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  Jeff Bailey   7/16/200,  6:05:17 PM
Pivot Matrix for next week at this Link

  Jeff Bailey   7/16/200,  4:58:22 PM
Closing Internals at this Link

  Jeff Bailey   7/16/200,  4:26:28 PM
Current OPEN MM Profiles at this Link

Closed the QQQ swing trade short from $35.20 out at $34.30 after QQQ showed ability to trade above WEEKLY S1 and DAILY R2 at the open.

Closed the QQQ swing trade long from $35.05 out at $34.75

Closed the QQQ July $35 puts at $0.20. Was worth the cost of commission to not get stuck with 1,000 shares at this point.

For JDSU Dec. $3 calls. IF we get a bounce, I'm seriously considering the selling of near-month $4 calls, ESPECIALLY if I don't see some broader sector participation in the NH/NL indications.

  Jeff Bailey   7/16/200,  4:10:50 PM
Buy Program Premium ... QQQ $34.65, SPY $110.65, DIA $101.66

  Jeff Bailey   7/16/200,  4:06:11 PM
S&P 500 Index (SPX.X) 1,101.27 -0.48% .... if not mistaken, this was June's option expiration "Max Pain"

  Linda Piazza   7/16/200,  4:05:12 PM
Today the FTSE 100, CAC 40, and DAX all erased their gains to close near the flat-line level. The FTSE 100 closed down 1.50 points or 0.03%; the CAC 40 closed down 0.15 points or 0.00%; and the DAX closed down 1.26 points or 0.03%. I don't think I've ever seen the three parked so close to their flat-line levels simultaneously.

  Jeff Bailey   7/16/200,  3:54:09 PM
Boston Scientific (BSX) $35.06 -13.2% ... released for trade.

  Linda Piazza   7/16/200,  3:53:17 PM
Back. The OEX is moving toward the supporting trendline of its falling wedge, with that support currently at about 536, but moving lower, of course.

  Linda Piazza   7/16/200,  3:46:20 PM
Caught on a telephone call. Into the close, the smallest Keltner channel points down toward 535.18, so that the OEX has vulnerability to that level unless the OEX can get above 537.46 and stay there. This may not happen this afternoon, however.

  Jeff Bailey   7/16/200,  3:44:33 PM
Naked put close out alert .... close out the QQQ July $35 naked puts at $0.20.

  James Brown   7/16/200,  3:43:45 PM
More natural gas stocks at or near new highs: EGN, WGR, STR, KWK

  James Brown   7/16/200,  3:39:31 PM
Natural gas issue Sempra Energy (SRE) is breaking out from its recent consolidation to hit new all-time highs.

  Jim Brown   7/16/200,  3:33:00 PM
Don't forget we have Greenspan speaking to the Senate and House committees on Tuesday/Wednesday in what was formerly know as the Humphrey Hawkins testimony.

  Linda Piazza   7/16/200,  3:32:11 PM
Some subscribers have mentioned the possible reverse H&S formations perhaps building on the OEX's and SPX's daily charts. I've been somewhat skeptical of them because they're forming in the midst of consolidation and as continuation-form patterns. However, there was bullish price/MACD divergence as the heads were formed and the heads and right shoulders were formed as the indices tested their 200-dma's, so I wouldn't dismiss them, either. However, both indices need to steady now if they're to have any validity.

  James Brown   7/16/200,  3:30:54 PM
OI call play SUN has hit the bottom edge of our suggested exit range at $70.00-72.00.

  Jim Brown   7/16/200,  3:24:56 PM
BSX recalling several products after compllications includng one death. Going to take a loss of $45 million plus a writedown of current inventory of about $50 million. Delaying earnings for a week.

  Linda Piazza   7/16/200,  3:22:16 PM
Just before 2:00, crude futures began a climb that took futures back above $41.00 again. About 2:00, the SPX began the dive that took it down to test its 200-sma.

  Jeff Bailey   7/16/200,  3:20:13 PM
03:15 Market Watch at this Link

  James Brown   7/16/200,  3:18:51 PM
Exxon Mobil (XOM) is breaking out to new 3 1/2 year highs.

  James Brown   7/16/200,  3:17:30 PM
ORCL's 3.5% decline is noteworthy not because it's the third day of declines on heavy volume but it breaks support near $10.65 from March and breaks support at the 10.40 level from December. ORCL's P&F chart has produced a triple-bottom breakdown sell signal with a $5.00 bearish target.

  Linda Piazza   7/16/200,  3:17:29 PM
This is one opex Friday when the OEX never settled into an equilibrium position on its five- or fifteen-minute Keltner channels, one of the few times that I can remember that not happening.

  Jeff Bailey   7/16/200,  3:14:36 PM
03:00 Internals at this Link

  Jim Brown   7/16/200,  3:08:43 PM
Hearing that Bacanovic got five months and five months

  Linda Piazza   7/16/200,  3:04:59 PM
The Nikkei is closed on Monday for a national holiday, so we won't be able to watch the Nikkei's performance or measure the way our futures react to the Nikkei's performance.

  Jeff Bailey   7/16/200,  3:03:56 PM
SOX.X 412.00 ...

QQQ $34.83

  Linda Piazza   7/16/200,  3:03:00 PM
Remember that potential bullish falling wedge I showed earlier on the OEX's fifteen-minute chart? The OEX hasn't yet breached it, either to the downside or upside. It's still trading within the formation.

  Jeff Bailey   7/16/200,  2:56:01 PM
Sell Prog. Premium SPX 1,103.49 , OEX 536.96 , QQQ $34.79

  Linda Piazza   7/16/200,  2:51:33 PM
As suggested in my 14:02 and 14:19 posts, the break out of consolidation hasn't constituted much of a break after all, at least not yet. The TRAN approached 3100, the SPX its 200-sma, slowing the descent. The Nasdaq has dropped below the 1895 level. The bounces haven't been exactly enthusiastic as these levels were hit, however, not exactly inspiring confidence in what was always predicted to be a possible reflexive bounce if those levels were hit. On the OEX, the Keltner channels still point down, with support trying to firm up again but not there yet as indices turn down once again.

  Jonathan Levinson   7/16/200,  2:47:06 PM
This is certainly not the bounce that bulls wanted to see off the 30 min channel test for QQQ- volume is declining as price advances so far, and the wavelet oscillator is just peaking here within what is hopefully a short cycle upphase commencing. On a purely price basis, 34.95-35.04 is the key resistance to watch here. Bonds have advanced, hitting session highs with TNX down 11.7 bps now at 4.368%.

  James Brown   7/16/200,  2:39:02 PM
Polaris Industries (PII) is showing some post-earnings strength. The company reported on July 15th and beat estimates by 2 cents while revenues came in higher than expected. PII is up 10% in the last two sessions and breaking out over the $50.00 mark to hit new all-time highs.

  James Brown   7/16/200,  2:35:42 PM
Investors continue to rotate out of semiconductor maker KLA-Tencor (KLAC). The stock was weak as the SOX fell this month and KLAC gapped lower on Intel's earnings news. Now KLAC is falling through round-number psychological support at the $40 level. Its P&F chart points to a $30.00 target. Shares are very oversold but momentum traders might want to give it another look. Earnings are expected on July 29th.

  Linda Piazza   7/16/200,  2:35:20 PM
The TRAN is back at 3100, actually at 3100.65 as I type.

  James Brown   7/16/200,  2:32:22 PM
Adolph Coors Co (RKY) has been the energizer bunny. The stock is up seven weeks in a row and after its recent consolidation sideways it appears to be breaking out to the upside again. It will be interesting to see if RKY sees any "sell the news" reaction on its July 22nd earnings report.

  Jonathan Levinson   7/16/200,  2:31:57 PM
The short cycle oscillators aren't as maxxed out as I've ever seen them on QQQ and the equity futures, but they're quite oversold. On the 30 min charts, they're not oversold but the 300 min stochastic is close, as it is on the daily. A break above prior support in the 34.95-35.04 range will confirm a new 30 min cycle upphase, but at current levels, we have oversold markets below support at a new low for the move.

  Linda Piazza   7/16/200,  2:28:39 PM
The OEX headed toward 537, again approaching the top of the congestion zone from May. This should slow its descent or even provide another bounce opportunity, but the operative word is "should." As of 30 minutes ago, crude futures had dropped back through the $41.00 level, which should have eased pressure on equities, but didn't.

  Jeff Bailey   7/16/200,  2:25:44 PM
SOX.X 409.70 -2.10% ....

  Jeff Bailey   7/16/200,  2:25:22 PM
Swing trade bullish stop alert for the QQQ at $34.75.

  Jonathan Levinson   7/16/200,  2:23:06 PM
The current QQQ move is peeking below the 30 min bull wedge and is taking out the 300 min stochastic bullish divergence. That divergence remains on the Macd, and the 30 min candle needs to complete on a closing basis to seal the breakdown- so far it's just a spike on the 30 min chart. On the short cycle chart, the move has stopped at lower 60 min channel support, with descending 30 min channel support now 5 cents below that. There's still room for the long awaited bounce, but bulls are holding on by their fingernails here.

  Linda Piazza   7/16/200,  2:19:11 PM
Of course, now the markets move, after my 14:14 post! The OEX is threatening to fall toward 537 and then 536.85 if that doesn't hold. A break below 536.85 will constitute a downside breakout, but the 15-minute charts still show a possibility that 537-537.50 will hold as support.

  Jonathan Levinson   7/16/200,  2:19:02 PM
30 min channel support is down to 34.77, 60 min support 34.80.

  Jeff Bailey   7/16/200,  2:16:23 PM
Semiconductor Index (SOX.X) 412.00

QQQ $34.87 ....

  Linda Piazza   7/16/200,  2:14:49 PM
Did you buy out-of-the-money July options this morning, certain that the OEX or some other entity was going to make a big move? If so, those options are leaking value, pouring it, actually. If they were purchased with your lotto money, as I suggested yesterday might be wise for anyone inclined to trade today, then let them run. If not and if you can't afford to lose any more money, then don't! Sell them. Of course, that's a guarantee that the markets will immediately head your direction in a big way, but you can still go into the weekend congratulating yourself on your sound account management practices. Make your own decisions, of course, but there are people out there sure that the indices are going to bounce from the approached known support levels and others just as sure that markets are going to plunge through those levels this time. Then there are those like me who aren't so sure that the markets are going much of anywhere. They could, but other opex Friday's have stayed steady at the midday level through the end of trading, defying all odds. I give this advice because I care, and because I had a trading partner who once lost $250,000 in a single opex cycle buying OTM options he was sure were going to bounce. Up to the very last minute. (Hint: the stock was Enron and the options were calls.)

  Jonathan Levinson   7/16/200,  2:14:23 PM
Here's the test of 34.90 QQQ. Lower bull wedge trendline getting hit here.

  James Brown   7/16/200,  2:13:16 PM
Bulls may want to give Sierra Health Services (SIE) another look. The stock has been bouncing from support at its 40 and 50-dma's for months. The most recent consolidation against its 50-dma has broken out to the upside again and shares are now pushing through what could have been round-number resistance at the $45.00 mark. Its P&F chart has produced a new buy signal. There is some resistance at $47.50 but SIE looks poised to make a run toward $50. Earnings are expected on July 21st.

  Jeff Bailey   7/16/200,  2:09:04 PM
Stocks with sector association that are hitting new highs at this Link

I quickly ran through Dorsey's point and figure charts, grabbed their bullish vertical count calculations.

One stock that caught my eye was a XPRSA.

Time willing, I'll go through some new lows too, but initial analysis is that energy is really leading the NYSE NH indications.

  Jonathan Levinson   7/16/200,  2:08:48 PM
Note the TRINQ at 2.32. That's a high reading compared with the sub-1 readings to which we've grown accustomed for the past year, but is it high enough to wash out the sellers on the current daily cycle downphase?

  James Brown   7/16/200,  2:03:09 PM
Oil stock Amerada Hess (AHC) is breaking out from its recent consolidation above the $80.00 level with a 3% gain to new two-year highs. The next hurdle is surpassing its May 2002 resistance at $85.

  Jonathan Levinson   7/16/200,  2:02:52 PM
Got me, Keene. I tried once but never learned to knit :)

  Linda Piazza   7/16/200,  2:02:05 PM
Recognizing patterns is essential to a healthy trading account. One pattern that's repeated almost every month is the one that pins indices to certain levels from middle of the morning on opex Friday into the close. Recognizing that pattern allows us to refrain from trading these periods. With that said, however, the Keltner pattern suggests that the OEX could soon break, but perhaps only up to 539.85 or down to 537.86. Not much of a break, right? Of course, if those levels are broken and sustained, others are then targets, but those are the most likely targets at this time.

  Jonathan Levinson   7/16/200,  1:57:24 PM
Updated 100-tick QQQ chart: Link

  Linda Piazza   7/16/200,  1:54:27 PM
Just as resistance lines were separating a while ago on the OEX five-minute Keltner chart, those supporting lines on the 15-minute chart are now separating. On the 15-minute chart, it now appears as easy for the OEX to fall as to climb.

  Jonathan Levinson   7/16/200,  1:52:00 PM
Session high for WMT here. Dow futs are up .42% while the Nasdaq futs are down .28%.

  Linda Piazza   7/16/200,  1:46:24 PM
The OEX didn't take advantage of a momentary lightening of overhead resistance, and now it's trying to firm up again. The mid-channel level drifts down to 539.90, so that by the time the OEX finally decides to break to establish equilibrium, it might not have that far to go.

  James Brown   7/16/200,  1:43:36 PM
Is it time for an oversold bounce in Chicago Mercantile Exchange (CME)? The stock has fallen from $147 on July 1st to $116.60 this morning. Shares are bouncing from their simple 100-dma and the early June lows but they appear to be struggling at the $120 level. Earnings are next Thursday.

  Jonathan Levinson   7/16/200,  1:41:37 PM
Gold and suilver have settled down slightly at 406.90 and 6.715, with HUI down .21% and XAU up .29%. No reaction whatsoever to the comments reported earlier from Governor Bies.

  James Brown   7/16/200,  1:26:05 PM
A "strong buy" upgrade from JPMorgan this morning is not enough to stop the selling in AMD today. Shares continue to slip lower in a post-earnings depression. The breakdown yesterday produced a massive P&F sell signal that currently points to a $9.50 target.

  Linda Piazza   7/16/200,  1:25:18 PM
Thanks, Jonathan, for the information on the TRIX.

  Linda Piazza   7/16/200,  1:20:41 PM
Keltner resistance may now be thinning just overhead on the OEX 5-minute chart. OEX 540 may be possible.

  Jonathan Levinson   7/16/200,  1:15:07 PM
CHICAGO, July 15 (Reuters) - The U.S. current account deficit is large and warrants adjustments in the dollar's value on foreign exchange markets, Federal Reserve Board Governor Susan Schmidt Bies said on Thursday.

"The exchange rate is going to have to adjust, just because you are running current account deficits at five percent of GDP which is very large and the real issue is when and how it will happen," she told a business audience after a speech here.


  Jonathan Levinson   7/16/200,  1:12:17 PM
The bullish divergence has just cancelled out on the wavelet oscillator but not on the TRIX. 30 min support is down to 34.80 and resistance is down to 35.25. key support is now 34.94, resistance 35.05. This action is feeling more and more like a bearish descending triangle, but until the bottom drops out, the 30 min bull wedge is still on the table.

  Jeff Bailey   7/16/200,  1:08:39 PM
01:00 Internals at this Link

  Jonathan Levinson   7/16/200,  1:05:05 PM
Linda, it's a triple smoothed oscillator that provides a very low detail view of the short cycle on my settings. When there's uncertainty in the twitchier oscillators, I use the TRIX to point out general bias. It's the 2nd pane from the bottom at this Link . It's defined as a momentum indicator that displays the percent rate-of-change of a triple exponentially smoothed moving average of the security's closing price. It is designed to keep you in trends equal to or shorter than the number of periods you specify.

  Linda Piazza   7/16/200,  1:03:21 PM
Jonathan, I haven't been watching TRIX. What should we know about it?

  Linda Piazza   7/16/200,  1:00:48 PM
The OEX now hits resistance on the five-minute Keltner chart, near 539. If it can climb above that resistance, then a test of mid-channel resistance near 540 might be next. If it falls below 538.70 instead and maintains levels below that, it's more likely to flatten or turn down again.

  James Brown   7/16/200,  12:58:56 PM
Some of you already know that Netflix (NFLX) is getting crushed today, down 25.8% to $23.72. The company missed earnings estimates of 13 cents a share by 2 cents even though revenues soared more than 90% to $120.3 million for the quarter.

  Jonathan Levinson   7/16/200,  12:58:23 PM
There's a bullish TRIX and wavelet divergence on the short cycle QQQ, and we've just seen 2.5M QQQ shares hit the offer within 100 ticks, the biggest buy candle of the day. Support looks like it means to hold here.

  Linda Piazza   7/16/200,  12:57:18 PM
Today's OEX action nas done nothing to improve the picture on the OEX's daily Keltner chart. Here's a chart with annotations: Link For information on how I use Keltner channels, see my 7/13 Traders' Corner article: Link

  Jonathan Levinson   7/16/200,  12:52:08 PM
Unless I'm mistaken, opex settlement price for Dow and SPX options is today's opening print, while for Nasdaq options is today's close. I'm trying to make sense of the divergence between the Dow and SPX, both green by more than .25%, and the NQ futures, down .25%. In any event, the Naz is the laggard here, with QQQ down by .21%, led by the SOX, down 1.11% at 413.89.

  Jeff Bailey   7/16/200,  12:51:26 PM
SPX Option Chain sorted by most active at this Link

The decline in the VIX.X looks to be largely from selling of out the money puts.

The BEARISH read on this in my opinion is that the selling is only coming from prior buyers. There's little selling of puts near the money that I can see. I've added up-tick volume and down tick volume to option chain.

  Linda Piazza   7/16/200,  12:45:23 PM
How is the OEX doing with respect to establishing an equilibrium position on the five- and fifteen-minute Keltner charts? Resistance still looks slightly stronger than support on the OEX five-minute chart, suggesting a continued vulnerability to a downturn. So far, the Keltner channel is still pointed up toward 540, but it's trying to flatten. The 15-minute chart shows slightly more support than resistance, with that support near 537.75, but there the channel still points down. Sounds like a perfect recipe for more aimless wandering to me, but with a slight nod given to the bearish camp.

  Jeff Bailey   7/16/200,  12:38:04 PM
12:30 Market Watch at this Link

Oil backing off its session highs of $41.80, but getting very close to contract highs of $42.30.

  Jonathan Levinson   7/16/200,  12:37:58 PM
QQQ touched a nominal new low at 34.93 there, moving the 30 and 60 min channel supports lower to 34.82 and 34.87 respectively. A break to that lower range would set up 34.94-35 as new confluence resistance and set the stage for the bearish daily cycle washout scenario discussed earlier. The bounce from support is one decent volume, but that volume is waning as I type.

  James Brown   7/16/200,  12:34:14 PM
..Linda, I found it funny a few days ago when CNBC did a bit on the resurgence of Izod shirts that were popular when I was in school. I did check out charts on American Eagle Outfitters (AEOS) and Abercrombie & Fitch (ANF). Both stocks are up significantly in the past several months but having a rough time these last couple of weeks.

  Linda Piazza   7/16/200,  12:29:12 PM
James, your last post about HOTT and about the preference for preppy clothes sent me to look at GAP (GPS). Apparently, teens are getting their preppy clothes somewhere other than GAP these days, as GAP is plunging, too.

  James Brown   7/16/200,  12:26:26 PM
Ouch! Hot Topic (HOTT) is down 16.5% to $15.91, which are new 14-month lows, after issuing an earnings warning last night. The company says sales are struggling as teenage fashion turns back to more preppy trends. HOTT expects Q2 earnings to be 10 cents a share versus analysts estimates in the 13-14 cent range.

  Linda Piazza   7/16/200,  12:25:15 PM
The OEX's 15-minute Keltner chart still shows support trying to firm up, but the five-minute chart keeps alive the possibility that the support won't hold. There's little to hold the OEX up on the five-minute chart. There is one hope, however: the smallest Keltner channel has turned up again on that chart.

  Jonathan Levinson   7/16/200,  12:22:31 PM
Session low for NQ futs here.

  Jonathan Levinson   7/16/200,  12:20:06 PM
QQQ's maximum pain op-ex value is 36, and while we've seen plenty of max-pain misses this year, it adds another potential engine to fuel an upside breakout. The most recent wavelet high reached 35.15 QQQ, and that's the first line in the sand for bulls above the more recent 35.04 resistance.

  Jeff Bailey   7/16/200,  12:18:57 PM
Maverick Tube (MVK) $28.34 +3.43% Link .... new 52-weeker. Makes steel tubing for oil/gas well bore.

  Jeff Bailey   7/16/200,  12:17:04 PM
12:00 Internals at this Link

  James Brown   7/16/200,  12:12:06 PM
Oil stock Occidental Petroleum (OXY) is trying to break out of its recent consolidation and is very close to pushing through overhead resistance at the $50.00 mark (today's intraday high). This looks like a decent bullish candidate but earnings are on July 19th (Monday).

  Linda Piazza   7/16/200,  12:10:44 PM
Is this a descending wedge? Link And will it break to the upside, the way bullish wedges are supposed to do? We saw a lot of wedges that failed to work last year, so I wouldn't be entering bullish trades based on this possibility, but if I were in a bearish position, I'd be watching out for a possible upside break, too, as a first sign that my trade might not be working as expected. One thing we've seen happen with these bullish wedges this year kept happening last year with the bearish ones: after a break, the indices trades sideways instead of climbing (bullish falling wedges) or dropping (bearish rising wedges). Watch out for that possibility this time, too, as an upside break would just bring the OEX into a congestion zone and especially as the trend of the TRIN isn't supporting bullish plays right now. Watch price action, and not just oscillators or formations.

  Linda Piazza   7/16/200,  11:59:31 AM
So far, the OEX hasn't been able to sustain levels above the central average of its smallest Keltner channel on the five-minute chart, now at 538.82, and it has to do that as a first step toward turning the channel up toward 540 and then 542. Support continues to try to firm up near 537.60.

  Jeff Bailey   7/16/200,  11:57:25 AM
Alcoa (AA) $33.11 +0.66% ... Link

A "focus" stock of mine as it relates to second leg of bull market and economic growth. Second test of 200-day SMA could be critical. Found some short-term strength from the rising 21-day SMA.

  Jonathan Levinson   7/16/200,  11:54:36 AM
Gold and silver are holding their gains at 407.5 and 6.734 respectively. HUI is up .33% and XAU +.83% at 196.69 and 90.74 respectively.

  James Brown   7/16/200,  11:50:39 AM
Fannie Mae (FNM) is breaking out from its recent trading range over resistance at $72.50 and its 100 & 200-dma's. The stock is up five days in a row.

  Linda Piazza   7/16/200,  11:50:01 AM
The TRIN has been on quite a trajectory today, hasn't it, Jane? For you bulls out there, I don't see anything yet in that trend that would support bullish plays other than quick scalping plays, but perhaps others on the MM with more experience watching the TRIN might have different opinions.

We're now entering the time of day during an opex Friday when markets start getting pinned down. On a Keltner chart basis, that frequently shows up as Keltner channels begin lining up in an equilibrium position. That hasn't happened yet, and in order for it to happen on the 15-minute chart, the OEX would have to rise toward 541-542, with the mid-channel level now at 541.94 on that chart, and at 540.44 on the five-minute chart. Actually, with the weakness in the markets, I think it will be tough to establish that equilibrium position, and perhaps instead, the smallest channel will line up just under the mid-channel level, so that there's almost equilibrium, but the OEX remains in the lower half of the channels.

  James Brown   7/16/200,  11:44:29 AM
Medical device maker Stryker Corp (SYK) is down 11.29% to $48.65 and breaking through multiple support levels after reporting earnings last night. SYK beat estimates by 3 cents but came in light on revenues. The news is weighing on rival Zimmer Holdings (ZMH), which gapped lower and traded to the $76.00 level before bouncing back to $78.90 (ZMH is still down -4.4%).

  Jonathan Levinson   7/16/200,  11:43:38 AM
35.15 held on the last wavelet bounce for a lower high on QQQ.

  James Brown   7/16/200,  11:40:15 AM
H R Block (HRB) is breaking out over seven-week old resistance at the $49.00 level and its simple 100-dma. There is more resistance at the $50.00 level and its simple 200-dma still overhead but HRB might be worth keeping on your watch list as it bounces from P&F support.

  James Brown   7/16/200,  11:33:16 AM
OI call play Sunoco (SUN) is surging higher today, up another 2.6 percent, to new all-time highs at $69.03. Keep in mind that our target was the $70-72 range so we're getting close.

  Jonathan Levinson   7/16/200,  11:32:12 AM
Session low for GE here at 33.28, down .27% vs. +.37% in the Dow futs. I believe that we're seeing op-ex distortions here.

  Jonathan Levinson   7/16/200,  11:31:03 AM
Session high for ZN bonds here, with TNX down a whopping 10.7 bps (a 2.41% decline) to 4.377%. The 4.5% resistance level held.

  Jonathan Levinson   7/16/200,  11:30:08 AM
The bounce is certainly more gradual than the decline that preceded it- thus Keene's "corrective" comment. As I've mentioned so many times with respect to ranges like this in the Futures Wraps, just watch the upper and lower ends of the range if you want to avoid swimming in the washing machine. Different traders in different timeframes will have different approaches- intraday scalpers can go long at support, short at resistance with stops just on the other sides of the line. Longer term players can use the same entries to catch what they feel to be corrective moves to support or resistance, or can wait and follow a break in the direction they feel will prevail longer term. In this case, the support and resistance lines earlier are significant to me not just for scalps but also in the context of the daily cycle downphase that is getting extended to the downphase. I believe that either support at the day low or at the levels posted yesterday above 34 will hold for this daily cycle downphase. If they don't, it will involve turns in the longer (weekly and monthly) timeframes, a less likely scenario.

  Linda Piazza   7/16/200,  11:23:51 AM
The OEX currently faces resistance at about 539.25 (Keltner and other), and will face next strong Keltner resistance at about 540.50. The OEX needs to get above that resistance to point the smallest channel up again.

  Jeff Bailey   7/16/200,  11:17:48 AM
QQQ $35.13 .... session low so far.... $34.94.

BIX.X 349.24 +0.51% ...

  Jonathan Levinson   7/16/200,  11:16:49 AM
Here's the 30 minute picture on QQQ Link showing the bearish descending triangle within the bullish descending wedge. Support held at the lower wedge support line, 34.94 being the day low. There's short cycle resistance now at former support of 35.15, with the 7200-tick SMA lined up at 35.16, above which more significant resistance is at the 30 min channel, 35.30 currently. 60 min resistance is 35.45.

  Jeff Bailey   7/16/200,  11:16:32 AM
11:00 Internals at this Link

Updating NH/NL indications today.

  Linda Piazza   7/16/200,  11:13:52 AM
The BIX has been finding support at its 30-dma again today, the fourth day in a row when it's done so. That 30-dma is now at 347.75, and so a breakdown below that would be a sign of a change in trend, but it would only send the BIX deeper into its recent consolidation pattern. A break above the 6/24 intraday high of 351.98 would be a sign of an upside break.

  Jim Brown   7/16/200,  11:07:06 AM
The Russell 2000 is leading us lower this morning and the weakness in the Russell is mostly due to weakness in the SOX. The Russell is clinging to support at 558-560 but only barely. An break here could see a dive to the 540 range and this would be very negative to the broader market. Link

The SOX has broken support at 418-420 and could be headed for the next real support level at 375. This would be a serious drag on the Russell and the Nasdaq. Market sentiment would be seriously damaged. Link

The S&P is hovering just over the 200dma at 1102 and the bulls are fighting to maintain this level. A break here could easily see a drop to 1090 or below considering the negative trends on the SOX/RUT. Link

The Dow is clinging to last ditch support at 10175 (we have seen the 10162 low twice this week) and a break here could easily see a drop past weak support at 10150 all the way to 10,000. With the Russell, and SOX failing the Dow is dependent on the SPX to hold 1102. We are setting up for a failure across all the indexes and a break of Dow support here could be the leading domino. Link

  Linda Piazza   7/16/200,  11:01:12 AM
The OEX is sitting right on its 200-ema, trying to hold that support. It closed just beneath it yesterday. Like Keene on the Futures side, I wouldn't be surprised to see markets clank around a bit within ranges. Specifically on the OEX, I wouldn't be surprised to see a range today from 536-541 or perhaps up to 543.25 or so, with that range roughly encompassed by the 200-ema and -sma. Of course, that depends somewhat on whether we get the expected reflexive (but probably countertrend, and so vulnerable to a breakdown at any time) bounce from the Nasdaq and SPX.

  Jeff Bailey   7/16/200,  10:57:52 AM
S&P Banks (BIX.X) 349.10 +0.44% ....

  Jeff Bailey   7/16/200,  10:57:23 AM
Swing trade long alert for the QQQ $35.05 here, stop $34.75, target $36.95.

  Jeff Bailey   7/16/200,  10:46:33 AM
QQQ $35.02....

  Jeff Bailey   7/16/200,  10:44:29 AM
QQQ $34.93 ...

BIX.X 348.42 +0.24% ... juuust above its DAILY Pivot.

  Linda Piazza   7/16/200,  10:43:30 AM
The TRAN is now negative.

  Linda Piazza   7/16/200,  10:42:01 AM
Many markets approach likely bounce points. While I believe that such bounce points may produce only countertrend bounces, those in bearish positions should have plans in place as to how they'll handle any reflexive bounce, if one occurs.

  Jeff Bailey   7/16/200,  10:41:36 AM
August Crude Oil futures (cl04q) $41.60 +2.03% (30-minute delayed) ...

  Linda Piazza   7/16/200,  10:40:49 AM
The Nasdaq is less than 4 points away from a touch of 1900.

  Linda Piazza   7/16/200,  10:39:26 AM
On the 15-minute OEX chart, support tries to firm up near 538, but channels still point down toward 536, with MACD pointing down, too. The OEX currently needs to get above 539.55 or preferably 541.12 to turn those channels higher again.

  Linda Piazza   7/16/200,  10:33:15 AM
The SOX is not showing any strength so far, but neither is it dropping below yesterday's low, either, although it's testing it as I type. The 5-minute Keltner chart shows support trying to firm up near 417.80, and if that support holds, there's been bullish divergence Keltner-style. That support is about to be tested now, however, so we may soon see. (Note: The SOX dipped just below that as I typed, with further support at 415.97.) The mid-point of Wednesday's tall red candle lies at 428.79, and candlestick theory suggests that resistance might be found there, so if you're tempted to play SOX stocks long on a hoped-for bounce (I'm not), then guard your positions as the SOX approaches that midpoint. Of course, it has to rise first, and get past 420 and 425, any which of might be failure points.

  Jeff Bailey   7/16/200,  10:29:31 AM
TASER Intl. (TASR) $40.35 +0.24% Link .... Jeff: I am long -term bullish on TASR, however I own the August 35 puts at $ 2.30. With earnings coming on Tuesday, what is your opinion on holding vs selling these before Tuesday. My thought is the stock will sell off after earnings which would create a buying opportunity in the mid 30's. Your thoughts?

Based on the charts I've put together, I'd hold those puts until TASR can show something above $42.06-$42.17.

  Linda Piazza   7/16/200,  10:23:48 AM
The TRAN today ran up to a high higher than yesterday's, but is now near the low of the day again. Daily oscillators are trying to turn up again, but they need the cooperation of the TRAN. The stochastics are trying to turn up mid-cycle, not from a level indicating fully oversold conditions, and I find such upturns a little suspect. They can mean that not all weak hands have yet been shaken out, and they're likely to bail at the least provocation.

  Jim Brown   7/16/200,  10:23:39 AM
Alert - Martha Stewart sentenced to five months in prison, plus five months of home detention and two years probation plus $30,000 fine

  Linda Piazza   7/16/200,  10:20:28 AM
The SPX is only five points above its 200-sma at 1103.71. Watch that possible bounce point if the markets should dip further.

  Jeff Bailey   7/16/200,  10:19:55 AM
QQQ $35.24 .... listening anxiously....

SOX.X 419.40 +0.2% ...

  Linda Piazza   7/16/200,  10:18:22 AM
The OEX fifteen-minute chart shows support firming up at 538.23 with resistance trying to firm at 541.29. The smallest channel still points down on that chart, down toward 536.20 now. The OEX needs to maintain values above 539.77 and preferably 541.35 to point that channel up toward 542.30 and then 544.

  Jonathan Levinson   7/16/200,  10:16:48 AM
In the event of a break below 34.90 on a 30 min candle closing basis, the setup would look like a bearish triangle over the last 5 days. That would coincide with the scenario of a terminal selling spree to wash out the daily cycle downphase. That scenario looks less likely to me, but if support breaks, that's what I think will be happening.

  Jeff Bailey   7/16/200,  10:15:07 AM
Volatility Indices... VIX.X 14.25 -3.12%, VXN.X 21.01 and even the VXO.X 14.90 -5.27% all lower at the same time.

  Jeff Bailey   7/16/200,  10:12:40 AM
Sell Program Premium .... SPX 1,108.57, OEX 539.02, INDU 10,187, QQQ $35.17

  Linda Piazza   7/16/200,  10:11:46 AM
The OEX has turned down within the regression channel on its 5-minute chart, with MACD on the point of, but not quite yet, producing a bearish cross from below signal. Nex Keltner support lies at 538.70-539.00, with support below that at 537.79.

  Jonathan Levinson   7/16/200,  10:09:59 AM
Cash session low for QQQ at 35.17.

  Jeff Bailey   7/16/200,  10:08:24 AM
Semiconductor Index (SOX.X) 417.92 -0.14% .... drips red.

QQQ $35.21

  Jonathan Levinson   7/16/200,  10:08:08 AM
On the current short cycle downphase, bulls want to see 30 min channel support hold. Ideally a higher low will confirm a 30 min cycle upphase, but so long as the lower bull wedge support line (lined up with Keltner support now) holds, we'll be able to expect a retest of the day highs on the way to 35.50 resistance.

  Jeff Bailey   7/16/200,  10:06:12 AM
Current OPEN MM profiles of mine at this Link

  Linda Piazza   7/16/200,  10:01:56 AM
The period of the first retracement of the day should be ending about now. Five-minute MACD still turns up, about to test its strength and see if it can push up through the signal line. Both resistance and support are fairly widely spaced right now, not giving many clues as to which is stronger.

  Jonathan Levinson   7/16/200,  9:59:29 AM
The Fed has refunded 3.25B of the expiring 8.25B in overnight repos using a longer dated 6-day repo, for a net drain so far of 5B but leaving the door open for an overnight repo still to be announced. Will keep you posted as to any changes in the net for the day.

  Jeff Bailey   7/16/200,  9:57:26 AM
Treasuries on fire ... 10-year yield down 8.4 basis points at 4.401%.

Homebuilders (DJUSHB) 570.78 +2.16% Link leading broad list of sector gainers and big test at converging 21-day, 50-day and 200-day SMAs at 575.

  Jeff Bailey   7/16/200,  9:56:02 AM
Pacholder High Yield (PHF) $9.06 +0.11% .... just checking in. Sitting between $9.00 and $9.15.

  Linda Piazza   7/16/200,  9:53:34 AM
Five-minute OEX RSI and CCI, usually the first to react, are hooking down now. They're also fickle, however, and can turn right back up. However, it remains possible that the OEX will not be able to break over the 540-541 resistance band, at least on this attempt, and could turn down again within that descending regression channel on its five-minute chart. Watch the crude (cl04u on QCharts) as well as the trend of the TRIN and advdec line.

  Jeff Bailey   7/16/200,  9:53:19 AM
QQQ $35.21 .... will bulls bid the DAILY Pivot. I think they should.

  Jim Brown   7/16/200,  9:52:52 AM
BSX and ANPI halted for trading

  Linda Piazza   7/16/200,  9:49:45 AM
As this first retracement of the day proceeds, the OEX isn't retreating far, a good sign for those who hope to see more gains today, but the five-minute MACD is pointed up while the OEX pulls back slightly, and that's not as good a sign. The OEX needs to break out of the little flag formation on the five-minute chart, to the topside before those oscillators turn down again.

  Jim Brown   7/16/200,  9:48:26 AM
Michigan Sentiment = 96.0, (est 97.0,last 95.6)

  Linda Piazza   7/16/200,  9:47:18 AM
Crude futures were just under $41.00 as of 30 minutes ago, trading in a tight range since yesterday afternoon. They're still high enough to pressure equities.

  Jonathan Levinson   7/16/200,  9:46:44 AM
Rising short cycle support is at QQQ 35.25 (again), with 30 min channel support at 35. The key to the bullish setup here is in the 30 min chart, with bull wedge support at 34.95-35 and resistance at 35.50. A break below 34.90 on a 30 min closing basis (ie long enough to print at full 30 min candle) would invalidate that picture, while a breakout above 35.50 would have it in play and make good on the bullish oscillator divergences. Next resistance above 35.50 is at 35.65 and 35.80, with a preliminary implied target of 36.25 on the bull wedge. But by then, the daily cycle downphase will be reversing, setting the stage for a more extended climb based on that longer cycle.

  Jeff Bailey   7/16/200,  9:42:26 AM
Swing trade long alert 1/2 bullish for Aluminum Corp. China (ACH) $52.10 +3.78% here, stop $48, target $65.

  Jim Brown   7/16/200,  9:41:27 AM
Michigan Sentiment in about 5 min (est 97.0,last 95.6)

  Linda Piazza   7/16/200,  9:39:54 AM
The OEX is at the top of this regression channel: Link Will it turn down again?

  Jonathan Levinson   7/16/200,  9:38:20 AM
CBOE option settlement values at this Link.

  Linda Piazza   7/16/200,  9:37:10 AM
During the first five minutes of trading, the OEX ranged from 538.64 to 541.35.

  Jonathan Levinson   7/16/200,  9:36:06 AM
Silver to a session high at 6.745, up .09 or 1.35% here. HUI is up .74% at 197.5, XAU up .82% at 90.74.

  Jeff Bailey   7/16/200,  9:35:57 AM
Swing trade bearish close out alert for the QQQ 300 share short here at $35.30. QQQ traded $35.45 in opening minutes. Shouldn't have done that in my opinion.

  Linda Piazza   7/16/200,  9:32:59 AM
The OEX came right up to test the 540-541 level that Keltners showed as first important resistance to pass up. Let's see how this holds pre-first retracement and during the first retracement.

  Jeff Bailey   7/16/200,  9:30:48 AM
Yes we will. I'm bullish above $35.00 with that naked put too! Looks like we're both bullish for a change. I've got my computer speakers turned up today, and look forward to hearing a "bell" on your bullish alert profile.

  Jonathan Levinson   7/16/200,  9:29:38 AM
A trade above 35.55 QQQ or below 35 QQQ on expanding volume, as discussed at length yesterday and noted today, should be good trades. But we'll see what the market gives us, won't we?

  Jeff Bailey   7/16/200,  9:28:20 AM
I see.... got some good trades lined up for today?

  Jonathan Levinson   7/16/200,  9:27:42 AM
No. It was a humorous double entendre on the frequent media use of the phrase "the core". No opinion was expressed with respect to "inflation hawks". That's the poster from the film "The Core".

  Jonathan Levinson   7/16/200,  9:26:55 AM
Session highs for gold at 407.40 (resistance 408) and YM futures at 10190, ditto bonds and euros.

  Jeff Bailey   7/16/200,  9:26:28 AM
Jonathan.... .... That's a cool picture you posted at 08:59:56. Are you implying something? Like.... "inflation hawks are getting buried?"

  Jonathan Levinson   7/16/200,  9:24:22 AM
1428 NQ / 35.50 QQQ is the approximate level of the upper descending bull wedge resistance line discussed yesterday, and the bullish divergences on the 30 minute chart remain in play. A short cycle upphase is in progress here, and the question will be whether bulls can hold the opening gains and avoid a downside gap fill. Any bounce from a higher low over last night's close should create an positive bias this morning.

  Jeff Bailey   7/16/200,  9:21:50 AM
QQQ going by at $35.41. If it hold to the opening bell, this is going to be 3 cents above my lowered stop alert of $35.38 for the 300 share short from $35.20.

  Linda Piazza   7/16/200,  9:00:50 AM
Futures have been on an upward trajectory since yesterday's close, but crude futures have been on a mostly upward trajectory, too, popping above $41.00 again, as of 30 minutes ago. It looks as if the test of OEX 540-541 might occur, perhaps near the open, with the test of 542.50-543 also possible if 540-541 can be maintained. That's a big "if," however, with those rising crude costs. Be aware that regular opex Friday activity and the rising crude futures might temper gains. As the day ended yesterday, the most likely limit to any advance for the OEX was to the 544 level, although higher, perhaps up to 547-548 was also possible if that 544 level could be maintained. That seems unlikely at this point, but these figures and Keltner configurations will be changed by the opening levels, so we'll look again after the early volatility settles down.

  Jonathan Levinson   7/16/200,  8:59:56 AM
The "Core" Link

  Jonathan Levinson   7/16/200,  8:37:56 AM
As reader Mark just noted, GE is back up here- I show bidding 33.37, offered at 33.5, with 700 shares' volume.

  Jonathan Levinson   7/16/200,  8:35:19 AM
Gold is up 1.6 to a session high of 405.80.

  Jonathan Levinson   7/16/200,  8:34:55 AM

  Jonathan Levinson   7/16/200,  8:31:33 AM
Equities are spiking higher here, though GE remains pinned at 33- could be bad quote data from my provider. Bonds are rocketing higher, with TNX down 2.3 bps so far but the futures showing a big spike up. QQQ is up .28 to 35.36.

  Jonathan Levinson   7/16/200,  8:30:20 AM
8:29am U.S. JUNE CPI UP 0.3% VS. 0.2% EXPECTED

8:29am U.S. JUNE CORE CPI UP 0.1% VS. 0.2% EXPECTED

  Jonathan Levinson   7/16/200,  8:21:02 AM
GE is down 1.11% at 33, session low here. A strange, and no doubt op-ex related divergence, given that it rocketed to the upside yesterday. It'll be great once da-boyz have done what they need to do so that the markets can return to some modicum of normal pricing patterns.

  Jonathan Levinson   7/16/200,  8:11:27 AM
Awaiting the CPI and core CPI at 8:30, est. .2% for both, and at 9:45 the preliminary UMich sentiment index, est. 97.

  Jonathan Levinson   7/16/200,  8:05:22 AM
A splash of green greets us this AM, with ES up to 1107.25, NQ to 1422.5, ES to 10162 and QQQ up .24 to 35.32. Gold is up .8 to 405, silver flat at 6.656 and bonds flat at 110.375.

  Linda Piazza   7/16/200,  7:17:12 AM
Good morning. Ahead of a holiday Monday, the Nikkei gapped down and soon fell below 11,300 in Friday's trading. Tech-related stocks fell hard in early trading, with South Korea's Samsung dropping in Asia on concerns about Q2 earnings, earnings that were reported later in the morning. That report showed that profit almost tripled over the year-ago level, but was slightly below expectations. Operating profit also disappointed, measuring 3.7 trillion won against expectations of 4 million won, but the results were considered generally in line with expectations. In addition, information came through about midmorning in the Japanese session that China's Q2 GDP showed a 9.6% increase year-over-year, less than the expected 11.5%. China's June CPI fell 0.7% over May's number. That reassured market watchers that China's efforts to cool its economy were working. The Nikkei turned higher about midmorning, with chip-related stocks seeing strong rebounds, and was able to achieve a positive close, up 26.86 points or 0.24%, at 11,436.00. That was almost 240 points off the day's low.

While chip stocks rebounded, two banking issues involved in recent merger talks tumbled. UFJ Holdings lost 2.7%, and Mitsubishi Tokyo Financial Group, the recipient of the strongest gains in recent days, lost 8.7%. Sumitomo Trust has reportedly decided to try for an injunction to halt the merger, because that merger includes a decision by UFJ not to sell one of its units to Sumitomo, as had been previously planned. Several automakers declined. Honda is reportedly making plans to enter the aircraft jet engine business and has created a wholly owned subsidiary in the U.S. for that purpose. A newspaper reported that Mitsubishi Motors will allocate another 300 employees to deal with recalls and exchanges of faulty parts, and the company's stock tumbled 17.5%.

Most other Asian bourses climbed. The Taiwan Weighted was one exception, dipping 0.73%. With Samsung closing higher by 3.3% after its earnings report and with LG Electronics benefiting from the U.S. and Korean debut of LG Philips LCD, a joint profit with Philips Electronics, South Korea's Kospi closed higher by 0.91%. Singapore's Straits Times gained 0.21%, and Hong Kong's Hang Seng gained 1.00%. After the release of its GDP, China's Shanghai Composite gained 2.43%.

European bourses are mixed, but more trade higher than lower. The performance of tech stocks perhaps is also proving mixed, with chip-related stocks seeing a relief rally after Samsung's and IBM's results, but with Nokia's slide perhaps pressuring related stocks. Goldman Sachs downgraded Nokia to an underperform rating. Morgan Stanley also indicated that the company still faced tough times. Pfizer's indication that 2004's sales would be lower than it had guided analysts to expect in April pressured the drugmakers. Electrolux warned of the impact that higher steel prices could have on H2's income, perhaps not the last company that will show the effect of higher commodity prices. Perhaps of interest to those watching the GSO decline in the U.S., Software AG leaped 9.7% after it surprised by releasing its earnings sooner-than-expected, and showed a lift in license revenue. A protest at DaimlerChrysler by 60,000 workers over changes in the workweek reportedly threatens to spread throughout the country, with Germany's Chancellor Schroeder appealing to protesting workers for calm.

As of this writing, the FTSE 100 has gained 4.00 points or 0.09%, to trade at 4,344.70. The CAC 40 has gained 13.18 points or 0.37%, to trade a 3,623.73. The DAX has gained 24.28 points or 0.63%, to trade at 3,871.47.

  Linda Piazza   7/15/200,  11:07:40 PM
The OEX closed Thursday just below its 200-ema, perhaps overrunning it a bit in the get-me-out-before-IBM-reports stampede. Daily MACD turned down through the signal line. The OEX violated lower Keltner support on the five-minute chart, giving a breakout signal.

The daily Keltner charts show that the OEX has now pointed its smallest channel down toward 531.69. Unless the OEX can bounce above and maintain values above 543.70 and preferably 545.70, that channel is going to stay pointed down. What are the chances of hitting 543.70? We'll need to look at some closer resistance levels first. Fifteen-minute Keltner channels show the OEX in danger of falling to 536.69 or below unless it bounces quickly tomorrow and gets above the 540 level or preferably 541, maintaining those values. A bounce to 540-541 would put the OEX back inside the recent consolidation zone, perhaps ready to challenge the 542.50-543 zone, with that zone bounded at the top by the 200-sma. That 15-minute chart shows that the most likely top to any advance tomorrow is just under 544, but it also shows a possibility of an advance up to 548.25 if the OEX can breach that 544 resistance and stay above that level.

A failure to move above 540-541 fairly early tomorrow morning, then, suggests the possibility that the OEX will fall to the 537 level, where the descent should slow as the OEX moves back into May's congestion zone. A drop below that creates a breakout signal on the 15-minute chart, too, to go with the one already created on the five-minute one, and continues the possibility that the OEX could eventually work its way down toward 532. A quick bounce above the 200-sma tomorrow points that smallest Keltner channel up again and brings about hope that those lower values won't be seen.

Tomorrow is opex Friday, however, and one that sees important data released. Don't assume that the first reaction tomorrow morning will be the final one--remember Wednesday--and be prepared to be whipsawed if participating in plays. If you're playing front-month options, use lotto money only and watch out for the possibility that markets could zoom around in the early morning and then get pinned to certain levels by late morning, with OTM options leaking time premium minute-by-minute.

  OI Technical Staff   7/15/200,  8:54:07 PM
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