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  Jeff Bailey   7/13/200,  8:37:11 PM
Major economic reports table at this Link

INTC would be considered to be toward the Wholesale side of the economy. With INTC laying out the "good" (flash memory) portions of its business, and the "not so good" (processor) parts of its business and inventory issues at that end, there will be GREAT focus on Thursday's Business Inventory/Sales reports for May.

Also... continue to understand IMPORTANCE of economic cycle, the IMPACT the rise in Treasury yields have had on Wholesale/Business sales. I've tried to color code the 10-year YIELD with Green = Friendly, Pink = Getting a little "hot", Red = On Fire! and Blue = Whew! Cooling off a bit.

What's the Feds TWO major points of focus? The ECONOMY and INFLATIONs impact on the sustainability of an economy!

Watch your bonds! That includes JUNK BONDS!!!!!

This week's PPI and CPI reports also important as it relates to the bid we find in our "junk bond" Pacholder High Yield (PHF)

Intel just reported results for its April, May and June quarter.

Jim Brown also made note of today's Treasury Budget surplus of $19.1 billion, which I updated in the table.

 
 
  Jeff Bailey   7/13/200,  6:54:24 PM
Excellent commentary/analysis from Intel's Andy Bryant on CNBC right now.

INTC's stock looks to be a "dead money" trade for the next quarter.

Many of INTCs inventory problems were management derived and reminds me very much of brief discussion in 05/23/04 Ask the Analyst column Link , where we talked a little about inventory management (see HPQ in that commentary).

OK.... now we can take some of Mr. Bryant's discussion regarding inventory issues, but I think carry those forward to a more macro level and economy.

 
 
  Jeff Bailey   7/13/200,  6:18:44 PM
Closing Internals at this Link

 
 
  Jeff Bailey   7/13/200,  5:48:54 PM
Pivot Matrix for tomorrow at this Link

 
 
  Jeff Bailey   7/13/200,  5:21:14 PM
QQQ ... $35.25 .... intra-day chart + extended hours with addition of tomorrow's DAILY pivot levels. Link

Thoughts for those naked the $35 puts and short the underlying QQQ.

 
 
  Jonathan Levinson   7/13/200,  4:45:50 PM
QQQ is testing lower 30 min support here at 35.25. This would be the level from which I would expect a bounce, but the sellers look serious- dropping to 35.20 as I type.

 
 
  Jeff Bailey   7/13/200,  4:35:41 PM
Semiconductor HOLDRs (SMH) $34.68 +0.02% .... trades $34.02 in extended hours.

 
 
  Jeff Bailey   7/13/200,  4:27:30 PM
QQQ .... Tomorrow's DAILY Pivot levels are as follows...

S2 35.23 , S1 35.39, P = 35.60 , R1 35.76 , R2 35.97.

 
 
  Jonathan Levinson   7/13/200,  4:26:38 PM
Session low for INTC here at 25.50, down 2.82%.

 
 
  Jonathan Levinson   7/13/200,  4:24:50 PM
Updated QQQ Link heading for declining 60 min support at 35.34.

 
 
  Jeff Bailey   7/13/200,  4:24:17 PM
QQQ $35.55 -0.14% .... after-hours low has been $35.35. Trades $35.40 here.

 
 
  Jeff Bailey   7/13/200,  4:21:40 PM
Cisco Systems (CSCO) $22.14 -0.67% .... moves up at $22.35 on JNPR's quarter.

 
 
  Jonathan Levinson   7/13/200,  4:20:22 PM
The 60 min keltner break lasted for a couple of ticks, gave a reversl signal and prompty collapsed to the current 35.48.

 
 
  Jeff Bailey   7/13/200,  4:19:04 PM
Intel (INTC) .... $26.14 -0.38% .... trading $25.89 here.

 
 
  Jonathan Levinson   7/13/200,  4:17:46 PM
QQQ at this Link

 
 
  Jeff Bailey   7/13/200,  4:17:03 PM
OEX $544.00 +0.05% .... didn't quite get a trade at 545.00 today. Closed juuuuuust above correlative WEEKLY S1 and MONTHLY S1.

Can thank the BIX.X 350.25 +0.57% for that.

 
 
  Jonathan Levinson   7/13/200,  4:16:52 PM
QQQ has just spiked to the top of the 30 min range, pressing toward day high.

 
 
  Jeff Bailey   7/13/200,  4:15:23 PM
QQQ $35.57 -0.08% ... upated chart with WEEKLY/MONTHLY at this Link

 
 
  Jeff Bailey   7/13/200,  4:10:04 PM
Current OPEN MM profiles at this Link

QQQ still trading regular session until 04:15 PM EDT.

 
 
  Jim Brown   7/13/200,  4:08:04 PM
Alert - Earnings after the close:

AMB est 0.18, actual = +0.22 beat
YUM est 0.52, actual = +0.55 beat
INTC est 0.27, actual = +0.27 rev light
JNPR est 0.04, actual = +0.08
CAMP est 0.08, actual = +0.07 miss

DSS warning on revenues
Intel capital spending is unchanged
Intel gross margin estimates fell to 60% from 62% for all 2004.
Intel tax rate fell 1% for the quarter and helped their numbers.
JNPR announcing a share buy back program.

 
 
  Jonathan Levinson   7/13/200,  4:05:10 PM
Session low for MSFT here.

 
 
  Jeff Bailey   7/13/200,  4:01:51 PM
QQQ $35.55 -0.14% ..... INTC just ahead.

 
 
  Jonathan Levinson   7/13/200,  4:00:52 PM
Tarzan's Escaped Tiger Eludes Fla. Search 13 July 2004, 3:57pm ET , AP Online Link

 
 
  Jeff Bailey   7/13/200,  3:59:52 PM
Stillwater Mining (SWC) $15.50 +0.38% .... presses positive to the close.

U.S. Dollar Index (dx00y) 87.89 +0.57% (30-minute delayed) .... slips back below its WEEKLY 38.2% pivot retracment.

 
 
  Jonathan Levinson   7/13/200,  3:58:33 PM
True, Keene. And given the "volatile" food and energy components, the squeeze has never been tighter :)

 
 
  Linda Piazza   7/13/200,  3:58:02 PM
The OEX's five-minute pattern shows the index settling into a triangle today. It's not quite a symmetrical triangle, not quite a bullish right triangle. The top descends, but not as steeply as the ascending trendline ascends. Does that make it a neutral triangle with a slight bullish bias? Not quite. With the exception of the candle shadow that spiked higher at about 2:20, the formation could also be drawn as a bearish rising wedge. As is true of so many conflicting formations lately, choose your bias and choose your interpretation.

 
 
  Jeff Bailey   7/13/200,  3:56:30 PM
Eyeballing a short/put for tomorrow ... in shares of Avaya (AV) $14.63 -1.87%. Link

I was bullish this name last year when SLNK $9.54 -21.99% surged on strong sales of its telephony products.

With SLNK Link getting whacked today, AV gets added to my "suspect" list.

We know that ELX $11.24 -0.17% Link hasn't been a pillar of stength.

 
 
  Jonathan Levinson   7/13/200,  3:54:53 PM
QQQ is just flapping in the breeze here, and even INTC is near unchanged. Current 30 and 60 min support are at 35.35 QQQ, resistance down to 35.72 (30 min) and 35.77 (60 min).

 
 
  Linda Piazza   7/13/200,  3:45:48 PM
If that TRAN pattern is a reverse H&S, then the TRAN needs to round up toward the neckline area soon. Actually, the pattern looks like a head-and-wings pattern, with downward spikes at each wing tip. (Note to those new to technical analysis: there isn't a head-and-wings pattern, as far as I know.)

 
 
  Jonathan Levinson   7/13/200,  3:44:28 PM
(REUTERS) MCTEER-US INFLATION TO COME DOWN "ONE WAY OR THE OTHER", ALONE OR WITH FED HELP REUTERS

He thought so too, back when he gave that Forbes interview in which he bloviated about his ability to keep gold below 375, if memory serves. Never ignore the Fed, though.

 
 
  Linda Piazza   7/13/200,  3:35:27 PM
I would advise those holding front-month options, especially those holding OTM options, to begin making plans soon as to whether they'll hold over the Intel earnings or not. The indices and the indicators aren't going to be any use to you in making that decision, unfortunately, unless something happens in the last thirty minutes of trading. You're going to have to make that decision on blind faith, so decide if you feel comfortable with that premise. Some with bigger accounts than we have might be making their own plans, and there might be a scramble at the end of the day, so take the time to make your account-appropriate plans now.

 
 
  Jonathan Levinson   7/13/200,  3:28:29 PM
QQQ is 5 cents above the session low. Both prior probes of that level resulted in doji spikes back up, but so far this is the slowest decline from the lowest level of the day. A break below 35.43 should see a quick move to 35.35, current 60 min channel support.

 
 
  Linda Piazza   7/13/200,  3:26:07 PM
Neither the SOX nor the GSO has been a source of strength for the Nasdaq today, with the GSO holding near the bottom of the recent possible "b" distribution pattern and with the SOX's daily candle body staying beneath 440.

 
 
  Jonathan Levinson   7/13/200,  3:21:42 PM
With the plethora of PhD's in the Eccles Building, one would guess that "possible economic impact" of high energy prices would be something that could be anticipated rather than watched. I keep getting stumped as to how the economy can even "muddle through" to use Mauldin's phrase with energy prices high.

 
 
  Jim Brown   7/13/200,  3:19:07 PM
McTeer saying GDP to be around 4% and the Fed is watching energy prices for possible economic impact. Sure, do you think they ask the limo driver every day what they paid for gas on their last fillup?

 
 
  Jonathan Levinson   7/13/200,  3:15:09 PM
For QQQ, we have the 30 and 60 minute channels in an uncertain downphase, with the short cycles perfectly chopped up and unreadable. Support is down to 35.35, resistance 35.75-80 (combined 30 and 60 min channel levels). INTC is sure to roil the markets, and while the 60 min and daily cycle bias is to the downside, I'm uncertain of either direction after today's chop.

 
 
  Linda Piazza   7/13/200,  3:14:46 PM
Is the TRAN trying to form a reverse H&S at the bottom of its decline, with that formation visible on the 15-minute chart? If it is, it hasn't yet finished rounding up into the right shoulder. I see a rougher counterpart on the Dow's 15-minute chart, not nearly as nicely formed and without the bullish divergence as the head was formed.

 
 
  Jonathan Levinson   7/13/200,  3:02:13 PM
Jim's "lucky" comment sums up my feelings about the intraday picture here- it's a perfect mess. Add the uncertainty of earnings announcements after the bell within scam week, and there's every reason why it should be a mess. Other than longer term positions put on based on the longer timeframe signals (such as the daily cycle downphase), there's little to do here but ride it out. Scalps feel very close to pure gambling to me in an environment such as this.

 
 
  Jeff Bailey   7/13/200,  2:57:07 PM
Taser Intl. (TASR) $40.73 -2.02% ... slips to low of session. Lots of action at the July $45 call and $40 puts.

July's "Max Pain" is $40. ($5 increments) as noted previously.

For my currently profiled calls, would love nothing more than a Friday close at $39.99, then TASR rally to $100 by December expiration. Needs to trade $46 before it gets to $100 though.

 
 
  James Brown   7/13/200,  2:55:12 PM
Fastenal Co (FAST) is up 9.6%, breaking through resistance at $57.50 and hitting new highs after beating estimates by 5 cents with Q2 profits of 46 cents per share. Revenues jumped almost 25% to $310.1 million which was also above estimates.

 
 
  Linda Piazza   7/13/200,  2:51:04 PM
The BIX is above 350 this afternoon, but not yet above the 6/24 high of 351.98. So far, it's still trading within the consolidation pattern that it began building in late May. The difference this time is that daily 21(3)3 stochastics turn up as the BIX approaches the upper end of that trading range. Still, until it's confirmed a breakout by a move above that June high, be cautious. During January-March, the BIX developed horizontal resistance up to 352.60 or so. Balancing those cautions are the fact that the BIX retraced an almost perfect 38.2% of its 2003 rally when it fell to May's low. It's balancing now above the 19.1% retracement. This sign of strength suggests more strength, but it must be confirmed first by a push above the June high and then to a new high. Jeff may have covered some of this already in his intraday update.

 
 
  Jeff Bailey   7/13/200,  2:50:25 PM
PHF vs. NWX.X ... follow up to 14:34:45 and 10:32 post at this Link

 
 
  Jonathan Levinson   7/13/200,  2:49:09 PM
And back again. The short cycle Keltner channel is widening in response to these sudden moves, with resistance up to 35.65 and support down to 35.46.

 
 
  James Brown   7/13/200,  2:47:49 PM
Software bears may want to take another look at Veritas (VRTS). The stock crumbled six days ago under an earnings warning. The dead cat bounce has brought it back toward the bottom of the gap (which is typically resistance) and now VRTS is failing again.

 
 
  Jonathan Levinson   7/13/200,  2:44:34 PM
Looks like even the 'bots are getting impatient with this intraday mess, pushing to the downside and now back up.

 
 
  James Brown   7/13/200,  2:43:54 PM
Caution ahead of Intel's earnings and disappointing comments from KLA-Tencor (KLAC) have undermined the early bounce in chip stocks. KLAC is down 3.45%, breaking support at $44.00 level while failing at its simple 50-dma. KLAC's management spoke at the SEMICON West tradeshow today, the largest in the chip equipment industry. KLAC said June orders would be flat.

 
 
  Linda Piazza   7/13/200,  2:42:55 PM
While the OEX is clinging to the support offered by the 15-minute 100/130-ema's, it's stuck beneath the 30-minute versions, with those at 544.74 and 545.61, respectively.

 
 
  James Brown   7/13/200,  2:37:08 PM
Antivirus software maker Symantec (SYMC) has finally produced a new "sell" signal on its MACD indicator. Shares are slipping lower toward support at the $40.00 mark and its simple 200-dma. Look for earnings on July 21st.

 
 
  Jonathan Levinson   7/13/200,  2:36:52 PM
Session high for GE here.

 
 
  James Brown   7/13/200,  2:35:35 PM
With most of the bad news in the sector already out shares of Apollo Group (APOL) looks like a tempting long play if it can breakout over its 40 & 50-dma's near $91.50. Its bullish P&F chart points to a $99 target.

 
 
  Jeff Bailey   7/13/200,  2:34:45 PM
Junk bonds and networkers ... Jeff, your 10:32 post on PHF and the netwokers has me trying to make the connection with junk bonds. Would you explain why you feel this to be a good test for the bonds.

It has been my thought for about 12 years, that on the scale of RISK, junk bonds are the riskiest bond asset class. Tend to perform better in growing economy, low inflation. IF junk bond do well, then broader equity do well.

In relation to networkers (NWX.X), NWX.X failed the rally at its 200-day SMA, now its time for the "junk bond" to prove my scenario for a growing economy, low inflation.

Why did PHF fall from $10 to $8? Was it slow economy? Or... was it that bearish scenario of "hyper inflation" discussed in the 05/06/04 Index Trader Wrap? Link

In the May 14 03:15 PM EDT, I thought PHF gave us the clue, and we faded the "hyperinflation" theory. Link

My PHF and NWX.X observation is PURELY technical in nature. CAN the PHF and junk bonds continue higher? Give hint as they have in the past of growing economy, lower inflation, and friendly fed?

What are the banks doing? What was the BEARISH scenario on May 6?

 
 
  Linda Piazza   7/13/200,  2:34:03 PM
The OEX isn't the only index trapped between its 200-sma and its 50-dma. The Russell 2000 is another one. The Dow was, but is edging above its 50-dma, but remaining close enough that we would consider it still testing that average.

 
 
  Linda Piazza   7/13/200,  2:27:58 PM
The OEX attempted a breakout above the descending regression channel in which it's traded since Monday afternoon, but was quickly knocked back.

 
 
  Jonathan Levinson   7/13/200,  2:25:41 PM
Current short cycle intraday view of QQQ at this Link . Note that short cycle resistance has advanced to 35.65, but still no upturn in the wider 30 min channel (orange 35 period Keltner bands).

 
 
  Jeff Bailey   7/13/200,  2:18:52 PM
QQQ $35.58 -0.05% .... intra-day 15-minute interval chart, with that conventional retracement I've shown. Still keeping trends on chart, where it really gives no clear picture. Also review where I'm at in NAKED PUTS and QQQ short. Link

While I would NOT be interested in putting on a strangle in the QQQ, due to the more fractional price moves it has offered, it would be interesting and perhaps informative to set up a $35 $36 strangle using AUGUST prices right in here. Try and get a feel for what the market makers are going to do tomorrow morning based on reaction to INTC. Similar to what we did with YHOO.

 
 
  Jonathan Levinson   7/13/200,  2:18:04 PM
35.60 QQQ continues to hold back the advance, but the short cycle channels are tilting higher here. Unless we see the wavelet downphase just commencing break the session lows in the next half hour or so, the following bounce should give us a test of the prior spike high at 35.70. It's a mixed bag, but the weakness of today's 30 min cycle upphase is bearish overall. The shorter timeframes are calling for a bounce, but the longer timeframes, from 30 min on up to daily have little to offer bulls yet.

 
 
  Linda Piazza   7/13/200,  2:17:49 PM
Since late yesterday afternoon, the OEX has been establishing a slightly descending regression channel about a point and a half wide.

 
 
  Jonathan Levinson   7/13/200,  2:10:52 PM
07/13/2004 14:10 *DJ McTeer: Not Concerned About Dollar; Let Markets Work

 
 
  Jeff Bailey   7/13/200,  2:01:21 PM
Per Jonathan's 01:07 ... will also note today's QQQ DAILY R1 at $35.77.

QQQ session high was $35.81, where highest 5-minute close found today was $35.79.

I still want to hang in here with that QQQ swing trade short. Just think we get a gap lower, then reversal back higher tomorrow. Will see, but use Jonathan's comment and DAILY R1 as a test.

Darned BIX.X is strong though.

 
 
  Jim Brown   7/13/200,  2:00:22 PM
June monthly Treasury Budget = $19.1B (est $16B, last -$62.5B)

 
 
  Jonathan Levinson   7/13/200,  1:58:41 PM
The current wavelet upphase shows a slight bullish divergence again, and there's another attempt here to turn the short cycles back up. A break above 35.60 QQQ should do it, and unlike on the previous attempt, the 30 min channel is almost perfectly flat. This should be a more successful bounce attempt, but bulls won't have a chance until 35.60 falls.

 
 
  Linda Piazza   7/13/200,  1:50:56 PM
I'm doing what I'm sure every writer on this page and every trader out there is doing: scanning chart after chart, looking for the clue that's going to tell us when this consolidation period will stop and what direction markets will head. I don't see it yet. The OEX's current pattern on the daily chart looks like a measured distribution pattern, but stochastics are sure trying to hook up and get something more bullish started. MACD is in the opposite mood, attempting to turn down through the signal line. Meanwhile, the OEX trades between the 50-dma and the 200-sma, and just above the 15-minute 100/130-ema's.

 
 
  Jonathan Levinson   7/13/200,  1:40:11 PM
Gold isn't reacting to the selloff in equities here, holding above 402 at 402.50 currently, even as HUI and XAU chug along just above session lows.

 
 
  Jonathan Levinson   7/13/200,  1:37:46 PM
QQQ 30 min channel support is down to 35.35 here, with the lower 30 min band below the 60 min channel bottom at 35.40. The short cycles are back to oversold and on the verge of trending at that extreme.

 
 
  Linda Piazza   7/13/200,  1:34:03 PM
The OEX is doing its best to settle into an equilibrium position on both the five- and fifteen-minute Keltner charts. This doesn't surprise me. See my 9:25 post for my warnings about the prolonged consolidation the last time the OEX tested its 200-sma. While I'd hoped that we might see something different today, I wouldn't be surprised to see another couple of days of consolidation, at least, complete late in the consolidation cycle with wider swings that constitute apparent breakouts but that are soon reversed. That's if the OEX follows May's pattern. It may not, but traders should be forewarned and make appropriate plans as to whether to enter plays and how long to stay in. I have no desire to be cut up in a choppy market, and I'm sure you don't, either.

 
 
  Jonathan Levinson   7/13/200,  1:26:48 PM
The trouble with moves like this is that they run counter to and overwhelm the cycle setup. The short cycle was in an upphase when that sell program hit. However, it signals that there's more to the 30 minute cycle rollover than was previously apparent. Despite the potentially bullish setup on the 30 min chart, I'd be very hesitant to anticipate it with bullish plays so long as the stochastics on the 30 min chart continue to point south.

 
 
  Linda Piazza   7/13/200,  1:15:32 PM
What can be said about the OEX's trading today? It's still rattling around between the 200-sma's support and the 50-dma's resistance. That's about it.

 
 
  Jonathan Levinson   7/13/200,  1:15:28 PM
Steep selloff here on QQQ and NQ, testing 60 min channel support and bouncing off the bottom here.

 
 
  Jonathan Levinson   7/13/200,  1:10:09 PM
QQQ just got whached for 10 cents here in a single 100 tick candle.

 
 
  Jonathan Levinson   7/13/200,  1:07:36 PM
Quick and dirty 30 min chart of the QQQ at this Link . Note the bullish divergences set up. A break above 35.70 would be the first test of declining upper resistance and would set up a potential flag or even reverse head and shoulders breakout (look for a break of 35.80 to kick off this latter). The bulls need to hold the current day lows, however, to avoid the imminent 30 min downphase from confirming on the Macd.

 
 
  Linda Piazza   7/13/200,  1:05:46 PM
How about some P&F targets for the indices? SPX, 1000; OEX: 492, although there's a bullish support line at 500; Dow, 11,600; NDX, 1310, although there's a bullish support line at 1410; Russell 2000, 660, although a trade at 555 will produce a new sell signal; Nasdaq, 1800; TRAN, 4050; SOX, 412.

 
 
  James Brown   7/13/200,  1:02:09 PM
Crossing the headlines about 15 minutes ago... an "associate" of Bin Laden surrenders in Saudi Arabia. -CNN

 
 
  James Brown   7/13/200,  1:00:41 PM
FuelCell Energy (FCEL) is up 10.9% to $10.57 after First Albany upgraded the stock from a "neutral" to a "buy" with a $15 target.

There is resistance at the $11.00 level but FCEL also has overhead resistance is at the $12.00 level.

 
 
  Jeff Bailey   7/13/200,  12:59:50 PM
S&P 500 Index (SPX.X) 1,114.87 +0.04% .... updated chart with weekly/monthly Pivot retracement at this Link

With Merrill Lynch just warning us about semiconductor weakness at the lows, I discuss potential trade action for tomorrow, and into end of the week. Also tie in with where the BIX.X is.

As it relates to current OPEN positions in the QQQ. What would be the "perfect" trade tomorrow morning, then into Friday's expiration?

 
 
  Jim Brown   7/13/200,  12:56:39 PM
Earnings after the close:

AMB est 0.18
YUM est 0.52
INTC est 0.27
JNPR est 0.04
CAMP est 0.18
Earnings Wednesday morning:

BAC est 1.74
HDI est 0.75
NYT est 0.50
STN est 0.49
ASML est 0.15
EXAR est 0.03
GENZ est 0.40
MOGN est 0.05

 
 
  Jonathan Levinson   7/13/200,  12:54:42 PM
This pop has given us the first steps of a short cycle upphase targeting 35.80 as a preliminary goal, followed by 60 min channel resistance at 35.85. A failur to reach that first target at the session high would confirm a 30 min cycle downphase, which would then set the stage for a retest and probable violation of the day lows. I have the strange feeling that despite this setup, we'll just see volume trickle off and the indicators become choppy ahead of tonight's INTC report.

 
 
  Linda Piazza   7/13/200,  12:49:44 PM
An OEX move over 544.71 will tend to confirm the OEX push off the 15-minute 100/130-pma's. The 15-minute Keltner resistance has separated somewhat, perhaps allowing for a push above that resistance. Watch for a lower high as a sign that the OEX does not yet have the strength to push above that resistance, separated lines or not. Bulls want to see a higher high, of course. Next Keltner resistance is at 544.36, just touched, with the OEX immediately falling back, and 544.84.

 
 
  Jeff Bailey   7/13/200,  12:46:48 PM
Current OPEN MM profiles .... update at this Link

 
 
  Linda Piazza   7/13/200,  12:46:07 PM
This morning's move lower brought the OEX back down to test the 15-minute 100/130-ema's. The OEX is trying to rise from those averages now, with RSI hooking back up again. MACD has now completed its bearish cross, however, although that bearish cross was completed from above signal and so is less trustworthy. Those averages are now at 543.14 and 543.61, respectively.

 
 
  Jonathan Levinson   7/13/200,  12:44:40 PM
The current bounce is challenging the downtrend from the morning highs on QQQ, and a break above the 7200 tick MA at 35.66 will confirm it. The short cycle oscillators are coming up out of deep oversold territory, and this is where bulls and bears are coming nose-to-nose, with downsloping 30 min channel resistance above at 35.77.

 
 
  Jeff Bailey   7/13/200,  12:37:41 PM
S&P Banks Index (BIX.X) 349.48 +0.35% ... with weekly/monthly pivot retracement at this Link

I've moved my "cheater's trend" to challenge the banks further.

As a note, the SPX currently trades right at the equivalent SOLID RED trend on the BIX.X. BIX.X trying to lead for a rebound, but INTC seems to be focus into tonight's earnings.

With VIX.X 14.48 -3.14%, I've got to think this decline is SELLING the 1,125 puts, and buying the 1,125 calls.

 
 
  James Brown   7/13/200,  12:35:38 PM
IBM continues its oversold bounce with another 1.14% gain today. The stock is struggling with its simple 10-dma as overhead resistance. The move today is fueled by a Morgan Stanley upgrade from "equal weight" to "over weight" and a $100 price target. Remember that IBM reports earnings on Thursday after the closing bell.

 
 
  James Brown   7/13/200,  12:32:00 PM
Soon to IPO Google announced it had purchased privately held Picasa, Inc. for an undisclosed sum. Picasa is a digital photo management company.

It sounds more and more like Google plans to become a full fledged portal with its new Gmail, its suite of blogging tools, and now photo management.

 
 
  James Brown   7/13/200,  12:25:45 PM
Canadian network giant Nortel Networks (NT) has issued a press release with a status update on their "condition" as the company deals with their "complex" financial restatements.

While there were no material developments its President and CEO Bill Owens had some positive comments, "I am also pleased with Nortel Networks market momentum and continue to expect our revenues in 2004 to grow faster than the market (which we now expect will grow in the low to mid single digits)."

This probably accounts for NT's 9.45% rally to $4.62.

 
 
  Linda Piazza   7/13/200,  12:24:36 PM
This OEX move down turned the smallest 15-minute Keltner channel down again, but now the OEX has support building near 542.79-542.91, roughly near the 200-sma. The OEX needs to maintain levels above those in order to avoid pointing the channel back toward 540.81. These are just more fluctuations around the 200-sma so far, and fluctuations that are deadly to OTM options prices. If you're a holder of OTM OEX options, consider setting stops according to losses in your option prices as well as according to the OEX's movement. The OEX could even creep along in the direction of your play while your option decreases in value due to the slowness of the creep. Of course, if you purchased cheap options as a lottery play, intending to let them run, advice would be different. As always, much depends on your account-management style.

 
 
  Jonathan Levinson   7/13/200,  12:21:40 PM
Gold is holding its losses, trading 401.70 here, still at the top of the key 398-402 confluence zone. HUI and XAU have weakened again, however, with HUI down 2% at 195.37 and XAU down 1.89% at 89.08. Bonds also remain weak, TNX up 4.7 bps at 4.49%. That 4.5% level is stiff resistance for the yield, and I'd expect it to get broken with an early morning gapper rather than a slow drift upward.

 
 
  James Brown   7/13/200,  12:16:49 PM
Another big loser is SpectraLink (SLNK). The stock gapped down this morning after last night's earnings warning. The company now expects Q2 earnings in the 10-cent range compared to analysts' estimates near 14 cents. SLNK is down 19.8% to $9.80.

 
 
  Jeff Bailey   7/13/200,  12:16:14 PM
Overstock.com (OSTK) $34.92 -3.53% ..... struggles back to July "Max Pain" of $35.00.

 
 
  Jim Brown   7/13/200,  12:15:25 PM
Companies announcing earnings after the close today include INTC, JNPR, RJF, YUM, AMB and CAMP. Obviously INTC and JNPR are the key stocks.

 
 
  James Brown   7/13/200,  12:14:12 PM
FYI: Assassins tried to ambush the head of Iraq's Olympic committee in Baghdad today.

 
 
  Jonathan Levinson   7/13/200,  12:13:53 PM
30 and 60 min channel support are converging at 35.44. If QQQ sees that level, the short cycle should be maxxed out by then.

 
 
  Jim Brown   7/13/200,  12:13:40 PM
The warnings continued yesterday. I noticed that CPWR, CTAS, FIC, LSI, OO, SCSS and WHRT all warnined and only IMGC, PETC, RRGB said things were better than expected.

 
 
  James Brown   7/13/200,  12:12:25 PM
State Street Corp (STT) bank reported earnings this morning that were inline with estimates at 68 cents a share. Prudential followed up with a downgrade to "under weight" and shares of STT are now down 8.5% to $45.27.

 
 
  Jonathan Levinson   7/13/200,  12:11:54 PM
You certainly picked a good day to miss, Jim.

 
 
  Jeff Bailey   7/13/200,  12:10:44 PM
VIX.X 14.52 -2.94% .... continues to decline, but off session low of 14.29.

July 1,125 calls (10,182) and 1,125 puts (6,573) are the two most active SPX options.

SPX's July "Max Pain" is 1,125 as noted previously.

 
 
  James Brown   7/13/200,  12:10:07 PM
UBS has turned negative/cautious on REITs and downgraded several to "neutral" or "reduce".

 
 
  James Brown   7/13/200,  12:07:53 PM
Ouch! Red Hat Inc (RHAT) is down more than 21% to $16.03 and breaking through its simple 200-dma. Investors are not happy with the news that RHAT will change how it recognizes revenue and the company will restate financials for 2002 through 2004.

 
 
  Jonathan Levinson   7/13/200,  12:05:25 PM
SUMMARY: The Securities and Exchange Commission is adopting a new rule and related rule amendments under the Investment Advisers Act of 1940 that require registered advisers to adopt codes of ethics. The codes of ethics must set forth standards of conduct expected of advisory personnel and address conflicts that arise from personal trading by advisory personnel. Among other things, the rule requires advisers' supervised persons to report their personal securities transactions, including transactions in any mutual fund managed by the adviser. The Commission is also adopting amendments to rule 17j-1 to conform certain provisions to the new rule. The rule and rule amendments are designed to promote compliance with fiduciary standards by advisers and their personnel.

DATES: Effective Date: August 31, 2004. Compliance Date: January 7, 2005.

Link

 
 
  Keene Little   7/13/200,  12:04:49 PM
Jane, I know where you live. We need to talk about your decision-making skills as to where to live.

 
 
  Jane Fox   7/13/200,  12:03:50 PM
I fell in love with Vancouver when I was 14 the first time I visited. So did my family for they all live there but me.

 
 
  Jonathan Levinson   7/13/200,  12:03:49 PM
Session low for GE here.

 
 
  Jonathan Levinson   7/13/200,  12:03:28 PM
Me too, Keene. I'd love to be able to afford it. I bought my first pair of jogging shoes there on my last visit- anything to get more of that sweet, moist air into me. Great mountaineering too.

 
 
  Keene Little   7/13/200,  12:02:05 PM
Jonathan, I'd love to retire in Vancouver, BC. Being close to Whistler for world-class skiing doesn't hurt either.

 
 
  Jonathan Levinson   7/13/200,  11:59:56 AM
Following Keene's and Jane's comments, I've never breathed air so sweet or seen land so beautiful as in and around Vancouver. Blackberries grow in the bushes by the sideways, and the city is spotlessly clean. It'll only take 2 or 3 days to fall in love with the place.

 
 
  Linda Piazza   7/13/200,  11:58:53 AM
For reference, the OEX's 200-sma lies at 542.64.

 
 
  Linda Piazza   7/13/200,  11:56:14 AM
The SOX fell to the bottom of this morning's gap higher, and is now trying to find support there and rise again. Earlier, it had risen into Monday's gap lower, but was not able to retrace 50% or more of the gap before dropping back again.

 
 
  Jeff Bailey   7/13/200,  11:52:59 AM
QQQ $35.55 -0.14% .... back at upward trend and that conventional 61.8% retracement from May relative low ($34.11) to recent June 30 relative high of $37.90.

 
 
  Jonathan Levinson   7/13/200,  11:52:22 AM
Session lows are printing here at 35.52. Below 35.50, 30 min channel support is in play at 35.45, below which is price confluence at the top of yesterday's sideways range starting at 35.35. Below 35.25 (yesterday's range low), the 30 min channel will be back in a clear downphase and we'll be looking at a reconfirmation of the daily cycle downphase.

 
 
  Jeff Bailey   7/13/200,  11:50:36 AM
U.S. Dollar Index (dx00y) 88.04 +0.74% .... just off session high of 88.07, and currently trading WEEKLY R1 of 88.05.

Will monitor, but if we start seein some slippage, keeping an eye on Aluminum Corp. China (ACH) $51.85 -1.53% Link , which treated bulls well from $48 to $53.02, as it then went on to trade $57.50.

 
 
  Linda Piazza   7/13/200,  11:45:29 AM
The OEX hesitates on the neckline of the possible H&S on its three-minute chart, or at least on one version of that neckline. Because of the hesitation, perhaps we can consider this version the most reliable. As I typed this post, the OEX began breaking below that neckline although the move might be a fake-out one. Turning to the five-minute chart, I see that the OEX is turning down the smallest of its Keltner channels, making it likely that the OEX will test 542.78 before it tests 545.24, unless that configuration changes.

 
 
  Jonathan Levinson   7/13/200,  11:35:44 AM
The Fed has relented a touch with a 398M coupon pass just announced. That's a permanent addition to liquidity, and reverses part of the 1.5B net drain from its open market desk today.

 
 
  Jonathan Levinson   7/13/200,  11:34:18 AM
Gold is so far holding above the 402 level, with a dip to 400.8 reversed on a doji bounce. The 398-402 confluence has been key in both directions all year. That said, the upturn in the US Dollar Index should pose a direct challenge to that level unless it stops here.

 
 
  Linda Piazza   7/13/200,  11:32:23 AM
The OEX three-minute chart now displays a very rough H&S formation, with definite bearish divergence as the head was formed. It's such a rough formation that it's difficult to be sure of the neckline, but it may already have been violated, with the OEX now rising to retest the neckline. Another version shows the neckline at about 543.45. The downside target would be about 542.11, if that downside target is met. Part of the goal in recognizing such formations setting up is to see if their targets are met, and if the bears are able to deliver on the bearishness promised. As I said earlier, however, this may just constitute more choppy consolidation around the 200-sma before the OEX ever decides on a direction.

 
 
  Jonathan Levinson   7/13/200,  11:24:51 AM
In typical fashion, the short cycle downphase is growing extended to the downside here even as the 30 minute channel begins to roll over for QQQ. Support is down to 35.50, with 60 min support flattening at 35.42. There's a bullish short cycle Macd divergence building here, suggesting that the 30 min support level is going to hold.

 
 
  James Brown   7/13/200,  11:20:12 AM
OI put play DISH continues to slowly sink under its trend of lower highs.

 
 
  James Brown   7/13/200,  11:18:27 AM
It doesn't look good for the momentum/bounce play in WFMI. There was no follow through on Friday's hammer-candlestick and shares are drifting back toward the $90.00 mark. While the $90.00 level should be round-number, psychological support the intraday chart suggests there is stronger support near $89.

 
 
  James Brown   7/13/200,  11:15:57 AM
This is an important test for OI call play SUN. The stock has slowly drifted back to previous resistance, now new support at the $65.00 level. We need to see it bounce here. Fortunately, there does appear to be a bounce underway in the last five minutes. This looks like an entry point for new bullish positions but traders may feel more confident if they wait for the push through minor resistance at $66.10.

 
 
  James Brown   7/13/200,  11:13:40 AM
OI call play PD has been consolidating sideways between $78 and $80.00 for the last three sessions. Meanwhile Copper futures have rallied to and are struggling with resistance at $1.30 a lb. We remain bullish on PD but we need to see the breakout over $80.00 now, which could be soon given the short-term trend of higher lows.

 
 
  Jonathan Levinson   7/13/200,  11:10:45 AM
The current action in the US Dollar Index shows a tall bullish engulfing doji hammer so far today, gapping open above yesterday's high and reaching resistance at 88.3 on the Sept DX future contract. The last 3 sessions have already been engulfed by the move, with last Wednesday's tall sell candle currently getting retraced. 88.5 is stiff resistance to 89, but the daily cycle downphase was bottomy and it looks likely to me that the yesterday will prove to have been the daily cycle bottom for that downphase. If so, look for resistance at 89, followed 90, 90.5 and 91.2.

 
 
  James Brown   7/13/200,  11:09:30 AM
OI call play ITT surged higher yesterday on stronger than average volume and we're seeing some profit taking today. Look for a bounce in the $82.50-83.50 range.

 
 
  James Brown   7/13/200,  11:07:40 AM
OI call play ATK continues to climb, stretching out its winning streak to six days in a row. Bulls should be encouraged by the better than average volume on the rally over the previous four days. Dips back to $64.00-64.50 still look like decent entry points but ATK may continue to climb if the DFI index begins to rebound from its recent low.

 
 
  Linda Piazza   7/13/200,  11:06:50 AM
The GSO, the software index, turns down again today within the consolidation pattern at the bottom of its recent decline. That pattern looks like a possible "b" distribution pattern, with these usually breaking to the downside, but 21(3)3 daily stochastics try to turn up again.

 
 
  Jeff Bailey   7/13/200,  11:06:28 AM
11:00 Internals at this Link

Yesterday's Internals at this Link

 
 
  Linda Piazza   7/13/200,  10:59:09 AM
Fifteen-minute OEX RSI has already turned bearish, moving down through the signal line. Althought RSI can be fickle and turn right back up again, it's also often a leading indicator. On the OEX's case, that may mean that the 15-minute Keltner resistance may continue to hold. The OEX again tests its 15-minute 100/130-ema's. If it can hold above those averages while oscillators cycle down, if they continue doing so, that would be a bullish development, while a push through them while oscillators cycle down would fit with a more bearish short-term outlook. I still wouldn't be surprised to see the OEX continue to oscillate around its 200-sma another day or two, however, so these gyrations may not mean much.

 
 
  Jonathan Levinson   7/13/200,  10:56:53 AM
Bears got their lower high on the last wavelet peak for QQQ, but the lower low has yet to print. Look for a move below 35.62, current short cycle channel support.

 
 
  Jeff Bailey   7/13/200,  10:54:09 AM
Current OPEN MM Profiles at this Link

Note: Option position's profit/loss column is calculated from option bid/ask. Option Benchmark securities (SWC, OSTK, TASR, EBAY), or underlying positions by themselves (QQQ) profit/loss is "Las" trade.

 
 
  Linda Piazza   7/13/200,  10:45:05 AM
Looking at the OEX from another perspective, I see that it's had difficulty moving far away from the 15-minute 100/130-ema's. It's perched just above them, with those averages currently at 543.03 and 543.61, respectively. It has not breached them, however.

 
 
  Jonathan Levinson   7/13/200,  10:43:31 AM
Bears want to see a lower high on this bounce, and so far they're getting it. But the persistence at the high end of the short cycle channel here is challenging the ongoing short cycle downphase, and Russell futs are hitting a session high here. A break above 35.75 should set up a test of the day high, above which resistance is between 35.86 and 35.91.

 
 
  Jeff Bailey   7/13/200,  10:38:58 AM
Salesforce.com (CRM) $16.29 -2.74% Link .... recent IPO started with a "sell" at AmTech Research with price target of $12. Analyst sees strong company growth in coming years, but has concern regarding overall CRM software growth and competitive nature of industry with big players like MSFT, PSFT, ORCL, SEBL and SAP.

 
 
  Linda Piazza   7/13/200,  10:34:21 AM
The Russell 2000 remains caught between its 200-sma, serving as support, and its 50-dma, serving as resistance. Those averages are at 561.14 and 564.95, respectively, and they roughly describe the recent consolidation pattern. That pattern, like that on many of the indices, looks suspiciously like a measured distribution pattern, but oscillator evidence remains mixed, with some trying to become more bullish while others verge on bearishness.

 
 
  Jeff Bailey   7/13/200,  10:32:25 AM
Pacholder High Yield (PHF) $9.12 +0.55% Link .... probing above rising 200-day SMA.

Networkers Link couldn't do it a couple of weeks ago, good test for junk bonds near-term.

 
 
  Jonathan Levinson   7/13/200,  10:31:01 AM
Bonds have been weak since the balance of trades data, and the TNX is now up 4.5 bps to 4.488%. Key resistance is at 4.5%, last week's high.

 
 
  Linda Piazza   7/13/200,  10:30:53 AM
The BIX did build on yesterday's gains, but it has not yet been able to push above 350, much less above the June high of 351.98.

 
 
  Jeff Bailey   7/13/200,  10:29:50 AM
10:25 Market Watch at this Link

Airlines, Oil Service and Gold show weakness. HMOs, Homebuilders and Networkers early strength. Treasuries find selling with 10-year yield +4.5 bp at 4.488%.

 
 
  Linda Piazza   7/13/200,  10:26:22 AM
The OEX support that was trying to firm up on the five-minute Keltner chart just couldn't firm up fast enough. The resistance on the 15-minute chart just couldn't be surmounted. Now that support that was trying to firm up will possibly serve as added resistance, near 544.15-544.39. The OEX needs to hold at the current level or at least above 542.60 to keep the smallest Keltner channel pointed up on the 15-minute chart.

 
 
  Jonathan Levinson   7/13/200,  10:25:19 AM
QQQ is struggling with the 72 pma on the 100-tick chart... so that would be the 7200 tick MA... at 35.64. 30 min channel support is up to 35.52, with the 60 min channel bottom at 35.35. The 30 and 60 min channels are still rising, so this should be a corrective pullback affecting the short cycle only. If the price doesn't bounce quickly from those supports, the longer intraday channels will flatten, signalling more weakness to follow.

 
 
  Jeff Bailey   7/13/200,  10:20:10 AM
Overstock.com (OSTK) $34.00 -6.07% .... here's bar chart of OSTK Link and will follow with CBOE Internet Index (INX.X). While OSTK is not a component, does look as of OSTK has followed INX.X lower.

CBOE Internet Index (INX.X) 182.36 +0.26% Link

 
 
  Linda Piazza   7/13/200,  10:16:43 AM
The OEX can't work free of the resistance on the 15-minute Keltner chart. The five-minute shows support near 544.20-544.30 trying to firm up, however.

 
 
  Jonathan Levinson   7/13/200,  10:07:22 AM
Rising support at the 72 pma on the 100-tick QQQ is currently at 35.62. 30 min channel support is below at 35.47.

 
 
  Jonathan Levinson   7/13/200,  10:04:25 AM
Session low for INTC here at 26.26, +.08% on the day.

 
 
  Jonathan Levinson   7/13/200,  10:01:42 AM
A 4B overnight repo has just been announced, which results in a 1.5B drain from the Fed against the 5.5B in overnight repos expiring today.

 
 
  Jonathan Levinson   7/13/200,  10:00:12 AM
Session low for gold here at 401.10. HUI -2.24% to 194.89, XAU -2.05% to 88.94.

 
 
  Linda Piazza   7/13/200,  9:59:20 AM
The TRAN opened near yesterday's high, but has since slipped. It's not the picture of strength so far, but the day is early yet.

 
 
  Linda Piazza   7/13/200,  9:56:48 AM
The OEX now needs to maintain levels above 543.46 or at least 542.43 in order to keep alive the possibility that it's going to be able to move first toward the 50-dma and then toward 547-548. Upper Keltner resistance on the 15-minute chart lies at 548.93. Although the OEX has moved above 544.50, it's dragged Keltner resistance along with it, so that it hasn't yet surmounted that next resistance. It's still in danger of being tugged back.

 
 
  Jeff Bailey   7/13/200,  9:55:26 AM
Overstock.com (OSTK) $33.75 -6.76% Link .... weak again today. No news that I can find and I can only wonder if upcoming Google IPO has anything to do with recent stock price action.

Not a lot of open interest in the options to have me thinking option expiration related, though "Max Pain" was calculated at $35.

 
 
  Jonathan Levinson   7/13/200,  9:52:22 AM
There's high drama but low movement so far. QQQ is making another attempt on the session highs here, drifting higher as the short cycle upphase begins to grow extended. QQQ and NQ futures are sloping more aggressively higher for a change, with ES and Dow futs looking flatter. For the Nasdaq indices, the 30 min channels are sloping higher. We'll see if the Dow/SPX follows along.

 
 
  Linda Piazza   7/13/200,  9:49:28 AM
I'm still not certain that I'm getting up-to-date OEX information on my charting system. However, the fifteen-minute charts show Keltner resistance perhaps firming just above the OEX. As long as the OEX can maintain levels above 543.40 or so, however, it looks possible for it to continue to challenge that overhead resistance. Right now, resistance looks somewhat stronger than immediate support, so a pullback to at least that 543.40 level might be in store unless the OEX can quickly surmount the 544.50 level,as it's trying to do now, and stay above that level.

 
 
  Jonathan Levinson   7/13/200,  9:40:57 AM
Session low for bonds and CDN dollar futures here. QQQ continues to chop along below 35.79, session high 35.80, but the push has moved the 30 min resistance line to 35.84 here with support up to 35.40.

 
 
  Jeff Bailey   7/13/200,  9:40:24 AM
Qualcomm (QCOM) $70.22 +1.10% Link .... declares 2:1 stock split and increases quarterly dividend to 14 cents from 10 cents. The new dividend will be payable September 24 to stockholders of record at the close of trading on August 27.

William Blair lowers its raiting on QCOM to "market perform" form "outperform" on valuation.

 
 
  Linda Piazza   7/13/200,  9:37:48 AM
Careful, OEX traders. I'm not getting up-to-date figures on my charts. They're lagging. As nearly as I can tell, during the first five minutes of trading, the OEX ranged from 543.85-544.45.

 
 
  Jeff Bailey   7/13/200,  9:34:18 AM
Lucent (LU) $3.51 +3.84% Link .... wins $5 billion contract from Verizon Wireless for next generation network expansion. The deal has LU supplying a wide variety of network equipment, software and services.

 
 
  Linda Piazza   7/13/200,  9:32:19 AM
The SOX also opens near yesterday's closing level.

 
 
  Jeff Bailey   7/13/200,  9:32:09 AM
Red Hat (RHAT) $18.74 -7.6% Link ... announces new revenue recognition method, and restatement of financials for 2002 through 2004.

 
 
  Linda Piazza   7/13/200,  9:31:18 AM
The OEX opens only slightly above the closing level.

 
 
  Jonathan Levinson   7/13/200,  9:27:32 AM
A short cycle upphase is near overbought territory but not yet maxxed out for QQQ. The 30 min cycle channel is flat, with resistance at 35.79. That level should hold back the advance, absent a very strong trending move- I see no evidence of that yet, but if bulls can avoid giving back this AM's gains for the next hour, that channel will shift to an upslope and resistance will climb.

 
 
  Linda Piazza   7/13/200,  9:25:53 AM
The economic numbers this morning have resulted in modestly higher futures levels as I type. Although these futures levels are not always indicative of the cash open, it appears that the markets may open at or slightly above their closing levels yesterday. If that happens on the OEX, and if you're thinking bullish, look for a strong push above the gathering Keltner resistance at 544-544.40, as a failure to push strongly through that area allows the resistance to firm. Watch for a push above the 50-dma at 545.23 as a first sign this morning of returning strength. Look for crude futures (cl04u on QCharts) to stay below $40/barrel, to relieve some of the pressure on equities. Watch for a SOX push up first to test the former support of its most recent bear flag at just above 450 and then a push above 457, the approximate site of the former supporting trendline off the May low. Watch for the BIX to continue yesterday's bounce, with a move over 350 and then over the June high of 351.98. You don't want to see the SOX fail to push above its most recent bear-flag support or the BIX turn down again, or crude futures climb and the TRAN break down out of its attempt to steady above the 30-dma.

Most of all, remember that this is option expiration week, with strange machinations. I was hearing last month that one of the reasons we were seeing so little volatility last opex period is that most had rolled into July positions ahead of the FOMC meeting and the Iraq turnover, so that means that we might see increasing volatility this opex week. (Let's hope?) Remember, too, that the last time the OEX consolidated along its 200-sma, it took 11 days for it to finally decide on direction. During that 11 days, moves away from the 200-sma encompassed wider and wilder swings as time went on. That meant that each time traders thought there was a breakout and jumped in, markets would then reverse. Be prepared to be whipsawed. Make sure your account can handle that before you engage in plays. That's especially true if you're a trader with an account too small to allow you to daytrade more than three times a week. You could get stopped and stopped and stopped, only to then watch the big move you knew was going to happen, happen without you. It might be better to spend the week paper-trading and then congratulate yourself on your astute vision for what would happen to the markets.

 
 
  Jonathan Levinson   7/13/200,  8:53:01 AM
Session highs across the board fro equities, with QQQ testing yesterday's high.

 
 
  Jonathan Levinson   7/13/200,  8:45:44 AM
Session low for bonds, gold and silver here.

 
 
  Jonathan Levinson   7/13/200,  8:42:19 AM
Gold has slid lower, as have silver and ten year treasuries as the dollar rises. Equities are slightly higher, but have no declined at all. TNX is up 4.1 bps to 4.484%.

 
 
  Jonathan Levinson   7/13/200,  8:41:29 AM
US Balance of Trades -4.5% to -46B, better than expected.

 
 
  Jonathan Levinson   7/13/200,  8:20:49 AM
Session high for Russell2K futures here at 562.8.

 
 
  Jonathan Levinson   7/13/200,  8:14:25 AM
Awaiting the balance of trades data at 8:30, est. -43.8B.

 
 
  Jonathan Levinson   7/13/200,  8:13:31 AM
The rise from yesterday continues this morning, with ES up 1.50 to 1115, NQ up 3.5 to 1437.5, YM up 9 to 10234 and QQQ up .08 to 35.68. Gold is down 3.60 to 404.80, silver down 12.6 cents to 6.41.

 
 
  Linda Piazza   7/13/200,  7:10:41 AM
OEX notes: This information is copied from a post made late yesterday. Since then, futures dipped at about the time of the European open, showing us some continued vulnerability to the downside, but have now climbed into positive territory.

Monday, the OEX climbed high enough to test and surmount its 15-minute 100/130-ema's for the first time since July 1. That 6/30-7/1 move above these averages was relatively short-lived. Will this one be, too? As Monday closed, RSI had hooked down, threatening to move through the signal line again, hinting that it's at least a possibility that the move to test those averages could be short lived.

Monday's action constituted another day of oscillation around the 200-sma, with the OEX trading part of the day below that average and part above it. Since the OEX spent 11 days oscillating around that average in May before it finally decided on direction, these few days spent so far don't seem out of line, and we could even have a few more and be well within the norm expected for a test of an important level. The day was also another spent finding support on the midline of the descending regression channel in which the OEX has traded since the first of the year and at the 19.1% retracement of the rally off the March, 2003 low. Monday's action was enough to kick up the shorter-term and less-reliable 5(3)3 stochastics and the RSI, turning the stochastics up through the signal line. The OEX needs to do more than consolidate while those stochastics cycle up, however. A first step to show that it was beginning to break out would be a move through the 50-dma at 545.24, an average that turned the OEX back on Wednesday and Thursday of last week. A second step would be a move above 547-548.

An important pair of 100/130-ema's for the OEX over the last few months has been the 120-minute 100/130-ema's. These averages have figured as a pivotal point for many a short-term high or low over that several-month period. They're currently converging at 547.92 and 547.98.

These are the steps that might be needed to say that the OEX has successfully tested its 200-sma and is moving up, but are they likely to happen? The 15-minute nested Keltner charts suggest that resistance is gathering under 545, so the OEX needs to push through that resistance quickly in order to keep it from firming up and fencing the OEX off from further gains. Specifically, the OEX needs to maintain levels above 543 and hopefully above 544 to keep the smallest channel on its fifteen-minute chart turned higher, and it needs to maintain levels above 544.40 to keep the middle-length one turned higher. That's important because it's usually the middle-length channel, currently with an upper line at 544.38, that delimits the OEX's movements. If the OEX can break above that resistance, next resistance on the 15-minute chart lies at 549.09.

What about downside possibilities? If the OEX maintains values below 542.92 and especially if it maintains levels below 541.77, it risks turning the Keltner channels lower again, toward 539.76, or perhaps toward 537.60 if that first support should fail.

One warning: the last time the OEX consolidated at its 200-sma, the oscillations around that average grew more violent, so that the OEX seemed to break out of the consolidation only to reverse and head the other direction, whipsawing anyone brave enough to take a position. That could happen again. Monday, the OEX attempted a reakout, but didn't quite make it. It needs to build on that breakout potential Tuesday, and do so quickly, or else that resistance will firm.

 
 
  Linda Piazza   7/13/200,  7:05:31 AM
Good morning. Ahead of the Bank of Japan's decision later in the day, the Nikkei gapped down Tuesday morning, led lower by the semi-related stocks. The sector was pressured by the Merrill Lynch downgrade of some semi-related stocks and by the missed orders forecasts by Novellus Systems. Some retailers dropped in early trading, hurt by a 3.8% drop in same-store sales among eight retailers.

Later in the day, the Bank of Japan's Fukui reiterated his commitment to keeping Japan's current easy monetary policy, and the government upgraded its assessment of the economy, as many had speculated it might do. The Nikkei moved higher throughout the afternoon, climbing more than 100 points off its low to end the day 26.34 points or 0.23% into positive territory, at 11,608.62. Strong performances by some banks and automakers helped guide the Nikkei higher, with many techs remaining weak through the afternoon. In stock-specific news, Sony announced that it will use the game show to be held in May 2005 to introduce its next-generation video game console. Toshiba will launch its TV-capable notebook PC's later this month.

Other Asian bourses turned in mixed performances. The Taiwan Weighted lost 1.27%, but South Korea's Kospi gained 0.63%, with Samsung Electronics rebounding 2.5%. Singapore's Straits Times gained 0.39%, but Hong Kong's Hang Seng dropped 0.92%. China's Shanghai Composite gained 0.17%.

European bourses mostly trade higher this morning. In the U.K. figures show that consumer prices grew 1.6% over the year-ago level, with transportation services costs rising 3.2%. Month-over-month, however, consumer prices reportedly dropped 0.1% in June. Royal Philips Electronics reported strong quarterly profit, the strongest in more than three years, cheering those worried about consumer demand. In addition, June's car sales in Western Europe grew, leading to gains among some car manufacturers. After a UBS analyst raised Munich Re's rating to a neutral rating from its former reduce rating, Munich Re was gaining in early trading.

As of this writing, the FTSE 100 trades higher by 5.30 points or 0.12%, at 4,365.30. The CAC 40 trades higher by 16.09 points or 0.44%, at 3,667.72. The DAX trades higher by 19.85 points or 0.51%, at 3,913.09.

 
 
  Linda Piazza   7/12/200,  11:55:21 PM
OEX notes: Monday, the OEX climbed high enough to test and surmount its 15-minute 100/130-ema's for the first time since July 1. That 6/30-7/1 move above these averages was relatively short-lived. Will this one be, too? As Monday closed, RSI had hooked down, threatening to move through the signal line again, hinting that it's at least a possibility that the move to test those averages could be short lived.

Monday's action constituted another day of oscillation around the 200-sma, with the OEX trading part of the day below that average and part above it. Since the OEX spent 11 days oscillating around that average in May before it finally decided on direction, these few days spent so far don't seem out of line, and we could even have a few more and be well within the norm expected for a test of an important level. The day was also another spent finding support on the midline of the descending regression channel in which the OEX has traded since the first of the year and at the 19.1% retracement of the rally off the March, 2003 low. Monday's action was enough to kick up the shorter-term and less-reliable 5(3)3 stochastics and the RSI, turning the stochastics up through the signal line. The OEX needs to do more than consolidate while those stochastics cycle up, however. A first step to show that it was beginning to break out would be a move through the 50-dma at 545.24, an average that turned the OEX back on Wednesday and Thursday of last week. A second step would be a move above 547-548.

An important pair of 100/130-ema's for the OEX over the last few months has been the 120-minute 100/130-ema's. These averages have figured as a pivotal point for many a short-term high or low over that several-month period. They're currently converging at 547.92 and 547.98.

These are the steps that might be needed to say that the OEX has successfully tested its 200-sma and is moving up, but are they likely to happen? The 15-minute nested Keltner charts suggest that resistance is gathering under 545, so the OEX needs to push through that resistance quickly in order to keep it from firming up and fencing the OEX off from further gains. Specifically, the OEX needs to maintain levels above 543 and hopefully above 544 to keep the smallest channel on its fifteen-minute chart turned higher, and it needs to maintain levels above 544.40 to keep the middle-length one turned higher. That's important because it's usually the middle-length channel, currently with an upper line at 544.38, that delimits the OEX's movements. If the OEX can break above that resistance, next resistance on the 15-minute chart lies at 549.09.

What about downside possibilities? If the OEX maintains values below 542.92 and especially if it maintains levels below 541.77, it risks turning the Keltner channels lower again, toward 539.76, or perhaps toward 537.60 if that first support should fail.

One warning: the last time the OEX consolidated at its 200-sma, the oscillations around that average grew more violent, so that the OEX seemed to break out of the consolidation only to reverse and head the other direction, whipsawing anyone brave enough to take a position. That could happen again. Monday, the OEX attempted a breakout, but didn't quite make it. It needs to build on that breakout potential Tuesday, and do so quickly, or else that resistance will firm.

 
 
  OI Technical Staff   7/12/200,  11:55:05 PM
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