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  Jeff Bailey   7/27/200,  5:27:13 PM
Monster Worldwide (MNST) $22.31 +9.98% .... jumps to $23.90 in after-hours after reporting quarterly EPS of $0.14, which was a penny better than consensus estimates. Link (see chart at 15:40:32)

 
 
  Jeff Bailey   7/27/200,  5:18:54 PM
Pivot Matrix for tomorrow at this Link

Metals/mining traders.... I marked dollar resistance correlation at DAILY R1, WEEKLY R1, MONTHLY R1. I didn't mark the WEEKLY S1 and MONTHLY S1.

 
 
  Jeff Bailey   7/27/200,  4:41:00 PM
Closing Internals at this Link

 
 
  Jeff Bailey   7/27/200,  4:03:30 PM
Current OPEN MM Profiles at this Link

 
 
  Jonathan Levinson   7/27/200,  3:53:01 PM
30 min update of QQQ at this Link.

 
 
  Jonathan Levinson   7/27/200,  3:51:47 PM
The short cycle oscillator is trending in overbought and the 30 min oscillators are overbought but showing no sign of downturn since the break of 34.44 resistance. The 30 min channels have caught up to the rise, with resistance up to 34.80 here. A break above 34.70 would set that level up as support.

 
 
  James Brown   7/27/200,  3:51:41 PM
I can't see the catalyst but Fastenal (FAST) is up sharply again today +6.25% to resistance at $62.

 
 
  James Brown   7/27/200,  3:49:34 PM
It will be interesting to see how investors react to high-flying grocer WFMI after it reports earnings tomorrow night after the closing bell. Estimates are at 50 cents a share.

 
 
  Linda Piazza   7/27/200,  3:48:16 PM
It looks as if OEX bulls will get their wishes fulfilled today, as the OEX completes a morning-star reversal pattern on its daily chart.

During the height of the rally days in 2003, though, we saw some bearish reversal patterns complete, with the pullback needed to form the reversal being the only pullback that occurred. That could happen the opposite way as the OEX moves up into a resistance zone. Some charts suggest that 539.50-541 might be a tough zone that proves to be the limit of the OEX's advance, at least on the first attempt; others suggest that 544-547 might be. Others suggest that the OEX is beginning a move back up through its descending regression channel and that 554 might be a rollover or breakout level to be tested.

 
 
  James Brown   7/27/200,  3:44:38 PM
The rebound in RIMM might be worth following. Yesterday the stock broke support at $60.00 and its simple 50-dma. Today the stock is erasing yesterday's losses with a 6.24% climb and it's back above the $60 mark again. It almost looks like a tweezer-style bottom for the candlestick traders.

 
 
  Linda Piazza   7/27/200,  3:42:53 PM
The OEX is still having difficulty holding onto the breakout level on the five-minute and 15-minute nested Keltner charts, but it's striving to establish support in the first support zone offered on its five-minute chart. The five-minute MACD has made a bearish cross, however. Although that's an above-signal bearish cross, it suggests that the pullback may not be completed. Suggestion or not, however, the OEX is charging back up as I type.

 
 
  Jeff Bailey   7/27/200,  3:40:32 PM
Swing trade 1/2 bullish call alert .... for the Monster.com (MNST) $21.99 +7.42% Link ... December $22.50 Calls (BSQLX) at $2.70 offer.

On Thursday, we'll get June Help Wanted with conensus at 40 versus May's 39.

 
 
  James Brown   7/27/200,  3:36:52 PM
Legg Mason (LM) is at a critical short-term juncture. The oversold bounce is coiling into a bullish wedge with higher lows under resistance at $80.00. The MACD is hinting at a new buy signal soon. If LM can breakout over $80.00 (or $80.30 - the recent high) then bulls can probably ride it up toward the 200-dma. Otherwise, bears can watch it for a breakdown under the trend of higher lows and/or the $75 level of support.

 
 
  Linda Piazza   7/27/200,  3:36:41 PM
On the five-minute OEX chart, the OEX has been showing bearish price/MACD divergence with each peak today.

 
 
  Linda Piazza   7/27/200,  3:31:55 PM
The OEX is having difficulty holding onto the breakout level, at least so far. It's coming back to 534.89-535.55 possible support, to test that. Bulls do not want to see the OEX maintain levels below 534.90.

 
 
  James Brown   7/27/200,  3:31:52 PM
It is noteworthy that EBAY's P&F chart has produced a new buy signal, which currently points to an $87 target.

 
 
  James Brown   7/27/200,  3:31:02 PM
EBAY is up 5.68% and outpacing the 3.6% rally in the INX Internet index. While EBAY's MACD indicator is hinting at a new bullish reversal soon the stock needs to breakout above its 10 and 100-dma's as well as what could be resistance at the round-number $80.00 mark.

 
 
  James Brown   7/27/200,  3:28:18 PM
The rally in Symantec (SYMC) is impressive. The stock is probably trading higher (+4.6%) not just because the GSO software index is up 2.22% but due to the new MyDoom virus making the rounds.

 
 
  Jonathan Levinson   7/27/200,  3:20:59 PM
QQQ is pulling back from upper 30 min channel resistance at the session high, with the 30 min channels back to a steep upward slope after having flattened earlier. Channel support is now 34.30, and the short cycle oscillators are maxxed out in overbought. This would be a likely spot for a corrective pullback, but as long as 34.44 remains intact on a possible retest, I expect to see higher highs.

 
 
  Jonathan Levinson   7/27/200,  3:17:27 PM
3:16pm TNX 10-YEAR TREASURY YIELDS CLOSE AT MONTHLY HIGH OF 4.60%

 
 
  Linda Piazza   7/27/200,  3:16:32 PM
The OEX is breaking out now on the 15-minute chart and the 5-minute one. The 15-minute breakout will point the smallest Keltner channel toward 541, but this also represents a time of danger for those in bullish plays as the OEX can pull back once moving into the next zone. In the short-term, maintaining that 541 target that requires that the OEX maintain values above 534.46 on any near-term pullback or at least maintain values above 533.30.

 
 
  Linda Piazza   7/27/200,  3:12:25 PM
So far, the OEX has not been able to break out above the top Keltner resistance, currently at 535.92 and rising with the OEX. Many of the recent five-minute candles now sport upper shadows as they try to pierce that resistance and then fall back. Even if the OEX is going to punch through that 536-538-ish resistance, it may need to pull back to 534.80-535 first. If it pulls back below 534.38 and maintains levels below that, it's going to turn its smallest Keltner channel lower again. Of course, as I type this, the OEX is rising to a new high, above 536. It still has not created a breakout situation, however, at least on this chart. It is trying to do so on the 15-minute chart.

 
 
  Jeff Bailey   7/27/200,  3:07:02 PM
03:00 Market Watch at this Link

 
 
  Jonathan Levinson   7/27/200,  3:02:58 PM
Session high for QQQ, with price breaking above 30 min channel resistance, leading me to expect a pause. Using 34.44 as a neckline, we have a reverse h&s target in the vicinity of 35. But, with the daily cycle turning up, that could be enough to get the QQQ some lift for a strong daily cycle upphase.

 
 
  Linda Piazza   7/27/200,  2:56:11 PM
Graham M. notes that while the OEX was rejecting the regular H&S on its five-minute chart, the QQQ was confirming a nicely shaped inverse H&S (seen on 15- and 30-minute charts). Good eye, Graham, as Jonathan might say. I wasn't watching the QQQ at the time, but as it was confirming that inverse H&S, it was also moving above mid-channel resistance on the 15-minute Keltner chart. Note, however, that the QQQ's are now about to move into that gap zone from the 23rd. I'm always leery of gaps, as they can provide resistance. So far, so good, however. Nice to hear from a subscriber from New Zealand.

 
 
  Jeff Bailey   7/27/200,  2:54:44 PM
Gold Bugs ($HUI.X) 82.74 +0.12% .... battles back to fractional gains.

 
 
  Linda Piazza   7/27/200,  2:48:54 PM
The OEX is hitting upper Keltner channel resistance on the five-minute chart. A sustained move above this level will create another breakout situation, but this is definitely a time for bulls to make plans to protect profits in case the OEX rebounds lower from that resistance rather than breaking out.

 
 
  Linda Piazza   7/27/200,  2:46:14 PM
The OEX still charges toward upper Keltner resistance, now at 535.65. I wasn't sure at all that the OEX could get above 533-534 today, although I thought it likely that the OEX would get to that first resistance level. Now it approaches the next at 536-537, and extending up to the 200-ema at 537.97.

 
 
  Jonathan Levinson   7/27/200,  2:41:02 PM
Volume is still looking light but the price is behaving with new highs printing. The light volume break so far tells me that a dip back under .44 could be in the cards- but the new highs printing as I type seem to be correcting that. The picture looks bullish for the daily cycle above 34.44, which, as discussed at length last week, could be good for a multiweek advance.

 
 
  Linda Piazza   7/27/200,  2:39:06 PM
The OEX is trying to break out, toward 535.56.

 
 
  Linda Piazza   7/27/200,  2:33:36 PM
The OEX H&S is rejected. The OEX is again at resistance Keltner and historic resistance that turned it lower earlier today. It needs to maintain level above 533.15 to point its smallest Keltner channel toward upper Keltner resistance at 535.50 and needs to maintain 532.38 to keep it from turning lower.

 
 
  Jonathan Levinson   7/27/200,  2:32:34 PM
View of the QQQ break above 34.44 at this Link , but looking light on the volume so far for a full fledged breakout.

 
 
  Jonathan Levinson   7/27/200,  2:29:35 PM
Session highs across the board. QQQ 34.47.

 
 
  Jonathan Levinson   7/27/200,  2:28:36 PM
Still staring at that 34.44 QQQ resistance line: Link . Short cycle oscillators are in an upphase but are no longer so deeply overbought.

 
 
  Linda Piazza   7/27/200,  2:24:14 PM
So far, the OEX's action is fitting with the possibility that I outlined in my 13:06 post: first a pullback to form the neckline of a H&S, then a rise into a right shoulder, with that right shoulder at about the 533 level. Next comes either the confirmation of the pattern by a move through the neckline or a rejection of it by a move to a new high. Confirmation looks as if it will occur on a move below 531.96, but I'd certainly wait until a move below the mid-channel Keltner level at 531.65, too, before I considered the H&S a done deal. Even then, I'd be careful as I consider this some chopping around just above the Keltner support on the weekly channel before the OEX establishes final direction, and that chop could take a week or two still.

 
 
  Jeff Bailey   7/27/200,  2:24:06 PM
Taser Intl. (TASR) $28.31 +12.24% .... pretty good bounce today from test of 200-day SMA. Test for strength coming at $29.44. Link

 
 
  Jonathan Levinson   7/27/200,  2:18:13 PM
TNX now up 11 bps to 4.585% and above descending resistance, 4.639% next upside resistance, lining up with bollinger resistance confirming the price and fibonacci confluence. Recall that while the daily cycle is up, the weekly is still pointed south. Bond bulls should be able to tolerate a daily cycle that tops at or below 4.8%, while a breach of the year highs above 4.88% could cancel the ongoing weekly cycle downphase for the yield. Link

 
 
  Jeff Bailey   7/27/200,  2:11:14 PM
Stillwater Mining (SWC) $13.73 +0.95% Link .... Didn't give the "sell signal" did it?

 
 
  Jeff Bailey   7/27/200,  2:10:13 PM
Phelps Dodge (PD) $72.47 +0.58% Link .... "Copper hoppers" breath a sigh of relief on test of bullish support trend. Almost achieved its prior bullish vertical count of $82. Recent sell signal ($77) is currently bearish to $55.

If economy is strong, PD should build base, generate a "buy signal" which exceedes prior bullish vertical count of $82.

Super Bull setup would be a "low pole warning" followed by a triple-top buy signal at $82, but I'd have to think a VERY strong economy to get that supply/demand setup.

 
 
  Jeff Bailey   7/27/200,  2:05:57 PM
Beetle's Balanced at this Link

I'm a bit suspicious of today's PHF move, but would grow more bullish if the LQD (high grade corporate bonds) weren't matching the move in Treasuries.

I've seen fellow analysts put together their "bullish wish list" and mine would be for Treasuries to see some further selling, but corporates as well as "junk bonds" to find continued buying.

Action in gold stocks is what bulls may want to see, but as gold stocks continue to lead weakness for the broader markets, the "kicker" for bulls will be to see renewed strength among the industrial metals, where despite dollar strength (healthy economy? Budget deficit declining? Fed raising rates?), which should have gold falling, economy continues to strengthen, build demand for industrial metals.

 
 
  Jonathan Levinson   7/27/200,  2:04:37 PM
30 min QQQ at this Link shows the first sign of weakness in the 300 min stochastic on the most recent failure at 34.40. The pullback could be a return to the scene of the crime, but I don't like the way it lines up with the stall in the stochastic upphase. A break below 34.20 would be very bearish here and suggestive of a move back to 34. 30 min channel support is at 34.12 currently, but a quick move to that level would likely kick off a new 30 min cycle downphase.

 
 
  Jane Fox   7/27/200,  1:55:23 PM
Jonathan has been talking a lot about bonds and yields so I would like to add a little to his comments. Here is a chart of the TYX, the 30-year Treasury Bond Index (yields), which I think says it all. Link

 
 
  James Brown   7/27/200,  1:54:58 PM
OMC reported earnings this morning and beat estimates by 3 cents. The stock immediately traded higher once trading began but has failed at the $70.00 mark and turned lower. We might consider bearish positions if OMC breaks support at the $68 level. Its P&F chart remains bearish with a $53 target.

 
 
  James Brown   7/27/200,  1:50:40 PM
MGA is back under support at the $80.00 mark.

 
 
  Linda Piazza   7/27/200,  1:50:38 PM
The OEX is edging slowly down toward the 531.50-531.60 level. Remember that this is the level I'm watching for a possible bounce, possibly up into a right shoulder of a H&S formation on its five-minute chart. If bearish sentiment is strong enough, bears may eschew the formation of the right shoulder and drive the OEX down without forming one. If bullish sentiment is strong enough, the OEX will bounce, possibly in advance of that 531.50-531.60 level, and reach a higher high.

 
 
  Jonathan Levinson   7/27/200,  1:47:59 PM
Bonds are getting dunked again, with TNX now up an impressive 10.6 bps at 4.581%. The 4.5% struggle for weeks now looks like a distant memory, with the TNX's 2.37% gain today. The Fed's repo money appears to be going into equities, as bonds are so far looking very weak.

 
 
  Linda Piazza   7/27/200,  1:38:41 PM
All day yesterday, a certain Keltner channel line (basis line of the middle channel) kept serving as resistance on the OEX. Today, it's been serving as support. Currently, the OEX tests it, with that line at 532.39. If that fails to serve as support, that will be a variation from the earlier dip.

 
 
  Linda Piazza   7/27/200,  1:26:35 PM
I'm enthralled with the information that nested Keltner channels give me on the OEX. (For information on how I use them, here's my Traders' Corner article: Link ). They were suggesting support in the area where we saw support and today suggested upside, but possibly only to 533-534 with the suggestion that might be tough resistance.

Before you begin trading on information gained from nested Keltner channels, do a lot of paper trading, however. I'm currently using them to watch another trading vehicle, and I don't yet have the optimum setup or the sense of how that vehicle acts around a certain Keltner channel line, and that's resulted in being caught in some choppy (paper-trading) plays that I probable would have recognized as such on the OEX. I like these channels because the evidence is visual and not particularly difficult to interpret, at least in my opinion, but there is a bit of an art to this, too, and that involves knowing how your trading vehicle tends to act with respect to certain Keltner channel lines.

 
 
  Jonathan Levinson   7/27/200,  1:23:28 PM
Short cycle QQQ update at this Link . 30 min resistance has climbed to 34.52, support 34.11.

 
 
  Linda Piazza   7/27/200,  1:19:16 PM
The OEX needs to pull itself higher in the next 11 minutes or it will have created a nearly perfect evening-star formation: Link Of course, sometimes the reversal that produced a reversal signal is the only pullback seen, but this won't encourage bulls.

 
 
  Jonathan Levinson   7/27/200,  1:10:36 PM
The head and shoulders interpretation is off the table. The pattern is looking more like a reverse h&s or a bullish cup and handle. The 30 min cycle oscillators are still pointed north and have more room to run, but until that 34.44 resistance level has been cleared, there remains the risk of an early abort to the 30 min cycle upphase.

 
 
  Linda Piazza   7/27/200,  1:06:49 PM
The OEX is above the 15-minute 100/130-pma's, but a glance at the 30-minute chart shows a possibility for an evening-star formation on that chart--white candle, doji, and now red candle in progress. We're far from completing this 30-minute period, but bulls should again be careful of protecting profits. I'm wondering about the possibility of a pullback to 531.50-531.60 and then another rise, perhaps to 533 or so, into the right shoulder of a possible H&S formation. The head hasn't even formed, so I'm jumping the gun here, but just looking at possibilities. The 531.34 level is the mid-channel level on the five-minute OEX chart, so a drop to that level would constitute a retest of the mid-channel support. Looking at this possibility warns bulls to be careful in the possible right-shoulder level if there is such a pullback and then a bounce. Bulls would want to see the OEX achieve a new daily high on such a bounce to undo the possibility of a H&S formation.

 
 
  James Brown   7/27/200,  1:06:40 PM
Penn National Gaming (PENN) is up 7% and breaking out over resistance at $34.00 and trading near all-time highs after reporting earnings this morning. PENN beat estimates by 7 cents and guided higher. The news was followed by an upgrade from Fulcrum to a "buy".

 
 
  Jeff Bailey   7/27/200,  1:02:46 PM
12:53 Market Watch at this Link

 
 
  Jonathan Levinson   7/27/200,  12:57:02 PM
Session high just printed at QQQ 34.43. 30 min resistance is up to 34.50. Link If .44 is a neckline, and today's dip the right shoulder of a large reverse h&s, then the implied target is just above 35.00 QQQ.

 
 
  James Brown   7/27/200,  12:53:46 PM
L3 Communications (LLL) is up 5.3% to $59.53 after reporting earnings this morning that beat estimates by 2 cents. The company also guided higher on its revenues for the full year. The rally today has eclipsed yesterday's sharp drop but bulls need to see the breakout over resistance at the $60 mark (and maybe resistance at $62).

 
 
  James Brown   7/27/200,  12:50:31 PM
Domino's Pizza (DPZ) hit new all-time lows this morning after reporting its Q2 earnings. Stronger sales failed to outpace higher interest and higher cheese costs. Revenues jumped 9.8% to $324.2 million. Same-store sales in the U.S. rose 2.1% while same-store sales overseas jumped 9.4%.

 
 
  Jonathan Levinson   7/27/200,  12:45:43 PM
30 and 60 min channel resistance has risen to 34.48, with support lined up at 34.05 QQQ. The short cycle is rising but not yet overbought, with room to move to the upper Keltner resistance before the oscillators will be looking maxxed out.

 
 
  Linda Piazza   7/27/200,  12:43:06 PM
It's time to consider the possibility of a double-top formation on the OEX today. Or almost-double-top. There was bearish divergence as the second, slightly higher high was reached. A drop below the trough between the two peaks, 531.37, would confirm the double-top formation, setting up a downside target just above 529.

 
 
  James Brown   7/27/200,  12:41:37 PM
Jeff mentioned YHOO was up today. I see that Ask Jeeves (ASKJ) is also up 5.8% and breaking out over the $30.00 mark. Its MACD is getting closer to producing a new buy signal from its oversold status but its P&F chart is still bearish. Look for ASKJ to report earnings tomorrow evening after the closing bell. Estimates are for 22 cents a share.

 
 
  James Brown   7/27/200,  12:38:57 PM
Nortel Networks (NT) is down more than 15% to $3.43. The company said it will have to reduce expenses after missing its targets for cost controls and gross margins. (-Reuters)

 
 
  Linda Piazza   7/27/200,  12:38:06 PM
The OEX still has difficulty making it past that 533-534 zone, but still isn't dropping back much, either. It is easing slightly below the 15-minute 130-ema again, though.

 
 
  Jeff Bailey   7/27/200,  12:36:13 PM
Yahoo! Inc. (YHOO) $29.63 +5.03% Link .... strong move from some recent $28 consolidation.

Stock might appear "cheap" relative to yesterday's news out of Google.

 
 
  Jonathan Levinson   7/27/200,  12:34:05 PM
New session lows for ZN bonds here, with TNX now up 8.1 bps to 5.559%.

 
 
  Jeff Bailey   7/27/200,  12:29:28 PM
12:00 Internals at this Link

Yesterday's Internals at this Link

 
 
  James Brown   7/27/200,  12:28:59 PM
Cooper Industries (CBE) traded under its simple 200-dma after Prudential downgraded the stock to "neutral" on valuation concerns this morning. Fortunately for shareholders CBE managed a sharp bounce off round-number psychological support near the $55 region. This looks like a bullish buy the bounce from support entry point but it needs to see some confirmation. There is resistance overhead at $60.

 
 
  Linda Piazza   7/27/200,  12:26:58 PM
A new high of the day for the OEX. It's headed toward 534.55 next resistance on the 15-minute Keltner chart. This is the Keltner channel that usually stops the OEX, except in breakout conditions. Unless the OEX breaks out, then, it's approaching a level at which gains should slow, if not stop.

 
 
  Jonathan Levinson   7/27/200,  12:25:31 PM
Here we are, with QQQ back at 34.38, knocking at upper confluence from a higher low.

 
 
  Linda Piazza   7/27/200,  12:21:21 PM
For reference, this morning's OEX high was 533.71, with the OEX currently at 533.42.

 
 
  Linda Piazza   7/27/200,  12:19:43 PM
The OEX has climbed above the 15-minute 100-ema and now challenges the 130-ema. It's eased above it again, as it did earlier this morning, and now needs to maintain that level to give bulls hopes of further climbs. The 130-ema is at 533.22. Nearby Keltner resistance spans up to 534.48 on the 15-minute chart.

 
 
  James Brown   7/27/200,  12:15:37 PM
Ouch! Bob Pisani on CNBC just mentioned that Cardinal Health (CAH) was lower on a management resignation. Shares are down 13.5% to $43.65 hitting new four-year lows. The company announced this morning that its CFO had quit and they would be forced to delay their earnings results. Their CFO Richard Miller resigned yesterday saying it was in the "best interest" of the company. Investors are obviously worried that his departure may mean the current SEC accounting probe may find more problems.

 
 
  Jonathan Levinson   7/27/200,  12:14:51 PM
Current 30 min channel resistance is 34.40, support down to 34, where the 60 min channel also has support. The wavelet oscillator has been trending higher for the past 20 minutes, and it looks like the 30 min channel wants to turn back up within the upsloping 60 min channel.

 
 
  Jonathan Levinson   7/27/200,  12:12:54 PM
The TNX is at session highs, currently trading 4.554%, up 7.9 bps for a 1.75% gain today. 4.5% is now support, with possible descending trendline resistance at 4.56%. Next resistance is at 4.63%.

 
 
  James Brown   7/27/200,  12:08:18 PM
French drugmaker Aventis (AVE) is down 2.65% to $76 and nearing the bottom of its recent trading range after the U.S. patent office rejected AVE's application for Lovenox. Lovenox is the "No. 1-selling low-molecular-weight heparin in the world". AVE plans to reissue their application.

 
 
  Jeff Bailey   7/27/200,  12:05:23 PM
12:00 Market Watch at this Link

 
 
  Linda Piazza   7/27/200,  12:05:21 PM
Keene asked a while ago if he was the only one who was bullish. I was bullish the OEX up to 533-534, as described in my 23:10 post, but far from certain what to expect after that in what I consider a possible countertrend bounce, so now I'd describe myself as wary and standing back to watch rather than either bullish or bearish. The TRIN's level worries me on behalf of any in bullish plays. I think the OEX is in the process of deciding whether that weekly Keltner and historical support is going to hold or not, and so might be chopping around a bit for a week or two . . . or perhaps even more, so I'm cautious about any assumptions now.

 
 
  Linda Piazza   7/27/200,  11:55:26 AM
The OEX still hasn't made it above the 15-minute 100/130-ema's or the mid-channel Keltner level on that time frame, but it's still trying. RSI has turned down, but MACD only flattened. The TRIN's level certainly suggests that bullish plays remain countertrend ones, and bullish traders might be extra careful to protect any profits they might have.

 
 
  Jonathan Levinson   7/27/200,  11:54:02 AM
I'll be with you, Keene, on a break north of the 34.38-34.44 QQQ confluence zone.

 
 
  James Brown   7/27/200,  11:37:06 AM
OI put play PGR continues to sink with another new lower. Last night we mentioned that the stock is very oversold and due for a bounce. We're expecting some sort of bounce at the $75 level. Short-term traders may want to consider exiting for a profit near $75. Especially since the August $80 puts have risen from $2.55 to $4.70 and the August $75 puts have climbed from $0.80 to $1.55.

 
 
  James Brown   7/27/200,  11:34:00 AM
OI put play MGA slipped under support at the $80 mark and its simple 200-dma for the second day in a row but the market bounce is lifting it back into positive territory.

 
 
  Jonathan Levinson   7/27/200,  11:32:28 AM
Session low for ZN bond futures here, with TNX up to 4.536%.

 
 
  James Brown   7/27/200,  11:32:23 AM
We remain un-triggered in IBM. The stock is edging higher and nearing minor resistance in the $86.00-86.50 range. In the news IBM announced that it was building a new super computer for the U.S. Dept of Defense. Once it's finished the new machine is supposed to be the fastest computer in the U.S. military and one of the fastest supercomputing clusters in the world. With 3,000 processors the new machine is designed to perform global scale modeling and simulations that can run 20 trillion mathematical operations a second. (source: IBM's press release)

 
 
  Jonathan Levinson   7/27/200,  11:31:54 AM
Someone just wandered into my office and I was pointing out the QQQ chart: Link , with the bull flag/2-day cup and handle interpretation vs. the intraday head and shoulders dilemma. I've outlined the downside h&s neckline, below which the bullish interpretation should be off the table.

 
 
  Linda Piazza   7/27/200,  11:31:26 AM
The OEX retests its 15-minute 100-ema. As it does, it's also facing gathering Keltner resistance at 532.71. The OEX needs to maintain levels above that 532.71 number to turn its smallest Keltner channel up toward next Keltner resistance on the five-minute chart, currently at 534.92.

 
 
  James Brown   7/27/200,  11:26:50 AM
I'm noticing that OI put play DISH is slipping nearly 1% this morning despite the bounce in the major indices. The stock has been consolidating its gains from last week under the simple 21-dma with a series of lower highs. This may be another entry point for bearish positions.

 
 
  Linda Piazza   7/27/200,  11:22:19 AM
The OEX is trying to come up and test the 15-minute 100/130-ema's again, with those at 532.20 and 533.24, respectively.

 
 
  Jonathan Levinson   7/27/200,  11:13:22 AM
The current bounce looks (intraday) like a bull flag on the Dow futures, but more like a head and shoulders top on the SPX and Naz futures and QQQ. A break above 34.30 QQQ would look like a bull flag break out and come close to invalidating the possible h&s top, while a break below 34.07 would likely be a h&s neckline break. Watch for expanding volume (or the absence thereof) to confirm (or deny) the breakout on a cross of any of these levels.

 
 
  Linda Piazza   7/27/200,  11:09:41 AM
This morning's OEX action was just what bulls wanted to see. Because indices don't often gap, they don't often produce the classic morning-star formation in which a doji gaps down from the previous day's red candle and then the third day, a white candle gaps up from that doji. However, the OEX did open at/near yesterday's close and then climb high enough to retrace more than 50% of Friday's tall red candle. The action since then hasn't been what bulls hoped to see, especially with the testing of the 15-minute 100/130-ema's and fall back beneath them, but the day is still young. The OEX did try to steady at the 38.2% retracement of the climb off yesterday's last five-minute low and its formation on the five-minute chart looks like a bull flag as it pulls back. I expected 533-534 to be tough for the OEX, and it apparently was. I was never certain about the OEX's ability to climb much above that level, however, and I'm still not certain of that ability, so would advise bulls to be cautious about protecting profits. Now we have to see how the OEX behaves. Keltner resistance now gathers at 532.68.

 
 
  Jeff Bailey   7/27/200,  11:04:49 AM
Pacholder High Yield (PHF) $9.40 +2.06% .... jumping higher.

 
 
  Linda Piazza   7/27/200,  11:04:18 AM
The BIX appears caught between the support offered by its 50-dma, currently at 346.14, and its 30-dma, currently at 348.07, with the BIX at 347.42 as I type. The BIX is back this week inside the broadening consolidation zone that it built over the last couple of months. No breakout there to guide us.

 
 
  Jeff Bailey   7/27/200,  10:59:10 AM
10:55 market watch at this Link

 
 
  Linda Piazza   7/27/200,  10:58:10 AM
Time to snap retracement brackets on the climb from the last afternoon low yesterday to this morning's high. A 38.2% retracement will be at 531.17 and a 50% retracement at 530.39, near mid-channel Keltner support. Bulls do not want to see the OEX retrace more than 50% of the climb and would prefer for the retracement to stop at 38.2% or above. A retracement below the 61.8% level, at 529.60, usually suggests a retest of the low.

 
 
  Jonathan Levinson   7/27/200,  10:57:46 AM
QQQ has found support so far at 34.10, below the 7200-tick SMA but right on lower 30 min channel support. The bounce is weak so far, with MSFT hitting session lows as I type, and a failure to get back to the previous range above 34.30 in short order will result in the 30 min channel turning back down. It is currently flat, moving sideways and undecided for the time being.

 
 
  Linda Piazza   7/27/200,  10:53:48 AM
The OEX's smallest Keltner channel threatens to turn lower again. Bulls want to see the OEX back above 532.86 or at least maintaining values above 532.26 to stabilize that channel. Hoever, now that the mid-channel level has been surmounted, that might hold as support if the OEX should drift low enough to test it. That's currently at 530.57.

 
 
  Linda Piazza   7/27/200,  10:51:30 AM
The OEX is dropping below the 15-minute 100/130-ema's after having tested them, not something that bulls want to see happen. The drop is minimal as yet, but this should warn bulls to protect positions. As I mentioned in my 23:10 OEX report, 533-534 might be tough for the OEX, at least on the first try.

 
 
  Jonathan Levinson   7/27/200,  10:48:27 AM
Euros are also at session lows here, with gold and silver still very weak. Bond yields are strongly higher, with TNX now above 4.5% at 4.52%. Thinking about the unwinding of the carry trade that the Fed has been mentioning with increasing frequency, whereby participants have been borrowing using short duration money and lending longer duration debt to capture the spread, the unwinding of these insitutional positions could conceiveably result in a heightened demand for US dollars with which to pay for the bonds being sold. If so, that's what we're seeing here, with bonds weak and the USD Index rising. I'm by no means confident of this guess- just brainstorming and trying to figure out what we're seeing.

 
 
  Linda Piazza   7/27/200,  10:47:50 AM
Careful, bulls. As Jeff has just noted, crude futures have been climbing.

 
 
  Linda Piazza   7/27/200,  10:44:27 AM
More Keltner resistance snakes above the OEX, from 532.46 to 533.05, with more at 534.89. The only nearby Keltner support is at 531.87, a level that bulls want to see maintained. Below that is mid-channel support, at the 530.50-530.70 level.

 
 
  Jeff Bailey   7/27/200,  10:42:47 AM
September Crude Oil Futures (cl04u) $42.00 +1.25% (30-minute delayed) .... contract highs.

 
 
  Jonathan Levinson   7/27/200,  10:36:56 AM
The current pullback is a wavelet downphase that is only now beginning to drag the short cycle oscillators down from trending in overbought. 30 min channel support is up to 34.10, with the 7200-tick SMA just above at QQQ 34.16.

 
 
  Jonathan Levinson   7/27/200,  10:32:45 AM
QQQ has been testing but so far unable to clear the upper descending 30 min wedge resistance line: Link .

Gold has just broken below 388 support, with a session low of 387.10. Next support is at 385, followed by 382. HUI is down .84% at 173.60, XAU -.73% at 82.04 and showing very little strength.

 
 
  Linda Piazza   7/27/200,  10:28:53 AM
Keltner support is trying to gather under the OEX from 531.94-532.61. The OEX has paused long enough for Keltner resistance to snake above it, at 533.29, but if the OEX can hold here long enough for the support to firm, then that support could hold and a push toward 534.88 isn't ruled out. Bulls should be following the OEX higher with their stops, however.

 
 
  Linda Piazza   7/27/200,  10:21:06 AM
The OEX is turning back from its test of the 15-minute 130-ema at 533.32, heading back toward the 100-ema, currently at 532.43. Bulls would like to see the OEX stay above this average, just testing it, and then climb back above the 130-ema again. The 15-minute RSI has hooked down, but it's fickle and can turn right back up again. MACD hasn't turned down.

 
 
  Jonathan Levinson   7/27/200,  10:16:09 AM
QQQ is taking another run at .38-.44 confluence, with the 30 min channel rising now to 34.48. The 60 min channel resistance line is only up to 34.32, however, reinforcing the fact that the rise this morning is quite fast. The short cycle oscillators are maxxed out and trending in overbought- yet another trending day for the shorter intraday cycles.

 
 
  Jeff Bailey   7/27/200,  10:12:07 AM
10:07 AM Market Watch at this Link

 
 
  Linda Piazza   7/27/200,  10:08:54 AM
According to the five-minute Keltner channels, OEX bulls want to see the OEX maintain levels above 531.99 or at least 531.08, to keep from turning the smallest Keltner channel lower again. Currently, that channel is pointed up toward 534.80.

 
 
  Jeff Bailey   7/27/200,  10:07:46 AM
Current OPEN MM profiles at this Link

 
 
  Linda Piazza   7/27/200,  10:04:24 AM
The OEX now tests the 15-minute 130-ema after having moved through the 100-ema. Bulls want to see a sustained push through those averages and do not want to see the OEX drop below the 532.41 level of the 100-ema again.

 
 
  Jonathan Levinson   7/27/200,  10:03:51 AM
QQQ is at a session high of 34.38 here, knocking at the door of .38-.44 confluence. The 30 min channel resistance line has also risen to this level.

 
 
  Jonathan Levinson   7/27/200,  10:02:24 AM
Session lows for gold here at 389.90.

 
 
  Jonathan Levinson   7/27/200,  10:00:21 AM
Session highs across the board.

 
 
  Jim Brown   7/27/200,  10:00:12 AM
Consumer Confidence = 106.1 , (est 102.0, last 101.9)
New Home Sales = 1,326,000 , (est 1,255,000, last 1,369,000)

 
 
  Jonathan Levinson   7/27/200,  9:59:12 AM
Data due in 1 minute.

 
 
  Jonathan Levinson   7/27/200,  9:59:02 AM
A 6B overnight repo from the Fed adds 1.25B net against the 4.75B expiring. As yesterday, this should provide a positive bias in either the bond or equity markets. As much of the repo drains last week saw equities suffer the brunt of the selling, I'll be watching to see whether the repo adds this week again impact equities.

 
 
  Jeff Bailey   7/27/200,  9:58:39 AM
Stanley Works (SWK) $41.88 -5.59% .... intra-day chart with upper 5-MRT. If bulls get a bounce into $43.14-$43.47, look to exit the August $45 calls. Link

See earnings 09:47:02

 
 
  Linda Piazza   7/27/200,  9:54:47 AM
The OEX's important-of-late 15-minute 100/130-ema's are at 532.39 and 533.32, respectively, with the OEX currently testing them ahead of the 10:00 economic numbers. The last time they were tested was 7/22, with the OEX not able to move above them on that test.

 
 
  Jonathan Levinson   7/27/200,  9:49:55 AM
Current 30 min channel resistance has risen to QQQ 34.30, with support up to 33.89. 60 min resistance is at 34.28, support 33.70.

 
 
  Jeff Bailey   7/27/200,  9:47:02 AM
Stanley Works (SWK) $42.00 -5.32% .... late yesterday reported quarterly EPS of $0.73 per share, which was above the $0.67 per share consensus. Revenues rose to $794.7 million from $652.6 million in the year-ago period, well ahead of consensus estimates for $776.8 million.

Reiterated its 2004 profit target of $2.75-$2.85 per share.

Link

 
 
  Linda Piazza   7/27/200,  9:46:14 AM
So far during the first pullback, the OEX is not pulling back far, good news for the bulls. Bulls want to see the OEX maintain levels above 530.72 and certainly above 529.85.

 
 
  Jim Brown   7/27/200,  9:42:46 AM
Closing in on the 10:00 reports

Consumer Confidence (est 102.0, last 101.9)
New Home Sales (est 1,255,000, last 1,369,000)

 
 
  Jeff Bailey   7/27/200,  9:40:20 AM
Trimble Navigation (TRMB) $26.46 +19.68% Link .... percentage gainer at NASDAQ after earnings.

Link

 
 
  Jeff Bailey   7/27/200,  9:36:12 AM
TASER Intl. (TASR) $26.98 +6.93% .... bounces after CBS evening news negative coverage of stun guns.

 
 
  Linda Piazza   7/27/200,  9:34:51 AM
The OEX is attempting an upside breakout above one channel on both the five- and fifteen-minute Keltner charts. The five-minute chart now suggests that if the OEX can maintain 531 or at least 529.80 on any pullbacks, it will stay pointed up toward 534.50, with those values changing as the day progresses. We should have the first pullback beginning in less than ten minutes, so we'll be able to see then whether this first zoom is just amateur-hour positioning or whether it has sticking power.

 
 
  Jonathan Levinson   7/27/200,  9:34:38 AM
QQQ 34.38-34.44 has been key confluence for the past week. That level coincides with the upper descending resistance line on the 30 min bullish descending wedge posted earlier.

 
 
  Jonathan Levinson   7/27/200,  9:29:42 AM
Session low for gold at 390.80, up .40.

 
 
  Jonathan Levinson   7/27/200,  9:27:41 AM
Quick and dirty view of the 30 min S&P futures at this Link and the SPX at this Link.

 
 
  Jeff Bailey   7/27/200,  9:23:12 AM
09:00 Update at this Link

 
 
  Jonathan Levinson   7/27/200,  9:17:49 AM
Here's the equivalent view of QQQ based on yesterday's close: Link

 
 
  Jonathan Levinson   7/27/200,  9:16:24 AM
Here's a view of the current bounce in the Naz furtures (a proxy for QQQ) on the 30 min candle chart. Link . I interpret the bullish divergence highlighted therein as resulting from the uptick in the still-oversold daily cycle. Bulls need to break upward out of this descending wedge- a print on a 30-min closing basis above 1385 should be sufficient. The implied target could be as high as 1439.

 
 
  Jonathan Levinson   7/27/200,  8:35:06 AM
Session highs across the board in the futures. Bonds have opened weak, with TNX up 2.4 bps to 4.499%. 4.8% has now held as support, so the next level for yield bulls to gain is the 4.5% level we've been discussing for a few weeks now, the top of the daily range.

 
 
  Jonathan Levinson   7/27/200,  8:08:58 AM
Equities are higher, with ES up 2.75 to 1085.75, NQ up 5.50 at session highs of 1378.5, YM up 18 at 9967 and QQQ up .16 to 34.22. Gold is up 1.80 to 392.20, silver up .03 to 6.27. Ten year bonds are down .156 to 110.3281. We await New home sales for June at 10AM, est. 1.261M vs. 1.369M in May, and Consumer Confidence also at 10AM, est. 102 vs. 101.9 prior.

 
 
  Linda Piazza   7/27/200,  6:57:01 AM
Good morning. The Nikkei opened, moved briefly into positive territory, and then fell back, tumbling through the afternoon. It closed lower by 128.01 points or 1.15%, at 11,031.54. From the first, tech stocks tended to be weak ahead of earnings reports by major tech stocks and after the spot prices for chips fell 0.7%. Banks had gained in early trading, helping to support Japanese bourses, but then fell in the afternoon. Monday, Moody's Investors Services said it will consider upgrading four of Sumitomo Mitsui Financial Group's and Mizuho Financial Group's banking units. Among the major banks, only UFJ Holdings retained some of its gains, ending higher by 0.7%.

Stocks tended to react to their earnings or to hopes or fears about upcoming earnings. Trend Micro, an anti-virus software manufacturer, showed strong gains in early trading after Monday's after-the-close report showed net income rising 45% higher than anticipated. By the close, the stock was 2% higher. Perhaps the Internet troubles yesterday also helped this manufacturer. Brewer Sapporo Holdings also gained strongly after raising its profit and sales targets for the year.

Other Asian markets turned in mixed performances, with the performance of chip-related issues also mixed across Asia. Taiwan Semiconductor and United Microelectronics gained, and the Taiwan Weighted closed higher by 1.25%. With a news source reporting that Intel is likely to reduce the prices of its processors soon, Samsung fell in early trading, but the stock closed higher by 0.5%. South Korea's Kospi climbed 0.31%. Singapore's Straits Times climbed 0.71%, but Hong Kong's Hang Seng fell 0.15%. China's Shanghai Composite also fell, by 0.26%.

Currently, European bourses turn in mixed performances. In the U.K., insurers trade higher after Prudential's earnings report and encouraging outlook on business prospects in the U.K. sent the insurers higher. Germany's July Ifo indicator of business climate rose to 95.6 from June's 94.6. Both the current-situation and future-expectations components rose. As had been true in Japan, stocks in Europe tend to react to their own earnings reports or those from other stocks in their sector. An earnings report from Peugeot that was not as bad as expected sent that stock higher by more than 4% at one point in European trading, with some other car manufacturers also gaining. France Telecom reported EBITA that was within expectations, although H1 net income dropped 56.1 due to comparison to the year-ago period when the company received a tax credit of 3.3 billion euros. France Telecom rose. Puma, manufacturer of sneakers and apparel, and Merck rose after their earnings reports.

As of this writing, the FTSE 100 had risen 7.10 points or 0.17%, to 4,294.10. The CAC 40 had risen 17.48 points or 0.49%, to 3,550.09. The DAX had risen 29.99 points or 0.80%, to 3,782.58.

 
 
  Linda Piazza   7/26/200,  11:10:18 PM
The OEX and Dow printed doji at the bottom of their declines during Monday's trading, setting up the hope that these two indices, at least, will attempt bounces tomorrow. The SPX created a near-doji. On the OEX and SPX, these doji prove important since they occurred at possible support. On the OEX, that support is both historical and formed from converging Keltner channels on the weekly chart.

However, those hopes of a bounce are only hopes until the OEX confirms the potential reversal. That confirmation would come in the form of an open near or above yesterday's close and a rise that recoups at least half of Friday's losses, if not all or almost all. Various charts show potential resistance in the 533-534 zone, with that representing the channel lines that usually bound the OEX on the 15-minute Keltner chart as well as the upper resistance on the five-minute chart, for example. In addition, the 15-minute 100/130-ema's lie at 532.41 and 533.36, respectively, and it was these averages that turned the OEX lower again on Thursday afternoon. A move through those resistance levels would be important and a rollover beneath them would be, too.

OEX 536-537 also represents another potential resistance level, with the 200-ema at 538.11 possibly also representing potential resistance. Then there's the 539.50-541 region, with 541 showing up as possible strong resistance on the weekly chart. It's not until the OEX can maintain values above 541 that the OEX can hope to turn its smallest Keltner channel higher again on that chart. The 15-minute Keltner chart currently shows 541.37 as the likely upside if there's a breakout above the 534 level, and that 539.50-541 zone is a known historical S/R level.

Taking all these levels into account demonstrates that 533-534 might be tough for the OEX. If that zone is surpassed, then it's possible that 539.50-541 could be tested, although there might be some difficulty at 536-538, too.

What if the OEX falls instead? An open much below yesterday's close would preclude that reversal signal being produced, at least in near-classic form. The OEX is still trying to hold onto weekly Keltner support as well as known historical support. The descending regression channel on its daily chart shows that 522 bottom support might be a possible target if the 525-527 level fails. However, the 15-minute chart shows that unless the OEX maintains levels below 529 early tomorrow morning, it's likely to try for 533-534.

 
 
  OI Technical Staff   7/26/200,  6:18:57 PM
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