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  Jeff Bailey   5/21/200,  6:04:41 PM
Pivot Matrix for next week at this Link

I use the very last settle tick for the U.S. Dollar Index (dx00y) where despite tick prior to 90.49, the dx00y was trading 90.64. That 90.49 value gives almost perfect 90.77 DAILY R2 and WEEKLY Pivot correlation.

What it also might do is now allow dollar strength to 90.77, which might just have Newmont Mining (NEM) $38.40 +2.04% backfilling today's gap back to the downside.

So, plan for Monday morning (dollar begins trading on Sunday) is to watch dollar closely and if on Monday morning dollar is hanging out close to 90.77, then should Newmont (NEM) gap lower at the open, I'll want to close out on that gap.

The 90.00 level is not only a major near-term level of support for the Index (dx00y) on a bar chart, but pretty good correlation for support at WEEKLY S1 and MONTHLY Pivot next week. The dx00y 09:05-03:00 session low was found immediately at the opening tick today, as if buyers were eager at the 90.00 level.

Looking forward to Monday morning to see how things work out.

  Jeff Bailey   5/21/200,  5:37:30 PM
Comments on CNBC Friday Night .... "things looking more like 1996.." regarding economy and current Fed policy.

I tend to agree, as this would make for the "second leg of the greatest bull market in history."

I'd just like to see the S&P 500 Bullish % ($BPSPX) Link get a little lower to around 40% (maybe this summer) and an SPX 1,000 might just be the inflection point. Link

  Jeff Bailey   5/21/200,  4:25:58 PM
U.S. Dollar Index (dx00y) 90.54 -0.53% .... if we close here, then we're going to have correlative RESISTANCE at DAILY R1 of 90.77 and WEEKLY Pivot of 90.78.

As such, this would be a near-term NEGATIVE in my opinion for holding a Newmont Mining (NEM) $38.40 short over the weekend. NEM could gap lower should dollar trade above 90.78 on Monday morning.

Risk averse traders hold NEM short, might look to try and close out over an ECN

  Jeff Bailey   5/21/200,  4:11:14 PM
U.S. Dollar Index (dx00y) at the 03:00 hour, dx00y went out at 90.49 and just under its 09:05-03:00 high of 90.51.

As I type and looking at 30-minute delayed chart, the dx00y just making a break above the 90.50 level to 90.60. Will see where it closes the week session later this afternoon.

  Linda Piazza   5/21/200,  4:00:24 PM
It looks as if the OEX is going to have another close beneath the 200-sma, which is not good, but a close above the 200-ema and no breakdown out of the consolidation formation. What a week.

If Jane were here today, she'd wish everyone a good weekend and that's what I wish you all, too.

  Jeff Bailey   5/21/200,  3:59:05 PM
Newmont Mining (NEM) $38.47 +2.25% ... will hold over the weekend.

  Jeff Bailey   5/21/200,  3:54:31 PM
Newmont Mining (NEM) $38.39 +2.01% .... just off matching session low of $38.30.

I'm 50/50 on holding over the weekend.

Had 10-year YIELD closed firmly above 4.766% I would feel better about holding over the weekend.

Going to try and quickly calculate Dollar Index Weekly pivots...

  Linda Piazza   5/21/200,  3:52:35 PM
I just noticed that today's $TNX candle engulfed yesterday's bearish candle. We'll need to see follow-through on Monday, follow-through that might not occur, but that could prove problematic for equities if the follow-through should occur and if the inverse relationship between yields and equities continues.

  Linda Piazza   5/21/200,  3:49:38 PM
Here are a couple of things I've noticed on the BIX daily chart: Link

  James Brown   5/21/200,  3:39:33 PM
Neiman Marcus (NMG.A) is turning in a bullish session with a 3% gain and a breakout over $50.00 and its 200-dma.

  Linda Piazza   5/21/200,  3:39:25 PM
A couple of times today, I've posted Keltner channel charts showing some of the ways that I use them, first posting a chart with only one channel and then another with two. I wanted next to post a 15-minute chart that illustrates another action that's often apparent on the Keltner charts. Link Because the nested charts can look confusing if you're not used to watching them, I've eliminated the basis lines for each channel just to simplify the chart. I usually include and follow those basis lines quite closely. That attempt to establish an equilibrium position can't be maintained forever, and when the candles start squeezing into smaller shapes and the channels straighten, that's a signal to get prepared for a breakout, although it doesn't tell when that breakout will occur. Today, I'd bet that the OEX could spend the rest of the day establishing that equilibrium state in preparation for a breakout next week.

  James Brown   5/21/200,  3:25:07 PM
I would keep an eye on some of the homebuilding stocks. They're hinting at a potential bullish turnaround after their recent weakness.

  Jeff Bailey   5/21/200,  3:24:44 PM
03:00 Internals at this Link

  Jeff Bailey   5/21/200,  3:18:25 PM
Newmont Mining (NEM) $38.45 +2.17% .... OK, with bond market closed and 10-year YIELD at session high, the strength in the dollar would be the only remaining "indicator" ... dollar looking strong on intra-day comeback, and should have gold stocks under pressure as strength continues.

  Linda Piazza   5/21/200,  3:13:34 PM
The OEX approaches the 15-minute Keltner chart channel line that usually supports it, with that line at 532.25. The OEX does sometimes break through that channel line or follow it lower.

  Jeff Bailey   5/21/200,  2:58:54 PM
Bond market set to close in 2 minutes 10-year YIELD ($TNX.X) up 4.6 bp at 4.764%

  Jeff Bailey   5/21/200,  2:57:26 PM
Sell Prog. Premium SPX 1,090.65

  Jeff Bailey   5/21/200,  2:45:11 PM
10-year YIELD ($TNX.X) 4.766%

  James Brown   5/21/200,  2:44:47 PM
Currently FRX looks like a bearish candidate with today's breakdown under the 200-dma and the $60.00 level on rising volume.

  Linda Piazza   5/21/200,  2:36:02 PM
Is that a rough inverse H&S forming now on the OEX two-minute chart, complete with bullish divergence as the head was formed and with a neckline just above 535? It's going to be one of those days, isn't it?

  Jeff Bailey   5/21/200,  2:32:24 PM
Pacholder High Yield (PFH) $8.69 +2.23% ...

  Jeff Bailey   5/21/200,  2:31:20 PM
Day trade lower stop alert for Newmont Mining (NEM) to $38.76.

10-year YIELD ($TNX.X) approaching MONTHLY R1 as I type and might be big buyer reversal, so want to protect. If YIELD continues higher, then I'd have to think NEM gets hit lower.

  Jeff Bailey   5/21/200,  2:25:05 PM
Dow Diamonds (DIA) $99.95 -0.06% ... has been steady at its DAILY Pivot last 40-minutes.

GE $30.55 +1.05% ...

  Jeff Bailey   5/21/200,  2:22:24 PM
Newmont Mining (NEM) $38.51 +2.33% .... post bearish profile low has been $38.41, with NEM now testing its DAILY R1 of $38.53 as intra-day resistance here.

Session low of $38.30 not violated at this point, which gives some nice room to backfill of morning gap.

Get feeling it's going to take a YIELD above that MONTHLY R1 to get the flush I want.

  Jeff Bailey   5/21/200,  2:17:43 PM
Evened out is my thingking.... QQQ $34.86 just off a test of DAILY Pivot, while 10-year YIELD ($TNX.X) at 4.75% right here.

I sense that that 4.75% yield move higher earlier brought some selling into just about everything.

  Jeff Bailey   5/21/200,  2:14:16 PM
02:00 Internals at this Link

  Linda Piazza   5/21/200,  2:13:18 PM
FWIW: I've been using SIRI as a sort of bellwether stock over the last few months. It was one of the first stocks that I began watching with respect to the 72-ema on the daily chart, noting that most of last year SIRI had been bouncing from touches of that moving average. Beginning in March, I began seeing some technical considerations on the daily chart that made me doubt whether SIRI would continue to find support at that MA. It did bounce again, but into a lower high and then finally fell below that average in May. It's risen twice since then to test it, yesterday rising to a high of $3.25 with the 72-ema yesterday at $3.24, but now that MA is serving as resistance instead of support. That's a change in tenor in this stock.

The TRAN was one index that I also watched with respect to this average. It fell beneath it earlier than SIRI. Wednesday the TRAN rose to a high of 2885.16 with the 72-ema at 2885.70 that day, with the TRAN falling back again, showing that this average now serves as resistance for the TRAN, too.

What does this all mean? Maybe nothing important, but it does mean that some stocks and some indices are now changing their behavior with respect to this hidden average that seems--perhaps falsely--to have figured in buying behavior over the last year.

  James Brown   5/21/200,  2:01:08 PM
...ARDI might be worth putting on your watch list. Shares are trying to bottom and may have done so at the $7.00 level. The P&F chart is still very bearish.

  Linda Piazza   5/21/200,  2:00:59 PM
Not only did the OEX meet the downside target projected from that two-minute chart's H&S formation, but it also exceeded it. That's a bearish development. It's now testing the 200-sma, now slightly below it but slightly above the 200-ema. All should remember, too, that while this action looks like a rounding down below the 60-minute 100-pma, here we have the OEX currently sitting right in the middle of the zone that it's occupied over the last couple of weeks as we head into the afternoon of an opex Friday.

  James Brown   5/21/200,  1:48:23 PM
Downey Financial (DSL) is making progress today. The stock is building on its recent rally and Friday's gain is a breakout over resistance at $50.00 and its 50-dma.

  Linda Piazza   5/21/200,  1:39:53 PM
The Dow is dropping back below 10,000 again.

  James Brown   5/21/200,  1:28:44 PM
I don't think I've heard any comments about TASR the last couple of days. After a few days of struggling under the $31 level the stock now appears to be headed toward its May lows near $25.

  Linda Piazza   5/21/200,  1:14:41 PM
Here's a chart showing why I think the 60-minute versions of the OEX 100/130-pma's (exponential) are important, and also showing the OEX's action with regard to those averages this morning: Link This current downturn, if continued, looks bearish. Note that the OEX is still above the important 200-dma's, however. No system or particular technical analysis tool is foolproof, and especially not on opex Friday, when movements can seem to begin and then be just as quickly aborted.

  Jeff Bailey   5/21/200,  1:14:11 PM
01:00 Internals at this Link

  Linda Piazza   5/21/200,  1:10:28 PM
There's the downside break through the neckline of the two-minute H&S on the OEX, with a downside target now near 535.30, constituting a retest of the 200-sma at 535.38 if that downside target is approached.

  Jeff Bailey   5/21/200,  1:04:46 PM
01:05 Market Watch at this Link

  Linda Piazza   5/21/200,  12:57:51 PM
The OEX comes back to test the neckline of that two-minute H&S formation again. I mention this, not because that formation on such a short-term chart has strong implications for the market, but only because we're also watching for signs that the OEX might turn down below the 60-minute 100-pma that it has been testing over the last couple of hours (537.97) and head back down to retest the 200-sma (535.38). The neckline is at about 536.70 now.

  Jeff Bailey   5/21/200,  12:52:22 PM
Day trade short alert for Newmont Mining (NEM) here at $38.65, but stop above today's high $38.82 ($38.86), with original target from setup.

  Jim Brown   5/21/200,  12:52:12 PM
FBI Warning I am sure most readers have heard this already but it bears repeating. The FBI is warning state and local authorities to be on the alert for suicide bombers. Concern over special summer events and the increase in rhetoric from extremist groupls make the warning necessary.

They warn everyone to be on the lookout for individuals wearing bulky jackets on warm days, smelling of chemicals, or even individuals whose fists are tightly clenched.

  Jeff Bailey   5/21/200,  12:51:27 PM
10-year Yield ($TNX.X) 4.751%

  Jeff Bailey   5/21/200,  12:50:52 PM
I'll have updated internals at 01:00 PM. Getting those updated.

  Jeff Bailey   5/21/200,  12:44:52 PM
Day trade short alert for Newmont Mining (NEM) $38.66 +2.73%, should it trade $38.45 then would follow with a stop above $38.75 to begin, with a target back lower at $38.08.

I need to get started on 01:00 Update, but wanted to outline now. Keep eye on 10-year YIELD too. While we may be seeing some carry over to "max pain" for 10-year YIELD of 4.75%, a trade in NEM worth setting up.

  James Brown   5/21/200,  12:44:21 PM
AIG and the IUX insurance index are hinting at a bullish turnaround. AIG's gain today is close to breaking its trend of lower highs while its MACD edges closer to a new buy signal.

  Linda Piazza   5/21/200,  12:44:01 PM
As Jim and Jonathan have commented on the Futures side of the Monitor, we've now entered the mid-morning-on stage of opex Friday in which indices and stocks often get pinned to a certain number except for brief, unpredictable swings away that aren't particularly amenable to technical analysis. Be careful if considering entering any positions and be especially careful if you are a holder of any OTM May options today. That time value (the only value you have in those options) is going to begin pouring out of them from this point on. Without a quick move through your strike, you're going to be in bad shape. Perhaps you picked up a few cheap OTM contracts as a lottery play, with the intention of losing the entire stake if things didn't go your direction, but, if not, give careful consideration to your positions. I used to have an unbreakable rule against trading front-month options during opex week, and the few times I broke that rule, I mostly regretted it. We could get a big directional move today, but such a move will be working against that tendency to play pin-the-markets.

  Linda Piazza   5/21/200,  12:34:35 PM
The OEX so far resists confirming that H&S on its 2-minute chart, staying above the neckline level and stretching the right-shoulder level out of proportion. The neckline is now at about 536.65-536.70, but a move much above 537.30 would negate that formation entirely.

  James Brown   5/21/200,  12:27:35 PM
Many of you with kids will probably be seeing the new Shrek 2 that opened on Wednesday this week. So far the film is breaking some opening records and analysts have forecast the sequel to bring in nearly $300 million in just the U.S. Evidently there are rumors going around that Dreamworks, the studio behind Shrek, might use the momentum from Shrek 2 to file an IPO later this year. (-CNN)

  Linda Piazza   5/21/200,  12:20:48 PM
The OEX two-minute chart shows a well-formed H&S setting up with a neckline at about 536.60 currently, but rising slightly. The downside target of such a formation would be minimal, about a point and a half, but, if confirmed and the downside target met, that would bring the OEX back down close to a retest of its 200-dma. Note that the OEX has not been able to move above the 60-minute versions of the 100/130-pma's, a version that's currently more important than the 30-minute versions.

  Jeff Bailey   5/21/200,  12:10:48 PM
Day trade short setup alert .... for Newmont Mining (NEM) $38.51 based on intra-day reversal back up in Treasury YIELD. Please wait for signal.

Keeping eye on 10-year YIELD ($TNX.X) 4.743% after morning reversal back up, with YIELD alert set at 4.76% (47.66)

  James Brown   5/21/200,  12:09:53 PM
The DJUSHB home construction index is trying very hard to rally over resistance at 550 and its 200-dma with today's 2.16% gain. Yet there is more resistance at 560 as well. The MACD is close to producing a new buy signal.

  Jim Brown   5/21/200,  12:05:04 PM
Rumor hitting the wires that the UN building is being evacuated

  Linda Piazza   5/21/200,  12:04:10 PM
In regard to James' 11:51 post (and, don't forget Jonathan's entertaining illustration) of the climb in the airline stocks on news that OPEC might recommend upping production at its informal meeting this weekend, I'm reading a lot of skeptical comments about how much good that would do. According to what I read and noted in Wednesday's Market Wrap, only Saudi Arabia has an ability to up production, and that's only a small increase, experts think. I'm not an expert in this area and can only report what I've read, but that's what's coming across from foreign commentators, too. This decrease in crude prices might be only temporary then. Maybe not, but John Felmy of the API thinks that OPEC countries would happily be selling all the crude they could at current prices, and so probably can't produce much more to sell. Demand is not expected to slacken any time soon, either.

  James Brown   5/21/200,  12:02:46 PM
Not much of a bounce today in shares of Navistar (NAV). The stock plummeted yesterday on an earnings warning. Shares are up 24 cents to $34.20 today.

  James Brown   5/21/200,  11:59:22 AM
Dow-component UTX was started at an "out perform" by CSFB this morning but share are not responding and appear stuck in their month-long down trend. Shares will soon be approaching support near $80.

  Jeff Bailey   5/21/200,  11:57:11 AM
Dow Diamonds (DIA) $100.28 +0.25% .... Jeff: What was original play advice for DIA short?

This is actually a put option for 1/2 position in the DIA July $100 puts (DIA-SV), no stop, and a most bearish target of $92.00.

  Linda Piazza   5/21/200,  11:56:59 AM
So far, Keltner resistance is holding the OEX back just where it would have expected to do so, but the OEX isn't yet through testing that Keltner resistance and that could still change. The TRIN has tried to stabilize in neutral territory, but that could change, too.

  James Brown   5/21/200,  11:55:56 AM
Conexant Systems (CNXT) is up 14% to $4.28 after Morgan Stanley started coverage on the stock with an "over weight" this morning. The next level of resistance appears to be the $5.00 mark and its simple 40-dma.

  Jeff Bailey   5/21/200,  11:52:22 AM
10-year YIELD ($TNX.X) has seen notable reversal and now up 1.7 bp at 4.735%. Session low yield was 4.68%, where selling looks to have come in after the ABT "Rail terrorism" report.

Gold equities could become vulnerable based on recent trade patterns with YIELD.

  James Brown   5/21/200,  11:51:23 AM
Airlines stocks are really flying high today with the news out of OPEC that the cartel might up production. The XAL airline index is up 2.89% to 52.53 and building on yesterday's gain. Here are some of the movers in the sector...

UAIR +17.34%
DAL +6.84%
NWAC +4.09%
CAL +3.93%
AMR +2.45%
LUV +2.42%
JBLU +2.66%

  James Brown   5/21/200,  11:45:51 AM
Marvel Enterprises (MVL) is down 4.72% to $19.34 after reporting that the company is offering another 6 million shares for sale in a secondary offering. This will increase the number of outstanding shares from 108.9 to 114.9 million shares.

  Linda Piazza   5/21/200,  11:44:21 AM
About 40 minutes ago, the OEX broke to the upside above that rising regression channel that had looked like a possible bear flag, breaking above it at the same time that it broke above a 50% retracement of the drop from 5/19's high to yesterday's low. We had two signs then that the formation was not the typical bear flag--that breakout above the formation itself and the move above a 50% retracement of the drop. Now, however, the OEX is facing upper channel Keltner resistance on the five-minute chart and resistance that usually turns it back on the 15-minute chart. It can still give a breakout signal and move higher, but it's time to begin making decisions about protecting profits if in a bullish play while not necessarily yet time to exit that play. I'd sure be aware of that bearish Keltner divergence, however, that I noted earlier as well as the historical resistance the OEX has encountered in the current level and slightly higher over the last couple of weeks. If this consolidation zone is a "b" distribution pattern, as it might still be, then the OEX is just zooming around within it, and it's possible to see a downdraft assert itself just as quickly as this updraft did.

  Jeff Bailey   5/21/200,  11:44:20 AM
11:00 Update at this Link

May explain early morning dip lower and strong bid in video survellance stocks (ISNS, IPIX, MAGS). Will look for any updated to the ABC news report from about 10:00 AM EDT.

  James Brown   5/21/200,  11:38:03 AM
President Bush just finished speaking at LSU's graduation ceremony.

  Linda Piazza   5/21/200,  11:36:10 AM
Here's a Keltner channel setup using the 15-minute chart, with two channels now shown: Link Note something interesting about this chart. Note that on both 5/19 and today, the OEX approaches the top black channel line. However, when it approached that top black channel line on 5/19, that top black line was closer to the upper mauve or purple line than it is on the current approach. That's bearish divergence, Keltner style. It can be erased, of course, just as can any other, and will be if the OEX keeps pushing upward and turning the black channel up, too, but that's what's showing up now. On Keltners as on other types of technical analysis tools, such divergences can serve as warnings, but price itself should be your guide. Let the warnings help you prepare, perhaps to decide how you'll protect bullish profits if you have them, but don't act on warning alone.

  Jeff Bailey   5/21/200,  11:36:05 AM
Buy Prog. Premium SPX 1,099.21

  James Brown   5/21/200,  11:31:37 AM
Sector update...

(Biggest) Winners:
XAL airlines index: +2.91%
XAU gold & silver: +2.69%
DJUSHB homebuilders: +1.82%
BTK biotech index: +1.75%
HMO healthcare: +1.23%

noteworthy - Copper futures: +3.02%

OSX oil services: -0.83%

  Linda Piazza   5/21/200,  11:24:34 AM
You've heard me talk about Keltner channels a lot, as does Jonathan. I hope to find time soon to write an article describing the way I use them, but here's one illustration taken from my comment today that the five-minute chart was showing possible Keltner resistance at 538.13 if the OEX should reach that high: Link

  Linda Piazza   5/21/200,  11:14:24 AM
If that consolidation formation on the OEX daily chart was a triangle formation with one aberrant spike higher on Wednesday, then the OEX has again broken out of that formation to the topside. If it's a messy "b" formation with spikes both directions, it hasn't. Those spikes both to the topside and downside have made it difficult to identify the formation's type and the breakout levels. For guidance, I'm next watching the 60-minute 100/130-pma's and the upper channel resistance on the five-minute nested Keltner channels, currently at 538.12.

  Jeff Bailey   5/21/200,  11:07:42 AM
Bearish day trade stop alert for Gen. Elec. (GE) $30.56 +1.09%

DIA back lower from DAILY R1, day trader in GE that not trading "hard stop" may give a little room (just above BLUE #4), but I have to close out as profiled. This "zone of resistance" at GE's DAILY R2 is "ideal" short area, but I didn't think it would reach here, based on early DIA/INDU trade action below the DAILY Pivot.

  Jeff Bailey   5/21/200,  11:03:14 AM
Gen. Elec. (GE) $30.49 and BLUE #2 right now.

DIA $100.28 +0.25% and its DAILY R1

Thinking.... if the bears are going to "whack them" it better be here.

  Linda Piazza   5/21/200,  10:59:30 AM
The OEX is now at the 50% retracement of the drop from the 5/19 high to yesterday's low, with that retracement at about 536.05.

  Linda Piazza   5/21/200,  10:56:57 AM
The OEX is again above the 30-minute 100-pma, again heading up to test the 130-pma, at 536.37. Remember that the 60-minute versions have been more important lately, and those are at 538.21 and 539.59 currently.

  Jeff Bailey   5/21/200,  10:56:05 AM
Gen. Elec. (GE) $30.48 +0.82% .... session high

  Linda Piazza   5/21/200,  10:55:43 AM
The OEX heads up for another test of the day's high, with that number at 535.90.

  Jeff Bailey   5/21/200,  10:55:18 AM
Buy Prog. Premium SPX 1,095.18

  Linda Piazza   5/21/200,  10:52:32 AM
As I suspected this morning, today's gain in the $DJUSHB, the Dow Jones Home Construction Index, are gains within a possible bear flag or "b" distribution pattern, with that pattern forming between historical horizontal support at about 526-528 and the 200-sma overhead. They cannot yet be considered a sign of particular strength despite today's decline in yields for the Ten-Year Treasury Note. I do note that the TNX is off its low of the day, too.

  Jeff Bailey   5/21/200,  10:48:10 AM
Gen. Elec. (GE) $30.39 +0.49% .... might be easier to read intra-day chart. Link

  Linda Piazza   5/21/200,  10:47:08 AM
There's been no breakdown out of the possible bear flag that the OEX began forming yesterday at about 12:30 and that flag is extending a bit too long now to be a true bear flag. Still, we can watch for breaks of the support line to give us clues as to a weakening in the OEX. Watching for an upside break is a little more difficult, because upper resistance appears to be broadening. However, we have other measures to help us determine upside strength, including a new five-minute high, a break above the 200-sma, and a break above the 30-minute 100/130-pma's. Those conditions haven't been met, either, although the OEX certainly keeps trying.

  Linda Piazza   5/21/200,  10:38:04 AM
European markets all continue their downward trajectories, with the FTSE 100, CAC 40, and DAX all just bouncing slightly off their lows of the day, all now in negative territory.

  Jeff Bailey   5/21/200,  10:31:43 AM
Gen. Elec (GE) $30.39 +0.52% ... here's intra-day chart with 5-MRTS and DAILY Pivot levels. Link

Thought good trade setup for a May "max pain" based on what I saw from 5-MRT and Daily Pivot levels.

  Jim Brown   5/21/200,  10:30:46 AM
Treasury Snow saying high oil prices could have a negative impact on the economy. (He gets paid for this?)

  Linda Piazza   5/21/200,  10:23:38 AM
The OEX has been trading in a likely bear flag since about 12:30 yesterday afternoon and is currently challenging the supporting trendline of that flag, with that trendline crossing at about 533.90. A candle shadow yesterday afternoon pierced that trendline, so a quick piercing and candle close back above the line would not be considered a serious breach. However, a breakdown out of that possible bear flag might be a first signal that the OEX again heads down to stronger Keltner support, perhaps near 532.60 or 531. A break below 531 would signal a breakout signal on this Keltner chart and would also signal a break below a longer-term ascending trendline that has been supporting the OEX since 5/12. It won't be until then that I would consider the OEX as having broken down out of the current consolidation pattern and even then, I'd tread carefully on an opex Friday. Remember that there's often a tendency to pin the markets down from mid-morning on, so any directional movement will be working against that tendency.

  Jeff Bailey   5/21/200,  10:18:27 AM
Day trade short alert for General Electric (GE) $30.44 here, stop $30.56 to begin, target $30.15 by the close.

  Linda Piazza   5/21/200,  10:13:20 AM
The OEX tries to find support at the mid-channel Keltner level on the 15-minute chart. If it can, it will next face resistance on that chart near today's high and then at 537.40, but it certainly hasn't tugged free of the gravitational pull of that mid-channel level just yet and is in danger of falling back below it. (Note: the OEX dropped as I prepared this post.) At the same time, it's continuing to challenge the 30-minute 100-pma, not able to stay above that level, either. Nor is it able to maintain levels above the 200-dma, currently at 535.37 (simple). This shows the massive resistance the OEX faces, demonstrated by several methods and across several time frames. Of course, that also means that a successful breakout above those levels would be significant, but the rising trajectory of the TRIN this morning lends some doubt to the OEX's ability to do that. The TRIN isn't at bearish levels yet, but its trajectory serves as a warning.

  Jeff Bailey   5/21/200,  10:08:50 AM
QQQ $34.88 +0.10% .... would have liked to have gotten off a day trade short up at DAILY R1, but was "locked out" of MM just after the open. Keep session high of $35.06 in mind later as long as CRB near/above 270.

  Jonathan Levinson   5/21/200,  10:04:08 AM
The Fed has just replaced the 6B expiring today with a 6-day 7B repo, for a net addition of 1B.

  Jeff Bailey   5/21/200,  10:03:13 AM
10:00 Market Watch at this Link

  Linda Piazza   5/21/200,  10:01:34 AM
European markets now come under pressure, with the FTSE 100, CAC 40, and DAX all in the red now.

  Jeff Bailey   5/21/200,  9:54:48 AM
Currently open plays update ...

OSI Pharma (OSIP) $78.63 +0.44% (bullish since 05/06/04)

eBay (EBAY) $80.35 +0.34% (bearish since 05/12/04)

Dow Diamonds (DIA) $99.94 -0.07% (bearish since 05/17/04)

  Linda Piazza   5/21/200,  9:53:31 AM
As I type, the yield on the ten-year Treasury Note continues to fall back from its test of the neckline of the reverse H&S on its weekly chart, perhaps easing the pressure on equities. However, when I look at homebuilders in particular, I see any bounce today (no print yet), if any, will be bringing the $DJUSHB, the Dow Jones US Home Construction Index, higher within a likely "b" distribution pattern and perhaps up to retest its 200-dma from below. That may be an easing of pressure on this sector, but it may not present a show of particular strength. I'll be watching as we get a print on this index.

  Linda Piazza   5/21/200,  9:40:26 AM
During the first five minutes of trading, the OEX ranged from 533.91 to 535.50.

  Linda Piazza   5/21/200,  9:39:21 AM
The OEX is again at the 30-minute 100-pma, so we're seeing another test of that important average. A rollover here or a rollover after a test of the 130-pma at 536.42, rolling down below the 100-pma again, would be considered bearish action, while a push above the 130-pma would be showing more strength. Note, however, that the 60-minute versions have been more important over the last month, and those are at 538.24 and 539.68, respectively.

  Linda Piazza   5/21/200,  9:34:50 AM
The OEX opens and heads above central Keltner channel resistance on the 15-minute chart, but it hasn't yet tugged free of the gravitational pull of those lines yet, so could still be tugged back.

  Linda Piazza   5/21/200,  9:28:50 AM
The OEX ended the day yesterday squeezed between its 200-dma's and a supporting trendline off the 5/12 low. It also ended the day just below the central Keltner channel resistance on both the 5- and 15-minute charts. It ended the day in the middle of the congestion zone that's contained its movements--well, mostly contained--over much of May. It hasn't broken out of that formation, and all those other parameters I set out just emphasize the way it's been stuck between resistance and support.

Is today the day it will break out? Futures suggest a higher open, but will the upward momentum evaporate once the S&P 500 stocks all open and there's a settlement value for the SPX options or will this condition continue through today?

Because of another close below the 200-dma's, let's look first at the bearish case. For clues as to a possible downside break, watch the ascending trendline off the 5/12 low, with that trendline currently at about 531.30. Also watch the SPX with relationship to its own 200-dma, currently at 1081.46, as touches of that moving average have prompted recent bounces and a failure to bounce this time could impact the market strongly.

For signs of upside breaks, look first for an OEX break above its 200-dma and then above Wednesday's high, but anyone considering a long play on a break above the 200-dma should be aware of the 200-week moving average at 543.07, with that average likely to pressure the OEX, too.

  Jonathan Levinson   5/21/200,  8:09:33 AM
There are no major economic reports scheduled for today.

  Linda Piazza   5/21/200,  7:39:04 AM
Good morning. The Nikkei opened more than 20 points in the green Friday morning, with early gains prompted by rising computer-related stocks such as Tokyo Electron and by rising domestic service providers. Throughout Asia, stocks such as Samsung Electronics, Advantest, Kyocera, and Hynix Semiconductor rose as the North American chip-equipment makers showed a book-to-bill ratio of 1.14 for April, demonstrating that orders were outstripping sales. In Japan, March's tertiary index, a measure of demand for services, rose 1%. In addition, crude oil had pulled back below $41 per barrel. By the close of the session, the Nikkei had tacked on 208.21 points or 1.92% to close at 11,070.25, its first close above 11,000 since May 12, although it did not equal May 12's closing high. However, the Nikkei did close the week only 6 points off its high of the week.

In addition to the tech stocks already named, Hitachi and Toshiba also posted gains. Banks showed strong gains, with Resona the top percentage gainer among that sector. After the close, UFJ verified recent speculations that it would merge its trust bank operations with Sumitomo Trust and Banking. Autos gained, too, with Mitsubishi Motors climbing ahead of its after-the-close earnings report and restructuring plan. That restructuring plan included a $4 billion bailout from various sources, and the earnings report revealed a net loss for the recently ended year that was three times the loss forecast.

Other Asian bourses mostly closed higher, too. Of possible interest to those watching the airline industry were gains in many airliners throughout Asia as crude prices eased. The Taiwan Weighted gained 2.57%. In South Korea, consumer spending fell in the first three months of the year, with the economy's 0.8% growth for that quarter coming in at a lower-than-expected level. Despite government efforts to boost consumer spending, sales within the country have been weak as consumers deal with escalating debt payments. Despite that news, the Kospi gained 2.42%. Singapore's Straits Times added 1.47% and Hong Kong's Hang Seng gained 2.08%. China's Shanghai Composite gained 0.60%. In China, the head statistics chief commented that it was possible that May's inflation level could be 5% or lower.

Most European bourses climb this morning with many techs posting gains, as they did in Asia. Nokia was not participating in those gains, however, trading sharply lower after Morgan Stanley downgraded the stock to an underweight rating. Nokia also announced plans to help it build more low-cost phones in China. Metals gained, too, after the inflation news from China. Financial stocks gained in early trading, but the biggest movers included those stocks reporting earnings or changing expectations. Those companies included Hilton, rising after strong pre-tax profits, and Cadbury Schweppes, rising after giving an upbeat statement about expectations.

As of this writing, the FTSE 100 has gained 11.70 points or 0.26%, to trade at 4440.40. The CAC 40 has gained 18.61 points or 0.52%, to trade at 3628.58. The DAX has gained 15.12 points or 0.39%, to trade at 3854.44.

  OI Technical Staff   5/20/200,  7:52:23 PM
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