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  Jeff Bailey   7/1/2004,  6:27:21 PM
Closing Internals at this Link

  Jeff Bailey   7/1/2004,  5:34:10 PM
August Crude Oil futures (cl04q) slipping lower at $38.59. Here's an updated PnF chart. $39.50 a focal point right now. Link

$39.50 may well tie in with TRAN 3,160 support. My thought today is that a slight move above $39.50 in oil might at least trigger some profit taking from transport bulls. Carry that thought into tomorrow.

CNF a liiiiittle weaker than the TRAN last couple of sessions.

  Jeff Bailey   7/1/2004,  4:19:57 PM
Current OPEN MM profiles at this Link

  Linda Piazza   7/1/2004,  4:04:50 PM
The Dow now has even more points to go before following the TRAN to a new closing high. The longer it takes, the weaker the bullish signal, if it still comes. The longer it takes, the more likely it is that the signal will be a bearish and not a bullish one.

  Linda Piazza   7/1/2004,  4:02:38 PM
The OEX bounced from its 50-dma today, but still ended the day at the bottom of the recent trading range.

  Linda Piazza   7/1/2004,  3:54:05 PM
The TRAN has come right back down to retest the neckline of its reverse H&S, not usually a good sign.

  Linda Piazza   7/1/2004,  3:52:38 PM
Careful: The OEX's climb looks a bit like a rising wedge.

  James Brown   7/1/2004,  3:50:00 PM
FYI: for those you following the PremierInvestor candidates on the OI website, it might be time to take profits in the ELX short. Or at least significantly lower your stop. I'm thinking $12.51 or $11.77 depending on how much of the move you want to protect.

  Linda Piazza   7/1/2004,  3:45:21 PM
The OEX approaches mid-channel Keltner resistance at 549.80-550.

  James Brown   7/1/2004,  3:44:52 PM
Today's decline may prove to be a bullish entry point in stocks like EBAY and DHR, both on the OI call list.

  Linda Piazza   7/1/2004,  3:44:22 PM
The TRAN and the OEX have both pushed above the neckline levels of their respective reverse H&S's. Now they have to stay there: not a given in this environment today.

  Jeff Bailey   7/1/2004,  3:43:27 PM
Microsoft (MSFT) $28.61 +0.15% .... edges up to afternoon high.

  James Brown   7/1/2004,  3:43:25 PM
Insurance stock Zenith Natl (ZNT) is bucking the downtrend today with a 3.7% rally to a new high over resistance at $50.00.

  Jeff Bailey   7/1/2004,  3:41:15 PM
Buy Program Premium SPX 1,129.20 , OEX 549.18, QQQ $37.06.

Rumors circulating Ms. Cohen has stepped into her office and closed the door.

  Linda Piazza   7/1/2004,  3:39:46 PM
The TRAN's pattern at the bottom of its plummet could also fit the scenario of a reverse H&S, as I mentioned earlier today. The TRAN is currently in the process of forming a right shoulder, although it did just test the neckline level again. That neckline level at about 3173-3174.50, depending on how it's drawn. We're now waiting to see whether there's a neckline break (not just a momentary, fake-out move one) or a move down to complete the right shoulder, or even a breach of the shoulder level.

  Jeff Bailey   7/1/2004,  3:31:05 PM
Semiconductor Index (SOX.X) 466.41 -3.85% ... I don't have the new MONTHLY pivot retracement on the SOX.X yet, but just noting that current session low of 462.59 came pretty close to its WEEKLY 61.8% retracement of 462.64, where that upward trend also resides.

Junes MONTHLY Pivot sure did seem to mark that early congestion though.

  Linda Piazza   7/1/2004,  3:28:07 PM
Do you get the feeling that all market participants are holding their breath?

  Linda Piazza   7/1/2004,  3:21:54 PM
Okay, so far, the potential OEX reverse H&S scenario that I laid out in my 14:19 post is working, so I think we have enough conformity to that potential pattern now (left shoulder and head with slightly descending neckline established) so that we can use the potential formation to measure whether bulls or bears are gaining the upper hand. If the OEX drops much below 547, it's likely the formation is negated, and the bulls could not follow-through on that incipient bullishness. If the OEX instead moves back up after steadying a while and moves through the neckline (remember that the formation can still be rejected at the neckline), that says the bulls are gaining at least some short-term strength--enough to get some sort of measured distribution pattern going, if nothing else.

  Jeff Bailey   7/1/2004,  3:21:27 PM
CNF Inc. (CNF) $41.08 -1.15% ... correction to bearish stop alert! Should be $41.60 and NOT $42.60.

  Jeff Bailey   7/1/2004,  3:14:40 PM
03:10 Market Watch at this Link

  Linda Piazza   7/1/2004,  3:12:07 PM
The OEX is charging up toward 549, but the Keltner central-channel resistance still hasn't dropped that low, so it's unclear whether 549 will stop it as I speculated earlier, based on a possible reverse H&S setup. The OEX is dragging other Keltner resistance up with it, however, and that resistance may be enough to tug the OEX back down into the shortest-length channel again.

  Linda Piazza   7/1/2004,  3:04:24 PM
The OEX is still laboring up toward the would-be neckline of its possible reverse H&S, with that neckline at about 549. It's facing Keltner resistance as I type at 548.30-548.40, however. Remember that the OEX is not anywhere near completing that formation. It hasn't even completed the head, if that's what it's to be. We're just watching to see if the OEX climbs to 549 and then drops back again to form a possible right shoulder. The other alternatives, of course, are that it will drop back toward the day's low, negating the potential formation or else zoom past 549 without ever forming a right shoulder. As I type, mid-channel Keltner resistance has not quite made it down to the 549 level, and is instead near 549.75-550. If the OEX could break free of the current Keltner resistance, it has a chance to reach that level, but the likeliest setup from here appears to be either a negation of the formation or a continuation of the setup, possibly with a descending neckline. The "zooming past the neckline" scenario does not appear likely from this perspective, but that could change if someone out there plans on a buy program into the close.

  Jeff Bailey   7/1/2004,  3:03:42 PM
Current MM Profiles ... update at this Link

Feeling a little "long" in the tooth today.

  Jeff Bailey   7/1/2004,  2:59:33 PM
heee.. heee...heee

  Linda Piazza   7/1/2004,  2:55:03 PM
The TRAN finally violated yesterday's low. It's back above that level as I type, but the TRAN's action so far has fit at least some of the parameters of a key reversal day--a new high reached this morning and then a drop below the open to trade at negative levels. Of course, we have to see where it closes, and there are volume and volatility requirements, too. For example, the movement in the early hours should range as far as the TRAN typically ranges an entire day. The TRAN met that requirement, too, as it plummeted to the 3165 level by noon after reaching that new high earlier in the session. ATR (Average True Range) on the TRAN is currently 37.74 points and the TRAN plummeted 43 points off its high by noon. There's the possibility that today's candle could be a bearish engulfing candle, too, depending on where the TRAN closes.

  James Brown   7/1/2004,  2:50:33 PM
AFG looks like a bullish play if it can breakout over multi-year resistance at $31.00. It might be better as a covered call candidate.

  Jeff Bailey   7/1/2004,  2:48:57 PM
Defense Index (DFX.X) 226.59 +1.06% .... Did anyone look at UTX's point and figure chart this morning? BIIIIIIG "low pole warning"

I've got a pullback alert set at $86.Link but the way the stock struggled for the first half of the year, but then suddenly, and rather easily looking scoops back higher through all that overhead supply suggests to me the stock has bottomed out, and new highs are ahead in the months to come.

  James Brown   7/1/2004,  2:47:39 PM
A G Edwards (AGE) has been rather weak the last few days and is in danger of breaking down through the $33.00 level. Volume has been very strong on the declines and the weekly chart suggest AGE could drop toward the $30.00 level. Its P&F chart is bearish and points to a $29 target but is still dealing with P&F support right at the $33 level.

  Jeff Bailey   7/1/2004,  2:45:32 PM
Day trade close out alert for Emulex (ELX) $11.60 here.

A couple of intra-day volume spikes from the session low of $11.43 and RED #5 ($11.45)

  Linda Piazza   7/1/2004,  2:39:08 PM
Crude prices have continued higher this afternoon, continuing to apply pressure to equities.

  Jeff Bailey   7/1/2004,  2:37:59 PM
Dow Transports (TRAN) 3,162.89 -1.28% ... Linda's been following closely today.

Doesn't want to give up that 12/31/2000 relative high of 3,157.44 (3,160) at this point.

Granted my swing trade profile in CNF is anticipatory of the break, but may be tough to get any upticks if TRAN does break near-term.

  Jeff Bailey   7/1/2004,  2:30:40 PM
Chicago Merchantile (CME) $146.53 +1.49% Link ... new highs! Still some upside to its PnF bullish vertical count of $181.00

CME slogan... "If you list it, they will come"

  Linda Piazza   7/1/2004,  2:19:41 PM
The OEX tried to push above that Keltner resistance I mentioned in my last post, but it fell back. There's a possiblity it could still steady, however, near its current 547 level. There's bullish divergence again on that OEX five-minute chart as it reached the day's low. Again, we've seen these divergences show up all day without any real bounce following them. Let's try the whole reverse H&S scenario again, though, watching the current OEX formation. If the OEX should rise up to 549 or so and then drop back again, there's the possibility that the drop is to form a right shoulder, with the drop then being to about 547.50-548. By the time it could then rise again, the central Keltner resistance might have dropped to 549 or so, so that a test of the neckline of that reverse H&S would then be a test of the central Keltner channel resistance again. At this point, this is all speculative, and it's so speculative that there's no indication of whether a neckline test would be successful or not, even if this scenario did play out. If the OEX drops to a new low now instead of steadying, the speculation is off.

  James Brown   7/1/2004,  2:19:15 PM
Dow-component Pfizer (PFE) is trying to hold support at its March lows near $33.50 but the stock looks bearish with the recent breakdown under the 200-dma and the failed rally to rebound back through it.

  James Brown   7/1/2004,  2:18:02 PM
Dow-component PG is nearing the bottom of its rising channel and price support near $54.00.

  Jeff Bailey   7/1/2004,  2:16:27 PM
Aside from Ms. Cohen's comments yesterday ... August Crude Oil futures (cl04q) 38.87 +4.91% up $1.82. Breaking back above its 21-day ($38.00) and 50-day ($38.48) simple moving averages.

  Linda Piazza   7/1/2004,  2:14:22 PM
The OEX faces strong Keltner resistance at its current 547.31 level. Don't I remember 547.35 showing up over and over as historical S/R a while back?

  Jeff Bailey   7/1/2004,  2:11:14 PM
Swing trade short alert ... CNF Inc. (CNF) $41.17 to $41.10 here, stop $41.60, target $40.01.

  Linda Piazza   7/1/2004,  2:11:04 PM
I missed Abbey J-C this morning, and from the talk on the MM, I'm sorry I did.

The SOX is trying to mount a push back above the 50-dma, currently at 466.64. If it's not successful in producing a big push up today, that's going to be one ugly candle on the daily chart.

  James Brown   7/1/2004,  1:57:08 PM
WFMI continues to march to the beat of its own drum. Shares are still climbing toward the $100 mark.

  James Brown   7/1/2004,  1:55:24 PM
The breakdown under 10,300 in the Dow is leading MMM through short-term support at $88.00.

  Linda Piazza   7/1/2004,  1:52:21 PM
There goes the OEX again. Continue to follow the OEX lower with your stops, as vulnerability to a bounce to mid-channel resistance continues. That mid-channel resistance is dropping right along with price, however, and now is at 550.69. Congratulations to all in bearish OEX trades. The OEX is approaching another possible support level, with 544-546 being possible support. Below that, 541-542 seem most likely support. We could sell off into the close, but those sitting on massive profits might consider setting a profit target for at least a portion of their positions.

  Linda Piazza   7/1/2004,  1:46:46 PM
The SOX has dipped below the 50-dma.

  Linda Piazza   7/1/2004,  1:43:46 PM
We can rule out the reverse H&S on the OEX, but not yet on the TRAN. Careful, the OEX's move comes during the stop-running time of day.

  James Brown   7/1/2004,  1:35:25 PM
Xilinx (XLNX) is helping lead the semiconductor sector lower with a 4.77% drop through support at $32.00. It also happens to be a breakdown through P&F support.

  James Brown   7/1/2004,  1:31:53 PM
Starbucks (SBUX) hit new highs today after reporting that same-store sales jumped 10% in June. This was the eight month of double-digit percentage gains (Reuters).

In other news SBUX is planning to roll out a lower-calorie Frappacino. Considering that some of their large (hot & cold) drinks are more than 600 calories a pop this sounds like a good idea!

  Jeff Bailey   7/1/2004,  1:24:56 PM
TASER Intl. (TASR) $43.67 +0.94% ... at approximately 12:30 PM, I'm seeing news reports from Bloomberg that the Houston Police Department is set to buy $3.6 million worth of stun guns.

That would coincide with earlier 12:37 post as TASR bid back to the short-term downward trend.

  Linda Piazza   7/1/2004,  1:23:26 PM
The TRAN needs to steady off now if it's going to form a right shoulder and climb toward the neckline of its reverse H&S on its 5-minute chart.

  Linda Piazza   7/1/2004,  1:19:28 PM
The OEX is now trying to steady off at the right shoulder level of the possible reverse H&S on its five-minute chart. It's steadying off a little lower than I anticipated (see my 13:05 post), but it's not too low for a right shoulder. Note that a fall to a new day's low of course negates this potential formation, while a climb above 549.10 or so confirms it, setting up a retest of the central channel resistance, now at 551.

  Jane Fox   7/1/2004,  1:14:16 PM
James I did not know Wendy's owned Tim Horton. I used to go there all the time when I lived in Canada and always wondered why they never had a presence in the States.

  Jeff Bailey   7/1/2004,  1:12:37 PM
01:00 Internals at this Link

  Linda Piazza   7/1/2004,  1:05:02 PM
If the OEX is also going to form a reverse H&S at the bottom of its descent today, it probably needs to pull back about now to form a right shoulder, perhaps to 548.25-548.60. I don't see much Keltner resistance holding it back from making further advances right now, however, as it tests the confirmation level of the double-bottom formation. (Note: Keltner resistance or not, it began pulling back as I began typing.) Strongest resistance is at the mid-channel level, currently at 551.23. I had thought that might mid-channel resistance have descended to 551 by the time the OEX could test it, and it looks now as if it might descend at least that far by then.

  Jeff Bailey   7/1/2004,  1:03:57 PM
01:00 Market Watch at this Link

  James Brown   7/1/2004,  1:02:44 PM
We're not seeing much reaction in the stock price but Guess Inc (GES) has reported June sales up 19% with same-store sales up 12.7%.

  James Brown   7/1/2004,  12:56:48 PM
Wendy's (WEN) June same-store sales jumped 2.3% while its Tim Horton same-store sales rose 9.5%.

For those of you who don't know WEN owns the Tim Hortons chain. The chain was founded in 1964 and is the largest coffee and fresh baked goods chain in Canada with 2,363 stores in Canada and about 225 in the U.S.

  James Brown   7/1/2004,  12:52:12 PM
Hoover's says there were 53 IPOs in the second quarter vs. 5 a year ago. IPOs raised $8.8 billion in the second quarter vs. $1.6 billion a year ago.

  Linda Piazza   7/1/2004,  12:51:57 PM
The TRAN's five-minute chart shows a possible miniature reverse H&S in the making. If that's a valid formation, then a brief downturn to 3167-3168.50 might be needed to form the right shoulder. A move to a new day's low negates the possible formation, of course, while a move above 3172 after a brief pullback would constitute a confirmation of the formation. This isn't a big formation and wouldn't have a big upside target, but I'm watching it because it's a sign that the bulls might be trying to mount a defense of the transportation stocks before the index drops below yesterday's low.

  James Brown   7/1/2004,  12:45:25 PM
Coming up at 4:00 PM ET - President Bush will be speaking at the White House in a commemoration for the 40th anniversary of the Civil Rights Act.

  Linda Piazza   7/1/2004,  12:40:46 PM
The OEX is hitting Keltner resistance near 548.80. Nearest support is near 548.20-548.40.

  Linda Piazza   7/1/2004,  12:38:36 PM
Although I've mentioned a couple of times today that this move by the OEX just constitutes another move down through recent range, it doesn't feel like a neutral move. It's been enough to turn the daily 21(3)3 stochastics into a full bearish roll, although it hasn't yet driven the MACD below signal. Histogram levels are negative, however. This feels as if a breakdown below this range is possible, perhaps to test 544-546 or even 541-542. There's no solid proof of that as yet. It's just a possible scenario based on sentiment damage that might have been done. Tomorrow's numbers may prove the catalyst that either turns the OEX up through that range again or breaks it down, but we have to watch the bellwether indices and other factors, too. For today, there should be some sort of measured distribution pattern sending the OEX higher, but then I've been thinking that for a while today.

  Jeff Bailey   7/1/2004,  12:37:21 PM
TASER Intl. (TASR) $43.66 +1% ... once again does battle with the short-term downward trend from Monday's high to yesterday morning's relative gap high.

  Jeff Bailey   7/1/2004,  12:31:52 PM
JDS Uniphase (JDSU) $3.62 -4.48% ... here's the bar chart I'm working off of. Link

  James Brown   7/1/2004,  12:30:00 PM
Another Chinese Internet NTES is down 6.26% to $38.75 and breaking down through round-number support at $40.00. NTES was downgraded to "equal weight" this morning. The P&F chart is bearish and points to a $33 target.

  Jane Fox   7/1/2004,  12:29:55 PM
The one stock that doesn't seem to care a hoot the markets are bearish today is RIMM. It is up another +2.49 today.

  James Brown   7/1/2004,  12:27:48 PM
Some of the Chinese Internets have been weak and yesterday Sohu.com (SOHU) broke down through technical support at its 40 & 50-dma's in addition to breaking support at the $20.00 mark. Today SOHU is down another 8.25% to $18.23 after being downgraded to "under weight" this morning. SOHU looks headed toward its previous lows near $15.00.

  Linda Piazza   7/1/2004,  12:25:07 PM
The TRAN is trying to stay above yesterday's low of 3162, with the TRAN's low today of 3165.25. I've seen the TRAN's action lead other indices so many times along with the other bellwether indices we watch that I can't help thinking that holding above/sinking below yesterday's low is an important guide today.

  James Brown   7/1/2004,  12:23:11 PM
Blockbuster Inc (BBI) is down 2.56% and nearing its one-year lows after being downgraded from "out perform" to "peer perform". It was only a few days ago that a different firm said BBI was under valued and that investors should use recent weakness as a buying opportunity.

  Linda Piazza   7/1/2004,  12:20:08 PM
To confirm the double-bottom formation on the OEX's five-minute chart, the OEX must get above the peak between the two lows, with that peak at 549.06.

  James Brown   7/1/2004,  12:18:58 PM
DRS Technologies (DRS) is up 22.5% to $39.08 after L-3 Communications (LLL) makes an unsolicited $42 per share bid to buy the company.

  Jeff Bailey   7/1/2004,  12:18:28 PM
MM trade profiles ... update at this Link

Technical negative right now is that JDSU has slipped back under a little "zone of support" from $3.63-$3.65, where next level is lower at $3.41.

  Linda Piazza   7/1/2004,  12:13:09 PM
Equal low on the OEX? We'll have to see. Next Keltner resistance has lowered to 549.00.

  Jeff Bailey   7/1/2004,  12:12:15 PM
Emulex (ELX) $11.70 -18.16% ... here's a bar chart I've put together on ELX. I had originally started out with the BLUE one, per a trader's question last week. Link I've added a "fitted" 38.2% in PINK.

  Linda Piazza   7/1/2004,  12:03:48 PM
If this morning's OEX low was the short-term low for now, then a 50% retracement of the flagpole plunge lies at 551.81, near the still-moving-lower mid-channel resistance at 551.94. A bear flag can retrace as much as 50% of a previous move and still the action is bearish. It's not until it's above that level or preferably above a 61.8% retracement that watchers should consider the bounce anything but an oversold bounce. Those in bearish plays should assess their vulnerability if such a bounce should occur. Bulls considering entries should be aware that a flag doesn't have to retrace 50%. It could break down at any time, so such a play might be particularly risky. With that said, however, this is still just an OEX move down through the recent trading range. It just happened to accomplish that move in a few hours of trading.

  Linda Piazza   7/1/2004,  11:57:25 AM
The OEX again attempts to steady. Next Keltner resistance courses down to 549.45, but still descends.

  Linda Piazza   7/1/2004,  11:53:48 AM
Bullish divergence beginning to show up on the SOX's 5-minute chart. It offers only a warning to bears, not a promise to bulls.

  Linda Piazza   7/1/2004,  11:48:37 AM
Crude futures are shooting higher this morning, adding to market pressures. I see that Jonathan has already noted their prices on the Futures side of the Monitor.

  Jeff Bailey   7/1/2004,  11:46:40 AM
Emulex (ELX) $11.70 -18.23% ... RED #4 here and lows of session.

  Linda Piazza   7/1/2004,  11:44:09 AM
So far, today's TRAN candle almost engulfs yesterday's. The TRAN has not yet traded yesterday's low, however.

  Linda Piazza   7/1/2004,  11:33:20 AM
The OEX is back above the best-fit trendline off the February high.

  Jonathan Levinson   7/1/2004,  11:32:41 AM


  Linda Piazza   7/1/2004,  11:28:00 AM
The OEX is trying to mount a bounce, with strongest nearby Keltner resistance now showing up near 550.20-550.40. Don't know if the OEX can make it that high, but that's where it's showing up right now. Mid-channel resistance is at 552.31 but still descending fast.

  James Brown   7/1/2004,  11:19:05 AM
OI put play OMC is breaking down through support at $75.00 and its trendline of support/higher-lows.

  Linda Piazza   7/1/2004,  11:18:24 AM
Remember, as dire as this seems, and it seems that way to me, too, the OEX has so far only hit the bottom of its trading range from June 7.

  James Brown   7/1/2004,  11:16:43 AM
OI put play GCI has fallen to significant support at $84.00. GCI needs to break through and hit $83.95 to trigger the play for us.

  James Brown   7/1/2004,  11:14:51 AM
OI call play MMM has broken its simple 10-dma and is falling quickly toward minor support at $88.00. Yesterday's breakout over $90.00 is starting to look like a bull trap.

  Linda Piazza   7/1/2004,  11:14:35 AM
The OEX has moved to a new low not seen since June 7. It's approaching the 50-dma at 546.38 as well as the 547 historical support level. There's obviously been a breakdown out of the OEX's Keltner channels, too. Follow the OEX lower with your stops, being aware of the possibility of a bounce up toward central Keltner resistance, now at 552.50 but descending fast. I would expect it to be at least at 551 before the OEX could rise to test it.

  Jeff Bailey   7/1/2004,  11:14:18 AM
Day trade short alert ... Emulex (ELX) $11.83 here, stop $12.10, target $11.21.

  James Brown   7/1/2004,  11:13:19 AM
OI call play EBAY has pulled back to the $90.00 level. $90 was resistance a month ago so it "should" act as support. We'll see shortly.

  Jeff Bailey   7/1/2004,  11:12:16 AM
Sell Program Premium

  Linda Piazza   7/1/2004,  11:11:40 AM
The OEX is headed down to test that recent 548.18 low.

  Jeff Bailey   7/1/2004,  11:09:21 AM
11:05 Market Watch at this Link

  James Brown   7/1/2004,  11:07:05 AM
OI call play DHR is slipping back toward support at its 10-dma and the $50.00 mark. Time to see if it bounces.

  James Brown   7/1/2004,  11:05:48 AM
OI call play AHC is bucking the bearish trend today and hitting new highs but still under resistance at $80.00.

  Linda Piazza   7/1/2004,  11:05:09 AM
The OEX is again sitting right on the best-fit descending trendline off the February high. It's also approached the 549 level that's marked the approximate low for its trading range since June 7 or so, although there was one 548.18 intraday low.

  James Brown   7/1/2004,  11:02:18 AM
The DFI defense index appears to be the only sector index in the green. The DFI's 1.17% gain actually appears to be pushing it to a new all-time high.

  Jeff Bailey   7/1/2004,  11:02:11 AM
Getting swamped with various support level al_rts.

  Jeff Bailey   7/1/2004,  11:01:37 AM
NYSE Composite ($NYA.X) 6,555 -0.73% ... back below our downward trending "cheater's trend."

  Linda Piazza   7/1/2004,  11:01:16 AM
Those in semi-related bearish plays should be aware that the SOX has violated its Keltner channels to a degree seldom seen. This gives a breakdown signal, of course, but it also indicates some vulnerability to a bounce toward mid-channel resistance, currently at 478.68, but declining fast. What often happens in situations like this is that Keltner resistance declines so fast that a bounce to test that resistance turns out not to be much of a bounce after all. Still, now is a good time to follow your stocks lower with your stops, as the possibility of a bounce exits. This often is not a good time switch sides, however. Sometimes that turns out to be a good decision, but this day certainly doesn't seem to be a good one to consider that tactic.

  Jeff Bailey   7/1/2004,  11:00:51 AM
Sell Program Premium SPX 1,131.72 , OEX 550.32, QQQ $37.15

  James Brown   7/1/2004,  11:00:48 AM
The tech sectors are leading the markets lower...

SOX semiconductors: -3.52%
This group came right up to its 200-dma yesterday and now the SOX is breaking mild support at 470.

NWX networking index: -2.81%
The NWX actually broke through its 200-dma to the upside yesterday and was poised to breakout above its 100-dma but now the NWX is about to fall through mild support at 250.

DDX disk drive index: -2.57%
The DDX has been struggling near resistance at 110-111 the last few days and is now falling through technical support at its 10 and 50-dma's.

INX Internet index: -2.32%
The INX broke through round-number resistance at 200 yesterday and was very close to hitting new multi-year highs but is now slipping toward mild support at 195.

GSO software index: -1.38%
GHA hardware index: -1.38%

  Jeff Bailey   7/1/2004,  10:57:37 AM
Day trade bullish stop alert for the SMH $36.45

  Linda Piazza   7/1/2004,  10:55:16 AM
Down certainly appears to be the direction for today, but as you're making decisions about positions, remember that the OEX, at least, is still in the middle of a choppy zone that's been murder to many a position over the last couple of weeks. It's about to hit the descending trendline off Monday's low. It keeps trying to steady at various possible support levels, with little luck so far, but like the SOX, it's due for a possible measured-distribution-type bounce, possibly up to 552.70-553 on the OEX. Neither the SOX nor the OEX can seem to mount a bounce, however, so if you're still in some kind of bullish play, thinking one of these "has" to bounce, then that's an erroneous assumption. Although there should be at least bounce attempts, at this point it would seem that they would likely be countertrend bounces with no assurance of their amplitude. So far, we're not seeing even the attempts. We're seeing pause points in the declines and that's all. A bounce could come at any time, but they don't have to come.

  Linda Piazza   7/1/2004,  10:46:43 AM
The FTSE 100, CAC 40, and DAX are all now negative.

  Linda Piazza   7/1/2004,  10:44:29 AM
The TRAN is back below 3200.

  Linda Piazza   7/1/2004,  10:40:15 AM
The SOX is attempting to bounce from just below the 30-dma that has supported it over the last week, but massive Keltner resistance appears to be coursing down toward the 472-473.50 zone, so I'm not certain how far the climb will get. After a steep flagpole drop like the one we saw this morning, there should be a rather lengthy measured distribution phase, perhaps in the form of a rising wedge or bear flag, perhaps retracing as much as 50% of the flagpole drop and taking at least a couple of hours to do that. So far, we're not seeing signs that will happen. A further drop without that measured distribution phase would look particularly bearish to me, but then there's that 50-dma waiting just below.

  Jeff Bailey   7/1/2004,  10:39:36 AM
Semiconductor Index (SOX.X) 470.33 -3.04% ... session low has been 469.10, with WEEKLY Pivot at 469.53.

  Jeff Bailey   7/1/2004,  10:34:28 AM
Day trade long alert for the Semi HOLDRs (SMH) $36.69 -3.01% here (red #5), stop $36.45, target $37.45. Red #6 at $36.50.

SMH first 5-minute bar was from $37.45-$37.27.

  Linda Piazza   7/1/2004,  10:32:24 AM
The OEX ascending trendline off Monday's low now crosses at about 551.60, but resistance looks as if it's trying to firm up near 552.70-553.

  Linda Piazza   7/1/2004,  10:28:53 AM
The OEX threatens to slip through the 60-minute 100/130-ema's. Unless it bounces above 552.76 soon, the Keltner channels now suggest a drop to 551.68, and then to 549.73 if that doesn't hold.

  Linda Piazza   7/1/2004,  10:26:01 AM
The TRAN is slightly negative now, although only slightly. I sure don't like that way it shot up over the last month and a half, though, barely pausing.

  Jeff Bailey   7/1/2004,  10:22:59 AM
Gemstar-TV Guide (GMST) $4.96 +3.33% Link ... higher on AmTech coverage and "buy" rating while also added to the firm's Focus List. Likes GMST as turn-around story under new management, strong core businesses, large cash position, price target $7.50.

  Linda Piazza   7/1/2004,  10:20:26 AM
The OEX now has Keltner resistance gathering at 552.75, which it's testing as I type. That's the only place on the Keltner chart where two lines converge, but it looks as if other resistance may soon converge near 553.25-553.50.

  Linda Piazza   7/1/2004,  10:18:57 AM
The OEX has slipped below the 30-minute 100/130-ema's, and now sits on the 60-minute 100-ema. Both the SOX and the OEX sit on levels that could produce a bounce attempt here, but the TRIN so far still says it will be an attempt only, if it does occur. Keep watching.

  Linda Piazza   7/1/2004,  10:16:14 AM
The thrashing around on the OEX still has the Keltner channels less being less revealing than I've ever seen them, but here's the little I can glean. The OEX looks pointed down toward 552.78, but there could be at least a bounce attempt somewhere between that level and 552.50 or maybe slightly lower.

  Jeff Bailey   7/1/2004,  10:14:06 AM
10:10 Market Watch at this Link

  Linda Piazza   7/1/2004,  10:13:43 AM
The SOX hits its 30-dma. This should be good for at least a bounce attempt. If not . . . well, that's not good, but the 50-dma lies below at 466.77.

  Linda Piazza   7/1/2004,  10:10:53 AM
The ECB's Trichet believes that Europe's gradual economic recovery is being confirmed. Reportedly, he says the ECB has no policy bias at the current time. He believes that inflation may exceed the desired 2% level into 2005.

  Linda Piazza   7/1/2004,  10:06:44 AM
The SOX approaches a test of its 30-dma, with that average at 471.47. That average supported the SOX over the last five or six trading sessions, so should be watched for bounce potential. The SOX is currently at 474.49.

  Linda Piazza   7/1/2004,  10:04:28 AM
The OEX has been testing the 30-minute 100/130-ema's this morning and is trying to rise from that test, but certainly hasn't yet pulled far enough above them that we can consider the test successfully concluded. I'd certainly keep a watch on the TRIN's trend as I thought about initiating positions. The SOX's behavior, the TRIN, and other measures don't yet support a bullish thesis, but that doesn't mean one can't develop.

  Jeff Bailey   7/1/2004,  10:04:07 AM
I'm shutting down a re-booting, having some computer problems this morning.

  Jonathan Levinson   7/1/2004,  10:04:00 AM
Correction- that's a 1.25B net drain for the day.

  Jonathan Levinson   7/1/2004,  10:01:10 AM
8.5B overnight repo announced for a net drain of 7B so far.

  Jim Brown   7/1/2004,  10:00:21 AM
Alert - ISM Index = 61.1 , (est 61.4, last 62.8)

  Linda Piazza   7/1/2004,  9:55:02 AM
The OEX drops right back to the 30-minute 100-ema, with that average at 553.35.

  Linda Piazza   7/1/2004,  9:53:05 AM
The comments by writers on the Futures side about markets being all over the place is echoed in the condition depicted by the OEX's five-minute nested Keltner charts. I've never seen these charts give less direction than they are now.

  Linda Piazza   7/1/2004,  9:50:49 AM
Jane has warned us to watch the TRIN level. It's continuing to climb. I haven't watched it long enough to know how it tends to act around potentially market-moving economic releases, however.

  Jeff Bailey   7/1/2004,  9:49:26 AM
Current OPEN MM profiles at this Link

  Linda Piazza   7/1/2004,  9:48:45 AM
The SOX continues its decline.

  Linda Piazza   7/1/2004,  9:47:13 AM
On the Futures side, Jim is reminding readers of the ISM number due at 10:00, and those of you reading only the Options side need to be aware of that potentially market-moving number, too, as you make decisions this morning.

  Linda Piazza   7/1/2004,  9:45:41 AM
OEX 554 is turning out to be a bit of a problem this morning, as if the OEX just overran it yesterday and now needs to see if it is resistance or not. The OEX needs to get above that and maintain levels at least above that or the shortest-length Keltner channel risks turning down toward mid-channel support, currently at 552.72, but rising.

  Jeff Bailey   7/1/2004,  9:44:56 AM
200-day Al_rt ... Networking Index (NWX.X) 258.01 -1.02% ... pulls back to test its rising 200-day SMA after two consecutive closes above.

  Jonathan Levinson   7/1/2004,  9:44:27 AM
A 6B 14-day repo has been announced. Still awaiting the shorter term repo announcements. I'm guessing at a net drain for the day given the benign statements from the Fed yesterday.

  Linda Piazza   7/1/2004,  9:42:10 AM
As expected, the ECB kept interest rates unchanged. It's felt by many market watchers that economic recovery in Europe, particularly in Germany, is too fragile as yet to begin raising rates.

  Linda Piazza   7/1/2004,  9:38:25 AM
The OEX's nested Keltner lines are spread out all over the place on the five-minute chart, not showing either support or resistance to be stronger. This thing could go either way according to those charts.

  Linda Piazza   7/1/2004,  9:37:15 AM
During the first five minutes of trading, the OEX traded in a tight range from 553.44 to 553.63. It opened on the 30-minute 100-ema and is currently rising from that moving average, now testing 554 historical resistance. Wasn't much resistance yesterday afternoon, though, was it?

  Linda Piazza   7/1/2004,  9:35:30 AM
The SOX has retraced all yesterday's gains. It needs to bounce here, from just under the 100-dma.

  Jeff Bailey   7/1/2004,  9:35:22 AM
Emulex (ELX) $12.51 -12.5% Link ... Warns for its fourth-quarter (June) saying it now sees non-GAAP EPS of $0.18 versus consensus of $0.25.

Merrill downgrades to "neutral" from "buy"

JP Morgan downgrades to "neutral" from "overweight"

  Linda Piazza   7/1/2004,  9:34:52 AM
The TRAN opens higher.

  Linda Piazza   7/1/2004,  9:33:54 AM
The OEX opened right on the 30-minute 100-ema.

  Keene Little   7/1/2004,  8:55:05 AM
BTW Linda, Jane and I have decided that both you and Jonathan can't be out at the same time. After you left yesterday, we were bereft of any confirmation of our trading levels from the Keltner bands. Our Keltner couple had abandoned us.

  Linda Piazza   7/1/2004,  8:50:44 AM
I had to leave before the market closed yesterday afternoon. One of my last posts before leaving concerned the OEX's confirmation of a reverse H&S on the 15-minute chart, setting up an upside target of 557. I had commented that the OEX was spending an inordinate amount of time retesting the neckline rather than climbing toward its upside target. Support had looked stronger than resistance, however. The OEX did its best to hit that 557 target after I left but came up a point short, and then was rebuffed, closing almost two points off that day's high. I had mentioned that meeting the upside target just meant that the OEX would travel up through its recent choppy congestion zone again, and that's exactly what was accomplished.

I had also mentioned that the SOX had broken out of its recent consolidation zone and appeared headed up to retest the 200-dma. The SOX did that, too, but was rebuffed at that moving average. It may be a break of the 200-dma and the 490 level that leads markets higher or a roll down out of that level that leads them lower, but I'm not going to pin all my market scenarios on the SOX's action alone. I want to watch other benchmark indices. The BIX, another key index to watch as interest rates are being hiked, printed a high-wave candle in the middle of a consolidation zone. The TRAN managed another new closing high. The TRAN's action suggests the breakout is real, but the Dow still has a couple of hundred points before it confirms the TRAN's breakout, so that evidence is mixed. A failure of the Dow to confirm the new TRAN closing highs by reaching a new closing high of its own is actually a bearish sign if it continues. Although the SOX appears to be trying to break out, it was rebuffed by the 200-dma and the 490 level, so that evidence is mixed. The BIX and the OEX have not broken out of recent resistance zones.

Dialing down to the OEX's five- and fifteen-minute Keltner charts, it's difficult to ascertain much. Yesterday afternoon's spikes skewed the charts. On the 15-minute chart, support and resistance look about evenly matched. On the 5-minute chart, 554.50-554.60 resistance looks slightly stronger than any support. The OEX did end the day above the 100/130-ema's on the 15-, 30- and 60-minute charts, however. Yesterday's last 30-minute shooting star candle suggested a risk that the OEX might be heading down to test those averages again, however, so I'll be watching to see how that retest settles out, and if the OEX finds support at those averages. Until then, I'll be waiting for the Keltner charts to sort themselves out again. The 30-minute 100/130-ema's lie at 553.19 and 553.35, corresponding to historical support. The 60-minute versions are at 552.57 and 551.79. At this vantage point, I wouldn't be surprised to see the OEX muddle around somewhere within its congestion zone, but the outlook might change as the trading day gets underway.

  Linda Piazza   7/1/2004,  8:42:55 AM
Welcome back from me, too, Jonathan.

  Jonathan Levinson   7/1/2004,  8:31:24 AM

8:29am U.S. 4-WEEK AVG. INITIAL CLAIMS UP 2,500 TO 347,000



  Jonathan Levinson   7/1/2004,  7:57:07 AM
Awaiting initial claims at 8:30, est. 343K, followed by the 10AM release of construction spending, est. .7% and the ISM, est. 61.5.

  Linda Piazza   7/1/2004,  7:22:43 AM
Good morning. Within the first few minutes of its open, the Nikkei had shot up within 12 points of the 12,000 level. The much-awaited Tankan Business Confidence Index for June rose to a much higher-than-expected 22, against expectations of 17. The component measuring confidence among large service companies climbed to 9. Strong demand from China and the U.S. prompted the strong numbers.

Those numbers drove exporters and techs higher. The banking sector declined in early trading, and the Nikkei fell away from the day's high, trading around 11,900 the rest of the day and closing up 37.14 points or 0.31%, at 11,896.01.

The banking sector started lower, and it closed lower, too, with Goldman Sachs lowering its view of Japanese banks to a neutral rating from its former attractive rating. In stock-specific news, Mitsubishi Corp. announced a plan to form a company in Canada that would concentrate on the company's hydrogen production equipment business. The new company would be wholly owned by Mitsubishi Corp. A newspaper speculated that Softbank Investment would acquire Ace Securities, a midsize brokerage, and Softbank Investments gained in early trading, too. The company couldn't hold onto those gains, however, and closed down 1.5%. Tiremaker Bridgestone was one of the exporters posting gains, as were big caps Toyota Motor and Sony.

Other Asian bourses were mixed, with tech stocks mixed in Asian trading. The Taiwan Weighted was flat, down 0.04%. South Korea's Kospi lost 0.99%, but Singapore's Straits Times climbed 0.34%. Hong Kong's Hang Seng gained 1.40%, and China's Shanghai Composite rebounded 3.00%.

Most European bourses trade higher this morning, with tech stocks reportedly higher as the eurozone awaits an ECB decision about rate hikes. The ECB is not expected to raise rates. In the U.K., June's manufacturing index unexpectedly fell to 54.8 from a revised 55.7, when market watchers had anticipated a rise. The orders component fell, as did the employment component, with the employment component now at 50.3, hovering just above the benchmark 50 number.

In stock-specific news, Deutsche Bank upgraded Nokia to buy, saying the market was underestimating some aspects of Nokia's business. Nokia was posting strong gains in early trading. Seimens wasn't so lucky, receiving a downgrade from Dresdner Kleinwort Wasserstein, but the stock posted gains in early trading. After acquiring the U.K.'s Life Assurance Holding Company and instituting the sell of a 640 million euro convertible bond, Swiss Re was moving lower in early trading.

As of this writing, the FTSE 100 had gained 14.60 points or 0.33%, to trade at 4,478.70. The CAC 40 had gained 35.54 points or 0.95%, to trade at 3,768.53. The DAX had gained 41.69 points or 1.03%, to trade at 4,094.42.

  Jeff Bailey   6/30/200,  11:45:01 PM
NASDAQ-100 Tracker (QQQ) $37.74 +0.99% .... chart with new MONTHLY Pivot retracement at this Link

In my opinion, today's trade AND close confirms pattern of higher highs.

In early 2003, the NDX/QQQ showed leadership from the lows, and it would appear they are doing it again.

  OI Technical Staff   6/30/200,  11:44:50 PM
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