Option Investor
Printer friendly version
  Jeff Bailey   6/3/2004,  6:30:40 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   6/3/2004,  5:49:43 PM
Closing Internals at this Link

  Jeff Bailey   6/3/2004,  4:28:50 PM
Semiconductor HOLDRs (SMH) $36.75 -2.49% .... trade $37.00 in after-hours

  Jeff Bailey   6/3/2004,  4:26:17 PM
Swing trade cancel alert for the QQQ (from 04:04:36) .... QQQ $36.06 in extended hours.

  Jeff Bailey   6/3/2004,  4:18:51 PM
QQQ goes out at $35.98 -1.20% ... trades $36.07 here.

DAILY Pivot levels for tomorrow are... 35.54 , 35.76, P=36.06, 36.28, 36.58

  Jeff Bailey   6/3/2004,  4:12:03 PM
Intel (INTC) went out at $27.41 -2.14% ....

  Jeff Bailey   6/3/2004,  4:04:36 PM
Swing trade long alert ... for the QQQ $35.96 -1.26% ... should it trade $35.70 in after-hours trade, or until 04:15 close. If filled on a "knee jerk" reaction, would then follow with a stop at $35.45 to begin. Target for this trade is $36.25.

  Jeff Bailey   6/3/2004,  4:01:10 PM
Sell Program Premium .... DIA $102.07 , SPY $112.22, QQQ $35.96.

  Linda Piazza   6/3/2004,  3:58:27 PM
If you haven't already done so, it's time to decide whether to hold overnight ahead of Intel's update and tomorrow's economic numbers. On the OEX, today's candle has just about eclipsed all of yesterday's gains, but hasn't quite, creating an inside-day trading situation. That could change by the day's end, of course. (Note: It's just done so.) This is coming again at the congestion zone that's been building, making this perhaps part of the normal back-and-forth of a congestion zone. It's forming just under/at important resistance and daily oscillators are trying to tip over into a more bearish expression.

I came into today's trade thinking it possible that we'd see a sell-the-fact effect after the OPEC decisions, and we have seen lower values on the OEX, but it's been a muted effect that hasn't really committed to a rollover. It's a tough decision as to whether to close out a trade or hold over, but it's a decision you're being forced to make while blind. You don't know what Intel is going to say or what those numbers are going to be, or the reaction to those revelations. Asian semi-conductor stocks have been diving for days, so is any negative feedback from Intel already discounted? Will there be a pop tomorrow in semi-related stocks? Or will disappointment send the SOX to the bottom of its descending regression channel again? What will happen with crude overnight? Make sure you're comfortable with--and that your account can handle--a loss if you guess wrong.

  Linda Piazza   6/3/2004,  3:49:11 PM
The OEX failed in its retest of the H&S neckline, but it just doesn't want to drop. One reason is that it's been testing historical support and 15-minute mid-channel Keltner support, with that mid-channel support at 544.80, but with further important Keltner support at 544.12.

  Jeff Bailey   6/3/2004,  3:40:01 PM
QQQ $36.04 -1.01% .... session low $36.00 even.

  Jeff Bailey   6/3/2004,  3:34:05 PM
Sell Program Premium ... SPX 1,118.17

SOX.X 464.31 -2.31% ... new session low...

QQQ $36.03

INDU 10,210 (DAILY S1 10,210)

  Linda Piazza   6/3/2004,  3:30:42 PM
A new low of the day would confirm that the OEX had failed its retest of the H&S neckline. The current low of the day is 545.01.

  Linda Piazza   6/3/2004,  3:15:45 PM
The SOX has been holding in about a five-point range most of the day, with a break out of that range suggesting a five-point move.

  Jeff Bailey   6/3/2004,  3:04:08 PM
02:55 market watch at this Link

  Linda Piazza   6/3/2004,  3:03:03 PM
The neckline test continues on the OEX, with the OEX not yet able to move above the neckline. The mid-channel Keltner resistance on the five-minute chart lies near or just above the midline level, while the 15-minute mid-channel support lies just below the low of the day, so one is offering resistance and the other support. We just have to see which holds. MACD tries to produce a bullish cross, but is doing so from below signal.

  Linda Piazza   6/3/2004,  2:51:58 PM
Crude futures have been climbing since about 12:30, but the climb may be of the bear-flag type after this morning's precipitous drop. $39.38 marks the 50% retracement of the drop from this morning's high to today's low, but I would expect $40.00 to be important, too, if the prices should climb that high.

  Linda Piazza   6/3/2004,  2:43:37 PM
The OEX now comes back up immediately to retest the neckline of the H&S from the underside. I usually don't like to see the OEX halt its decline immediately after a neckline break and turn right around to retest it. However, we'll have to see what happens.

  James Brown   6/3/2004,  2:39:10 PM
Another chip on the decline is AMAT. Shares are nearing "support" at the bottom of what looks like a bear flag.

  James Brown   6/3/2004,  2:36:20 PM
Texas Instruments (TXN) looks pretty weak here, down 3.5%, and nearing support at $24.00 ahead of Intel's mid-quarter update tonight.

  Jeff Bailey   6/3/2004,  2:35:00 PM
TBUS $7.53 +16.2% ... $*@&#^$% regarding the raising of intra-day stop.

  Linda Piazza   6/3/2004,  2:33:00 PM
The OEX's 15-minute chart shows mid-channel Keltner support at 544.74, with important support layered down to 544.28. The OEX rarely dips more than momentarily--an hour or so--below that lower support. The downside target of the H&S formation is much lower, however, is at about 541.30.

  James Brown   6/3/2004,  2:31:48 PM
Uh-oh! FO is reversing its recent breakout over resistance and is now down 1.8% and back under the $75.00 mark and its 50-dma.

  Jeff Bailey   6/3/2004,  2:28:31 PM
MM Open positions at this Link

OSI Pharma (OSIP) $77.08 -4.72% ... session low has been $76.81. Swing trade raise bullish call alert to close out this call option should OSIP trade $76. A trade at $76 would trigger a "bullish signal reversed" and I would most likely negate any possibility of stock achieving bullish targets on or before expiration of these July calls.

  James Brown   6/3/2004,  2:28:25 PM
If you're looking for bearish candidates check out CME. The stock is down another 3.2% and under the $120 level.

  Linda Piazza   6/3/2004,  2:28:20 PM
I show the OEX as having broken below the neckline of the bigger H&S built across yesterday and today. It's now dropped to a new low of the day, too.

  Linda Piazza   6/3/2004,  2:25:17 PM
I just listened to Charles Ebinger, senior VP with Nexant, who told Marketwatch.com that OPEC has already been exceeding its quotas and probably can't ramp up production much more, and that their stated goal to increase production levels just legitimizes what they're already doing, a statement I've heard echoed elsewhere. Even if OPEC countries could ramp up production considerably, the U.S. does not have the refinery capacity to refine more gasoline, and crude would just accumulate without gasoline stocks building through the high-demand summer season. He believes the lack of refining capacity to be the bigger problem. He says that the surge in demand in China and India was not anticipated, and that we're competing with those countries to import already refined products, something we habitually did when our refining capacity fell short. He expects a small increase in gasoline prices this summer, but he doesn't see any relief until September. Even then, he doesn't expect a big dip in prices. He mentions fears that something could happen disrupting production in Saudi Arabia, with that fear being built into crude prices.

  Jeff Bailey   6/3/2004,  2:24:02 PM
02:00 Internals at this Link

  Jeff Bailey   6/3/2004,  2:19:06 PM
Mace Security (MACE $5.83 +9.15% ... just making session high. Some volume build this 5-minute bar

  Jeff Bailey   6/3/2004,  2:18:29 PM
IPIX Corp. (IPIX) $12.28 +48.52% ...

  Jeff Bailey   6/3/2004,  2:17:51 PM
Digital Records (TBUS) $7.26 +12.03% ... back to challenge session highs of $7.39.

  James Brown   6/3/2004,  2:16:09 PM
Goldman Sachs (GS) was on our watch list last night for a break down through support at $90.00. Today's 1.16% drop to $90.70 certainly brings it closer to that breakdown.

  Linda Piazza   6/3/2004,  2:12:10 PM
If the OEX can't steady near the current level, next Keltner support is down at 544.03, the bottom Keltner channel support. This is on the five-minute chart. The OEX is trying to steady near the neckline of the H&S formed over yesterday and today.

  James Brown   6/3/2004,  2:12:09 PM
Lowes Companies (LOW) is also struggling to hold its early breakout over its 200-dma.

  James Brown   6/3/2004,  2:10:13 PM
Wal-Mart (WMT) is struggling to hold its early morning breakout over its 50, 100 and 200-dma near $57.00.

  Linda Piazza   6/3/2004,  2:09:54 PM
We got a bounce at 546.34, but it was only momentary. The OEX has now exceeded the downside target for the right-shoulder H&S, a bearish event in itself. The OEX now reaches down toward the neckline of the bigger H&S, already having touched one version just below 546, with another version at about 545.65.

  Linda Piazza   6/3/2004,  2:02:33 PM
OEX 546.34 is the site of the supporting line of a Keltner channel that usually contains OEX prices. That conforms to the downside target from the right-shoulder H&S on the OEX intraday chart, so that could be a strong candidate for a bounce level, although it's possible that any such bounce might be only back to the 547-547.50 level.

  Jeff Bailey   6/3/2004,  2:00:26 PM
IPIX Corp. (IPIX) $11.94 +44% .. not sure if that was "bad tick" at this point $12.65, but stock continues to build intra-day gains.

  Linda Piazza   6/3/2004,  2:00:01 PM
The OEX performed a neckline test of the right-shoulder H&S formation on its intraday chart, turning down again from that neckline test. It's now only cents away from its 546.35 downside target. That's not going to take it quite deep enough to test the neckline of the bigger H&S formation that was formed over yesterday and today.

  Linda Piazza   6/3/2004,  1:55:14 PM
The VXO is moving generally up again, although it hasn't equaled the early morning high yet.

  Linda Piazza   6/3/2004,  1:40:16 PM
From Jane's and Keene's comments, it appears that H&S formations are breaking out all over. The OEX one that formed the right shoulder of the potential H&S formation (Wednesday through today on intraday charts) has now confirmed, setting up a downside target near 546.35. That may or may not be met, as 547 support may be strong. Watching whether it is or not gives us a first clue as to whether the bigger H&S is likely to confirm.

  Linda Piazza   6/3/2004,  1:30:39 PM
The right shoulder of the potential OEX H&S formation displayed in my 13:10 post is itself a H&S formation, with a neckline at about 547.35. A confirming break through that neckline would set up a downside target about a point below the neckline, not quite deep enough to set up a neckline test for the bigger H&S.

  James Brown   6/3/2004,  1:26:40 PM
Apparel retailer Talbots (TLB) is up a strong 9.11% to $38.08 placing it above significant resistance at $37.00. The move is being fueled by its better than expected 8.1% May same-store sales numbers and an upgrade to "strong buy" from First Albany.

  Linda Piazza   6/3/2004,  1:10:03 PM
That regular H&S that I first mentioned in an 11:29 post this morning still remains a potential formation to watch. The right-shoulder level hasn't been breached yet, at least in my opinion. Link The neckline is currently near 545.85, but is rising.

  Jeff Bailey   6/3/2004,  1:07:53 PM
01:00 Internals at this Link

  Linda Piazza   6/3/2004,  1:05:09 PM
An excerpt from OPEC's press release: Having reviewed market developments since its 130th Meeting, held on 31 March 2004, as well as the supply/demand outlook, the Conference noted with concern that, as a result of several factors, prices have continued to escalate, despite the efforts by OPEC Member Countries to meet market requirements. These factors are mainly the robust growth in demand in the USA and China, which had not been fully anticipated; geopolitical tensions; and refining and distribution industry bottlenecks in some major consuming regions, coupled with more stringent product specifications. Combined, these factors have led to unwarranted fear of a possible future supply shortage of crude oil, which has, in turn, resulted in increased speculation in the futures markets with substantial upward pressure on crude oil prices.

The full release can be found at www.opec.org by clicking on News & Info and then clicking the link to "Press Releases." You'll find today's report there.

  Jeff Bailey   6/3/2004,  12:59:14 PM
Bearish day trade stop alert for IPIX $11.40 .... I'm done for the day.

  Jeff Bailey   6/3/2004,  12:53:25 PM
12:50 PM Market Watch at this Link

  Linda Piazza   6/3/2004,  12:50:02 PM
I'm time delayed with crude futures, but they've really taken a dive, or had as of 30 minutes ago. They were then at their lowest levels since May 11.

  James Brown   6/3/2004,  12:45:27 PM
Johnson & Johnson (JNJ) continues its recent string of advances and has broken out to new one-year highs. The company announced late last night that an FDA panel has recommended an approval for its Charite Artificial Disc. The product has been sold in Europe for more than a decade. Once it is approved in the U.S. it will be available for the 200,000 American who undergo fusion surgery each year. (-Reuters)

  Linda Piazza   6/3/2004,  12:43:37 PM
That apparent OEX bull-flag pullback on the five-minute chart did see an upside break. The OEX now approaches the 548.50 upside target predicted by the reverse H&S this morning, also on its five-minute chart. The OEX approaches a maximum upside, too, if the competing, tilting H&S formation is to have any validity. If the OEX were to move much above that 548.50 level, it would be moving past the right-shoulder zone. On the five-minute Keltner chart, it's trying to pull free of the gravitational pull of last Keltner resistance ahead of upper-channel resistance at 549.06, but it can't quite tug free yet of the 548.17-548.25 zone.

  James Brown   6/3/2004,  12:41:29 PM
We're finally seeing some action in Electronic Arts (ERTS), another OI call play. Shares are up 2.8% and breaking out over resistance at $51.50 and its 40 & 50-dma's. I can't find any specific news for the advance but the company did announce the new Madden NFL 2005 Collector's Edition is going to be available in August.

  Jeff Bailey   6/3/2004,  12:38:50 PM
Day trade short alert .... for IPIX Corp. (IPIX) 10.90 +31.8% here, stop $11.40, target $9.70.

  James Brown   6/3/2004,  12:37:30 PM
Aetna Inc (AET), a current OI call play, is up 2.98% and breaking out above resistance at $84.00 and its 40-dma. Shares are now challenging resistance at its simple 50-dma.

AET issued a press release today...
The company announced a new program designed to help members live a healthier lifestyle and control their weight. The program was unveiled at The TIME/ABC News Summit on Obesity in Williamsburg, Virginia, which was sponsored in part by Aetna.

"Fighting excessive weight is one of the toughest challenges facing many Americans today, and this is a battle that millions of people just aren't winning," said William C. Popik, M.D., Aetna's chief medical officer. "Being overweight or obese often has a negative impact on a person's quality of life, overall health, and professional productivity and we believe Aetna's members can benefit from the additional support we intend to offer through this program."

  Jeff Bailey   6/3/2004,  12:36:51 PM
Day trade exit alert for Digital Recorders (TBUS) $6.95 (break even) .... just not getting the follow through higher.

  Jeff Bailey   6/3/2004,  12:33:29 PM
S&P 500 Index (SPX) 1,124.14 -0.07% .... was reviewing some "fitted 38.2%" retracement charts late last night and found this one in the SPX as perhaps getting some attention. Link

  Linda Piazza   6/3/2004,  12:30:55 PM
The TRAN did bounce from the best-fit version of its descending trendline off the year's high. It's back above the midpoint of yesterday's range, but only barely, and it hasn't yet approached the 3000 level again. So, we have a bounce from expected support but otherwise mixed signs.

  Jeff Bailey   6/3/2004,  12:25:38 PM
Semiconductor Index (SOX.X) 466.10 -1.88% ... with SOX.X currently below its MONTHLY Pivot, my thought process for tomorrow morning is this.

If market response to INTC mid-quarter is negative, then SOX.X most likely stays below MONTHLY Pivot, and therefore, broader tech vulnerable, where SOX.X could be vulnerable to its head/shoulder top downside projection of 412.

If market response positive to INTC mid-quarter, then stage set for continued gains to WEEKLY R1s at a minimum.

  Linda Piazza   6/3/2004,  12:15:33 PM
The current pullback on the OEX five-minute chart looks like a bull-flag pullback, but it's also occurring at the right-shoulder level of the possible regular H&S that I detailed in my 11:29 post, so I'm a bit suspicious of it, too.

  Jeff Bailey   6/3/2004,  12:12:36 PM
Day trade raise bullish stop alert for Digital Recorders (TBUS) $7.07 +9.10%... to break even.

  Linda Piazza   6/3/2004,  12:05:48 PM
The SOX is headed down within its descending regression channel, but is now hitting/approaching the support from its short-term flag formation. Link This may be a dangerous play to place semi-related stocks ahead of Intel's update after the close, with the SOX apparently headed down within its longer-term channel, with that move tentatively backed up by the oscillators, but with the SOX also approaching short-term support.

  Jeff Bailey   6/3/2004,  12:05:40 PM
10-year yield ($TNX.X) is at session low (price higher) with yield down 1.9 bp at 4.711%. Sesson low yield has been DAILY S1

  Jeff Bailey   6/3/2004,  12:02:42 PM
July Crude futures (cl04n) $39.68 -0.90% ... downside alert would have been triggered 30-minutes ago.

Begin to at least think oil markets respond to OPEC and weekly DOE data.

  Keene Little   6/3/2004,  12:01:19 PM
The gold stocks have now formed a clean 5-wave move down from the high on May 27th. XAU had a low so far today of 86.28 and is currently 86.81 as I type. The fib target for the 5th wave of this move down was 86.25 so pretty close to hitting its target. A 5-wave impulsive move down should be our signal of a trend change back to down. After a 5-wave move, price will likely correct back up from here (or possibly from a little lower before we get a bigger bounce--the bottom of the current down-channel sits at about 85). If you're short you can hold on through the correction or cover here and then reinitiate a short after a bounce. A bounce could go all the way back up to the high on the 27th, though unlikely, so that's where your stop needs to be now. I'll be watching for a 3-wave bounce that gets back up into the 38-62% retracement zone (of the decline from the 27th). For example, for XAU, if the low for this leg is in at 86.28, a 38-62% retracement will take us back up to 88.20-89.39. For any who would like to short the gold stocks, a bounce up into this area should make a very good entry for at least another leg down to a new low below today's. For those following NEM, the same 38-62% retracement zone is 39.08-39.63. Link

  Jeff Bailey   6/3/2004,  12:00:33 PM
Digital Recorders (TBUS) $7.17 +10.49% .... thinking IPIX needs to get above $12.10 or so to give TBUS further lift.

  Jeff Bailey   6/3/2004,  11:57:50 AM
IPIX Corp. (IPIX) $11.60 +40% ... at near-term resistance Link

  James Brown   6/3/2004,  11:53:44 AM
May Same-Store Sales

CHS +17.9%
GES +14.6%
BJ +12.1%
ANN +9.9%
SKS +9.4%
JWN +9.4%
JCP +9.1%
PSUN +8.3%
BKE +8.3%
TLB +8.1%
JOSB +6.4%
GPS +6.0%
WMT +5.9%
FRED +5.2%
KSS +5.0%
CHRS +5.0%
TGT +4.6%
DG +4.0%
CACH +4.0%
CTR +4.0%
PSS +3.9%
FDO +3.5%
MIK +3.0%
LTD +3.0%
FD +2.9%
BONT +2.6%
JAS +2.0%
ANF +1.0%
STGS +1.0%
SHRP +1.0%
SCVL +0.5%
GYMB -1.0%
ROST -1.0%
BWS -2.2%
DEBS -2.3%
S -3.7%
SKFB -3.7%
MAY -3.8%
DDS -5.0%
WLSN -6.4%

  Linda Piazza   6/3/2004,  11:50:10 AM
I had a bearish scenario in mind for today, one first formulated more than a week ago, but as I said this morning, I wasn't so married to that viewpoint that I wasn't on the lookout for possible bullish behavior this morning. The TRIN's surprising drop this morning, while markets were still dropping, was a first warning, one that sent me looking for bullish formations. That potential reverse H&S was another warning that there might be more bullishness in the market than I had anticipated. Even if your first thesis is wrong, it's useful to form one against which you can measure market activity.

With that said, however, I always expected some volatility today as markets try to sort out the various forces at work. Is OPEC's new plan enough to counteract strong demand? Will China increase rates, cooling demand? What will Intel say tonight? What will our economic numbers show tomorrow? The OEX has not yet eclipsed yesterday's high and could still fail in that 549-552 resistance zone, if not lower.

  James Brown   6/3/2004,  11:45:24 AM
Michaels (MIK) raised its Q2 earnings estimates and reported their expectations for June same-store sales to be up 8-10%. May's same-store sales were up 3.0%.

  James Brown   6/3/2004,  11:38:26 AM
BJ's Wholesale Club (BJ) is up 3.01% and breaking out over minor resistance at $24.00 after reporting May same-store sales of +12.1%.

  James Brown   6/3/2004,  11:36:17 AM
Gap Inc (GPS) is nearing new 3-year highs after reporting May same-store sales +6%.

  Linda Piazza   6/3/2004,  11:34:29 AM
The OEX has now moved above the neckline of the reverse H&S on the five-minute chart, perhaps heading up to the 548.50 target level predicted by that formation. Be careful, however, because competing bullish and bearish formations may signal some choppy trading conditions. Not all such formations see their upside targets met.

  James Brown   6/3/2004,  11:33:48 AM
Saks Inc (SKS) is cracking above resistance at $15.00 and its 200-dma after reporting May same store sales of +9.4%.

  Linda Piazza   6/3/2004,  11:29:06 AM
The OEX bounced back from its neckline test, but is rising to test that neckline again. Just to make things interesting, there's another formation to watch. To compete with the various reverse H&S's visible on various OEX intraday charts, here's a possible regular H&S building: Link What happens when we see dueling bearish and bullish patterns in this way? Sometimes a lot of choppy trading results.

  James Brown   6/3/2004,  11:28:01 AM
Family Dollar Store (FDO) announced that its May same-store sales rose 3.5% and expects the third quarter same-store sales to come in at +2-4%.

  James Brown   6/3/2004,  11:24:39 AM
Sears Roebuck (S) is down 2.59% to $37.14 after announcing that its May same-store sales dropped 3.7% on weak performance for its spring clothing line and a later-than-usual Memorial Day (-Reuters). Sears also stated that Q2 same store sales would likely be flat to down.

  James Brown   6/3/2004,  11:21:32 AM
Rambus Inc (RMBS) has been consolidating in a bearish pattern against support at $17.50 for the last 4 1/2 weeks. A breakdown under this level would probably lead to a quick test of its next support level near $15.00. Shares are currently down 2.7% to $17.94.

  Linda Piazza   6/3/2004,  11:21:22 AM
The OEX is now testing the neckline of that reverse H&S, also the best-fit descending trendline off the March high. Careful here, because this test could result in a move either direction.

  Jeff Bailey   6/3/2004,  11:16:34 AM
Day trade raise bullish stop alert for TBUS $7.08 +9.25% to just under this pullback low of $6.80 (say $6.75). Session high has been $7.39.

  James Brown   6/3/2004,  11:16:09 AM
Symbol Technology (SBL) has been halted for trading (it never opened this morning) due to news pending. According to a Reuters story the company is expected to settle with the U.S. Dept. of Justice today. SBL is also expected to settle with the SEC for $40 million and with its shareholders for $100 million.

  James Brown   6/3/2004,  11:11:58 AM
CV Therapeutics (CVTX) is up 19.3% to $15.79 after an announcement yesterday afternoon that the company has agreed with the FDA on a "procedure for a clinical trial of its experimental chronic angina treatment" for their drug Ranexa. (-Reuters)

Following the news First Albany upgraded the stock to a "buy" and Lehman upgrades the stock to "over weight".

  Linda Piazza   6/3/2004,  11:09:42 AM
Here's the possible reverse H&S on the OEX five-minute chart: Link It's always guess-work to determine the neckline, but since this one is an extension of a former rising trendline (not shown), it may have the most relevance. Remember that I'm not suggesting that this is going to definitely confirm, but instead am watching to see whether it does or not in order to measure underlying strength or weakness. The setting up of this formation suggests to me that there's still some bullish fervor that hasn't yet been erased, but a rejection at the neckline would suggest that the bullish fervor isn't strong enough to sustain higher levels.

  James Brown   6/3/2004,  11:07:06 AM
Phelps Dodge (PD) is down 0.53% to $66.57 after CIBC upgraded the stock to sector perform. Shares of the copper producer have been struggling with resistance at its 40-dma for the last week and the stock is currently trading under its simple 200-dma.

  James Brown   6/3/2004,  11:04:42 AM
Brinker Intl (EAT) is down 3.42% to $34.98 (but up off its lows from $34.36). Yesterday the company guided earnings inline with estimates but this failed to inspire a few Wall Street analysts. CIBC downgraded the stock to "sector perform". Bear Stearns downgraded EAT to "peer perform".

  Jeff Bailey   6/3/2004,  11:04:01 AM
11:00 Market Watch at this Link

  Linda Piazza   6/3/2004,  10:57:39 AM
The reverse H&S on the OEX five-minute chart verges on losing credibility. The OEX needs to steady now if it's going to do so and round up into a right shoulder. I'm watching more as a gauge of strength or weakness than for a playing opportunity. The upside target, if the formation were confirmed, would be just short of 548.50, so wouldn't represent much of a playing opportunity.

  Jeff Bailey   6/3/2004,  10:55:24 AM
Mace Security (MACE) $5.71 +6.9% ....

  Jeff Bailey   6/3/2004,  10:54:51 AM
IPIX Corp IPIX) $11.09 +34% .... volume run remains heavy at approx. 1.9 million per 5-minutes.

  Jeff Bailey   6/3/2004,  10:52:19 AM
Digital Recorders (TBUS) bar chart at this Link

  Jeff Bailey   6/3/2004,  10:44:39 AM
Day trade long alert for Digital Recorders (TBUS) $6.95 here, stop $6.50, target $7.50.

  Jane Fox   6/3/2004,  10:43:55 AM
Jonathan reported this earlier and here is the rest of the story.

DAteline WSJ George Tenet resigned as director of the Central Intelligence Agency, claiming personal reasons, and President Bush accepted his resignation. His deputy will temporarly lead America's premier spy agency until a successor is found.

"[Mr. Tenet] has been a strong and able leader at the agency. He has been a strong leader in the war on terrorism, and I will miss him," Mr. Bush said in a midmorning press conference.

In mid-April, members of the presidential-appointed 9/11 commission sharply faulted the CIA for being years late in realizing the scope and threat of al Qaeda, saying the agency before the Sept. 11, 2001, attacks had failed to adapt crucial intelligence methodology to the post-Cold War menace of terrorism.

  Linda Piazza   6/3/2004,  10:43:28 AM
OEX traders: be watchful now of a potential reverse H&S setting up on the five-minute chart, first shoulder formed at 9:30, head at the low of the day, and potential right shoulder being formed now. The neckline would be at about 546.90 currently, but is slightly rising. A drop much below 545.80 would negate the potential formation, with the OEX currently dropping to test that level. Watching this formation will help us gauge underlying strength or weakness.

  Jeff Bailey   6/3/2004,  10:42:18 AM
IPIX Corp. (IPIX) $9.50 +15% .... Department of Homeland Security's Tom Ridge cites IPIX as "important player" in protecting the homeland.

  Jeff Bailey   6/3/2004,  10:39:47 AM
IPIX Corp. (IPIX) $9.14 +10.4% ... surges higher in last 5-minutes from $7.80 on 2 million shares.

  Jeff Bailey   6/3/2004,  10:34:13 AM
Buy Program Premium ... SPX 1,121.83 , INDU 10,242, QQQ $36.25

  Linda Piazza   6/3/2004,  10:33:26 AM
The OEX is finding support at its 100-ema, among other types of support. That moving average is at 454.20, just above the 545.26 low of the day. This is also near the 545.32 Keltner channel line that usually supports the OEX on declines. The OEX is now testing mid-channel Keltner resistance again, having climbed a little above it.

  Jane Fox   6/3/2004,  10:30:20 AM
At the close of trading on June 25, the Frank Russell Co. will rebalance its small-cap benchmark, the Russell 2000 and large-cap Russell 1000 indexes. Some analysts predict 278 companies will be added to the Russell 2000 index for the first time this year and may include Encore Capital Group (ECPG), Nelnet (NNI), Whiting Petroleum (WLL) and NetGear (NTGR) .

About 68 companies have "outgrown" the Russell 2000 and will move to Russell 1000 index at the annual rebalance. Some of these are Allmerica Financial (AFC), Petco (PETC), Westar Energy (WR), Ask Jeeves (ASKJ) and CNET Networks (CNET).

201 companies may be eliminated from the Russell 2000 entirely because they are too small for the index or because they have fallen below $1 a share. Some of the names on this list are Bally Total Fitness (BFT), Broadvision (BVSN) and Tweeter Home Entertainment (TWTR).

  Jeff Bailey   6/3/2004,  10:29:04 AM
Semiconductor Index (SOX.X) 466.84 -1.73% .... session low of 464.96 briefly pierced its WEEKLY S1 (465.59) and correlative DAILY S2 (465.29)

QQQ $36.16 session low came at $36.06

  Linda Piazza   6/3/2004,  10:28:05 AM
The BIX is lower again today, having approached that next 343.25-344 possible support zone. It has dropped back below its 100-dma, but only minimally. RSI has hooked down, but at a shallow angle of the kind that sometimes predicts that the RSI will turn right back up again. 21(3)3 stochastics have made a bearish kiss, but from above signal. MACD flattens, but hasn't produced a bearish cross yet and histogram levels remain positive although less positive than earlier in the week. This could go either way.

  Jonathan Levinson   6/3/2004,  10:26:59 AM
13B in different term repos have been added against 12.5B expiring for a net add of 500M from the Fed.

  Linda Piazza   6/3/2004,  10:22:21 AM
Mid-channel Keltner support on the 15-minute chart lies at 544.03, near known recent historical S/R. I'm listing this as a possible bounce point, too.

  Jeff Bailey   6/3/2004,  10:20:49 AM
OPEC Output BBC reporting that OPEC has agreed to raise oil production by 2 million barrels per day.

  Jane Fox   6/3/2004,  10:20:09 AM
Linda thanks for the heads up on the TRIN. 1.06 is a number us bears need to watch for sure.

  Linda Piazza   6/3/2004,  10:19:14 AM
The advdec line continues to drop, supporting a bearish outlook.

  Linda Piazza   6/3/2004,  10:16:25 AM
What's up with the TRIN? It's dropped down to 1.06, if QCharts is giving the correct figure. Bears perhaps ought to keep a watch on this.

  Jonathan Levinson   6/3/2004,  10:14:07 AM
Factory orders -1.7%, ISM services 65.2.

  Linda Piazza   6/3/2004,  10:13:27 AM
The OEX is rising to test the mid-channel Keltner level from the underside now, with that level at 545.86. The OEX has support from a Keltner channel level that usually contains its prices near the day's low, however, so let's see if it holds on a second test, which appears to be in the making as I type.

  Linda Piazza   6/3/2004,  10:11:00 AM
The SPX's 50-dma is at 1118.02, with that being an index and an average that should perhaps be watched today.

  Jeff Bailey   6/3/2004,  10:10:33 AM
10:10 AM Market Watch at this Link

  Linda Piazza   6/3/2004,  10:09:33 AM
European bourses turn lower again, with the DAX clinging to positive numbers, up 1.61 points or 0.04% as I type, but with the FTSE 100 negative again and the CAC 40 turning lower before quite reaching positive territory. With all the hype about the importance of the ECB's press conference, I'm not finding any news coverage of that conference, nor is the written portion yet posted on the ECB's site. I'm not sure if European markets are reacting to something the ECB's president had to say or to weakness in U.S. markets or their own sell-the-fact effect after OPEC's decision.

  Jeff Bailey   6/3/2004,  10:06:30 AM
10:00 Internals at this Link

Yesterday's internals at this Link

  Jonathan Levinson   6/3/2004,  10:04:58 AM

  Jonathan Levinson   6/3/2004,  10:04:33 AM
  Linda Piazza   6/3/2004,  9:55:16 AM
We're seeing the expected OEX bounce attempt from mid-channel Keltner support on the five-minute chart, but as Keene on the Futures side might say, it's beginning to look corrective. The 50% retracement of this morning's first five-minute candle, a larger-than-normal five-minute candle, lies at 546.70. Candlestick theory suggests that resistance should be found there.

  Linda Piazza   6/3/2004,  9:45:46 AM
The TRAN pulls way back from its touch of 3000 yesterday, but it's now approaching the descending trendline from the year's high, this time from the top. It could be just coming down to retest that trendline. So far, it's not looking pretty, though, with a possible sell-the-fact effect seen after the OPEC meeting. Again, however, I'm watching for a possibility of a bounce from the current day's low down to 2960.

  Jonathan Levinson   6/3/2004,  9:42:38 AM

  Jonathan Levinson   6/3/2004,  9:42:23 AM
Linda caught it first:


  Linda Piazza   6/3/2004,  9:36:14 AM
During the first five minutes of trading, the OEX ranged from 547.58 to 545.82.

  Linda Piazza   6/3/2004,  9:34:22 AM
The OEX falls out of that potential bull flag and below the best-fit trendline off the March high, straight down to mid-channel Keltner support on the five-minute chart, but expect some volatility as the markets figure out how to respond to the various forces. I've had a possible sell-the-fact scenario in mind for after the OPEC decision since early last week, but I'm not so married to that scenario that I can't watch for other possibilities, too. There should be a bounce attempt made from this mid-channel level, and it will be the strength or weakness of that bounce attempt that will tell us about the market's reaction.

  Linda Piazza   6/3/2004,  9:28:21 AM
Thanks, Jonathan, for the information in the 9:16 post.

  Linda Piazza   6/3/2004,  9:24:40 AM
And so it's here. The long-awaited OPEC meeting has occurred, with the ratification of a 2 million barrel a day increase still awaited, with a further 500,000 barrel a day increase to occur in August. Yesterday, equity markets front-ran the beginning of the OPEC meeting, climbing high enough to test or scramble above key trendlines or moving averages. The OEX was no exception. It climbed above one version (a best-fit version) of a descending trendline off the March high, rising to test the bottom of the next resistance zone from 549-552. I had mentioned early yesterday morning that I would be surprised to see the OEX climb above that trendline ahead of the OPEC meeting, but that anything could happen on the kind of light volume that we were seeing across the globe, and I ended the day surprised. The OEX did retreat after climbing above that trendline, before it tested the descending trendline version that incorporates all candle shadows since early March, but it closed above the best-fit version and the 50-dma. The Nasdaq did not manage a close above 2000, however, and the SPX was turned back by its version of the descending trendline off the March high, both factors that might bear watching today. The SOX could not manage much of a bounce when other markets bounced yesterday, although it did climb high enough to close almost at its 50-dma. Overnight, many global semi-related companies traded lower, perhaps ahead of Intel's update after the close today.

That's the daily view. The OEX five-minute Keltner chart shows that the OEX produced a breakout signal late yesterday, something I always distrust when it comes either late in the day or early in the morning, so that I'll want to see what happens this morning before I make up my mind about the breakout. The OEX ended the day pulling back, but doing so in a possible bull flag pattern. Arguing against that bull-flag interpretation, however, was the bearish price/MACD divergence showing up on that five-minute chart. Keltner resistance was trying to firm up from 548.29-548.64 as the day ended, with support at 547.46, 547.13, and again from 545.83-545.97. The supporting line of the possible bull flag was about to be tested again, so that this morning might produce either a breakdown out of that flag, negating its potential bullishness or an upside break out of it. Futures remain down as I type, but trying to rise off their lows, so it's possible that the OEX will open at or below that bear flag.

Although breakout signals can be valid on the Keltners, any breakout signals a vulnerability to a pullback to central or lower channel support, currently at 545.83 and 543.11, but both still rising. That's on the five-minute chart. A break below 547 will signal a downturn back below that best-fit trendline and might signal a beginning of a pullback to the mid-channel Keltner support. However, I don't know about you, but I wouldn't be surprised to see some volatility on the opening as the markets sort out various forces. With OPEC now expected to ratify that 2 million barrel a day increase, I wouldn't be surprised to see another attempt to send equities higher, even if we are to get a sell-the-fact effect later today, with that effect being one possible scenario.

  Jonathan Levinson   6/3/2004,  9:16:19 AM
Linda- from earlier this AM:

LONDON (CBS.MW) -- Iraq is aiming to boost its oil production for export to 2 million barrels a day and raise its output to 2.8 million bpd, the country's new oil minister Thamir told Reuters in an interview. "We want to sustain an export figure of 2 million barrels per day in the coming months," Ghadhban said. "We hope that we reach and sustain such a figure (2.8 million barrels per day) within this year," he said.

  Linda Piazza   6/3/2004,  9:12:14 AM
OPEC members agree to increase production by 2 million barrels a day, with a further 500,000 increase in August according to CNBC and Marketwatch, but I don't see an official announcement yet on the OPEC site (www.opec.org), so I'm not sure that the agreement has yet been ratified. I'm reading contradictory reports about how the markets would view this, as some were hoping for the higher 2.5 million barrels a day immediately.

  Linda Piazza   6/3/2004,  8:38:06 AM
ECB President Jean-Claude Trichet's press conference should have now begun, as of 8:30 EST, but the ECB has not yet published the prepared remarks on its site.

  Jonathan Levinson   6/3/2004,  8:31:16 AM
8:29am U.S. Q1 PRODUCTIVITY REVISED TO 3.8% VS. 3.5%





  Linda Piazza   6/3/2004,  8:27:00 AM
Important OPEC Meeting Notice: OPEC ministers are due to ratify the plan that they've chosen at 4:00 local time today. If my computations are correct (verify for yourself), 4:00 p.m. in Beirut would be 9:00 am EST. OPEC ministers are considering two plans. One would increase production by 1-1.5 million barrels a day, and the other would increase production by 2-2.5 million barrels a day.

  Linda Piazza   6/3/2004,  8:15:54 AM
As expected, the ECB leaves interest rates unchanged. We await the press conference, of more interest to market watchers, with those market watchers waiting to hear the ECB's take on the impact of oil prices and inflation concerns.

  Jonathan Levinson   6/3/2004,  8:13:52 AM
We await the Q1 Productivity revision, est. 3.7% and initial claims, est. 337K, both scheduld for 8:30.

  Linda Piazza   6/3/2004,  7:07:39 AM
Good morning. Before the markets opened in Japan, the Ministry of Finance released a survey showing that during the January-March quarter, Japanese companies spent 10.2% more on capital expenditures than in the year-ago quarter, with sales rising 2.4% and pretax profits soaring 24.6%. Crude oil futures below $40.00 also encouraged market participants. Still, foreign investors were net sellers in Tokyo, worrying some market watchers. That didn't stop the Nikkei from opening higher and moving quickly up to meet and slightly exceed Friday's high. During the afternoon session, however, the Nikkei plummeted, diving almost 400 points below the day's high, closing down by 215.29 points or 1.91%, at 11,027.05. As crude oil futures traded above $40.00 again in after-hours trading, sentiment worsened again according to some market watchers. Some in Japan speculate, as they do around the globe, that any OPEC proclamations about increased production will not ease crude prices much, since demand may still outstrip production capacity.

Most auto stocks headed higher in early trading, but Mitsubishi Motors was an exception, dropping more than 6% in early trading after revealing that it did not issue recalls for defects that warranted recalls. Despite the precipitous drop in the Nikkei, Toyota and Honda retained at least some of their early gains, however. In stock-specific news, UFJ finally halted its declines and saw a bounce in early trading, with that bounce resulting from Wednesday's announcement that the company might seek financial help from Toyota Motor. UFJ also held onto at least some of its gains, closing higher by 3%. Matsushita Electric Industrial was one company that could not hold onto early gains, however, with those early gains having resulted from its announcement of a new three-year plan.

Most other Asian bourses closed lower, with chip-related stocks appearing to be particularly hard-hit in that region, perhaps reacting ahead of Intel's update tonight. China's Semiconductor Manufacturing International, South Korea's Hynix Semiconductor, Hong Kong's Chartered Semiconductor, and Taiwan's Taiwan Semiconductor and United Microelectronics all closed lower by at least 3%, with many seeing much deeper losses. Another pressure on Asian bourses might have been a newspaper report that China might raise both interest rates and electricity prices, with Jonathan having reported the rumor about the interest rates yesterday on the Monitor. In stock-specific news, trading in Harbin Brewery was suspended amid rumors that SABMiller may now withdraw its hostile bid.

The Taiwan Weighted dropped 3.48% and South Korea's Kospi fell 4.27%. Singapore's Straits Times dropped a more modest 0.62%. Hong Kong's Hang Seng fell 2.23% and China's Shanghai Composite declined 1.50%.

European bourses turn in mixed performances this morning ahead of the ECB decision--or rather the ECB's statement accompanying its decision--and the OPEC meeting. Tonight's upcoming Intel update was mentioned as one influence, too, with some semi-related stocks trading lower. Auto stocks are mixed. In stock-specific news, the U.K.'s famous retailer Marks & Spencer declined after an anticipated offer by billionaire Philip Green disappointed. News that a French regulator may probe Vivendi Universal's share buybacks initiated after 9/11 resulted in a slight decline in that stock. Deutsche Bank trades lower this morning after going ex-dividend.

As of this writing, the FTSE 100 is moving off its low, now down only 7 points or 0.16%, at 4415.80. The CAC 40 trades lower by 9.93 points or 0.27%, at 3636.30. The DAX moved into positive territory as I prepared this report, now up 5.91 points or 0.15%, at 3894.22.

  Jeff Bailey   6/2/2004,  12:54:01 AM
Briggs & Stratton (BGG) $83.40 ... hmmmm.... check this one out with addition retracement stretched to current bullish vertical count of $115. Link

Now, to keep the bullish vertical count of $115, the PnF chart Link would need to see at least a 3-box reversal to $81 for the bullish vertical count column to be finalized.

  Jeff Bailey   6/2/2004,  12:41:52 AM
Briggs & Stratton (BGG) $83.40 ... bar chart with fitted 38.2% at this Link

  OI Technical Staff   6/2/2004,  8:37:10 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.


Market Monitor Archives