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  Jeff Bailey   6/18/200,  4:13:08 PM
QQQ $36.42 +0.08% ... with 2.5 minutes to the close. Will be be DAILY Pivot or WEEKLY S1?

  Jane Fox   6/18/200,  4:04:51 PM
CNN unconfirmed reports about Paul Johnson seem to be true

Dateline WSJ - RIYADH, Saudi Arabia -- An al Qaeda group said Friday it killed American hostage Paul M. Johnson Jr., posting an Internet message that showed photographs of a beheaded body that appeared to be his.

Saudi security officials later said Mr. Johnson's body was found in a northeastern district of Riyadh.

The execution statement was posted on a Web site where the group frequently makes announcements. Also posted were three still photos showing a head that appeared to be Mr. Johnson's.

  Linda Piazza   6/18/200,  4:02:09 PM
Good afternoon, everyone. Have a great weekend.

  Jeff Bailey   6/18/200,  3:59:14 PM
Day trade close out alert for (ELX) here at $15.66. I wanted a close below $15.61 to hold over the weekend, but may not get it.

  Linda Piazza   6/18/200,  3:55:47 PM
The SOX broke above that descending trendline in place since noon, but it's not zooming high after doing so. It's pulling back, either to gather its strength before another push or else to drop right back below that trendline. Unless it does either of those in a big way, it's still going to be printing a high-wave doji for the day, a potential reversal signal that would need confirmation by a tall white candle Monday that retraced at least 50% of yesterday's tall red candle. So far, this still appears to be a countertrend bounce, but we'll just have to see what develops next week.

  Linda Piazza   6/18/200,  3:43:23 PM
The SOX again tests the descending trendline built since noon.

  James Brown   6/18/200,  3:41:24 PM
A couple of days ago I listed Curtiss Wright (CW) on the monitor for its unexplained rally higher. CW is another defense contractor and lo and behold shares are up another 8% today on huge volume. Yet there is still no news.

  James Brown   6/18/200,  3:39:33 PM
Defense contractor EASI is up a strong 5.69% and breaking out over significant resistance at $55.00. Volume is three times the average. I can't find any news as a catalyst for the move.

  Jeff Bailey   6/18/200,  3:31:45 PM
Microsoft (MSFT) $28.41 +2.3% .... session highs. Oh, I want this swing trade back.

  James Brown   6/18/200,  3:31:11 PM
Yankee Candle Co (YCC) is breaking out over resistance at $30.00 to hit new all-time highs. Its bullish P&F chart points to a $59 price target. This might be a decent covered call play.

  James Brown   6/18/200,  3:27:27 PM
Kimberly Clark (KMB) is edging closer and closer to a breakout over resistance at $67.00.

  Linda Piazza   6/18/200,  3:24:43 PM
H&S's everywhere: As I mentioned in my first morning post this morning, the Nikkei came within one box on its P&F chart of creating a new sell signal, making that one-box push above the bearish resistance line before the reversal into an "O" column a little suspect. Although I like to look at P&F charts to get a better outlook on what's happening, the Nikkei has spent the last several weeks zooming around, creating buy and sell signals left and right. Several weeks ago, it confirmed a reverse H&S on its daily chart, formed at the bottom of a decline, but it has not yet achieved the 11,900-12,000 upside target, having reached a recent high of 11,673.48. It may not reach that upside target predicted by the reverse H&S. There's also a much bigger regular H&S, formed throughout the year, and the Nikkei has spent this month at the right-shoulder level. It closed the week below the 50-dma again. Daily MACD has not yet made a bearish kiss, but it's showing a hint of rolling down. Hints don't count, though, and I wouldn't count out anything on the Nikkei. However, I bring up the subject because Monday could see the Nikkei move down far enough to create another sell signal, since it came within 12 points of doing so today. It needs a trade at 11,300, with that also being a level of historical S/R on the bar chart. A big reversal on the Nikkei might not do much for market sentiment here Monday morning. However, remember the Nikkei's unpredictability. I always do.

  Jeff Bailey   6/18/200,  3:21:51 PM
Gander Mountain (GMTN $22.26 -1.50% ... still keeping an eye on this one for a potential swing trade long.

  James Brown   6/18/200,  3:19:35 PM
The selling in PRX is starting to pick up steam. The stock is down another 5% after its recent breakdown through support near $39-40. Volume is rising on the declines.

  Jeff Bailey   6/18/200,  3:17:44 PM
03:00 Market Watch at this Link

  James Brown   6/18/200,  3:15:56 PM
Bulls can keep an eye on drug stock TEVA. The stock is hitting new highs today after its recent breakout above resistance at $67.50. The stock splits 2-for-1 in less than two weeks and could see some pre-split momentum.

  Jeff Bailey   6/18/200,  3:05:41 PM
Emulex (ELX) $15.65 +1.75% ... I'm using a 5-mrt, but because of a slightly delayed open, using a range of $15.38-$15.55 as the opening 5.

  Linda Piazza   6/18/200,  3:03:41 PM
I haven't looked at the BIX today. It reached up through 350, but then has fallen back, leaving only a candle shadow at that level. If it closes near or below the current level, it preserves the possibility that it's building a H&S at the top of its climb off the May low, but if it should close above 350, that possibility looks a bit more doubtful. I mentioned this possibility last week and again earlier this week. The neckline roughly follows the 100-dma.

Looks as if we're setting up for some exciting action next week: either sound rejections of these potential bearish formations and sustained climbs or a confirmation of them. We can hope, anyway.

  Jeff Bailey   6/18/200,  2:58:04 PM
VIX.X 14.96 -0.53% .... little pop from 14.70 last 25 minutes.

  Linda Piazza   6/18/200,  2:56:14 PM
The TRAN now challenges the steep ascending trendline off the 6/14 low, with a longer-term ascending trendline now crossing at 3027-3030, depending on how it's drawn.

  Linda Piazza   6/18/200,  2:53:57 PM
How many right shoulders does it take before a bull gives up? The SOX currently works on its third right shoulder, heading up again to test the neckline area on what was a potential reverse H&S on its five-minute chart, with that neckline now at about 454.40. I'm obviously no longer considering this a real reverse H&S, but am still paying attention to that trendline since the SOX has been turning lower from each test of that trendline since about noon today. The expectation now is that the SOX will turn down again, but bulls sure aren't giving up easily. A sustained move above it would indicate a change in trend. I have to say, though, that this late in the day on an opex Friday, I'm not going to give strong weight to what I see as the last stragglers unwind options positions unless it significantly changes the picture on the daily chart. Right now, that daily chart is showing a doji at the bottom of a decline, so if this continues into the close, bulls will be watching closely for a possible open above the close today and then a climb. Daily oscillators still predict that there's plenty of downside to go on the SOX.

Note: I got too long-winded. The SOX has already dropped away from that neckline area again.

  Jeff Bailey   6/18/200,  2:53:45 PM
Day trade short alert .... Emulex (ELX) $15.73 here, stop $15.85, target $15.25.

  James Brown   6/18/200,  2:53:22 PM
Looking for bearish plays? Check out the Chinese Internets. SINA, SOHU and NTES.

SINA has broken through support at $37.00 and its simple 200-dma. Its MACD has rolled over into a new sell signal. Traders could target the $30 region.

SOHU is also rolling over near $21 with a new MACD sell signal. The recent lows were near $15.

NTES is approaching round-number support at $40.00 but a breakdown there could lead to its December and May lows near $36.

  Jeff Bailey   6/18/200,  2:52:44 PM
Sell Program Premium ... 1,135

  James Brown   6/18/200,  2:41:20 PM
Yesterday Emerson Electric (EMR) broke down through support at $60.00 and its simple 200-dma on strong volume. Today is seeing some follow through with a push through its 21 and 40-dma's while its MACD produces a new sell signal. The next support level is at $56.

  Linda Piazza   6/18/200,  2:40:28 PM
The TRAN did turn down after my 13:32 post noting that it was beginning to look as if it might pull back. It still maintains an ascending trendline off the 6/14 low, however, with support from that trendline now at about 3060-3064, depending on how its drawn. An ascending trendline off the May 17 low falls a bit lower, at about 3030, so that trendline might provide support, too. Sixty-minute RSI has hooked down. MACD has only flattened, but shows bearish divergence as price climbed to a new high today.

  James Brown   6/18/200,  2:36:47 PM
Traders might want to consider Danaher (DHR) as a bullish candidate with a trigger over short-term resistance at $49.00. The recent breakout over $48 produced a new P&F buy signal.

  Linda Piazza   6/18/200,  2:34:08 PM
The SOX again rises to test the neckline of that possible reverse H&S on its five-minute chart, having formed a second right shoulder. That second right shoulder almost--but perhaps not quite--dropped low enough to negate the formation. There had been bullish divergence as the head was formed, so I would give this possible formation some leeway. It looks better on the five-minute chart than it does on a two-minute one. As I type, the SOX is turning down from the neckline, but five-minute MACD histogram levels are now positive and lines try to push above signal. They're not there yet, however, and this can be an iffy time when they turn down below signal after all. We're watching this formation to measure strength and weakness, and to continue to reaffirm whether today's action might have been an oversold bounce. So far, the SOX is following through on bearish intraday formations and not on bullish ones.

  James Brown   6/18/200,  2:28:19 PM
Another copper miner on the rise is Southern Peru Copper (PCU). Shares are up more than 10% and rising quickly after its breakout over resistance at $35.00 and its 100 and 200-dma's.

  James Brown   6/18/200,  2:15:33 PM
Hmm... who would have thought that KMart Holdings (KMRT) would more than double to $69 in the last 3 1/2 months?

  James Brown   6/18/200,  2:13:01 PM
J.C.Penney (JCP) is up 2.9% to $38.08 and hitting new four year highs. It's also very close to its P&F target of $38.50.

  James Brown   6/18/200,  2:11:07 PM
Costco Wholesale (COST) is hitting new two-year highs in its current six-week old rally. Bulls can watch it for a pull back to its 10-dma.

  Linda Piazza   6/18/200,  2:10:49 PM
As Jim said on the Futures side of the Monitor, the next few minutes could be critical. Studying the OEX five-minute Keltner chart, it appears that the OEX is trying to steady and avoid falling to the mid-channel level, currently just at 554. Current resistance and support from its shortest-length channel are at 555.30 and 554.72. A push much beyond that boundary in either direction over the next few minutes could turn that shortest-length channel in the direction of the push.

  Linda Piazza   6/18/200,  1:59:36 PM
The SOX turned down from its neckline test of its possible reverse H&S, a nicely formed one, too, at least on the two-minute chart. Earlier we had evidence that this bounce today might have been a countertrend or oversold bounce, based on the SOX's confirmation of a regular H&S and the subsequent achievement of its downward target. Now we have further evidence, in the form of a rejection at the neckline of a potential reverse H&S. Be careful, though, because the SOX could just be forming another right shoulder, something that sometimes happens. A drop too much below the current level and particularly below 453 would negate that last possibility.

  Linda Piazza   6/18/200,  1:55:52 PM
I've been talking about how I didn't trust that continuation-form reverse H&S on the OEX, particularly as there was no bullish divergence as the head was formed. Meanwhile, I've been so intent on that formation that I've been missing this possible regular H&S: Link

  James Brown   6/18/200,  1:49:19 PM
UPS-rival FDX is trading higher and hitting new all-time highs above $78.00 but volume is very low today, less than half the norm.

  James Brown   6/18/200,  1:48:07 PM
UPS is trying to breakout from its recent consolidation. Looking at its daily chart might make bulls hesitate with resistance at $74-75 but its P&F chart shows a bullish triangle breakout pattern with a $90 price target.

  Jane Fox   6/18/200,  1:45:32 PM
Dateline CNN - Al Arabiya TV: Al Qaeda militants behead U.S. hostage Paul Johnson. CNN working to confirm.

  James Brown   6/18/200,  1:43:13 PM
Fisher Sciences (FSH) is up 1.09% and breaking out over resistance at $60.00. Noteworthy is its new triple-top breakout buy signal on its P&F chart.

  Linda Piazza   6/18/200,  1:42:03 PM
We saw a H&S develop on the SOX's five-minute chart this morning, more than fulfilling its downside target. Now there's a possible reverse one, with the SOX currently rising to test the 455.15 or so neckline area. Dialing down to the two-minute chart, bullish price/MACD divergence did exist as the head was formed. Remember that the formation can be rejected as well as confirmed. Bears want to see one thing happen: bulls, another.

  Linda Piazza   6/18/200,  1:35:05 PM
The OEX is pulling back for another retest of the violated descending trendline off the 6/08 high. It just can't seem to get far above that trendline.

  James Brown   6/18/200,  1:34:59 PM
New hacker alert
By Mark Prigg,
Evening Standard Technology Correspondent
18 June 2004

A new alert was issued today over criminals targeting home computer users. Figures published this afternoon showed an astonishing one third of all PCs connected to the internet are infected with hacking software.

For more details: Link

  Linda Piazza   6/18/200,  1:32:49 PM
I'm still watching the TRAN, with those growing-smaller 15-minute candles now sporting spikes above the candle bodies. It hasn't rolled over and may not do so, but it's looking more and more as if it might pull back to retest broken resistance.

  James Brown   6/18/200,  1:29:27 PM
CNBC reporting that Arab television claims Saudi terrorists have killed their American hostage.

  Linda Piazza   6/18/200,  1:26:17 PM
Jonathan spoke earlier of bullish divergences, in a post on the Futures side of the Monitor. I've been watching potential price/MACD bullish divergence develop on the SOX five-minute chart (higher price low coupled with a lower MACD low). That won't be confirmed until and unless the SOX reaches a new five-minute high, too. Right now, it's trying to make its way through a thicket of resistance lines, but support lines lie just below, too.

  James Brown   6/18/200,  1:24:49 PM
Inco Ltd (N) is another mining stocks traders may want to check out. Shares of N have surged 3.95% and broken out above significant resistance at its 100 & 200-dma's and the $34.00 level.

  Jeff Bailey   6/18/200,  1:24:00 PM
01:00 Internals at this Link

Just highlighting some of the things we've been observing of late.

SOX.X impact on NASDAQ Price action, NASDAQ Internals not nearly as strong as NYSE ....

  James Brown   6/18/200,  1:22:34 PM
Bulls might want to check out MBIA Inc (MBI). The stock has been building a six-week base near the $55.00 level and now shares are breaking out over resistance at $57.00. There is plenty of overhead resistance at $60 and its 50 and 200-dma's but this does look like a decent bottom.

  Linda Piazza   6/18/200,  1:21:22 PM
Okay, OEX traders: Watch out for that 557 level again if the OEX should continue rising. Also be watchful for the possibility of a lower high on the five-minute chart.

  Linda Piazza   6/18/200,  1:17:04 PM
ADP appears to be turning down from its test of H&S neckline and from the 15-minute 100/130-ema's. The daily 100/130-ema's appear even more important, with those averages just below at 43.39 and 42.83, respectively. Those levels should be watched for possible bounce potential again or for the possibility that ADP could roll down through them this time. Or a third possibility exists--that ADP will spend the rest of the day between their support and the overhead resistance.

  James Brown   6/18/200,  1:16:36 PM
Marathon Oil Corp (MRO) is up another 0.77% after yesterday's breakout above resistance at $36.00. The stock has been rising with the energy sector and the recent gains have sent it to new 5 1/2 year highs. P&F chart readers will note the bullish triangle breakout. This is normally a very successful pattern to trade. However, MRO might look better as a covered call candidate.

  Linda Piazza   6/18/200,  1:13:14 PM
The OEX just broke out of its possible bull flag, with a break to the upside, but watch out for a possible false move. Keltner support firms up near 554.60. Oops, the OEX began dropping back as I typed.

  James Brown   6/18/200,  1:13:06 PM
The rally in Countrywide Financial (CFC) continues despite rising interest rates. The mortgage lender's stock is up five out of the last six weeks and hitting new all-time highs. Yesterday CFC broke out over the $70.00 mark. Its P&F chart points to a $104 price target.

  Linda Piazza   6/18/200,  1:11:42 PM
The TRAN just keeps chugging higher, but the 15-minute candles grow smaller, too, and bearish price/MACD divergence continues on this chart with price at a higher high but MACD flattening below the MACD high of 6/15. That divergence warns us to be watchful, but other measures show the TRAN could climb toward 3088-3100. As I mentioned this morning, once the TRAN gets going, it sometimes keeps going.

  Jeff Bailey   6/18/200,  1:11:28 PM
Motorola (MOT) $17.52 -3.2% Link

That's why I had an al_rt set at $17.50. OK... if SOX is going to trade recent lows, then most likely MOT tries to test its bullish support trend is my thinking.

I can perhaps get a feel that a MOT 3-box reversal back up (it is a stronger stock among semiconductors) might give the SOX.X a lift back toward 470 the next week or so.

Therefore..... any new positions short at this point would only be 1/2.

Same for SOX.X or SMH ... can't put on a full position at an upward trend on the bar chart.

I can tell you this for sure. If I were long the underlying stock in MOT, I'd be looking at selling a covered call right now.

  James Brown   6/18/200,  1:08:56 PM
After three weeks of consolidating in a very tight range above $40.00 we're seeing shares of Nordstrom (JWN) starting to move higher. The stock is challenging resistance at $42.00. Its bullish P&F chart points to a $57 price target.

  James Brown   6/18/200,  1:07:39 PM
Hmm.. interesting divergence here. Copper futures are down 0.91% to $1.188 per pound while Phelps Dodge (PD) is up 3% and breaking out over resistance at $70.00.

  Jeff Bailey   6/18/200,  1:06:24 PM
Hmmmm..... .... Semiconductor Index (SOX.X) 452.91 -0.12% ... edges back into negative territory. Sellers seemed to be set to sell that bounce back to WEEKLY S2. Taking notes... thinking h/s top price objective still in play. Will probably take a few days to really get some confirmation of these thoughts, but if the sector bullish % reversed back to "bull correction" then we could see SOX.X may one more leg lower.

  Jeff Bailey   6/18/200,  1:03:56 PM
Motorola (MOT) $17.50 -3.31% ... downside alert I had set here some time back. It's making a session low here too.

  Jeff Bailey   6/18/200,  12:55:45 PM
Stillwater Mining (SWC) $15.05 +8.27% .... trader e-mail makes good note when she says "Jeff... Stillwater's 60-minute chart looks almost identical to the relative strength chart you keep showing."

I agree and I noted that myself when we looked at the RS chart a couple of days ago. That is part of the reason why I was really trying to watch the dollar on Wednesday and Thursday, and use the Pivot Matrix to try and figure out what the dollar (or traders of the dollar) might do.

I'm getting a lot of questions/comments regarding this, and will try and address them in this weekend's Ask the Analyst. But traders should note that relative strength by itself doesn't necessarily equal price gains. It's a tool that should really be used in conjunction with additional analysis.

  Linda Piazza   6/18/200,  12:52:08 PM
The OEX's shortest-length Keltner channel has now definitely turned down within the longer-term one. There's some vulnerability now down to the mid-channel level, currently at 553.71. (I know I'm eventually going to get the SOX's 453 and the OEX's 553 levels mixed up at some point today, so if I type something surprising about one of those indices, you'll know why.) However, the OEX currently approaches Keltner support from 554.58-554.74. It also approaches that descending trendline that it broke through this morning, the one off the 6/08 high.

  Linda Piazza   6/18/200,  12:46:26 PM
The SOX is trying to rise from that Keltner support I mentioned earlier, but it's not getting far and the support lines are beginning to separate a bit now. The upper edge of that support has drifted a bit lower, to 453.66. The support from 453.40-453.70 still looks fairly good, but not as firm as it did earlier, a possible warning sign.

  Jeff Bailey   6/18/200,  12:45:23 PM
MM Open Positions at this Link but build on 12:38:42 discussion regarding SWC position/trade management in the underlying stock. (Note: I profiled the options, not the underlying stock, but track the stock as a benchmark of entry and establishing number of option contracts related to what a full position $10,000 would be).

Remember... just because you sell some, doesn't mean you can't get back on board if price still moves higher.

  Jane Fox   6/18/200,  12:42:01 PM
Dateline WSJ - Educational-software maker Blackboard Inc. soared in initial trading Friday, marking the best debut for a new technology stock issue so far this year.

At midday, Blackboard shares were at $21.70 a share on the Nasdaq Stock Market, 55% above the $14 offering price set on its initial public offering of 5.5 million shares.

  Jeff Bailey   6/18/200,  12:38:42 PM
Still Water Mining (SWC) $15.12 +8.77% .... OK, if I had an underlying stock position or near month calls (July), I'd probably be a seller right here on at least 1/2 of holdings.

Look at where the U.S. Dollar Index (dx00y) 89.11 -0.54% is right now. It's right at WEEKLY Pivot.

Thought is.... hey.... sell potential resistance, book a profit, then look to see what takes place from here.

  Jeff Bailey   6/18/200,  12:35:01 PM
$HUI.X vs. Dollar Indx Rel Strength chart at this Link

  Linda Piazza   6/18/200,  12:30:06 PM
The OEX came back to test the violated trendline off the 6/08 high and is now trying to rise from that test. It hasn't made it far, however.

  Linda Piazza   6/18/200,  12:26:56 PM
The SOX sits just above Keltner support that looks strong near 453.40-453.75.

  Jeff Bailey   6/18/200,  12:23:28 PM
SWC vx. US$ rel. strength chart at this Link

I think that 200-pd SMA was a pretty good trigger to establish an entry point don't you?

Might have to start working with this, but on some shorter-term trade setups (long and short)

  Linda Piazza   6/18/200,  12:18:46 PM
ADP: A reader wrote asking about ADP yesterday. I had noted some possibility that it could bounce back into its ascending regression channel, which it did. That possibility was based on the fact that ADP was testing its daily 100/130-ema's. Since it had bounced from those averages since last fall, I had thought it might see at least a reflexive bounce from them again. I had thought it likely that ADP might find resistance again at either the bottom of that channel, the 100-dma or the neckline of its H&S formation. It's climbed above two of those and now challenges the neckline level. The 15-minute 100/130-ema's have proven significant in recent trading, and ADP is trying to steady at the 15-minute 130-ema and move above it. It may be having difficulty. Those averages lie at $43.87 and $43.96, respectively, with the 100-ema near that $43.80 S/R level.

If ADP should continue climbing, much resistance gathers near the shoulder level, with both the 30- and 50-dma's gathering just below that level, but bullish traders should also be watchful for possible weakness as the neckline is retested from the underside.

  Jeff Bailey   6/18/200,  12:16:06 PM
Ceck out your SWC/$dx00y relative strength bar chart (60-minute intervals). I show it in a minute after I get one drawn up. Right at downward trend here.

  Jeff Bailey   6/18/200,  12:08:21 PM
12:00 Internals at this Link

All be darned... if the current NYSE NH/NL daily ratio holds up, its 10-day Avg. Ratio will too.... from 74.1 to 75.5.

Yesterday's Internals at this Link

  Linda Piazza   6/18/200,  12:04:04 PM
We have two bits of information now about the SOX that support the idea that the rise today might be a countertrend or technical bounce. One is that it formed a bearish formation and confirmed it--that H&S on the five-minute chart--and the other is that it met and even exceeded the predicted downside target. That's a sign of short-term weakness only, but it does reinforce the idea that while a bounce might have been anticipated, as I thought might be possible, that it perhaps ought not to be trusted, as I also thought possible.

The TRAN just keeps chugging higher, though. This is just what I didn't want to see today: mixed evidence from these indices that sometimes serve as leading indicators for other indices. Five-minute MACD is still not accompanying the TRAN's rise, however, leveling off and threatening to roll down instead, so keep a watch on that, too.

  Jeff Bailey   6/18/200,  11:57:51 AM
Huh... QQQ session low was $36.26 and session high has been $36.84.

I would have looked much smarter than I am if I had closed out that QQQ short yesterday at $36.26.

  James Brown   6/18/200,  11:53:33 AM
We also put Magna Intl (MGA) on the watch list last night for a bullish breakout over major resistance at $84.00. The stock is pushing through this level today with a 1.83% rally to $84.76. Its P&F chart points to a $105 price target.

  Linda Piazza   6/18/200,  11:52:58 AM
Studying the TRAN on a Keltner basis, I see that Keltner support appears to be firming up between 3070-3072, but the five-minute MACD keeps threatening to roll down. It's not keeping up with the higher high just printed. We may get an opportunity to see if that support holds.

  James Brown   6/18/200,  11:51:59 AM
Coventry Healthcare (CVH) was on the watch list last night for a breakout over $50.00. Shares are up 38 cents to $50.38. This might be an entry point. Its P&F chart points to a $62.00 price target.

  James Brown   6/18/200,  11:49:00 AM
Keep an eye on OI call play ETN. The stock is up 1.32% and challenging resistance at $62.00. Our trigger to go long is $62.05, which would produce a new triple-top breakout buy signal on its P&F chart with an upside target of $77.00.

  Linda Piazza   6/18/200,  11:48:17 AM
Upper channel Keltner resistance did hold on the last OEX approach, but the OEX isn't pulling back far as yet, either. There's danger of the OEX's shortest-length Keltner channel turning back inside the longest-length one, signaling a possible return to mid-channel support, but that's going to require that the OEX drop to, and probably past, the Keltner line currently at 554.97 before that channel turns down significantly.

  James Brown   6/18/200,  11:47:14 AM
OI call play BCR is trying valiantly to breakout over resistance at $58.00 but it just can't do it. Shares are up 29 cents to $57.92.

  Jeff Bailey   6/18/200,  11:44:00 AM
Guessing on a QQQ close but I think Friday's close will be pretty close to $36.50.

Last night I thought good chance of something closer to $36.00, but I don't think QQQ should have traded as much above DAILY R1 as it has if that were going to happen.

  Linda Piazza   6/18/200,  11:43:27 AM
As I type, the SOX slips below 458, perhaps headed toward the 457 target of the original H&S-ish formation with the stunted right shoulder.

  Linda Piazza   6/18/200,  11:37:15 AM
The OEX did find support at its next level of Keltner support near 555. Keltner resistance now gathers near 555.75, but it's not clear whether there's enough resistance gathering to stop the advance. We'll soon see.

  Linda Piazza   6/18/200,  11:28:13 AM
Here's another possibility for the H&S-ish formation on the SOX: Link Maybe it hasn't completed yet.

  Linda Piazza   6/18/200,  11:17:21 AM
That H&S-ish formation on the SOX five-minute chart has perhaps just seen its neckline violated to the downside, although it's difficult to ascertain exactly where the neckline might be since it's a roughly formed formation. If that was the neckline, the downside target would be somewhere around 457-457.25. To help measure the strength in the SOX, watch to see if that gets met.

  Linda Piazza   6/18/200,  11:13:30 AM
Below the current OEX position, if that support should be broached, next Keltner support for the OEX gathers near 555.

  Jeff Bailey   6/18/200,  11:06:24 AM
11:00 Market Watch at this Link

  Linda Piazza   6/18/200,  11:04:46 AM
Upper candle shadows spike above the candle bodies on the OEX five-minute chart. It may be time for a pullback to begin soon.

Keep a watch on the SOX five-minute chart. There may be a stunted H&S forming at the top of this morning's climb. A new high of the day will negate that possibility, of course.

  Linda Piazza   6/18/200,  10:57:27 AM
There's been a Keltner breakout on the OEX, too, so OEX bulls should be following the OEX higher with their stops. Keltner support is gathering now near 554.90, with other support a bit higher and with the mid-channel level at 553.09.

  Linda Piazza   6/18/200,  10:53:12 AM
The OEX approached within a point of the 6/08 high of 556.88. If it now pulls back, bullish traders want to see it stay above the 554.75 or 553.50 trendlines that it broke above this morning. This is a tricky time for the OEX.

  Jeff Bailey   6/18/200,  10:50:57 AM
On observation that seems to present itself is that the broader market averages trade more bullish when mining and metals stocks trade more bullish.

  Jeff Bailey   6/18/200,  10:49:01 AM
No intra-day, or bar charts this morning. I've been switching QCharts servers, but that hasn't helped. Getting quotes and alerts, but that's it.

  Linda Piazza   6/18/200,  10:47:56 AM
Slight pullback on the SOX after challenging the 460 level; slight pullback on the TRAN after challenging the 6/09 high.

  Jeff Bailey   6/18/200,  10:36:33 AM
MM Open profiles at this Link

  Linda Piazza   6/18/200,  10:35:18 AM
The SOX looks as if it's going to try a challenge of round-number and historical resistance at 460.

The TRAN moved above yesterday's high, gapping higher (breakaway gap?) on the five-minute chart as it did so. It's now given a breakout signal on its five-minute Keltner channel, so those bullish the transportation-related stocks should now be considering following those stocks higher with their stops. The TRAN is vulnerable to a pullback now to at least 3050 according to those Keltner charts, but once the TRAN makes a breakout, it can sometimes run for a while. That's going to depend a lot on what it does with the 6/09 high of 3071.74, with the TRAN fast approaching that level. (Note: Slightly exceeded it as I typed.)

  Jeff Bailey   6/18/200,  10:31:57 AM
Buy Program Premium SPX 1,139 , INDU 10,433, QQQ $36.79, SOX.X 460.61

  Jeff Bailey   6/18/200,  10:31:09 AM
Microsoft (MSFT) $28.00 +0.97% Link .... X gets the square. Bullish vertical count of $44 remains in play.

  Jeff Bailey   6/18/200,  10:27:30 AM
Semiconductor Index (SOX.X) 458.62 +1.17% ... nice bounce back near WEEKLY R2 after trading just under MONTHLY S1 at the open.

  Linda Piazza   6/18/200,  10:20:02 AM
The TRAN moves up, too, so far coming within a few cents of yesterday's high. Be watchful of the possibility of a double-top on the 5- and 15-minute charts.

  Linda Piazza   6/18/200,  10:17:46 AM
Late last night as I was seeing how the Nikkei and other Asian bourses dealt with their semi-related stocks and I knew that the already-written wrap that I'd prepared in substitution for Jim was on its way, I was thinking, why, oh why, had I suggested even the possibility that the SOX might see a buy-the-(bad)-news reaction to the book-to-bill number, a number I hadn't been able to find before submitting the article. I was so worried that I might have led readers astray. We're seeing that bounce this morning, so I'm relieved on that score, but I want to make sure that readers also understand that the possibility exists that this is nothing more than a technical or oversold bounce. We don't know for sure, but will get a better idea when the SOX moves up to challenge the double-top neckline, if it gets that high. That's a retest of an important level, a completely natural and to-be-expected retest of broken support.

  Jeff Bailey   6/18/200,  10:14:50 AM
10:10 AM Market Watch at this Link

  Linda Piazza   6/18/200,  10:12:10 AM
The SOX charges up toward the next historical horizontal resistance at 463-463.50--the confirmation level of the double-top formation on its daily chart. A descending trendline off the 6/08 high is at about 465 or a little above, near the bottom of the gap from 6/14-6/15. Those in bullish tech-related plays should be watching how the SOX handles those levels or the 30- and 50-dma's above those, as we have to be aware that the current bounce could be an oversold bounce only.

  Jeff Bailey   6/18/200,  10:08:42 AM

  Linda Piazza   6/18/200,  10:08:17 AM
The OEX has now taken down one descending trendline (off Wednesday's high) and now challenges the one off the 6/08 high. This one marks the possible neckline of a roughly formed continuation-form (and untrusted but noted) reverse H&S formation. Those in bullish plays should have a plan in mind for how they'll handle the challenge of 557, if that should occur.

  Jonathan Levinson   6/18/200,  9:59:53 AM
The Fed has 3.75B in overnight repos expiring today, with a 7B 6-day repo just added for a net 2.25B gain today.

  Linda Piazza   6/18/200,  9:56:27 AM
The OEX is back at that descending trendline off Wednesday's high, a trendline it challenged yesterday unsuccessfully. It's at about 553.50 today, with another trendline off the 6/08 a bit higher, at about 554.75.

  Linda Piazza   6/18/200,  9:46:33 AM
The SOX headed down to next support near 450 this morning and is now bouncing from that level. I don't know why I have this feeling this morning that the SOX may produce a buy-the-(bad)-news bounce this morning after last night's book-to-bill disappointment, but I've had that feeling since yesterday. It's a feeling only, not based on any technicals except that it's grossly oversold on a 30-minute basis. This is not a suggestion to buy the SMH or semi-related stocks, since at this point with a downside target not yet reached, we must be aware that a bounce could be a countertrend or technical one only, but rather an uneasiness about believing too strongly in the downside for either the SOX or tech-related indices.

  Keene Little   6/18/200,  9:45:53 AM
NEM has also jumped up to its equivalent downtrend line.

  Keene Little   6/18/200,  9:44:16 AM
XAU has jumped up to the upper trendline in the chart I posted earlier (8:50). Important test here.

  Jeff Bailey   6/18/200,  9:43:49 AM
Stillwater Mining (SWC) $14.35 +3.3% .... making a move above near-term zone of resistance.

  Linda Piazza   6/18/200,  9:39:21 AM
During the first five minutes of trading, the OEX traded in a tight range from 552.07 to 551.90.

  Linda Piazza   6/18/200,  9:38:05 AM
Dow bulls are not cheered this morning to see the Dow's sister index, the TRAN, open below yesterday's closing level. Yesterday's TRAN price action created a doji at the top of a climb, and today's lower open creates the possibility that a three-candle reversal signal might be in completed today. Since the TRAN sometimes leads the Dow, that's not a happy thought for Dow bulls. This day is far from over, so I'm not predicting that the TRAN will complete that reversal signal, but just suggesting that one not-desired-by-bulls action has now occurred.

  Linda Piazza   6/18/200,  9:31:48 AM
The OEX opens below the 15-minute 100/130-pma's.

  Linda Piazza   6/18/200,  9:05:29 AM
Opex Friday has finally arrived, and glazed-eyed, bored-out-of-their skulls options traders can't wait for this opex week to be completed. The OEX ended the day right where it's been for much of the last week: at the 100-dma, at horizontal support, just above a best-fit descending trendline off the February high, and within a possible bull flag/possible broadening formation on its daily chart. The short-term and admittedly fickle 5(3)3 stochastics actually made a bullish cross from midway down in their bearish phase. While that incipient bullish kiss offers an intriguing possibility of movement, futures slipped lower last night as the Nikkei dove, showing vulnerability to the downside. Plus, the OEX remains within the 547-557 range, and smack in the middle of it, as a matter of fact. It's sitting right on the 15-minute 100/130-pma's that have been important lately. It's perched at the mid-channel level on both the 5- and 15-minute Keltner channels. And it's opex Friday. With conditions like that, are you going to take the day's direction from a solitary upward hook of the 5(3)3 stochastics the day before? Not me.

I'm going to be watching everything I can this morning, but especially the SOX and its reaction to the book-to-bill number last night (1.11) and the TRAN and its reaction to crude oil futures. I'm going to be paying special attention to the $TRIN and to advdec. If an OEX movement begins one direction or another, I'm going to want to see the Dow, the Nasdaq, and Russell 2000 moving right along with it, not in opposition. Futures are still lower as I type, although trying to climb off the overnight low. The SOX has plenty of room to fall further and overnight action showed that already-beaten-down semi stocks across the globe can still fall, but the SOX also remains grossly oversold on a 30-minute basis. Crude futures have been fairly steady overnight at the top of yesterday's range, and the wildcat strike in Norway isn't adding any reassurance to those worried about oil supplies and production. If the SOX does keel over today, it's going to add to those other pressures. OEX traders need to be watching all of this today. If inclined to trade, be wary of the possibility that any movements could be immediately squashed or reversed and be aware that technical analysis is not always a great predictor of action at the end of opex week. Decide on contract size accordingly if you're going to enter the market. If you miss a great trade because you were hesitant to enter under what might be goofy trading conditions, remember that there will always be another good trade, as long as you have preserved an account with which to trade.

  Keene Little   6/18/200,  8:50:04 AM
Time for an update on the gold stocks--the EW pattern is getting interesting here. I had expected to see price stay below about 83.75 where it was hitting the top of its down-channel, as seen in the 60-min chart. I also expected price to stay below the end of the 1st wave down which was the low on June 4th. A few gold stocks, such as NEM have already exceeded that low, which means it can't be a 4th wave in a 5-wave pattern down.

This leaves us with two choices in the EW pattern. We either had only a 3-wave move down to the low on the 14th and we're in the process of rallying to a new high, or we're doing another 2nd wave bounce and we're getting ready to drop hard. Which scenario it is won't be known for sure until we either take out the high on June 8th, or drop below the low on the 14th.

Gold is up significantly this morning which may give the gold stocks a pop this morning as well. But until I see an impulsive 5-wave move up from the low on the 14th I'm leaning towards the more bearish scenario due to the larger EW pattern. And if this bearish scenario is to play out, we need to start back down very soon. And as a 3rd wave of the 3rd wave down, it should go quickly. So this is what I'm watching now to see what develops from here. We should know quickly. Link

  Jonathan Levinson   6/18/200,  8:30:37 AM

  Jonathan Levinson   6/18/200,  8:01:40 AM
It's a quiet newsday today, with just the Q1 Current Account due at 8:30, est. -140.9B, prior -127.5B.

  Linda Piazza   6/18/200,  7:12:59 AM
Good morning. Led lower by Mitsubishi Motors, UFJ Holdings, and Advantest, the Nikkei gapped down Friday morning. That's if you believe one news source. Check another, and you'll find that Fuji Photo, Yahoo Japan, and Toyota Motor led decliners in earliest trading. Unless I've missed it among the list of the Nikkei's components, I don't believe Yahoo Japan is a constituent of the Nikkei 225, but the others all are, so I'm not certain of the reason behind the discrepancy, but it's likely that all those companies traded lower and pressured the Nikkei. The Nikkei fell 100 points in early trading, tried to steady there all through the morning session and then plunged as soon as the afternoon session opened. It closed off its low of the day, but down 225.82 points or 1.95%, at 11,382.02, appearing to break through the ascending trendline it began forming as it climbed off its May low. The Nikkei does a lot of zooming around, however, so I don't always trust the technical developments I see on that chart. It came within 11 points of creating a new P&F sell signal with a trade at 11,300, making its one-box move above the bearish resistance line look quite suspicious now. Since the Nikkei had spent the previous couple of weeks creating P&F signals of various types only to immediately reverse direction and create another, I'm not surprised to see that happening.

Disappointment in a possible slacking of demand as indicated by the semi book-to-bill number released last night damaged sentiment. So did the rising crude prices. Many semi-related stocks fell, including Advantest, listed as being an early leader in the declines. Some auto stocks traded lower, including Mitsubishi Motors, also listed as an early leader in the declines. Mitsubishi plummeted 6% to a record low. Banking stocks fell, including UFJ Holdings, also listed as an early leader in the declines. As had been speculated might happen, a regulatory agency accused the company of avoiding inspections and issued orders intended to clean up UFJ's act and business. This occurred after the market closed. UFJ has been trading lower at the end of the week on speculation this might occur. Shinsea Bank declined, too, along with the others, but announced that its ADR's will begin trading in the U.S. today. I believe its symbol will be SKLKY.

Other Asian bourses mostly declined with chip-related stocks under pressure throughout Asia. The Taiwan Weighted declined 1.68%, and South Korea's Kospi declined 2.42%. Singapore's Straits Times fell 1.24%, and Hong Kong's Hang Seng declined 1.88%. China's Shanghai Composite fell 1.26%.

European bourses are mixed this morning, with the not-tech-heavy FTSE 100 benefiting from a rise in oil majors amid rising crude prices. Financial stocks were weak in the U.K., too, as they had been in Japan, with Merrill Lynch downgrading mortgage lender Bradford & Bingley to a sell rating. Although I don't believe it's a component of the FTSE 100 unless I missed the name on the list of components, Misys, a software company serving the financial and health sectors, lowered revenue guidance. The company mentioned declines in revenues from the banking and securities division and the financial services division. Accounting software manufacturer Sage is a FTSE 100 component, however, and it declined 2.5%. Homebuilders fell in the U.K. Supermarket chain Tesco gained, however, after revealing its Q1 earnings.

Energy stocks rise throughout Europe, carried higher by rising crude prices, while chip-related stocks such as Philips and Infineon decline, as they did in Asia. A wildcat strike has reportedly begun in Norway, the world's third-largest crude oil exporter, with that strike expected to lower production by as much as 300,000-400,000 barrels a day.

As of this writing, the FTSE 100 trades up 7.90 points or 0.18%, at 4,501.20. The CAC 40 trades higher by 0.80 points or 0.02%, at 3,718.88. The DAX trades lower by 7.80 points or 0.20%, at 3,977.66.

  Jeff Bailey   6/17/200,  12:52:07 AM
NASDAQ-100 Tracker (QQQ) at this Link

  Jeff Bailey   6/17/200,  12:41:11 AM
SPX Option Chain sorted by OI at this Link

Current "Max Pain" for September expiration (can change with time) is 1,125.

  Jeff Bailey   6/17/200,  12:01:33 AM
SPX Option Chain most actives at this Link

June 1,125 call/put all expiration-related. Difference in today's volume might have OI coming out just about even and squared up. Gives look that we might see a close or some type of trade lower to DAILY S2 tomorrow (Friday).

Looked at some of the September rolling option and just subtracted/added today's AVGOHLC to each strike to get some support/resistance feel either side. Might be able to use down the road.

For the record... the June 1100 puts with open interest of 90,061 were either this quarter's biggest robbery, or biggest lottery depending on how you look at it (buyer / seller). Peaked at around $45 on March 22-24 and ends up out the money.

Same bet may be on in the September 1100 puts right now with thought that a naked seller will take all they can get at 1,076.

Follow up to Wednesday's June05 700 puts... no volume today, OI up to 72,928 (so +14,465) and % gain to a yesterday seller of 6.97%. The June05 600 puts ... no volume today, OI up 39,632 (so +5,072) and no change.

  OI Technical Staff   6/17/200,  11:02:37 PM
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