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  Jeff Bailey   7/6/2004,  6:23:59 PM
Pivot Matrix for tomorrow at this Link

I can not find any service that has intra-day dollar charts, so I've deleted DAILY Pivot levels for tomorrow.

  Jeff Bailey   7/6/2004,  4:45:46 PM
Closing Internals at this Link

  Jim Brown   7/6/2004,  4:40:05 PM
Alert - JDAS - is warning.

  Jim Brown   7/6/2004,  4:15:05 PM
Alert -ASCL, KANA and SCUR all warned after the close.

  Jeff Bailey   7/6/2004,  4:07:59 PM
Current OPEN MM profiles at this Link

  Jeff Bailey   7/6/2004,  4:00:27 PM
General Electric (GE) $31.85 +0.56% ... goes out at session high.

  James Brown   7/6/2004,  3:58:17 PM
Heads up for the bears... Mylan Labs (MYL) is on the verge of breaking support at the $20.00 mark (again). A trigger under today's low at $19.93 or the June 23rd low at $19.80 might be a decent entry point. Earnings are expected on July 22nd.

  James Brown   7/6/2004,  3:53:02 PM
Kinder Morgan Inc (KMI) might be worth a second look. The stock is hitting new two-month highs today and pushing through minor resistance at $60.50. The stock is rising with the energy sector and looks poised for a potential run back towards the 64-65 range but its P&F chart is bearish and points lower.

  James Brown   7/6/2004,  3:49:50 PM
Natl Semiconductor (NSM) looks short-term oversold with today's 6.4% drop and its three-day fall from the $22 level to $19.01 but traders should keep an eye on it for a drop through significant support at $18.00.

  Linda Piazza   7/6/2004,  3:48:39 PM
Mid-channel Keltner resistance is turning back the OEX, at least for the time being. Those in bearish positions need to assess their willingness to hold overnight now. We've had the obligatory bounce from the 200-sma, but it's possible that the OEX could now linger at that average for a period of time before deciding where to go next, or even that it could manage a bigger bounce up to retest broken support. Daily oscillators show more downside to be possible, but these decisions unfortunately have to be made without knowledge of whether that downside in oscillators might be accomplished while the OEX consolidates at the 200-sma. Of course, as the OEX turns down again, it's possible to see a close below that average, with more follow-through tomorrow. That seems less likely without a bigger bounce intervening, but it's not impossible. Make the decisions right for you and your account.

  James Brown   7/6/2004,  3:44:08 PM
Hershey Foods (HSY) is doing all right with a 1.25% bounce back toward resistance at $46.50. Bulls might want to consider new longs on a breakout. Earnings are expected on July 22nd.

  Linda Piazza   7/6/2004,  3:37:32 PM
The OEX is still laboring up toward mid-channel Keltner resistance, hitting it as I type. If the OEX can sustain levels above 545, it looks as if it might make a try for 547.50, but if it falls below 543.75 and sustains levels below that, that 547.50 try looks less likely.

  James Brown   7/6/2004,  3:32:30 PM
There's no weakness in medical-device maker Stryker (SYK) as the stock hits another all-time high with today's 2.7% rise to $56.27.

  Jeff Bailey   7/6/2004,  3:27:32 PM
S&P 100 (OEX.X) 543.97 -0.58% .... with updated WEEKLY Pivot retracement at this Link

Trying to reclaim the 545 "doji"

  Linda Piazza   7/6/2004,  3:27:04 PM
I'm watching the volume pattern for the SMH, noting that although there was a volume spike just after 2:45 to get the bounce started, that volume then trickled off (until the past five minutes when it picked up again as I typed--on a downturn) and never did amount to as much as the volume spikes on the downturns. We need to see more volume on the climb, but perhaps bulls have a "show me" attitude today. Perhaps it will take a move above 34.50 on the SMH to get the bulls interested. That appears to equate to about 439.50 on the SOX.

  James Brown   7/6/2004,  3:22:20 PM
Chipmaker QLGC is currently under and testing support at the $25.00 mark. Shares have a consistent trend of lower highs as traders sell into strength. A breakdown/close under $25.00 and traders might want to target a move toward $20.00 but watch out for earnings. They are coming up soon on July 14th.

  Jeff Bailey   7/6/2004,  3:17:14 PM
03:08 Market Watch at this Link

  James Brown   7/6/2004,  3:16:40 PM
Today's 5.2% drop in Citrix Systems (CTXS), another software stock, follows declines from Thursday and Friday last week. The move has produced a very bearish triangle breakdown on its P&F chart with a $12.00 price target. The stock is short-term oversold but traders might want to consider bearish positions under $18.00 or look for a bounce and a failed rally under $19.00 to consider positions. A good initial target is probably $15.00. Look for earnings near July 21st.

  Linda Piazza   7/6/2004,  3:16:09 PM
If the OEX can pull free of the current Keltner resistance, then it might have a chance at 544.75, the level of mid-channel Keltner resistance. If it tumbles back below 543.17 and sustains levels below that, the chance of reaching mid-channel Keltner resistance lessens.

  James Brown   7/6/2004,  3:10:29 PM
CDW Corp (CDWC) looks like a new bearish candidate with today's 2.2% drop through support at $60.00. Earnings are suspected on July 20th. The bearish P&F chart points to a $55 target.

  Jeff Bailey   7/6/2004,  3:07:48 PM
Buy Program Premium SPX 1,117.35, OEX 543.79, QQQ $36.06.

  James Brown   7/6/2004,  3:07:30 PM
YHOO is down 2.8% to $32.99 after testing the $32 level earlier today. The company is due to report earnings after the bell tomorrow. Analysts' estimates are for 8 cents per share but there was speculation a week or two ago that YHOO would turn in a very strong quarter. Looks like confidence has faded.

  Jeff Bailey   7/6/2004,  3:07:00 PM
Overstock.com (OSTK) $38.85 +2.56% .... short-covering being cited after company confirmed quarterly earnings. Chatter that company didn't warn on the quarter has pressed some shorts into covering.

  Linda Piazza   7/6/2004,  3:02:59 PM
As others have mentioned with respect to the indices or contracts they watch, we continue to see bullish price/MACD divergences set up on the OEX. So far, they've foretold nothing but brief bounces. We're still in a danger zone for a bigger bounce, however, and bears should be planning accordingly. How much of a bounce is too much for your account? How much profit are you willing to let go by? At what point do you want to bail and then sit out and wait for a possible rollover entry?

  James Brown   7/6/2004,  3:02:49 PM
Broadcom (BRCM) is getting hit hard today with a 8.9% drop to $39.29, breaking support at several moving averages and the $40.00 level. Volume is more than double the norm.

  James Brown   7/6/2004,  2:59:59 PM
RIMM is finally showing some weakness with a 4% drop in profit taking after last week's pop higher on earnings. The top of the gap near $65.00 should be support.

  James Brown   7/6/2004,  2:57:12 PM
EchoStar (DISH) continues to look weak with another 1.7% drop to $29.77. If DISH breaks the $29.00 mark traders might want to consider bearish plays targeting the $25.00 level. DISH's bearish P&F chart points to an $18 target.

  Jeff Bailey   7/6/2004,  2:56:41 PM
Current OPEN MM profiles at this Link

  James Brown   7/6/2004,  2:54:03 PM
Comcast (CMCSA) is down another 1.96% and breaking support at the $27.50 mark. Shares look vulnerable toward the $25.00 level while its bearish P&F charts points to a $19 target. Earnings are expected on July 28th.

  Jonathan Levinson   7/6/2004,  2:49:57 PM
There's a bullish wavelet divergence on the QQQ, suggesting that the short cycle is building a more serious upphase here. A break of 36-36.05 should give us direct oscillator confirmation that it's underway.

  James Brown   7/6/2004,  2:47:01 PM
Networking giant CSCO is down 2.7% to $22.33 and falling under its 40 & 50-dma's as it nears support near $22.00.

  James Brown   7/6/2004,  2:45:52 PM
a bit of trivia... Current President George Bush celebrates his 58th birthday today.

  James Brown   7/6/2004,  2:43:57 PM
Software giant ORCL is down 3.86% and breaking through its 10, 20, 40 and 50-dma's while falling toward support at the $11.00 mark.

  Jeff Bailey   7/6/2004,  2:40:02 PM
Buy/Sell Program Premium ... HL Camp & Company has their computers set for program buying at $0.59 and selling at $-1.47.

  Linda Piazza   7/6/2004,  2:34:39 PM
There certainly hasn't been much of a reflexive bounce when the OEX hit its 200-dma. I would have expected a bit more, which is why I cautioned OEX bearish traders to have a plan in mind once this level was tested. I always thought the bounce would likely be a countertrend bounce and wasn't at all certain that it would get too far, but I did expect a bounce. The OEX hasn't dropped so far that it couldn't still bounce. Daily Keltner charts suggest that a failure to produce a bounce from somewhere near the current level and then maintain levels above 549.85 could set up a potential downside target somewhere near 532.55, although that channel line is certain to move by the time it could be tested.

  Jonathan Levinson   7/6/2004,  2:29:54 PM
Session low for MSFT here.

  James Brown   7/6/2004,  2:29:09 PM
Starbucks (SBUX) continues to buck the trend by hitting another new high today. Earnings are expected on July 21st.

  James Brown   7/6/2004,  2:27:02 PM
Energy/oil stocks like DVN and CHK continue to hit new highs in spite of the market's weakness. Meanwhile crude oil is climbing another 3% to $39.55 a barrel.

  Linda Piazza   7/6/2004,  2:26:10 PM
The TRAN's low of the day today has been 3114.32, with that low near some monthly support from 1999 and early 2001. The TRAN is trying to hold above that monthly support. Today's action makes it even less likely that the Dow will soon match the TRAN's feat of achieving a new relative closing high, setting up the potential for bearish divergence of these sister indices according to Dow theory.

  Jonathan Levinson   7/6/2004,  2:23:07 PM
The 30 min cycle downphase is still in progress on QQQ but the channels are flattening slightly on the failure to break significantly below the prior low. A nominal new low only, such as we had here, is consistent with the beginning of a turn in the 30 min channel. The short cycles are chopped up now, mostly neutral, with the wavelet cycle in a weak upphase off the bottom. Support is at 35.79, resistance 36.20 on the 30 min channel. On the short cycle channel, it's at 35.87 - 36.

  Linda Piazza   7/6/2004,  2:22:42 PM
The BIX still holds above its 100-dma.

  Jeff Bailey   7/6/2004,  2:22:03 PM
Wal-Mart (WMT) $51.96 +0.05% ... UBS making comments today that it believes WMT will lower guidance to a 3-5% same store sales growth range for July, the to 2-4% for August. UBS notes WMT trading at the low end of its historic relative P/E earnings multiple.

  Linda Piazza   7/6/2004,  2:18:23 PM
The SOX now approaches the midline support of the descending regression channel in which it has traveled most of this year. A failure to bounce at that midline support, currently at about 532.20, sets up the possibility that the SOX could fall all the way to the lower supporting trendline of that channel. That's some impressive tall red candle today, isn't it? We've now seen three days of declines that have retraced almost all the gains that it took the SOX most of May to achieve. After three days like this, it would seem likely that the next resulting action would be either a small-range day to consolidate recent losses or else a zoom up when all the oversold pressure is released and shorts begin to cover.

  Jeff Bailey   7/6/2004,  2:14:22 PM
Overstock.com (OSTK) $38.21 +1% .... announces it will release quarterly financial results on July 22 after the market close.

  Jeff Bailey   7/6/2004,  2:06:43 PM
QQQ $35.90 -2.47% .... updated WEEKLY/MONTHLY pivot retracement at this Link

  Jeff Bailey   7/6/2004,  1:58:13 PM
Motorola (NYSE:MOT) $16.84 -5.23% Link ... fills its gap higher from 04/20-04/21 here. Sets up a test at its rising 200-day SMA at $16.18.

  Jonathan Levinson   7/6/2004,  1:51:25 PM
30 min QQQ support is down to 35.80, and that short cycle upphase is about to abort until the weight of the current wavelet downphase. There's still very little strength, and the short cycles are no longer oversold. A break of the low of the day at 35.91 should set up an easy test of that 35.80 level.

  Linda Piazza   7/6/2004,  1:51:01 PM
I made that last post about being suspicious of the sustainability of the OEX bounce predicted by the reverse H&S just before the OEX dove again. We haven't seen a new low of the day yet, but five-minute MACD tries to complete a bearish cross from below signal. Neither has been accomplished yet, but we're being warned to pay attention.

  Linda Piazza   7/6/2004,  1:43:56 PM
I'm back for a few moments. The OEX did break above the neckline of the reverse H&S on its five-minute chart, but it hasn't built any upward momentum since doing so. In the heart of the 2003 rally, we used to see bearish formations be confirmed, but then no downside momentum following, and then eventually a quick reversal when bulls were certain that bears couldn't deliver on the promised bearishness. This morning, we're see the opposite on this five-minute chart, which means that we should keep our skepticism about the sustainability of any upward push.

  James Brown   7/6/2004,  1:37:45 PM
Software stock MSTR is down another 5.25% in its current decline and today's move has broken round-number support at $40.00. Check out the attached chart. Will MSTR bounce from the trendline or break it? Chart: Link

  Jonathan Levinson   7/6/2004,  1:31:14 PM
WASHINGTON (Dow Jones)--The U.S. Treasury awarded $18.00 billion in three-month bills at Tuesday's auction at a high rate of 1.320%. The Treasury received bids totaling $39.43 billion and accepted $18.00 billion, including $1.52 billion of noncompetitive tenders. The dollar price was 99.666 and the investment rate, or bond-equivalent return, was 1.344%. The Treasury also sold $395 million of bills to foreign and international monetary authority accounts on a noncompetitive bidding basis. Foreign and international noncompetitive tenders totaled $395 million. The bid-to-cover ratio, an indication of demand, was 2.19, Treasury said.

  Jim Brown   7/6/2004,  1:27:20 PM
The A/D volume is 6:1 in favor of decliners and it is heavier than our recent trend. With the ratio ot earnings warnings to positive guidance the worst since March 2003 and accelerating it is clear many traders are heading to the sidelines rather than wait for actual earnings to begin.

  Jonathan Levinson   7/6/2004,  1:25:24 PM
QQQ is showing a small bearish wavelet divergence as the wavelet oscillator begins a new downphase here from a lower high. Support is at 35.95, below which the current sideways short cycle upphase will abort. Current 30 min channel support is at 35.84.

  Jeff Bailey   7/6/2004,  1:19:01 PM
01:15 Market Watch at this Link

  Jeff Bailey   7/6/2004,  1:14:48 PM
01:00 Internals at this Link

  James Brown   7/6/2004,  1:11:38 PM
IBM is expected to report earnings a week from this Thursday.

  James Brown   7/6/2004,  1:11:04 PM
The GHA hardware index is down 3.36% and breaking support at its simple 200-dma and the 240 mark. Its MACD has produced a new sell signal.

Dow-component IBM is helping lead the way with a 1.95% drop to $85.35 following last week's declines.

  Linda Piazza   7/6/2004,  1:09:57 PM
The OEX's two-minute chart shows a possible reverse H&S building, with bullish divergence as the head was formed, and with a descending neckline now at about 543.25. The upside target, if confirmed would be about 544.50. Mid-channel resistance is now at 544.10, however, so be careful about a brief upside violation that soon gets turned down again.

I'm going to be away for 30 minutes to an hour.

  James Brown   7/6/2004,  1:09:08 PM
Ouch! The GSO software index is down a big 4.86% on top of the Thursday-Friday declines. The sector index is at new six-month lows.

  Jim Brown   7/6/2004,  12:58:29 PM
The SOX is down a whopping -4.10% (-19 points) and under 450 support. At its current 438 it is only +5 points above its nine month low of 433 set on the May 3rd dip. The SOX has dropped over -10% in only three days.

  Jeff Bailey   7/6/2004,  12:46:34 PM
S&P 500 Index (SPX.X) 1,116.08 -0.82% .... updated with WEEKLY Pivot retracement at this Link

VIX.X 16.45 +9.08% as a benchmark to the mid-May levels of 20.00 and 05/25/04 Index Trader Wrap Link

  Linda Piazza   7/6/2004,  12:41:08 PM
The OEX is currently hitting first Keltner resistance. The mid-channel resistance lies at 546.08, but still descends quickly.

  James Brown   7/6/2004,  12:36:04 PM
CNBC reporting that movie box office sales hit a new record in the month of June breaking the $1 billion mark boosted by blockbusters like Shrek 2 and Harry Potter and the Prisoner of Azkaban. Sales rose to 163.5 million tickets.

  Linda Piazza   7/6/2004,  12:33:21 PM
For this first time this morning, the Russell 2000 has been able to turn its shortest-length Keltner channel up again. The Russell needs to maintain values above 573.10 to keep it turned higher, while maintaining values below 572.50 will turn it lower again. Keeping the channel turned higher means the Russell 2000 has a chance at retesting the mid-channel resistance, currently at 579, but still descending quickly.

  Linda Piazza   7/6/2004,  12:29:37 PM
The BIX traveled down to test its 100-dma today, with that average at 344.89 and with the BIX low at 345.08. It's now attempting a bounce from just above that average.

  James Brown   7/6/2004,  12:29:31 PM
Hutchinson Technology (HTCH), a disk-drive/storage device company, is down four days in row and falling another 3.5% to $22.50 today after breaking support in the $24.00 range on Friday. The P&F chart is very bearish and points to a $13.00 price target.

  James Brown   7/6/2004,  12:24:01 PM
Oil & gas stock Canadian Natural Resources (CNQ) climbs another 1.3% to another new high at $31.00. The stock has more than doubled from its February 2003 lows.

  Jeff Bailey   7/6/2004,  12:22:13 PM
Swing trade sell naked put alert .... Will sell 10 of the QQQ July $35 puts (QQQSI) for $0.20 per contract for my Market Monitor profiles.

QQQ $36.02 -2.14% .... NASDAQ-100 Volatility Index (VXN.X) 22.03 +10.75%

July Option expiration is next Friday, July 16.

  James Brown   7/6/2004,  12:21:13 PM
Insurance giant Aetna (AET) is down another 2% to $81.06 on top of Friday's decline through its simple 50-dma. The move today is a breakdown through the bottom of its recent trading range and what should have been mild support at $82.00. AET might have round-number support at $80.00 but the next significant level of support appears to be the $77.00 level, where AET found a bottom in May.

  James Brown   7/6/2004,  12:17:24 PM
Biotech giant AMGN is down 1.92% to $54.13 and appears to be reversing the three-day rally from last week. The stock had broken through the top of its descending channel but now AMGN appears to be failing under the simple 50-dma. Weighing on the stock is a downgrade from CSFB who cut AMGN from "out perform" to "neutral" and lowered their price target from $77 to $62.

  Linda Piazza   7/6/2004,  12:15:15 PM
Market breadth is solidly bearish. It's perhaps not so bearish that it should get contrarians interested, although it's perhaps moving more toward that point on the Nasdaq. Down volume was 13.8 times up volume on the Nasdaq as of a few minutes ago. I've seen the disparity be bigger at other points when we've had the kind of cascading falls when indices can't seem to pick themselves up long enough to create a decent bear flag, which sort of describes the Nasdaq today, but that kind of disparity does warn us that volume patterns may be getting to an extreme. I look at this the same way I do a violation of Keltner channels. It warns me to pay attention to bounce potential, planning what I'll do if this or that happens, but I still let price action be my guide.

  James Brown   7/6/2004,  12:14:17 PM
Harman Intl (HAR) is down 3.2% to $87.26 in profit taking as the daily chart produces a new sell signal in its MACD indicator. The test will be to see if the $85.00 level holds up as support.

  James Brown   7/6/2004,  12:06:21 PM
Networking Nortel Networks (NT) is down another 6.14% to $4.28 today making its three-day loss about 14% after its failed rally under the simple 200-dma just over the $5.00 mark.

  Jeff Bailey   7/6/2004,  12:05:47 PM
12:00 Internals at this Link

  Linda Piazza   7/6/2004,  12:03:58 PM
That's not much of a bounce the OEX has mounted since hitting its 200-sma, is it? There's no bounce at all so far. On any bounce, first strong Keltner resistance now gathers at the 543.50 level.

  James Brown   7/6/2004,  11:58:38 AM
Homebuilder Hovnanian (HOV) is down 3.82% to $33.67 despite news out this morning June sales rose 3% and "the dollar value increased 12.7% in a month that had one less selling weekend than the year-earlier period" (-Reuters).

  Linda Piazza   7/6/2004,  11:55:03 AM
Due to the possibility that the OEX's five-minute pattern is a falling wedge (usually bullish) and to the proximity of the OEX's 200-sma, bearish OEX traders should have an exit plan in mind, with some perhaps electing to take at least partial profits as the 200-sma is tested. Others might elect to take all profits, sit out and watch what happens as that average is tested, as is being done as I type, deciding whether they'll use part of their profits to roll into a lower strike, thus preserving some of their profits while still participating in more possible downside, if that occurs. Others will just follow the OEX lower with their stops, letting the OEX take them out if it bounces too strongly. Some might create a spread, but that's too complicated a matter to consider in this context.

  Linda Piazza   7/6/2004,  11:50:54 AM
The OEX is less than a point above its 200-sma, but as I mentioned in an earlier post, we should also watch the SPX with relationship to its 200-sma, still more than 15 points away. The SPX has room to fall before testing that average.

  Jonathan Levinson   7/6/2004,  11:47:32 AM
On QQQ, 30 min channel support is down to 35.95 and is still declining. The 30 minute oscillators are still pointed south as well. AS oversold as the short cycle oscillators are, and as much as my gut is warning me of a bounce from these levels, the indicators seem to be pointing at further damage from here.

  Linda Piazza   7/6/2004,  11:40:21 AM
Although I've been noting the OEX's 200-sma today, we should remember that it was actually a test of the SPX's 200-sma in May that produced the bounce up into June's highs. We still have some room to go to the downside before the SPX retests that 200-sma, currently at 1099.94. That sets up the possibility that the OEX could fall far enough to violate its own 200-sma while the SPX drops down to its 200-sma.

  Linda Piazza   7/6/2004,  11:33:39 AM
This morning's OEX decline now looks a bit like a falling wedge on the five-minute OEX chart. Those are typically bullish formations, with the expected break to the upside, but we should still be suspicious that any upside break amounts to a countertrend move up to test broken support and establish it as resistance.

  Jonathan Levinson   7/6/2004,  11:31:04 AM
The current bounce is just a sideways pause, almost a no-show on QQQ currently. Keltner support is down to 35.99-36.04 here, with both the 30 min and short cycle channels pointed south.

  Linda Piazza   7/6/2004,  11:22:54 AM
Others on the futures side may have already commented on the volatility indices, but the VXO has broken above the 6/29 high of 16.45, and now measures 16.71.

  Linda Piazza   7/6/2004,  11:12:04 AM
Those in bearish OEX plays should of course be following the OEX lower with stops. The OEX has created a breakout signal on the five-minute Keltner channels, but it's approaching the 200-sma, an almost guaranteed reflexive bounce point. Although I don't know how far that bounce might carry it this time, bulls should try to defend that level.

  Linda Piazza   7/6/2004,  11:09:55 AM
New low for the OEX. The 200-sma is just below at 542.01.

  Linda Piazza   7/6/2004,  11:07:33 AM
The TRAN has also moved to a new low.

  Linda Piazza   7/6/2004,  11:06:56 AM
The SOX has, however, moved to a new low.

  Jeff Bailey   7/6/2004,  11:06:39 AM
11:00 Market Watch at this Link

  Linda Piazza   7/6/2004,  11:05:56 AM
The OEX may be falling out of the bear flag formation that it had been attempting to form, although it hasn't yet confirmed that movement by a move to a new low.

  Linda Piazza   7/6/2004,  10:53:29 AM
The BIX fell back again below the mid-channel resistance on its Keltner chart, with Keltner resistance now gathering from 346.61-346.68. That five-minute pattern is still not clear, however.

  James Brown   7/6/2004,  10:51:16 AM
OI put play SLAB is down 3.36% to $42.26 and hitting a new relative low following the weakness in the SOX.

  James Brown   7/6/2004,  10:50:35 AM
OI put play NTES is down 3.5% to $37.50

  James Brown   7/6/2004,  10:49:49 AM
New OI put play IRF is down 2.6% to $36.68.

  James Brown   7/6/2004,  10:49:02 AM
New OI put play APPX is down another 5.05% to $27.60

  James Brown   7/6/2004,  10:48:20 AM
OI call play ETN has been stopped out with today's drop through support at $62.00 (stop was 61.85). Its MACD has produced a new sell signal today. The $60.00 mark should offer some round-number support, bolstered by the 40 and 50-dma.

  James Brown   7/6/2004,  10:47:05 AM
OI call play EBAY is slipping 1.4% and back under the $90.00 mark as the INX Internet index slips more than 2%.

  James Brown   7/6/2004,  10:46:14 AM
OI call play DHR has been stopped out on this morning's drop through $50.00.

  James Brown   7/6/2004,  10:45:30 AM
OI call play AHC still inching higher. Today's 1.2% pushes AHC to a new high.

  Linda Piazza   7/6/2004,  10:44:40 AM
So far, the OEX climb looks suspiciously like a bear flag.

  Linda Piazza   7/6/2004,  10:35:33 AM
Along with the OEX, the BIX appears to be mounting a bounce attempt. The BIX is bouncing from its 100-dma, with that average currently at 344.91. The BIX's five-minute pattern could be variously interpreted as a bullish right triangle with the flat top already broken to the upside or as a possible flag or even a rising wedge. It's just too early to tell.

As I began this post, the Russell 2000 hadn't yet made much of an attempt at a bounce.

  Jonathan Levinson   7/6/2004,  10:34:35 AM
This is a big move, volatility-wise. Check out the QQV, up 12.42% at 19.91 (+2.2) and VXO, +8.02% at 16.30 (+1.21).

  Linda Piazza   7/6/2004,  10:26:51 AM
Neither the SOX nor the TRAN has been able to mount a bounce yet, but the OEX is trying to do so. It's trying to do so within a formation that so far looks like some sort of measured distribution pattern forming up, however. Right now, strongest resistance appears to be near 547-547.60.

  Linda Piazza   7/6/2004,  10:18:27 AM
With the OEX's 200-sma lurking below at 542.02, a new bearish entry at this point would be heavy on the risk (of a bounce) and light on the possible reward, although it's always possible that this time the OEX could just plunge through that average. Although I'm not certain yet whether the OEX will hold above this average in the intermediate-term, on the short-term, I think it likelier that the OEX would try a reflexive bounce from it or establish another congestion zone at it. Those wanting a new bearish entry need a bounce first. Those who like countertrend plays, trying to get in at the beginning of a move, are probably eyeballing the OEX's proximity to that possible strong bounce point and considering an entry now, but it's not my kind of entry since at this point we can consider it a countertrend bounce up to retest broken support, vulnerable to failure somewhere between 547-549 or possibly 550.80-551.

  James Brown   7/6/2004,  10:15:32 AM
Bob O'Brien (on CNBC) just mentioned Spiderman 2. So far the movie has grossed $180 million since its open last Wednesday.

Yet shares of Sony (SNE) are down 2.75% to $37.38 and falling under its simple 200-dma. Likewise Marvel Enterprises (MVL) is down 3.2% to $18.36. MVL had fallen under its 200-dma a couple of weeks ago.

  James Brown   7/6/2004,  10:09:55 AM
Driving the SOX semiconductor index's 2.2% decline and breakdown through support at the 450 level is Lehman's downgrade of the sector from "positive" to "neutral". The following are some of the stocks targeted by LEH's downgrade:

AMCC is down 7.7% to $4.42 and hovering above crucial support at $4.40.

PMCS is down 6.25% to $12.14 and stalling above pivotal support at $12.00.

VTSS is down 11.75% to $3.98 and hitting new lows not seen since May 2003.

CNXT was also on LEH's list.

  Linda Piazza   7/6/2004,  10:08:06 AM
The OEX still tries to steady. If it should rise this morning, we should watch the gap level for possible resistance. In addition, the former supporting trendline from Friday crosses now at about 547, and that should be watched as a level of possible resistance.

  James Brown   7/6/2004,  10:02:34 AM
Dow-component Boeing (BA) is up about 1% back to the $50.00 level after Wachovia has upgraded the stock from "under perform" to "market perform". BA is also benefiting from positive coverage in a Barron's story over the weekend highlighting the management and the new 7E7 program.

  Jim Brown   7/6/2004,  10:01:36 AM
Alert - Challenger Employment Report = 64,434, (last 73,368)

  Jonathan Levinson   7/6/2004,  10:01:17 AM

  Jonathan Levinson   7/6/2004,  10:01:02 AM
Bonds just spiked up and equities spiked down on the ISM data.

  Jim Brown   7/6/2004,  10:00:20 AM
Alert - ISM Services = 59.9, (est 62.8, last 65.2)

  Jonathan Levinson   7/6/2004,  9:58:25 AM
7.5B expiring, 10B in overnight repos just added by the Fed for a net 2.5B add. That's a large overnight amount- could be some trepidation in the control room over the upcoming ISM report due in 1 minute.

  James Brown   7/6/2004,  9:58:21 AM
Goodyear Tire (GT) is up 3% to $9.61 after being upgraded to "over weight" at JPM.

  Jeff Bailey   7/6/2004,  9:57:41 AM
Current OPEN MM profiles at this Link

  James Brown   7/6/2004,  9:57:06 AM
AnnTaylor Stores (ANN) is down 2.94% to $27.36 and nearing support at $27.00 and its simple 200-dma after being downgraded to a "hold" this morning.

  Linda Piazza   7/6/2004,  9:56:11 AM
The OEX is still trying to steady. Keltner resistance also looks as if it's trying to gather near 545.50-546. If the OEX doesn't bounce strongly soon, that Keltner resistance will have time to gather.

  James Brown   7/6/2004,  9:55:31 AM
CNBC talking about Conexant Systems (CNXT). Shares of CNXT are down 43% to $2.31. The company issued an earnings warning claiming it lost market share to cheaper Taiwanese competition. CNXT is lowering its April quarter (Q3) revenue expectations from $308-323 million to $265-270 million.

Here's an excerpt from CNXT's press release:

"In the third fiscal quarter, a shortfall in demand in our wireless LAN business led to overall company performance that was less than we expected at the beginning of the quarter," said Armando Geday, Conexant's chief executive officer.

"Several factors affected our wireless LAN business during the course of the quarter," Geday continued. "A number of Taiwan-based chip suppliers emerged with extremely low-priced solutions, displacing incumbent suppliers in certain high-volume applications. These additional competitors exacerbated pricing pressure in a market already characterized by severe price competition. Also, channel inventory of our customers' products increased as new competitors' products, based on low-priced Taiwanese solutions, caused our customers to lose market share. "

  Jim Brown   7/6/2004,  9:51:18 AM
Less than ten minutes until the remaining economic reports for the day:
Challenger Employment Report (last 73,368)
ISM Services (est 62.8, last 65.2)

  Jeff Bailey   7/6/2004,  9:50:30 AM
Swing trade bullish stop alert .... Microsoft (MSFT) $28.15 -1.5% here.

In 06/29 at $28.48. Net $-0.33, or -1.16%.

  James Brown   7/6/2004,  9:50:23 AM
Lattice Semiconductor (LSCC) is down 6.14% (to $6.26) and falling fast after Bank of America cut the stock to a "sell" this morning.

  Jeff Bailey   7/6/2004,  9:49:47 AM
NASDAQ-100 Index (NDX.X) 1,461.25 -1.34% .... getting hit at WEEKLY S1 and below DAILY S2.

  Jim Brown   7/6/2004,  9:49:17 AM
Not looking good for the bulls. The Dow is under 10250 and the Nasdaq is pressing 1985 support. The S&P is clinging to 1120 but only barely. The Russell is in freefall and the SOX is down another -2.55% and below 450 support at 445. If we are going to see a post holiday rebound into July earnings this is the place otherwise the outllok for summer does not look good.

  Jeff Bailey   7/6/2004,  9:48:09 AM
Micromuse (MUSE) $4.60 -28.90% Link .... Warned Q3 revenues would be between $34.5-$35.5 million, which was below consensus of $39.4 million. Attributed shortfall to adverse affect of longer sales cycles due to a cautious decision making customer. While MUSE admitted a number of transactions were delayed, the company remained optimistic about its long-term growth prospects and ability in its new go-to-market strategy and product roadmap.

  Linda Piazza   7/6/2004,  9:45:22 AM
Remember the OEX's 200-sma at 542.02.

  Jeff Bailey   7/6/2004,  9:44:39 AM
Qualcomm (QCOM) $72.33 +0.08% Link .... Piper Jaffray raises price target to $93 due to the firm's view that WCDMA datapoints continue to improve and that weakness in South Korean, Indian, and Chinese CDMA markets is temporary.

  Linda Piazza   7/6/2004,  9:43:15 AM
On any SOX bounce now, we should watch the site of the ascending trendline since May for possible resistance. That trendline lies at about 454.50.

  James Brown   7/6/2004,  9:42:57 AM
An upgrade to "over weight" from Morgan Stanley is giving Canadian Pacific Railway (CP) and Steel Dynamics (STLD) a boost this morning. CP is up 1.1% to $24.80 but still under resistance at $25.00 and its simple 200-dma. STLD is up 4.85% to $29.36 after several days of sideways consolidation just above the $28.00 level.

  Jeff Bailey   7/6/2004,  9:41:23 AM
Aluminum Corp. China (ACH) $56.40 +4.54% .... Strong open.

  James Brown   7/6/2004,  9:40:02 AM
Apparel retailer Hot Topic (HOTT) is opening higher this morning (+2%) to $21.01 after being upgraded to "buy" at Wedbush Morgan.

  Jonathan Levinson   7/6/2004,  9:39:03 AM
Session low for QQQ here at 36.49, cracking support at 36.50.

  Jeff Bailey   7/6/2004,  9:38:29 AM
Veritas Software (VRTS) $19.00 -28% Link ... Lower after quarterly earnings. Company said it now sees Q1 non-GAAP earnings per share of $0.18-$0.20, which was below consensus estimates of $0.24, and total revenue of $475-$485 million, versus consensus of $502.1 million. VRTS attributed weakness to order flow.

  James Brown   7/6/2004,  9:38:02 AM
CNBC saying Lehman Brothers has cut the semiconductor sector this morning.

LEH has downgraded Dow-component and NDX-component INTC's earnings estimates for the next quarter (Q3).

  Linda Piazza   7/6/2004,  9:37:55 AM
The OEX has hit lower Keltner channel support and is trying to bounce from that support. Keltner resistance is gathering overhead, so the OEX needs to bounce strongly to get through it before it all converges. During the first five minutes of trading, the OEX spanned a range from 545.91 to 545.04.

  Jim Brown   7/6/2004,  9:37:46 AM
The earnings warnings continue to flow with CNXT and VRTS warned that earnings would miss estimates. Both suffered strong drops at the open. INTC estimates for Q3 were cut before the open by Lehman as the dog pile on Intel continues. Lehman downgraded the chip sector in general and that is a primary reason for the morning market drop. AMGN was cut by CSFB with the price target lowered to $62 from $77 on lack of any exciting news in the pipeline.

  Linda Piazza   7/6/2004,  9:36:13 AM
The TRAN opens near possible support at 3100-3140. The SOX, however, has crashed right through the ascending trendline off the early May low. Unless there's a quick bounce from possible 449 support back up to that trendline and through it, we may not see the "bounce-and-then-let's-see-how-markets-look" scenario unfold.

  Linda Piazza   7/6/2004,  9:31:28 AM
The OEX opens below its 50-dma.

  Linda Piazza   7/6/2004,  9:15:41 AM
Note: Beginning tonight, I'm probably going to be posting this OEX-related assessment of market action in the late evenings rather than early mornings due to changes in my morning schedule.

What are some of the forces that might impact trading today? Kerry's choosing of Edwards as his running mate might be one pressure as market watchers assess Kerry's chances of winning the presidency with Edwards as a running mate. With a weekend attack on an Iraqi pipeline leading to higher crude prices, those of us trading equities or indices based on equities should also pay special attention to crude prices today. In addition, the SOX ended last week just above an ascending trendline off the early May low, and the presumption is that the SOX will at least attempt a bounce off that trendline again if it should dip down to touch it today. The trendline currently crosses at about 453.75, depending on how it's drawn. That trendline also describes the neckline of a continuation-form H&S complete with bearish divergence as the head was formed. Although I don't always trust continuation form H&S's to meet their downside targets, this formation bears watching. A violation of the neckline might be presumed to lead to a SOX test of 448, 444.50, and then 440, while a rejection of the neckline might see a climb back toward the 50-dma and then toward other resistance if that is surmounted.

The weekly view of the OEX depicts the index turning down again from its fourth week in a row of retesting the 200-week sma, with this month's test being the third consecutive period of testing of that sma this year. More than six months of testing have not been able to pierce that average, suggesting at least a return to the bottom of the descending regression channel that's governed trading this year. The 21(3)3 weekly stochastics have made a tentative bearish cross, but it's tentative and other oscillator evidence remains inconclusive. One strong week could turn those stochastics higher again.

The daily chart shows the OEX in a similar danger of rolling down under its own weight, but also perhaps not yet in an unredeemable decline. Stochastics and RSI are fully bearish on the daily chart, and Friday's candle appeared to be dropping out of the recent consolidation zone, although the OEX again found support at its 50-dma. Futures this morning suggest that the OEX could open lower. Although I'm never good at forecasting where the OEX will open based on futures action, an open near the 50-dma does not appear impossible.

A problem for those contemplating new bearish positions is the presence of that known support from last week. Even if that support is broken, other support is thickly layered near 546, 544-545, 542, the 200-sma at 541.88 and the 200-ema at 538. Weekly nested Keltner channels suggest that it's unlikely the OEX will fall much below 530-536, with the bottom of that range appearing an unlikely target at this point. The daily nested Keltner channels show the OEX to have tested central support both Thursday and Friday, with that support currently at 546.13. Those channels are configured in such a way that unless the OEX can sustain values above 551.40 this week, it's likely to continue to test that 546 zone or perhaps fall though it at least toward 544, if not much lower.

What about intraday developments? The OEX ended the day below the 30- and 60-minute 100/130-ema's, but far enough below that it's difficult to recommend new bearish entries based on this evidence, while no suggestion of a bounce back to retest those averages is yet suggested, either. The positioning of the intraday nested Keltner channels was such that the OEX could head either direction this morning, with the only definitive statement that could be made being that the OEX is below mid-channel support on both the five- and fifteen-minute charts, indicating that it ended the week last week in the bearish half of the channels. Mid-channel resistance is currently at 548.15.

Usually Keltner channels suggest whether the OEX is likely to head up or down in earliest trading, but today they offer no such suggestion. If futures are correct in suggesting a lower OEX open, that open could come near 546.34 Keltner channel support. Unless the OEX finds support there, at a level concurrent with its 50-dma, and then bounces back above mid-channel Keltner resistance, it may be doomed to fall toward 545.30 lower-channel support or even violate the channels, creating a breakout signal that carries the OEX lower.

A study of the SOX's chart and the OEX's, then, show some bearish chart characteristics, lending a bearish tone to the opening, a bearish tone confirmed by the lower futures and higher crude costs. Those crude costs may impact the TRAN, pushing it lower to follow through on the reversal signal it created last week. The TRAN could have some weekly support near 3100-3140, however, creating bounce potential from that zone. Both the SOX and the OEX approach trendlines or levels that have created bounces in the past, and unless we're going to see a cascading fall today (a possibility, of course), then we could see some coordinated bounce attempts as those support levels or trendlines are hit. Perhaps such attempts could come at or near the 10:00 economic release? As we approach the day, any such bounce should be questioned as to its sustainability. The OEX needs to sustain values back above 551 before we can consider it likely to travel back up again through the recent consolidation zone, and then we'd have to watch at 556-558 for signs of either a breakout or another rollover through that consolidation zone. Let's watch breadth and other indicators today if a bounce should begin to help us assess its sustainability.

  Jonathan Levinson   7/6/2004,  9:11:21 AM
I'm actually surprised not to see a relief rally today, just based on the amount of attention being paid to weekend event risk. There's a slight bullish divergence on the 30 minute index charts, always within those ongoing bearish daily cycle downphases, and so unless the markets fall apart at the bell, I expect that we've seen much of the day's decline already in the premarket.

  Jane Fox   7/6/2004,  8:49:00 AM
Dateline CNN Sen. John Kerry chooses Sen. John Edwards as his Democratic running mate for the 2004 presidential election.

  Jonathan Levinson   7/6/2004,  8:40:57 AM
Ten year bond yields (TNX) are down .5 bps at 4.453%, holding all of Friday's losses. This morning's move is so far a small doji star at the bottom of Friday's big bearish candle- we should see a consolidation within a narrow range for the day. If there's going to be a big move, it should occur when the ISM data is released at 10AM.

  Jonathan Levinson   7/6/2004,  8:23:13 AM
We await the 10AM release of ISM services for June, est. 65 (May reading was 65.2).

  Linda Piazza   7/6/2004,  7:08:15 AM
Good morning. Although U.S. markets remained closed Monday after this weekend's July 4th holiday, Asian and European markets of course traded. Monday, the Nikkei fell 1.53% or 179.78 points on light volume to 11,541.71, but trading in other Asian markets was mixed. Japan holds elections for upper house members July 11. Some question whether Prime Minister Koizumi's party will obtain a majority, with a failure to obtain a majority viewed as a possible negative for foreign investment in Japanese stocks. Stock-specific news included speculation that Nissan has under development a fuel-cell-powered car that it will launch by 2007. Big-cap tech stocks appeared to have been weak throughout the rest of Asia. The Taiwan Weighted dropped 1.51%, but South Korea's Kospi gained 0.17%. Singapore's Straits Times gained 1.27%, and Hong Kong's Hang Seng gained 0.26%. China's Shanghai Composite gained 0.24%.

Monday, European bourses held close to the flat-line level in trading that was also characterized as light. Ahead of a Bank of England decision this week, the FTSE 100 closed down 4.10 points or 0.09%, at 4,403.30. The Bank of England is not expected to change its rate. The CAC 40 closed up 3.12 points or 0.08%, at 3,688.18; and the DAX closed down 3.04 points or 0.08%, at 3,995.73. With the bombing of a pipeline in Iraq this weekend and the subsequent rise in crude futures, oil majors gained in the U.K. The release of passenger traffic figures for airlines in the U.K. resulted in mixed performances for those airliners. Homebuilder Bovis Homes commented on the moderation or dampening of price gains in the housing market. Bovis is not a component of the FTSE 100.

Oil-related stocks traded higher Monday in continental Europe, too, with another concern added for those watching the oil market. Russia's Yukos has apparently defaulted on a $1 billion loan arranged by France's Societe Generale, with Russian authorities reportedly having frozen the company's accounts. In Germany on Monday, June's purchasing manager services index unexpectedly dropped to 52.3 against expectations of a rise to 53.7. France's June PMI also failed to meet expectations, falling to 57.9. The eurozone's PMI also eased, to 55.3 from May's 55.8. Automakers declined.

Tuesday, the Nikkei attempted to make up some of Monday's losses in the morning session, opening near the flat-line level and climbing after Seiko Epson Corp. raised its full-year profit forecast. However, the Nikkei dove all afternoon, closing on its low of the day, down 66.44 points or 0.58%, at 11,475.27. Since hitting a high of 11,889.70 on July 1, the Nikkei has dropped 414 points. By July 2, the Nikkei had issued a high-pole warning on its P&F chart. A trade at 11,450 will create a new sell signal, but the 50-dma at 11,429.28 might provide at least temporary support if the Nikkei should drop further.

Articles attributed the afternoon decline to thin volume and jitteriness ahead of the elections this weekend. Seiko Epson benefited from its raised forecast, however, gaining 13.1%, and helping some other tech stocks to climb, too. Banking stocks fell, however. In stock-specific news, Mitsubishi Motors dropped 4.2% on fears that the company's stock could be delisted, although the company issued a statement claiming that it would keep its listing.

Other Asian bourses mostly traded higher. The Taiwan Weighted gained 1.30%, and South Korea's Kospi gained 0.23%. Singapore's Straits Times climbed 0.63%, and Hong Kong's Hang Seng gained 0.26%. China's Shanghai Composite gained 0.41%.

Unconfirmed reports of a controlled explosion at Paddington Station may be impacting European bourses, however, as they trade lower this morning. Rising crude oil costs this morning may also be pressuring those bourses. Other pressures include evidence of lackluster consumer demand given in the form of lowered sales growth expectations by German products group Henkel. In addition, UBS downgraded German reinsurer Munich Re to reduce from its former neutral rating and Swiss Re to neutral from buy, while Morgan Stanley downgraded Reuters on valuation concerns.

As of this writing, the FTSE 100 trades lower by 15.40 points or 0.35%, at 4,387.90. The CAC 40 trades lower by 22.48 points or 0.61%, to 3,665.70. The DAX trades lower by 39.00 points or 0.98%, at 3,956.73.

  OI Technical Staff   7/5/2004,  12:29:21 AM
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