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  Jeff Bailey   7/19/200,  5:01:16 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   7/19/200,  4:36:53 PM
Closing OPEN MM profiles I've made at this Link

JDSU $3.12 -1.26% up in after-hours on Corning (GLW) earnings.

  Jeff Bailey   7/19/200,  4:25:26 PM
Closing Internals at this Link

  Linda Piazza   7/19/200,  3:52:58 PM
Although I see the possibility of another reverse H&S trying to form on the OEX's five-minute chart, with an upside target at about 542, and although I see that doji at the end of a drop on the daily chart, today's action hasn't yet done enough to convince me that OEX traders will benefit from a long play. I think there's a possibility of a move up toward 544-546--certainly a big enough move to be profitable--but there's also a possibility of a move back down to test the lows first. I expected some rattling around and some choppiness as 530-532 was tested. Although we didn't quite get there today and might not do so, the OEX also hasn't been able to follow through on bullish formations, either, at least yet. The current pullback could just be a pullback to form that right shoulder on the potential reverse H&S, but it also constitutes a pullback to retest the broken resistance on the bullish falling wedge. A failure for that former support to hold would see both the reverse H&S and the wedge fail to deliver on their promises. This is one instance when it's certainly better not to jump into a long play on a possible reverse H&S until it's confirmed, and then to be ready to jump right back out if the OEX doesn't act as expected. That confirmation will likely have to wait until tomorrow, if it comes, while the failure could happen either today or today, if that's going to happen.

  Jonathan Levinson   7/19/200,  3:43:05 PM
ES currently 1101x1101.25, last 1101.25.

  James Brown   7/19/200,  3:42:21 PM
Mixed results from the airliners today after DAL's earnings.

Frontier Airlines (FRNT) is now down 11 out of the last 12 days and breaking under support near $8.50 to hit new one-year lows.

AMR is producing an oversold bounce worth 3.48% to $8.91 after a huge drop this month from $12.11.

SKYW is down another 2.48% to $14.51.

DAL is up 10.5% to $6.08 in what some believe is a short-squeeze after the company reported earnings this morning. The most recent data showed that short interest had reached about 45% of the float. DAL missed estimates by 14 cents and reported a $2 billion loss as fuel costs surge.

  Linda Piazza   7/19/200,  3:37:24 PM
Here's the OEX drop toward 536 that I expected. I don't think the OEX has time today to round into a nicely formed right shoulder for the potential reverse H&S, so it may be tomorrow until we find out if it's going to break above the neckline of that formation. The OEX does, however, have time to break below the potential right-shoulder level, with a drop much past 536 accomplishing that goal.

As Jonathan mentioned with respect to other securities today, the OEX is so far printing a near doji at the bottom of a decline, a potential reversal signal. The emphasis should go on "potential," however, as the day is not yet done and as daily MACD has dropped below signal. Still, it's possible that the OEX could bump along between the 532-ish level and the 539-ish one for a day or two now before deciding direction, with the daily Keltner chart still pointing toward 530.85. A break above 540 might see the OEX make a bid for the 544-547 level. As the daily chart is configured now, resistance builds from 545.56-547.98, with that resistance looking strong enough that it would be difficult for the OEX to move above it, and with lighter resistance at 541.26.

  Jonathan Levinson   7/19/200,  3:33:46 PM
The short cycle downphase is underway, with 30 min channel support rising to prior price confluence at 34.63. That remains my target for first short cycle support, but we'll find out when we get there. Bulls want to see the short cycle bottom out at a higher low above 34.47 to confirm the 30 and 60 min upphases.

  James Brown   7/19/200,  3:32:16 PM
If you're feeling bullish give APOL another look. The stock drifted back to support at the $90.00 mark and it's bouncing. I'd either use a tight stop or a trigger over $92.50 to confirm the bounce (or both).

  James Brown   7/19/200,  3:29:15 PM
Dow-component and oil giant XOM is pushing past its June 2001 highs to crack the $46.00 mark. Rivals COP and CVX are actually started to fade just a bit.

Crude oil is up to $41.64 a barrel.

  James Brown   7/19/200,  3:25:42 PM
Adolph Coors (RKY) soared from Friday's close at $73 to tag $79.50 a few hours ago on speculation the beer company is in talks with Canadian brewer Molson Inc. A merger between the two would create a much stronger competitor to beer giants Miller and Budweiser.

RYK is off its best levels of the session but still up 4% to $75.99.

  Linda Piazza   7/19/200,  3:17:59 PM
OEX Keltner support tries to firm up near 536.80-537, but the five-minute MACD also threatens to complete a bearish cross, although from above signal.

  James Brown   7/19/200,  3:17:53 PM
Reuters is reporting that General Dynamics (GD) is leading a group of companies all teamed together to provide a new system of hand-held radios to U.S. troops in a contact worth $5-10 billion.

The newest version of the Joint Tactical Radio System (JTRS) can be programmed to provide voice, data, image and video communication.

Boeing (BA), Rockwell Collins (COL), ITT Industries (ITT) and Raytheon (RTYN) are all part of the team.

  Jonathan Levinson   7/19/200,  3:13:08 PM
60 min QQQ chart at this Link . I haven't highlighted it, but note the higher low on the Macd preceding the current buy signal. That bullish divergence should be good for more strength, but we need to see the next short cycle downphase, currently starting now, find a bottom from a higher price high above today's low. If not, the 60 min buy signal will likely whipsaw and prove to have been a headfake.

  Linda Piazza   7/19/200,  3:04:47 PM
While the OEX tests its 200-ema, the SPX tests its 200-sma, both from the underside. The OEX has not been able to maintain levels above that 200-ema or above the neckline of its possible reverse H&S on its five-minute chart. The OEX needs to maintain levels above 536.73 or preferably above 537.33 to keep its smallest Keltner channel pointed higher.

Those who might have ventured into a long position on an upside break of the supposed bullish falling wedge should be prepared for some choppy action and should have a bail-out plan in mind in case the breakout doesn't hold. Although it's possible that the OEX has seen a short-term low, any bounce now should be deemed a countertrend bounce that might take the OEX all the way up toward 546-547, eventually, or might fail at some place short of that level. These comments shouldn't be deemed advice to trade the OEX long, then, as it's likely to be a countertrend play. Even if it's possible that it could be a profitable play, it's also possible that it could fail at any point. Even if it's going to head higher, it's possible that the OEX could pull back to the 536 level first.

  Jonathan Levinson   7/19/200,  2:52:42 PM
Bulls would be happy with a close right here for QQQ, leaving a doji on the daily chart with the oscillators deep in oversold- looking over the past 6 months, these have tended to be good reversal candles. Link But the day's not over yet. A short cycle downphase is due anytime with the oscillators maxxed out. Any further strength would be a short cycle trending move- not uncommon, but the odds favor a pullback, again to what I'd guess to be a higher low within the 30 min cycle upphase.

  Linda Piazza   7/19/200,  2:51:13 PM
The OEX tests its 200-ema. I still haven't felt comfortable suggesting long plays while the OEX hasn't cleared that average and while TRIN remains relatively high, although on a downward trajectory. While someone tried buying, the question is whether there will be follow-through. Funds have deeper pocketbooks than retail traders.

  Jonathan Levinson   7/19/200,  2:48:15 PM
And for QQQ and MSFT. Short cycle oscillators growing toppy with price breaking above upper 30 and 60 min channel resistances.

  Linda Piazza   7/19/200,  2:47:43 PM
Was OEX 533.94 close enough to the 530-532 zone to provide a bounce? Might have been. As I warned earlier today, funds might step in sooner than we retail investors would feel comfortable doing, so it was a good idea to have an exit plan in mind ahead of the 530-532 zone if in bearish plays. Hold on, though: the OEX's five-minute chart now shows the possibility of a larger reverse H&S (than this morning's) with a neckline currently at about 538. If the OEX should retreat from that neckline level, being tested as I type, watch for possible support to firm near 537 or lower, near 536-536.30. Currently, the smallest Keltner channel points up toward 540.13, and as long as the OEX does not maintain levels below 536.30 or preferably 537, it will remain pointed higher. Note: Of course, the OEX began pushing above that neckline as I typed.

  Jonathan Levinson   7/19/200,  2:45:32 PM
Session high for NQ futures here.

  Jeff Bailey   7/19/200,  2:42:09 PM
S&P Banks Index (BIX.X) 352.34 +0.78% ... gets another WEEKLY R1.

First to trade their MONTHLY R1 of 351.79.

  Jonathan Levinson   7/19/200,  2:35:54 PM
The short cycle upphase is sputtering here as an overdue wavelet pullback begins to kick in. Bulls want to see another higher low- I'd guess at 34.63 as a possible target for support- to confirm the longer cycle uppturns.

  Linda Piazza   7/19/200,  2:32:46 PM
The OEX has now broken out of its falling wedge to the upside and has overrun the mid-channel resistance on the 5-minute Keltner chart. It can still get tugged back into that resistance unless it maintains values above 536.40 or preferably above 536.95.

  Jonathan Levinson   7/19/200,  2:30:14 PM
New session high for MSFT here, +2.4% at 28.14.

  Jonathan Levinson   7/19/200,  2:23:02 PM
All equity indices are pushing on their 30 min channel resistances here. If the 30 min cycle were overbought instead of oversold, those would be clear sell signals. But because of the oversold condition from which this bounce started, I'm expecting one of these pushes to "crash" upward through the channel resitance and turn the channels back up. That's the bullish interpretation here.

  Jonathan Levinson   7/19/200,  2:14:49 PM
QQQ approaching 34.80 resistance at the 30 min upper Keltner target. The 60 min band is above at 34.93. If bulls can just not give back these gains and hold current levels for half an hour or so, we should get the expect upturn in the 30 and 60 min channels.

  Linda Piazza   7/19/200,  2:14:21 PM
Today, the SOX approached the 406-408 light support from its weekly chart, but also approached the bottom support of its descending regression channel. Its 100-week moving average crosses at 399.79, with the SOX showing some trading patterns in relationship to that average late in the spring and early in the summer of 2003. It found resistance there for several weeks, which means that it might now find support at that average, especially as it lies just below the supposed round-number support at 400. Although daily MACD is fully bearish, the SOX is approaching levels from which we should see a reflexive bounce attempt. Of course, that's what we were saying about the SPX with regard to its 200-sma and the OEX with regard to its 200-ema last week, wasn't it?

  Jonathan Levinson   7/19/200,  2:13:15 PM
MSFT now up 1.89% at a session high of 28.

  James Brown   7/19/200,  2:13:11 PM
Circuit City (CC) is up 1.8% to $13.46 after Bear Stearns upgraded the stock to "peer perform". Shares of CC are consolidating their recent gains above the $13 level. CC is also trying to break through resistance at its 200-week moving average. Its P&F chart is bullish and points to a $17 target.

Larger rival Best Buy Co (BBY) continues to slowly sink after falling through support at $50.00 a couple of weeks ago. BBY's decline is currently challenging P&F support near $46.

  Jeff Bailey   7/19/200,  2:09:13 PM
Swing trade call option alert for Stanley Works (SWK) $44.64 +4.96% Link and the August $45 calls (SWKHI) $1.40.

Target $50 on quarterly earnings scheduled for release on July 26 after the close. Consensus for $0.67 per share.

  James Brown   7/19/200,  2:08:49 PM
Ouch! After 3 1/2 months of churning sideways between $90-97.50 shares of Lexmark (LXK) are falling through the bottom of its trading range. The stock is down 7.2% to $83.87 and trying to hold support at its simple 200-dma. Earnings came in this morning and beat estimates by 5 cents but showed up light on revenues.

  Jonathan Levinson   7/19/200,  2:04:30 PM
Session high for bonds here, with the TNX down .1 bp at 4.351%. ZN futures are up .062 at 111.401- could be the first appearance of the Fed's 5B overnight repo money in the markets.

  James Brown   7/19/200,  2:04:23 PM
Legg Mason (LM) is the likely culprit weighing on the XBD broker-dealer index. Shares of LM are down 9% to $75.33 after missing estimates by 9 cents and coming in light on Q2 revenues.

Last week rival Merrill Lynch (MER)'s earnings also confirmed a seasonal slow down.

OI put play GS is slipping to new relative lows under $87.

  James Brown   7/19/200,  2:01:01 PM
Dow-component and retail titan Wal-Mart (WMT) issued comments today saying the initial demand in back-to-school shopping was good last week.

  Jonathan Levinson   7/19/200,  1:56:48 PM
I agree with Jim, but would only add that, in my opinion only, the indices are at levels from which a bounce could appear at any time. Given the oversold levels on the daily and 60 min oscillators, any bounce has the potential to deliver an extended upmove as the 60 min cycle upphase should have enough to turn the daily cycle up as well. But again, price needs to get moving higher before the oscillators begin trending in oversold.

  Jeff Bailey   7/19/200,  1:45:16 PM
Sell Program Premium ... SPX 1,097

  Jeff Bailey   7/19/200,  1:44:46 PM
Dow Industrials (INDU) 10,081 -0.57% .... C $44.10 +1.12%, IBM $85.26 +1.13% and MSFT $27.78 +1.05% percentage gainers.

  Linda Piazza   7/19/200,  1:43:09 PM
The OEX's 15-minute chart shows that lowest support has now drifted down to 533.86. The falling wedge is still visible. Although the OEX appeared to violate that wedge on the five-minute chart to the downside, on the 15-minute chart, the violation left only candle shadows below the wedge with the bodies moving back up into the wedge. Unless the OEX can maintain values above 535.20 and preferably above 536.22, however, the smallest channel on that chart will remain pointed toward lower-channel support.

  Jonathan Levinson   7/19/200,  1:38:25 PM
The wavelet oscillators are bottoming here on QQQ and the futures, doing so from a higher price low. Look for a bounce to take out the previous high from half and hour ago to confirm the short cycle upphase. Resistance on the 30 min channel is 34.80.

  Linda Piazza   7/19/200,  1:36:17 PM
OEX Keltner support is trying to firm up near 534.62, with resistance also trying to firm nea4 535.72 and then looking firm in the 537-ish area.

  Jonathan Levinson   7/19/200,  1:29:41 PM
The 30 min cycle upphase for QQQ isn't exactly lighting the markets on fire, but it's still an upphase. MSFT is holding its impressive gains and for QQQ, we're now on the lookout for a higher or at least equal low in the current wavelet pullback to confirm a short cycle upphase, which itself will confirm a 30 min cycle upphase. That's a lot of importance to ascribe to the current low print at 34.47, but with all oscillators from 30 min to daily trying to strengthen from oversold territory, that's the minimum we need to see confirmation of strength building.

  Linda Piazza   7/19/200,  1:24:07 PM
JNJ had originally traded higher today, boosted by an upgrade from CIBC World on the thought that the company might gain market share after Boston Scientific's recall of its stent last week. However, the gains didn't last long, with the stock starting a steep decine that have so far produced a 1% drop in the price, but a bigger drop off the day's high. This, added to MMM's losses, might have helped produce market weakness today.

  James Brown   7/19/200,  1:19:19 PM
Ouch! BioLase Technology (BLTI) is down 25.4% to $8.98. The company issued an earnings warning ahead of its July 27th report date. Profits are expected to come in 50% below estimates.

  James Brown   7/19/200,  1:15:24 PM
Wells Fargo is upgrading medical device maker Stryker Corp (SYK) from "hold" to a "buy" after last week's crash saying the drop is overdone. SYK dropped from $55 to its simple 200-dma at $46 on Friday after its Thursday evening earnings report. Aggressive players might consider a "dead cat" bounce play with a stop under the new low.

  James Brown   7/19/200,  1:07:16 PM
Trucking company Swift Transportation (SWFT) is up 7.85% and breaking out over its simple 200-dma after reporting earnings 13 cents above estimates and an upgrade from BB&T.

  Linda Piazza   7/19/200,  1:02:32 PM
Out of the BIX, TRAN, SOX, Dow, Russell 2000, OEX and SPX, only the BIX and the TRAN avoided new lows on that drop about 30 minutes ago.

  Jeff Bailey   7/19/200,  1:01:35 PM
12:55 Market Watch at this Link

  Jonathan Levinson   7/19/200,  12:58:25 PM
A break above 34.63 QQQ should be enough to kick off the overdue short cycle upphase.

  James Brown   7/19/200,  12:54:21 PM
Ouch! The selling appears to be reaching terminal velocity in Sirius Satellite Radio (SIRI). Shares have been dropping consistently through the month of July, where SIRI has broken through multiple levels of support.

Larger rival XMSR is also down sharply in the last couple of sessions.

News that Clear Channel Communications (CCU), who owns about 1200 radio stations in the U.S., is reducing commercials could slow the subscriber growth for SIRI and XMSR.

  Jonathan Levinson   7/19/200,  12:48:52 PM
No reprieve for mining stocks, which continue lower despite the lack of movement in gold, with HUI down 2.59% at 188.97 and XAU -2.13% at 87.75. Gold futures are finding support at previous resistance of 405, but have been unable to crack the 408 level to set up a test of the key 412-414 resistance.

  Jonathan Levinson   7/19/200,  12:45:39 PM

  Jonathan Levinson   7/19/200,  12:42:41 PM

  Linda Piazza   7/19/200,  12:37:56 PM
The OEX's lowest Keltner support on the fifteen-minute chart is diving as the OEX does, so that the OEX is only now touching that support, at 534.09. Keltner resistance is now beginning to firm up near 535.25-535.50 on that chart. The OEX has now created a breakout signal on the five-minute chart. It's time for OEX bears to follow the OEX lower with their stops, if they haven't done so already. While the OEX may be headed for a test of the 530-532 level (see my first OEX-related post this morning), it's possible that it won't quite get there. We sometimes see buyers step in ahead of tests of important levels, and we should now expect a retest of the 200-sma/ema's to begin at some point. This does not yet appear to be a time for retail buyers to step in, but some institutional buyers may. Funds may have different parameters than you and I have.

  Jeff Bailey   7/19/200,  12:35:55 PM
Sell Program Premium .... SPX 1,097

  Jonathan Levinson   7/19/200,  12:32:18 PM
The probe of the day low at 34.50 reversed quickly enough to leave a lower doji shadow under the 100 tick bar. The short cycle oscillators are maxxed out to the downside and QQQ volume is running slightly higher than average for this time of day. The picture looks good for a bounce from here, but price is going to have to cooperate. Note that bonds, which have been comatose all day, are advancing, with TNX up to unchanged. There's still that 5B of the Fed's money floating out there, and I'm still waiting to see the expected bids hit the market.

  Jeff Bailey   7/19/200,  12:30:11 PM
Oh Good ... Fleck will make bearish comments on INTC later today on CNBC. Fleck was bearish on INTC from post-split $20 to $70. Eventually, (2-years later) market agreed.

  Jeff Bailey   7/19/200,  12:24:06 PM
NitroMed (NTMD) $12.01 +130.0% Link ... off morning high of $16.08 after the Bedford, Mass. company said it halted a clinical trial of BiDil, its lead drug treatment for heart failure in African Americans, due to the "significan survival benefit" already shown by the drug.

Company plans to make the drug available to all patients participating in its phase III study, eliminating the placebo aspect after unanimous recommendations of the steering committee.

  Linda Piazza   7/19/200,  12:17:23 PM
OEX Keltner lower support on the five-minute chart crosses at 534.22 now and has not been violated as yet, giving no breakout signal as yet. The smallest channel still points lower, however, and the OEX would need to sustain values above 535.90 or preferably above 536.90 to turn it higher again.

  Jeff Bailey   7/19/200,  12:12:42 PM
ManTech Intl. (MANT) $12.30 -24% Link .... plunges after being halted earlier this morning. Company saying it is no longer able to confirm Q2, or full year guidance.

  Jonathan Levinson   7/19/200,  12:11:14 PM
Daily QQQ candles showing downside support levels. The daily cycle is bottomy, and the only question is from what price level we can expect the terminal selling spike to end. 34-34.15 looks like a likely bottom to me in this longer timeframe: Link.

  James Brown   7/19/200,  12:09:13 PM
OI put play PGR gapped lower this morning and has already rebounded to fill the gap. A failed rally under $80.00 would be a new bearish entry point.

  Jeff Bailey   7/19/200,  12:08:08 PM
3M (MMM) $82.45 -6% .... had INDU 10,071 -0.68% percentage loser for major indices.

  James Brown   7/19/200,  12:07:46 PM
OI put play MGA is bouncing from the $80 level and its simple 100-dma but the trend of lower highs remain.

  Jonathan Levinson   7/19/200,  12:06:52 PM
This is a strength-free market again today. We have price resting on lower 30 min support for QQQ and the futures, and while that support is descending, we have the daily and 30 min oscillators oversold. Under my cycle model, this would be the area to scope for a bounce from channel/price support. Currently we're at those levels, but the market's a falling knife. We want to see the price get back above Friday's lows to look for long positions. Risk/reward doesn't favor new shorts with the daily and 30 min oscillators this oversold except on a quick-scalp basis.

  James Brown   7/19/200,  12:06:11 PM
Not much action in OI put play GS. The stock bounced back to the $88.00 level this morning but has already rolled over and about to hit new relative lows.

  James Brown   7/19/200,  12:04:34 PM
OI put play DISH is finally seeing some of the weakness we've been expecting. The stock is down more than 4% to $27.60, hitting new one-year lows.

  James Brown   7/19/200,  12:03:04 PM
OI put play CEPH is down another 1% to $49.34 confirming Friday's breakdown under the $50.00 level.

  Jeff Bailey   7/19/200,  12:02:13 PM
eBay Inc. (EBAY) $77.50 -3.6% ....

  James Brown   7/19/200,  12:01:19 PM
OI call play ZBRA is still churning between $82-84 and struggling with minor resistance at its simple 10-dma. We're still looking for a bounce between $80-82.

  Jeff Bailey   7/19/200,  12:00:47 PM
NYSE Composite ($NYA.X) 6,435 -0.32% .... back at 38.2% retracement and trades previously broken to the upside downward trend. 200-day SMA rising at 6,387.

  Linda Piazza   7/19/200,  11:57:51 AM
As of 30 minute ago, crude prices were easing back after a move above $41.50 again. They hadn't eased far, however and at that time had remained above a short-term ascending trendline off the just-before-2:00 low Friday afternoon.

  James Brown   7/19/200,  11:54:01 AM
OI call play SUN is seeing some profit taking today as the OIX/OSX indices turn red. Look for a bounce near $68.00.

Crude is up another 43 cents to $41.43.

  Jonathan Levinson   7/19/200,  11:53:33 AM
Bonds haven't twitched, with the TNX up .3 bps at 4.364%. Gold is back to its earlier lows at 405.70. There's barely a bounce in equities, with QQQ holding 34.613 currently, playing with Friday's low. The current pullback is challenging the bounce that had been forming in the 30 min QQQ oscillators, and a nominal new low or even several of them won't negate the base starting to form in the daily cycle. But a washout below Friday's low would, and that's the key to the current level. A day or two of basing along these levels will bottom the daily cycle, while a break below will extend the downphase and suggest a trending move.

  James Brown   7/19/200,  11:51:52 AM
OI call play PD might be in trouble. The copper-mining stock has slipped back under the $80.00 mark and is testing the simple 10-dma again. Its MACD is very close to producing a new sell signal.

Strangely enough Copper prices are shooting higher and breaking out over resistance at the $1.30 per pound level. It's possible PD is trading lower in sympathy with the gold miners as the XAU is down 1.7%.

  James Brown   7/19/200,  11:48:56 AM
OI call play HUG is gaining strength today. Shares are up 1.3% and hitting new highs at $60.99.

  Linda Piazza   7/19/200,  11:48:53 AM
OEX bears should be on guard here, always having a plan in place for protecting their profits, especially if the OEX should approach 530-532. The OEX's smallest channel is now pointed down toward 535, but if the current small bounce continues (doesn't look as if it will as I continue typing), we're beginning to see bullish divergences set up on that five-minute chart. We've seen some days when the OEX continued lower all day while bullish divergences showed up all day, too, so a potential divergence shouldn't be a suggestion that bearish plays should be exited or bullish ones entered. Let price be your guide; let the divergences be your warning to make plans as to how you'll deal with a potential bounce, if one should occur.

  James Brown   7/19/200,  11:46:36 AM
OI call play ATK continues to churn sideways between $65-$66.

  Jeff Bailey   7/19/200,  11:44:58 AM
Swing trade put option alert for 3 (three) OSI Pharma (OSIP) $57.60 -4% ... Link Aug. $50 puts (GHUTJ) at $1.00.

  James Brown   7/19/200,  11:44:50 AM
OI call play AET is down about 0.96% and slipping back toward the $86.00 level. If AET trades under $85.00 the short-term bullish trend could be in trouble.

  Jonathan Levinson   7/19/200,  11:44:27 AM
MSFT isn't letting go here, still up 1.2%. The 30 min channel for QQQ is ticking lower, however, with support down .05 to 34.50 here.

  Jonathan Levinson   7/19/200,  11:40:23 AM
There wasn't the explosive volume accompanying the last set of session lows to suggest a serious break in effect, but price is the final arbiter and it's still going down. QQQ is at a session low of 34.62, and below 34.60, I expect volume to pick up as all of the dip buyers since Friday's low enter the red. Note that the TRINQ is at .90, showing neutral/bullish breadth. That's a double-edged sword, as it's not nearly oversold- there's plenty of room for sell volume to pick up in this market.

  Jeff Bailey   7/19/200,  11:39:12 AM
11:00 Update at this Link

  Jeff Bailey   7/19/200,  11:38:51 AM
Broker/Dealers (XBD.X) 114.09 -1.10% .... picking up steam to the downside.

Legg Mason (LM) $75.61 -8.68% .... on earnings.

  Linda Piazza   7/19/200,  11:33:48 AM
Here comes the test of the OEX low from Friday and today, with a sound rejection of the reverse H&S formation. If this level doesn't hold, an OEX test of 535 is suggested by the five-minute Keltner channels. A breakdown below that level could set up a test of the 530-532 level on the OEX.

  Jonathan Levinson   7/19/200,  11:31:51 AM
Session lows in the futures here, with QQQ testing the right shoulder. A break below the session lows at 34.67 should invalidate the reverse h&s, and below 34.60 (Friday's low) could get ugly.

  Jonathan Levinson   7/19/200,  11:17:58 AM
MSFT has popped higher, up 1.46% at 27.88. Once again, the indices shouldn't get far to the downside with MSFT this strong.

  Linda Piazza   7/19/200,  11:11:45 AM
The OEX drops further, perhaps into a second right shoulder or into a retest of the day's low. These small formations are not useful for trading OEX options, but they are useful for showing us something about underlying sentiment in the markets. I said earlier today that I was not yet comfortable with thinking it was time for a long play, and this first rejection of the confirmation level reinforces that conclusion. This may be just a second right shoulder forming, but it may be something else, and now we have to wait. At the least, we know that there was some underlying bullish sentiment this morning, perhaps on the thought that markets would bounce on the touch of the SPX 200-sma on Friday, but that the bulls have not so far been able to follow through on that original impulse. That puts the bullishness in question at least for now. As I've been typing, the OEX has been attempting another bounce, and we'll just have to be patient to see where that goes. So far, a move down to retest the day's low does not seem impossible, but neither does a move through the confirmation level of the reverse H&S.

  Jonathan Levinson   7/19/200,  11:08:06 AM
This wavelet pullback is revisiting the bottom of the short cycle channel on QQQ. Channel support is conveniently at 34.67, the previous reverse h&s shoulder.

  Jonathan Levinson   7/19/200,  11:04:53 AM
The reverse head and shoulders on the 2-day/ 100-tick QQQ is still on the table. I have the right shoulder just printed off a low of 34.67, and that low should not be exceeded- ideally, not even revisited- befor the break above 34.93. A break of 34.93 on expanding volume has an implied target of 35.25 from here.

  Linda Piazza   7/19/200,  11:03:43 AM
The OEX tagged the neckline of the potential reverse H&S and then dropped back. This shows that sellers were waiting at the confirmation level. However, the five-minute chart shows that resistance is beginning to lighten, so that if the OEX can maintain levels above the current level, it has a chance of turning the smallest Keltner channel up again or at least keeping it level.

  Jonathan Levinson   7/19/200,  10:52:01 AM
We're still in a narrow, choppy range for QQQ, and I'm still interpreting it as base-building within the bottomy daily cycle downphase. The 30 min cycle oscillators are just turning up here, and if Friday's low holds, we should see a synchronous daily and 30 min cycle upturn begin to form.

  Linda Piazza   7/19/200,  10:50:30 AM
The reverse H&S on the OEX five-minute chart remains a possibility. The neckline is now at about 537.80, but perhaps rising slightly. Remember the other resistance just above that confirmation level, however, up to about 539.

  Jonathan Levinson   7/19/200,  10:39:55 AM
Good eye, Linda. The reverse h&s on QQQ has the right shoulder support at the session low. It projects to an implied target of 35.25 on a break above 34.93. A break below the day lows will invalidate it.

  Linda Piazza   7/19/200,  10:37:38 AM
The OEX begins to violate the possible right-shoulder level of the potential reverse H&S on its five-minute chart, a bearish sign. Although the formation would be lopsided, a steadying now, before a retest of the low, could probably be considered just an overrunning of the right-shoulder level, but only if the OEX can now maintain values above 537. It's turned the smallest Keltner channel down again, and needs to maintain levels that turn it up again.

  Jeff Bailey   7/19/200,  10:36:23 AM
Taser Intl. TASR $38.42 -4.54% .... off session low of $36.50.

  Jeff Bailey   7/19/200,  10:33:18 AM
Ameritrade Holding (AMTD) $9.67 -0.41% .... 52-week low


NYSE NH/NL 49:26

  Jonathan Levinson   7/19/200,  10:31:38 AM
Session lows across the board here.

  Jonathan Levinson   7/19/200,  10:29:48 AM
The volume bar on this decline looks like a small buy program on QQQ, just beginning to turn the short cycle upphase down. There's short cycle support at 34.72 here, and the wavelet cycle oscillator is due for a bounce. Zooming out, the 30 min channel has stopped declining, and if bulls can keep the QQQ from testing the 34.60 level, there's a good chance that the channel will turn back up for the first time since Thursday afternoon.

  Linda Piazza   7/19/200,  10:29:45 AM
I'm now watching for possible OEX support near 536.50. There's a possible reverse H&S on the 5-minute chart, but it requires a steadying there, or else the formation is being rejected and a test of 530-532 could be possible.

  Jonathan Levinson   7/19/200,  10:24:53 AM
And a session low for GE at 33.10, +.01 for the day.

  Jonathan Levinson   7/19/200,  10:24:11 AM
Session low for Russell2K futures here at 553.60.

  Linda Piazza   7/19/200,  10:23:58 AM
The BIX and TRAN show more strength than the SOX and Nasdaq, but the BIX and TRAN both face overhead resistance, too. The OEX does, too, headed up to test the 538-ish descending trendline off the Wednesday noon-ish high, the 200-ema, and the Keltner resistance just under 539. The OEX pattern on the five-minute chart looks like a bear flag, but if it breaks down, I'm watching for the possibility of support in the 536.50 area. If that holds, the OEX could push up to test this resistance again. If it doesn't, the OEX may drop down to retest Friday's and this morning's low, and then possibly that 530-532 support zone I detailed last night.

  Jonathan Levinson   7/19/200,  10:22:15 AM
Despite the small gain in silver (+.46%) and slight decline in gold (-.10%), the miners are weaker, with HUI down .84% at 192.37 and XAU down .9% at 88.85. Bonds are holding their earlier levels with almost no movement whatsoever, TNX up .5 bps at 4.366%.

  Jonathan Levinson   7/19/200,  10:14:05 AM
QQQ failed one cent below the 30 min channel resistance level posted earlier and pulled back to current short cycle channel support. The short cycle is still in an upphase but is nearing the top of its range. 30 min and 60 min resistance now line up at 35.03, with support at 34.56.

  Linda Piazza   7/19/200,  10:12:32 AM
The OEX approaches a test of the resistance posed by its descending trendline off last Wednesday's noon-ish high, with that tendline at about 538.15 now. Just above that is the combined Keltner resistance that has been stopping the OEX since about that same time last week, with that resistance now at 538.73-538.92. The 200-sma is just below that. Significant resistance just ahead, then, resistance that it will be important to watch.

  Linda Piazza   7/19/200,  10:07:35 AM
The TRAN is still above 3100. Friday, it fell back inside the rising regression channel that had looked like a possible bear flag, and it's still inside that formation.

  Jeff Bailey   7/19/200,  10:07:05 AM
Current OPEN MM Profiles at this Link

  Jonathan Levinson   7/19/200,  10:05:47 AM
A 5B overnight repo has just been announced. This should add strength to the equity and treasury markets today.

  Linda Piazza   7/19/200,  10:05:02 AM
The BIX is above 350 as I type, but not yet above the 6/24 intraday high of 351.98.

  Linda Piazza   7/19/200,  10:01:25 AM
For reference, the OEX 200-ema is at 538.24. That average has shown some relevance in the last two days of trading, so bears watching.

  Jonathan Levinson   7/19/200,  9:57:45 AM
The fed has no repos expiring today, with Friday's operation being a 6 day repo. There's been no announcement yet today, and any amount added by the open market desk will constitute a net addition to liquidity.

  Jeff Bailey   7/19/200,  9:56:56 AM
Swing trade covered call alert ... sell 2 of the Overstock.com Link August $40 calls (QKTHH) at $1.00 bid.

INX.X violating its rising 200-day SMA. Link

  Linda Piazza   7/19/200,  9:52:52 AM
The OEX has settled into a back-and-forth kind of pattern that's sometimes indicative of a measured distribution rise. Be particularly watchful for a possible downturn again just above 538 or just below 539. That doesn't mean that it will happen, but it's certainly a possibility. I don't feel good just yet about a possible long play.

  Jonathan Levinson   7/19/200,  9:51:34 AM
If we do get a narrow, choppy range today, I will interpret that as the chop we often see inside a turning cycle channel- in this case, the basing that would accompany a daily cycle bottom. This is the equivalent of the "weightless" chop we saw at the last daily cycle peak. That interpretation will need the Friday lows to hold on the next 30 min cycle downphase, but that test should be approximately a day away.

  Linda Piazza   7/19/200,  9:44:10 AM
The TRAN rises to challenge 3100 again.

  Jeff Bailey   7/19/200,  9:43:37 AM
Taser Intl. (TASR) $37.00 -8.05% Link ... sharply lower after Sunday's New York Times article raises safety concerns about its stun guns used by police.

Hmmmm..... is a bullet launching weapon safer?

Sturm Ruger (RGR) $11.33 +2.07% ....

  Jonathan Levinson   7/19/200,  9:42:55 AM
Short cycle resistance is at QQQ 34.85, while 30 min resistance lines up with price confluence at 34.94. Rising short cycle support is at 34.67, 30 min support 34.55.

  Linda Piazza   7/19/200,  9:41:49 AM
The SOX tries to turn up today, but it hasn't made much progress yet.

  Jeff Bailey   7/19/200,  9:41:17 AM
Aluminum Corp. China (ACH) $54.07 +3.32% Link ... back above its still trending lower 5-day SMA.

  Jonathan Levinson   7/19/200,  9:39:50 AM
Dow futs at session lows hee at 10118, with GE at a session low as well, up .06% here. MSFT pulling back as well but still positive.

  Linda Piazza   7/19/200,  9:38:51 AM
During the first five minutes of trading, the OEX ranged from 535.90 to 537.01.

  Jeff Bailey   7/19/200,  9:37:59 AM
Pacholder High Yield (PHF) $9.25 +1.31% Link .... strong move from our "junk bond" above its 200-day SMA.

Last week, PHF declared a regular monthly dividend of $0.075 per share. Link

  Linda Piazza   7/19/200,  9:36:31 AM
The $OEX opens and heads higher. Watch for possible resistance at the top of last week's potential bullish falling wedge, with that resistance now at about 538.25, or for an upside break of that formation. The five-minute Keltner chart shows resistance trying to gather between 537.40-537.70, and then again at the 539-ish level, so be careful of buying on a breakout of that falling wedge, in case the 539 level turns the OEX right back down again. Know how you'll handle that level before you consider a possible bullish play. The OEX still trades in the lower half of its Keltner channels, the bearish half, so bullish plays should be treated with care. There's a chance that the OEX could be turned down again inside that channel and still plumb the 530-532 level.

  Jonathan Levinson   7/19/200,  9:36:07 AM
Despite the absence of life in the indices, MSFT is up .76% at a session high here, and GE is .30% in green. The indices won't get far to the downside so long as there's a strong bid in these bellwethers.

  Jeff Bailey   7/19/200,  9:35:34 AM
S&P 500 (SPX.X) 1,103.25 +0.16% ... with updated weekly pivot retracement at this Link

  Jonathan Levinson   7/19/200,  9:32:48 AM
Session low for gold here at 405.20, down 1.70.

  Jonathan Levinson   7/19/200,  9:32:05 AM
QQQ's 30 minute cycle is still down but trying to turn up within the ongoing 60 minute cycle downphase. The daily cycle is also still down but, like the 30 min cycle, near the bottom of its range. 30 min channel support is down at 34.55, with resistance at 34.96.

  Jonathan Levinson   7/19/200,  9:24:08 AM
Volume and movement are both very low this morning. Bonds are weakening, with the TNX now up 1.1 bps at 4.372%. Resistance is now 4.4%, and after last week's decline, I'd expect at least some kind of a bounce, however weak, to retest former support from beneath.

  Jeff Bailey   7/19/200,  9:21:48 AM
09:00 Update at this Link

  Linda Piazza   7/19/200,  9:19:09 AM
Futures drifted up and now have drifted down a little again, although NQ futures are still above their level at Friday's cash close. This morning, we'll be watching the SOX and SPX, among other indices, to see if we're more likely to see a continued dip before a possible technical bounce, or to see that technical bounce first. See my 22:22 post for some ideas about possibilities for this week.

  Jonathan Levinson   7/19/200,  8:51:59 AM
The Dow futures have given up their gains and are printing a session low at 10135, down 2. NQ is holding up, with QQQ up 15 cents at 34.82. Bonds haven't budged, TNX up .5 bps at 4.366%, while gold has gone negative, down 80 cents at 406.10.

  Jonathan Levinson   7/19/200,  8:20:49 AM
There are no major economic reports scheduled for today.

  Jonathan Levinson   7/19/200,  8:12:37 AM
A small bounce is lifting equities this morning, with ES up 2 to 1104.75, NQ up 4.50 to 1402, YM up 16 to 10153 and QQQ up 13 cents to 34.81. Gold is up 20 cents to 407.10, silver flat at 6.72, while euros and Canuck bucks are pulling back slightly, at session lows of .7624 and 1.2395 for the Sept futures. Bonds are just below flat at 111.3125 for the ten year future.

  Linda Piazza   7/19/200,  7:14:53 AM
Good morning. The Nikkei was closed Monday for a national holiday. In the rest of Asia, bourses turned in mixed performances as chip-related stocks struggled. Motorola had planned an IPO for its chip unit, but announced a 1/3 reduction in its offering price, damaging sentiment toward the sector. Big-cap chip stocks Taiwan Semiconductor and United Microelectronics both declined. Samsung and LG Electronics were both able to erase early losses, with LG Electronics reporting Monday. Sales of mobile phone handsets and premium home appliances helped boost its profit. Samsung Electronics had reported Friday, with its report showing net profit that almost tripled, with that company crediting strong sales of chips and LCD's.

The Taiwan Weighted lost 13.04 points or 0.24%, but South Korea's Kospi gained 11.01 points or 1.49%. Singapore's Straits Times gained 10.30 points or 0.55%. Hong Kong's Hang Seng gained 107.75 points or 0.89%, and China's Shanghai Composite gained 1.407 points or 0.10%.

European bourses mostly trade lower this morning. Pharmaceutical stocks gained the spotlight in Monday's trading. Bayer bought Roche's Consumer Health division and also purchased 50% of its U.S. joint venture with Roche. Bayer traded down in European trading as some viewed the price paid as too high. Roche's stock also dropped, perhaps because of its decision to sell U.S. non-prescription rights to one drug to GlaxoSmithKline. The U.S. FDA lengthened the review period of Schering's lower-dose version of oral contraceptive Yasmin, with that decision sending Schering lower, too. However, embattled Dutch chemical and pharmaceutical group Akzo Nobel traded slightly higher after it beat expectations in its Q2 earnings report. The company did restate its expectations that 2004's net income would fall.

As an air show takes place in England, industry execs mention cautious hopefulness about the industry, with Boeing and EADS spokespersons echoing that sentiment. EADS traded higher in early European trading.

As of this writing, the FTSE 100 trades lower by 6.40 points or 0.15%, at 4,332.80. The CAC 40 has lost 16.63 points or 0.46%, to trade at 3,593.77. The DAX has lost 26.82 points or 0.70%, to trade at 3,819.11.

  Linda Piazza   7/18/200,  10:22:46 PM
OEX Notes: Mid-week last week, most indices clung to the midline support of their descending regression channels. The Dow, the SPX, and the OEX clung to that midline support, but already the action of other indices hinted that support might not hold. The SOX had broken through midline support and dropped heavily on Wednesday. The Nasdaq had dropped through midline support, too. With the Nasdaq sometimes leading the other indices, and the SOX sometimes leading the Nasdaq, it appeared possible that those indices were leading the others down. Last year's star, the Russell 2000, clung to support near 557.75-558, looking, however, as if it was steadying at the neckline of a possible H&S, with the right shoulder still to be formed. Mid-week, the Russell 2000 and the BIX, still mired in its recent congestion zone, hinted that markets could attempt to bounce before following the other indices lower.

By the end of the week, the outlook had worsened. The SOX plunged further. The SPX and OEX moved below the midlines of their descending regression channels, suggesting that they might follow the SOX and Nasdaq in rolling down into the bottom half of their descending regression channels. In the last few minutes of trading on Friday, the SPX dipped just beneath its 200-sma. The OEX fell through its 200-ema. The Nasdaq fell through support from 1895-1900, perhaps headed toward possible support at 1865 or possibly 1850, the bottom of its descending regression channel. The TRAN moved from Friday's high of 3149 to close at 3087.66, below the 30-dma that had been supporting it since 7/08. All this was accompanied by rising crude costs, with crude moving up to test $42.00/barrel last week.

The OEX looks as if it's in danger of rolling down through that descending regression channel toward 532 support, and then toward 527 and the bottom of the channel at about 523 if that support doesn't hold. In fact, it was in February that I first began posting a weekly Keltner chart that was showing bearish divergence on a weekly basis. Here's that chart with the original annotations: Link (For an explanation of how I use Keltner channels and how they can show divergence, see my Traders' Corner article from 7/13.) At the time, the OEX was showing vulnerability to 523.50, the then-value of the mid-channel level, the teal-colored central line in the chart. Since then, the central line has climbed to 530.89, correlating fairly well with the 531-ish level that the daily chart shows as the next strong support on the OEX. The OEX does sometimes violate that particular support, occasionally even on a closing basis, but the violations to the downside have been few and brief since February 2003. Could that be changing? Daily MACD suggests that it could, but turning back to that weekly chart now shows a number of likely support lines converging in that 530-532 zone. The weekly chart suggests that even if the OEX is going to break through that zone, it's likely to bounce up toward 545-546 again first as support looks strong enough to hold on the first test at least. (Remember that I'm speaking of "first test" with reference to a weekly chart, so that doesn't necessarily mean on the first touch of that level on an intraday basis.)

The overview, then, is a possible short-term weakness down to 530-532 (although Keltner zones are sometimes not exact, and can be bulged outward a little), with the likelihood of a bounce following that, possibly up to 545-546 again to retest resistance there, but possibly lower. If 530-532 is touched, should that be a buy signal? Depends on how leathery your hands are and how good you might be at catching falling knives. Seriously, a good buying opportunity might exist at that level, but I'd sure like to get a look at how various market relationships were lining up as that level was tested before I commit to a viewpoint on that. It's possible that we could see the OEX bump along at 530-532 for a while, and even dip down toward 527-528, since that wouldn't be a big violation of that zone if looking at it from a weekly perspective, before the OEX rises toward the mid-channel level again.

As it rises to test resistance, we won't know whether the OEX is going to push through that resistance or fall again, eventually plunging below the mid-channel level, so that anyone jumping into such a play should consider it a countertrend play until proven otherwise. Plans should be made in advance for the approach to the 546-547 level, with those plans including whether automatic profit will be taken ahead of a touch of that level, if partial positions will be exited, or if other tactics will be employed. Plans should also be made for exits if the OEX appears to be stalling at lower resistance.

Dialing down to a fifteen-minute chart, the OEX is still pointed down toward 535, with Friday's settlement being at a lower value than the close on the intraday charts. The five-minute charts were on the verge of issuing a breakdown signal at Friday's close, with next resistance trying to gather near 536.50-537. These charts indicate a possibility that the OEX could move down to test that 530-532 level tomorrow, but don't promise that will happen. The touch of lower channel Keltner support on the five-minute Keltner chart could be showing that the OEX will bounce sooner than 532. Many market watchers predict a bounce tomorrow, but will it come from Friday's closing levels or from slightly lower? Many have been watching for that SPX touch of its 200-sma, expecting a technical bounce from that level, and I was one of those, but as I type, futures haven't moved much from Friday's level. They don't have the Nikkei to play against tonight, gaining if the Nikkei performs well, for example. The Nikkei is closed today for a national holiday. If futures haven't bounced tomorrow morning, I wouldn't be surprised to see some follow-through on Friday's losses, down toward that 530-532 range on the OEX, before a bounce begins. For signs that a bounce is getting underway, watch for a SOX bounce anywhere from the current level down to the bottom of its descending regression channel, at about 390-392. Watch for a BIX move back above 350 and then above the 6/24 high of 351.98. Watch for signs the SPX is steadying and perhaps bouncing either from Friday's close or from 1096-1097 if markets head lower instead of bouncing at the opening. Watch for the possibility the Russell 2000 could bounce from the 548-ish level, if it heads lower.

Most of all, if you decide to take a position, be prepared for whipsaws. Even if the OEX is going to eventually retest 546-547, an action suggested as a possibility but not promised, it won't be a steady course upward. Bulls should now be too nervous for that, and the possibility that the markets have not yet seen their swing lows looms too large for that. Rising crude costs and the possibility of terrorist attacks continue to pressure markets, as do the rumors beginning to circulate around forex circles that offshore investors are beginning to withdraw funds from American investments. A double-bottom formation wouldn't be a surprise for example, with the OEX perhaps rising up to test one of last week's congestion zones and heading down again. For example, 538-539 could be one of those zones that could stop the OEX and turn it back again. The good news is two-fold. First, it's possible that we could soon see a short-term end to the losses and some bounces up to test broken support and see if it holds as resistance. It's always more fun if the markets are bouncing, isn't it? (Unless you're in a bearish position, of course.) Second, it's possible that we'll soon have some good trading days, even if they're somewhat nervous ones. I'm looking forward to some directional days, and I bet you are, too.

If the OEX heads below 530-532, I'd certainly stand aside before considering a long play and see how it handles 527. If inclined to enter an OEX bearish play tomorrow based on a continued SPX move through its 200-sma, make plans for how you'll handle that OEX 530-532 level and then 527, followed by 524. By then, I'll be looking at the daily Keltner chart again, because it's possible it will have given a breakdown signal, and I'll be looking at next Keltner support.

  Jeff Bailey   7/16/200,  6:38:59 PM
Weekly Pivot Matrix for last three weeks at this Link

If you can get more than $1 out of the QQQ on a weekly basis, you're doing very good.

  OI Technical Staff   7/16/200,  6:18:21 PM
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