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  Jonathan Levinson   5/28/200,  4:14:22 PM
Got me. I doubt it, but no longer follow hockey. Having gown up in the Montreal Forum, watching Bob Gainey, Lafleur, Robinson and all the greats, watching baseball at the Big Owe, professional sports no longer do it for me. Sure do miss those guys, real heros. Remember Yastremsky, the Yaz, making those diving catches in center field? Those were the daze.

  Linda Piazza   5/28/200,  4:13:03 PM
I second (or is that third, or fourth) everyone's wishes for a safe and happy Memorial Day Weekend. My dad was a 17-year-old serving in the Navy during the tests of the atomic bomb at Bikini Atoll, sent to swab up the radioactive water on the ships afterwards, so I certainly thank all vets, too. (Not that I think the atomic bomb was a good idea or sending my dad to swab up the water after the tests, either, but I appreciate the sacrifices all vets have made, and that's what I meant. We sure had some interesting photos in our family photo album, though!)

  Jeff Bailey   5/28/200,  4:11:55 PM
Jonathan / Jane is Lanny McDonald still playing? Have been hearing rumor they might bring him back for the final press. Link

  Jeff Bailey   5/28/200,  4:07:24 PM
Buy Prog. Premium ... QQQ $36.52

  Jeff Bailey   5/28/200,  4:01:23 PM
Have a safe Memorial Day Weekend!!! .... Take a moment to remember those lost in defense of your country. Link

  Linda Piazza   5/28/200,  3:55:03 PM
Keene (on the Futures side) mentioned my post about the Nikkei's reverse H&S on the daily chart and the new P&F buy signal. In addition, this week saw it climb above its weekly 200-sma.

I was uneasy when I made that post, although I felt we ought to know about the Nikkei's potential upside. I was uneasy because although the Nikkei's chart shows those characteristics, the Nikkei can do strange things sometimes, and any hint of increased tightening out of China--not always telegraphed first--might threaten any rally potential. The 50-dma lies at 11,531.81 and there's some historical resistance just under 11,700, too, but today's trading pattern did show a (small) breakway gap as the Nikkei moved above the neckline, so there are many characteristics that say we should trust the potential for upside more than I find myself doing. Still, measured against all those is a possibility for a H&S with a slanting neckline on the daily chart. The trouble is that, if the Nikkei should rise much more, it's going to negate that possibility because it will have risen above the right-shoulder level. That formation therefore seems less likely (hasn't been confirmed, while the others have), but the Nikkei still makes me uneasy.

  James Brown   5/28/200,  3:52:20 PM
I want to wish a BIG THANK YOU to any veterans reading the monitor today. -From me and the rest of the staff.

To everyone else, enjoy the holiday.

  Jeff Bailey   5/28/200,  3:49:44 PM
Irrational Exuberance to the close???? ... XLNX $36.55 +0.99% ....

  Linda Piazza   5/28/200,  3:43:27 PM
Actually, the TRAN has been on quite a run while crude oil prices dipped heading into the OPEC meeting next week: Link What will happen if this run lower in crude heading into the meeting reverses afterwards? Lots of doubts remain about the ability to pump up production enough to meet demand, especially heading into the high-demand (here in the U.S., at least) summer months when refineries increase their production of gasoline?

  Jeff Bailey   5/28/200,  3:42:20 PM
Day trade exit alert .... for Xilinx (XLNX) $36.46 +0.74% here.

  Linda Piazza   5/28/200,  3:34:20 PM
The TRAN is up nearly 3% today, breaking soundly above the 2900 level and charging up toward 2950, currently at 2949.75. It has not yet broken above the descending trendline off the year's high, but it won't be long, just a matter of days, before it challenges it if it continues at this rate. It may be setting up a big symmetrical triangle on its weekly chart.

  James Brown   5/28/200,  3:29:28 PM
Midway Games Inc (MWY) is hitting new two-year highs with today's 3.66% gain. Shares have been on a roll with a six-day rally underway and a breakout over resistance at $10.

  James Brown   5/28/200,  3:26:38 PM
HAR might be a bullish candidate for traders. The recent rally has picked up speed and today's 3.2% gain is a breakout over its 40 & 50-dma's and the $80.00 mark. The $85-86 level looks like a potential target.

  Linda Piazza   5/28/200,  3:23:12 PM
The OEX is back to mid-channel Keltner support again, bouncing slightly from that level, gyrating around that support this afternoon. Although we could get hit by a late-day buy or sell order that could spike the markets inordinately due to the low volume, the order of the day appears to be to hold the markets steady.

  Jeff Bailey   5/28/200,  3:18:45 PM
03:05 Market Watch at this Link

  James Brown   5/28/200,  3:17:01 PM
Hmm... this news about Target (TGT) introducing a "dollar store" within their larger stores is not good news for the $1 store niche. Potential losers here are NDN, DG, FDO, DLTR.

  James Brown   5/28/200,  3:11:38 PM
Novell, Inc. (NOVL) is looking weak here under its simple 200-dma. A breakdown under $9.00 and nimble traders might be able to trade it to support near $8.00 or the top of the November gap near $7.00.

The P&F bearish target for NOVL is $5.00.

  Linda Piazza   5/28/200,  3:09:59 PM
Stockcharts.com has now updated the Nikkei's chart, showing today's trades, too, and it appears that the Nikkei has confirmed its reverse H&S, setting up an upside target of about 11,900-12,000. The P&F chart shows a new triple top breakout with a current upside target of 12,050, but with a bearish resistance line at 11,900, the upside target of that reverse H&S. None of that guarantees that the Nikkei will reach that 11,900-12,000 zone, but these charts suggest that it might at least try.

  James Brown   5/28/200,  3:07:50 PM
Not sure what's driving the rebound in shares of FNSR but the stock is up nearly 33% in the last week and breaking out over its 50-dma with today's 9.4% gain. The company is due to report earnings next Thursday.

  Jeff Bailey   5/28/200,  3:01:21 PM
XLNX $36.41 +0.6% ... 2-minute bar chart to the close... Link

  Linda Piazza   5/28/200,  2:54:11 PM
So far, the OEX is just squiggling around just above mid-channel Keltner support, with those Keltner channels settling down into an equilibrium position. They're trying to do so on the 15-minute chart, too, but that requires a slow descent or steadying in price that allows the mid-channel support to continue climbing. That support is now at 541.86 but still climbing.

  Jane Fox   5/28/200,  2:50:29 PM
Dateline WSJ BAGHDAD, Iraq -- The Iraqi Governing Council nominated one of its members -- Iyad Allawi, a Shiite Muslim who was prominent in the exiled opposition against Saddam Hussein -- to become prime minister in the new government taking power June 30, members said.

The White House said the nomination from the 25-member, U.S.-appointed body was only one of many recommendations being made to United Nations envoy Lakhdar Brahimi, who has led the process for drawing up the new government and is expected to announce the final lineup by Monday. The council also planned to nominate a president and two vice presidents.

  Jeff Bailey   5/28/200,  2:41:06 PM
XLNX $36.47 ... sudden "burst" of buying from $36.30 to $36.52...

  Jeff Bailey   5/28/200,  2:36:38 PM
OSI Pharma (OSIP) $81.58 -0.98% Link ... stock trying to make a little comeback here. Has been finding buyers on 4 and 5-box reversals.

  Linda Piazza   5/28/200,  2:31:52 PM
Yesterday, we had a number of IPO's and I thought afternoon might be a good time to go over their performances according to a daytrading perspective based on Jeff's 5MRT. Those IPO's included RJET, ACAD, CRTX, ANGO and STAN. Out of those RJET, CRTX and STAN never triggered any kind of trade. ACAD triggered a bearish trade, never hit the stop, and ended the day at $6.70, a few cents above the $6.64 or so entry. It saw a pop in the last five minutes of trade and a daytrader could actually have exited five minutes before the close at a slight profit. ANGO was interesting. It triggered a bullish trade at about $12.50, went high enough to reset the stop to that level, and then violated that stop. Then it continued its climb, but the stop would have taken daytraders using this system out at breakeven. Today ANGO still climbs, however, chugging up toward what would have been the original $14.45 target. It's now at $13.88.

  Jeff Bailey   5/28/200,  2:27:46 PM
eBay (EBAY) $89.60 +1.76% ... new highs ... again.....

Heavy action in the Jul $75 and June $75 puts, combined with price action has to depict (in my opinon) naked put selling, with some conviction to buy any pullback to that level between now and expirations.

Difficult to say, but could be BIG short just selling the he@@ out of the puts to get some cash, with willingness at this point to buy $75.

  Jeff Bailey   5/28/200,  2:25:46 PM
Overstock.com (OSTK) $36.04 +2.09% Link ... getting some action here.

  James Brown   5/28/200,  2:14:51 PM
Gen-Probe Inc (GPRO) looks like a potential bullish play with the recent breakout over the $40.00 level on big volume.

  Jeff Bailey   5/28/200,  2:14:38 PM
Day trade long alert for Xilinx (XLNX) $36.32 here, stop $36.15, target $36.56.

  James Brown   5/28/200,  2:11:36 PM
The pull back in shares of OSIP to $81.00 today might be a bullish entry point. The stock has a clear trendline of rising lows and this would be the entry point to go long near support with a relatively tight stop.

  Linda Piazza   5/28/200,  2:10:22 PM
We've all mentioned the low volume today. How low is low? As of a few minutes ago, total volume was only 637 million on the NYSE and 732 million on the Nasdaq. That's low. Advancers were ahead on the NYSE and decliners were on the Nasdaq. Down volume was slightly ahead on the NYSE, up was on the Nasdaq, although on both, volume was roughly equal.

  James Brown   5/28/200,  2:09:48 PM
The rally also continues in chip stock QLGC. This marks four strong gains in a row with today's move breaking out over resistance at $30.00 and challenging its simple 50-dma.

  James Brown   5/28/200,  2:07:39 PM
There is no slow down in the rally for URBN. Yesterday we noted the breakout over resistance at $50.00 on huge volume without any apparent catalyst. The rally continues today with another 3.4% gain to $54.49.

  Linda Piazza   5/28/200,  1:55:38 PM
Here's the expected bounce from the neckline area of the H&S on the OEX five-minute chart. I honestly could see the OEX just rambling around just north and south of the mid-channel Keltner support level throughout the rest of the day, with that level currently at 544.60. Is this action today the beginning of a rollover beneath that 547 resistance or is it a pullback before another assault on that resistance? I don't think the markets (or the people in those markets) want to make that decision on a Friday before a long weekend if they can get away without doing it, and would rather just hold markets right here if they could. Maybe they can't, but we've seen this same kind of narrowing down on a pre-holiday Friday afternoon at other times. Maybe in a short while, we'll get a look at how people feel about carrying stocks over this long weekend before the OPEC meeting and other possible events.

  Linda Piazza   5/28/200,  1:41:44 PM
Although the right shoulder of that potential H&S formation has become extended to the right and although it did not form at the top of a steep climb, the formation might still bear watching. The neckline has still not been confirmed, but would be at about 544.34, it appears. These necklines are always subject to interpretation, however. The OEX currently hits the mid-channel support on the five-minute OEX chart, so there may be a bounce in the works either here or at the neckline area, currently coinciding with other Keltner support. It took a while getting to that mid-channel support after that test of 547 yesterday, didn't it?

  Jeff Bailey   5/28/200,  1:24:16 PM
eBay (EBAY) $88.42 +0.42% ... trader noting some action in the July $75 puts (XBASO). I'll take a closer look later, see if they are offsetting with call action or not. Might just be putting a floor under the stock.

  Linda Piazza   5/28/200,  1:17:32 PM
MACD on both 5- and 15-minute OEX charts has flat-lined.

  Jeff Bailey   5/28/200,  1:15:49 PM
01:00 Internals at this Link

  Linda Piazza   5/28/200,  1:10:14 PM
Has the OEX already broken through this trendline? Link I'm not sure that it will make much difference if it has in this environment.

  Jeff Bailey   5/28/200,  1:06:20 PM
01:00 Market Watch at this Link

  Linda Piazza   5/28/200,  12:57:23 PM
Mid-channel Keltner support lies at 544.54 on the OEX, with the neckline of that possible H&S at about 544.28, the current level of the Keltner channel that usually supports the OEX. Once below that, there's only lower Keltner channel support, currently at 541.84 but still rising. A confirmation of the double-top formation would suggest a downside target much lower than that, at about 538.80, but a confirmation of the H&S formation would have a downside target of about 541.80, so close to the lower Keltner support.

  Linda Piazza   5/28/200,  12:49:29 PM
The OEX nested Keltner channels are doing their usual pre-holiday-afternoon thing, trying to settle into an equilibrium position and then maintain that position.

  Linda Piazza   5/28/200,  12:47:18 PM
I'm time-delayed on crude futures, but with both those (as of 30 minutes ago) and the ten-year bond yields moving up, equities may be feeling some pressure. I'm not sure what will happen after the bond market closes or even when it closes. Although CNBC suggested a 1:00 close, the Bond Market Association's website suggests that the close will be at 2:00 pm EST. Here's a link to their site, with the Spring Holiday Schedule listed at the top of the right-hand column: Link

  Jeff Bailey   5/28/200,  12:41:53 PM
Sell Prog. Premium SPX 1,119.58 -0.14% ... QQQ $36.40 -0.05% ...

  Linda Piazza   5/28/200,  12:33:56 PM
TNX is trying to push higher again.

  Jeff Bailey   5/28/200,  12:33:14 PM
Stillwater Mining (SWC) $15.12 -0.39% ... Link ... 120-minute interval to get some time perspective, where I'm showing conventional use of retracement. Will look to round up to full on pullback into $14 area, or break of $16.00.

  James Brown   5/28/200,  12:23:39 PM
Insurance stock AET may have found a new bottom with support at $77.00 over the last three weeks. Now shares are starting to rebound from the long drop that took it from $95 in early April to $77 in May. This could be a bullish candidate with the new MACD buy signal.

  James Brown   5/28/200,  12:20:22 PM
Another stock I'm watching for a potential breakout is Quest Diagnostic (DGX), which has been marching higher the past week toward major resistance near $87.00.

  James Brown   5/28/200,  12:18:58 PM
Bullish traders can keep an eye on insurance stock PGR. Shares are inching higher and close to breaking out over technical resistance at its 40 & 50-dma's near $86.50.

  James Brown   5/28/200,  12:17:42 PM
Dow-component VZ still looks weak and is down another 1.36% after its breakdown under the 200-dma a few days ago.

  Linda Piazza   5/28/200,  12:09:13 PM
The TNX does appear to be finding resistance at the supporting trendline of its former descending wedge, telling me that the formation probably did have some validity. Link Valid formation or not, the TNX broke to the downside instead of the expected break to the upside in a falling wedge formation, so it doesn't matter whether it was valid or not.

  Jeff Bailey   5/28/200,  12:00:57 PM
Xilinx (XLNX) $36.59 +1.10% ... making a session high at BLUE #2. Will look for a day trade bullish on pullback near $36.38 (BLUE #1). Stock found buyers from the open at its DAILY Pivot.

  Linda Piazza   5/28/200,  12:00:09 PM
The Russell 2000 is finding resistance at the converging trendlines marked on this chart: Link RSI hooks over and indicates that the Russell 2000 may be tiring in its efforts to pierce that resistance, but MACD and stochastics still point higher. RSI is always the first to react, but it can be fickle, too. What I would do here is to be forewarned that the Russell might find that resistance too tough to pierce and then wait for price action to follow through on that warning. Some might consider that it has already done so when it approached 572 and turned down, and they have been rewarded by their conviction, at least so far. The 60-minute oscillators have already turned down. However, they've done so at a sort of flat angle that sometimes gets reversed again and bears now want to see a move below that slight 60-minute support at 564.25 or so before assuming that the Russell is rolling down further. I note a weekly R2 at 564.92.

  Linda Piazza   5/28/200,  11:49:57 AM
The OEX is rounding nicely into that right shoulder on the possible H&S formation on its five-minute chart, with the neckline now converging conveniently with the mid-channel Keltner support at 544.35. That neckline has not been pierced, however. Especially in this pre-holiday environment, we shouldn't assume that it will be.

  Linda Piazza   5/28/200,  11:34:16 AM
An OEX rise much above 545.75 would negate that potential H&S on the OEX five-minute chart.

  Linda Piazza   5/28/200,  11:33:10 AM
Rick S. on CNBC was just mentioning that metals, oil, interest-rate futures, and "pretty much everything that doesn't have to do with equities" has a 1:00 EST closing time today. Equity markets continue regular hours today.

  Jeff Bailey   5/28/200,  11:30:44 AM
Swing trade stop alert for the QQQ $36.41 -0.02% ...

SOX.X 488.92 +1.33% above WEEKLY R2 (486.95) and DAILY R1 (486.01)

BIX.X 347.72 +0.19% ...

  James Brown   5/28/200,  11:26:06 AM
As expected the market feels like everyone has already left for the weekend.

  James Brown   5/28/200,  11:24:54 AM
Sector Update...

OSX oil services: +1.81%
SOX semiconductors: +0.93%

XAL airlines: -0.97%
DRG drug index: -0.68%
BTK biotech index: -0.66%
DDX disk drives: -0.65%

  Linda Piazza   5/28/200,  11:18:53 AM
There's a possible H&S showing up on the OEX five-minute chart, neckline currently at about 544.35 but descending slightly. It did not form after a steep climb, but during the climb to the equal high on that five-minute chart, so I'm not sure how much credence to give it. I'd certainly wait for a move below mid-channel Keltner support, currently at 543.82-544.24 before feeling much safety in looking for the downward potential to be met. I'd stay aware that in a low-volume environment, markets can form any kind of patterns they want and then zoom in a completely unexpected direction. That environment is not amenable to technical analysis.

  James Brown   5/28/200,  11:16:33 AM
According to an AP story U.S. airports have stepped up security for the Memorial Day weekend and are on "red alert" for the seven individuals suspected as terrorists singled out by the FBI this week.

  Jeff Bailey   5/28/200,  11:15:25 AM
11:00 Internals at this Link

  Linda Piazza   5/28/200,  11:14:45 AM
We're getting the expected bounce on the OEX, but it came from slightly above mid-channel support rather than at that support. Signs aren't clear as to what happens next, although the five-minute chart shows a possible rollover in progress--an action that isn't yet echoed in the five-minute MACD. If this is all the bounce there was, however, it was a tepid one.

  James Brown   5/28/200,  11:08:54 AM
Pilgrim's Pride (PPC) is down 3.19% to $26.98 after reporting this morning that one of their chicken farms in Texas has destroyed its entire flock after finding it infected with the Avian flu virus.

  James Brown   5/28/200,  11:06:31 AM
Hewlett-Packard Compaq (HPQ) announced that its Board of Directors has approved an additional $2 billion for its stock buyback program. The Board also approved an 8 cent cash dividend payable on July 7th. Shares are down 2 cents to $21.12.

  Linda Piazza   5/28/200,  11:04:12 AM
Here's an OEX daily chart I first posted early yesterday morning, showing several possible resistance levels: Link The OEX climbed up to test that upper descending trendline. This morning, it's begun an apparent downturn beneath that trendline, drifting below both the green 72-ema and the blue 100-ema. It's currently testing the top of the ascending regression channel that it broke above yesterday. The most important test, however, might come near the mauve 130-ema, just below yesterday's low, a level of historical S/R. It will certainly take a move below yesterday's low to confirm the double-top formation on the five-minute chart, and it might require a move below the 130-ema as additional confirmation.

  James Brown   5/28/200,  11:03:00 AM
Bank of America (BAC) is still challenging major resistance at the $83.00 level and may have enough momentum this time to actually break through it.

  Jeff Bailey   5/28/200,  11:02:08 AM
Swing trade lower stop alert for the QQQ $36.31 to $36.41.

SOX.X back at session highs 485.79 +0.69% ....

If we get a dip in the QQQ back to the $36.16-$36.17 level, I may well look to close this trade out. According to the Stock Trader's Almanac, the first day of June has had the Dow Industrials up 9 of last 12 years.

  James Brown   5/28/200,  11:01:05 AM
Anheuser Busch (BUD) has been a star performer this week with a big four-day rally. Shares are being boosted this morning by an upgrade from "equal weight" to "over weight" by Morgan Stanley. BUD may be worth watching as the stock marches toward long-term resistance at $55.00.

  James Brown   5/28/200,  10:54:39 AM
This morning Dow-component Merck Co (MRK) issued a press release about a positive study done on its ROTATEQ vaccine. Yesterday MRK broke out above its 200-dma and today we're seeing shares inch higher.

  James Brown   5/28/200,  10:50:14 AM
Last night Novellus (NVLS) held their mid-quarter update and issued good news. The company raised their revenue and earnings guidance for the quarter and Wall Street followed up this morning with a handful of analysts reiterating their positive outlooks on the stock.

NVLS is up 4.17% to $32.68 but struggling with the stock's 100-dma.

  Linda Piazza   5/28/200,  10:46:42 AM
Bond yields bouncing and crude trying to move up: that has to add to pressures on the equities, but both are bouncing into resistance, and it's possible that resistance will hold. Yields are currently drawing back from the former wedge support that I posted on the graph linked to my 10:33 post, for example.

  James Brown   5/28/200,  10:46:17 AM
Blue Coat Systems Inc (BCSI) is down more than 25% to $29.39 on big volume after reporting Q1 earnings that were below estimates. Revenues beat estimates but BCSI warned for the next quarter.

  Jeff Bailey   5/28/200,  10:44:13 AM
S&P Banks (BIX.X) 346.94 -0.02% ... back between MONTHLY R1 and WEEKLY R2. Looked back to see if the broader averages would follow, but no go.

  James Brown   5/28/200,  10:41:10 AM
Caterpillar (CAT) has announced that it will extend its enhanced Military Leave Pay Policy for an additional 12 months for those employees who are still on active duty in the war on terror.

  Jane Fox   5/28/200,  10:35:23 AM
Dateline WSJ OPEC ministers are considering proposals that would suspend the cartel's limits on oil production to bring down current record prices but also increase by as much as $8 a barrel the group's long-term target price range.

If agreed to, the proposals would represent a compromise among members of the Organization of Petroleum Exporting Countries, which have bickered since lead member Saudi Arabia said it would unilaterally pump more oil in order to help bring down currently high prices. The kingdom's action brought dissent from other members, notably Venezuela, which insists there currently is enough oil supply to meet demand. Instead, Venezuela has called on OPEC to demand higher prices from the market.

  Linda Piazza   5/28/200,  10:33:35 AM
Here's what I show happening on the ten-year bond yields, with two possible viewpoints from this chart: Link One is that the yields are just bouncing up to test broken support from that falling wedge. Another is that yields are bouncing up within a newly established descending regression channel that could be either a run-of-the-mill descending channel or a potential bull flag. Jonathan has been watching this chart longer than I have and may have differing views or more instructive ones.

  Linda Piazza   5/28/200,  10:29:16 AM
Here comes mid-channel Keltner support, with support now from 543.77-544.11. Bearish traders need to have a game plan in mind if there's a bounce from this level. There should be at least some degree of a bounce attempt, especially with the confirmation level of the double top just below, even if should turn out to be a tepid one doomed to fail. If a bounce attempt doesn't start at mid-channel support, it might at that confirmation level, at 542.94.

  Jeff Bailey   5/28/200,  10:23:16 AM
I'm having some computer problems. I'm going to shut down for a few minutes and be back.

  Jeff Bailey   5/28/200,  10:20:55 AM
QQQ $36.31 -0.28% ... so far it looks like they're buying the WEEKLY R2 and selling the DAILY Pivot. Tight range since 09:45 AM

  Jeff Bailey   5/28/200,  10:18:11 AM
10:15 Market Watch at this Link

  Linda Piazza   5/28/200,  10:14:03 AM
OEX mid-channel Keltner support has now risen to 544.08, with other support that usually bounds it at 543.84. Lower-channel support lies at 540.86. Those bearish players who might have entered a play on a test of and rollover from 547 yesterday should be making plans about how they'll deal with both mid-channel and lower-channel support if approached. Following the OEX lower with stops, setting profit targets, exiting partial positions or other such tactics might be appropriate, depending on trading style, account size, contract size, and other such matters. It's an individual decision, but I'd be guarding profits closely in a low-volume environment.

  Linda Piazza   5/28/200,  10:09:09 AM
Some OEX daily averages to keep on the radar screen today are the 50-sma at 545.87, the 72-ema at 546.07, the 100-ema at 545.14, and the 130-ema at 542.48. So far, the OEX's movements seem roughly supported by that 100-ema, but it's about to be tested again.

  Jeff Bailey   5/28/200,  10:07:49 AM
S&P Banks (BIX.X) 348.09 +0.29% .... a little move back above its WEEKLY R2

  Linda Piazza   5/28/200,  10:05:28 AM
Jonathan may have mentioned it already, but the TNX bounces strongly, moving up toward resistance.

  Jeff Bailey   5/28/200,  10:04:51 AM
Dow Diamonds (DIA) $102.15 -0.14% .... very tight morning range from $102.00-$102.29, but slipping below its DAILY Pivot.

MO $48.02 -0.82%, VZ $34.83 -0.71% .... HD $36.24 +1.09% INTC $28.66 +0.73%

  Jonathan Levinson   5/28/200,  10:02:33 AM
10:01 *DJ Chi Purch Mgmt: Prices Paid Highest Siince Feb '95

  Jeff Bailey   5/28/200,  10:02:17 AM
Sell Program Premium ... SPX 1,120.17 ... QQQ $36.32

  Jeff Bailey   5/28/200,  10:01:13 AM
Buy Prog. Premium SPX 1,119.67 -0.14% ... QQQ $36.34

  Jeff Bailey   5/28/200,  10:00:42 AM
Semiconductor Index (SOX.X) 482.89 +0.08% ... session high has been 485.77, and didn't get a trade at its WEEKLY R2 of 486.95 at this point.

Session low so far 482.89 just above its DAILY Pivot

  Jonathan Levinson   5/28/200,  10:00:42 AM
Chicago PMI 68 vs. 62 exp.

  Jonathan Levinson   5/28/200,  9:58:17 AM
A 3.75B 4-day repo replaces the 2B expiring for a net 1.75B gain from the Fed.

  Jeff Bailey   5/28/200,  9:57:15 AM
QQQ intra-day chart on 5-minute intervals with QCharts' DAILY Pivot levels and our 5-MRT at this Link

  Jonathan Levinson   5/28/200,  9:56:05 AM

  Linda Piazza   5/28/200,  9:54:07 AM
I barely got that 9:51 post uploaded before the very thing I'd been afraid might happen, did happen. That short-term ascending trendline was pierced, followed by a quick bounce. Let's see if the bounce holds any better than the piercing did, though.

  Jeff Bailey   5/28/200,  9:53:41 AM
Buy Prog. Premium SPX 1,120.70 ... QQQ $36.32

  Linda Piazza   5/28/200,  9:51:28 AM
At about 545.30 is a short-term ascending trendline rising off the OEX low of the day yesterday. In this low-volume environment, we could see some stop-running. For example, we might see a piercing of that trendline followed by a quick bounce. Just be careful.

  Jonathan Levinson   5/28/200,  9:47:34 AM
Michigan sentiment 90.2.

  Linda Piazza   5/28/200,  9:39:48 AM
This is the reason I still watch the 72-ema on the OEX: Link

  Jeff Bailey   5/28/200,  9:37:14 AM
S&P Banks (BIX.X) 346.91 -0.03% ....

  Linda Piazza   5/28/200,  9:36:52 AM
Mid-channel Keltner support for the OEX is at 543.90, just above the confirmation level of the double-top formation. This is on the five-minute chart.

  Linda Piazza   5/28/200,  9:35:32 AM
During the first five minutes of trading, the OEX spanned a range from 546.36 to 545.78.

  Linda Piazza   5/28/200,  9:34:51 AM
The OEX isn't sure whether it wants to go up or down this morning, opening higher but heading lower, still in the late-day short-term congestion zone.

  Jeff Bailey   5/28/200,  9:34:20 AM
Sell Program Premium ... SPX 1,120.38

QQQ $36.33 -0.23% ... right at its daily pivot on this program. The QQQ's first 5-minute range was from $36.32 to $36.41

  Linda Piazza   5/28/200,  9:20:19 AM
I agree with Keene's caution on the Futures side of the Monitor concerning today's volume levels. This might be a great day to study that new technical analysis tool you've always wanted to test or search the Stockcharts.com stock scan--a great tool and it's free--for stocks that might interest you in the coming weeks.

  Linda Piazza   5/28/200,  9:02:53 AM
Yesterday, the 547 resistance held on the OEX. Twice. The five-minute chart shows a possibility of the OEX forming a double-top pattern, to be confirmed only on a drop below Thursday's low of 542.94. Five-minute MACD shows bearish divergence with those equal highs produced yesterday. However, all daily oscillators remain in full bullish mode, so it seems possible that the OEX could either go on challenging that resistance for a little longer while the oscillators finish their cycles and turn down again or even that the OEX could break through that resistance. That seems a less likely event, but it exists as a possibility, especially since the OEX broke through its ascending regression channel to the upside. If the OEX can get through 547, look for next resistance at 549.60-553, and then at April's high and then the year's high.

However, some intraday charts, such as the five- and fifteen-minute Keltner charts suggest that a pullback or consolidation might be more likely, as do our futures this morning. Five-minute mid-channel support gathers from 543.77-543.83, above the confirmation level of the double-top formation, but if the OEX declines, those dynamic Keltner lines might, too. Lower-channel support lies at 540.71, but is still climbing, and a retest of that lower-channel support is not out of the question.

  Jonathan Levinson   5/28/200,  8:33:21 AM
Personal income +.6%, spending +.3%. Core PCE price index +.1%.

  Jonathan Levinson   5/28/200,  8:17:49 AM
Awaiting personal income, est. .5%, personal spending, est. .2%, both at 8:30, then at 9:45 Michigan Sentiment, est. 94.2 and at 10AM, Chicago PMI, est. 62.

  Linda Piazza   5/28/200,  7:18:29 AM
Good morning. The Nikkei opened higher by 100 points in Friday's trading despite a lower-than-expected 3.3% rise in industrial production from March to April. April's spending by wage-earning households increased 7.2% over the year-ago period, however. By the end of the afternoon, the Nikkei had closed higher by 143.54 points or 1.29%, to close at 11,309.57, producing its highest close since the May 7 close above 11,400. That close brought the Nikkei up to the neckline of a reverse H&S on its daily chart, perhaps piercing that neckline in intraday trading, but closing right at the neckline. The upside target, if that formation is confirmed, is near 11,900-12,000, with a bearish resistance line on its P&F chart at 11,900.

Gains were broad based in early trading and remained so throughout the day. Some stocks gaining due to news-related developments included Softbank, still gaining after Wednesday's decision to buy Japan Telecom; NTT DoCoMo, gaining after its Thursday announcement that it would sell its position in Hutchison 3G UK Holdings; and NEC, gaining after a Thursday decision by an American subsidiary to settle collusion and wire fraud charges. Shinsea Bank joined those other news-driven gainers, posting 7% gains after being added to the Morgan Stanley Capital International's World Index as of Friday's close, and after the bank revealed net profit rising 25.2% in the last year. Not all stocks posted gains, of course, and steelmaker JFE Holdings' investors did not like its decision to issue euro-yen convertible bonds to raise money for debt repayment and capital investment. The company lost 3.4%.

Other Asian bourses mostly closed higher. Many semi-related stocks appeared to be gaining in Asia, and some airliners bounced as oil prices decreased. The Taiwan Weighted gained 1.73%. South Korea's industrial production also disappointed, rising only 1.1% in April. The Kospi nevertheless rose 1.75%. Singapore's Straits Times gained 0.49% and Hong Kong's Hang Seng added 1.11%. China's Shanghai Composite dropped 0.54%, one of the regions few bourses closing lower.

European bourses mostly trade lower after May's eurozone consumer prices rose 2.5% over the year-ago level. Consumer demand has been of concern in the eurozone, and now some worry that higher prices will further depress consumer demand or keep it from rebounding, with this morning's report showing inflation increasing to its highest level in more than two years. Information showed that consumers planned to postpone major purchases and save more. Economic news also included France's April unemployment number, with that number not differing from March's 9.8%, and May consumer confidence, decreasing to -23 from April's -20. Amid those developments, technology and chemicals, sensitive to growth-related concerns, declined.

Stocks in the news included Unilever, benefiting from an upgrade by UBS with that firm saying that declines had taken Unilever to a position that had been good buying opportunities in the past, and ASML, benefiting after Novellus raised its targets and also after rumors that Applied Materials might be interested in acquiring the company. That rumor was later disdained, however, by an analyst who pointed out reasons why it would be almost impossible for another company to be successful in a hostile bid for ASML. Deutsche Bank was also in the news. Someone leaked an internal memo concerning Deutsche Post's upcoming Postbank IPO. Deutsche Bank had been one of two global coordinators for the IPO, but the internal memo valued Deutsche Post's banking unit for far less than Deutsche Post thinks it is worth. Both Deutsche Bank and Deutsche Post were gaining in early trading, however. In other stock-specific news, the Euronext stock exchange has issued a warning to Royal Ahold concerning the timing of last year's revelation of accounting irregularities in a U.S. unit, saying that Royal Ahold did not disclose the irregularities promptly enough. Royal Ahold declined in early trading.

As of this writing, the FTSE 100 had declined 8.80 points or 0.20%, to 4444.80. The CAC 40 had fallen 18.72 points or 0.51%, to 3660.65. The DAX had fallen 9.04 points or 0.23%, to 3904.29. All are just off their lows of the day.

  Jeff Bailey   5/27/200,  12:26:02 AM
Sector Bell Curve from Dorsey/Wright and Associates at this Link

With Semiconductor reversing up to "bull alert" I ran a quick Pnf stock screen ONLY looking for .... price >=$5 and price <= $100, where Relative Strength is BUY, RS trend is in X, Stock's PnF chart has a BUY signal associated with it, and TREND is POSITIVE.

Produces: ACLS $12.18 Link , ATRM $8.90 Link , BRCM $42.63 Link , CATS $8.11 Link , CREE $23.05 Link , MCRL $14.74 Link , NPTT $16.61 Link , NSM $20.96 Link , PLXT $14.83 Link , SYXI $9.40 Link , XICO $14.97 Link

Bullish Vertical Count for ACLS is $18, ATRM $17.25, BRCM $53, CATS $17.25, CREE $53.50, MCRL $20, NPTT N/A, NSM $35.50, PLXT $8.50, SYXI $21, XICO $24.50.

Before rushing to make a selection, traders/investors might want to read this article in the Ask the Analyst section from 05/04/03 titled "Risk/Reward, Point & Figure, and minimizing risk with options" Link

Note: CATS $8.12 fell to $7.50 in Thursday's extended hours after reporting Q4 (April) earnings of $0.29 per share, including a tax benefit of $2.2 million, or $0.14. CATS said revenues rose 34.4% year-over-year to $16.8 million. There were no analysts estimates available.

  Jeff Bailey   5/27/200,  12:10:13 AM
NASDAQ-100 Bullish % ($BPNDX) ... status change to "bull alert".

On Wednesday, AMZN Link gave a reversing PnF buy signal. On Thursday, CECO Link and MERQ Link gave the reversing upward PnF buy signals.

  Jeff Bailey   5/27/200,  9:44:58 PM
Dow Industrials (INDU) daily interval bar chart where for any July DIA $100 long put holders, I outline a near-term option strategy, where we still hold our puts, but consider either...

#1) On a dip to 10,100 in the INDU, buy an equal 1/2 position in the JULY $101 calls, establishing a July strangle, where I would look to sell the call back near 10,400.

#2) Or (but not both) .... on a dip to 10,100 in the INDU, SELL an equal 1/2 position in the June $100 puts (receive premium, take some heat off) but we should HOLD the July $100 puts as PROTECTION to this trade. Then, should INDU rally to 10,400 and trend, can begin considering adding 1/2 position into the July $100 DIA puts, bringing position to full.

INDU chart at this Link

I'm also wondering if Tuesday's trade "trimming of a hedge" isn't what trade #2 could have been, where the option-related activity seemed to drive Tuesday's action with the VIX.X plunging from 18.0 to 16.00

  Jeff Bailey   5/27/200,  8:16:13 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   5/27/200,  5:10:53 PM
Closing Internals at this Link

Major correction is needed to recent comments regarding the NYSE NH/NL 10-day Average Ratio in last night's Index Trader Wrap. I do not know what I was looking at, or what happened, but the NYSE 10-day NH/NL average ratio would have reversed up to "bull alert" status on Monday (05/24) at 21.5%, rose to 28.8% on Tuesday, rose to 35.8% yesterday, and 43.0% today.

Today's NASDAQ NH/NL 10-day Average rose to 40.8%.

  Keene Little   5/27/200,  4:18:46 PM
Gold is tagging its simple 200-dma at 396 at the same time daily, 60 and 30-min oscillators are in overbought with hints of bearish divergence in the oscillators. This would be a very logical place for the bounce in gold to end. The pullback in gold stocks today may be forecasting this. NEM tagged its exponential 200-dma today at 40.50 with the same oscillator signals. I'm not crazy about the form of the pullback in the gold stocks today (still looks like a corrective pullback which could mean a press to a new high still), but again this looks like a good setup to try a short, stop at a new high. It'll be worth a look tomorrow to see how these stocks open.

  Jeff Bailey   5/27/200,  3:53:51 PM
Dollar/gold .... into the close... U.S. Dollar Index (dx00y) 88.72 -1.12% with Gold Bugs ($HUI.X) 201.90 +1.46% ...

Can feel some tension between these two right now.

It's almost like every penny that came out of oil, also came out of dollar, then goes into gold, metals, treasuries and broader equities.

  Linda Piazza   5/27/200,  3:53:40 PM
That was a quick recoil from a possible double-top area. Confirmation of a double top would come at today's low, 542.94.

  Jeff Bailey   5/27/200,  3:50:01 PM
It's hard to find ANYTHING bearish near the close, but if looking, it would ONLY be the SOX.X lagging below its WEEKLY R2 (test tomorrow) and the BIX.X not quite able to sustain recent strength above its WEEKLY R2.

Again... these would be VERY small observations, as it isn't a small effor to get things up here.

  Linda Piazza   5/27/200,  3:47:54 PM
As the OEX rises, I see that the best-fit trendline is actually a little higher than 547, as it wasn't crossed on that last move.

  Jeff Bailey   5/27/200,  3:47:42 PM
S&P Banks Index (BIX.X) 347.09 -0.11% just trades back up to its WEEKLY R2.

  Jeff Bailey   5/27/200,  3:46:39 PM
Semiconductor Index (SOX.X) 483.41 +1.09% .... only equity-based index to not see a trade (at this point) at its WEEKLY R2 (486.95).

QQQ $36.39 +0.55% ....

NDX.X 1,464 +0.67% ...

  Linda Piazza   5/27/200,  3:43:55 PM
Today's OEX candle is anything but a confirmation of the potential reversal signal presented by the doji yesterday. Unfortunately for those of us who want to see the next decisive action taken, the OEX also hasn't up until now been able to break above resistance at 547, either. That may happen in the last few minutes of trading, but I tend to distrust such late-day actions, particularly when they come late on a Thursday afternoon that leads into a holiday weekend. Lots of people might be settling positions this afternoon, anticipating being out of the markets tomorrow as they head off to an early holiday.

  Linda Piazza   5/27/200,  3:38:43 PM
The OEX approaches the 547 resistance again.

  Jeff Bailey   5/27/200,  3:33:02 PM
Buy Program Premium SPX 1,119.80 +0.43%

  Jeff Bailey   5/27/200,  3:22:07 PM
03:15 Market Watch at this Link

  Linda Piazza   5/27/200,  3:21:40 PM
Because on the 60-minute chart, the OEX's formation looks something like a rounding bottom, I sure wouldn't want to say in a bearish play if the OEX moves above the lip level. It's sometimes difficult to determine just where that lip is, though. On the OEX, is it 547? 549? Even 552? Was it even 541? When I'm looking at equities, I watch volume patterns to help guide me, looking for the spot when volume expands when it's crossed--that's often the lip area. For now, I'd be watching that descending trendline off the March high, displayed in the OEX chart linked to my 9:07 post, always remaining aware that a last-minute run-up in prices this afternoon could spike above it, only to see the OEX turn down again from that resistance tomorrow.

That's a best-fit trendline, though, cutting off a few daily upper shadows late in April, and it's possible that a slightly higher version will be the most relevant. Since 547 seemed to correlate with other resistance levels, I've been watching the trendline that crosses there, but this is always an educated guess.

  Jeff Bailey   5/27/200,  3:18:00 PM
Newmont Mining (NEM) $40.00 +0.55% .... session lows... picked the wrong gold stock to short today.

  Jeff Bailey   5/27/200,  3:16:58 PM
03:00 Internals at this Link

  Linda Piazza   5/27/200,  3:07:06 PM
Looks as if the lower-high scenario on the OEX might be gaining some favor, but the OEX is approaching Keltner support again just above 544.60.

  Jeff Bailey   5/27/200,  3:04:54 PM
If the bears/sellers are going to whack'em its going to be here.

SPX 1,118.79 slips back below WEEKLY R2

  James Brown   5/27/200,  3:01:15 PM
QLogic Corp (QLGC) is on the move with a big three-day rally pushing the stock from $26.76 to $29.99. Today's 5.8% gain is a breakout over its 40-dma.

  Jeff Bailey   5/27/200,  2:49:46 PM
QQQ $36.29 +0.27% .... right in this zone

  Linda Piazza   5/27/200,  2:48:44 PM
Rollover into a lower high in progress? A pause before another push higher into upper-Keltner channel resistance? Could be either one. Five-minute OEX MACD is generally pushing higher, but perhaps trying to flatten a bit if one squints just right. Keltner resistance is trying to firm up just above the current OEX position, but isn't particularly convincing just yet. Could go either way.

  Jeff Bailey   5/27/200,  2:46:12 PM
Russell 2000 (RUT.X) 567.10 -0.11% ... only major index not showing some type of gain. Fractions red here and 12:00 PM "resistance" of 567.52.

Tick above 568 could build some strength.

  Jeff Bailey   5/27/200,  2:40:04 PM
Day trade bearish close out alert for BGO $2.68 here.

  James Brown   5/27/200,  2:36:17 PM
It might pay to keep an eye on Bausch Lomb Inc (BOL). The stock has been consolidating into a bearish trend of lower highs but has found support at $60.00 and its technicals are oversold. A breakout is coming but it could go either direction.

  Jeff Bailey   5/27/200,  2:35:19 PM
Bema Gold (BGO) $2.67 bid. Just traded 100 shares at $2.68, but I wouldn't stop out just yet.

  Linda Piazza   5/27/200,  2:35:13 PM
IPO RJET still trades within its first five-minute range. ACAD had a first five-minute range from 7.50 to 7.05, and has dropped below the bearish #2 on Jeff's 5MRT system, signaling a bearish play, with that signal occurring on a drop below 6.60, with a stop (paper trading) just above $7.50. CRTX had a first five-minute range from 7.65 to 7.25 and has drifted down since, but wouldn't yet have triggered a play according to Jeff's system. ANGO saw a first five-minute range from 11.30 to 11.90 and rose, triggering a bullish play on a move above $12.50 (paper trade). ANGO then rose to a high of $13.43 before crashing back near the entry level of the bullish play. Depending on how closely to the retracement levels one set a stop, that play might or might not yet have been stopped out for a small (few cents) loss. It's trying to rise again. STAN had a first five-minute range from 11.50-12.94, and still trades within that first five-minute range.

  Jeff Bailey   5/27/200,  2:32:58 PM
S&P 500 Index (SPX.X) 1,119.30 +0.38% .... claws its way back to WEEKLY R2 right here.

Good place for either a BUY or SELL program

  Jeff Bailey   5/27/200,  2:30:07 PM
Bull trap potential in the December Light, Sweet Crude futures (cl04z) $37.50 -1.88% point and figure chart.

Traded a triple-top buy signal at $38.75 on Monday, and today's session low of $37.05 is rather notable reversal. Trade at $36.75 would be needed for the bull trap pattern.

  James Brown   5/27/200,  2:27:46 PM
Torchmark Corp (TMK) is up 1.7% to $53.04 and breaking out over its 40 & 50-dma's. If you squint your eye it appears to be breaking the neckline of a reverse or inverse head-and-shoulders pattern formed over the last few weeks.

  Jeff Bailey   5/27/200,  2:24:16 PM
Pharmaceutical Index (DRG.X) 332.58 +0.97% .... session high.

  James Brown   5/27/200,  2:21:44 PM
Urban Outfitters (URBN) is up 5% to $52.00 and breaking out over major resistance at $50. The stock has been consolidating sideways the last few weeks and the breakout comes on strong volume. I can't find any specific catalyst for the move.

  Jeff Bailey   5/27/200,  2:20:33 PM
S&P Banks (BIX.X) 346.16 -0.38% ... right back at MONTHLY R1.

QQQ $36.23.

SPX 1,118.80

OEX 545.20

INDU 10,189.

  Jeff Bailey   5/27/200,  2:17:11 PM
02:15 Market Watch at this Link

Not a heck of a lot of change

  James Brown   5/27/200,  2:16:33 PM
Fortune Brands (FO) has been on our watch list for a breakout over $75 and we are seeing that move today. Unfortunately, with the long weekend ahead of us volume is pretty light.

  Linda Piazza   5/27/200,  2:16:32 PM
The OEX is trying to pull free of that gravitational tug of the just-passed Keltner-channel resistance. Next Keltner resistance is at 545.48 if it can do so, with next resistance above that at 546.44. Keltner resistance lines are thinning out, so it's possible that the OEX could try for another break higher.

  Jeff Bailey   5/27/200,  2:12:18 PM
Gold Bugs ($HUI.X) 201.33 +1.18% ... session lows.

Newmont Mining (NEM) $40.04 +0.65% ... session lows. Not seeing big volume, but some notable volume spikes intra-day at relative highs.

BGO is $2.65 x $2.66

  James Brown   5/27/200,  2:07:32 PM
Bulls can check out Walgreens (WAG) who is breaking out over daily and weekly resistance today with its 2.37% gain to $35.39. The stock moves a bit slowly for directional option plays but it might be a covered call candidate.

  Linda Piazza   5/27/200,  2:05:50 PM
Here's another look at the OEX, based on a 60-minute chart, showing the OEX pulling back from resistance, but finding support at a trendline of higher highs. So far. Link If it continues to find support at that trendline, it may be preparing to make another assault on resistance, with that resistance line now lower than it was this morning.

  Jeff Bailey   5/27/200,  2:05:33 PM
AMEX Gold Bugs ($HUI.X) 201.66 +1.34% ... about to test session lows. Link

  James Brown   5/27/200,  2:04:57 PM
Dow component PG is inching higher, up 50 cents, and nearing four-year highs.

  James Brown   5/27/200,  2:01:48 PM
Hmm... the action in Wells Fargo (WFC) is starting to look like a bearish reversal and a bull trap with the early morning breakout over resistance. Today's candlestick might be considered "dark cloud cover" if you're into candlestick patterns.

  James Brown   5/27/200,  1:57:13 PM
Edward Lifesciences (EW) is up 1.11% and breaking out resistance at $36 to hit new all-time highs. The move appears to be some follow through on a bull flag breakout a week ago.

  James Brown   5/27/200,  1:55:06 PM
New comments and renewed hopes for Boeing's (BA) tanker-leasing deal with the Pentagon has the stock up another 3.3% and breaking out over resistance at $45.

  Linda Piazza   5/27/200,  1:51:50 PM
So far, the OEX hasn't been able to make it past that first Keltner resistance on the five-minute chart.

  Linda Piazza   5/27/200,  1:45:12 PM
The bounce began, and now the OEX is at first five-minute Keltner resistance, at 544.18-544.41. Above that, Keltner resistance thins and is located at 545.54 and 546.38, while support from 542.82-543.13 is beginning to firm.

  Jeff Bailey   5/27/200,  1:45:02 PM
U.S. Dollar Index (dx00y) since last chart I posted, trade high has been 88.78 (from 12:35 to 12:45), but backing off at 88.72.

On the 5-minute chart, finding resistance at its 50-pd SMA.

Meantime, BGO $3.56 x $3.57.

  Linda Piazza   5/27/200,  1:42:27 PM
The OEX is breaking out of that descending wedge formation I detailed in my 13:28 post, but it's doing so in a sideways manner rather than on a steep climb so far. Still, this may begin the bounce at mid-Keltner channel support that we've been expecting.

  Jonathan Levinson   5/27/200,  1:31:23 PM
Linda, my thinking is that the bond is holding more or less with the binary dollar relationship, while oil is trading on its own for the time being. While intermarket relationships tend to help predict overall movements, a short squeeze or other single-market dynamics will distort the broader relationships. Oil is likely being buoyed by the weaker dollar, but there was obviously more froth to correct.

  Linda Piazza   5/27/200,  1:28:02 PM
Although the potential bullish falling wedge on the intraday chart for TNX broke to the downside instead of the upside, it might pay OEX bears and bulls alike to pay attention to this possible one on the OEX, reaching its apex as the OEX drifts toward mid-channel Keltner support. Link

  Linda Piazza   5/27/200,  1:23:05 PM
Just about the time I think I get the relationships among the various markets fixed in my mind, they uncouple, at least for a day or two. TNX continues lower and unless it's seen a big bounce in the last 30 minutes, so do the crude futures. While some of the indices are higher today, not all are and all the most frequently watched ones have pulled back off their highs of the day. Any theories, Jonathan?

  James Brown   5/27/200,  1:18:18 PM
FYI... I'm seeing a large 3.2% jump in what appears to be the December Copper futures contracts. The move is a breakout over the $1.20 level and its simple 50-dma. If the rally continues I'd look for Phelps Dodge (PD) to breakout over resistance at $70.00 and its own 50-dma.

  Linda Piazza   5/27/200,  1:12:22 PM
On the Russell 2000, Tuesday's breakout of the rectangular consolidation pattern (60-minute chart) set up an upside target near 572, with 571.87 being the high of the day today. Here's a Russell 2000 chart (admittedly messy) from my Tuesday subbing-for-Jim Wrap, complete with the annotations: Link Note that the 572 upside target, the 50% retracement of the decline from the April 5 high to the May 17 low, and the top descending trendline have all proven strong resistance today for the Russell 2000. Some oscillators suggest that it could still continue to challenge those levels, but RSI has begun to hook down, leading the way if the other oscillators care to follow. When I was writing that Wrap Tuesday night, I had begun by thinking bullishly about the markets, but ended the writing period not convinced that the markets could advance past the next few days or past the descending trendlines showing up on so many of them. I had titled that article to indicate that the Russell 2000 had led the way higher that day, and now perhaps we should watch to see if it leads the way lower again or is merely pulling back before assaulting that resistance again. The easing of crude prices and yields would seem to favor continued testing of that resistance if not a break above it, but that's not stopping the Russell 2000 from heading lower.

  Jeff Bailey   5/27/200,  1:00:56 PM
10-year YIELD ($TNX.X) session low at 4.611% .... looking like more of a "defensive" move into treasuries.

  James Brown   5/27/200,  1:00:26 PM
OI put play CAKE failed at the $40 resistance level on Wednesday and is now trading under its 10-dma with a 1.56% loss to $38.49.

  Linda Piazza   5/27/200,  1:00:19 PM
Decliners are now ahead of advancers on the Nasdaq, although up volume is still ahead of down volume. Volume patterns remain in favor of advancers and up volume on the NYSE.

  James Brown   5/27/200,  12:58:41 PM
Good news for OI call play BCR. The stock broke through the $110 level on Wednesday and is now challenging resistance at $112.

  James Brown   5/27/200,  12:57:11 PM
Current OI call play American Intl Group (AIG) managed to hit $73.38 in early morning strength but shares are slipping back toward the 40-dma near $72.50. The move looks like a failed rally so we'd be careful when considering new positions but a bounce form $72.00 could work.

  Linda Piazza   5/27/200,  12:56:57 PM
The OEX is attempting to steady ahead of a test of central Keltner support on the OEX five-minute chart, with five-minute MACD trying to turn up and produce a bullish cross and with histogram levels growing less negative. This morning's decline has a bit of a bullish descending wedge look to it, too, with the OEX currently testing the top trendline of that wedge . . but it turned down again at that trendline. The central support is now at 542.92. Those who have been in successful bearish plays from this morning's test of 547 should now be making plans as to how they'll deal with that central support. It's likely to produce a bounce attempt of some sort, although it's also possible that the OEX could work its way down to lower-channel support, currently at 539.52.

  Jeff Bailey   5/27/200,  12:56:31 PM
Sell Program Premium .... SPX 1,116.57 +0.14% ...

  Jeff Bailey   5/27/200,  12:53:55 PM
U.S. dollar Index (dx00y) intra-day chart on 5-minute intervals just taken. Link

  Linda Piazza   5/27/200,  12:45:01 PM
Reader Question: Do you see any news on SCON? Why is it up so much today?

Response: I haven't been able to find anything specifically about SCON, but Ericsson (ERICY) and many other telecommunications stocks were moving higher after ERICY's upgrade by CSFB to an outperform rating. Is it possible that SCON has finished placing their 20 million share offering and that the stock is rebounding a bit after that pressure on stock price was removed? I've seen that happen in other stocks. Perhaps someone else has seen news, however.

  Jeff Bailey   5/27/200,  12:43:51 PM
AMEX Gold Bugs ($HUI.X) 201.98 +1.5% .... session lows

  Jeff Bailey   5/27/200,  12:42:38 PM
U.S. Dollar Index (dx00y) 88.59 -1.25% .... 30-minutes ago (as of this typing) did trade a new session low.

Tie this with Bema Gold (BGO) 30-minute ago high of $2.66.

  Jeff Bailey   5/27/200,  12:35:20 PM
12:30 Market Watch at this Link

  Linda Piazza   5/27/200,  12:33:18 PM
Of possible interest to those who watch the Nikkei is a possible reverse H&S forming at the bottom of the recent steep drop. The neckline would be near 11,200, with an upside target, if the formation is confirmed of about 700 points, so up to 11,900, just short of 12,000. A drop much past the 200-sma, currently at 10,775.58, would negate the formation, dropping past the right-shoulder level.

  Linda Piazza   5/27/200,  12:23:36 PM
The OEX is now at a Keltner level that should produce a bounce, but if not, the 542.80 central Keltner channel support should do that, especially as it will come at a short-term historical S/R area. It's after such a bounce, if one occurs, that we'll know whether this morning's pullback was just some sort of measured pullback ahead of another assault on resistance or whether it was the beginning of a rolldown beneath that resistance.

  Jeff Bailey   5/27/200,  12:21:17 PM
I'm tapped out on plays right now. Got my hands full.

  Jeff Bailey   5/27/200,  12:20:50 PM
QQQ $36.15 -0.12% ....

  Linda Piazza   5/27/200,  12:18:37 PM
Here's a SOX chart I posted a number of days ago, complete with the original annotations that showed that the SOX was likely to test upper resistance on its regression channel at about the same time that the 200-dma rose to that same level. That's what's happening today. Link Note that the 21(3)3 stochastics have already risen into territory indicating overbought conditions. During the SOX's move down through that regression channel, there's been fair correlation with stochastics downturns and price downturns at the top of the channel, although not quite as good correlating action at the bottom of the channel. Those stochastics have not yet shown an inclination to turn down, and it's possible that this will be the time that the SOX will burst out of that channel, but bullish traders in semi-stocks should be watching this chart, making plans to protect profits if such a downturn should occur.

  Jeff Bailey   5/27/200,  12:18:06 PM
Day trade short alert .... for Bema Gold (BGO) $2.64 at the bid, stop $2.68, target $2.54.

Dollar Index (dx00y) 88.68 -1.17% ... showing some "firming" at our MONTHLY 61.8% retracement of 88.63.

  Jeff Bailey   5/27/200,  12:15:55 PM
S&P Banks (BIX.X) 345.75 -0.50% downside alert

  Jeff Bailey   5/27/200,  12:14:58 PM
Sell Program Premium SPX 1,117.59 +0.23%

  Jeff Bailey   5/27/200,  12:10:30 PM
Swing trade short alert for the QQQ here $36.25, stop $36.51, initial target $35.66.

I'm "early" as the BIX.X 346.33 -0.33% still sitting right on MONTHLY R1

  James Brown   5/27/200,  12:10:18 PM
Northrop Grumman (NOC) is up another 1.23% to $103.50 after winning a $100.4 million contract from the U.S. Navy.

  Linda Piazza   5/27/200,  12:09:12 PM
OEX Keltner support is at 545.13, then a bit more strongly from 544.59-544.72, and then at 542.74-543.30, near with the lowest of those the location of mid-channel Keltner support on the five-minute chart.

  Jeff Bailey   5/27/200,  12:08:51 PM
Sell Prog. Premium SPX 1,118.89 +0.35%

BIX.X 346.38 -0.33%

  James Brown   5/27/200,  12:05:53 PM
Jane, I agree with you. I like shopping at Costco.

  Linda Piazza   5/27/200,  12:05:28 PM
We've had tentative bearish price/MACD divergence on the OEX 15-minute chart.

  James Brown   5/27/200,  12:05:26 PM
Beleaguered Krispy Kreme Doughnut (KKD) is getting a reprieve today with the stock up 5.69% to $20.77. There are new rumors that KKD may be a takeover candidate at these all-time low levels but I wonder if the stock is seeing some sort of reaction to this Atkins lawsuit we're hearing about on CNBC. If you missed it a consumer is considering or already has filed a lawsuit against Atkins claiming the diet has clogged up his arteries. I'm not saying eating a bunch of doughnuts wouldn't do the same but KKD has been suffering from the low carb craze.

  Jane Fox   5/27/200,  12:04:34 PM
James Costco (11:57 post) has to be the best grocery stores there is. You have to buy in bulk but once you get over that the quality and price is second to none. I truly do not know how they do it.

  Jeff Bailey   5/27/200,  12:04:26 PM
Disk Drive Index (DDX.X) 108.67 -0.01% ... just edging red.

  Linda Piazza   5/27/200,  12:02:19 PM
We've had tentative bearish price/MACD divergence on the OEX 15-minute chart.

  Jeff Bailey   5/27/200,  12:00:56 PM
QQQ $36.30 +0.3% ... here's 10-minute intervals chart to use with 11:44:16 and 11:53:11 comments. Link

  Linda Piazza   5/27/200,  11:59:55 AM
I'm not seeing any sign of a bounce in crude or ten-year yields, which bearish traders would like to see happen unless that recent crude-higher/yields-higher/equities-lower relationship has come undone. TRIN continues a sort of lazy drift higher, but isn't really at levels bearish traders would like to see. Advdec did get hit with that decline. Advancers are now not that much above decliners on the Nasdaq, but up volume is still strongly above down volume.

  James Brown   5/27/200,  11:57:51 AM
Costco Wholesales (COST) is arguably the biggest company reporting earnings this morning. COST beat estimates by 5 cents with stronger than expected revenues. The stock is up 3.15% to $38.64 but off its highs of the day.

  Jeff Bailey   5/27/200,  11:53:11 AM
Here's what I'm doing.... setting downside alert on the BIX.X at $345.75.

If triggered, I'm going to want to try a swing trade short in the QQQ (will look at its chart) should I get the downside alert on the BIX.X.

Why the QQQ? Because we're long/call OSTK +0.08% and OSIP -2.03% right now.

  James Brown   5/27/200,  11:52:43 AM
Traders must be feeling generous today.. or it's an example of light volume exacerbating moves...Dollar General (DG) is up 5.44% to $19.80 after reporting earnings that were inline. I don't see anything to warrant the big move.

  James Brown   5/27/200,  11:49:36 AM
Sector update...

TRAN transports: +3.15%
XAU gold & silver: +2.05%
RLX retail index: +1.0%
CYC cyclicals: +0.85%
SOX semiconductors: +0.85%
DRG drug index: +0.80%

OSX oil services: -2.22%
XNG natural gas: -1.43%
OIL oil index: -0.73%

  James Brown   5/27/200,  11:46:42 AM
Kohls Corp (KSS) is up another 2.06% to $47.56 after Bank of America upgraded the stock to a "buy" from "neutral" with a $55 price target. KSS has been outperforming the market lately with a strong three-week rally under way but shares are approaching resistance at its simple 200-dma overhead.

  Jeff Bailey   5/27/200,  11:44:16 AM
S&P Banks Index (BIX.X) 346.71 -0.22% ... here's intra-day 10-minute interval chart. See what's going on. Link

SPX Chart on same 10-minute intervals at this Link

  James Brown   5/27/200,  11:43:14 AM
Baxter Healthcare (BAX) said it received a "warning" letter from the FDA about some of its promotional materials for its new hemophilia therapy treatment Advate. Drug was approved last summer but sales have been less than expected. It sounds like the FDA wants BAX to rewrite its side effects description in their advertising. (-Reuters)

BAX is up 1.3% to $31.11.

  James Brown   5/27/200,  11:39:09 AM
Smith Barney has upgraded AutoZone Inc (AZO) to a "buy" and bumped its price target $4 to $98. The upgrade sent AZO to an early high ($86.40) this morning but the rally is fading pretty quickly now.

  Linda Piazza   5/27/200,  11:37:22 AM
Here's a chart I posted early this morning delineating some possible resistance levels, showing how the OEX has reacted with regard to those levels. I've also added the 72-ema, an average I always watch with regard to the OEX: Link

  James Brown   5/27/200,  11:34:12 AM
Tyco Intl Ltd (TYC) is up 1.8% and breaking out over major resistance at $30.00. Investors are rewarding the company for announcing plans to get rid of debt over the next several quarters. Volume is huge at 23 million shares vs. the average of 8 million.

  James Brown   5/27/200,  11:31:12 AM
Last night Michaels Stores (MIK) reported earnings that beat estimates by 5 cents plus they raised their earnings guidance for the year by 15 to 20%. At least two analysts have raised their outlook on the stock based on the earnings news. The stock is up 8.45% to $50.65.

  Linda Piazza   5/27/200,  11:29:22 AM
As of a few minutes ago, total volume was still only 458 million for the NYSE and 597 million for the Nasdaq. Adv/dec ratios stood at 23:7 for the NYSE and 18:10 for the Nasdaq. Up volume was much stronger than down. Since this information is time-delayed, however, those proportions may have changed during the swoop lower that began a few minutes ago.

  James Brown   5/27/200,  11:25:10 AM
Abbott Labs (ABT) is announcing that the FDA has approved their Zemplar injection for use in young patients (aged 5 to 19). The stock is up 0.68% to $41.32.

  Linda Piazza   5/27/200,  11:21:51 AM
Mid-channel Keltner support on the OEX is currently at 542.38, with bottom channel support at 538.76, but that bottom-channel support is now declining. The OEX is hitting possible light support now, and might attempt a bounce, but Keltner resistance firms up from 545.78-546.62, and looks fairly strong. It looks as if the promised test of mid-channel Keltner support might be in the works after all, after that 547 level proved too difficult for the OEX.

  Jeff Bailey   5/27/200,  11:19:08 AM
Sell Program Premium SPX 1,118.35

S&P Banks (BIX.X) 347.07 -0.12% .... got it?

  Jeff Bailey   5/27/200,  11:15:12 AM
S&P Banks (BIX.X) 347.88 +0.10% ... off session high of... 349.13.

Traders should be alert for some weakness at resistance!!!!

  Jeff Bailey   5/27/200,  11:13:37 AM
11:00 Internals at this Link

  Jeff Bailey   5/27/200,  11:08:11 AM
Buy/Sell Program Premiums .... HL Camp & Company has their compters set for program buying at $0.72 and set for selling at $-1.50.

  Linda Piazza   5/27/200,  11:06:20 AM
The OEX continues to struggle with 547.

  Jeff Bailey   5/27/200,  10:49:13 AM
DJ U.S. Steel Index ($djusst 98.46 +2.08% Link ... above its 50-day SMA.

  Linda Piazza   5/27/200,  10:48:05 AM
The OEX is stalling beneath that 547 resistance, but is it stalling prior to another run higher or prior to a downturn? That's the question, isn't it? Everything else appears to be stalling, too: TRIN, TNX, advdec. We know a sustained move above 547 will be difficult, so that bulls should already have had a plan in mind about protecting profits if the OEX should roll down again and bears should have a plan in mind, too, if they've already entered and the OEX should bump above that resistance. The OEX has a resistance zone again from 549.50-553. With volume light, I think anyone in the market should be prepared to be whipsawed, because it's going to be easy to run the markets up or down to run those stops before the markets head another direction.

  Jonathan Levinson   5/27/200,  10:43:25 AM

10:34am JULY NATGAS DOWN 2.1% AT $6.59/MLN BTUS

  Linda Piazza   5/27/200,  10:42:28 AM
The VXO is trying to rise off this morning's low, but as Keene just mentioned (on the Futures side) with respect to the dip in the equities, the move in the VXO is looking corrective. It's always intrigued me to test how much of regular technical analysis we can apply to the volatility indices, with different technical analysts having different opinions. I think quite a lot of technical analysis tools can be used, but I know others feel differently.

  Jeff Bailey   5/27/200,  10:38:42 AM
10:35 market watch at this Link

  Linda Piazza   5/27/200,  10:37:45 AM
Today is a big day for IPO's. We have five, RJET, ACAD, CRTX, ANGO, and STAN. RJET, Republic Airway Holdings, runs Chautagua & Republic Airlines. It began trading about twenty minutes ago, with a first five-minute range of 13.50-14.32.

ACAD, Acadia Pharmaceuticals, is a biopharma company, due to begin trading any moment. CRTX, Critical Therapeutics, is another biopharma company, due to begin trading at 10:45 EST. The next two are ANGO, Angiodynamic, a manufacturer of products for peripheral vascular disease, and STAN, Standard Parking, a company that manages parking facilities. Neither has a time set for opening yet, with some speculation that they could delay opening until tomorrow.

  Keene Little   5/27/200,  10:35:16 AM
The pattern of XAU leads me to believe the gold stocks may have finally topped and it's worth a try again to short the gold stocks or this index. Gold came very close to its simple 200-dma (past its exponential 200-dma) and has pulled back slightly. XAU, as seen in this 60-min chart, has reached the top of its parallel up-channel at the same time it hit an important fibonacci target for this leg up. The 60-min stochastics hasn't yet reached overbought, let alone roll over, so this may be jumping the gun a little here, but I like the odds here to try to short this index here. Link

Note that this trade would be somewhat in opposition to Jeff's long play in SWC, and in fact SWC has a more bullish looking pattern. For those who like hedge plays, a long in SWC and a short in XAU could be a good play.

  Jeff Bailey   5/27/200,  10:35:10 AM
July Crude Oil futures (cl04n) 39.75 -2.3% ... getting "whacked"

  Linda Piazza   5/27/200,  10:25:23 AM
I don't see anything yet in the TRIN, advdec, VIX, or crude oil levels to indicate that a reversal in the indices might be imminent. Advdec and TRIN continue to support a bullish outlook for the day. Of course, reversals sometimes happen just when markets look the strongest, just as they're rising strongly into that next resistance. One troublesome possibility is that volume is predictably light as we head into a holiday weekend. Moves can be exaggerated when volume is light. I'd keep a watch on that bounce in the TNX, too, if in a bullish equity play, watching to see if resistance turns the TNX back.

  Jeff Bailey   5/27/200,  10:21:54 AM
Swing trade call option alert .... for Stillwater Mining (SWC) $15.60 +2.49% Link .... buy 1/2 position in the OCT $15 calls (SWCJC) $2.90 offer, no stop, target $22.

SWC is a miner of palladium. December Palladium futures (pa04z) 254.55 +0.03% recently gave a reversing higher point and figure buy signal at $256 after a "low pole warning" reversal. Current bullish vertical count building back to $290. Contract high was $344 in April.

  Jonathan Levinson   5/27/200,  10:19:38 AM
US April Help Wanted Index was 38, down from 39 in March but up from 37 last April.

  Jeff Bailey   5/27/200,  10:15:24 AM
Overstock.com (OSTK) $35.63 +2.09% Link .... gets the trade at $35.00 and strong from bullish support trend. Trade at $35 gets a bullish vertical count going of $44. If OSTK trades $44, the ebay puts forgotten.

  Jonathan Levinson   5/27/200,  10:14:28 AM
A 2B overnight repo from the Fed results in a net 4.75B drain, pretty much as expected from yesterday. That's 20B that the Fed ponied up in fresh money today.

  Linda Piazza   5/27/200,  10:14:07 AM
$TRIN, although still at a low 0.72, has been mostly climbing since the market opened. Trouble is, so has advdec.

  Jeff Bailey   5/27/200,  10:12:34 AM
Dow Diamonds (DIA) $102.28 +0.91% Link .... strong upside this morning. Will continue to hold the 1/2 position $100 puts, but look for DIA to stall out near $103. On a reversal, may leg into additional 1/2. Need some type of "slow mover" bearish for geopolitical risk is still my thoughts, as well as higher bullish % and market risk readings at this point.

  Linda Piazza   5/27/200,  10:11:37 AM
The SPX powers up toward a test of a descending trendline off the March high, with that trendline roughly coinciding with the 100-dma at 1127.27, being slightly above it at about 1130. That should be resistance to be reckoned with if the SPX should continue moving higher to test it, and I note that TNX is continuing its small bounce. However, I think it was Jonathan in a recent Futures Wrap who mentioned that tendency we saw last year for indices to look as if they were going to break down, but then to slice through resistance level after resistance level as if they meant nothing and we could see that happen all day today. Resistance that should matter, might not.

  Jeff Bailey   5/27/200,  10:07:36 AM
OSI Pharma (OSIP) $84.50 +0.43% Link ... remains strong. Still awaiting first real technical test of resistance at $87.62 from our fitted 19.1% retracement. Expecting clinical trial data on Tarceva to be presented at the American Society of Clinical Oncology which begins June 5.

Still targeting $120.

  Jeff Bailey   5/27/200,  10:03:22 AM
eBay (EBAY) $86.64 +0.21% Link .... I'm looking for cover on anything back near $80.

  Linda Piazza   5/27/200,  10:01:44 AM
The OEX is hitting its 72-ema, an average I watch closely with regard to the OEX. That average is currently at 546.07. Touches or near touches of this average on 4/29 and 5/04 saw the OEX recoiling, but MACD looked much different on those previous tests.

  Jonathan Levinson   5/27/200,  9:56:51 AM
The Fed has announced a 6 day repo of 8B. There's now 6.75B left to cover, and we await the overnight repo announcement next.

  Linda Piazza   5/27/200,  9:55:59 AM
Earlier, I referenced that Tuesday's bounce in crude spoiling the buy-the-rumor (of lower crude prices) effect, but that bounce actually occurred Monday, of course. I'm (frustratingly) delayed on crude futures, but note that as of 30 minutes ago, they were headed down toward a retest of this week's low but trying to steady near $40.00/barrel. That test is going to concur fairly closely with a test of resistance on the indices. I note that ten-year yields have begun an attempt to steady, too. Be careful if in bullish trades, as there's still the possibility of crude and the $TNX bouncing and equities rolling down. I don't know that's going to happen, but I'm certainly watchful for it to happen, and you should be, too.

  Linda Piazza   5/27/200,  9:49:00 AM
The Dow heads up. Overhead is 10,200-10,250 resistance, with the 50-dma and its former triangle support also converging near 10,250.

  Jeff Bailey   5/27/200,  9:48:11 AM
U.S. Dollar Index (dx00y) 88.83 -0.99% ... here's chart with WEEKLY/MONTHLY Link and notably weak this morning.

BIG bid for Treasuries as a result, gold and industrial metals.

  Linda Piazza   5/27/200,  9:45:37 AM
The OEX continues to test the daily 100-ema. It has broken out of the ascending regression channel to the upside, it appears. It's possible that a challenge of 547 could be in store.

  Jonathan Levinson   5/27/200,  9:44:19 AM
With respect to the massive 24.75B in Fed repos expiring today, we have a 14 day repo of 10B just announced- awaiting the 10AM announcement with respect to the remaining 14.75B.

  Jeff Bailey   5/27/200,  9:41:31 AM
S&P Banks (BIX.X) 349.03 +0.44% ....

S&P 500 (SPX.X) 1,120.50 +0.49% ....

  Linda Piazza   5/27/200,  9:41:31 AM
We have another breakout on the OEX five-minute Keltner channel, another potentially valid breakout signal, but also a sign of danger to those in bullish trades. Begin following the OEX higher with your stops, if you haven't done so already.

  Linda Piazza   5/27/200,  9:38:31 AM
During the first five minutes of trading, the OEX spanned a range from 543.04 to 544.99.

  Linda Piazza   5/27/200,  9:34:37 AM
TNX broke soundly below the trendline of descending lows displayed on the first chart on my 9:07 post. It also broke beneath a 50% retracement of the big-range day on 5/07, with candlestick theory suggesting that support should be found at a 50% retracement of those larger-than-normal candles. So far, that supports a continued climb on the equities, but those of you in bullish OEX trades should be particularly careful to guard profits as the OEX approaches those resistance levels I detailed in that 9:07 post, particularly the 547 level, if that should be reached. The OEX currently tests the daily 100-ema at 545.10. I'm still worried about rollover potential from this level up to 547 and slightly above.

  Linda Piazza   5/27/200,  9:07:46 AM
Markets will try to rise into OPEC's official meeting June 3 on a kind of buy-the-rumor run higher on hopes of lower crude prices: that was my thought early in the week with Tuesday's big gain in crude spoiling the effect. This morning, crude prices head lower, yields head lower, and our equities may head higher.

The trouble is that we may again get a test of the $39.70-40.00 support level on crude and we are getting a test of this descending trendline of lower lows on the ten-year-bond yields, with a possibility that the TNX may be trying to bounce from the lower trendline of what could be a bullish falling wedge: Link It was Tuesday's test of short-term support level in crude futures that prompted the bounce there, sending equities lower, and another bounce is possible today. So is a bounce in yields, although oscillators on daily charts for both entities suggest more downside instead of such a bounce.

Yesterday closed with the OEX having printed a doji at the top of an ascending regression channel that may or may not be a bear flag: Link The red trendline marks a 50% retracement, and the regression channel has not yet moved higher than that 50% retracement, meaning it could still be a bear flag. They usually break down below or at a 50% retracement, so just as we're near or at important tests of support on crude and yields, we're near one test of resistance on the OEX and other indices, too. The blue 100-ema and mauve 130-ema on the linked chart show that the OEX is also challenging these averages, important across many times frames. In addition, historical resistance comes into play at the current level and up to 543.50-544, and a descending trendline off the March high now crosses at about 547.

A doji printed at resistance, from within a possible bear flag: that confluence of factors should warn bullish players to pay attention. That warning is backed up by the OEX's prolonged crawl along upper Keltner channel resistance. Sooner or later, the OEX will need to retreat to middle-channel Keltner support if not lower-channel support, with those at 540.08 and 537.56 on the five-minute chart, but still rising. The longer the OEX crawls along that upper resistance, the more likely it is that it will be slung all the way to bottom support when it does retreat. One caveat to that observation is that support is climbing as the OEX does, and by the time it finally retreats, it may not have all that far to go.

Time to retreat or not, potential reversal signal or not, the OEX could keep rising, breaking through those averages, that historical resistance, and the top of that regression channel. It could keep climbing the Keltner channels. It could even break through a descending trendline off the March high, currently just over 547. That's why we identify these levels, so that we'll know when a change in trend is occurring and when directional trading might continue. Those who are thinking bullishly will want to see all those events happen, coupled hopefully with a continued retreat in crude prices and bond yields.

The OEX daily MACD has made a bullish cross, although from below signal, and it's likely to challenge the signal line at about the time the OEX could rise to test that descending trendline off the March high. RSI has already cycled up to the neutral area from levels indicating oversold levels, and it's ready to go either direction. Stochastics have turned up strongly, but may soon challenge a trendline of lower highs.

The trend has been down since early in the year, so our first presumption would be that the trend, once established, will continue, and this is perhaps a buy-the-rumor (of lower crude prices)-induced climb into resistance, but we need to be cautious about making that assumption. If that's what we believe, our next task is to find a likely rollover spot, and our third to establish a stop loss at which we'd know that we're wrong. If thinking bearishly, I would look for a rollover between here and 547, and would set a stop just above that descending red trendline, at whatever level it might be when the rollover begins, because a sustained move above that trendline could signal a retest of 549.60-553, then of April's and then the year's highs. Keep a watch on the crude prices and on the ten-year yields. Depending on the moment at which I snapped that first chart of the TNX linked above, it would have shown either a minor breakdown below that lower trendline or a bounce back above it, so it's touch-and-go as I type this.

  Keene Little   5/27/200,  8:49:13 AM
Looks like gold is rallying another leg higher (as the US dollar drops), so it would appear I'm too early in trying to short gold. This will likely mean another rally leg in the gold stocks as well. So any short attempts in these stocks, or XAU, yesterday will also likely be stopped out this morning. As I mentioned yesterday, I'm probing for a top to this rally so it may take an attempt or two. Gold may be targeting its simple 200-dma just under 396 (it's now above it's exponential 200-dma at 391). At a high of 393 so far this morning, it's not far away.

The pattern of the decline in the gold stocks yesterday began to look corrective and therefore looked like a high had not been put in yet. This morning's rally in gold may be confirming this so you can choose to immediately stop out this morning or wait for a new high to confirm. The EW pattern is a little complicated but it would count perfect for an end to the rally off the May 10th low with one more high so that's why shorting the next high could work well. But again, it's probing for a top. The more conservative way is to wait until we have evidence of a trend change down.

  Jonathan Levinson   5/27/200,  8:40:02 AM
After tax economic profits are the best reading in 23 years.

  Jonathan Levinson   5/27/200,  8:31:54 AM
8:29am U.S. WEEKLY JOBLESS CLAIMS DOWN 3,000 TO 344,000

8:30am U.S. 4-WEEK AVG JOBLESS CLAIMS UP 1,500 TO 335,500



8:30am U.S. Q1 PCE PRICE INDEX 3%, CORE 1.7%


8:30am U.S. Q1 FINAL SALES 3.7% VS. 3.9% PREVIOUSLY


  Jonathan Levinson   5/27/200,  8:20:51 AM
We await the 8:30 release of the GDP data for Q1, est. 4.5%, chain deflator, est. 2.5% and initial claims for the week of 05/22, est. 335K. At 10AM there's the help wanted index, est. 41.

  Linda Piazza   5/27/200,  7:05:24 AM
Good morning. The Nikkei opened just a few points in positive territory, dropped a little more than 40 points and then started a recovery that sent it above 11,200 for almost an hour. During the afternoon session, however, the Nikkei headed down toward the flat-line level again and stayed there most of the afternoon, closing up by 13.94 points or 0.12%, at 11,166.03. Early influences included a government report that revealed that April's retail sales fell, with retailers and banks heading lower in early trading. Despite a decrease in crude oil futures, worries about the impact of high crude prices limited gains, some theorized, but big caps Tokyo Electron, Honda, and Sony all gained. That worry impacted Japan Airlines, however, with the stock pulling back slightly after saying that it was considering raising fares to compensate for high fuel costs.

Stocks in the news included telephone company KDDI Corp., gaining after revealing discussions with Carlyle Group and Kyocera Corp to sell most of its position in DDI Pocket, a mobile-phone unit it owns. Kyocera fell. Other stocks in the news included Softbank, posting moderate gains after a report that the company had reached an agreement for the purchase of Japan Telecom; industrial robot manufacturer Fanuc, gaining after reporting better-than-expect net income for last year; and cosmetics company Kanebo, falling limit-down after reports about the Industrial Revitalization Corp's rescue plan for the troubled company.

Other Asian bourses mostly closed higher. The Taiwan Weighted gained 0.10% but South Korea's Kospi gained a stronger 2.35% on the back of gains by Samsung Electronics, SK Corp, and Hyundai Motor, among others. Singapore's Straits Times rose 0.10%. Hong Kong's Hang Seng climbed 2.49% and China's Shanghai Composite posted gains of 2.15%.

Most European bourses currently trade higher, too. In the U.K., lender Nationwide announced a rise of 1.9% in housing prices during May, increasing fears about an overheating market. A member of the Bank of England's Monetary Policy Committee spoke out, contradicting recent speculation that the Bank of England might need to double the current 4.25% interest rate, saying instead that he believed it unlikely that rates would rise above 7%. One article mentioned that most banks in the U.K. saw modest gains in early trading with the exception of Barclays.

With July Brent crude futures easing on the London market, European markets traded higher as oil-sensitive stocks gained. Other influences included a better-than-expected earnings report from media and telecoms group Vivendi Universal (V), with the company narrowing its Q1 net loss from the year-ago period and seeing net profit rise by 24%. Other stocks in the news included stock exchange operator Euronext, also gaining after its Q1 earnings report, and video games manufacturer Infogrames Entertainment, dropping after its earnings report.

As of this writing, the FTSE 100 has gained 19.40 points or 0.44%, to trade at 4457.70. The CAC 40 has gained 24.25 points or 0.66%, to trade at 3684.17. The DAX has gained 42.44 points or 1.10%, to trade at 3909.96.

  OI Technical Staff   5/26/200,  7:43:12 PM
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