Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
  Jeff Bailey   6/22/200,  11:03:20 PM
Well, that's it! I leave you with my last quote of the day....

U.S. Dollar Index (dx00y) 89.15 -0.15% (30-minute delayed).

 
 
  Jeff Bailey   6/22/200,  11:01:34 PM
S&P 100 Index (OEX.X) chart at this Link

 
 
  Jeff Bailey   6/22/200,  10:42:26 PM
S&P 500 Index (SPX.X) chart at this Link

Similar 21-day SMA support today as observed in the NYSE Comp. chart in this evening's Index Trader Wrap. 1,125 continues to be a level that draws interest.

Will note that both the VIX.X and SPX reached repsective session lows/highs at the exact minute today. I didn't check option action, but with 1,125 having been the current quarter's "Max Pain" there may have been some option action in the form of put selling/call buying that needs attention.

 
 
  Jeff Bailey   6/22/200,  7:00:06 PM
Dollar Index (dx00y) 89.30 +0.01% (30-minute delayed) ....

 
 
  Jeff Bailey   6/22/200,  6:52:16 PM
Current OPEN MM Profiles at this Link

SWC traders should review the Pivot Matrix and Dollar Index correlations.

Trades profiled today saw QQQ Bear stopped for $0.19 loss, SMH Bull for $0.29 loss, and SMH Bull #2 for $0.44. While third time was a charm, a whole lot of work for nothing on an intra-day basis.

 
 
  Jeff Bailey   6/22/200,  5:36:01 PM
Pivot Matrix for tomorrow at this Link

 
 
  Jeff Bailey   6/22/200,  4:40:21 PM
Closing Internals at this Link

 
 
  Jeff Bailey   6/22/200,  4:12:10 PM
QQQ probably goes out at $36.70. If so, then this would have tomorrow's DAILY R1 at $36.93. That would match the QQQ WEEKLY R1 $36.92. Then DAILY Pivot would come out at $36.47 and WEEKLY Pivot $36.51.

 
 
  Jeff Bailey   6/22/200,  4:06:37 PM
NASDAQ-100 Index (NDX.X) 1,474.87 +1.48% ... using this as a close, would have near-term correlative support at DAILY Pivot 1,466.27 and WEEKLY Pivot 1,468.09. Correlative resistance at DAILY R1 and WEEKLY R1 1,484.39.

If so, then QQQ WEEKLY R2 of $36.92 is above my swing trade bearish stop.

 
 
  Jeff Bailey   6/22/200,  4:02:03 PM
Looked like a buy side bias toward the close to me.

MSFT rose $0.16 in a matter of minutes toward its 04:00 close, QQQ $36.68 prints a session high here.

 
 
  Linda Piazza   6/22/200,  3:57:26 PM
It looks as if the OEX just about met the downside target for the regular H&S on its two-minute chart. What a day! It's just above mid-channel Keltner support and has now come down to test the 30-minute 100-ema after being unable to move above 554. This positions the OEX for another downturn through those averages tomorrow morning or for a bounce from them, with 30-minute RSI already having hooked over but 30-minute MACD having created a bullish cross from below signal. I still think it significant that the OEX can't get above ever-lower overhead resistance, but it's printed a doji right in the midst of a congestion zone, and what could be more indicative of indecision?

 
 
  Jeff Bailey   6/22/200,  3:52:04 PM
Swing trade short alert for the QQQ $36.56 here, stop will be $36.80, target $35.75.

Ran quick NH/NH tabulations on both NYSE and NASDAQ, and don't think QQQ much above that $36.72 level.

We should all have pretty good idea of where important near-term support is ...

 
 
  Jeff Bailey   6/22/200,  3:48:39 PM
QQQ $36.60 +1.26% ... updated intra-day 5-minute chart to use with SOX.X chart (03:35:37) at this Link

 
 
  Linda Piazza   6/22/200,  3:46:09 PM
Maybe we have to take another look at that two-minute H&S on the OEX after all. (See my 15:35 post.) If the OEX should confirm it by a move below 553.20 or maybe even 553, then it looks as if the downside target would be somewhere around 552.46, near mid-channel support on the Keltner charts.

 
 
  Jeff Bailey   6/22/200,  3:37:37 PM
Day trade bullish exit alert for the SMH $36.84 +3.13% at target of $38.80.

 
 
  Jeff Bailey   6/22/200,  3:35:27 PM
Semiconductor Index (SOX.X) 466.05 +3.42% ... intra-day chart at this Link

 
 
  Linda Piazza   6/22/200,  3:35:20 PM
Don't you wish sometimes that you'd never heard the term H&S? There's a potential H&S on the OEX's one- and two-minute charts, with a neckline now being tested (with the OEX at 553.37 as I type). Note: The OEX appears to be headed up again after retesting that neckline. Unless it's forming a second right shoulder, it's possibly rejecting the formation, with a move over the day's high formalizing that rejection.

I remember the first time I heard the term "head and shoulders." I was using a traditional broker back then and had just called in an order for my (then) usual 30 or 40 contracts of expensive calls (of course, calls) on some high-flying stock or another. My broker didn't follow technical analysis and I followed only a rudimentary form involving watching the rhythms of a familiar stock along with volume and trendlines, but a broker in his firm did. I clearly remember my broker excitedly telling me that his broker friend had just let him know that the stock had formed a H&S as he put the order through. Wish one or the other of us had just known what that was! Maybe that's why I'm particularly watchful for their formation now. You think?

 
 
  James Brown   6/22/200,  3:21:56 PM
Hmm... just looking at some of the annual shareholder meetings this week.

Weds. June 23:
InterActiveCorp's (IACI) annual shareholder meeting.
Seibel Systems' (SEBL) annual meeting

Thurs. June 24:
Best Buy's (BBY) annual meeting
EBAY's annual meeting.

 
 
  Linda Piazza   6/22/200,  3:15:21 PM
This afternoon's OEX high was 553.95, close to the 554-ish upside target predicted by the reverse H&S on its five-minute chart. So, we have some short-term bullishness shown first by the confirmation of a bullish pattern and then by reaching its upside target. We didn't need that information to know there was some short-term bullishness, however, after we had already seen its effect. What we need to know now is whether it's going to continue. That I don't know. The OEX is right in the middle of that congestion zone in which it's traded most of June, at the 100-sma, just above the neckline of its regular H&S, just . . . a lot of places where it might encounter resistance that turns it down again, if this was nothing more than a countertrend bounce, or chop around a while.

 
 
  Jeff Bailey   6/22/200,  3:08:37 PM
03:00 Internals at this Link

 
 
  Linda Piazza   6/22/200,  3:05:45 PM
Keene mentioned an "exercise in frustration" in determining EW counts in his 14:50 post on the Futures side of the Monitor. Those watching other types of chart patterns understand that frustration, too. In the last several days, I've noted a (not trusted) continuation-form reverse H&S on the OEX 60-minute chart, with one version of the neckline breached last week. The OEX came back to test that version on 6/18, a test that proved successful, but when it tried to move up again, it couldn't make it above the historical resistance. Late yesterday, it fell back below that neckline, certainly frustrating those who might have put more faith in the formation than I did. At the same time, the OEX was building a competing regular H&S, and it violated that neckline this morning. Bears couldn't drive the OEX past the 60-minute 100/130-ema's, however, and now the OEX has zoomed back above that neckline. The zoom appears to be stalling now, so the chance remains that the OEX just overshot my version of the neckline. Whatever happens, though, these competing patterns point to the difficulty of trading a choppy market and certainly frustrate those who are trying to make some sense of the markets. I'm reminded of this morning's CNBC Europe guest analyst who advised individual investors to just "go play football" because the light volume made it impossible to determine a pattern with any accuracy.

Which formation do you trust? None. Let them forewarn you of potential developments, but perhaps lighten up on your own trading activity, either by trading less or by using fewer contracts when you do trade. Understand that you may be whipsawed if you do trade. No matter what your market bias, pay attention to chart developments that point the opposite direction. This morning, the OEX's fall beneath the 30-minute 100/130-pma's and subsequent retest of them paved the way for a decline to the day's low, so there was solid evidence that the OEX might decline beyond the opening level. Chart developments then pointed to the potential for a climb, forewarning bears to protect profits, with those chart developments on the OEX including bullish divergence, approaching important resistance, and a reverse H&S. Again, there was solid evidence of a potential for a bounce, although I did believe the OEX would hesitate longer near 552-552.50.

 
 
  James Brown   6/22/200,  3:01:38 PM
Investors have been buying dips to the 40 & 50-dma's for months in shares of Waters Corp (WAT). Once again shares are bouncing from the 40-dma near price support at $44.00. This looks like an entry point for the bulls.

 
 
  Linda Piazza   6/22/200,  2:52:33 PM
The SOX has moved back above the confirmation level of the double-top formation on its daily chart. Now it has to hold above that level or this has just been a retest. It has not yet met the downside target that was projected by that double-top formation, so some caution might be in order here. The 30- and 50-dma's now cross at 466.87 and 469.08.

 
 
  James Brown   6/22/200,  2:49:46 PM
Like JDSU shares of Lucent (LU) are moving higher today. LU is up more than 5% on better than average volume while breaking out over its simple 50-dma.

 
 
  Jeff Bailey   6/22/200,  2:49:35 PM
IPIX (IPIX) $12.27 +2.25% .... range trading...

 
 
  Jeff Bailey   6/22/200,  2:48:56 PM
Stillwater Mining (SWC) $15.50 +1.43% ....

 
 
  Jeff Bailey   6/22/200,  2:47:34 PM
SMH $36.63 +2.54% ... lurching higher.

 
 
  James Brown   6/22/200,  2:47:20 PM
MXIM is now breaking out over the $51.00 level...

 
 
  Jeff Bailey   6/22/200,  2:47:05 PM
QQQ $36.56 ... session high by a penny.

 
 
  Jeff Bailey   6/22/200,  2:45:30 PM
SMH $36.55 +2.32% .... session high here.... buyer looked aggressive with that crossed bid-to-offer.

Can QQQ $36.52 +1.02% then confirm to session high which would be $36.56?

 
 
  James Brown   6/22/200,  2:44:52 PM
Forest Labs (FRX) is down 6.7% on big volume following yesterday's breakdown below its simple 200-dma. The stock is breaking down below its May lows while its MACD produces a new sell signal. The drop seems to be connected to potential concerns over FRX's Celexa drug and any side effects in children.

 
 
  Jeff Bailey   6/22/200,  2:44:37 PM
SMH $36.50 ... somebody just came in and crossed the bid up to the offer.

 
 
  Jeff Bailey   6/22/200,  2:41:22 PM
Day trade exit alert for the Semiconductor HOLDRs $36.49 +2.15% should they trade $36.47.

Just doesn't feel/look right in here.

 
 
  Jeff Bailey   6/22/200,  2:40:26 PM
Dow and QQQ now a matched pair at their WEEKLY Pivot.

 
 
  Linda Piazza   6/22/200,  2:39:40 PM
Jonathan's note (perhaps on the Futures side of the Monitor) about the VXN being at or near an all-time low worries me. In the past, I used to note a tendency for the volatility indices to rise as important resistance was being challenged and then sink back when the levels were safely cleared. Now, those volatility indices just collapse every time there's an upward push of whatever degree. We've talked in the past about the risk taken when you try to use the volatility indices for market timing, but this keeps me watching for the possibility that the volatility indices are showing a dangerous lack of fear.

 
 
  Jeff Bailey   6/22/200,  2:38:48 PM
SMH $36.49 +2.15% .... still stuck at $36.50, although did see a sessiion high of $36.53.

 
 
  Jeff Bailey   6/22/200,  2:36:26 PM
QQQ $36.52 +1.02% .... is a very tough intra-day trade here. Note how QQQ has moved past its just after 12:00 PM intra-day high of $36.66, but SOX.X 462.24 +2.55% right at its 12:00 PM intra-day high. As if QQQ has "cracked the whip" type of move.

 
 
  James Brown   6/22/200,  2:35:30 PM
Tyco Intl (TYC) continues to look strong and is hitting new two-year highs after breaking out from its recent two-week consolidation under $32. It will be interesting to see if its 200-week moving average just overhead offers any resistance.

 
 
  Linda Piazza   6/22/200,  2:34:46 PM
The SOX hasn't yet made it past the 463-463.50-ish confirmation level of the double-top formation on its daily chart. Bulls want to see a move above that level and then above the converging 30- and 50-dma's, although perhaps it's unlikely that all that could happen today even if the SOX were to mount a several-day rally up to test resistance. Bears want to see the SOX stalled right here or near 563.

 
 
  Linda Piazza   6/22/200,  2:31:47 PM
The OEX did push above the 30-minute 100/130-ema's and the neckline of the H&S on the 60-minute chart and heads up toward the 554 upside target suggested by the breakout of the reverse H&S formation I noted in my 13:37 post. Upper Keltner resistance is marked at 554.59. However, I'll have to remind bulls to be careful, just as I did bears. The OEX is moving into a known resistance zone. It's possible that gains could slow here or that the OEX could even turn down.

 
 
  Jeff Bailey   6/22/200,  2:29:10 PM
Semiconductor Index (SOX.X) 462.02 +2.48% .... matches it noon highs.

QQQ has moved past.... $36.55 +1.07% and above WEEKLY Pivot.

 
 
  James Brown   6/22/200,  2:26:56 PM
JDSU is up 10% to $3.52 and breaking out over its simple 50-dma (and the $3.50 mark). Volume is 10 million above normal at 37 million shares.

 
 
  James Brown   6/22/200,  2:25:31 PM
A Reuters story is reporting that Norway's oil-worker strike is growing. Norway is the third largest oil exporter in the world. Five days ago some of its oil workers went on strike, which reduced the country's output from 3 million bpd to 2.625 million bpd. Now another group of oil workers have joined the strike reducing the country's output to 2.3 million bpd.

 
 
  Jeff Bailey   6/22/200,  2:24:10 PM
Dow Industrials (INDU) 10,373 +0.02% .... back to unchanged and session high.

CAT $76.08 +1.46%, HON $36.75 +1.35%, MMM $88.59 +1.37% and PG $56.07 +1.02% on breadth that is still negative at 17:13, but improving from 01:00 update.

 
 
  Jeff Bailey   6/22/200,  2:19:07 PM
02:16 PM Market Watch at this Link

Captured just after that buy program premium at 1,132

 
 
  James Brown   6/22/200,  2:17:47 PM
Semiconductor maker MXIM is drifting higher again (+2.15%) for another try to break through resistance near $51.00. It also happens to be resistance on its P&F chart.

 
 
  Linda Piazza   6/22/200,  2:16:46 PM
Here's a look at the OEX H&S neckline in conjunction with the 30-minute 100/130-ema's, with the blue average the 100-ema: Link (Note: the formation actually looks better when viewed on longer-term charts, but I wanted to show the 30-minute averages.) So far, this has just constituted a retest of that violated neckline and those averages. Now let's see what the OEX can really deliver or whether it turns down again after a test of this neckline.

 
 
  Jeff Bailey   6/22/200,  2:15:45 PM
Buy Program Premium SPX 1,131.89 +0.14% ....

 
 
  James Brown   6/22/200,  2:14:43 PM
Internet retailer Amazon.com (AMZN) is down 2.91% and breaking through support at $49.00 and its simple 200-dma.

 
 
  James Brown   6/22/200,  2:13:18 PM
More aggressive bulls might want to look at APOL again. The stock is bouncing from a dip to the $90-91 region and charging back above several key moving averages. Currently APOL is up 1.64% to $93.36.

 
 
  Jeff Bailey   6/22/200,  2:12:25 PM
Broker/Dealer Index (XBD.X) 123.74 +0.7% .... moves to session high here and that 80.9% retracement of 123.66.

 
 
  Linda Piazza   6/22/200,  2:11:50 PM
We're soon going to see if the 552.12 mid-channel Keltner level provides any resistance for the OEX, or whether the OEX is likely to charge straight up to the 554 upside target predicted by its reverse H&S. The OEX also charges up to challenge the 30-minute 100/130-pma's, with those ranging up to 552.60.

 
 
  James Brown   6/22/200,  2:10:29 PM
QCOM is bouncing strongly today. The stock is up 3.2% to $67.95 after yesterday's intraday rebound from the $65.00 region.

 
 
  Jeff Bailey   6/22/200,  2:09:06 PM
Day trade long alert SMH $36.36 here, stop $36.20, target $36.80.

 
 
  James Brown   6/22/200,  2:08:43 PM
EBAY is bouncing from support at $84.00 and its simple 40-dma. The stock is up 24 cents to $86.07. Yesterday Goldman Sachs said EBAY should continue to out perform. Currently EBAY is dealing with a lawsuit by Tiffany & Co (TIF) claiming that EBAY violated TIF's trademarks by letting vendors sell counterfeit Tiffany merchandise on EBAY's website.

 
 
  Jeff Bailey   6/22/200,  2:07:54 PM
Swing Trade Bearish stop alert for the QQQ $36.37 here.

 
 
  Linda Piazza   6/22/200,  1:57:36 PM
I forgot to reiterate in my 13:51 post that in addition to not trusting bullish formations on days when the action is bearish, this is also the time period when we sometimes see false breaks, so the OEX push higher could have been just that.

 
 
  Jeff Bailey   6/22/200,  1:53:45 PM
QQQ $36.33 +0.5% ... I think that was a "bad tick" at $36.37.

SOX.X 459.49 +1.93% ... now showing trade either side of WEEKLY Pivot.

Market can't seem to make up its mind what to do at this point. I must say... I'm no different either.

S&P 500 Index (SPX.X)

 
 
  Linda Piazza   6/22/200,  1:51:12 PM
The OEX steadied at the right-shoulder level of its possible reverse H&S on its 5-minute chart and is challenging the neckline near 551 as I type. Although a confirmation of that formation would set up a possible upside target near 554, I would expect relatively strong resistance at the mid-channel Keltner level of 552.20, as that corresponds with the 30-minute 100/130-pma's, at 552.14 and 552.61. Although we could see a steep and prolonged bounce, my sense right now is that long positions may be difficult for all but the adept scalper.

 
 
  James Brown   6/22/200,  1:39:42 PM
Harman Intl (HAR) finally began to see some profit taking after its run from $70 to $90 but traders jumped in to buy the dip at its simple 10-dma. I'd be careful here. The stock is still overbought.

 
 
  Linda Piazza   6/22/200,  1:37:32 PM
A reverse H&S with a steeply descending neckline is possible on the OEX five-minute chart, with the head at today's low, and with the 550 level being an appropriate level for a right shoulder before rounding up through the neckline, now at about 551. If confirmed and if it meets its upside target, that upside target would be about 554.00, but don't put all your trust in potential bullish chart developments and expect the upside target to be met on days such as today. Rather use this possible formation to measure bullishness and to measure your risk if you're in a bearish position.

 
 
  James Brown   6/22/200,  1:36:09 PM
Wow! Jane Wells on CNBC just said the food industry plans to introduce 62 flavors of low-carb ice cream this summer.

I think that if you're on a diet you probably shouldn't be eating ice cream whether it's low-carb or not, but maybe that's just me.

 
 
  James Brown   6/22/200,  1:34:35 PM
We're still watching Ball Corp (BLL) for a breakout over resistance at $71.00. Shares are down 13 cents to $70.17.

 
 
  James Brown   6/22/200,  1:32:41 PM
No reprieve for shares of PRX. The struggling biotech/drug stock continues to sink after breaking support at $39-40 a week ago. This looks like a put candidate but PRX is very oversold! The stock has already surpassed its P&F bearish target.

 
 
  Linda Piazza   6/22/200,  1:31:54 PM
OEX 549.94-550.17 tries to firm up as Keltner support. Mid-channel resistance drops to 552.28 and continues lower, with upper channel resistance at 554.52 and still dropping. It's possible that the OEX could still be making a push for that mid-channel level, even with the (possibly false) breakdown out of the potential bear flag.

 
 
  Jeff Bailey   6/22/200,  1:23:11 PM
Day trade stop alert for the Semiconductor HOLDRs (SMH) $36.20

SOX.X 457.89 +1.57% ... quick little 5-minute drop back below its WEEKLY Pivot.

 
 
  Linda Piazza   6/22/200,  1:23:07 PM
The OEX threatens to fall out of its possible bear flag, but be wary of possible false breaks.

 
 
  James Brown   6/22/200,  1:13:46 PM
Just in case you didn't hear yet the S. Korean hostage has been killed by his kidnappers in Iraq.

Further details here: Link

 
 
  Jeff Bailey   6/22/200,  1:12:19 PM
01:00 Internals at this Link

 
 
  Linda Piazza   6/22/200,  1:12:09 PM
Here's an OEX chart I've posted several times over the last few trading days, showing a possible H&S on the OEX 60-minute chart, with this morning's drop confirming the neckline: Link Each time I posted the chart, I warned to watch for possible support at the 60-minute 100-ema. I've also included the 130-ema to show how the OEX behaved on a test of those averages (reflexive bounce?). The OEX now tries to continue that bounce, but even if it's successful, it will then face the violated neckline. Another rollover through those averages, with a confirming drop to a new low, might lead to further declines, but there's that 547-548 support zone just underneath. Those still in bearish positions want to see a rollover from these averages or from a test of the violated neckline. Some bears might feel comfortable waiting out a test of that neckline and some might not, depending on trading style and account size, as well as whether a trade was planned as a day trade or a position trade.

 
 
  Jeff Bailey   6/22/200,  1:08:53 PM
Semiconductor Index (SOX.X) 459.07 +1.85% ... now back to trade its WEEKLY Pivot.

SMH $36.25 +1.50% ... didn't like session high of $36.50.

Dow Industrials (INDU) 10,337 -0.32% .... 10-points either side of WEEKLY S1 still.

 
 
  Jeff Bailey   6/22/200,  1:00:19 PM
U.S. Dollar Index (dx00y) 89.46 +0.19% (30-minute delayed) ... just after 06:00 AM EDT, Dollar Index did trade a session high of 89.55, and get a trade at its WEEKLY Pivot of 89.51. Since 09:05 AM EDT, range has been 89.26-89.48.

Stillwater Mining (SWC) $15.36 +0.52% at sessiion high, but sideways after session high of $15.38.

 
 
  Linda Piazza   6/22/200,  12:58:17 PM
The TRAN has bounced and now faces 3060-3066 resistance in a few points. The sixty-minute chart shows pronounced bearish price/MACD divergence as the TRAN reached recent higher highs, but that doesn't mean it can't challenge that S/R zone.

 
 
  Linda Piazza   6/22/200,  12:50:08 PM
The SOX does appear to be leading the way for some of the other indices. The OEX charged up to 551 again. Mid-channel Keltner resistance is now at 552.59, and still descending. This possibility was suggested by this morning's bullish divergence and was the reason I suggested that bears should have an exit plan in place for handling a dip below 549.50, according to profit goals, trading syle, and other parameters. The five-minute OEX rise still looks like a possible bear flag, but it could retrace a number of points still, even if that's what it is. Note that the SOX approaches the 463 zone and then the 30- and 50-dma's, all possible resistance.

 
 
  Jeff Bailey   6/22/200,  12:41:36 PM
Day trade long alert for the Semi HOLDRs (SMH) $36.49 here, stop $36.20, target $36.80.

SOX looks like it want to trade at least DAILY R2. SMH's Daily R2 according to QCharts is up at $36.82. DAILY R1 is $36.27.

 
 
  Jeff Bailey   6/22/200,  12:38:58 PM
SOX.X 460.95 +2.25% ... continues to try and lead a session recovery.

Only thing I see holding things back that is obvious at this point is INDU finding some resistance as it tries to come back to WEEKLY S1.

 
 
  Linda Piazza   6/22/200,  12:28:21 PM
The SOX has not broken out of its rectangular consolidation pattern, but it has broken above a steep descending trendline off the 6/08 high. Different patterns: different pictures. I would give the rectangular pattern that many have noted more credence, but be forewarned to watch for a potential break due to the breakout above that trendline. So far, though, upper resistance just above 460 holds.

 
 
  Jeff Bailey   6/22/200,  12:28:01 PM
12:00 Internals at this Link

 
 
  Jeff Bailey   6/22/200,  12:14:51 PM
Semiconductor HOLDRs (SMH) $36.36 +1.79% .... pretty good volume spike of 1.1 million shares that last 5-minute bar from $36.30-$36.37.

 
 
  Linda Piazza   6/22/200,  12:11:28 PM
The 6/18 SOX high was 460.85, a level the SOX is about to test. The 30-minute 100-ema lies at 462.48, a level of recent historical S/R.

 
 
  Jeff Bailey   6/22/200,  12:09:44 PM
Dow Industrials (INDU) 10,332 -0.38% ... just came back to test its WEEKLY S1 (10,336.40).

SOX.X 460.40 +2.13% ... 1-point above WEEKLY Pivot.

Sensing some rotation in the WEEKLY Pivots.

 
 
  Jeff Bailey   6/22/200,  12:06:10 PM
Buy Program Premium was found about 5 minutes ago.

 
 
  Linda Piazza   6/22/200,  12:06:07 PM
The SOX reaches a new day's high and now rises to challenge the 460-562 level that has been so difficult over the recent period. The confirmation level for the SOX's double-top formation on its daily chart lies at about 463.20, so resistance might show up at that level, too, if the SOX should continue to rise. The SOX is trying to mount a bounce, and it may be the index to watch. A failure to push through resistance or maintain the day's highs could negatively impact the markets. If the SOX continues higher, watch to see if the other indices follow or lag behind, likely to draw the SOX back again.

I note that the Russell 2000's behavior today continues the possibility that it could be rounding over into a H&S on its daily chart, with its neckline near the 200-sma.

 
 
  Jeff Bailey   6/22/200,  12:03:54 PM
Semiconductor Index (SOX.X) 459.17 +1.86% ... session high and tests WEEKLY Pivot (459.07) here.

QQQ $36.22 +0.22% ...

 
 
  Jeff Bailey   6/22/200,  12:02:36 PM
12:00 Market Watch at this Link

 
 
  Linda Piazza   6/22/200,  12:00:14 PM
When the SOX dropped today, it dropped into this morning's 9:40-9:45 gap higher, testing that gap. It retraced more than 50% of that gap, something bulls would prefer not to see, but it certainly avoided a lower five-minute low. Now it rises to test today's high, with that high at 458.31 if I'm reading the chart correctly. A push above that day's high would confirm the higher low. SOX bulls should watch for possible resistance to reassert itself, however.

 
 
  Jeff Bailey   6/22/200,  11:58:12 AM
Dow Industrials (INDU) 10,317.35 -0.52% ... 60-minute chart at this Link

Can easily make tie between INDU session low and QQQ session low at its WEEKLY S1.

 
 
  Linda Piazza   6/22/200,  11:54:46 AM
The Nasdaq has not yet made it back above its 200-sma and is currently facing Keltner resistance that looks strong from 1970-1972. We'll see how strong it is.

 
 
  Jeff Bailey   6/22/200,  11:51:21 AM
Weekly S1 trades have been found in the INDU/DIA, SPX/SPY, OEX and QQQ.

NDX, SOX and BIX.X have not seen trade at WEEKLY S1.

 
 
  Linda Piazza   6/22/200,  11:49:27 AM
The OEX is coming up now to retest the 60-minute 100/130-ema's. Sixty-minute MACD has just turned down through the signal line, and it would take a concerted move up or a prolonged consolidation here to turn it higher again. The 30-minute versions of these averages show the 100-ema at 552.92.

 
 
  Jeff Bailey   6/22/200,  11:48:11 AM
Semiconductor Index (SOX.X) 457.64 +1.52% .... back to challenge morning high of 458.32.

QQQ $36.17 +0.05% ....

 
 
  Linda Piazza   6/22/200,  11:29:06 AM
The OEX's Keltner resistance lines are now separating rather than fencing off the OEX as they converged. Sometimes that means that the OEX will have a smoother time rising through them, suggesting at least a short-term countertrend bounce, even if nothing else results. As I type, MACD shows equal lows while price definitely hit a lower low. That bullish divergence still exists, but it certainly hasn't kept the OEX from tumbling all day, has it? On any rise, if one should occur, watch the 60- and 30-minute 100/130-pma's for possible resistance. The 60-minute versions are at 550.83 (known historical S/R) and 549.73, respectively. The 30-minute versions are slightly higher.

 
 
  James Brown   6/22/200,  11:27:57 AM
Gtech Holdings (GTK) is down 1.59% to $49.24 after reporting earnings this morning. The company missed estimates by 2 cents and came in light on the revenues. Its forward guidance was only so-so. The company tried to soften the bad news by announcing a 2-for-1 split. Shares of GTK dipped to their May low and bounced but the stock doesn't look too healthy here.

 
 
  James Brown   6/22/200,  11:23:45 AM
After hitting new all-time highs yesterday, shares of oil tanker company Teekay Shipping (TK) are down 3.5% due to a downgrade to "under weight" from MWD.

 
 
  James Brown   6/22/200,  11:20:38 AM
Biotech leader Amgen (AMGN) continues to sink. The stock is down another 0.96% to $52.31 after yesterday's breakdown to a new 52-week low. The bottom of AMGN's descending channel appears to be near the $50.00 area.

 
 
  Jeff Bailey   6/22/200,  11:20:28 AM
11:00 Internals at this Link

 
 
  James Brown   6/22/200,  11:17:28 AM
Wall Street seems pretty happy with the sporting goods merger this morning. Galyan's Trading Co (GLYN) is up 50% to $16.66 after Dick's Sporting Goods (DKS) announced it would buy its rival for $305 million in cash. Shares of DKS are up 14.65% to $32.76. The company said the acquisition would immediately improve earnings.

 
 
  Linda Piazza   6/22/200,  11:16:27 AM
Our market action isn't doing the European markets much good. They swooped lower after the weakness in our markets became clear. The DAX is just off its day's low, currently down 64.87 points or 1.63%, at 3,924.44.

 
 
  James Brown   6/22/200,  11:12:11 AM
PalmOne Inc (PLMO) is up 38.8% to $29.83. The company reported earnings last night. Analysts were looking for 13 cents a share. PLMO reported 32 cents per share. Revenues jumped 23% to beat estimates.

PLMO also raised its earnings forecast for the next quarter.

 
 
  Linda Piazza   6/22/200,  11:10:05 AM
The BIX maintains the possibility that it could be rounding down into a right shoulder of a possible H&S formation. The neckline roughly follows the 100-dma, currently at 345.12.

 
 
  James Brown   6/22/200,  11:08:40 AM
Wal-Mart (WMT) is really weighing on the Dow Jones Industrials. WMT is down 1.82% to $53.91 after a judge certifies the 1 million plus women class-action sexual discrimination suit against the company.

 
 
  James Brown   6/22/200,  11:06:19 AM
After five weeks of consecutive gains Albertsons (ABS) is being downgraded to a "hold" this morning. So far shares are not reacting.

 
 
  James Brown   6/22/200,  11:04:58 AM
Goldman Sachs (GS) also reported Q2 earnings this morning. Estimates were for $1.95 per share. GS turned in $2.31 per share on revenues of $5.51 billion (+38% for the quarter). The stock is up 14 cents to $88.93.

 
 
  Linda Piazza   6/22/200,  11:03:43 AM
Yesterday, the OEX confirmed a double-top formation on its five-minute chart, and now there's the potential for a larger one on its 60-minute chart. A drop below the 6/14 low of 548.18 would confirm the double-top formation, with the equal highs reached in early June and over the last few days. We're not the only ones who can see the potential for a double-top formation, so some might step in and buy the indices just ahead of that confirmation level, assuming there will be at least a technical bounce there if not something more. That means that those in bearish OEX trades should probably be considering a plan to handle any movement below the current 549.50 level, rather than waiting until 547-548. That plan could include moving stops down aggressively, widening them (if you're that type of trader, perhaps with a longer time frame), taking partial profits, selling the entire position and using part of the profits to roll down into a lower strike, and too many other choices to list.

 
 
  James Brown   6/22/200,  11:03:01 AM
Morgan Stanley (MWD) reported Q2 earnings this morning. Estimates were for $1.05 per share. MWD reported $1.16, or 11 cents above. Revenues soared almost 32% to $6.65 billion for the quarter, which was also above estimates. MWD is down 30 cents to $50.97.

 
 
  Jeff Bailey   6/22/200,  11:02:19 AM
Dow Industrials (INDU) 10,322 -0.46% ... now nearing DAILY S1 of 10,315.58. Looking defensive here.

 
 
  James Brown   6/22/200,  11:01:01 AM
Whoops! Jackson Hewitt (JTX), one of this morning's IPOs, has fallen under its offering price at $17.00. Shares are down 1.76% to $16.70.

 
 
  James Brown   6/22/200,  10:59:04 AM
Network Associates (NET) surged more than 8% this morning on rumors that MSFT was considering the anti-virus company as an acquisition. NET's management came out shortly thereafter and said the rumors were not true. NET's rally has faded to just +2.5% at $16.99.

 
 
  Linda Piazza   6/22/200,  10:57:53 AM
Bullish price/oscillator divergence continues to show up on the OEX five-minute chart, suggesting that the OEX could bounce up to test that 551-551.75 next Keltner resistance level. That bullish divergence exists not only on the slow-moving MACD, but on the fast-moving RSI, too. That doesn't mean that the OEX will necessarily get far on any bounce attempt, but it suggests the possibility of a bounce attempt. Both MACD and RSI turn lower, however, so it's possible that the divergence could be erased.

 
 
  James Brown   6/22/200,  10:53:42 AM
Heads up on the OI call play in ZMH. Shares of ZMH are slipping again (-0.90% to $85.22) and they've broken the simple 21-dma. We'll probably close this play tonight. Our stop is at $84.95.

 
 
  Linda Piazza   6/22/200,  10:53:36 AM
No bounce attempt yet on the OEX. OEX 550.80-551 has been strong historical S/R in the past, but the OEX is slipping below that level, too. The 15-minute chart shows that it's past-due time for the OEX to bounce, with Keltner 15-minute resistance now gathering near 551.80, with the five-minute chart showing strong resistance now at 551.40-551.60. Bears need to continue to lower their stops as the OEX drops.

 
 
  Jeff Bailey   6/22/200,  10:51:07 AM
Broker/Dealer Index (XBD.X) 122.71 -0.13% .... little morning whipsaw (122.13-123.62) just after the open. Sitting right at my upward "cheater's trend" here.

 
 
  James Brown   6/22/200,  10:51:01 AM
Shares of OSIP, a current OI put play, surged from $64.75 to $67.50 this morning on rumors that the company might be a takeover candidate. Fortunately, the rally failed at its converging 10-dma and 50-dma's.

 
 
  Jeff Bailey   6/22/200,  10:49:52 AM
Dow Industrials (INDU) 10,342 -0.28% .... testing DAILY S1 here. If INDU loses its low, then I think session, if not the week's highs may have been found yesterday.

 
 
  Jeff Bailey   6/22/200,  10:48:09 AM
Swing trade short alert for the QQQ $36.18 here, stop $36.37, target $35.75.

 
 
  James Brown   6/22/200,  10:46:35 AM
Our put play in Altria Group (MO) is starting to see some action. MO has been stuck in a trading range the last several days between $47.30 and $48.00. MO's weakness this morning has broken through the bottom of this range and is about to test/break the $47.00 mark.

 
 
  Linda Piazza   6/22/200,  10:46:26 AM
The OEX continues to test the 60-minute 100/130-pma's at 550.87 and 549.84. These should provide a base from which the OEX attempts a bounce, but the violated H&S neckline at 552.50-553.25 should now be resistance. If the OEX falls through these averages without attempting another bounce, matters look even more bearish, but bears should then begin preparing for how they'll handle the 547-548 support zone.

 
 
  James Brown   6/22/200,  10:45:07 AM
Our put play in Kohl's (KSS) is working out pretty well. The stock is down 9 days in a row. Yesterday shares closed under support at the $45.00 mark and today they are breaking support at the 40-dma while challenging the 50-dma. Be sure to tighten stops. Short-term traders might want to be thinking about taking some profits off the table. KSS is way overdue for an oversold bounce.

 
 
  Linda Piazza   6/22/200,  10:37:43 AM
New five-minute low for the OEX. MACD hasn't caught up yet, so for the time being signals bullish divergence. That warns bears to be careful, if it should continue. MACD is rolling down again.

 
 
  Linda Piazza   6/22/200,  10:35:45 AM
VXO is climbing, at 15.30 as I type.

 
 
  Linda Piazza   6/22/200,  10:34:36 AM
The Nasdaq is holding less than a point above its 200-sma and may be headed down to test it again, with that average at 1972.45. Oops. Just eased below it again.

 
 
  Linda Piazza   6/22/200,  10:32:34 AM
This morning's first OEX bounce brought the OEX right up to the 30-minute 130-ema, so constituted a retest of the 30-minute 100/130-ema's, with the OEX then turning down. That's a bearish action, but the bearishness is not necessarily being supported by TRIN and the advdec line, so I continue to urge caution. That's backed up by the fact that the OEX found support at the 60-minute version, dropping almost to the 60-minute 100-ema earlier at the important 550.90 level and bouncing from there. The OEX is now trapped between the two versions of those MA's, although it's heading below the 60-minute 100-ema as I type. Those in bearish positions should have a plan in mind for how they would handle a stronger bounce than we've had so far. Ostensibly the OEX has dropped below the neckline of the H&S on its 60-minute chart and all is working as it should for those in bearish positions, but bears will feel better if the OEX also drops below the 60-minute versions of those MA's. Mid-channel Keltner resistance has now dropped to 553.05 and continues to drop quickly.

 
 
  Jeff Bailey   6/22/200,  10:26:03 AM
SOX.X 456.59 +1.29% .... 15-minute interval chart at this Link

 
 
  Linda Piazza   6/22/200,  10:21:49 AM
On the OEX five-minute chart, Keltner resistance gathers at 551.87, 552.28-552.36, and then the OEX has clearer sailing up until the 553.30 level that marks the 50% retracement of the flagpole decline since late yesterday. The pattern on that five-minute chart is now looking more like a possible bear-flag, but we have to see what the outcome is before we're sure. Bears should continue following the OEX lower with their stops. Bulls should be aware that this bounce could be just a bear-flag bounce into resistance.

 
 
  Jane Fox   6/22/200,  10:19:28 AM
Dateline WSJ - The New York Stock Exchange is considering a plan to allow investors to execute more stock orders automatically -- a major expansion of its push to expedite trading that would probably reduce the role of the floor brokers.

Big institutional investors favor the plan, because they consider the New York Stock Exchange sometimes to be slow and inefficient, with its system that historically has depended on brokers screaming out prices to "specialists" who act as auctioneers. Floor brokers oppose the plan because it could hurt their business and, they argue, cause price swings that hurt investors and companies alike.

The plan being considered by the Big Board's chief executive, John Thain, would follow a more-modest proposal announced early this year that is awaiting approval from the Securities and Exchange Commission. The earlier plan allows investors' buy and sell orders of any size to be electronically matched, so long as, at that moment, the prices at which stock can be bought or sold are the most attractive in the market. Current rules permit such automatic executions only of small stock orders, leaving the big ones to the specialists

 
 
  Linda Piazza   6/22/200,  10:19:12 AM
The Nasdaq headed down again--the low of the day has been 1971.73, with the Nasdaq at 1975.36 as I type. Bulls want to see a higher five-minute low: bears want the opposite.

 
 
  Jeff Bailey   6/22/200,  10:15:50 AM
QQQ $36.22 +0.2% .... tested that overlap of $36.31 between the WEEKLY and Pivot retracement. Session high has been $36.33.

Intra-day chart of the SOX.X shows session high of 458.32 came into its "zone of resistance" and kissed the underside of its upward trend.

 
 
  Jeff Bailey   6/22/200,  10:14:14 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

 
 
  Linda Piazza   6/22/200,  10:05:11 AM
The OEX has begun a little more backing and filling on its five-minute chart, but the climb is still fairly steep. Watch the 553.29 level (50% retracement of the decline), as the OEX really shouldn't retrace much more than 50% of that move if this is merely a countertrend bounce.

 
 
  Jonathan Levinson   6/22/200,  10:04:38 AM
The Fed has drained 500M by adding a 4.25B overnight repo against the 4.75B expiring today.

 
 
  Jeff Bailey   6/22/200,  10:02:45 AM
10:00 Market Watch at this Link

 
 
  Linda Piazza   6/22/200,  10:01:33 AM
Here's the possible H&S formation I've been watching on the BIX's daily chart, watching for the formation to possibly develop since the middle of June: Link Note the bearish divergence as the head was formed. I've been watching this for either a confirmation of the formation (bearish for markets) or a rejection of it (bullish for markets). Both Friday and yesterday, it appeared that the BIX would reject the formation, but the index eased away from its highs of the day both days. The right-shoulder formation is now getting a little extended. Bears would like to see the BIX round down soon while bulls want to see a close above 350 or preferably even above the early June high.

 
 
  Jeff Bailey   6/22/200,  9:55:59 AM
Semiconductor Index (SOX.X) 455.38 +1.02% ... juuuust under DAILY R1 at this point.

 
 
  Linda Piazza   6/22/200,  9:55:02 AM
On the OEX, a 50% retracement of the flagpole decline from the last five-minute high to this morning's low lies at about 553.29. This bounce looks more impulsive than corrective, to borrow Keene's terms, but if it's going to reformulate itself into a normal type of measured distribution pattern or if it was a reflexive dip-buying that's going to be soon met with selling, then we should soon begin to see some backing and filling. If that type of action occurs, then bears should hope to see the OEX fail to sustain levels above a 50% retracement of the flagpole decline. If an impulsive wave continues, then the OEX could pass up that benchmark and others.

 
 
  Linda Piazza   6/22/200,  9:50:21 AM
We have three of this week's projected 16 IPO's today. All three of today's issues priced either below or at the lower end of their initial ranges. They are biotech company Momenta Pharmaceutical (MNTA), quotation period to begin at 10:25; biotech company Senomyx (SNMX), quotation period to begin at 11:05; and tax-provider company Jackson Hewitt (JTX), with a time for the quotation period not yet available.

 
 
  Jeff Bailey   6/22/200,  9:48:41 AM
IPIX Corp. (IPIX) $12.42 +3.5% Link ....

 
 
  Jeff Bailey   6/22/200,  9:45:21 AM
Digital Recorders (TBUS) $7.22 +21% Link ... announced late yesterday that its Digital Audio Corp. (DAC) business unit received an order for security-related equipment that will be used during the Olympic Games in Athens, Greece. Story at this Link

 
 
  Linda Piazza   6/22/200,  9:44:15 AM
Remember that the 200-sma could be a strong bounce point for the Nasdaq, especially as other MA's congregate there, and especially as it's also near the site of a neckline of a H&S that formed just under the descending trendline off the year's high. Lots of reasons to attempt a bounce here, but if it is not attempted or fails . . . I show that H&S neckline anywhere from 1971.50 to 1962, depending on how it's drawn, and the presence of a H&S formation under resistance already lends a bearish flavor to the chart.

 
 
  Jeff Bailey   6/22/200,  9:43:55 AM
Dow Industrials (INDU) 10,351 -0.19% .... bank/finance components ... AXP $51.32 -0.34% Link , C $47.01 -0.31% Link , JPM $36.79 -0.59% Link.

 
 
  Linda Piazza   6/22/200,  9:40:35 AM
The Nasdaq tests its 200-sma at 1972.44, with the Nasdaq easing just below that, at 1972.23 as I type.

 
 
  Linda Piazza   6/22/200,  9:39:20 AM
The OEX has reached the 551.00 downside target predicted by the double-top formation yesterday on a five-minute chart. It's reached a possible level of strong support, too, just ahead of the usual first retracement of the day, so a bounce from 550.50-551 would fit timewise and support-wise if it should begin sometimes in the next few minutes. The amplitude of that bounce will tell us a lot about early strength and weakness, but the reaching of a bearish downside target already tells us something about that.

During the first five minutes of trading, the OEX ranged from 552.07 to 551.22.

 
 
  Jeff Bailey   6/22/200,  9:38:13 AM
QQQ $36.15 (unch) ... here's 120-minute interval chart (for time perspective) with volume at price overlay (discussed in Index Trader Wrap) at this Link

Ideal area I'm looking for a swing trade short (missed it yesterday afternoon) is back near today's DAILY R1 ($36.50) and WEEKLY Pivot ($36.51).

 
 
  Linda Piazza   6/22/200,  9:35:58 AM
The TRAN trades sideways out from Friday's and Monday's candles, a little below both closes, but not drastically so, at least so far. The TRAN can zoom around a lot more than you would expect for a venerable old index, so it's always dangerous to reach a conclusion about what the TRAN might do this early in the day.

 
 
  Linda Piazza   6/22/200,  9:33:37 AM
The OEX continues below the 30-minute 100/130-pma's, with those averages currently at 553.02 and 553.28, but anyone considering or already in a bearish OEX play should carefully watch how the OEX behaves with respect to these averages on the first retracement of the morning today. Those in bearish plays should be following the OEX lower with their stops since the OEX has breached the Keltner channels to the downside. That's perhaps a valid breakout signal, too, but shows some vulnerability to a bounce to the mid-channel level, currently at 554.56 but dropping fast.

 
 
  Linda Piazza   6/22/200,  9:07:19 AM
Competing formations: we've seen several on the OEX and yesterday was no exception. Yesterday the OEX ended the day perched on the neckline of a possible H&S formation on its 60-minute chart. The 60-minute RSI had already fallen beneath its own H&S neckline at or about the time the OEX starting pulling back from its test of the right-shoulder level. That RSI trendline break confirmed the OEX's weakness as it began rolling down.

Friday, the OEX had moved above the neckline of a formation I never completely trusted, a continuation-form reverse H&S, but Monday's decline took it back below the neckline of that competing structure. The 5(3)3 stochastics had started Friday with an upward hook and had extended that climb Monday morning, but then turned down again. Other daily oscillators remain less convinced of direction, flattening as the OEX traded sideways on the daily chart for another day. This morning, I was listening to CNBC World, and the conclusion of the guest analyst was that individual investors should go "watch football or something," that it was not worth the trouble to try to figure out the markets right now, that volumes are so light that to try to determine some pattern was useless. I tend to agree, but nevertheless, it's my job to try to figure something out or to tell you when I agree that it's a useless endeavor, so let's dig in.

Monday's drop also confirmed a double-top formation on the five-minute chart, setting up a downside target of 551, with the 550.50-551.00 zone being one that shows up often in S/R levels derived by different methods. For example, the lower end of that zone marks one version of a best-fit descending trendline off the February high, a trendline that the OEX violated to the upside in early June. The 60-minute 100/130-ema's lie at 550.86 and 549.73, respectively.

How do we sort through the competing formations? I'm struck by the fact that so far the OEX has not been able to build upon any gains made and push above resistance. Nor have many of the other indices. Yesterday, the SPX retraced almost all of Friday's range, pushing away from the resistance at the top of its descending regression channel. The Nasdaq ended the day just above the converging 50- and 200-sma's, ready for either a plunge beneath them or a bounce from them. The Russell 2000 could not maintain levels above 570. The Dow's candle nearly engulfed Friday's candle. The BIX pulled back from its test of 350. The SOX could not capitalize on the potential to create a morning-star reversal signal. The TRAN pulled back below the 6/07-6/08 high again, creating another doji, the third day in a row when candlesticks produced a visual confirmation of indecision.

Staring at the pattern on the OEX's daily chart, it's possible to interpret it as a bull flag, one that has perhaps even been broken to the upside. Yet that failure to capitalize on an upside breakout, if that's what it was, still appears striking to me. When reading about Asian markets this morning, I read one analyst's commentary that the Nikkei could not make further gains ahead of the uncertainty arising from the FOMC's meeting next week. While I wouldn't go so far as to say gains could not be made, I certainly am noticing that they're not being made. Many indices remain within striking distance of upside breakouts, but they certainly need to effect those breakouts if they're going to do so. Oscillators threaten to roll down. As I study the pattern of the futures overnight, it almost appears that futures wanted to rise, given the least excuse (as in a not-too-big decline on other bourses), but the action on European bourses appears to be pressuring them. I continue to believe that if breakouts occur, and if they're not hit by a wave of selling, then we may have a bout of shortcovering that sends the indices higher, but that's not exactly a strongly positive statement, is it? Perhaps markets remain more vulnerable to the downside. I'd certainly be hesitant to suggest a long position under light-volume nervousness ahead of the Fed meeting.

I'm almost as hesitant to suggest any bearish positions with the SOX still capable of steadying and the TRAN still capable of adding to gains and the Nasdaq capable of bouncing from its 200-dma test. Watch the bellwether indices, including the Nasdaq in its test of the 200-sma, the TRAN in its test of 3080-3100, as well as the SOX and the BIX.

Since the OEX ended the day Monday with a test of the 30-minute 100/130-pma's, I'm going to cue off those averages, watching for a further breakdown below those averages as a sign that bears are gaining the upper hand, at least temporarily. On a bounce through those averages, bulls might be assumed to be gaining the upper hand, at least temporarily, but with the 556.30 level having been reinforced as resistance, hopeful bulls should note that the OEX doesn't have far to go before challenging important resistance. Above that, the 556.70-558.40 zone appears as important Keltner resistance.

 
 
  Jonathan Levinson   6/22/200,  8:04:25 AM
There are no major economic reports scheduled for today.

 
 
  Linda Piazza   6/22/200,  7:26:17 AM
Good morning. Worry about the effect of an anticipated rate hike in the U.S. next week began to assert itself in Tuesday's overnight trading. The Nikkei opened more than 50 points below Monday's close, with exporters leading early declines. By late morning, the Nikkei had dropped to its day's low, down 128 points, but it climbed through the afternoon session. It closed down only 18.89 points or 0.16%, at 11,581.27. After coming with 12 points of confirming a new P&F sell signal Friday, the Nikkei had created a new buy signal Monday. After all the zooming around it's been doing, Tuesday's 128-point decline and more-than-100-point recovery off the low seem rather tame for a day's action.

Citigroup decided to sell a 9% position in Nikko Cordial, deemed the world's largest financial-services corporation, with Nikko Cordial to buy half and individual investors to buy the other half of the shares Citigroup will sell. The stock tumbled in early trading on fears that oversupply would cut share price, and ended the day lower by 6.8%, with Standard and Poor's having downgraded the company's outlook to stable from the previous positive rating.

At least some of the major banking concerns declined, including Mitsubishi Tokyo Financial Group and Sumitomo Mitsui financial Group. However, not all sectors declined. Telecommunications stocks gained early in the session with Kyocera and KDDI agreeing to the terms under which Kyocera and the Carlyle Group will acquire a 90% stake in KDDI's wireless Internet access business unit DDI Pocket. Both Kyocera and KDDI closed higher Tuesday. Although it had been an early decliner, Mitsubishi Motors zoomed up 13.5% on what was deemed a short squeeze. As had been rumored would happen, an insurance company has examined cases involving accidents for signs they might have been caused by defects in Mitsubishi's vehicles, and has asked for reimbursement of insurance money in one. It has been alleged that the company's Fuso unit hid knowledge of defects that warranted recalls. Shorts must have been caught when the stock either did not add to declines or began a bounce.

Other Asian bourses were mixed, with more trading lower than higher. The Taiwan Weighted was closed for a holiday. In South Korea, Hyundai Motor inched 0.2% higher after settling a class-action suit in the U.S., with that suit claiming that Hyundai exaggerated the horsepower of some models. South Korea has also reportedly announced this morning that it will evacuate its nationals from Iraq after the kidnapping and threatened beheading of one of its citizens, but that was a late-breaking headline that included no explanation of plans. South Korean's have demonstrated against a South Korean presence in Iraq after the capture of one of its citizens. The Kospi traded lower by 0.38%, and Singapore's Straits Times declined 0.07%. Hong Kong's Hang Seng was closed for a holiday, too. China's Shanghai Composite rose 1.20%.

Most European bourses trade lower on volume that is characterized as being light. "Go watch football or something," a CNBC Europe guest analyst advised individual investors when talking about the dangers of trading in the light volume seen on European bourses. Articles tag the banks as leading declines both in Europe and in the U.K., with that sector declining ahead of quarterly earnings by Goldman Sachs and Morgan Stanley today. In Germany, the ZEW Institute released June's institutional investor sentiment number, with that number rising to 47.4 against May's 46.4. According to my information, expectations had been for a rise to 47.5, but the ZEW Institute pointed to strong export demand and strong volume of incoming orders as reasons for the expansion over May's number, and early articles deemed the number an encouraging one. Lower oil prices were also cited.

Many airlines and airline-related companies declined in early trading, with Alitalia's trading suspended ahead of an announcement. European aerospace group EADS received a list from the U.K.'s top military procurement official asking for a number of price and financing concessions related to an air-to-air refueling tanker project. The company had recovered some of its early losses, however.

In stock-specific news, France Telecom announced an IPO for its directories unit, an expected announcement, with the shares to begin trading July 8. The shares appear to be priced at the lower end of the estimated price range, and France Telecom eased in early European trading. In the U.K., Vodafone dropped for a third straight day, with the company denying rumors that its Southern European executive may leave. Competition concerns have been pressuring the stock. Morgan Stanley downgraded Dutch insurer Aegon from overweight to equal-weight on worries about future growth in the life insurance business in the Netherlands. UBS downgraded Royal Dutch to neutral from its former buy rating.

As of this writing, the FTSE 100 trades lower by 16.10 points or 0.36%, at 4,486.10. The CAC 40 trades lower by 12.57 points or 0.34%, at 3,727.71. The DAX trades lower by 15.06 points or 0.38%, at 3,974.25.

 
 
  OI Technical Staff   6/21/200,  8:38:27 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

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

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

 
 

Market Monitor Archives