI Technical Staff   5/13/200,  8:35:46 PM
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