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  Jeff Bailey   6/10/200,  6:15:29 PM
Pivot Matrix for next week at this Link

  Jeff Bailey   6/10/200,  4:59:28 PM
Closing Internals at this Link

NYSE Comp. 52-week High/Low (10-day Avg.) Chart at this Link

NASDAQ Comp. 52-week High/Low (10-day Avg.) Chart at this Link

  Linda Piazza   6/10/200,  4:00:05 PM
The OEX ends the day within a building congestion zone, as I had thought it might today. It's above the 100-dma, below 557 resistance.

Have a great weekend, everyone. Being a 60's-style liberal (yeah, one of those), Reagan wasn't my favorite president, but he probably was a favorite person, in the kind way he dealt with people and in his relationship with his wife. Tell the people you love how much they mean to you this weekend. Do it for the Gipper, and also for my 51-year-old stepsister, still unable to speak those words to her loved ones three weeks after a massive stroke.

  Jane Fox   6/10/200,  3:53:50 PM
Dateline WSJ Martha Stewart asked a judge to grant her a new trial, citing charges that a government witness at her first trial lied repeatedly on the stand.

The request, considered a long shot by legal experts, came four weeks before Ms. Stewart and former stockbroker Peter Bacanovic are to be sentenced for lying about a well-timed stock sale by the celebrity homemaker in 2001.

  Linda Piazza   6/10/200,  3:49:36 PM
I knew those OEX Keltner channels were narrowing down so much that a breakout was looming. However, as I stated in my 15:35 post, I'd be leery of a breakout on any index this late in the day, ahead of the Russell reshuffling and the long weekend.

Speaking of a long weekend, options traders need to give serious consideration to whether they'll hold June options over the long weekend. Unless your options are already deep in the money and so have little time premium left, a lot of your premium is going to evaporate over the weekend. That's particularly true of out-of-the-money options. Would it be better to sell and buy back on Monday? That's an individual decision based on whether you've got a too-high stake in those OTM options or have only a lottery-type play that you'd always intended to let run, as well as dozens of other considerations.

  Linda Piazza   6/10/200,  3:35:36 PM
The OEX 5-minute Keltner channels narrow down. Will the powers-that-be in the markets be able to avoid a breakout before the close? We'll see, but I'd be wary of any such breakout with today the last day of trading ahead of the Russell 2000 reshuffling and pre-long-weekend positioning.

  Linda Piazza   6/10/200,  3:30:08 PM
The TRAN eases below that 15-minute 130-pma.

  Linda Piazza   6/10/200,  3:22:19 PM
I mentioned earlier today that the TRAN had been hugging its 15-minute 100-pma, always having bounced from touches or near touches of that MA since May 21. It has since slipped below that MA and is now hugging the 130-pma, with a sustained slip below that MA, currently at 3021.15, suggesting a retest of 3000-3005. The TRAN is at 3020.17 as I type.

  Linda Piazza   6/10/200,  3:09:02 PM
Did everyone read Jane's article on divergences between commodities and their related shares and what those divergences might show? Interesting stuff. Here it is: Link

  Linda Piazza   6/10/200,  3:07:04 PM
OEX bulls couldn't do any better than the bears. Nearest resistance turned the OEX back.

  Jeff Bailey   6/10/200,  3:06:48 PM
03:00 Internals at this Link

  Linda Piazza   6/10/200,  3:03:49 PM
So far today, the BIX is printing an inside-day candle, a harami in candlestick terms. The 5(3)3 stochs show bearish divergence, hinting that the inside day (if it's still an inside day by the close) could be resolved to the downside on Monday, but that's not a given.

  Linda Piazza   6/10/200,  2:51:46 PM
I'm reluctant to comment too much on the little ebbs and flows of the OEX, afraid I'll say something that encourages someone to leap into a play. My best-guess scenario for today was chop somewhere between 551-557, without a strong view as to which would be seen first. I don't think today is a day i should necessarily be micro-analyzing each move because the low volume and need to settle accounts pre-long-weekend might mean that anything we're seeing on a technical basis could be reversed immediately because someone somewhere out there could change the whole thing by a small buy or sell program. We should always expect chop when it's our best guess that consolidation will occur, but that's exaggerated when the volume is low.

Now that that's been said, the Keltner channels do predict a breakout, but not when or what direction. Could be today; could be Monday.

  Linda Piazza   6/10/200,  2:39:13 PM
The OEX bears couldn't take it down below support, so now bulls will try to head it above resistance. So far, though, the OEX appears to be turning down along a best-fit trendline of lower highs established on the 1:00 candle yesterday. So far, this is just more chop in an even tighter choppy range than I expected.

  Jeff Bailey   6/10/200,  2:24:21 PM
June 1,135 call (SPTFG) $6.80 ... has moved up to #2 (volume 4,622) was 2,096 just prior to 01:00 PM EDT on the most active SPX.

Have to at least think that little pop in the VIX.X might have been a call seller.

  James Brown   6/10/200,  2:20:41 PM
Ouch! After a week of struggling with resistance at its 20/21-dma ICOS is capitulating with a 7% drop to $26.26 today.

  Jeff Bailey   6/10/200,  2:17:46 PM
VIX.X 15.23 -1.03% ... there was a pretty good little pop higher in the VIX.X from 01:20-01:25 PM EDT. I was working on the 01:00 Update at the time, but will snoop around and see if there wasn't some unusual trade volume in an at/out the money call (selling) or 1,130 put.

  Linda Piazza   6/10/200,  2:15:51 PM
Here's what I mean when I mention that Keltner channels have settled into an equilibrium position: Link You don't have to know what the channels mean to see that they're all nestled neatly within one another. Note that MACD has flat-lined, too. Usually this predicts a breakout, but it doesn't predict when it will occur, and this equilibrium state could continue through the end of the day.

  James Brown   6/10/200,  2:14:49 PM
Average volume is too low to trade this equity but the breakout over resistance at $40.00 is a new 4 1/2 year high for Consolidated Graphics (CGX).

  James Brown   6/10/200,  2:10:15 PM
Bullish traders might want to take a second look at CVD and BCO. Both stocks look long-term overbought but on the other hand it's hard to argue with their relative strength. They move a bit too slowly for directional option plays but covered calls might work. Don't forget your stop loss.

  James Brown   6/10/200,  2:03:59 PM
Chicago Mercantile Exchange (CME) has bounced back strongly from its technical breakdown last week. Now the stock looks stronger with today's move over the $125.00 level.

  Linda Piazza   6/10/200,  1:57:28 PM
The OEX broke below that rising trendline that it built today and then turned around and headed right back above it. Be reluctant to trust anything you're seeing today.

  James Brown   6/10/200,  1:56:35 PM
Luxury goods retailer Coach (COH) is breaking out to new all-time highs above the $45.00 level.

  James Brown   6/10/200,  1:54:35 PM
Nike Inc (NKE) could be turning things around. Shares were looking weak a few days ago with the breakdown back under $70.00. Now the stock is challenging resistance at $72.00 and its 50-dma.

  James Brown   6/10/200,  1:51:09 PM
How low will it go? Lexar Media (LEXR) is down another 3.75% and breaking support at $8.50. Its short-term technicals are bearish (again) and its MACD is about to produce another sell signal. Its P&F chart points to an $8.00 target, which happens to be its next support level.

  Linda Piazza   6/10/200,  1:43:20 PM
The OEX is now breaking below the ascending trendline it built today.

  James Brown   6/10/200,  1:36:43 PM
Sierra Wireless (SWIR) has been a big winner for the bulls the past three weeks. In the last few days SWIR has broken through resistance at $30.00 and its 50-dma. Instead of chasing it consider waiting for a dip and bounce from the $30-31 region.

  Linda Piazza   6/10/200,  1:35:31 PM
The OEX is testing the bottom of the support line of higher lows that it's been building today on its five-minute chart.

  James Brown   6/10/200,  1:30:19 PM
SanDisk Corp (SNDK) might be a put candidate. Shares have broken down under support near $22.00 on big volume and its technicals are turning bearish yet again. Its bearish P&F target is $10.00 but I'd be cautious about potential support at the $20.00 mark.

  Linda Piazza   6/10/200,  1:27:18 PM
As of a few minutes ago, total volume on NYSE was 631 million and on the Nasdaq, 731 million. Advancers were ahead on the NYSE, but it was neck-and-neck on the Nasdaq.

  James Brown   6/10/200,  1:22:20 PM
Cabot Microelectronics (CCMP) is down again after a week of struggling with overhead resistance at its 40-dma. Now shares are breaking down under the $30.00 level with today's 2.5% drop.

  Jeff Bailey   6/10/200,  1:18:38 PM
01:00 Internals at this Link

  James Brown   6/10/200,  1:14:21 PM
Bulls can keep an eye on Magna Intl (MGA) for a breakout over resistance at $84.00. Bears might want to watch it for a breakdown under its 10-dma. The stock has been in a very wide trading range for the last few months ($73 to $84). If you like to play channeling stocks this might be an entry point for the next leg down.

  James Brown   6/10/200,  1:11:07 PM
Hmm.. I haven't looked at Toyota Motor Corp (TM) lately. The stock trades here as an ADS. Shares are up strongly in the last few days on big volume. This week has seen TM hit new 3 1/2 year highs.

  James Brown   6/10/200,  1:06:27 PM
General Dynamics (GD) looks tempting here with another new high this morning. Shares have been consolidating in a tight sideways trading range the last few days after breaking out over resistance near $97. Bulls might want to give this defense play another look. The DFI defense index happens to be near its all-time highs.

  Jeff Bailey   6/10/200,  1:05:36 PM
SPX Option Chain sorted by June strike at this Link

Everything pretty well paired off. SPX trades 1,133.85 +0.22% ....

  Linda Piazza   6/10/200,  1:00:44 PM
The OEX has neither confirmed that latest reverse H&S on its five-minute chart nor dropped below the right shoulder level. It is, however, forming a second right shoulder. Some might now prefer to look at the formation as a bullish right triangle with a flat top at about 554.25 and with a series of higher lows.

  Linda Piazza   6/10/200,  12:58:53 PM
The SOX threatens to fall through the support of its short-term rising regression channel, the one formed within the longer-term descending regression channel. (See the chart linked to my 10:18 post.) Below that support lies the 30-dma, with that average having stopped the last decline. The 30-dma lies at 463.97.

  Jeff Bailey   6/10/200,  12:52:17 PM
SPX Most Active Options ... While VIX.X 15.02 -2.4% falls today, option action is notably more spread out today, not nearly as much action in June/July put/call options. Link

  James Brown   6/10/200,  12:51:48 PM
IBM still looking bullish with a bounce from the $90.00 level this morning. Watch out for potential resistance at its 200-dma.

  Linda Piazza   6/10/200,  12:36:20 PM
The SOX is sinking back from its test of the descending regression channel resistance. (See the chart linked to my 10:18 post.)

  James Brown   6/10/200,  12:36:02 PM
Heads up for Home Depot (HD) shoppers. The company issued a recall this morning for some oscillating floor fans. Here's the AP report:

WASHINGTON (AP) -- Home improvement chain Home Depot Inc. reported Thursday that its Atlanta unit, in conjunction with SMC Marketing Corp. and the U.S. Consumer Product Safety Commission, is voluntarily recalling 2.2 million SMC-brand oscillating floor fans, citing fire hazard complaints.

Home Depot said the electric power cord can be damaged by the oscillation motion of the fan, which can result in a short circuit and possible ignition of the plastic case.

Home Depot said it sold these fans from January 1997 through October 2001 for about $20. The recalled fans also were sold at other retailers, some of which have gone out of business.

  Linda Piazza   6/10/200,  12:34:46 PM
The TRAN is now negative.

  Jeff Bailey   6/10/200,  12:32:29 PM
OSI Pharma (OSIP) $67.03 -2.48% .... If you have time (if its REALLY slow this afternoon) could you chart your thoughts on how far you think OSIP might sink....thanks.

Recent trade at $76 and current column of O building to $66 has current bearish vertical count building to $47. So, it might sink to there. Previously shown bar charts with fitted retracement have an 80.9% retracement at $51.79.

  Linda Piazza   6/10/200,  12:22:02 PM
The OEX 15-minute chart shows the nested channels trying to settle into an equilibrium position on that time interval, too. Mid-channel support there is at 552.17, so I wouldn't be surprised to see the OEX oscillate in a two-point range just above or around that number for a while.

  James Brown   6/10/200,  12:20:08 PM
Oil services company Smith Intl Inc (SII) is up 2% to $50.60 after UBS upgraded the stock to a "buy" this morning. Unfortunately, shares remain under resistance at $52.00 and its combined 40 and 50-dma's.

  Jeff Bailey   6/10/200,  12:19:20 PM
Swing trade bullish option close out alert ..... Close out the Overstock.com July $35 calls (QKTGG) at $3.00 bid. Link

Nothing bearish about the stock, just think stock might pullback into base and with NASDAQ NH/NL starting to fade a bit, odds slip that OSTK is going to trade a 52-weeker before expiration.

  James Brown   6/10/200,  12:18:38 PM
Allstate Corp (ALL) is up 0.98% and gapping above resistance at $45.00 and its 50-dma after Morgan Stanley upgraded the stock to "over weight" this morning.

  James Brown   6/10/200,  12:14:35 PM
Burlington Resources (BR) is up a strong 3.6% to $34.48 after Smith Barney upgraded the stock from a "sell" to a "hold". The stock is near its all-time highs and just under resistance at $35.00.

  Jeff Bailey   6/10/200,  12:12:52 PM
12:00 Internals at this Link

  James Brown   6/10/200,  12:12:29 PM
Drug store chain CVS said May same-store sales rose 6.1% while total sales rose 7.7%. They plan to complete their Eckerd drug store acquisition in July. Shares are up 1.25% to $42.00 and nearing new three-year highs.

  Linda Piazza   6/10/200,  12:10:12 PM
The OEX five-minute nested Keltner channels I watch are trying now to align themselves in an equilibrium position with all the channels trying to straighten out their kinks and line up smallest-to-largest, one nested neatly inside the other. That often happens when markets are just trying to hold onto certain levels, especially just ahead of long weekends. The OEX can't hold that equilibrium position forever, but it can for a few hours, and may be trying its best to do so now. Those of you holding June options should be considering what will happen if there's no movement into the close, as you'll be looking at losing a hefty 3/7 of your time premium over the weekend.

  Linda Piazza   6/10/200,  11:58:39 AM
The TRAN hangs onto breakeven levels today while the 5(3)3 stochs tilt downward through the signal line, not quite making it through just yet. I've been watching some indices on the 15-minute charts, with their 100/130-pma's (exponential) on those charts, and the TRAN's shows the TRAN clinging to its 15-minute 100-pma at 3027.93. The TRAN has been bouncing from touches or near touches of its 15-minute 100-pma since May 21, so a move below the 100/130-pma combo would be a change of trend according to this indication. The 15-minute 130-pma current crosses at 3020.66, but the TRAN is likely then to find support at 3000.

  Linda Piazza   6/10/200,  11:44:30 AM
If confirmed, the latest version of a reverse H&S on the OEX five-minute chart would have an upside target near 555.50, but currently the OEX turns back from that neckline rather than moving up through it.

  Jeff Bailey   6/10/200,  11:43:39 AM
Day trade stop alert for the QQQ $36.74 +0.44% here. And that's it for me today.

Look for range between $36.31-$36.77, but I'm not going to try and trade this light volume chop.

  Linda Piazza   6/10/200,  11:43:11 AM
The OEX currently tests the latest and better-formed version of a reverse H&S on its five-minute chart, the one linked to my 11:18 post.

  James Brown   6/10/200,  11:30:23 AM
Interesting... The Labor Dept. says outsourcing was responsible for 5.5% of the jobs lost in the first quarter.

  James Brown   6/10/200,  11:23:33 AM
Sector update

XAU gold & silver: +2.01%
XNG natural gas: +1.67%
OSX oil services: +1.52%
OIX oil index: +0.88%
GHA hardware: +0.59%
CYC cyclicals: +0.54%

XAL airlines index: -3.35%
DJUSHB homebuilders: -2.66%
TRAN transports: -1.67%
XBD broker-dealers: -0.73%
INX Internet index: -0.52% and...
Copper futures: -1.76%

  Jeff Bailey   6/10/200,  11:20:02 AM
Day trade lower stop alert for the QQQ $36.66 +0.22% to break-even.

  James Brown   6/10/200,  11:19:41 AM
Goods news for puts players in Kohl's (KSS). The stock tried to breakout over its 200-dma on Tuesday and Wednesday but failed. Now shares are slipping back under the $48.00 level. Momentum traders may still want to wait for a move under $47.00 as an entry point.

  Linda Piazza   6/10/200,  11:18:59 AM
Now that's more like it. Is this going to be the actual reverse H&S that we should watch on the OEX five-minute chart? Link This looks a little better formed than the previous one, so perhaps bulls are going to give this one more try. Remember that doesn't mean that the formation will be confirmed or will meet its upside target, if so. I don't trust much of anything I see today, with volume so light and with the OEX perhaps in the process of building a consolidation zone. Perhaps.

  Jeff Bailey   6/10/200,  11:15:24 AM
11:00 Internals at this Link

  Jeff Bailey   6/10/200,  11:03:22 AM
Russell 2000 (RUT.X) 568.31 -0.04% .... session low and just edging below yesterday's low.

  Jeff Bailey   6/10/200,  11:02:38 AM
QQQ $36.63 +0.16% .... quick little drop back near WEEKLY R1.

  Jeff Bailey   6/10/200,  11:01:42 AM
Semiconductor Index (SOX.X) 475.28 +0.31% ... session low and now back at WEEKLY Pivot.

  Jeff Bailey   6/10/200,  10:58:34 AM
Dow Industrials (INDU) 10,391 +0.21% ... slips back below WEEKLY R2

  Linda Piazza   6/10/200,  10:57:20 AM
I'm watching the trend of the TRIN (none) and the advdec (not much of one) to try to get a heads-up on what might happen next. Both still support the bullish case, but that's about all that can be said. Total volume is so low--267 million on the NYSE and 331 million on the Nasdaq as of a few minutes ago--that you can't expect too much of a trend or any consistency in signals. A small buy or sell program could undo everything you're seeing develop on any intraday chart, anyway.

  Linda Piazza   6/10/200,  10:43:40 AM
The OEX is perhaps rejecting the reverse H&S formation on the five-minute chart, turning down in a more pronounced manner from the neckline.

  Linda Piazza   6/10/200,  10:41:25 AM
The OEX is either turning back below the neckline of that improbable reverse H&S formation I detailed earlier or it's retesting the neckline, depending on how you draw that neckline. Although I'm far from certain what will play out today, I'd probably have to give strongest weight to an attempt to steady within a building consolidation zone from 551-557, but with a possible low side down to 547 and a possible high side up to 559. I really don't have a strong feel today for whether I'd most expect the OEX to head up to test 557 first or down to test and establish the lower boundary first or just chop around right where it is. I used to try to fight my way to a conclusion when I found myself this uncertain until I found over and over that on the mornings I was uncertain, the market appeared to be uncertain, too, and I was better off out of the confusion. Sometimes I would miss good plays that way, but many times all I missed was seeing my options premium evaporate while markets chopped around. Futures traders don't have to worry about that evaporating options premium while markets chop (they have other worries), but options players do. You not only have to be right, but you have to be right within a certain time frame, often.

  Linda Piazza   6/10/200,  10:34:24 AM
We have three IPO's today, PowerDsign Ltd (PDSN), CB Richard Ellis Group Inc. (CBG), and Digirad Corp (DRAD). PDSN is an integrated circuit company based in Israel. The company is involved with power transmittal and management over data network cables, via Ethernet networks. It should have already been launched according to the release time, but I don't find quotes for it yet, at least on QCharts. CBG is a U.S. and international commercial real estate services firm based in Los Angeles. CBG began trading at 9:35, but showed a first five-minute range of only 18.99 to 19.01. It since fell sharply to $18.10 and is now trying to rebound. DRAD is involved with the use of digital gamma cameras used for cardiac imaging. DRAD also should have been released as of a few minutes ago, but QCharts isn't yet giving me any information.

  Jeff Bailey   6/10/200,  10:34:01 AM
Biotechnology Index (BTK.X) 487.87 -0.23% ... moves below yesterday's lows here.

  Jeff Bailey   6/10/200,  10:33:07 AM
Day trade short alert for the QQQ $36.77 here, stop $36.95, target $36.37.

  Linda Piazza   6/10/200,  10:21:32 AM
The OEX is pushing above the neckline of the "probably not valid" reverse H&S formation detailed in my 10:09 post. Unless there's a quick reversal, something I wouldn't be surprised to see on a day like today, then we have to consider that the formation could be showing some underlying bullishness, even if we shouldn't necessary expect the upside target of such a badly formed pattern to be fulfilled. That upside target would be somewhere around 555.60 or perhaps slightly higher, depending on how you draw the neckline.

  Linda Piazza   6/10/200,  10:18:07 AM
The SOX hit the support of its near-term ascending regression channel and then heads up this morning, but is currently facing resistance at the longer-term descending channel. Link SOX bulls need to see the SOX push above the linked 100- and 200-dma's, as well as recent highs, but those are going to be tough resistance. There's currently bearish price/MACD divergence on this daily chart.

  Jeff Bailey   6/10/200,  10:15:22 AM
OSI Pharma (OSIP) $66.21 -3.46% .... session low on some volume

  Jeff Bailey   6/10/200,  10:13:34 AM
Dow Industrials (INDU) 10,402 +0.33% ... makes its way back above WEEKLY R2 (10,394) ....

  Jeff Bailey   6/10/200,  10:11:52 AM
MM profiles at this Link

Not much going on, but higher across all profile. OSTK +2.44% is only percentage mover.

  Linda Piazza   6/10/200,  10:09:23 AM
Could this qualify as a reverse H&S? Link The bullish divergence is there, but that right shoulder is too large in proportion to the head to be a classical formation, at least. I don't think it's a great candidate, but that doesn't mean that I'm not going to keep watching it anyway for confirmation or a rejection at the neckline. I've seen too many of these "probably not valid" formations go on to confirm and meet their upside targets. I'm not going to count on that happening, however, and I don't think you should, either.

  Jeff Bailey   6/10/200,  10:06:12 AM
10:00 Market Watch at this Link

I'm having some problems with data feed and proper quotes. I've tried to check accuracy of the Market Watch and believe current table edited for accuracy.

  Linda Piazza   6/10/200,  10:01:36 AM
On the 15-minute Keltner chart, support groups from 551.72-552.12. That support can be bulged downward, but if it's soundly broken, next support on that chart is down at 546.87. Right now, 15-minute resistance is a little thinner-looking than support, but is layered in close proximity up to 554.20, and then at 555.75 and 556.94. That would fit with the OEX building a consolidation range roughly from 551-557, one of the scenarios I thought might be possible for today. I really don't have a strong feeling as to whether that's the most likely scenario, however.

  Jonathan Levinson   6/10/200,  9:55:33 AM
11.5B in multi-day repos have been announced against 19.25B expiring, for a net drain of 8.75B from the Fed.

  Linda Piazza   6/10/200,  9:49:01 AM
The TRAN opened below yesterday's close, but now tries to rise, rather unsuccessfully so far. The short-term 5(3)3 stochastics have produced a bearish kiss and are now trying to turn down through the signal line, but we know those stochastics can redraw themselves with ease. I use them as a sort of warning signal but not as a trading one, particularly when ADX is over 30, as it is (just barely) for the TRAN, showing that it's been trending strongly. We watch the TRAN for many reasons, not the least of which it's sometimes a leading indicator for the Dow, as the SOX sometimes is for the Nasdaq. So far, the evidence isn't clear, but we're seeing bearish price/oscillator divergence and other signs of potential weakness, so bulls in transportation stocks might be watchful, thinking of ways to protect their recent profits if a pullback should deepen.

  Linda Piazza   6/10/200,  9:41:18 AM
Mid-channel Keltner resistance on the OEX lies at 553.82, but the OEX encounters other Keltner resistance first, all the way down to 553.45.

  Linda Piazza   6/10/200,  9:40:13 AM
During the first five minutes of trading, the OEX spanned a range from 552.69 to 553.58.

  Jeff Bailey   6/10/200,  9:32:55 AM
Federal Express (FDX) $76.01 Link ... delayed open but indicated higher at $78 on company's positive Q4 outlook. Company now saying it expects to earn $1.36 per share compared to prior guidance of $1.20-$1.30. Updated outlook included a 4 cent gain from a one-time tax benefit.

  Linda Piazza   6/10/200,  8:52:35 AM
Yesterday, the OEX did just what I feared it would do: it rolled over far enough to put fear in the hearts of bulls but not far enough to embolden bears, severely violate the nearest strong support, or close below the midpoint of Monday's tall white candle: Link

What next? While it may seem to have little to do with our markets, economic numbers released in China last night hinted that China's efforts to tighten may be working without that country yet tightening rates. That may help prompt gains in other indices, although the Bank of England's 1/4 point tightening this morning, as reported in my 7:07 post, may erase some of that sentiment as might some of our economic numbers just released. Still, we have to be aware of the global context in which our trading begins today.

I mentioned yesterday that both daily and weekly Keltner charts suggested that the OEX could test 563, but that the daily chart suggested about an equal likelihood that the OEX would first retreat toward 544-547.40 before it attempted 563, with 547.08 also being the location of the 50-dma. With 549.50-553.50 being a zone of support, I was never sure that the OEX would drift far below that zone, however, and I'm still not sure. The 15-minute Keltner chart now shows fairly strong support gathering near 551.87, suggesting at least a bounce attempt from either yesterday's close or from near that 551.87 level. If 551 should fail, however, that Keltner chart does suggest a downside near 547.

What do futures suggest? They're up this morning, but a look at the overnight trading pattern shows both YM and ES having a H&S-ish look to them, so hinting that all might not be as bullish as it appears. What if the bounce should get started, though? Daily oscillators are approaching or at levels indicating overbought conditions, warning of a possible prolonged consolidation or a pullback, but we all know that's a warning only and those oscillators could trend while the OEX trends higher. Until the OEX moves above 557, however, I'd consider any such bounce suspect, part of a movement within a consolidation zone. If tempted to enter a long play on a push above 557, set a stop that would get you out quickly if the move is only a head fake and have a plan in mind for how you'll handle that 563 level, if it should be reached. We'll have to see how internals look today as the market opens, but it's possible that any rise today could just be choppy movement within a building consolidation zone.

  Jonathan Levinson   6/10/200,  8:31:06 AM





  Jonathan Levinson   6/10/200,  8:30:41 AM



  Jonathan Levinson   6/10/200,  8:30:20 AM
Bank of England Raises Key Interest Rate 10 June 2004, 08:27am ET , AP Online Link

  Jonathan Levinson   6/10/200,  8:15:05 AM
We await the 8:30 release of export price ex-agriculture for May and import prices ex oil, April's reading being +.4% and +.3% respectively, and initial claims for the week ending 06/05, est. 335K.

  Linda Piazza   6/10/200,  7:07:06 AM
Good morning. The Nikkei gapped lower by more than 70 points in Thursday's trading, but soon started a vertical climb that took it almost 200 points higher in less than two hours. Ahead of and into the 2:00 release of the April machinery orders number, the Nikkei had climbed almost 260 points off its day's low, easing slightly into the end of the day to close up by 126.23 points or 1.10%, at 11,575.97. Expectations for that number had been for a rise of 1.9-2.3%, according to various articles, after the previous month's decline of 3.2%. Instead the number surged a seasonally adjusted 11.8%.

Reportedly, in addition to hopes that the machinery number would be higher, an announcement by Sumitomo Mitsui Financial Group that it might buy a stake in Japan's Promise Co., a consumer finance company, helped prompt the early gains. Market watchers speculated that other financials might consider mergers and acquisitions. Consumer lenders gained in early trading, but the banking sector ended the day with mixed performance. UFJ Holdings declined after announcing that it will not ask the government for financial help in restructuring one of its borrowers. Some techs declined in early trading, but recovered by the close. Domestic-demand issues gained.

In stock-specific news, Sharp filed a patent infringement suit against a Japanese unit of Taiwan's Teco Electric and Machinery and retailer Aeon then deferred business with Sharp. NTT DoCoMo set up a deal to deliver its i-mode mobile Internet service to Telstra, an Australian telecom and mobile operator. Sharp made modest gains and NTT DoCoMo was flat.

Other Asian bourses turned in mixed performances. The Taiwan Weighted lost 1.65% and South Korea's Kospi declined 1.54%. Singapore's Straits Times gained 0.48% and Hong Kong's Hang Seng gained 0.67%. In China, May's industrial production rose 18% from the year-ago level, down from the 19% rise the previous month. Market watchers took this as good news, a sign that China's efforts to slow its economy and avoid a hard landing were working. Just Monday, a Chinese central bank governor had mentioned inflation, suggesting that China might be considering a rate increase, a subject of speculation over recent weeks, but today's number cooled some of that speculation. The government's goal is reportedly to slow economic growth to 7% this year. China's Shanghai Composite was flat, up 0.02%.

European bourses are mixed this morning, too, with many showing either modest gains or modest losses on light volume. It's a religious holiday in many European countries, contributing to the light volume, but some also mention the upcoming three-day holiday in the U.S. as contributing to that light volume. The Bank of England is also meeting, with estimates for their decision ranging from no hike, to a quarter-point hike, all the way to a half-point hike. Reasons being cited for a hike include the still-too-hot housing market and recent strong economic numbers. As I completed this report, the Bank of England announced a quarter-point hike, citing household spending and global economic recovery as reasons for the hike, according to commentators on CNBC Europe.

Two stocks in the news included luxury goods group Richemont and drinks group Remy Cointreau, both lower after releasing earnings. Richemont gave a subdued outlook for the rest of the year. In other news, the president of the French telecom regulator reportedly said in an interview that he was considering requiring lower prices for text messages by 2005. The news pressured Vivendi Universal and France Telecom, majority stakeholders in two French mobile operators, but their losses were minimal in early trading. France Telecom also announced changes of its own, including a trimming of Internet access fees and the introduction of a voice-over-IP plan.

As of this writing, the FTSE 100 was down 4.90 point or 0.11%, to 4484.60, rising immediately after the rate-hike announcement. The FTSE 100 hasn't yet had time to see volatility subside after that announcement, however. The CAC 40 was up 7.04 points or 0.19%, to 3706.33. The DAX was up 9.58 points or 0.24%, to 4007.34.

  Jeff Bailey   6/9/2004,  9:38:55 PM
Current OPEN MM trade profiles at this Link

I did not receive a QCharts upside alert on IPIX $12.03 +10.2% when it evidently traded my profiled entry point of $14.30 and session high of $14.34. I take the trade as profiled, stop at $10.50.

What do I think.... I think I see similar trade in IPIX Link as what took place yesterday in AMZN as discussed in last night's Index Wrap and this chart Link

  OI Technical Staff   6/9/2004,  9:24:00 PM
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