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  Jeff Bailey   7/9/2004,  6:11:18 PM
Closing Internals at this Link

NYSE NH/NL 10-day Avg chart at this Link the lower case "f" is where the "f"ive-day would be.

NASDAQ NH/NL 10-day Avg chart at this Link Here I've populated with more "f"ive day ratios.

 
 
  Jeff Bailey   7/9/2004,  5:33:18 PM
Pivot Matrix for next week at this Link

 
 
  Jeff Bailey   7/9/2004,  5:03:22 PM
Current OPEN MM profiles at this Link

 
 
  Jonathan Levinson   7/9/2004,  4:33:13 PM
Like a new horror film: "'Bots Amuck"

 
 
  Linda Piazza   7/9/2004,  4:01:24 PM
Have a great weekend, all.

 
 
  Linda Piazza   7/9/2004,  3:58:38 PM
It's time to make a decision about holding over the weekend if you're in options. With next week being opex week, any OTM options you own will lose a hefty portion of their value over the weekend.

 
 
  Jonathan Levinson   7/9/2004,  3:56:18 PM
Agreed, Linda.

 
 
  Linda Piazza   7/9/2004,  3:55:22 PM
If you're the type to look for the silver lining that's going to come out of all this boredom on the market, it's this: when the markets zoomed up last year, they did not pause for backing and filling, failing to establish support levels upon which traders could rely. Where did support exist? That made the markets vulnerable all the time. Now, they've spent so much time backing and filling that many of the markets have established these terrible consolidation zones in which we've been trapped. If markets ever climb above them or drop below them, we'll know exactly where support or resistance might lie. Or at least, we'll know a range within which it might lie.

 
 
  Linda Piazza   7/9/2004,  3:49:29 PM
The OEX has settled into an equilibrium position on the five-minute Keltner charts, but still trades in the lower half of the Keltner channels on the 15-minute version. Because the five-minute versions are fairly equally aligned, a move up to 543.35 or down to 541.31 appear equally likely, but looking at Keltner resistance and support only, short-term support looks slightly stronger, gathering near 542.32-542.41, so right at the level of the 200-sma.

 
 
  Jonathan Levinson   7/9/2004,  3:43:23 PM
There's been no resolution of the mixed chop on the 30 minute cycle, and the short cycle is trying to get going to the upside but the wavelet cycle is maxxed out. The daily cycle remains the clearest, and it points south. But the current setup looks good for more of the same excruciating chop heading into the close. 35.50 QQQ is now overlapping 30 and 60 min channel support- resistance is at 36 and 36.10 for the 30 and 60 min channels.

 
 
  Linda Piazza   7/9/2004,  3:41:33 PM
After being pressured down by its 200-week sma, it looks as if the OEX may close beneath that average, currently at 543.47, depending on the action into the close. If it does, that perhaps increases the chances that the OEX will roll down through its descending regression channel on its daily and weekly chart. However, that must be balanced against the possibility that the OEX could close above its daily 200-sma, probably a more frequently watched average, with the OEX having appeared to have bounced (minimally) from the midline support of that descending regression channel. It's a draw. If you're bullish, you look at a potential close above the 200-sma and cheer. If you're bearish, you look at the OEX's performance with relationship to both the 200-week averages, the -sma and the -ema, and you cheer. And that's probably the problem. There's just enough fodder to enable both bulls and bears to nourish their hopes.

 
 
  Jonathan Levinson   7/9/2004,  3:34:54 PM
Arghhhh!

 
 
  James Brown   7/9/2004,  3:27:01 PM
Astrazeneca (AZN) is bucking the bullish bounce in the DRG drug index with a 1.72% decline. Shares have been weak for several days, breaking support at $45 and breaking its 200-week moving average at the $44.00 level today. Shares have also broken support on the P&F chart, which currently points to a $38 target.

 
 
  Linda Piazza   7/9/2004,  3:24:00 PM
Maybe I should invent a Linda-confusion indicator. These days when I start out confused about likely market direction (see my 10:24 post, among others), tend to be the days when markets tend to be directionless, too. That's one reason I stopped feeling as if I must just be missing some important clue when I couldn't say the market was likely to do one thing or the other by the time the markets opened. Maybe when you stare at charts and can't make up your mind, it's not that you're missing anything, either, but instead are picking up on signals that the day might be a choppy one.

 
 
  Jonathan Levinson   7/9/2004,  3:23:48 PM
XAU has gone positive here, up .25 to 91.59, while HUI is back up to flat at 200.91.

 
 
  Jonathan Levinson   7/9/2004,  3:22:57 PM
The last 20 minutes' worth of buying added 15 cents to the Qubes, reversing all of the decline since 11AM. The wavelet oscillator is trending higher but is currently overbought.

 
 
  Jeff Bailey   7/9/2004,  3:21:07 PM
Bearish day trade stop alert for AmeriTrade (AMTD) $9.96.

Thought about selling 10 July $10 puts for $0.20 (if short 1,000 shares), but decide to just close out.

 
 
  Jeff Bailey   7/9/2004,  3:15:33 PM
03:00 Internals at this Link

I added the current 5-day and 10-day NH/NL readings (to 03:00 PM) and currently, we would see a reversal lower for the NYSE 10-day ration. (got to chart something today!)

 
 
  Linda Piazza   7/9/2004,  3:14:52 PM
The OEX has seen a lower five-minute low now, confirming the downturn from the test of the broken support, but that wasn't much of a lower low, was it? The OEX did, however, touch 541.36, actually piercing that level by a penny, as the Keltner channels had predicted it would. This quick bounce now could turn the smallest channel higher again, however. If the OEX can maintain levels above 542, it has a chance at turning that channel higher and reaching first for the 542.64 central channel level, and then possibly 543.23. It has to hold at or get past the 200-sma to do that, however, and that might prove difficult.

 
 
  Jonathan Levinson   7/9/2004,  3:03:58 PM
QQQ 35.666- a suitable number here.

 
 
  Linda Piazza   7/9/2004,  2:59:00 PM
Keltner charts still show that the OEX is more likely to drift down to 541.36 or even 539.99 than to climb to 543.25, but if the OEX can sustain values above 542.04 or preferably above 542.42, that 543-ish level becomes likely.

 
 
  Jonathan Levinson   7/9/2004,  2:57:39 PM
The miners continue to creep higher, HUI now down .35% at 200.24, XAU down .28% at 91.1. The broader equity markets continue to not move- did C3PO blow a fuse?

 
 
  Linda Piazza   7/9/2004,  2:53:20 PM
If looking at a two-minute chart, here's what the OEX's action looks like since Thursday afternoon's low: The OEX settled into a symmetrial triangle with an apex just above the 200-dma. It broke down out of that triangle, then immediately headed up to retest the broken ascending triangle. It retreated from that test--a confirmation that former support is now resistance, and now, as I type, it's headed down to retest the last two-minute low at 541.75.

 
 
  Jonathan Levinson   7/9/2004,  2:45:55 PM
Another lower high here, with QQQ hugging the 72 pma on the 150 tick chart. The only cycle working intraday here is the shortest, the wavelet cycle measuring roughly 10 minute cycles. It is currently pointed south toward channel support of 35.60.

 
 
  Linda Piazza   7/9/2004,  2:24:20 PM
I'm still watching that 72-ema on many daily charts for the indices, and here's why, as depicted on a chart of the BIX: Link

 
 
  Jeff Bailey   7/9/2004,  2:23:13 PM
Buy Program Premium .... SPX 1,112.31, OEX 542.35, INDU 10,211, QQQ $35.71, BIX.X 344.88.

 
 
  Jonathan Levinson   7/9/2004,  2:21:18 PM
Gold at 408.50, silver 6.47, and HUI and XAU are creeping slightly higher along with bonds, currently down .71% and .57% respectively. TNX is down 1.2 bps at 4.458% here- could be some caution coming in ahead of the 7/11 weekend.

 
 
  James Brown   7/9/2004,  2:18:28 PM
Dow-component IBM is not seeing much of a bounce, only up 20 cents to $83.85 today. Investors do not appear optimistic about Big Blue's July 15th earnings report.

 
 
  Linda Piazza   7/9/2004,  2:16:28 PM
The OEX now has broken below the supporting trendline that was established off yesterday's low, but it's not going anywhere yet after breaking down. Unless it pulls up soon, however, it's vulnerable to a drop to 541.44, and then eventually to 439.99, if that level fails. As I type, resistance looks stronger than support, but doesn't preclude a bounce up to 542.25-542.41 without changing that outlook much.

 
 
  Jeff Bailey   7/9/2004,  2:15:29 PM
Stillwater Mining (SWC) $16.10 -1.82% Link ....

AMEX Gold Bugs ($HUI.X) 199.41 -0.75% Link

 
 
  Jonathan Levinson   7/9/2004,  2:15:03 PM
The short cycle is still in a downphase and has plenty of room to run after going nowhere for the past who hours.

 
 
  Jonathan Levinson   7/9/2004,  2:14:14 PM
QQQ testing short cycle support right here. Next is 30 min support at 35.51 and 60 min support at 35.48.

 
 
  Jeff Bailey   7/9/2004,  2:11:40 PM
U.S. Dollar Index (dx00y) 87.41 -0.14% ..... afternoon lows. This pretty much negates the intra-day reverse h/s pattern as the right shoulder grows to the ear. WEEKLY S1 here.

 
 
  James Brown   7/9/2004,  2:08:13 PM
The three-day rally in General Dynamics (GD) has broken out to a new relative high and above resistance at the $100 level.

 
 
  Jonathan Levinson   7/9/2004,  2:05:01 PM
There's a lower short cycle Macd high so far on QQQ despite the return to the top of the afternoon range. Similarly, however, there was a bullish divergence preceding it- and neither signal has had any effect on price so far. For those watching this mess from the sidelines, I'd be inclined to fade a move to either upper or lower Keltner limits at 35.51 - 36.05, and reverse to stop out and follow a breakout beyond those levels. Other than trying to catch 5-10 cent moves with the wavelet oscillator, the inside of this range is as close to directionally random as my model can get.

 
 
  Linda Piazza   7/9/2004,  1:57:47 PM
We're finishing up one of those stop-running times of day, and the OEX can't even manage a break of the symmetrical triangle it's been building! Bulls and bears still appear to be equally matched.

 
 
  James Brown   7/9/2004,  1:55:31 PM
Aerospace & defense player Lockheed Martin (LMT) has been very strong the last four sessions and is breaking out to new one-year highs while challenging resistance on its P&F chart. Traders might want to consider bullish positions on a dip to support/resistance at $52. Look for earnings on July 22nd.

 
 
  Jonathan Levinson   7/9/2004,  1:47:28 PM
A stunning 10 cent QQQ range for the past 2 hours.

 
 
  James Brown   7/9/2004,  1:45:46 PM
Check out the relative strength in chicken-farmer Pilgrims Pride Corp (PPC). The stock is hitting new highs and might make a decent covered call candidate.

 
 
  Linda Piazza   7/9/2004,  1:42:00 PM
TRIN is still creeping higher, the advdec line is flat-lining, and the OEX hovers near its 200-dma. The OEX may not be forming a triangle . . . or maybe it's just moving around randomly, but the TRIN's action gives a little more of a bearish flavor to the day.

 
 
  Jonathan Levinson   7/9/2004,  1:40:55 PM
Short cycle support is 35.68, above 30 min QQQ support of 35.55.

 
 
  Jonathan Levinson   7/9/2004,  1:34:08 PM
Disturbing indeed.

 
 
  James Brown   7/9/2004,  1:33:21 PM
-- Disturbing News --

If you happened to be watching FOX news around 1:00 PM ET then you heard about the new book detailing the nuclear threat to America. One analyst, basing his views on global intelligence and interviews, believes that Al Queda has about twenty suitcase-sized nuclear bombs already in America. He went on to state that it's not a matter of if but when a nuclear attack hits the U.S. and he believes it will occur in the next year!

Ah.. found it.. the book is "Osamas Revenge: The NEXT 9/11: What the Media and the Government Haven't Told You" by Paul Williams. details: Link

 
 
  Jonathan Levinson   7/9/2004,  1:32:00 PM
There's been zero movement on my tick charts during the past half hour. There's still a wavelet upphase topping against the short cycle downphase. The prognosis is more chop.

 
 
  James Brown   7/9/2004,  1:25:08 PM
Biotech giant DNA continues to sink after its recent earnings report this Tuesday but the stock is bouncing from support at the $50 level and its simple 200-dma. Meanwhile today's decline has produced a new MACD sell signal.

 
 
  Linda Piazza   7/9/2004,  1:22:02 PM
After breaking down out of what appeared to be a bearish rising wedge on the five-minute chart, crude futures just traded sideways, as of 30-minute ago. They refused to drop much. This is such familiar behavior from the spring of 2003, when we all began watching bearish rising wedges set up on equities across many time frames. They would break down, but then prices would refuse to follow through with the precipitous drop that was supposed to be the reliable result of such breakdowns. Instead, we'd get that sideways drift. Then later would come another push higher. While I haven't watched the crude futures often enough to know if they behave in accordance with standard tenets of technical analysis, and especially if they follow through on the exceptions to those tenets, that breakdown now appears suspect to me. Crude futures were challenging the $40.50 level that had been resistance through much of May, as of 30 minutes ago.

 
 
  Jonathan Levinson   7/9/2004,  1:13:19 PM
1:00 PM ET : Kansas City Federal Reserve Bank President Thomas Hoenig to speak about monetary policy and the economic outlook, in Columbus, Nebraska Audience Q&A expected .

 
 
  Jonathan Levinson   7/9/2004,  1:11:52 PM
Still no direction on the 30 min oscillators, and both the 30 min and short cycle channels are drifting sideways with a slight negative bias. The daily cycle downphase remains the clearest trend I see, and today just looks like a pause within it. A strong 30 min upphase could change that, but this doesn't feel like a market that's looking for strong moves today.

 
 
  Jeff Bailey   7/9/2004,  1:10:51 PM
01:00 Internals at this Link

 
 
  Jonathan Levinson   7/9/2004,  1:09:08 PM
It's not just the low volume chop. I'm waiting for a repairman to come fix our bathtub. There's something unsettling about waiting for a stranger to come specifically to alter your bath- it's been throwing me off all day.

 
 
  Linda Piazza   7/9/2004,  1:08:16 PM
Last week, the NDX finally pierced its 200-week ema, falling back after doing so. Many have been waiting for the big-cap stocks to catch up to the small-caps this year, wanting the generals to join in the bullish parade. The Russell 2000, for example, climbed above its 200-week ema back in May 2003 and hasn't come anywhere near it since then. The Russell 2000's bullish pendulum had actually swung that index quite far from its 200-week ema. Either the Russell 2000 needed to stall while the 200-week ema caught up a bit, something that has been happening this year, or else the Russell 2000 needed to retrace to reestablish it as support, something that could still happen. The Russell 2000's 200-week ema is at 481.96. That's still a long, long way away.

 
 
  Jonathan Levinson   7/9/2004,  1:04:33 PM
Hi, I have tried to find the site on s&P to see the listing by cap on the the S&P 500 for July. I like to follow the larger cap issues as I trade the ES. Could you advise me of the link?

Good question. Here's what I've managed to find: Link.

 
 
  Jeff Bailey   7/9/2004,  1:04:29 PM
01:00 Market Watch at this Link

 
 
  Linda Piazza   7/9/2004,  12:59:00 PM
The Nasdaq is so far being supported this week above its 200-week ema, with that average at 1922.88. That might be an average to put on the radar screen, as other than two weeks in May, the Nasdaq has closed each week above or right at that moving average since late October. Weekly RSI has hooked down and weekly 21(3)3 stochastics threaten to do, but haven't yet. MACD flattens.

 
 
  Jonathan Levinson   7/9/2004,  12:57:41 PM
With that said, a wavelet bounce is giving the QQQ a lift, taking a shot at the short cycle downphase from above oversold territory. The intraday cycles all the way up to the 30 min are virtually unreadable due to the aimless chop n slop all day.

 
 
  Jonathan Levinson   7/9/2004,  12:56:01 PM
Volume overall is very light today, with little movement and little progress on my tick-driven indicators. Contract volume on the futures is roughly half of what it would be on a normal day.

 
 
  Linda Piazza   7/9/2004,  12:52:00 PM
The TRAN has pulled all the way back to its opening level today, so far creating a doji right above the 30-dma.

 
 
  Linda Piazza   7/9/2004,  12:47:05 PM
The OEX's 15-minute chart shows bullish price/MACD and Keltner channel divergences on yesterday afternoon's low, as compared to the low reached on the 6th. Perhaps that divergence was predicting this morning's bounce attempt? If so, the continuation of the bounce may be in trouble, as the 15-minute MACD now threatens to complete a bearish cross from below signal. Everywhere we look, we can find both potentially bullish and bearish signs. I think that's natural, because we have the bearish crowd who are looking at these minor violations of the 200-sma as an unequivocally bearish sign and we have the bullish crowd thinking it's a time to buy OEX stocks. Eventually one side or the other is going to prevail, but until then, prepare to be chopped around a bit or--worse--bored to tears as markets settle into an equilibrium position. As is true with any tug of war, however, it's possible that one side could gain a temporary advantage over the other before being vanquished itself.

 
 
  Jeff Bailey   7/9/2004,  12:43:46 PM
Day trade short alert ..... Ameritrade (AMTD) $9.89 +0.5% here, stop $9.96, target $9.72.

 
 
  Jonathan Levinson   7/9/2004,  12:34:14 PM
QQQ returning to session low at 35.686.

 
 
  James Brown   7/9/2004,  12:32:02 PM
The strength in mortgage lender Countrywide Financial (CFC) is starting to crack. Two weeks ago rival Washington Mutual (WM) issued a warning that profits would be hit by a slow down in home loans. Yesterday rival New Century Financial (NCEN) reaffirmed their 2004 outlook but it was under analysts' estimates. Today CFC reported that monthly purchase activity was up 20% from May but June loans were actually flat compared to May (which means they saw a big drop in refi's).

After three weeks of trading sideways between $69.00 and $72.50 we're now seeing CFC break its 21-dma. A move under $69 and traders can target a drop to support at $65.00. Bulls can look for a bounce near its 100-dma, where the stock has found support in the past.

 
 
  Jonathan Levinson   7/9/2004,  12:30:11 PM
Metals are recovering, but the action remains light and listless, with August gold now up .2 at 408.5, silver up .06 at 6.49, HUI down 1.14% at 198.64 and XAU down 1.07% at 90.36.

 
 
  Jeff Bailey   7/9/2004,  12:28:52 PM
S&P Insurance (IUX.X) 316.07 -0.17% .... gives up gains.

Broker/Dealer (XBD.X) 118.90 (unch)

S&P Banks (BIX.X) 344.26 -0.42% ... hovering at afternoon and session lows. Looks like it wants to pull into its rising 50-day SMA (342.60) and re-test that downward trend (342.60) that was broken to the upside in early June.

Seems to be pulled lower by the SPX/OEX.

A relative strength chart would confirm this analysis.

 
 
  James Brown   7/9/2004,  12:23:05 PM
SanDisk (SNDK) is up 4.6% and reversing its recent breakdown under the $20.00 mark after CSFB started coverage on the stock with an "out perform" this morning but the rally is fading under the $21 level. Its P&F chart remains very bearish with a $5.00 target.

 
 
  Jonathan Levinson   7/9/2004,  12:22:54 PM
The current support at 35.70 QQQ lines up with 1440 NQ, which is the start of a strong confluence support level to 1435 NQ, roughly 35.50. The shape of the daily cycle oscillators, as well as the failure to break above 36 and hold it, suggest that this support level will be tested soon.

 
 
  Linda Piazza   7/9/2004,  12:22:27 PM
The SOX has dropped below 450, or rather below 450.75, which was recent historical S/R.

 
 
  James Brown   7/9/2004,  12:19:11 PM
3Com Corp (COMS) is down more than 7% to $5.17 on rising volume after Oppenheimer cut the stock to "neutral". Bears need to be careful as it approaches round-number support at $5.00 because its trendline of lower lows happens to offer support there as well.

 
 
  Jeff Bailey   7/9/2004,  12:17:46 PM
12:00 Internals at this Link

 
 
  Jonathan Levinson   7/9/2004,  12:15:31 PM
Linda, he's been supporting the strong dollar since around February 2003, when the index was just below 100, if memory serves.

 
 
  Linda Piazza   7/9/2004,  12:14:32 PM
Am I really reading again that Snow repeats his support for a strong dollar? Doesn't that happen every time the dollar begins to take a hit against other currencies?

 
 
  James Brown   7/9/2004,  12:13:27 PM
Dow-component Wal-Mart (WMT) is failing near its 10-dma again this morning. Yesterday the retail giant said June same-store sales came in at +2.2%, near the bottom of its lowered 2-4% range. WMT kept the 2-4% growth forecast for July. Currently WMT's P&F chart is bearish with a $46 price target but the daily chart still has round-number support at the $50 mark. WMT also has a rising trendline of support from its higher lows on its weekly chart that should offer some support in the $47-48 range.

 
 
  Jonathan Levinson   7/9/2004,  12:06:01 PM
I've seen more inspiring short cycle downphases, but the weakness is enough to be giving the first downside direction to the foundering 30 min channel. Recall that the intraday cycles are chopped up within the strong ongoing daily cycle downphase. At some point, I expect the sideways churning to get back in gear with that cycle to the downside. The 30 and 60 min channels both have resistance at 36.10-36.12, which should cap any bounce in the short term if it occurs.

 
 
  James Brown   7/9/2004,  12:04:31 PM
Commercial Metals Co (CMC) is up 5.77% to $33.72 and nearing its highs after JPM started coverage on the company with an "over weight" this morning.

 
 
  James Brown   7/9/2004,  12:01:06 PM
German software maker SAP is up 4.74% and back above its simple 200-dma after issuing a positive earnings warning. The company now sees total Q2 revenues at 1.78 billion Euros and software revenues at 495 million euros versus estimates of 1.74 bln and 485 bln euros, respectively.

 
 
  Jonathan Levinson   7/9/2004,  11:58:44 AM
There's gap support at 35.70 QQQ, below which it should be a quick trip to 30 min channel support at 35.59. The tape is being driven by program trades, as there's almost no action or volume in between.

 
 
  Linda Piazza   7/9/2004,  11:55:11 AM
The OEX just fell away from the central Keltner channel level. Unless it bounces quickly, it's in danger of turning the smallest Keltner channel lower again, pointing it toward 541.29 or maybe even 539.80. The OEX is bouncing as I type, but now needs to maintain levels above 542.90 to hope to keep that smallest channel at least level. This is a dangerous trading environment, particularly if we consider that the OEX could oscillate around its 200-sma over at least a several-day period.

 
 
  Jeff Bailey   7/9/2004,  11:53:08 AM
Amazon.com (AMZN) $48.32 -2.42% .... darts below yesterday's low.

July "Max Pain" $47.50 ($2.50 increments)

 
 
  Jeff Bailey   7/9/2004,  11:52:08 AM
Sell Program Premium

 
 
  James Brown   7/9/2004,  11:49:48 AM
OI call play Phelps Dodge (PD) gapped higher on the open but has been churning between $77.50 and $78.50 all day. PD is currently up 1.42%. I'm surprised it is not trading higher with the strong 3% rally in Copper prices today (to $1.289 a lb.)

 
 
  Jeff Bailey   7/9/2004,  11:49:08 AM
Buy Program Premium .... SPX 1,114.04 , OEX 543.34 , INDU 10,235, QQQ $35.86, BIX.X 344.61.

 
 
  Jonathan Levinson   7/9/2004,  11:43:12 AM
The 30 min channels are no longer rising- the stall of the past hour has killed the uptick. The range is unchanged at 35.60 - 36.10, but it hasn't advanced.

 
 
  Linda Piazza   7/9/2004,  11:35:14 AM
So far, the OEX's action fits the possibility of a reverse H&S on the five-minute chart, with the OEX now rising to continue the formation of the right shoulder. It's about to face central channel resistance from 543.07-543.18, however. I interpret this formation as a visible sign of bulls stepping in to buy the 200-sma support, but not as the ultimate sign they'll be successful in leading the indices higher.

 
 
  Jonathan Levinson   7/9/2004,  11:30:12 AM
Mexico central bank monetary policy left unchanged 9 July 2004, 11:25am ET , Reuters Link

 
 
  Jeff Bailey   7/9/2004,  11:29:47 AM
U.S. Dollar Index (dx00y) 87.52 -0.02% (30-minute delayed) ....

 
 
  Jonathan Levinson   7/9/2004,  11:23:15 AM
When in doubt, zoom out, so I'm looking at the 30 min QQQ, which continues to chop along below the former triple bottom support at 36. The 30 min cycle oscillators are ambiguous at this point, moving sideways with the price. On the daily, however, the downphase is young and clearly in progress. My read on that combination is that we're in a corrective sideways consolidation of the week's losses.

 
 
  Linda Piazza   7/9/2004,  11:20:10 AM
This morning, the SOX did rise almost up to the former supporting trendline off the early May low. It has since drawn back, but not far. The daily nested Keltner charts show the SOX currently settled into an equilibrium position, although there's a slightly bearish bias since it's below the mid-channel level. Dialing down to the five-minute nested Keltner charts, the SOX needs to maintain levels above 452.71 if it hopes to challenge that trendline again today. If the SOX instead maintains levels below 450.88, it's more likely to drop toward 448 again.

 
 
  Jonathan Levinson   7/9/2004,  11:17:09 AM
This has the makings of a long session. The 30 min channel is rising here, with support up to 35.60, against the declining short cycle which has resistance currently at 35.90. The opposition of cycles results in sideways chop most of the time. The current short cycle downphase is weaker than the previous upphase, which was itself weak.

 
 
  Jeff Bailey   7/9/2004,  11:10:03 AM
11:03 Market Watch at this Link

 
 
  Jeff Bailey   7/9/2004,  11:04:51 AM
Buy Program Premium .... SPX 1,112.89 , OEX 542.84, QQQ $35.80, INDU 10,222.

 
 
  Jeff Bailey   7/9/2004,  11:02:56 AM
Biotechnology Index (BTK.X) 492.41 -0.48% .... has seen distribution lower since morning pop above 500.00. Session lows here.

QQQ $35.78.

 
 
  Linda Piazza   7/9/2004,  10:59:37 AM
One warning to those contemplating or already in bearish OEX positions: although the rollover beneath the 200-sma looked good (the OEX is now slightly above that average again) and allows you to set a firm stop at an account-appropriate level above that important average, there's a potentially bullish reverse H&S on the five-minute chart, this one at the bottom of the decline, complete with bullish divergence as the head was formed. This is not the same formation to which I referred earlier. The OEX is now at the right-shoulder level, trying to steady there. A drop much below 541.80 would tend to negate that potential formation, while a climb above 544-544.50 would confirm the formation. The neckline ascends, so that confirmation level will be climbing, too. I give the 200-sma much more importance than any five-minute formation, but that five-minute formation shows us that bulls are trying to muster some strength here, whether or not they'll be successful. The last time the OEX hit its 200-sma, it chopped around that average for most of a month, so we should be prepared for that kind of action this time, too, although I rather think it won't take quite that long to settle the OEX's fate this time. It could take several days, however, so be prepared to take quick profits.

 
 
  Jeff Bailey   7/9/2004,  10:55:21 AM
U.S. Dollar Index (dx00y) 87.61 +0.07% (30-min delayed) Link .... all sessions turned on, dollar may want to bounce next couple sessions to 87.96.

 
 
  Jonathan Levinson   7/9/2004,  10:53:09 AM
Could be a descending wedge forming here on the 150 tick charts, projecting back up to the session high.

 
 
  Jonathan Levinson   7/9/2004,  10:48:23 AM
QQQ has just broken to a session low. Looks like Jim caught the move perfectly. Current 30 min support is at 35.53, and with a short cycle downphase just beginning after a weak upphase, my guess is that that lower level should be easily attainable. If not, then we have a more important shift in the 30 min cycle commencing.

 
 
  Linda Piazza   7/9/2004,  10:48:22 AM
The OEX is below its 200-dma again.

 
 
  Jonathan Levinson   7/9/2004,  10:46:54 AM
Gold and silver are holding steady, gold down 1.10 at 407.20 and slightly off its earlier levels, silver up .033 and not moving. HUI and XAU are sliding however, down 1.86% and 1.68%.

 
 
  Jeff Bailey   7/9/2004,  10:46:41 AM
S&P 100 Index (OEX.X) 542.26 +0.37% .... session high has been 543.75 and without the BIX.X, OEX didn't stand much of a chance at DAILY R1, WEEKLY S1 and MONTHLY S1 correlations.

 
 
  Jeff Bailey   7/9/2004,  10:42:49 AM
August Crude Futures (cl04q) $39.98 -0.86% (30-minute delayed) .... trades session low.

 
 
  Jonathan Levinson   7/9/2004,  10:40:26 AM
Session low for GE here.

 
 
  Jeff Bailey   7/9/2004,  10:39:58 AM
QQQ $35.85 +0.42% .... early morning trade finds the Q's bouncing along its WEEKLY S2 of $35.85. So far has refused to see a 5-minute close below $35.85.

SOX.X 451.68 +1.95% off its highs of 454.50, which was just above DAILY R2.

BIX.X 344.70 -0.29% .... rather negative for today's trade, and may stem any type of broader market advance.

 
 
  Jonathan Levinson   7/9/2004,  10:38:27 AM
Jim examines the bait: Link

 
 
  Jonathan Levinson   7/9/2004,  10:35:37 AM
The short cycle upphases are overbought on QQQ and the futures, and the dip we're seeing is a wavelet downphase just ending. Soon, within the hour, I expect to see those wavelets begin failing at lower highs in their upphases to signal the start of the short cycle downphase. So far this has been an unimpressive 30 min cycle upphase, despite the higher low from which it launched.

 
 
  Linda Piazza   7/9/2004,  10:33:05 AM
TRIN continues to rise, although it's still not exactly in bearish territory. Meanwhile, if you study the OEX's two- and three-minute charts, you can see a rough continuation-form reverse H&S forming at the top of this morning's climb. At least, if you're bullish, that's what you see. If you're in a bearish frame of mind, you're squinting and seeing a possible diamond shape at the top of the climb (first broadening and then narrowing), a potentially bearish formation. Oops. The bearish interpretation just got the nod as I typed, with the OEX dipping below the right-shoulder level and dipping down to test the head level.

 
 
  Linda Piazza   7/9/2004,  10:24:54 AM
Is today one of those days when the direction is going to be absolutely clear at the end of the day, and we're all going to kick ourselves for not realizing that direction at the beginning of the day? Perhaps so, but I'm frankly uncertain here. The OEX hovers near its 200-dma. The advdec line is above yesterday's range, but it's been declining this morning. The TRIN's is bullish, but it's got a slight rise, too. Crude futures appeared to drop out of a rising wedge form on the intraday charts, although it was still above $40/barrel 30 minutes ago.

 
 
  Jeff Bailey   7/9/2004,  10:22:58 AM
Whole Foods Market (WFMI) $91.85 -2.34% ... Jeff: can you find any news on wfmi?? Big gap down. thanks

UBS downgraded to "reduce" from "neutral"

I will note that WFMI's PnF chart has neared its current bullish vertical count of $98 recently. Link

 
 
  Jonathan Levinson   7/9/2004,  10:22:17 AM
Not a lot of weakness this morning, but the bounce isn't looking particularly impulsive either. Recall that this is occurring on the bulls' nickel- a short cycle upphase converting the 30 min cycle upward as well. The current sideways action is running the clock and burning off the oversold extreme on the intraday cycles.

 
 
  Jeff Bailey   7/9/2004,  10:21:04 AM
10:20 Market Watch at this Link

 
 
  Jeff Bailey   7/9/2004,  10:14:03 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

 
 
  Jonathan Levinson   7/9/2004,  10:13:15 AM
The 30 min channel range has climbed to 35.51 - 36.10 QQQ.

 
 
  Linda Piazza   7/9/2004,  10:13:11 AM
Keltner channels still haven't quite settled down after this morning's zoom higher, but nearby support and resistance appear to be about equally weighted with support from 542.55-542.70 and resistance from 543.17-543.43.

 
 
  Linda Piazza   7/9/2004,  10:04:08 AM
If it weren't for the TRIN levels, this would be looking like a perfect setup for a rollover--a rise through the 200-dma and then a possible (hasn't happened yet) rollover back through it again. However, that TRIN level has me worried about believing in such a possibility.

 
 
  Jonathan Levinson   7/9/2004,  10:01:08 AM
That was a big upside surprise against the .5% expected. The Fed tipped us off again.

10:00am U.S. MAY WHOLESALE INVENTORY-SALES RATIO RISES TO 1.13

 
 
  Linda Piazza   7/9/2004,  10:00:26 AM
The OEX eases back toward its 200-dma, but so far holds above it.

 
 
  Jonathan Levinson   7/9/2004,  10:00:23 AM
10:00am U.S. MAY WHOLESALE INVENTORIES UP 1.2% VS. 0.2% APRIL

 
 
  Linda Piazza   7/9/2004,  9:59:06 AM
The BIX tests its 100-dma again this morning. (So what else is new, right?) It's easing beneath that average right now, but is still within the now-almost-two-month-long consolidation range that it began forming in middle-to-late May.

 
 
  Jonathan Levinson   7/9/2004,  9:58:17 AM
I agree with Keene- better to buy at support of a higher low that risk buying near a short term (wavelet or short cycle) top.

 
 
  Jonathan Levinson   7/9/2004,  9:56:58 AM
A 3.25B weekend repo just announced effects a net drain of 5.75B. My guess is that wholesale inventories will meet or exceed expectations in 5 minutes and that the control room is taking the opportunity to recall some repo money.

 
 
  Linda Piazza   7/9/2004,  9:52:30 AM
The TRAN attempts a bounce from just above its 30-dma, with that average having risen to 3067.51, about ten points below yesterday's low. The TRAN approaches resistance at 3100-3120, or at least it approached that level earlier today, with the day's high at 3093.05. The TRAN has approached its first rollover point today, then, and has pulled back, although the pullback is small as yet. I don't have a conclusion as yet as to which direction the TRAN might go, but advise continuing to watch crude futures for guidance.

 
 
  Jonathan Levinson   7/9/2004,  9:52:09 AM
The Fed has 9B in overnight repos expiring today- the announcement is due any minute. Recall that wholesale inventories are due at 10AM as well.

 
 
  Jeff Bailey   7/9/2004,  9:49:00 AM
Taser Intl. (TASR) $40.76 +3.4% .... updated bar chart/strategy of covered call at this Link

Here's the PnF chart of TASR at this Link

 
 
  Jonathan Levinson   7/9/2004,  9:47:49 AM
Gold is down 80 cents to 407.50, with HUI down .83% at 199.27 and XAU -.85% at 90.56. Two days ago I noted 200 and 90 as HUI and XAU resistance here- make it 200 and 91.

 
 
  Linda Piazza   7/9/2004,  9:47:19 AM
Remember that we still have economic data due today, and many markets approach key resistance levels, so that they could be positioning themselves for a rollover after that release or a push through resistance levels after that release. Be careful. So far, the OEX pullback during this first retracement period has been tepid and so far the TRIN and advdec line appear more favorable to bulls, but that's just so far.

 
 
  Jonathan Levinson   7/9/2004,  9:46:08 AM
Session high for MSFT here as the futures roll over from 30 min channel resistance .

 
 
  Linda Piazza   7/9/2004,  9:45:17 AM
The SOX moves up strongly, and is currently above the highs of the previous two days. It will soon challenge from below the former supporting trendline from the May low, with that trendline now crossing at about 455.60, and with the SOX at 451.54 as I type. The gains up to the currently level have been relatively easy, but will become more difficult now.

 
 
  Linda Piazza   7/9/2004,  9:43:04 AM
The OEX currently challenges the mid-channel level on the Keltner charts, with this being a level at which we'd normally expect at least a temporary pullback. We're moving into the first retracement period of the day, too. It's the level of that retracement, if any, that will tell us about early market strength or weakness.

 
 
  Jonathan Levinson   7/9/2004,  9:41:36 AM
The sell volume that has just come in dwarfs all of the volume bars since noon yesterday, and so it appears that someone big was waiting for the first pop to sell into. The wavelet and now the TRIX are looking very toppy against the young short cycle upphase.

 
 
  Linda Piazza   7/9/2004,  9:39:38 AM
No sign of a rollover yet, and the TRIN level warns bears to be careful of assuming that there will be a rollover.

 
 
  Jonathan Levinson   7/9/2004,  9:35:10 AM
Session highs for NQ and QQQ here. The wavelet oscillator is trending in overbought.

 
 
  Linda Piazza   7/9/2004,  9:33:35 AM
The OEX's 15-minute 100/130-ema's are at 544.69 and 545.49.

 
 
  Jonathan Levinson   7/9/2004,  9:33:33 AM
The wavelet downphase imminent on QQQ is starting here as predicted by the upside Keltner violation. Look for short cycle support at 35.60, above 30 min support of 35.40. A bounce above 35.60 will confirm a new short cycle upphase and suggest a test of 36 resistance.

 
 
  Jeff Bailey   7/9/2004,  9:33:18 AM
Swing trade put option close alert .... Close out the DIA July $100 puts for $0.15 bid here.

 
 
  Linda Piazza   7/9/2004,  9:32:35 AM
For reference, the OEX's 200-sma is at 542.35.

 
 
  Linda Piazza   7/9/2004,  9:31:12 AM
The OEX opens and heads back toward its 200-dma and the 15-minute 100/130-ema's.

 
 
  Jim Brown   7/9/2004,  9:28:56 AM
Oil prices spiking above $40 again, now $40.30

 
 
  Jonathan Levinson   7/9/2004,  9:27:02 AM
GE has pulled down to 32.08, now up .38 from last night's close.

 
 
  Jim Brown   7/9/2004,  9:26:12 AM
UIS is warning

 
 
  Jonathan Levinson   7/9/2004,  9:25:13 AM
The current bounce is pulling the short cycle back up into another upphase, but price is currently above the short cycle channel, confirmed by the overbought wavelet oscillator. Price needs to hold up here past the cash open to permit the short cycle channels to catch up to the bounce in price. QQQ has resistance at 35.90, and every 5 points to 36.10.

 
 
  Jonathan Levinson   7/9/2004,  9:06:34 AM
Bonds have softened slightly, with gold and silver pulling back, gold down 1.5 and silver up .031. Gold continues to struggle with 408 resistance on the way to 412-414.

 
 
  Jonathan Levinson   7/9/2004,  9:03:20 AM
QQQ has a 30 min channel range between 35.44 and 36 currently.

 
 
  Linda Piazza   7/9/2004,  8:56:38 AM
Futures are up this morning, as Jonathan has already commented, suggesting that we'll have a bounce first thing this morning. If so, watch the key levels I mentioned in my 00:21 post about the OEX for a possible rollover or a continued bounce. Markets are due for a relief rally, but I'm not certain of the duration of that rally. Keep an eye on the SOX, balanced at the midline support of the descending regression channel in which it's traded this year. Also watch crude prices. It's difficult to believe in the sustainability of a rally if crude prices continue to rise, pressuring equities. The belief among many has been that higher crude prices were temporary, and a continued rise could threaten that belief. Be aware of the economic release at 10:00, too, as you make early-morning decisions.

 
 
  Jonathan Levinson   7/9/2004,  8:52:54 AM
Slight weakness in bonds has the yield (TNX) up .4 bps to 4.474%.

 
 
  Jonathan Levinson   7/9/2004,  8:15:28 AM
NEW YORK (CBS.MW) - General Electric reported second-quarter net income of $3.9 billion, or 38 cents a share, in line with the same period a year ago, but above the average analyst estimate compiled by Thomson First Call of 37 cents a share. Total revenue rose 11 percent to $37.04 billion, topping analyst forecasts of $35.55 billion, boosted by 14 percent growth in sales of goods and services. The diversified industrials conglomerate's chairman Jeff Immelt said, "This economy is the best we've seen in years," as orders rose 13 percent, with services orders growing 29 percent. Looking ahead, the company expects 2004 earnings of $1.55 to $1.60 a share, surrounding current analyst projections of $1.57 a share, and remains "confident" of 10 to 15 percent earnings growth in 2005. The stock, a component of the Dow industrials, closed Thursday down 32 cents at $31.70.

GE is currently bidding 32.30, up 60 cents.

 
 
  Jonathan Levinson   7/9/2004,  8:03:10 AM
We await wholesale inventories at 10AM, est. +.5% after last month's .1% decline.

 
 
  Jonathan Levinson   7/9/2004,  8:02:13 AM
Equities are bouncing overnight, with ES up 3.25 to 1114, NQ up 6.50 to 1445 and YM up 31 to 10206. QQQ is up 14 cents to 35.84. Gold is flat at 408.30, silver up 9 cents to 6.52, and bonds just below flat at 110.4531.

 
 
  Linda Piazza   7/9/2004,  7:03:36 AM
Good morning. Ahead of this weekend's elections, the Nikkei opened in the red, but soon climbed into positive territory and stayed there the rest of the day. The Nikkei closed higher by 101.30 points or 0.89%, at 11,423.53. Banks headed higher in early trading on speculation that two, Sumitomo Trust and UFJ Trust, could merge by this fall, a year sooner than had been expected. Although the government will soon sell 138.2 million shares of Bank of Yokohama's shares, that bank joined other financial stocks in posting gains. With crude futures rising above $40/barrel again in Thursday's session, export-related stocks declined in early trading, but many tech exporters had gained by the end of the session. Some chip-related stocks gained, with an industry group forecasting that Japan's sales of semi-manufacturing equipment and LCD panels might hit its height in the current fiscal year rather than next fiscal year. There might have been a hint of short-covering ahead of the election, however, as some of the most beaten-down stocks during the last five days of declines tended to be among the gainers.

Other Asian bourses turned in mixed performances, but more gained than lost. The Taiwan Weighted gained 1.13%, and South Korea's Kospi climbed 0.51%. Singapore's Straits Times was flat, up 0.08%, and Hong Kong's Hang Seng gained 0.68%. In Hong Kong, shares of China's largest chipmaker, Semiconductor Manufacturing International, was a victim of the latest round of US/Chinese bargaining over trade issues, dropping 2.4%. As the U.S. had requested, China will stop giving tax rebates to new Chinese chipmakers and will begin withdrawing the rebates to those already receiving them. China's Shanghai Composite dropped 0.63%.

Most European bourses currently slip lower as warnings by companies related to consumer demand heighten concerns that consumer demand is still not picking up. ECB President Trichet also commented on the higher oil prices, saying that a continuation of those higher prices could send the eurozone's inflation higher than the desired 2%.

As of this writing, the FTSE 100 is lower by 0.60 points or 0.01%, at 4,380.50. The CAC 40 is lower by 9.20 points or 0.25%, at 3,661.21. The DAX is lower by 15.30 points or 0.39%, at 3,919.18.

 
 
  Linda Piazza   7/8/2004,  12:21:49 AM
OEX Notes: Thursday, the OEX opened below the support of its bear flag formation, but not below the 200-sma, as the futures had suggested it might do. The OEX moved up high enough to retest the 15-minute 100/130-ema's and the broken support of that flag, levels I mentioned as necessary to watch in yesterday's recap, and then rolled over, closing below the 200-sma for the first time since its May tests of that average. Thursday, the OEX closed below its 200-week ema as well, an average that had temporarily supported it Wednesday. By the close, the OEX had created a breakout signal on the five-minute Keltner chart, gapping down in its last five minutes to confirm a continuation-form H&S on its five-minute chart. I don't always trust these continuation-form H&S's, particularly when they're confirmed in the last few minutes of trading, but this time, the H&S was confirmed by a MACD H&S formation, too. We can't completely discount that formation.

These market developments were accompanied by a rise in crude futures above $40.00 again and a cratering of the TRAN. It's now been eight trading days since the TRAN topped its January 4, 2001 closing high of 3145.65, creating a new swing high for the TRAN, and Dow is still far from confirming that signal by moving above its May18, 2001 closing high of 11,301.70. We can begin to see the Dow's failure to confirm that new TRAN closing high as bearish divergence, unless the Dow performs some remarkable feats over the next few days.

What's next? Perhaps in what Jeff might call a cheater's retracement bracket, a new retracement bracket that took into account June's movement, too, the OEX can be seen to be traveling down through a bracket drawn on the weekly chart. It ended Thursday at the midline support of that descending retracement bracket, and also at the 19.1% retracement of the rally off last year's low. Weekly stochastics and RSI suggest that the OEX could travel to the bottom of that retracement bracket again, but the close at the midline level suggests that the OEX could also try to steady or even bounce ahead of any roll down, if that should occur. A look at the SOX's chart shows it spending the last couple of days balancing along the midline support of a similar descending regression channel.

That suggests to me that both the SOX and the OEX are perched again on the edge of a cliff, ready to find support and bounce or plunge down into the canyon of their descending regression channels. Friday morning, pay attention to crude futures. I wouldn't be surprised to see the OEX bounce back up to retest the neckline of its continuation-form H&S on its intraday charts, perhaps up to 540.90-541.40. If the OEX can sustain levels above 541.40 or preferably above 542.30, it may be able to turn up its smallest Keltner channel again and try for a retest of the mid-channel level. The 200-sma lies at 542.24, however, so that level could prove difficult to surmount. I could also see the OEX plunging straight from the open, but if it does so, watch out for possible support at the 200-ema at 538.20. If already in a bearish play, I'd have a plan in mind for how I wanted to handle a test of the 200-ema. I'd also be especially attentive of the SPX's approach to its 200-sma at 1100.70, if that should happen, as it was the SPX's touches of that average in May that provided the May bounces across the indices. Since the SPX bounced up into a lower high, the presumption now is that the SPX's 200-sma may eventually fail this time, but anyone thinking about the nice gains they made buying that support back in May could be willing to give it a try again.

So, tomorrow, I could see an immediate bounce attempt, perhaps likely to fail near the 200-sma. I could also see an immediate drop, likely to bounce at least tepidly from the 200-ema, especially if the SPX is hitting its 200-sma concurrently. If considering playing that potential bounce by going long, I'd be extremely careful with my stops, ready to bail at any moment, but that would be a scary play right now. Bears can hope for an early bounce up to the 200-sma and a rollover from there, but should be just about as careful with their positions.

 
 
  Jeff Bailey   7/8/2004,  12:21:30 AM
Pivot Matrix for tomorrow at this Link

Lots of program premiums (buy and sell) generated today, but SPX couldn't quite get a trade at MONTHLY S1. So, I'm thinking more bearish bias near-term below that level.

 
 
  OI Technical Staff   7/8/2004,  12:21:18 AM
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