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  Jeff Bailey   6/9/2004,  6:16:30 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   6/9/2004,  5:05:31 PM
Closing Internals at this Link

  Jeff Bailey   6/9/2004,  4:49:03 PM
Just got a buy program premium alert .... while way after close, thought I'd pull up my e-mini S&P futures chart with the two fitted retracement. Link

  Linda Piazza   6/9/2004,  3:59:00 PM
The Russell 2000 looks to end the day sitting right on its 30-minute 130-pma, ready either to bounce tomorrow or plummet through it.

  Linda Piazza   6/9/2004,  3:54:08 PM
Absent the degree of whipsawing that I expected, today turned out fairly close to my expectations. That's not good, though, because my expectations were that we'd end the day with the OEX not quite confirming the potential reversal signal, bearish enough to worry bulls, but not quite bearish enough to give bears any confidence in rollover potential. Full confirmation of that reversal signal would have required a drop below the midpoint of Monday's candle, at 551.39. Depending on what happens in the last few minutes of trading, key support detailed on this linked chart as well as that 551.39 midpoint may have held or just barely been breached while key resistance at 557 clearly has held. Link I didn't want to wait until the last couple of minutes to get this post made, however, to see whether that support holds, as I wanted options traders to have the information long enough to make a decision about whether to hold overnight.

  Jeff Bailey   6/9/2004,  3:51:02 PM
Swing trade round to full action point alert for the other 1/2 DIA $100 puts (DIASV)

INDU 10,370 -0.6% ...

  Jeff Bailey   6/9/2004,  3:48:14 PM
Swing trade bearish target alert ... close out Amazon.com (AMZN) $50.05 -3.61% here.

  Jeff Bailey   6/9/2004,  3:47:12 PM
SOX.X Option Chain ... at this Link

Traders just routed the puts

  Linda Piazza   6/9/2004,  3:41:27 PM
The potential reverse H&S on the OEX five-minute chart has now been negated. A double-bottom formation remains possible, but we'll have to see what the last few minutes of trading bring.

  Jeff Bailey   6/9/2004,  3:39:57 PM
Semiconductor Index (SOX.X) 473.77 -3.19% ... starting to give up on its WEEKLY Pivot. Next support is MONTHLY Pivot 470.77.

  Linda Piazza   6/9/2004,  3:38:02 PM
I knew I didn't trust that Russell 2000 bounce from the 30-minute 100/130-pma's, at least not when it first occurred. (See my 15:04 post.) The Russell 2000 turned around shortly after that post was uploaded to retest the averages. It's only retesting, however, and hasn't fallen to a new low of the day or below those averages, so it's still possible that the Russell 2000 could begin a bounce from here. Even if the Russell 2000 should bounce strongly from these averages or else dive beneath them, I think I'd be hesitant to dive into a play at the end of the trading day just ahead of the last day of trading before a reshuffling of this index.

  James Brown   6/9/2004,  3:25:40 PM
Wow! Illinois Tool Works (ITW) is not showing any weakness as the stock hits another new all-time high. Shares are up four strong weeks in a row.

  Linda Piazza   6/9/2004,  3:20:23 PM
The OEX was not able to climb above the last five-minute high, with that level serving as resistance, as I thought it or the next Keltner resistance level might. So far, we've had less whipsawing than I expected today, although that last rise must surely have had some bears thinking about what would happen to stops set just above the last five-minute high. Can't help mentioning the possible reverse H&S that's forming on the OEX five-minute chart, however, with the right-shoulder level currently being tested, and with the head at the day's low. There was bullish price/MACD divergence as that head was formed. The neckline would be somewhere around 554.15-554.41, depending on how you draw the neckline. This may never be confirmed, of course, and a drop to a new low of the day would negate the potential formation.

  James Brown   6/9/2004,  3:19:07 PM
Keep an eye on Davita (DVA). A breakdown under $45.00 and its 100-dma could be a bearish trigger to capture a move toward its 200-dma above $40.

  Linda Piazza   6/9/2004,  3:15:17 PM
I've mentioned before that SIRI has been a kind of bellwether stock for me with regard to the 72-ema that I watch on some equity and index daily charts. For more than a year, that 72-ema has had some relevance with regard to SIRI's trading pattern, but I thought it might show quicker than an index when that relevance had been erased. I don't think it has been, although it's possible that SIRI's trading pattern in relationship to that MA might have changed. Link Perhaps now, it's beginning to serve as resistance rather than support. I think I'll keep that MA on my index charts for now, too.

  James Brown   6/9/2004,  3:12:55 PM
One stock fighting against the crowd today is World Wrestling Enterprises (WWE). Shares are up 3.93% to $12.93.

  James Brown   6/9/2004,  3:10:58 PM
WYE might be another bearish play. The stock is rolling over under is 20-dma with its 1.25% decline to $36.09. Technicals are bearish and the stock reminds me of BRL's chart a few days ago before the big breakdown. The P&F target on WYE is $30.00.

  Linda Piazza   6/9/2004,  3:04:02 PM
Here's what's happening today on the Russell 2000 with regard to its 30-minute 100/130-pma's: Link The last few times the RUT has climbed above these moving averages have been good buying opportunities, haven't they? Because of my bias for the day, I can't bring myself to believe it's as good an opportunity today, but that may be letting bias get in the way of what charts are showing. On the daily chart, there's not much difference in the configuration of oscillators between this bounce from those averages and the one that occurred on 6/03, but there is from the previous climb above those averages, including the fact that the Russell was rising to test the 200-dma at that time. I'd sure want to see the Russell 2000 get above the 50-dma (572.07) before I even began to believe that the bounce might hold this time. This time, it feels a bit more like a reflexive "ought to" kind of bounce, but again that might be my bias getting in the way. Hence, I'm showing you what I see and letting you make up your own mind. My bias for the day did include a retreat and a possible whipsawing when support was hit, but that bias also included a probable negative close.

  James Brown   6/9/2004,  3:01:42 PM
IBM is holding on to its recent gains and breakout over the $90 level. The GHA.X hardware index cannot say the same.

  Jim Brown   6/9/2004,  2:47:40 PM
PPI delayed due to index calculation problems according to gvmt. Will not be released until June-15t or later.

  Keene Little   6/9/2004,  2:42:18 PM
For those following TNX, here's a chart of action as I see it unfolding. After the peak on May 14th, we started a pullback (a rally in bond prices), which I've labeled wave-A, down to the low on May 27th. We've since been in a corrective bounce that I've got labeled as wave-B (which consists of waves a-b-c). Note that inside this wave-B that wave-c = wave-a at 48.39 and at the same time it was hitting the top of the ascending wedge pattern, a bearish pattern. That's why I had my alarm set for 48.39 to watch for evidence of a top to this move.

I'm now watching for yields to drop below the May 27th low as it continues to correct the rally from March to May. Note though that I'm looking at this as a correction to that rally. Once the correction is completed (downside fib target is now 43.28-45.25 with the lower one more likely as it gets it down to the 38% retracement of the March-May rally at 44.25) I'm expecting yields to continue their rally to new highs, and quickly. Link

  Linda Piazza   6/9/2004,  2:41:26 PM
One reason that I believe the OEX and some other indices might have difficulty with the overhead resistance that they're rising to test is that the bounce wasn't preceded or accompanied by much of a rise in the advdec line. At least not yet.

  Linda Piazza   6/9/2004,  2:36:16 PM
So the bullish price/MACD divergence on the OEX five-minute chart did mean something after all. The OEX is minimally above mid-channel Keltner resistance, but not yet above the last five-minute high of 554.41, something bulls want to see happen. Next important Keltner resistance above that is at 554.82, and it's possible that resistance could be tough.

  Jeff Bailey   6/9/2004,  2:34:41 PM
Swing trade lower stop alert .... for Amazon.com (AMZN) to break even. $50.67 -2.56% after session low of $50.32.

  Jim Brown   6/9/2004,  2:34:31 PM
PPI release has been cancelled for Thursday - no new date yet

  Jeff Bailey   6/9/2004,  2:33:49 PM
QQQ $36.73 -0.97% .... pretty good little bounce from $36.60 underway.

  Jeff Bailey   6/9/2004,  2:31:31 PM
Tie in ... SOX.X session low (WEEKLY Pivot) and INDU Session Low 10,372.06.

  Linda Piazza   6/9/2004,  2:29:38 PM
Jeff has mentioned the max pain level for the $SOX, and I'd like to add that it's hovering near its 50-dma at 475.61, a last-ditch area of support before the bottom of the short-term rising regression channel within a longer-term and broader descending regression channel formed this last five or six months.

  Jeff Bailey   6/9/2004,  2:29:12 PM
Dow Industrials (INDU) 10,392 -0.38% ... right back to its WEEKLY R2.

  Jeff Bailey   6/9/2004,  2:26:43 PM
Max Pain Alert .... Semiconductor Index (SOX.X) 475.81 -2.77% here. Also its WEEKLY Pivot.

Now we'd REALLY better be monitoring the Volatility Indicators...

Should they suddenly implode back lower, things could unwind back to the upside.

  James Brown   6/9/2004,  2:25:58 PM
NOC was on the watch list last night for its breakout over $105.00. The stock is not showing any weakness today, up 45 cents to $105.58, but it is struggling with the $106 level.

  Linda Piazza   6/9/2004,  2:20:32 PM
The OEX continues to show bullish price/MACD divergences on the five-minute chart. Like the other day when the OEX kept climbing despite bearish divergences, it keeps declining despite those bullish ones. Bears, be wary, though.

  James Brown   6/9/2004,  2:18:19 PM
OSIP was on the watch list last night for a breakdown under its April-May lows near $67.50.

  Jeff Bailey   6/9/2004,  2:16:33 PM
I can't take on any more trades... but OSIP breaks into gap and below "zone of support".... vulnerable to $62.86 here.

  James Brown   6/9/2004,  2:15:35 PM
Ouch! Last night we put BRL on the watch list as a bearish candidate after its high volume breakdown under the $40.00 level. Today shares are down another 4.75% to $36.98.

  James Brown   6/9/2004,  2:10:55 PM
QLogic (QLGC) is really struggling with resistance at its 50-dma, which has been a top on the stock price for the past several days. Shares look headed back to the $26.00 level.

  Jeff Bailey   6/9/2004,  2:07:11 PM
Dow Industrials (INDU) 10,379 -0.51% .... right at DAILY S1 (10,380)... want to give it the 10-points to 10,370 before rounding to full in the DIA July $100's.

Right at that downward trend too.

  James Brown   6/9/2004,  2:06:44 PM
Bears can keep their eyes on Genzyme (GENZ). The stock has failed for the last two weeks at its simple 40-dma. Now the stock is moving lower (-3.2%) and headed toward recent support at $41.00. The stock would appear to have more support at $40 on its weekly chart but a breakdown here could lead to a drop toward $35. Its P&F chart points to a $31 price target.

  Jeff Bailey   6/9/2004,  2:05:03 PM
02:00 Market Watch at this Link

COMPX cracks back below 2,000 .... getting some volitility....

  James Brown   6/9/2004,  2:03:12 PM
Last night we had SYMC on the watch list as a possible bearish play. Shares are down 4.06% and back below the round-number $45.00 level. Momentum traders may want to look for a break under last week's low near $43.70.

  Jonathan Levinson   6/9/2004,  2:02:55 PM
Thanks, Linda. I have 4.88% as resistance at the year high, and a break of that level should target your 4.904% level pretty quickly.

  Jeff Bailey   6/9/2004,  2:01:43 PM
VIX.X 15.35 +2.26% ... session highs

  Linda Piazza   6/9/2004,  2:01:12 PM
I'm sure Jonathan has mentioned the action in bond yields, but ten-year yields are close to testing a best-fit rising trendline in place since late 2002, with a confirmation at a move over 49.04.

  James Brown   6/9/2004,  2:00:47 PM
Costco Wholesale (COST) is bucking the market's weakness today with a 1.37% gain and a new all-time high. The move is a nice follow through to yesterday's breakout over the $40.00 level.

  Jeff Bailey   6/9/2004,  1:59:10 PM
QQQ $36.62 -1.34% .... testing WEEKLY R1 here.

  Jim Brown   6/9/2004,  1:58:53 PM
If North Korea can ban cell phones I am sure Paris can figure out how to ban SUVs.

  James Brown   6/9/2004,  1:51:29 PM
Yesterday we noted the breakout in shares of ASH over resistance at $50.00. Shares are up again (+0.83%) to $51.01.

  James Brown   6/9/2004,  1:43:06 PM
FYI... French officials in Paris are now planning to ban SUV's with a recent vote on the city council. How they plan to put the ban into place was undetermined.

  Linda Piazza   6/9/2004,  1:41:52 PM
The Russell 2000 is now slipping beneath its 50-dma and beneath 572, but has a S/R band from about 567-569.50, too. It's also slipped beneath a 50% retracement of Monday's gains. Bulls don't want to see it stay beneath that 50% retracement, but especially don't want to see it slip beneath that next support zone.

  Linda Piazza   6/9/2004,  1:38:56 PM
The TRAN still hasn't been able to mount much of a bounce off the day's low today.

  James Brown   6/9/2004,  1:19:35 PM
Gibraltar Steel (ROCK) is up 5.59% to $30.40 and a new all-time high after CIBC upgraded the stock to "out perform" from "sector perform".

  James Brown   6/9/2004,  1:14:11 PM
Ask Jeeves (ASKJ) is down 5.24% and breaking support at $40.00 and its 40 and 50-dma's while producing a new sell signal in its MACD indicator. It's probably just profit taking but the company did announce an acquisition of privately held Tukaroo Inc., a San Jose-based desktop search technology company, for an undisclosed sum.

  Jeff Bailey   6/9/2004,  1:13:15 PM
01:00 Internals at this Link

Note: Made correction to Spot Gold from 12:00 Update. Not getting hit "that bad."

  Linda Piazza   6/9/2004,  1:10:41 PM
So far, that sort-of-like-the-Nikkei scenario for the OEX today is playing out. The OEX headed lower, but not drastically lower, and is now attempting a bounce. If the OEX were to end the day at or near the current level, traders would be left in some confusion. The day would have seen declines, but not beneath the support detailed here: Link The potential reversal signal would not have been confirmed. Of course, a lot can happen over the last several hours of trading.

  James Brown   6/9/2004,  1:04:55 PM
Bausch & Lomb (BOL) has announced it has received FDA approval to market a generic form of Alcon's (ACL) Ciloxan treatment. The eye solution is used to treat bacterial infections, including conjunctivitis, or pinkeye. (-Reuters)

  Linda Piazza   6/9/2004,  1:04:28 PM
As of a few minutes ago, total volume for the NYSE was 631 million while it was 770 million for the Nasdaq. Declining issues number more than twice advancing ones on both exchanges, with down volume outstripping up volume.

  Jeff Bailey   6/9/2004,  1:03:24 PM
Updated SPX Option Chain at this Link

Had a couple of questions about the Dec. 1125 Calls. I'm thinking it and Jun 2005 calls are simply some quarterly roll, with observation of Average Trade Size being more institutional size and a longer-term type of hedge/protection trade.

Blue arrows would be the focus as per last night's Index Wrap discussion.

  James Brown   6/9/2004,  12:58:38 PM
Boeing (BA) is up another 1.14% to $48.63 and another two-year high after Lehman Brothers upgraded the stock to "overweight".

  Linda Piazza   6/9/2004,  12:56:28 PM
The SOX has come within a point of its 50-dma today. It's not showing any attempt to bounce yet, but some tentative price/MACD bullish divergence can be seen on the five-minute chart.

  James Brown   6/9/2004,  12:54:57 PM
OmniVision Technologies (OVTI) is down 29.4% to $17.96 after issuing an earnings warning for its July quarter. The company also announced it would delay the release of its FY2004 results because it may need to restate earnings for 2004 and 2003. OVTI now expects the current quarter to fall in the 29-to-31 cents per share range versus analysts' estimates of 34 cents per share.

  James Brown   6/9/2004,  12:51:01 PM
Global ePoint (GEPT) is up 25.6% to $5.93 after announcing that its AirWorks division has received a big order for its state-of-the-art Cockpit Door Surveillance Systems to be installed in Lufthansa Airlines new planes.

  Jeff Bailey   6/9/2004,  12:50:44 PM
Dow Industrials (INDU) 10,397 -0.33% .... holding it together at WEEKLY R2 still. Here's 10-minute interval chart, where DAILY S1 looks to be the level of support and ties to recently violated to the upside downward trend (red line trending lower across the chart) . Link

  Keene Little   6/9/2004,  12:50:17 PM
Here's an update to the earlier XAU chart I showed (9:35). So far so good--a nice strong move lower today which fits as a 3rd of a 3rd wave down. I would expect some sideways/up consolidation here or from a slightly lower level and then a continuation of the move down. Worth watching is this down-channel now. We should not break out the top of it until the move down is complete (below the May low) and therefore the upper line of the channel will make a good stop level as price moves down. I do this because I want to get out in case this move down is just part of a larger upward correction. Link

  Linda Piazza   6/9/2004,  12:49:39 PM
The OEX just can't make it above mid-channel Keltner resistance, at least not yet. Resistance lies from 554.15 to 554.26. Support is from 553.32-553.49.

  Linda Piazza   6/9/2004,  12:39:10 PM
Here's where the OEX is now with respect to that possible bullish falling wedge that I've mentioned several times this morning: Link The OEX may just be widening that wedge into a descending regression channel, but so far, it's broken above it, retested the top line and is now trying to rise. It's facing that last five-minute high's resistance at about the level of significant Keltner resistance, too, so it may not get far. The OEX isn't zooming up as it typically should after breaking above a falling wedge, but it's trying to act bullish in its weakling sort of way. (Note: it broke above the last five-minute high but not the Keltner resistance as I typed.)

  James Brown   6/9/2004,  12:38:58 PM
Investors are rotating quickly out of Copper today. Copper futures are down 5% to $1.176 per pound and falling fast. Its MACD has produced a new sell signal and volume is very big today.

Shares of Phelps Dodge (PD) is down 3.42% to $66.58 and falling under technical support at its 40 and 200-dma's.

  Linda Piazza   6/9/2004,  12:30:11 PM
The BIX has rolled down toward 347.50-348.00 support. If it should drop down to the 100-dma, currently at 345.25, or even slightly lower and then bounce, bullish traders in BIX component stocks should start watching out for the possibility of a H&S formation at the top of the climb off the May low. They should be wary of a possible BIX rollover again in the 347.50-348 zone. We're a long way ahead of that, however, and the BIX may either find support at the current test of that zone or else drop way below a possible neckline area.

  Jeff Bailey   6/9/2004,  12:28:41 PM
Raytheon (RTN) $34.30 +0.82% ... challenges session high

  Jeff Bailey   6/9/2004,  12:26:37 PM
Current Open MM trades at this Link

  Linda Piazza   6/9/2004,  12:24:17 PM
Tentative bullish price/MACD divergence showed up on that last dip on the OEX's five-minute chart, but it's tentative only.

  Jeff Bailey   6/9/2004,  12:18:59 PM
U.S. Dollar Index (dx00y) 89.45 +1.06% .... has dollar surging today. Has traded up through WEEKLY Pivot and R1 at this point (30-min delayed) and may well be headed for correlative WEEKLY R2/MONTHLY Pivot.

Metals stocks are under pressure, Stillwater Mining (SWC) $13.95 -7.25% included.

At this point, I'm going to wait for second 1/2 bullish in SWC and try to see if the dollar doesn't calm down.

  James Brown   6/9/2004,  12:17:15 PM
The broker-dealer sector was just starting to look bullish again with steady gains the last couple of days but now the group is really feeling the profit taking today.

LEH is down 2.4% and headed back to support at $76.00 and its 50 and 200-dma's.

MER is back under its 200-dma and testing minor support at $57.00.

BSC is testing support at $82.00 and its 50-dma.

  Jeff Bailey   6/9/2004,  12:16:44 PM
12:00 Internals at this Link

Yesterday's Internals at this Link

  Linda Piazza   6/9/2004,  12:10:46 PM
The SOX is less than 3 points away from a test of the 50-dma at 475.66, with that MA marking one possible bounce point. Below that lies the support at the short-term rising regression channel, with that support near 470.63.

  Jeff Bailey   6/9/2004,  12:01:40 PM
S&P 500 Index (SPX.X) .... intra-day chart with a VIX.X benchmark at this Link

  Linda Piazza   6/9/2004,  12:01:03 PM
The OEX has now attempted another upside break out of the falling wedge, but it's not getting far with Keltner resistance just overhead.

  Jeff Bailey   6/9/2004,  11:53:24 AM
SPX/OEX .... so far, session lows have been right at/near their DAILY S2s.

NDX/QQQ lows have been just above DAILY S2s

INDU/DIA session lows have come just above DAILY S1s

  James Brown   6/9/2004,  11:53:21 AM
Bucking the trend in biotechs is IMCL, which has managed to hold on to its gains and is up another 2.11% today after WR Hambrecht reiterated their "buy" rating on the stock.

  Linda Piazza   6/9/2004,  11:53:06 AM
The TRAN has not been able to bounce so far, still forming a possible tweezer-top at the top of the rise off May's low. For reference, the year's high is 3090.07, with this morning's high at 3071.74, so the TRAN rose almost up to that year's high as well as the upper boundary of its rising regression channel since the spring. RSI continues hooking down and 21(3)3 stochs attempt a bearish kiss, but RSI is fickle and the stochs are still above signal, so this evidence is far from conclusive.

  James Brown   6/9/2004,  11:51:51 AM
Investors are still rotating out of biotechs with the BTK index down another 2.26% and breaking through support at the 500 level and its simple 200-dma.

Genentech (DNA) is a big drag on the group with a 6.47% decline to $52.86. The stock was downgraded this morning from "out perform" to "market perform" from Sanford Bernstein.

  Jeff Bailey   6/9/2004,  11:48:22 AM
SPX Option Chain at 11:44 AM EDT. Linda.... you selling those June 05 1,125 calls? Link

  Linda Piazza   6/9/2004,  11:48:15 AM
Thanks, Jonathan. (See my 11:38 and Jonathan's 11:43 posts.)

  James Brown   6/9/2004,  11:45:59 AM
The XAU gold and silver index really looks weak with a new two-week low and a breakdown below the 85 level and all of moving averages. Its MACD is also very close to producing a new sell signal while its RSI and stochastics have already rolled over into bearish signals.

Traders looking for bearish candidates can check out NEM, AU, ABX, GFI, PDG, and KGC.

  Jonathan Levinson   6/9/2004,  11:43:40 AM
I haven't, Linda, but overall I think it varies. In general, net adds from the Fed result in strength in equities and bonds and weakness in the dollar. On auction days, I've found that it varies, as well it should, given the vagaries of demand from the various purchasers of US debt. For instance, Japan began lightening up on its treasury purchases this spring, and despite the infusions of Fed cash to support the auctions, overall the bond market is well off those highs.

  Linda Piazza   6/9/2004,  11:40:52 AM
The OEX did attempt an upside breakout of that falling wedge, but it didn't get far, at least not yet. If the OEX tries again, Keltner resistance firms up from 554.22-554.64. Keltner support is trying to firm from 553.48-553.56, too.

  James Brown   6/9/2004,  11:40:33 AM
The two-day drop in the homebuilders looks pretty discouraging. The DJUSHB is trading back toward its Friday lows and back under its 40, 50 and 100-dma's. Its MACD indicator is close to falling over into a new bearish sell signal.

  Linda Piazza   6/9/2004,  11:38:46 AM
Jonathan, have you tracked what happens to equities when there's an infusion of cash from the Fed on the day when there's a bond auction? I know that it's not telegraphed where that money might be put to use, but I wondered if you'd noted a pattern.

  James Brown   6/9/2004,  11:37:58 AM
Biggest Sector Losers:
DJUSHB homebuilders: -2.68%
XAU gold & silver: -2.98%
SOX semiconductors: -1.95%
BTK biotech index: -1.87%
OSX oil services: -1.72%
XBD broker-dealers: -1.65%
OIX oil index: -1.60%
DDX disk drives: -1.47%
Copper futures: -1.73%

  Jonathan Levinson   6/9/2004,  11:34:54 AM
In addition to the 3.25B net add from the Fed in temporary open market ops, the Fed has just announced a permanent addition via coupon pass in the amount of $1.035B.

  Linda Piazza   6/9/2004,  11:33:49 AM
Here's the potential falling wedge on the OEX five-minute chart: Link Again, I may just be hyper-aware of any possible formations that signal a potential short-term reversal or choppy movement. There's no bullish price/MACD divergence here to suggest that this will break to the upside.

  Linda Piazza   6/9/2004,  11:26:52 AM
The current OEX pattern on the five-minute chart is beginning to look like a possible falling wedge--with those formations sometimes breaking sharply to the upside. However, MACD heads down on conjunction with price candles, so there's no bullish divergence to hint at any such upside breakout. I'm just extra wary of formations that hint at possible quick moves today because my best-guess scenario includes the possibility of such moves.

  Linda Piazza   6/9/2004,  11:17:07 AM
I'm back. The OEX has dropped below the support of the bearish right triangle on the five-minute chart, but then immediately turned around and retested the support level. This kind of action and worse is what I was afraid might happen today. Keltner support appears to be firming up near 553.82-553.87. Those lines are dynamic and can be bulged out, but if that support fails, the Keltner chart suggests a tumble down toward 552.

  Linda Piazza   6/9/2004,  10:52:15 AM
I have been called away for a telephone call. Be back soon.

  Jeff Bailey   6/9/2004,  10:51:23 AM
Swing trade round to full alert ... for the Dow Diamonds July $100 puts (DIASV) should the Dow Industrials (INDU) trade 10,370.

  Linda Piazza   6/9/2004,  10:51:07 AM
The SOX is below 480.

  Jeff Bailey   6/9/2004,  10:47:24 AM
VIX.X ... 15.20 +1.26% ...

  Jeff Bailey   6/9/2004,  10:44:26 AM
Sell Program Premium ... SPX 1,136.79 -0.47% ...

  Jeff Bailey   6/9/2004,  10:42:22 AM
VIX.X chart at this Link

For first time, I'm just noticing inflection points of VIX.X have actually come at SPX 1,090 to SPX 1,140.

  Linda Piazza   6/9/2004,  10:41:38 AM
The SOX retraced all of yesterday's gains but is now at the top of its former regression channel. The 50-dma is below at 475.72.

  Linda Piazza   6/9/2004,  10:37:07 AM
The OEX pierced the bottom of that possible right triangle, but then bounced right back up. It's testing the support again as I type. Again, my best-guess scenario for today is for declines, but possibly not deep ones and possibly ones accompanied by whippy action as the OEX hits bounce points.

  Jeff Bailey   6/9/2004,  10:32:42 AM
VIX.X 15.08 +0.46% .... starting to get a little premium

SPX 1,137.73 -0.38% .... comes back to see what's there at its WEEKLY R2.

  Jeff Bailey   6/9/2004,  10:31:40 AM
Bencmarking SPX Option Chain/VIX.X at this Link

Highlight the SELL July 1150 calls, June 1160 calls, then buying the June 1,126 puts?

  Linda Piazza   6/9/2004,  10:24:37 AM
It's possible that the OEX could be forming a bearish right triangle on its five-minute chart, with a series of lower highs and flat support near 554.50, with some candle shadows piercing that lower support, but only briefly.

  Jeff Bailey   6/9/2004,  10:22:25 AM
S&P 500 Index (SPX.X) 1,138.06 -0.36% .... with VIX.X 14.98 -0.19% .... SPX most active options at this point are ... June 1100 puts (SPTRT) (2,775:84,063) and July 1100 Put (SPTST) (1,822:27,938), then Aug 1150 call, July 1150 call, July 1200 call, June 1160 call.

perhaps something we wanted to look for in last night's Index Wrap unfolding, but would need to see VIX.X eventually turn up.

  Jeff Bailey   6/9/2004,  10:17:14 AM
10:15 Market Watch at this Link

  Linda Piazza   6/9/2004,  10:13:32 AM
The OEX could not sustain levels (at least so far) above the 50% retracement of the decline from the last peak yesterday afternoon (not the high of the day) to today's low, so that's one confirmation of weakness. We've just had a new low, albeit a minimal new low, but that's a further confirmation of weakness. Read my 8:55 post this morning for my worries related to trading bearishly (or trading, period) today, however.

The OEX is currently testing mid-channel support on the five-minute Keltner chart. This could be a bounce point.

  Jeff Bailey   6/9/2004,  10:13:25 AM
Swing trade short alert ... Amazon.com (AMZN) $51.23 here, stop $52.25, target $50.05.

  Jeff Bailey   6/9/2004,  10:07:55 AM
Raytheon (RTN) $34.18 +0.47% .... chart at this Link with two fitted retracement.

  Linda Piazza   6/9/2004,  10:02:42 AM
Keltner support just beneath the OEX lies from 554.26-554.67. Nearest Keltner resistance is from 555.26-555.43, at 555.86, and from 556.61-556.95.

  Linda Piazza   6/9/2004,  9:59:55 AM
Decreasing crude oil prices or not, the TRAN drops today, nearly retracing all of yesterday's gains, in danger of creating a tweezer-top reversal signal. It's far too early in the day to assume that's going to happen, and a similar tweezer-top formation printed 6/02-6/03 did nothing to halt the TRAN's further climbs, but this one comes at the top of a rising regression channel that's been building since February: Link

  Jeff Bailey   6/9/2004,  9:59:47 AM
Raytheon (RTN) $34.14 +0.35% ... did some work on this one last night as a stock in the Defense Index (DFX.X) 214.15 +0.41%.

I saw that RTN was one of the stocks that was "bought the most" when buy programs were found yesterday. Based on some fitted retracement work, stock looks like it should trend higher to $37.31 next two months.

  Jonathan Levinson   6/9/2004,  9:58:18 AM
The Fed has just announced a 9.25B overnight repo to refund the 6B expiring from yesterday, for a 3.25B net addition.

  Linda Piazza   6/9/2004,  9:51:59 AM
The Russell 2000 so far clings to its 100-dma at 577.38, with the Russell 2000 at 577.81 as I type.

  Linda Piazza   6/9/2004,  9:50:50 AM
Here's a first marker for OEX traders to watch during early trading: the 50% retracement of the decline from yesterday afternoon's last peak to this morning's low is at 555.55. The OEX bulls want to see the OEX sustain values above that 50% retracement while the bears want to see the opposite. This certainly isn't a be-all-and-end-all marker, but it's one way to watch the early trading to measure building strength or weakness. Then we watch for moves over yesterday's high or below this morning's low.

  Jeff Bailey   6/9/2004,  9:49:09 AM
Swing trade long alert for IPIX Corporation (IPIX) $13.52 +24% ... should the stock trade $14.30, go long, stop $10.50 (to begin), target $20.00.

  Linda Piazza   6/9/2004,  9:46:42 AM
The SOX opened just cents under the 100-dma, and now falls below that and the 200-dma again. It has not yet retraced 50% of Monday's tall white candle or even fallen below yesterday's low. RSI continues to round over, but other oscillators still point upward, including the short-term 5(3)3 stochastics. The jury is still out, but so far, this certainly couldn't be called bullish action. The bearishness just hasn't been confirmed.

  Linda Piazza   6/9/2004,  9:43:31 AM
I forgot to give the first five-minute OEX range for the benefit of those watching the OEX for daytrading opportunities using Jeff's 5MRT system, but unable to get the figures for themselves: during that first five minutes, the OEX ranged from 556.08 to 554.54. It also fell almost all the way to mid-channel Keltner support, now rising in the first retracement of the day.

  Jeff Bailey   6/9/2004,  9:40:25 AM
IPIX Corp. (IPIX) $13.91 +27% Link .... most active in morning session after the company announced its Full-360 degree video surveillance systems are fully deployed for multiple applications at the 2004 G-8 Summit.

First 5-minute bar was a good one from $12.71-$14.24.

  Linda Piazza   6/9/2004,  9:38:26 AM
Today's OEX opening was not below the real candle body from yesterday, preventing bears from seeing the opening they'd like to see for a classic evening-star reversal pattern, but some leeway should be given for indices as they gap less frequently than equities. Still, I'm cautious that we'll see something like what happened on the Nikkei--negative opening and negative close, but not negative enough to complete that evening-star pattern and enough zooming around in between to whipsaw both bullish and bearish players.

  Keene Little   6/9/2004,  9:35:37 AM
Gold and gold stocks appear to have finished their upward correction against the decline that started at the end of May. As seen in this XAU 60-min chart, price bounced up to retrace 62% of the decline, which also brought it back up to the broken uptrend line. The next leg down should be starting and will be wave-3 of the 5-wave sequence down. Wave-3's are the strongest so I will be watching for a swift decline from here to near the low at the beginning of May. If the pattern follows through, we'll then get a sideways/up correction (wave-4) and then a final leg down below the May low (wave-5). Then it will be time to be thinking long the gold stocks. But in the meantime, short is the place to be. Link

  Jane Fox   6/9/2004,  9:20:32 AM
Dateline WSJ Steven J. Heyer resigned as president and chief operating officer of Coca-Cola Co. The company said his departure comes "by mutual agreement." He was passed over in the hiring of a new chief executive earlier this spring.

Mr. Heyer, the company's No. 2 executive, will remain at the company long enough to ensure an orderly transition.

  Linda Piazza   6/9/2004,  8:55:04 AM
Yesterday, it was pretty easy to guess what the OEX might do, based on the old adage about tight-range days following big-range days. Today is more difficult. Yesterday's tight-range day created the second candle of a potential three-candle reversal signal. Classical technical analysis suggests that an open this morning below yesterday's candle body will likely result in a tall red candle to complete the reversal signal, but I'm not so sure it's going to be that easy. First, we should assume that the OEX now has significant support below it. Also, a trusted market observer has been sending me charts suggesting that the high put/call ratio implies a buying opportunity, but the historically low volatility indices worry those who might be thinking bullishly. Jonathan addressed this conundrum last night in his Futures Wrap and Jim also mentioned the behavior of the volatility indices in his Market Wrap, posting some charts we ought to watch.

The Energy Department did its part to prop up the markets yesterday, suggesting late in the day that crude oil prices might drop as low as $36.00/barrel, with overnight developments leading CNBC to tout the drop so far to $37.00 a barrel and slightly below at some points. Yet with a possible strike looming in Nigeria, the world's 7th largest oil producer and OPEC member, crude prices essentially steadied throughout the night. Market watchers will be studying the behavior with respect to the 50-dma overhead near $38.00 and the 100-dma below near $35.50. Yesterday's drop in crude prices and the attendant move up in equities show that we still should pay attention to what's happening with crude.

The 60-minute OEX chart continues to show bearish divergence as price continues to reach new highs but MACD and some other oscillators do not, warning bullish traders that the rises may not be as healthy as they appear. The light volume issues the same kind of warning, as does the building overbought pressure as indicated by the hugging of top Keltner resistance for a prolonged time. So, here is what bulls don't want to see: They don't want to see an open today below yesterday's open, so below the body of yesterday's candle. That open was at 555.69. Second, they don't want to see a sustained move below the midpoint of Monday's tall white candle, with that midpoint at 551.39. That would also represent a move below the 100-dma from which the OEX bounced yesterday, the 553.40 historical support, and the best-fit descending trendline off the February high. They also don't want to see 5(3)3 stochastics turn down through a trendline of higher lows. However, even such a move represents only the possibility of a downturn because the OEX could be stopped by multiple layers of possible support, including the 50-dma at 547.04, near historical resistance. I wrote most of this report prior to seeing how the Nikkei would close, but the Nikkei's behavior is something like what my best guess of today's behavior might be--a seeming beginning confirmation of the three-candle reversal signal (the Nikkei had printed a doji Tuesday after Monday's big gain) by a negative opening, followed by a decline, but a decline accomplished in a choppy manner and a decline that didn't take the Nikkei low enough to confirm the reversal signal, at least in my opinion. Anyone trying to day-trade something that tracked the Nikkei either bearish at that negative opening or bullish on a bounce from support would likely have been whipsawed out of the trade as the Nikkei zoomed around.

Here's what bears don't want to see: First they don't want to see an open this morning above yesterday's open. Although our futures are currently negative, cash openings don't always follow the actions of the futures exactly, and it's possible that we could see a flat opening or at least an open above yesterday's open. Bears don't want to see a higher high than yesterday's, and don't want to see the OEX move above 557, especially if such a move occurs on stronger volume than has been seen lately. Even then, however, bulls should be aware of historical resistance near 559, extending up to 563.40 or so, the nominal upside target suggested by the daily and weekly Keltner charts. Early yesterday, I mentioned that the daily Keltner chart suggested that the OEX might pull back to a line that now measures 547.55 or even down to one now measuring 543.99 before it tackled its 563.36 possible upside target, however.

So, what do I expect today? I'm not sure. As I touched on earlier, what I'm afraid will happen is a pullback that looks classic--opening below yesterday's open, a downturn accompanied by bearish TRIN and advdec levels, but then a buy-the-dip reaction somewhere between 551-553.50 or maybe even as low as 547.00, resulting in a quick zoom higher, wrecking a lot of until-then-working bearish plays. We've got Fedspeak today, altered release schedules for economic numbers for the rest of the week, a looming reshuffling of the Russell 2000, bond auctions over the next couple of days, a possible strike by oil workers in Nigeria, and various other factors to sort through. I frankly don't know how to weigh the varying outlooks posed by the high put/call ratios and the historically low volatility indices. If you're a have-to-be-in-the-market kind of person, I'd probably limit my contract size today, set close profit goals for at least part of my position, take that profit if achieved, and be prepared for whipsaws.

  Jonathan Levinson   6/9/2004,  8:22:20 AM
Awaiting the 10AM release of April wholesale inventories, est. +.5%.

  Linda Piazza   6/9/2004,  7:07:03 AM
As I mentioned yesterday morning, Tuesday's trading on the Nikkei produced a doji that gapped above Monday's closing levels. Nikkei bulls might have been anxiously watching Wednesday's open, hoping they wouldn't see a negative open. They did. The Nikkei opened slightly in the red, dipped about 100 points during the mid-morning, and then recovered about 30 of those lost points. It closed down 72.19 points or 0.63%, at 11,449.74. The day's candle, although a red one, did not retrace at least half of Monday's gains, and so probably wouldn't be considered the third in a three-candle evening-star formation.

Before the market opened, Japan increased its estimate for Q1's growth to 6.1% against a previous estimate of 5.6% and an expected revision to 5.8%. Business spending was revised down to growth of 1.7% from the previous estimate of 2.4%, but GDP in real terms and government spending were revised higher. Consumer spending stayed at the same 1% growth as reported in the previous estimate. Inventories rose. Another report revealed that in April spending in households headed by a salaried worker rose a seasonally adjusted 9.3%. Unemployment figures showed April's wages rising, with unemployment remaining steady at 4.7%.

Market watchers apparently set high expectations on the numbers, with manufacturers declining in early trading due to the disappointing decrease in business spending. In addition, Goldman Sachs removed Mizuho Financial Group and Sumitomo Mitsui Financial Group from its recommended list, apparently on valuation concerns, with the stocks of those two banks leading the decliners early in the day, and with all four major banking groups closing lower. Techs declined. Many automakers fell, with Mitsubishi declining on news that DaimlerChrysler was considering a lawsuit against the company due to damages incurred because of quality problems in one unit.

Other Asian bourses turned in mixed performances, but most of the ones we commonly watch traded lower. Semi-related stocks appeared mixed across the region, too, with one report noting that Goldman Sachs had downgraded two, Taiwan Semiconductor and United Microelectronics, to an in-line rating from their previous outperform ratings. Reportedly, the firm doesn't see much more upside in price for the two companies. The Taiwan Weighted declined 0.35% and South Korea's Kospi lost 1.83%. Singapore's Straits Times was flat, closing down only 0.02 points and 0.00%. Hong Kong's Hang Seng was also flat, down only 0.03%, but China's Shanghai Composite fell 1.72%.

In contrast, most European bourses currently trade near the flat-line level or in the green, buoyed or at least propped up by lower crude oil prices ahead of this morning's U.S. inventories numbers. Oil majors and mining stocks headed lower in London in early trading. Oil major Total was also lower in European trading with energy stocks performing poorly. Euro Disney garnered attention, gaining strongly after a tentative agreement on a refinancing package. Other stocks in the news included Business Objects (BOBJ), gaining after announcing that Microstrategy's patent infringement suit against the company had been dropped; Philips Electronics, gaining after announcing plans intended to increase its market share in its Medical Systems business as well as giving an upbeat outlook on its Chinese business activities; and DaimlerChrysler, gaining after the news already mentioned regarding Mitsubishi as well as its revelation of planned capex expenditures meant to expand its business in China. With Volkswagen acknowledged as the leader in car sales to Europeans, its CEO was disgruntled at the French and German governments' plans to create industry champions to defend their industries, labeling the plan "nonsense."

As of this writing, the FTSE 100 has dipped 4 points or 0.09%, to 4500.80. The CAC 40 is up 1.53 points or 0.04%, at 3724.99. The DAX has climbed 9.57 points or 0.24%, to 4028.52.

  OI Technical Staff   6/8/2004,  8:01:42 PM
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