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  Jeff Bailey   7/14/200,  6:18:08 PM
SanDisk (SNDK) $19.98 -3.15% Link ... jumps to $23.90 after reporting quarterly EPS of $0.38 versus consensus of $0.30.

One of the "good news/bad news" items from Intel (INTC) $23.38 -10.55%, was that strong growth in its flash memory business would have its gross margins falling from 62 to 60%.

  Jeff Bailey   7/14/200,  5:39:05 PM
Closing Internals at this Link

NASDAQ NH/NL ratio Chart at this Link RED fs depict today's change in the 5-day ratio from yesterday, while RED Os depict today's change in the 10-day from yesterday. 5-day ratio is nearing its inflection low of 05/12/05, which was the day Barton Biggs said.... "these are the most oversold market's I've seen in 20-years!"

I thought Mr. Biggs might have been talking about the NYSE NH/NL indicator, when its 5-day ratio was at 3.7%.

NYSE NH/NL ratio chart at this Link

  Jeff Bailey   7/14/200,  5:14:08 PM
Pivot Matrix for tomorrow at this Link

BIX and INDU show some strength in the WEEKLY Pivots, but can't do it all by themselves and faded on further SOX.X weakness.

SOX.X DAILY S2 marked as support, only because it is so close to the head/shoulder top objective we had calculated at 412. Please note that I used the intra-day trade high of the SMH to derive the SOX.X intra-day high due to the gap lower. Shouldn't be too much different than if I used opening tick on the SOX.X, but SOX.X itself was dropping fast.

My late QQQ short, with stop noted of $35.90 (see 16:05:41) the current OPEN MM profiles (16:13:28) was a "weighted" stop against the naked July $35 puts. I do note that tomorrow's DAILY S2 is $35.90.

I highlight the SPY DAILY low today, last week's low and Junes low, as somewhat of an understanding that for bullishness to take hold, those brokers better get things together. The XBD.X finished at 117.69 -0.82%.

  Keene Little   7/14/200,  4:43:37 PM
Jonathan, that was a good call on INTC at the beginning of the year--down from 35 to its current 23 and change. It may flounder at current levels and above for a while but when it breaks that uptrend line from Oct 2002, I can easily project INTC to below 10. But then the whole market will be in its 2nd bear market leg by then so it won't be alone.

BTW, when I make my first million, remind me to let you manage it with those kinds of calls!

  Jonathan Levinson   7/14/200,  4:28:06 PM
Good point, Keene. An old cliche is to not buy issues that are "going down". Well, by all indications, that's the direction for INTC since the beginning of the year. I had recommended it as a short in my end of year picks for a number of fundamental and technical reasons. On a technical basis currently, other than short covering for a deadcat/technical bounce, this is clearly a stock that has been and is going down. A bounce that fails and falls to a higher low would maybe change our outlooks, but this one looks and is acting like a broken stock.

  Keene Little   7/14/200,  4:24:08 PM
INTC did not have a good day today. It got a 10.55% haircut, down 2.76 today, and on very heavy volume to boot. A reader (thanks Martin) did a little research and found the last time INTC saw this kind of volume was back in Sept 2000. However, I see on their weekly chart an uptrend line from Oct 2002 through February 2003 currently at about 23.15, not much below its low today of 23.25.

It's in between fibonacci retracement levels and I don't see any good moving averages around that could lend some support, but I would at least expect a bounce in INTC off this uptrend line from Oct 2002. It could be a good buying opportunity for INTC but I've heard too many comments about "dead money" in INTC and I don't like the un-bullish aspects of this market right now. Perhaps a short-term dead-cat-bounce kind of play in INTC, but I'm not sure this level will hold over time.

  Jeff Bailey   7/14/200,  4:13:28 PM
Current OPEN MM Profiles at this Link

  Jeff Bailey   7/14/200,  4:05:41 PM
Swing trade short alert for the QQQ IF NAKED 10 contracts in the July $35 puts.

Short 300-shares of the QQQ $35.20 here.

  James Brown   7/14/200,  4:00:37 PM
Today proves one thing (again). There is no such thing as a sure bet. The Stock Trader's Almanac had an 86% chance for the S&P 500 to close higher today. Looks like it's going to close down 3 points.

  Linda Piazza   7/14/200,  3:57:17 PM
The OEX's fifteen minute RSI turns up again, signaling that the OEX might attempt to rise up to test the 100/130-ema's on that time interval, with those averages near the 543.50-ish level. Keltner charts for that time interval show gathering resistance at that level, too, but not a lot of strong resistance before that level. That could change tomorrow, but that's what shows up now. Depending on what happens in the overnight session, then, that test might be the first action tomorrow morning.

  Linda Piazza   7/14/200,  3:48:04 PM
Will the OEX close beneath its 200-sma today? The quick zoom down scattered Keltner lines again, so that if the OEX rises quickly, it has little resistance ahead of it. It if pauses, resistance lines can snake above it again. This is just more zooming around the 200-sma, with the zooms getting more volatile as they did in May while the OEX spent 11 days testing the 200-sma before deciding where to head.

  Jonathan Levinson   7/14/200,  3:46:22 PM
The daily, 30 min and short cycle oscillators are in a downphase for QQQ and the equity futures. The short cycle could be trying to bottom, but there's been no explosive selling surge to indicate that it's yet occurred. The picture looks so perfectly bearish to me that I don't trust it- when a bullish or bearish position looks like a no-brainer to me, that's a clear indication that I'm not thinking straight. 30 min channel support is down to 35, resistance at 35.40. INTC continues to dive. There's a plethora of economic data tomorrow AM, including the PPI, Initial claims, capacity utilization, industrial production, the Philly Fed and the Empire State Index. Cash is a perfectly good position for those who are wondering what to do next.

  Jonathan Levinson   7/14/200,  3:36:46 PM
35.29 QQQ held as resistance, and we got not just our test but a break of the day lows. 30 min support is down to 35.03.

  James Brown   7/14/200,  3:34:55 PM
Building supply company Hughes Supply (HUG) has rallied to resistance at the $60.00 level (again) but can't quite seem to get through it. A trade above $60.50 would be a new all-time high. This looks like a bullish candidate.

  Linda Piazza   7/14/200,  3:33:41 PM
The SPX's 200-sma crosses at 1102.63, with touches of that average producing May's bounces.

  James Brown   7/14/200,  3:30:02 PM
Coal miner Massey Energy (MEE) is up 3% and breaking out of its recent trading range. The stock is nearing its all-time highs from May 2001.

  Jonathan Levinson   7/14/200,  3:28:27 PM
I agree with Keene's comment in his 15:20:49- that lines up with what I'm seeing in my charts as well. The daily cycle is still pointed south with the price trend intact and unchallenged.

  James Brown   7/14/200,  3:22:43 PM
The action in Cephalon (CEPH) is starting to look like a bearish entry point. The oversold bounce from $50 to $52 is fading and its P&F chart is showing a triple-bottom breakdown sell signal with a $41 target. Traders could use a trigger under the recent low at $49.71 and target the $45.00 area. Earnings are not until early August.

  Linda Piazza   7/14/200,  3:20:49 PM
The OEX just popped above that next Keltner resistance, but came right back down through that level again. This bounce begins to look like a likely bear flag. As long as the OEX fails to sustain values above 541.96 or so, that smaller Keltner channel will stay pointed toward the lower Keltner boundary, now at 540.74.

  Jeff Bailey   7/14/200,  3:20:20 PM
03:00 Internals at this Link

  Jonathan Levinson   7/14/200,  3:18:47 PM
Session lows for INTC here. Those Dec-Jan highs seem a long time ago, don't they?

  James Brown   7/14/200,  3:17:12 PM
I mentioned APOL as a bullish candidate yesterday and the stock showed up on our watch list last night. Shares are breaking out over its 40 & 50-dma's and its MACD has produced a new buy signal. Its P&F chart targets the $99.00 level. I'd consider this an entry point with a target at $98-$100.

  Jonathan Levinson   7/14/200,  3:16:15 PM
Here comes the test of 35.29.

  Linda Piazza   7/14/200,  3:14:02 PM
Crude prices were above $41.00 as of 30 minutes ago, headed toward the $41.85 high from 6/01.

  James Brown   7/14/200,  3:13:50 PM
Hmm... high-flying CME gapped lower, rallied into lunch and rolled over with the markets. Now shares look ready to test support at its simple 40-dma. Bears will be looking for a drop through the $130.00 mark but the 50-dma might offer support at $127. Earnings are expected on July 22nd.

  Jonathan Levinson   7/14/200,  3:12:51 PM
The daily cycle oscillators are still pointed south for QQQ, as are (now) the 30 min oscillators. Only the mixed short cycles suggest support here, and the most bullish of all is the shortest cycle, the wavelet, which is just topping now on this bounce off the afternoon lows. The short cycle channel has resistance at 35.29, and a failure to drive above that level in the next few minutes will suggest a retest of short cycle support, lined up with 30 min channel support at 35.10.

  Linda Piazza   7/14/200,  3:03:26 PM
The OEX hit the 541.06 level suggested by the configuration of the Keltner's, exceeding it by a penny to the downside. The attempt to bounce is going to face next Keltner resistance near 542.17.

  Linda Piazza   7/14/200,  2:54:28 PM
For reference, Monday's OEX low was 539.74. Also for reference, the 200-ema crosses at 538.26.

  Jeff Bailey   7/14/200,  2:53:49 PM
Sell Program Premium .... SPX 1,110.02, OEX 541.32, INDU 10,195, QQQ $35.20.

  Linda Piazza   7/14/200,  2:52:58 PM
The OEX's Keltner support did not hold, and the smallest channel still points toward a 541.06 next Keltner support. Next resistance is trying to firm near 542.50-542.60, and will do so unless the OEX bounces quickly.

  Jonathan Levinson   7/14/200,  2:50:45 PM
Silver is trading a session high here at 6.621: Link . Gold is holding its gains as well, with HUI rising to a 1.04% gain at 197.76, and XAU +1.22% to 90.79. Weakness in broader equities is being matched by strength in both the miners and the metals, something we haven't seen in awhile.

  Linda Piazza   7/14/200,  2:45:58 PM
The TRAN is back within the recent consolidation pattern, but today's candle has long shadows that extend on either side of the pattern. I've noticed that several indices sport doji or candles with both upper and lower shadows that span their entire recent ranges. Trading is becoming more volatile, and it's becoming more difficult to spot when a breakout might have occurred. I've mentioned this possibility a couple of times lately when talking about the OEX as it tests its 200-sma, with the possibility that trading could become more volatile and true breakouts more difficult to identify.

  Jonathan Levinson   7/14/200,  2:41:47 PM
WMT to a session low here, down .87%, leading the Dow futs lower. Note that GE is up .82%. It's a strange day in the market.

  Linda Piazza   7/14/200,  2:41:27 PM
Just noticed that crude futures are back above $40.00 again, at $40.68 as of 30 minutes ago.

  Jonathan Levinson   7/14/200,  2:40:29 PM
QQQ has 60 min channel support at 35.25, 30 min support below it at 35.16.

  Jane Fox   7/14/200,  2:39:46 PM
Nice inchworm Jeff!

  Jeff Bailey   7/14/200,  2:35:55 PM
Broker/Dealer Index (XBD.X) 118.00 -0.56% .... chart at this link, tie in INX.X and BIX.X comments from 01:00 PM EDT. As well as "inchworm" which seems to be pulled tight at both ends. Link

  Linda Piazza   7/14/200,  2:28:48 PM
The OEX again dips to test Keltner support near 542.90. Remember that these lines are dynamic and can be bulged outward if the OEX candles butt against them. They can snake back under the OEX if it doesn't breach them too far or declines with a slow creep down. After all the zooming around, is the OEX now going to settle right back into the same equilibrium position with regard to the Keltner channels? If holds above the 200-sma, that certainly seems to be a possibility.

  Jonathan Levinson   7/14/200,  2:24:09 PM
Looks like the spike to 25.28 QQQ was the best that the intraday head and shoulders could do to the downside, with a bounce back above 35.35 just printed. A lower volume sell candle has just brought QQQ back to 35.35, and the prior bounce could have been another failed test of the 35.45 neckline. The short cycle oscillators are pointed north, however, and the 30 min channel downphase is flattening, and so the picture looks less bearish than it did an hour ago.

  Jeff Bailey   7/14/200,  2:19:20 PM
CBOE Internet Index (INX.X) 183.23 +1.34% .... chart at this Link per 01:00 PM update.

  Linda Piazza   7/14/200,  2:13:21 PM
The current OEX pattern on the five-minute chart looks like a bear flag, but the Keltner support near 542.92 would have to be broken before I would consider it confirmed. I would also want to see the last 542.69 low broken.

  Jonathan Levinson   7/14/200,  2:03:20 PM
The 30 min channel rollover continues despite the bounce attempt here, with 30 min channel support down to 35.20 (and for the futurs, 10195 / 1111.25 / 1418) Bonds continue their gradual advance.

  Jonathan Levinson   7/14/200,  2:02:04 PM

A tremor of fear is felt by da_boyz.

  James Brown   7/14/200,  1:58:18 PM
... more on steel... Prudential raised its outlook on the industry from "unfavorable" to "favorable".

  Linda Piazza   7/14/200,  1:57:50 PM
After printing a rough H&S on its five-minute chart at the top of its climb, the TRAN dropped through the neckline and then more than exceeded the downside target of that small formation. It dropped through 3100 again and is now rising to challenge it from the underside. Strong support looks further down, near 3090.

  James Brown   7/14/200,  1:55:41 PM
... just trading emails with a reader about steel stocks and suddenly CNBC talking about Intl Steel Group (ISG), which is up 5.75%, after Bear Stearns started coverage with an "out perform" this morning.

  Jonathan Levinson   7/14/200,  1:55:37 PM
Lots of military bases around there, Keene. I once ducked out of a bathroom in a bar as the Canuck soldiers began razzing the US soldiers. Last thing I heard being said before zipping up and heading for the door was: "Our hair's shorter'n'yours, boy."

  James Brown   7/14/200,  1:51:24 PM
Omnivision Technologies (OVTI), one of the worst performing semiconductor stocks in the last month, is down another 12.5% to $11.53 after Schwab downgraded the stock to an "under perform" this morning. The stock is nearing its 200-week moving average and is quickly approaching its bearish P&F target at the $10.00 level. Aggressive bulls may want to keep this on their watch list for an oversold rebound (eventually).

  Jonathan Levinson   7/14/200,  1:50:56 PM
TNX is back to flat, down .1 bps at 4.475%. That 4.5% resistance level has held again.

  Jonathan Levinson   7/14/200,  1:50:22 PM
Gold continues to hold its gain, and silver is back up to 6.61 here, a 3.56% gain for the day. HUI is higher by 1% at 197.69, XAU by .97% at 90.57.

  Linda Piazza   7/14/200,  1:49:18 PM
Just as I thought, Keltner support lines are trying to snake under the current OEX position, with those lines now closer to the 200-sma's value. Keltner support is currently trying to line up in the 542.90-ish range. Resistance tries to line up in the 543.75-544.10 range.

  James Brown   7/14/200,  1:42:35 PM
United States Steel (X) is up 3% and breaking out of its recent trading range after Prudential upgraded the stock to a "neutral weight".

Meanwhile Steel Dynamics (STLD) is up 5.79% to a new high over the $30.00 level on no apparent news. (although I suspect strong earnings from a rival may be the catalyst - now if I can just find it.)

  Jonathan Levinson   7/14/200,  1:38:40 PM
30 min channel support converges with 60 min support at 35.22, just below our implied QQQ h&s target. The short cycles are growing oversold here, and that target is looking good for at least temporary support. If it doesn't hold, a retest of the day lows looks like a certainty to me.

  James Brown   7/14/200,  1:37:47 PM
Sirius Satellite Radio (SIRI) is up 1.92% to $2.65 after announcing that the company has reached 500K subscribers and expects to hit 1 million subs by the end of 2004.

Its larger rival XM Satellite Radio (XMSR) already has 2.1 million subscribers. XMSR managed to reach its first million subs in two years and its second million eight months later.

  Linda Piazza   7/14/200,  1:30:07 PM
The OEX tries to bounce. Resistance converges near the 543.75-ish level and again at 544.30-ish level, as well as just above the current OEX level. It's a free fall down toward 541.28 if the OEX can't steady here. Of course, with the 200-sma at 542.83, some might differ with the Keltner's assessment of where resistance and support might lie. I'd certainly keep that 200-sma in mind. It's possible that Keltner lines could snake under the OEX, toward that 200-sma.

  James Brown   7/14/200,  1:27:04 PM
Varian Medical Systems (VAR) is down 7.5% on a positive earnings preannouncement. Analysts are expecting Q2 earnings (VAR's third quarter) to hit 55 cents a share when VAR reports on July 29th. VAR came out today and said they expect to beat those numbers. Yet the stock is down 7.5% and breaking support at the $75.00 and $70.00 levels because its orders for cancer equipment in N. America are going to be relatively flat. Oncology systems sales in N. America are a huge part of VAR's revenues.

  Jeff Bailey   7/14/200,  1:25:18 PM
Sell Program Premium

  Jeff Bailey   7/14/200,  1:23:00 PM
S&P Banks (BIX.X) 349.87 -0.10% ....

  Linda Piazza   7/14/200,  1:20:24 PM
The OEX did hit the 543.87 mid-channel level Keltner support suggested by the Keltner channels (see my 13:00 post) and even dipped below that level. It's trying to firm up now at the black channel line (see my 12:46 post for the chart) that usually supports the OEX. It should bounce up to test broken support now, although it's difficult to see where that would have been! If it doesn't bounce, it's breaking out of the black channel and perhaps pointing down toward a test of 541.33. Because that support was so thinly spaced, those Keltner lines now above the OEX are just as thinly spaced. If the OEX bounces quickly, it can move through them fairly easily, but if it doesn't, they're going to begin converging, perhaps near 543.85-544.40 or so.

  James Brown   7/14/200,  1:19:28 PM
Biotech Genzyme (GENZ) is up 12.7% and breaking out over resistance at $48.00 and its simple 200-dma after reporting earnings this morning that beat estimates by 4 cents a share. The company also raised its revenue guidance for the year. It's probably not a coincidence that the rally has stalled right near the $50 mark, which happens to be P&F resistance.

  Jeff Bailey   7/14/200,  1:19:17 PM
01:00 Internals at this Link

Only sign of some internals strength would be current NYSE NH/NL indications would have slight improvement in the NYSE 5-day ratio.

  Jeff Bailey   7/14/200,  1:11:01 PM
Sell Program Premium

  Jeff Bailey   7/14/200,  1:07:01 PM
12:58 Market Watch at this Link

  Jonathan Levinson   7/14/200,  1:06:51 PM
QQQ broke the neckline at 35.45, bounced at 35.35 support, retested and just failed at the neckline, and looks to rechallenge support. The target remains 35.25, with 60 min support just below at 35.20.

  James Brown   7/14/200,  1:02:09 PM
CNBC talking about rumors that Harrah's Entertainment (HET) might make an offer to buy rival Caesars Entertainment (CZR). Shares of CZR are up 15% to $16.05. HET is down 2.57% to $50.60 and just above its simple 200-dma. The move appears to be a reaction to the recent MGG-MBG merger.

  Linda Piazza   7/14/200,  1:00:26 PM
After my 12:42 and 12:46 posts, the OEX did drop, showing the weakness of the underlying support. That drop has turned the smallest Keltner channel down toward 543.87 mid-channel support again. If it maintains levels above 544.81 or preferably 545.17, it can turn that channel right back up again, but that's how things are configured now. Resistance is now thinning, too, so it's almost anybody's guess as to what might happen.

  James Brown   7/14/200,  12:59:22 PM
Juniper Networks (JNPR) is up 13.3% to $24.90 after its positive earnings report last night. The company reported 8 cents a share vs. estimates of 4 cents. Revenues soared more than 85% to $306.9 million to surpass analysts' estimates. JNPR also guided higher for the third quarter, the second half of '04 and announced a $250 million stock buyback.

  Jeff Bailey   7/14/200,  12:52:51 PM
QQQ $35.37 -0.5% ... back at DAILY S1.

  Jeff Bailey   7/14/200,  12:51:38 PM
Semiconductor Index (SOX.X) 421.27 -4.34% .... approaches session low of 420.69.

Still looks capable of trading its head/shoulder top objective of 412.

  Jeff Bailey   7/14/200,  12:48:30 PM
Pacholder High Yield (PHF) $9.12 -0.10% .... wasn't expecting a big move near-term, but checking in anyway. Little trade as usual low/high $9.12-$9.13.

  Linda Piazza   7/14/200,  12:46:55 PM
The promised Keltner chart for the OEX: Link See my 12:42 post.

  Jeff Bailey   7/14/200,  12:46:46 PM
Biotechnology Index (BTK.X) 500.87 +1.62% Link

A lot of moving average resistance just above.

  Jonathan Levinson   7/14/200,  12:43:21 PM
This looks like the neckline break on the 100 tick QQQ below 35.45 on expanding volume. Look for a test at support of 35.35 on the way to 35.25.

  Linda Piazza   7/14/200,  12:42:57 PM
The OEX is floating in empty space as far as the five-minute Keltner channels are concerned. Chart to follow.

  Jeff Bailey   7/14/200,  12:38:07 PM
As regional banks try to lead strength for financials, the Broker Dealer Index (XBD.X 118.81 +0.11% continues to linger at recent lows.

XBD.X did trade that 38.2% retracement of 117.74 this morning and mid-point of downward trending regression.

This offsetting strength/weakness has OEX 545.06.

  Jonathan Levinson   7/14/200,  12:36:07 PM
GE to a session high here at 33.22.

  Jeff Bailey   7/14/200,  12:31:55 PM
Taser Intl. (TASR) $40.27 -1.07% .... looks like option expiration pegging around $40.00.

  Jeff Bailey   7/14/200,  12:29:43 PM
S&P Banks Index (BIX.X) 351.17 +0.26% ... right at session high and WEEKLY R2. MONTHLY R1 just above at 351.79.

OEX 545.38 and SPX 1,118.70 right here.

As I look at things in WEEKLY, QQQ should have shot at WEEKLY Pivot $35.97 and its WEEKLY Pivot, but most likely gets collared by July expiration.

  Linda Piazza   7/14/200,  12:24:39 PM
Although crude futures have risen after Department of Energy and industry figures showing that inventories dropped, the TRAN hasn't been adversely affected. It's zoomed to a day's high and a level not seen since the 7/08. Perhaps that's because crude futures were not able to exceed $40/barrel, at least as of 30 minutes ago.

  Jonathan Levinson   7/14/200,  12:23:28 PM
Looks like Jane and I are in sync again.

  Jonathan Levinson   7/14/200,  12:23:03 PM
Short cycle resistance is at 35.60 here. A failure to break that level would leave us with a potential head and shoulder top on the 100-tick short cycle chart, 1st downside projection roughly 35.25 QQQ.

  Jeff Bailey   7/14/200,  12:21:41 PM
12:00 Internals at this Link

  Jonathan Levinson   7/14/200,  12:18:07 PM
Jim's comment earlier about a possible higher high is a good one. My response is that the 30 min oscillators wanted the bounce, and still do, but less so than earlier. Note the potential for a disastrous bearish divergence if the bounce on the 30 min cycle fails here: Link . A break below 35.35 that doesn't bounce on a doji almost right away would threaten this upphase and, in my opinion, almost guarantee a retest of the day lows.

  Linda Piazza   7/14/200,  12:17:08 PM
Former Keltner support is now Keltner resistance on the five-minute chart, with that resistance now ranging up to 545.40, with next resistance at 546.22, if that 545.40 level can be breached. Support still does not appear firm under the OEX, however.

  Linda Piazza   7/14/200,  12:11:30 PM
Today the SOX has dropped beneath the midline support on its descending regression channel, also dropping out of the "b" distribution pattern on its daily chart. It's attempted to regain that midline support once today, but was not successful in staying above it. At least, not so far.

  Linda Piazza   7/14/200,  12:09:54 PM
The Russell 2000 has also not been able to maintain values above its 50-dma, although it, too, has not drifted far below that average.

  Jonathan Levinson   7/14/200,  12:08:57 PM
A break below 35.41 QQQ invalidates that.

  Linda Piazza   7/14/200,  12:08:40 PM
So far, the OEX has not been able to maintain values above the 50-dma, although it hasn't drifted far below it.

  Jonathan Levinson   7/14/200,  12:08:30 PM
QQQ is at short cycle support here- if it's going to bounce, this would be the logical spot.

  James Brown   7/14/200,  12:02:17 PM
Chip stock Texas Instruments (TXN) is weathering the Intel news pretty well, currently unchanged at $22.42, after Deutsche Bank upgraded the stock to a "buy" this morning. Earnings are expected on July 20th.

  James Brown   7/14/200,  11:59:11 AM
Eon Labs (ELAB) is up another 4.6% in its second day of an oversold bounce from its sharp Friday-Monday drop. Today's move was boosted by a new upgrade to "buy". The test for buyers will be resistance at its simple 100-dma near the $35.00 mark.

  Jonathan Levinson   7/14/200,  11:56:42 AM
30 min channel resistance has advanced to 35.70 here, support up to 35.35. The short cycle oscillators are down from overbought extreme, and there's room for another push to the highs- but upside from there looks limited to the upper 30 min channel boundary for the time being.

  Linda Piazza   7/14/200,  11:55:41 AM
The OEX rolls down slightly to test that next Keltner support, now from 544.97 to 545.27-545.28. If it can hold those higher levels, there's a chance to reach toward 546.22. If not, support looks weak underneath.

  Jeff Bailey   7/14/200,  11:54:11 AM
Update OPEN MM Profiles at this Link

JDSU Link stop of $2.75 on the underlying will be used (if needed) for the DEC. $3 Calls.

At current JDSU / QQQ levels, JDSU would be giving a relative strength buy signal. Link

  Linda Piazza   7/14/200,  11:47:09 AM
Light support gathers under the OEX in the 545.20-ish region, down to 544.77. Below that, it's fairly widely spaced. Until those support lines converge beneath the OEX, it still appears vulnerable to a pullback, but only if that next support fails to hold.

  Jane Fox   7/14/200,  11:46:08 AM
Dateline WSJ - The strained global oil-supply system will be particularly vulnerable to disruptions and price spikes in the next several months, according to industry analysts and data released yesterday by the International Energy Agency.

The Paris-based energy watchdog estimated oil demand this year has grown by 2.3 million barrels a day, or 2.9%, to 81.1 million, the steepest annual increase since 1980. At the same time, the world's margin of spare production capacity appears to have fallen below 2% of demand -- perhaps below even 1% -- for the first time since the oil crises of the 1970s. Last year, that level was about 4%. That thin margin of error, which the group said could last until late this year, has made oil-futures markets in New York and London skittish.

  James Brown   7/14/200,  11:42:16 AM
OI put play and chip stock SLAB also traded lower this morning and once again came very close to hitting our target at $40.00 but didn't quite make it with a low of $40.29. The sharp rebound off this support level for the second time in three days has me thinking it may be time to exit.

  Linda Piazza   7/14/200,  11:40:10 AM
The OEX has pushed above its 50-dma, a first sign of returning strength. It's now about to challenge the descending trendline of the February highs. The OEX popped above that trendline for most of June before dropping below it again. It now crosses at about 546.75, just below the known 547 historical S/R.

  James Brown   7/14/200,  11:37:52 AM
OI put play and chip stock IRF gapped down this morning to a new 11-month low but is seeing a rebound as it tried to fill the gap. IRF currently -1.48% to $34.44.

  James Brown   7/14/200,  11:36:11 AM
As expected we are stopped out in WFMI.

  James Brown   7/14/200,  11:35:38 AM
Yesterday I mentioned that OI call play SUN was bouncing from support at the $65.00 level and it looked like an entry point. Today the stock is seeing some follow through on yesterday's intraday rebound and the stock is up 1.89%.

  Jeff Bailey   7/14/200,  11:35:03 AM
Buy Program Premium

  Jeff Bailey   7/14/200,  11:34:36 AM
QQQ $35.55 +0.01% .... sesson high has been $35.59.

Looks bullish to me to $36.00 by Friday.

  James Brown   7/14/200,  11:32:53 AM
OI call play PD is up another 1.91% and breaking out over round-number, psychological resistance at the $80.00 mark.

  James Brown   7/14/200,  11:31:25 AM
OI call play ITT bounced from the $82.50 level as expected but the rebound is struggling to maintain any momentum.

  James Brown   7/14/200,  11:29:39 AM
OI call play ATK is stretching its winning streak to 7 days in a row.

  Linda Piazza   7/14/200,  11:29:00 AM
The Russell 2000 is testing its 50-dma, currently at 565.03, with the Russell 2000 at 564.72. It's tested this average each of the last four days, but has not been able to maintain levels above it since plunging beneath it to the 200-sma on 7/08.

  James Brown   7/14/200,  11:28:47 AM
Newly added OI call play AET has hit our trigger to go long at $86.55. This is a breakout over resistance at $86.50 and a new two-month high.

  Linda Piazza   7/14/200,  11:27:13 AM
The Nasdaq is rising again toward its 200-ema, currently at 1934.77.

  Jonathan Levinson   7/14/200,  11:26:50 AM
QQQ is settling into a range between the session high of 35.59 and 34.44, with the short cycle channel nearly overlapping those levels. 30 min support is up to 35.27, resistance 35.65. The short cycle upphase has sputtered here, but a downphase has yet to commence.

  Jonathan Levinson   7/14/200,  11:25:20 AM
INTC back below 24. I heard that Dan Niles had been bulling the stock yesterday, but it's only hearsay. If he did, that would be the second time he precedes a precipitous drop with bullish comments. Lettuce not even discuss Abby's bullish bloviations from a few weeks ago.

  Linda Piazza   7/14/200,  11:22:09 AM
The five-minute pattern on the OEX looks like a possible bull flag at the top of the climb, but that Keltner resistance is gathering just above, too. The OEX needs to be able to hold near the day's high long enough for support to cycle up beneath it. As I type, support lines are widely scattered, leaving plenty of room for a free fall. Support looks a little strong on the 15-minute chart, at 544, but strongest from 543.40-543.54.

  Linda Piazza   7/14/200,  11:15:06 AM
Support lines on the OEX 5-minute Keltner chart are thinning out, but the OEX challenges that firmer-looking resistance as I type, trying to push above it. If it does, those lines will then be support. The OEX hasn't made it past them yet, however.

  Jonathan Levinson   7/14/200,  11:12:23 AM
30 min channel support is now 35.25, resistance 35.60 for both the 30 and 60 min channels on QQQ.

  Jonathan Levinson   7/14/200,  11:10:06 AM
Session low for bonds here, with TNX up 1.5 bps to 4.494%. Above 4.5%, key resistance, bond bulls are in trouble with a possible retest of 4.88% in the cards.

  Linda Piazza   7/14/200,  11:08:54 AM
The OEX falls beneath Keltner resistance near 544.80. Next strong support near 543.60, alyhough there's some support at 544.21, too.

  Jonathan Levinson   7/14/200,  11:08:49 AM
This dip is trying to roll the short cycle oscillators over from below overbought territory, but it's causing just a stutter in that bullish-divergent 30 min cycle uptick.

  Jeff Bailey   7/14/200,  11:05:40 AM
11:00 Market Watch at this Link

  Linda Piazza   7/14/200,  10:57:34 AM
The Nasdaq has bounced back up to test its 200-ema. Yesterday, it closed beneath that average for the first time since the May weakness, and then opened below that average this morning, in its first open below that average since May 21. The 200-ema crosses at 1934.77. The Nasdaq high has been 1934.19.

  Jonathan Levinson   7/14/200,  10:56:01 AM
QQQ update at this Link.

  Linda Piazza   7/14/200,  10:55:23 AM
The OEX five-minute Keltner channels show that 546 is possible if the OEX can maintain values above 544.54 or perhaps above 543.75. This zooming around this morning has skewed those channels somewhat, however, so that support and resistance lines are widely spaced, not converging as they often do. Strongest support for the OEX appears to be back near 543, just above and just below.

Turning to the 30-minute chart, however, I see that the OEX has just hit the 30-minute 100/130-ema's, averages that stopped its advances over the last few days. Those averages now are at 544.65 and 545.48, respectively.

  Linda Piazza   7/14/200,  10:51:32 AM
Keene called this late last week, saying that volatility might return Wednesday of this opex week.

  Linda Piazza   7/14/200,  10:49:25 AM
I guess that does look like a V-shaped recovery after all, showing that bears were right to be forewarned that the bounce wasn't looking like the typical bear flag bounce.

  Jonathan Levinson   7/14/200,  10:49:22 AM
My Keltner projections show 30 and 60 min upper channel resistance being violated in the futures here and imminently for QQQ with a print above 35.62. That should be a sell signal, but I'm leery of it because of the 30 min oscillator bullish divergences noted earlier.

  Jeff Bailey   7/14/200,  10:48:36 AM
S&P 100 Index (OEX.X) 545.00 +0.18% .... could be pivotal point here.

  Jeff Bailey   7/14/200,  10:46:48 AM
Buy Program Premium

  Jeff Bailey   7/14/200,  10:44:47 AM
Swing trade bullish call alert for the JDS Uniphase (JDSU) $3.42 +5.23% .... December $3.00 calls (UQDLG) at the offer of $0.75.

  Jeff Bailey   7/14/200,  10:32:27 AM
VIX.X 14.18 -1.93% .... session low.

  Jonathan Levinson   7/14/200,  10:30:15 AM
Thanks to CC for bringing me the open market data for the day. The Fed added 5B in overnights against 4B expiring for a net 1B addition.

  Linda Piazza   7/14/200,  10:30:04 AM
The OEX is now hitting that resistance level just above 543 on the 15-minute Keltner chart. The mid-channel level is at 543.46.

  Jeff Bailey   7/14/200,  10:29:03 AM
Sell Program Premium .... SPX 1,114.71 , OEX 543.33, QQQ $35.38.

  Linda Piazza   7/14/200,  10:28:13 AM
My apologies to those listening for the al_rts. I try hard not to use that word, but it slips into my posts occasionally, as it did in my previous post. I've corrected it.

  Jeff Bailey   7/14/200,  10:27:25 AM
Networking (NWX.X) 237.69 +2.6% .... session highs.

  Jeff Bailey   7/14/200,  10:26:46 AM
Bearish swing trade stop alert for the QQQ at $35.35.

Now naked the QQQ July $35 puts.

  Linda Piazza   7/14/200,  10:26:21 AM
The OEX's rise isn't exactly typical of a V-bottom, not exactly typical of a distribution pattern, either. It hasn't yet settled down into the typical tight pattern of higher highs and higher lows that's typical of a bear flag, for example. It's just risen above a 50% retracement of the flagpole drop, so if it continues this rise, there's another reason to doubt that it's a bear flag . . . rose above the 61.8% retracement as I typed. Bears should be warned that this isn't acting like the typical measured distribution pattern. Doesn't mean that the OEX isn't just rising to yesterday's levels again to "do over" the opening or that sellers aren't lurking, waiting for yesterday's levels to be hit, but it does mean there are reasons to be wary if in bearish plays.

  Jeff Bailey   7/14/200,  10:25:35 AM
Buy Program Premium ... SPX 1,113.92 , OEX 543.12, INDU 10,231 , QQQ $35.37.

  Jeff Bailey   7/14/200,  10:22:43 AM
Buy Program Premium .... SPX 1,112.16 , OEX 542.07, INDU 10,222, QQQ $35.30.

  Jonathan Levinson   7/14/200,  10:19:45 AM
It's not just me- others are noting the absence of news from the Fed. Anyone with access to an institutional feed such as Bloomberg, please let me know if there's any news from the fed's open market desk at jlevinson@OptionInvestor.com.

  Jonathan Levinson   7/14/200,  10:17:36 AM
30 min channel resistance is down to 35.40 QQQ, 60 min down to 35.65. The 30 min channel has not let go of its downturn, and until it does, those bullish oscillator divergences are potential only.

  Jeff Bailey   7/14/200,  10:14:04 AM
Bearish Swing Trade lower stop alert for the Underlying QQQ short to $35.35.

QQQ $35.23 and just back from session high of $35.29.

  Jonathan Levinson   7/14/200,  10:12:19 AM
Session highs for GE and MSFT. Still waiting for the Fed's website to get back online.

  Linda Piazza   7/14/200,  10:10:01 AM
The OEX's 15-minute Keltner chart shows converging resistance just above 543: Link For an explanation of how I use Keltner charts, see my article in last night's newsletter.

  Jeff Bailey   7/14/200,  10:09:42 AM
Networking Index (NWX.X) 236.13 +1.93% ... just now edging above yesterday's high.

  Jeff Bailey   7/14/200,  10:08:15 AM
10:05 Market Watch at this Link

  Jonathan Levinson   7/14/200,  10:07:33 AM
A wavelet downphase is trying to kick off here. Rising support on this morning's bounce has support at 35.20 currently, below which things could turn ugly again for QQQ. Despite the bullish oscillator divergences on the 30 min chart, they're not valid until the 30 min cycle turns back up, which it has yet to do.

  Jonathan Levinson   7/14/200,  10:01:46 AM
Gold and silver are holding most of their earlier gains, gold up 2.50 at 404.90 and silver up .10 at 6.49. HUI is up 1% at 197.69 and XAU is up 1.06% at 90.65.

  Jonathan Levinson   7/14/200,  9:59:15 AM
The Fed's open market operations page isn't loading and so I'm in the dark as to whether we have a net drain or add today. Will keep watching and report back as soon as it's online.

  Jeff Bailey   7/14/200,  9:58:49 AM
Current OPEN MM profiles at this Link

  Linda Piazza   7/14/200,  9:58:16 AM
OEX Keltner resistance is trying to firm up from 542.25-542.39 and then again from 543.13-543.43. If the OEX rises fast enough, it can outstrip that first resistance band before it has time to firm, but the OEX looks as if it's pausing just below instead.

  Jonathan Levinson   7/14/200,  9:55:31 AM
Session high for GE here.

  Jeff Bailey   7/14/200,  9:53:27 AM
NASDAQ-100 Heatmap at this Link

  Linda Piazza   7/14/200,  9:49:43 AM
We're within the first reversal period of the day, and the OEX is trying to rise, but it's not exactly a V-bottom rise here so far.

  Jonathan Levinson   7/14/200,  9:43:09 AM
A wavelet upphase is starting here, and given the setup with deeply oversold short cycle indicators, there's the possibility of a more meaningful bounce developing to challenge the steep decline since yesterday's close. 30 min and short cycle channel support at at 35.07 QQQ, resistance first at 35.24, followed by the 7200-tick SMA at 35.45, followed by 30 min resistance at 35.65.

  Linda Piazza   7/14/200,  9:41:12 AM
During the first five minutes of trading, the OEX ranged from 544.00 to 540.63. It's violated its lower Keltner channel support on the five-minute chart, giving a breakout signal. It's far outstripped other Keltner lines, leaving little nearby resistance on a Keltner basis. If the OEX can bounce quickly, in a V-type recovery, then it's got free range with resistance lines widely scattered, but if it doesn't bounce quickly, those lines are going to converge and fence it off.

  Jeff Bailey   7/14/200,  9:40:37 AM
Strength early for Networking (NWX.X) 234.67 +1.3% and Gold Bugs ($HUI.X) 198.50 +1.41%.

  Jeff Bailey   7/14/200,  9:39:29 AM
QQQ $35.15 -1.12% .... session low still $35.10.

  Jeff Bailey   7/14/200,  9:37:30 AM
QQQ $35.10 -1.18% ... session low and MONTHLY S2 here.

  Linda Piazza   7/14/200,  9:36:38 AM
The TRAN opened below the 30-dma that has been supporting it over the last three trading days and now drops toward Friday's low, at 3058.39, with the TRAN at 3062.79. A drop below Friday's low will confirm the drop out of the recent consolidation pattern.

  Jeff Bailey   7/14/200,  9:36:23 AM
Semiconductor Index (SOX.X) 424.48 -3.61% ... below WEEKLY S2.

As such, I have to assess downside in the QQQ to its WEEKLY S2 of $34.92.

  Jonathan Levinson   7/14/200,  9:36:19 AM
30 min channel support declines here to 35.08 QQQ. The short cycle TRIX is buried in oversold, but no sign of strength yet.

  Linda Piazza   7/14/200,  9:34:43 AM
OEX 539.74 was Monday's low.

  Linda Piazza   7/14/200,  9:33:07 AM
Well, I guess we can say that the OEX turned its smallest Keltner channel lower again! This precipitous drop is going to skew the Keltner channels for a while this morning.

  Jeff Bailey   7/14/200,  9:27:34 AM
QQQ alert $35.16 in pre-market. While this is getting close to my bearish target of $35.10 for the Underlying QQQ short (280 shares at $35.68), I'm going to remove that target for those traders naked the July $35 puts (10 contracts at $0.20) at this point and let's try and get a pulse on things.

  Jonathan Levinson   7/14/200,  9:14:24 AM
The 30 minute oscillators on the Nasdaq futs are showing a slight bullish divergence, and the price of QQQ is currently below the 60 min channel support band. My guess is that after an opening washout as the cash players react to the news, we should see some kind of a bounce. My Keltner bands suggest that downside should be slow from here, and anything more than a consolidation would be a short cycle trending move. Current 60 min support is at 35.25 and 30 min support is at 35.13.

  Jonathan Levinson   7/14/200,  8:41:12 AM
Equities are cracking as well, ES down to a session low of 1106.75, NQ at 1417, QQQ 35.16 here. Session low for MSFT at 27.38. INTC's down 6.12% at 24.54.

  Jonathan Levinson   7/14/200,  8:37:20 AM
Session low for bonds here, with TNX peeking into the green, up .2 bps to 4.481%.

  Jonathan Levinson   7/14/200,  8:35:51 AM


  Jonathan Levinson   7/14/200,  8:35:12 AM


  Jonathan Levinson   7/14/200,  8:34:37 AM
Equities are mostly unphased by the news, with gold up to 406.30, silver to 6.51 and bonds have pulled back slightly.

  Jonathan Levinson   7/14/200,  8:31:48 AM





  Jonathan Levinson   7/14/200,  8:16:57 AM
INTC's bunker buster has ES down 5.25 to 1109, NQ -13 to 1421, YM -45 to 10182 and QQQ down 30 cents to 35.25. Gold is up 2.3 to 404.5 and silver +.06 to 6.44. Bonds are at a session high of 110.56, up .125 as we await the 8:30 releases of export prices ex. ag. and import prices ex. oil (prior .4% and 1.2% respectively), as well as June retail sales (exp. -.7%) and retail sales ex. auto (exp. .2%).

  Linda Piazza   7/14/200,  7:12:07 AM
During Tuesday's trading, the OEX printed a doji between the 200-sma's support and the 50-dma's resistance. That doji formed at the top of the recent consolidation pattern. The OEX balanced between the 15-minute 100/130-ema's, serving as support, and the 30-minute 100/130-ema's as resistance. Fifteen-minute oscillators flattened. Crude futures crept up again Tuesday, perhaps helping to keep pressure on the equities, although they did not move above $40.00. The TRAN stayed above the 30-dma another day, but continued a pattern that could be a measured distribution pattern. So did the SOX and the GSO. The BIX showed more strength, closing above 350, its highest close since the 6/23 close at 350.33, but did not exceed that close nor June's intraday high, so I consider it still trading within its recent consolidation pattern.

The OEX and BIX appeared poised for topside breakouts, while the SOX and GSO appeared more nearly poised for downside breakdowns. With the TRAN's pattern looking more like a bear-flag than anything else, it could be poised for another breakdown, too. Disappointment over some aspects of Intel's earnings report hit the futures overnight, indicating that techs at least may continue their slide down. In order to move away from the consolidation zone and to hold any breakout or downside break, markets need to act as nearly in concert as possible, although that wasn't necessary in Japan last night, with strength in banking issues doing nothing to stop the 2% slide in the Nikkei.

On the OEX, the 15-minute Keltner charts suggested at yesterday's close that it might be easier for the OEX to rise than to drop, but if this morning's open violates 543.44 and maintains levels below that number, then that action is going to point the smallest Keltner channel down toward 541.54 and then toward 538.48, if the 541.54 support does not hold. A move below 538.48 would constitute a breakout on that 15-minute Keltner chart, while a move below 541.30 constitutes a breakout on the 5-minute one.

The danger still exists that today could chop around within the most recent consolidation zone, but another danger exists: a quick swoop down that meets next support, with a climb from there. One possible support level is the 539.75-ish level, recent support. Traders interested in playing the downside or already in bearish plays should also be aware of the 200-ema at 538.23, a possible bounce point if the OEX should drop out of the recent consolidation pattern. Keltner channels keep showing 538-ish numbers, too, as possible support.

What if the cash open surprises us and the OEX opens at or above the yesterday's close? I'm looking for a break above the 50-dma at 545.23 as a first sign that the OEX is attempting an upside break, and the five-minute Keltner charts suggest that unless the open violates 543.90 and sustains values below that, the OEX could be headed up to test 544.73, and then 545.55, if it can move above that first resistance line. Traders interested in playing the upside should remain aware of possible strong resistance from 547-549.

  Linda Piazza   7/14/200,  6:48:44 AM
Good morning. The Nikkei opened more than 50 points above Tuesday's close and soon coiled around 11,660. Banks led the index higher in early trading, with merger news creating hope that the government's plan to reduce bad loans will be helped by the merger of two banking groups into the world's biggest bank. UFJ Holdings announced that it was considering a merger with Mitsubishi Tokyo Financial Group. Issues related to consumer demand also rose in early trading after the Bank of Japan raised its outlook for Japan's economy on Tuesday. However, that coiling market soon resolved in a downdraft that swept the Nikkei lower by 251.97 points or 2.17%, to 11,356.65.

Later in the day, UFJ's board met, confirming the decision to ask Mitsubishi Tokyo Financial Group to merge. In addition, the board reportedly decided not to sell UFJ Trust to Sumitomo Trust. Despite the downdraft in the Nikkei, most banking stocks gained, with Mitsubishi Tokyo adding 7.4% and UFJ Holdings, 10.6%. Sumitomo Trust did not share in those gains, however, plunging 9.9% and saying that it might sue UFJ for not going through with the planned sale of UFJ Trust.

Disappointment with some aspects of Intel's earnings report sent many chip-related issues lower throughout Asia, with other Asian bourses mostly trading lower. The Taiwan Weighted lost 1.09%, and South Korea's Kospi lost 1.91%. Singapore's Straits Times declined 0.39%, and Hong Kong's Hang Seng fell 1.20%. China's Shanghai Composite was one of the few Asian bourses that climbed, gaining 0.31%.

European bourses mostly trade lower this morning, too, also hit by tech weakness. ASML reported earnings that beat expectations, according to Bloomberg.com, but still the semiconductor equipment maker joined in tech weakness. In the U.K., retailer Marks & Spencer gained on advice by its largest shareholder to negotiate with billionaire Philip Green in his bid for the company.

As of this writing, the FTSE 100 has dropped 29.70 points or 0.68%, to 4,328.00. The CAC 40 has dropped 36.74 points or 1.00%, to 3,619.44. The DAX has fallen 49.03 points or 1.26%, to 3,854.85.

  OI Technical Staff   7/13/200,  9:05:46 PM
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