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  Jeff Bailey   6/7/2004,  9:53:42 PM
Closing Internals at this Link

  Jeff Bailey   6/7/2004,  9:51:50 PM
Pivot Matrix for Tuesday at this Link

  Jane Fox   6/7/2004,  4:05:57 PM
NYA has rallied 6.4% and the $RUT 9%.

  Jane Fox   6/7/2004,  4:04:12 PM
SPX has rallied 64 points since May 12th lows, an almost 6% move.

  Jeff Bailey   6/7/2004,  3:58:07 PM
Biotech Index (BTK.X) 511.78 -0.10% .... threatens to close green.

  Linda Piazza   6/7/2004,  3:57:21 PM
OEX bulls, you have a tough decision to make as we approach today's close. Today's candle is a bullish one, breaking above trendline after trendline, including a best-fit one off the February high. That candle broke above the 100-dma. Now the OEX will end the day somewhere near the next strong resistance, at 556.50-557. Are you going to hold overnight with that resistance looming just overhead, but with the OEX charging higher and passing up all those resistance levels? As you're making up your mind, remember the tight-range-days-follow-big-range-days tendency. That's going to murder the premium in your options if we do get that kind of day, even if gains hold. Conservative traders might consider taking some profits off the table by selling partial positions. Some options traders might sell an entire position and use part of the profits to roll into a higher strike, so that they still have a chance of participating in future gains, if any occur, but have safely pocketed some profits and lowered their exposure. Some might create a spread, although that's too complicated to address here. (See MacMillan's book for guidelines.) Some might sell the entire position, pocket their profits, and feel good overnight, ready to dive back in if a play presents itself tomorrow or the next day. Decide what your best course of action might be, as it differs according to your account management style, the size of your account, the number of contracts you own, and your own personality. My 51-year-old stepsister said her first word in two weeks after having a massive stroke. (Yeah!) Life is too short to stress over this, if that's what you're going to do.

  Jeff Bailey   6/7/2004,  3:53:34 PM
Microsoft (MSFT) $26.40 +1.7% ... decent volume build toward the close. 2.5 mill in last 5-minutes.

  Jeff Bailey   6/7/2004,  3:48:11 PM
QQQ $37.04 +2.34% ... WEEKLY R2 here.

  Linda Piazza   6/7/2004,  3:47:10 PM
That bearish price/MACD divergence continues on the OEX five-minute chart. On the 30-minute chart, MACD levels are higher as compared to the last two OEX peaks, with MACD today moving higher as the prices do, too. However, that's not true of the MACD level as compared to the late May peak. There's still a higher price high and lower (so far) MACD high when those two peaks are compared, although that can still be erased. Jonathan has mentioned today's similarity to days in 2003, and I remember times then that we were all warily watching bearish divergences while prices continued higher. Eventually, the prices did succumb, but I sure wouldn't have wanted to have been holding on to bearish positions or not participating in bullish gains all that time. Probably a day on which the Fed infuses 9.5 billion into the markets is not a great day to expect those bearish divergences to mean too much. Nor is a day in which the $TRIN stubbornly stays below 0.57 all day.

  Jonathan Levinson   6/7/2004,  3:37:40 PM
James, here's the flipside to your 15:34 post, albeit with respect to the UK: Link

  James Brown   6/7/2004,  3:37:03 PM
Another financial on the move is Bank of America (BAC). The banking stock recently broke out over 9-month old resistance in the $82.50-83.00 range and is now challenging resistance at $85.00. Its bullish P&F chart points to a triple digit price target.

  James Brown   6/7/2004,  3:34:14 PM
Noteworthy moves in the mortgage industry...

New Century Financial (NCEN) is up 4.7% and breaking out over the $45.00 level and its 100-dma after announcing this morning that loan production in May 2004 hit $4.2 billion, a "121 percent increase over the same period last year." According to their press release, "We believe our pipeline for June is strong and combined with April and May's loan production volume sets the pace for a strong second quarter. Additionally, we remain on track to meet or exceed our production goal of $36 billion for 2004,"

Meanwhile, Countrywide Financial (CFC) is up a big 6.3% on better than average volume and breaking out over heavy resistance at $65.00. It could a sympathy move with NCEN's loan comments and comments from a broker downgrading mortgage lending rival WM wherein the broker stated their belief that CFC is gaining market share.

  Linda Piazza   6/7/2004,  3:31:53 PM
As I warned earlier, OEX bulls need a plan in place as to how they'll handle 557, another level that needs to be anticipated. That's a level of strong historical S/R through the first months of the year, but perhaps even more importantly, it's the level of the 200-week moving average, with that average at 557.02. The SPX has long since moved through that average, so perhaps the OEX will, too, but bulls need to plan how they'll react, making plans to protect profit just in case.

  James Brown   6/7/2004,  3:29:14 PM
It is interesting to note EBAY's lack of participation in today's rally.

  James Brown   6/7/2004,  3:26:30 PM
Florida Rock (FRK) looks like a bullish candidate with today's 2.3% gain and breakout over its three-month old trendline of resistance. Unfortunately, volume is incredibly low and shares move pretty slowly for option players.

  Linda Piazza   6/7/2004,  3:24:19 PM
The Nasdaq has broken above its 100-dma. I've got the descending trendline off the year's high at about 2015, a bit higher than Jim placed it. Either way, it's either just been exceeded or is just about to be tested.

  James Brown   6/7/2004,  3:24:13 PM
CDW Corp (CDWC) also looks like a tempting bullish play with today's 2.35% gain and push through resistance at $70.00. Momentum traders might want to look for a move through last week's high near $70.93 and target the $75 region.

  James Brown   6/7/2004,  3:23:02 PM
Career Education Corp (CECO) is up 2.85% and breaking out over the $68.00 mark after its recent bull flag consolidation breakout. There is some resistance near $70 but if you like to trade bull flags this look like an entry point.

  James Brown   6/7/2004,  3:21:44 PM
L3 Communications (LLL) is up another 1.34% and producing a nice follow through move on Friday's breakout over the $65 level. This looks like a watch list candidate to buy a dip.

  Jeff Bailey   6/7/2004,  3:21:29 PM
Dow Industrials (INDU) 10,372 +1.26% .... challenging downward trend. Updated WEEKLY/MONTHLY at this Link

  Jim Brown   6/7/2004,  3:21:03 PM
The SOX is going vertical (+3.36%) ahead of the TXN mid quarter update after the close today. TXN is widely expected to raise estimates.

  Jeff Bailey   6/7/2004,  3:19:05 PM
Microsoft (MSFT) $26.29 +1.27% ... session high here. Looking for strength.

  Jim Brown   6/7/2004,  3:14:19 PM
The down trend resistance is still right on the line. Only the SPX has clearly broken out. The Nasdaq and Dow have yet to make the break. We desperately need to hold this rally and not retrace at the close like we did on April 27th.

Dow Chart: Link
Nasdaq Chart: Link
SPX Chart: Link

  Jane Fox   6/7/2004,  3:13:58 PM
Here is an image of all the major markets again. The same one I showed earlier with a down trend line from yearly highs. SPX and NYA have breached this line but INDU and Nasdaq composite have not. Link

  Jeff Bailey   6/7/2004,  3:10:16 PM
03:00 Internals at this Link

  Jim Brown   6/7/2004,  3:08:14 PM
The last uptick has pushed up volume to 5:1 over declining and advancers 3:1 over decliners. Volume is still light meaning no conviction to the rebound.

  Jim Brown   6/7/2004,  3:04:18 PM
The SPX has clearly broken above the current down trend line and the VXO has dropped to levels not seen since April 27th. That was the last time we spiked over the down trend intraday. Link

  Jonathan Levinson   6/7/2004,  3:04:14 PM


Consensus estimates were for 5.5B for April.

  Linda Piazza   6/7/2004,  3:00:00 PM
The OEX hit 554, a level the bulls wanted to see hit. It did not pull back from upper regression channel resistance, but instead is trying now to break above it. Like the SPX earlier, it has broken above the 100-dma. It's also broken above the best-fit trendline off the February high. If it can hold these levels, I'd imagine that we'd see some short-covering into the close. If. Note that the COMPX is just now challenging its 100-dma and is just below the descending trendline off the January high.

  Linda Piazza   6/7/2004,  2:54:51 PM
Here's what I meant in my 14:46 post when I mentioned the divergence with respect to the approach to upper resistance on each swing through the rising regression channel the OEX established beginning this morning: Link As I type, it doesn't look as though that divergence will continue.

  Linda Piazza   6/7/2004,  2:46:31 PM
Since about 10:00 this morning, the OEX has established a rising regression channel with the current support at about 552.50, and with current mid-line resistance at about 553.25 (just passed) and top resistance at about 554. On the last approach to top resistance, only a five-minute candle shadow tested the trendline and not candle bodies as had happened earlier. That's a small divergence and one that may not matter, but I'm watching for possible worrisome signs for those in bullish plays and possible signs of impending weakness for those considering bearish ones. Bulls want to see that 554 level on this ascension through the channel.

  Linda Piazza   6/7/2004,  2:40:55 PM
On a burst of buying or short-covering into the close, the DAX closed just a few points off its day's high, up 55.88 points or 1.41%, at 4017.81. That close puts the DAX squarely back in the just-above-4000 congestion. It was not enough to create a new P&F buy signal, erasing the current 3200 downside target, or to move it above a pattern of descending highs from January, but the DAX has now retraced more than half the decline from April's high to May's low.

  James Brown   6/7/2004,  2:36:07 PM
Kohl's (KSS) has announced that its general merchandise manager of its home and footwear business has resigned to become president and COO of Linens 'n Things (LIN). (source: Reuters)

  James Brown   6/7/2004,  2:30:52 PM
Landry's Restaurant (LNY) is down 4.5% after announcing that its CFO is leaving to pursue other interests. The move prompted Thomas Weisel to downgrade the stock from "out perform" to "peer perform".

  James Brown   6/7/2004,  2:29:12 PM
Dow-component McDonald's (MCD) reported this morning that its May same-store sales rose 7.4%.

  Jeff Bailey   6/7/2004,  2:28:00 PM
Biotechnology Index (BTK.X) 506.08 -1.21% ... testing morning lows here.

DNA $56.55 -5.13%, PDLI $18.09 -4.28%, CELG $56.44 -3.99%, HGSI $10.50 -2.32%

BIIB $62.56 +1.8%, IVGN $67.84 +1.31%

  James Brown   6/7/2004,  2:27:41 PM
General Motors (GM) is up 1.23% and breaking out over its 50 and 200-dma's after announcing this morning it will invest another $3 billion in its Chinese operations.

According to industry experts car sales in China have soared 40% a year for the last few years and China is expected to become the world's top vehicle market in the years ahead.

  Jeff Bailey   6/7/2004,  2:24:33 PM
02:00 Internals at this Link

  Linda Piazza   6/7/2004,  2:21:25 PM
The TRAN continues charging higher today. There's an interesting development, however, with the TRAN now having broken well above the descending trendline off the year's high and also above its last swing high in late April. The Dow has broken above neither. Although the TRAN frequently leads the Dow much as the SOX might lead the Nasdaq, the Dow now needs to get its act in gear and climb above that descending trendline and its last swing high in April or it will be diverging from the TRAN by these measures.

  Linda Piazza   6/7/2004,  2:16:17 PM
Keene mentioned the bearish divergences on the 60-minute and daily charts. I've noted some of those divergences on the OEX, too, as well as on the 30-minute chart. (See my 9:22 post.) When I spoke a few minutes ago about my hesitation in mentioning bearish divergence showing up on the five-minute chart because such divergences hadn't meant much this morning and were eventually erased, those were five-minute divergences. They're still present on 30-, 60-, and even daily charts, although 30- and 60-minute MACD is doing its best to turn up and erase price/MACD bearish divergences. Hasn't happened yet, however.

Right now, I'm watching 5(3)3 daily stochastics for a sign that they might turn down through a trendline of higher stochastics lows, a first sign of possible weakness, or for a continual move upward from that trendline: Link Although this stochastics configuration can be fickle, it, like RSI, can be useful to watch for trendline breaks. Such breaks don't usually precede a price trendline break as far ahead as RSI breaks might do and may instead just accompany a price movement, but they're still useful to watch. Although I don't have it marked on this chart, a break of the trendline of lower highs in late May accompanied the price break above the 491 resistance.

  Linda Piazza   6/7/2004,  1:55:31 PM
The Nasdaq still has a few points to go before hitting its 100-dma at 2007.96 and the descending trendline off the year's high at about 2015.

  James Brown   6/7/2004,  1:51:15 PM
OI call play ZMH is up 0.97% and at another new all-time high.

  James Brown   6/7/2004,  1:50:17 PM
OI call play QCOM is bouncing from its simple 10-dma and the $67 level. Shares are up 1.3% to $68.17.

  James Brown   6/7/2004,  1:48:50 PM
OI call play MERQ is up a strong 3.55% after its recent breakout from its bull flag consolidation. This morning MERQ announced its Business Technology Optimization strategy for India. Mercury announced its strategy at a press conference and customer event in Bangalore. Christopher Lochhead, chief marketing officer at Mercury, detailed the company's plans to address the significant IT market opportunity in India to an audience of leading media and IT professionals.

  Linda Piazza   6/7/2004,  1:48:44 PM
OEX Keltner support now groups around 552.46-552.81, but there's once again bearish divergence on the five-minute chart. I feel a bit sheepish mentioning it because those divergences this morning sure didn't impact the OEX and were eventually erased, but I feel duty-bound to mention what I'm seeing. Remember to let price action be your guide, while letting such divergences warn you to be attentive.

  Linda Piazza   6/7/2004,  1:46:07 PM
The SOX 200-sma is at 487.03, with the OEX currently at 484.07.

  James Brown   6/7/2004,  1:45:50 PM
OI call play BA is hitting another new yearly high on stronger than average volume. BA was upgraded to "overweight" by Lehman Brothers this morning.

  James Brown   6/7/2004,  1:44:30 PM
OI call play AIG is up 0.91% and challenging resistance at the $75.00 level.

  James Brown   6/7/2004,  1:44:03 PM
OI call play AET is up 1.01% and breaking out over its 50-dma and the $85.00 level but volume looks light.

  Linda Piazza   6/7/2004,  1:40:31 PM
If the OEX should break out above the resistance detailed in my 10:09 and 11:49 posts, which it's trying to do as I type, that sure makes the pullback off the year's high look like a bull flag pulling back to the 526 support before breaking higher. Be careful of breaks that come during this typical stop-running time of day, however, being prepared to jump back out of bullish plays if necessary.

If the OEX should break higher, however, OEX bulls should be particularly careful about how they'll handle the 557 level, another level that needs to be anticipated. That's a level of strong historical S/R through the first months of the year, but perhaps even more importantly, it's the level of the 200-week moving average, with that average at 557.02.

  Jim Brown   6/7/2004,  1:32:58 PM
I had a feeling when I was doing the weekend commentary and research that we would test this resistance this week and have a better than 50% chance of eventually breaking it. Any bad news is being ignored. Earnings are still improving. Warnings are almost zero and it is an election summer. We are four weeks from earnings and there are no material economic reports this week. There was nothing to hold them back and plenty to push them higher. I suggested buying any dip but unfortunately we did not get one before the rally began. With the various indexes chipping away at resistance today the bears appear to be weakening. A break over this resistance could be very strong.

  Linda Piazza   6/7/2004,  1:31:07 PM
The OEX price needs to move up now, or it's in danger of performing a lower high on the five-minute chart. Confirmation would come on a move below 551.79. However, such a move, if it happens, could occur during the 12:35-12:55 time period that often sees stop-running behavior, so be careful. Nothing in volume patterns (except that volume isn't stellar) or the TRIN or volatility indices suggests a rollover in progress. (Note: Just hit that higher high as I typed.)

  Linda Piazza   6/7/2004,  1:14:46 PM
As of a few minutes ago, total volume was 576 million on the NYSE and 750 million on the Nasdaq. Adv/dec ratios stood at 24:8 on the NYSE and 19:10 on the Nasdaq. Up volume still proved much stronger than down volume on both exchanges, but the proportion may not be quite as strong now on the Nasdaq.

  Linda Piazza   6/7/2004,  1:11:50 PM
The TRAN pushed above the 4/26 high and remains above it now, although the TRAN has pulled back slightly from its high of the day. The TRAN has been in a rising regression channel since the end of May, and this morning's climb touched the top of that channel. The TRAN is pulling back now toward the 3020 level, perhaps support prior to another push higher in that regression channel, but unless it's going to break out of the channel to the upside, then it's vulnerable to a pullback toward mid-channel or lower channel support, with those levels at about 3010 and 2985, respectively, but with both lines ascending. The 3000 level should also be factored in as possible support.

  James Brown   6/7/2004,  1:05:39 PM
Ameritrade (AMTD) is up 2.9% to $12.65 and JB Oxford Holdings (JBOH) is up 39% to $3.50 after a morning announcement that AMTD would buy 27,000 of JBOH's 50,000 retail clients for not more than $26 million.

  Linda Piazza   6/7/2004,  1:05:17 PM
What's happening with crude futures while our cash markets are challenging overhead resistance? Beginning about 6:00 EST, crude futures began moving higher, reaching a high of 38.90 before dropping again. Since then, they've steadied near 38.30, at least as of 30 minutes ago.

  Jeff Bailey   6/7/2004,  1:05:12 PM
01:00 Market Watch at this Link

  Linda Piazza   6/7/2004,  1:01:03 PM
The OEX tests overhead Keltner resistance on the five-minute chart now.

  James Brown   6/7/2004,  12:59:39 PM
Caesars Entertainment (CZR) is up 4.88% to $14.81. The gain comes after an upgrade by Bank of America to a "buy" but the move is being fueled by speculation that CZR is another takeover target in the casino industry.

  James Brown   6/7/2004,  12:53:19 PM
DaimlerChrysler (DCX) continues its recent rally with another 2.5% gain today after UBS upgraded the stock to "neutral".

  James Brown   6/7/2004,  12:51:09 PM
Another biotech Genentech (DNA) is down 4.8% and breaking significant technical support at its simple 50-dma on big volume today despite positive news unveiled at the ASCO conference.

  Linda Piazza   6/7/2004,  12:51:08 PM
The OEX is still trying to hold onto that Keltner support. Keltner resistance is now massing at 552.15-552.41, with this being on the five-minute chart.

  Jeff Bailey   6/7/2004,  12:50:31 PM
Microsoft (MSFT) $26.16 +0.8% ... with conventional retracement at this Link

  James Brown   6/7/2004,  12:49:02 PM
ONYX Pharmaceuticals (ONXX) is struggling, down 5.4% and precariously holding support at $40.00 as investors try and digest all the news from the biotech ASCO conference.

  James Brown   6/7/2004,  12:43:32 PM
Imclone Systems (IMCL) is making headlines and gains today with a 9.9% jump to $79.67. The company held its analyst day on Sunday and is presenting at the biotech conference in New Orleans this week. Another round of positive news for its Erbitux drug and an upgrade from "hold" to "buy" from Smith Barney is overshadowing news that a Phase III trial for its small cell lung cancer treatment failed to hit the study's milestones for success.

  Linda Piazza   6/7/2004,  12:40:17 PM
The OEX is testing/slipping below the Keltner support. It's trying to hold onto last Keltner support before 551.32, with that possibly being light support, and then 549.74-550.39, with that being stronger support at lines that often stop the OEX's descent.

  James Brown   6/7/2004,  12:34:23 PM
Dave and Busters Inc (DAB), the popular restaurant/arcade chain for adults, is breaking out over resistance at $19.00 and hitting new 4 1/2 year highs after reporting earnings this morning. DAB best estimates by 2 cents with earnings of 25 cents per share. The company said same-store sales turned positive in the first quarter.

  Jeff Bailey   6/7/2004,  12:34:11 PM
QQQ/MSFT updated QQQ chart with WEEKLY/MONTHLY Pivot retracement and tie in MSFT, which has been finding resistance below $26.31. Link

  Linda Piazza   6/7/2004,  12:33:36 PM
Jim mentioned a Bloomberg report that markets would close Friday in honor of President Reagan. Here's the NYSE announcement Link and the Nasdaq one Link . Note that this last one says the Nasdaq will likely close, but doesn't yet confirm it.

  James Brown   6/7/2004,  12:29:15 PM
Dow-component Home Depot (HD) announced plans this morning to expand to China. The company did not say when the first store would open or how many stores their initial push might be.

  Linda Piazza   6/7/2004,  12:25:56 PM
The five-minute OEX Keltner chart shows support massing at 552.33-552.38 and then again at 552.12-552.18. If the OEX instead slips below them, they join other resistance.

  Jane Fox   6/7/2004,  12:25:39 PM
Dateline WSJ A federal judge has delayed Martha Stewart's sentencing by three weeks while lawyers for the celebrity homemaker prepare a bid for a new trial.

Sentencing for Ms. Stewart and former stockbroker Peter Bacanovic, originally set for June 17, was rescheduled for July 8, federal prosecutors and defense lawyers confirmed Monday.

Ms. Stewart's lawyers said U.S. District Judge Miriam Goldman Cedarbaum granted the delay to give them time to submit a request for a new trial based on perjury charges filed against a government witness.

Larry Stewart, a Secret Service ink expert, was accused in May of lying eight separate times on the witness stand, mostly during testimony he gave about a worksheet prepared by Mr. Bacanovic. Mr. Stewart has no relation to Martha Stewart.

  Jim Brown   6/7/2004,  12:21:37 PM
Bloomberg now reporting that all markets will be closed on Friday.

  Linda Piazza   6/7/2004,  12:18:27 PM
The Russell 2000 broke above the descending trendline off the 6/02 high, and now is within 10 cents of that 574.81 high, or was as I began typing this post. It's dropping back now. This is either breakout or double top territory, with indicators so far showing bearish divergence on the 30- and 60-minute charts.

  James Brown   6/7/2004,  12:18:07 PM
You may have heard that MGM Mirage (MGG) has made an unsolicited $68 a share bid for rival Mandalay Bay Resort (MBG) this morning. Yet shares of MBG soared to $72.80 this morning and are currently up 17.5% to $70.86.

Obviously the market believes this deal might attract other bidders or MGG may have to raise its offer. Speculation has MBG selling in the low to high $70s assuming the government doesn't label the merger anti-competitive.

  Jeff Bailey   6/7/2004,  12:12:39 PM
12:00 Internals at this Link

  James Brown   6/7/2004,  12:10:11 PM
News is now circulating that Microsoft (MSFT) had discussed "merger" talks with German software company SAP. Talks ended months ago without any decision and MSFT said it does not plan to resume them.

  James Brown   6/7/2004,  12:07:03 PM
Blockbuster Inc (BBI) is up a strong 2.68% and breaking out over resistance at $16.00 and its 40-dma after a judge dismissed a class-action securities lawsuit this morning.

  Linda Piazza   6/7/2004,  12:00:48 PM
The OEX is now touching the top-channel Keltner resistance on the 15-minute chart. Most times lately that the OEX has approached or touched that resistance, it's turned down without breaking through and creating a breakout signal, but it has occasionally created a breakout signal and stayed above that resistance for a number of hours. This is another time for the bulls to be careful, however, as it turns down more often than it breaks through, at least recently.

  James Brown   6/7/2004,  11:54:33 AM
On Friday the July Copper futures contract dipped below technical support at a number of its moving averages and traded toward $1.20 a pound before rebounding into the afternoon. This created a "hammer" candlestick at the bottom of its three-day decline. We're seeing a strong follow through on that rebound today with a 2.47% gain (to $1.26) and a breakout back above (all) its moving averages.

This has produced a 1.88% rally in shares of

Phelps Dodge (PD), which is pushing through tough resistance at its 40 and 200-dma's.

  James Brown   6/7/2004,  11:50:50 AM
The breakout in the GSO software index is pushing it above technical resistance at its 40 and 50-dma's and nearing its 100-dma.

  Linda Piazza   6/7/2004,  11:49:03 AM
Here's where the OEX is in relationship to that resistance I detailed in my 10:09 post: Link I warned then that bulls should be formulated a plan for treating that level, and now it's upon us.

  James Brown   6/7/2004,  11:46:50 AM
The DFI defense index is trading at new all-time highs.

  James Brown   6/7/2004,  11:45:39 AM
The CYC cyclical index is breaking out of its sideways trading range and pushing through its simple 100-dma.

  James Brown   6/7/2004,  11:43:40 AM
The RLX retail index is currently at new all-time highs.

  Jim Brown   6/7/2004,  11:41:57 AM
Alert: Reuters reporting that Al-Qaeda is warning about coming attacks to the western U.S. and upon American airline flights. (not AMR but airlines in general)

  James Brown   6/7/2004,  11:40:04 AM
Sector update

(Biggest) Winners:
NWX networking index: +2.04%
DJUSHB homebuilders: +1.95%
SOX semiconductor: +1.94%
GSO software: +1.52%
DDX disk drives: +1.51%

XBD broker-dealers: +1.61%
OSX oil services: +1.25%
CYC cyclicals: +1.50%
XAU gold & silver: +1.23%

and.. Copper futures: +2.51%

BTK biotech index: -0.72%

  Linda Piazza   6/7/2004,  11:37:16 AM
The Russell 2000 has still not exceeded that 6/02 high of 574.81, but it remains within striking distance.

Those already in bullish OEX plays should continue to raise their stops as the OEX climbs higher in accordance with sound account management practices when the OEX has created a breakout signal on the five-minute chart. As I and most of the other writers have mentioned at various times today, we keep seeing bearish divergences show up. They sure haven't stopped the OEX in particular from climbing, but they do offer a warning to set and honor stops, especially with the OEX now approaching a best-fit trendline off the February high, historical horizontal resistance, and the 100-dma. This is another potential rollover zone.

  Jane Fox   6/7/2004,  11:33:11 AM
Here is how the major markets are trading in relation to their downward trendlines from January. Link

  Jim Brown   6/7/2004,  11:31:20 AM
Reuters now saying the markets will be closed on Friday. This has been expected.

  Jim Brown   6/7/2004,  11:26:34 AM
The S&P is at the downtrend resistance and at a critical point for the start of a summer rally. A breakout here will immediately run into further resistance at 1142, 1150 and 1158. Tough road ahead. Link

  Jim Brown   6/7/2004,  11:24:07 AM
The Nasdaq equivalent to the Dow down trend is about 2010. Link

  Linda Piazza   6/7/2004,  11:20:06 AM
The Russell 2000 approaches the 6/02 high of 574.81.

  Jim Brown   6/7/2004,  11:19:16 AM
Dow at downtrend resistance in place since February. This is a critical test of the rebound. Link

  Linda Piazza   6/7/2004,  11:17:12 AM
Soon, the OEX will be testing the descending trendline off the February high, the 100-dma, and horizontal resistance, all detailed in the chart linked to my 10:09 post.

  Jeff Bailey   6/7/2004,  11:08:21 AM
11:00 Internals at this Link

Friday's Internals at this Link

  Linda Piazza   6/7/2004,  10:57:48 AM
The SOX is pulling back from near approach to the top of the descending regression channel that's contained it for this entire year. If the pullback should continue, watch 475.43, the 50-dma, for possible support. The SOX currently is at 477.79.

  Linda Piazza   6/7/2004,  10:55:46 AM
The Russell 2000 has this morning been finding resistance at a trendline of lower highs that began forming on the 6/02 high of the day. The current pullback looks as if it could be a bull flag on the 15-minute chart, however. So did the last pullback on the afternoon of 6/02, so there's mixed evidence.

  Linda Piazza   6/7/2004,  10:51:32 AM
The OEX two-minute chart shows a miniature double-top formation, to be confirmed on a move below 550.73. The downside target, if the double top is confirmed, would be about 449.80, bringing the OEX back down to test that 449.50-450 zone to see if it now provides support.

  Linda Piazza   6/7/2004,  10:48:51 AM
As of a few minutes ago, total volume was 223 million on the NYSE and 330 million on the Nasdaq, with adv/dec ratios at 22:7 on the NYSE and 18:9 on the Nasdaq. Up volume proved much stronger than down volume, too. Bulls sure would like to see total volume pick up, however.

  Jeff Bailey   6/7/2004,  10:39:00 AM
Swing trade exit alert the OSI Pharma (OSIP) July $90 calls here at $0.90 bid.

OSIP underlying at $75.11 -4.3% ... not holding near the $76.50 level.

  Jeff Bailey   6/7/2004,  10:37:29 AM
S&P 500 Index (SPX.X) 1,130.93 +0.75% .... notable breaks of resistance this morning. Should have near-term upside to 1,140, with near-term support now building at the WEEKLY Pivot (1,125.39). Updated WEEKLY/MONTHLY Pivot retracement chart at this Link

  Linda Piazza   6/7/2004,  10:34:04 AM
100-dma's loom overhead for many indices, but the SPX has already pushed through its 100-dma today.

  Linda Piazza   6/7/2004,  10:32:04 AM
The bearish price/MACD divergence has now been erased on the OEX five-minute chart, with both price and MACD making a higher high. MACD tries to flatten, however, with histogram levels less positive than they were earlier this morning.

  Linda Piazza   6/7/2004,  10:29:40 AM
Among OEX components presenting at this weekend's ASCO conference, all are off their day's high. AMGN deepens its declines, now erasing Thursday's and Friday's gains; BMY is only slightly off the day's high and one of the best-performing of the group; JNJ has erased all of Friday's gain and heads down toward $56.00 support; MRK still trades higher but has pulled back into a gravestone doji; and PFE is still positive but near its low of the day. Several of these may just be pulling back into support, but some, such as PFE, appear to be struggling with resistance. So far, they're seeing selling at the day's highs. They need to get their acts together if they're going to help the OEX continue to make gains. Be watchful of this group's behavior if you're in bullish plays.

  Linda Piazza   6/7/2004,  10:20:06 AM
I often temper my comments about chart developments on the Nikkei with the advice that the Nikkei can see wild swings. That's been true lately, both on a bar chart and P&F chart perspective. Often, we consider the P&F charts more reliable--less subject to wild swings--than the bar chart. That hasn't been true for the Nikkei over the last week. Last week, the Nikkei produced a new buy signal to go along with its previous buy signal, but then the Nikkei reversed that bullish signal and created a new downside target of 10,700. Although Stockcharts.com has not updated the Nikkei's P&F chart today, Monday's 11,439.92 close would have been enough to reverse that sell signal and create a new buy signal. Whew! Having trouble keeping up?

What about the bar chart? Week before last, the Nikkei had confirmed a reverse H&S at the bottom of a steep decline, setting up an upside target near 11,900-12,000. Last week, it violated the neckline again, setting up the possibility that a larger H&S might form, with the Nikkei perhaps in the process of forming the right shoulder of a possible formation that has been in the making since early 2000. The formation has a slightly ascending neckline, so it's possible that the right-shoulder level could be higher than the left-shoulder level, but today's close comes close to the highest level before we'd have to say that the formation is negated. I think I'd probably use the 50-dma at 11,512.43 to demark that area when we have to stop considering the formation as valid, although there's some further strong resistance from about 11,600-11,700.

  Linda Piazza   6/7/2004,  10:15:03 AM
I posted a chart of the DAX earlier this morning in an 8:40 post. I'm surprised to see that the DAX has not been impacted by our gains today and instead still marches forward in as nearly a straight lines as markets can approximate. Hmm. It's currently at 4012.52, still hanging onto the 4000 level.

  Linda Piazza   6/7/2004,  10:12:53 AM
The BIX is approaching 350 resistance, although 349 actually looks more important to me based on the daily chart. The 5/27 high was 349.14, with the BIX at 348.86 as I type.

  Linda Piazza   6/7/2004,  10:09:00 AM
Once the OEX passes up the trendline off the March high, we'll need to start watching another descending trendline: the one off the February high. I've got a best-fit version that crosses at about 553.10, just below the 100-dma at 553.44. Link Bulls should already be making plans about how they'll deal with that level if it should be reached--take some of their gains off the table, snug up stops, etc.

  Jeff Bailey   6/7/2004,  10:07:57 AM
10:05 Market Watch at this Link

  Linda Piazza   6/7/2004,  10:02:58 AM
Performance of OEX presenters at the ASCO conference: AMGN, JNJ trade lower; BMY trades higher. MEDI trades higher but is well off the day's high. PFE trades higher, but is having difficulty with the 100-dma.

  Linda Piazza   6/7/2004,  9:56:07 AM
The OEX is trying to produce a breakout signal on the five-minute Keltner channels. Bulls should begin following the OEX higher with their stops. You've heard this from me before: this could be a valid breakout signal but it also suggests vulnerability to a pullback to mid-channel or lower-channel support. This is particularly worrisome since those pesky price/MACD divergences persist on some intraday charts.

  Jonathan Levinson   6/7/2004,  9:55:18 AM
A huge 9.5B overnight repo has just been announced with no expiries for today, for a net add in that amount.

  Linda Piazza   6/7/2004,  9:48:41 AM
The TRAN is above 3000 again this morning, heading up to test the 3020.76 swing high achieved on 4/26/04, with the TRAN at 3018.08 as I type.

  Linda Piazza   6/7/2004,  9:45:50 AM
Here's where the OEX is in relationship to the chart that I've been posting over the last several weeks: Link Could be time to break out or time to roll down. If you're not willing to wait, you'd have to just pick your bias and jump in, setting a stop that would be hit if your conclusion is wrong. I'd be willing to bet that those options prices are jacked up this morning, though, and that any steadying is going to see them come down. You're going to need a quick move in your direction to profit.

  Jeff Bailey   6/7/2004,  9:41:43 AM
Bullish day trade exit alert the Semiconductor HOLDRs (SMH) $37.89 +1.01% here. (held over from Friday's entry of $37.75)

  Linda Piazza   6/7/2004,  9:40:53 AM
This price zoom on the OEX has left its slower partner--the MACD behind--on five- and fifteen-minute charts, creating bearish divergence. That's tentative and can be erased by a steadying as MACD moves up, but keep a watch on this.

  Linda Piazza   6/7/2004,  9:38:24 AM
If QCharts is correct (never sure), the TRIN began the day at its lowest level since May 19, a day that saw the OEX climbing for the first 2-1/2 hours, steadying and then closing dropping to close lower, leaving a long upper shadow. Be careful out there.

  Jeff Bailey   6/7/2004,  9:37:32 AM
OSI Pharma (OSIP) $76.52 -2.5% .... jumped to $84.50 in early pre-market trade, but lower at the open. Merrill Lynch upgraded to "buy" following the company's Phase III Tarceva data presented this weekend. Merrill raised its US Tarceva sales estimates for fiscal 2005 to $258 MM, fiscal 2006 to $569 MM and fiscal 2007 to $3.08. The broker raised its target to $108.

  Linda Piazza   6/7/2004,  9:34:09 AM
The OEX is zooming up past the right-shoulder level of Friday's confirmed H&S. It's facing Keltner resistance at 549.91 (dynamic and still climbing) with next resistance over that at 551.07.

  Linda Piazza   6/7/2004,  9:29:32 AM
Just read on the NYSE site that the NYSE will observe two minutes of silence in honor of President Reagan. Link

  Linda Piazza   6/7/2004,  9:22:00 AM
Friday, the OEX touched the upper trendline off the March high, the one that encompasses all candle shadows, but it retreated by the end of the day. That retreat brought it right back into the congestion zone from the last week, leaving a long shadow above the small-bodied candle. If that candle had occurred other than in a congestion zone, it might have looked like a potential reversal signal, but we should perhaps not put too much credence in any such signal because of the candle's location. The 5(3)3 stochastics have already produced a bearish kiss and have rolled down below signal, indicating that a rollover might be beginning, but there's at least one other possibility--a continued consolidation at the current level while this short-term indicator cycles down and then turns up again. The third possibility is one that the futures suggest today--a strong enough upturn in prices to hook 5(3)3 stochastics higher again and abort the new downward cycle.

The longer-term 21(3)3 stochastics have not yet rolled down. MACD has flattened, and RSI measures a rather neutral 55.91 and has flattened, too. This daily chart suggests then, that the OEX will either pull back or see consolidation while the 5(3)3 stochastic completes its downward cycle. Futures and global markets suggest otherwise. The clue might be what happens with crude futures, with those having dived beneath $38.00/barrel, to a low of $37.75 at about 6:15 EST, but attempting to climb higher again. Another clue might be contained in my 9:14 post, with many components of the OEX reporting as this weekend's ASCO conference in New Orleans.

Thirty and sixty-minute MACD and RSI showed bearish divergence with the last OEX swing highs, also lending support to the possibility of a pullback. No matter what is suggested by those charts, we must be aware of the possibility of a push higher, through that descending trendline off the March high, with the action on global bourses warning of that possibility on ours, too. With that bearish divergence showing up, I'd sure want all the planets aligned before I jumped on a long play, however, on a move above that trendline, particularly as the OEX would still be mired in the 549-552 resistance zone.

Even at Friday's close, however, before we knew what would happen on global bourses this morning, five-minute nested Keltner channels suggested that the OEX might rise again to test mid-channel resistance at 547.89 or the neckline of the Friday's H&S at about 548.30-548.50 before it decided on direction. As I type, futures suggest that a stronger climb could be possible. Bulls may have the opportunity to see if they can drive the OEX higher and break it out of that congestion zone or above historical support and it's possible that they'll have the support of the biotechs and pharmaceuticals.

OEX bulls will need the cooperation of all the indices, so if the various major indices are working at cross purposes, it might make more sense to expect more choppy trading instead of a breakout either direction. As I prepared this morning's report on global bourses, I noted that semis also seemed to be bouncing in many regions, so perhaps the SOX will climb again and test the top of its descending regression channel. Resistance for the SOX lies at the 50-dma at 475.30, at the top of its regression channel at about 481, and again at the 200-dma at 486.97. Anyone who considers going long the OEX this morning should be keeping a watch on those SOX levels, too, as well as on crude prices. I'm reading of a lot of global airlines, at least, that are beginning to mention the impact of those crude prices, even the current ones.

Those bulls should also watch volume. I've noted that the Nikkei's gains today have taken place on lighter volume than on Thursday's and Friday's declines. If such lighter-than-normal volume should accompany gains in our markets and if that bearish divergence should persist, those who believe in a bearish outcome might consider playing a potential rollover from that 549-552 resistance. If so, consider volume patterns and TRIN levels and be willing to step out immediately if shorts start getting squeezed. Set a stop just over that resistance zone to take you out if markets should zoom higher instead of rolling over beneath resistance. If a rollover should begin, bears should then watch out for support at 544.

I'm not sure what to believe, so you're not going to get strong advice from me pre-market as to whether you should be in a bullish or bearish frame of mind. Markets could break either direction, depending on whether you lend more credence to the easing crude prices, the sound economic numbers, or those bearish divergences.

  Jane Fox   6/7/2004,  9:19:03 AM
Dateline WSJ With gasoline prices topping $2 a gallon, the spotlight is turning to a long-simmering energy problem in the U.S.: a lack of new refining capacity.

Even with the Organization of Petroleum Exporting Countries pumping more oil, U.S. refineries will be hard-pressed to turn that crude into substantially more gasoline. Scores of inefficient refineries have closed during the past two decades, and though existing refineries have expanded, supply is getting tight. Today, the average U.S. refinery is running at 96% of its capacity -- nearly flat-out.

There is disagreement about why, and about how serious the problem is. The refining industry blames environmental regulations that mandate that refineries and the gasoline they produce get cleaner. Consumer advocates, noting that refiners are celebrating fat profits, blame the industry, which they contend has intentionally constricted capacity to keep pump prices high.

  Linda Piazza   6/7/2004,  9:14:09 AM
OEX Traders: News out of the ASCO, American Society of Clinical Oncology, conference in New Orleans this weekend is driving trading in many pharmaceuticals or biotech companies. OEX component companies that have presented at that conference include AMGN, reporting on its drug Aranesp to treat anemia in cancer patients; BMY, a company that developed a study of Erbitux in conjunction with IMCL, with that drug being one star of the show at the conference; JNJ, whose drug Doxil was given together with Telcyta, a drug developed by Telik, Inc., to ovarian cancer patients, with 46% of them seeing a shrinkage of tumors, and a company that launched Veridex, a new company that will devote itself to ways to detect cancer earlier; MEDI, whose drug reduced dry mouth symptoms in cancer patients receiving radiation; MRK, with a statin drug that may be one of the statins reducing the risk of some forms of cancer and a participant in the Erbitux study; and PFE, a company reporting on an experimental pill for kidney cancer. I have not followed these companies and cannot evaluate the way in which these various presentations will be viewed, but at least some of these were seeing strong gains in Europe. Here's a list of OEX components, in case I've missed some of these: Link

  Linda Piazza   6/7/2004,  8:40:31 AM
We think we have boring days on our markets. Here's an intraday line chart of today's pattern on the DAX: Link Did you ever see anything straighter? Still on a P&F sell signal and below a trendline of descending highs, the DAX now challenges 4,000-4,100 resistance, trading at 4007.98 as I typed this post. There may be some hesitation to send it either higher or lower ahead of the U.S. open.

  Jonathan Levinson   6/7/2004,  8:27:36 AM
No major economic reports scheduled for this morning, with Consumer Credit the major headliner due at 3PM today.

  Linda Piazza   6/7/2004,  7:00:18 AM
Good morning. Global markets have been benefiting from our jobs numbers Friday and a further easing in crude oil prices. The Nikkei opened in the green Monday, sent higher by tech stocks such as Tokyo Electron, NTT DoCoMo, and Kyocera Corp, as well as by big caps Toyota Motor and Canon. The Nikkei then climbed through the rest of the day, closing higher by 311.87 points or 2.80%, at 11,439.92. Volume appeared to be lower than on Thursday and Friday's declines, however. The yen gained against the dollar.

Exporters benefited from signs of growth in the U.S., with Japan's government expected to update growth estimate for Q1 tomorrow. Japan's Minister of Finance announced that May's foreign reserves rose $1.88 billion above April's. In stock-specific news, UFJ Holdings is considering selling a credit-card issuer, with the sale expected to reduce its bad loans. UFJ may then ask the government to help out its borrowers. UFJ climbed 7%. Nippon Oil also climbed in early trading on speculation about the company ramping up production of the film needed for LCD's in mobile phones. All Nippon Airways rose after announcing plans to launch a low-cost subsidiary, with that news outweighing the company president's revelation that the company could miss forecasts unless fuel prices decrease. Daiwa Securities gained on news that its affiliate could be tapped as the first Japanese company to be allowed to establish a securities firm in China.

Other Asian bourses mostly closed higher. With tech stocks Taiwan Semiconductor and United Microelectronics posting strong gains, the Taiwan Weighted gained 3.68%. In South Korea, Samsung Electronics, Hynix Semiconductor, and Korean Air soared, sending the Kospi higher by 3.68%. Singapore's Straits Times gained 1.47%. Some airlines gained in Singapore, with Singapore Airlines perhaps considering buying 50 new airplanes from Boeing. Hong Kong's Hang Seng gained 2.53%. China's Shanghai Composite was one of the region's few declining bourses, losing 1.62%. I haven't been able to locate any news regarding last week's speculation that China would raise rates. The government was reportedly asking banks to temper lending late last week, adding fuel to that speculation.

All European bourses currently trade higher. On the FTSE 100, miners and insurers lead the index higher, while low-cost airline EasyJet dropped almost 16% at one point in the morning's trading after warning again, saying that fuel costs will cut its earnings. Bank Barclays announced that it will trim 800 jobs, and was seeing gains in early trading. Biotech Xenova had gained more than 9% in early trading after presenting at the American Society of Clinical Oncology's annual meeting.

Another drug company was helping European markets, with Germany's Merck gaining on just-released data about Erbitux, with that data also presented at the American Society of Clinical Oncology's annual meeting. That meeting also produced gains in other drug companies such as Bayer and Novartis, but gains that were moderate in comparison. In other news, market watchers continue to speculate about Deutsche Bank's intentions toward merging with another bank, with today's news noting that the bank perhaps mulls over the establishment of a holding company outside Germany to facilitate such a merger. Deutsche Bank and many other European banks climbed in early trading.

As of this writing, the FTSE 100 has gained 29.50 points or 0.66%, to trade at 4483.90. The CAC 40 has gained 20.76 points or 0.56%, to trade at 3719.63. The DAX has gained 51.81 points or 1.31%, to trade at 4013.74.

  OI Technical Staff   6/6/2004,  3:32:06 PM
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