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  Jim Brown   7/29/200,  7:09:33 PM
Target selling Mervyns for $1.65 billion in cash

  Jeff Bailey   7/29/200,  6:08:12 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   7/29/200,  5:07:01 PM
Closing Internals at this Link

  Jim Brown   7/29/200,  5:05:11 PM
KLAC making positive comments on their conference call.

  Jeff Bailey   7/29/200,  4:25:08 PM
Current OPEN MM Profiles at this Link

Today's activity .....

Day trade short WMT $54.01, closed out $53.47 (+$0.54, or 1.00%)

Day trade long PAYX $29.75, closed out $29.85 (+$0.10, or 0.34%)

Swing trade short JDSU $3.44, no stop and using the previously purchased Dec. $3 calls has hedge. Placing stop loss on the now NAKED Aug. $3 calls sold yesterday for $0.10, with STOP LOSS at $0.60.

Closed out the swing trade bullish MNST Dec. $22.50 calls (BSQLX) at $2.20 : Bought 2 contracts at $2.70, sold $2.20, loss $100.00

  Jim Brown   7/29/200,  4:04:59 PM
Material earnings after the close today:

IM est +0.15, actual +0.16 beat
ACS est +0.71, actual +0.72 beat
WDC est +0.15, actual +0.14 miss
ADPT est +0.04, actual +0.06 beat
CYTC est +0.18, actual +0.19 beat
GILD est +0.36, actual +0.49 (GAAP) beat
KLAC est +0.45, actual +0.48 beat
THQI est -0.10, actual -0.10 guided up
VSEA est +0.51, actual +0.52 beat

  Linda Piazza   7/29/200,  3:58:42 PM
Today's candlestick chart for the OEX shows a small-bodied candle with both upper and lower shadows, with the body forming under the 200-ema. That type of candle is indicative of indecision, and bulls would hope tomorrow to see it followed by a tall white candle while bears want to see a red one that falls from today's opening level.

  Jeff Bailey   7/29/200,  3:57:48 PM
Paychex (PAYX) $29.97 +1.01% .... going to challenge morning highs of $30.00. I just wan't certain, and stock tends to trade funky near the close.

  Jeff Bailey   7/29/200,  3:51:17 PM
Bullish day trade exit alert for Paychex (PAYX) $29.85

  Linda Piazza   7/29/200,  3:47:03 PM
The OEX just can't stay above those 60-minute 100/130-ema's.

  Jonathan Levinson   7/29/200,  3:44:38 PM
The bounce has stabilized the 30 min channel, which is now flat with support back up to 34.49 and resistance at 34.92. The short cycle oscillators are in an upphase but volume once again is light. The QQQ is now far above its 10AM levels, and looking at the sweep of today, it's either a great distribution job or a consolidation near the highs. The daily cycle is in its upphase and the 30 min cycle upphase in progress today got excellent price traction. So long as the next 30 min downphase bounces from a low above yesterday's 33.80 low, the daily cycle upphase will be confirmed.

  Linda Piazza   7/29/200,  3:43:00 PM
Reader Question: Where do you INTC/$SOX are going next?

Response: James and I have our descending regression channels drawn a little differently on the SOX, so that on mine, the SOX is about to challenge the midpoint of its regression channel at about 418-419. That's near, but not quite at the top of the recent consolidation pattern. In addition, I've snapped a Fib bracket on the SOX's rally, toying with whether the best fit is a bracket off the low hit in early October of 2002 or the low hit in early 2003. There's fairly good correspondence between the 50% retracement of the rally off the 2003 low and yesterday's SOX low, so I think I'll use that bracket. That means that the SOX has so far stopped short of retracing more than 50% of the rally, which still allows for the possibility that the pullback could be a bull-flag pullback. It's certainly an extended one, if it is. On the monthly bar chart, the recent pullback looks as if it could be part of an inverse H&S formed at the bottom of the decline off the all-time SOX high. If it is, symmetry would allow for the right-shoulder pullback to dip all the way toward 340-375, and, in fact, monthly oscillators are either turning lower or trying to do so. Weekly and daily oscillators look different, however, with daily 21(3)3 stochastics having produced a bullish kiss, although not yet above signal; RSI hooking up; and the MACD histogram looking less negative, although it hasn't yet completed its bullish cross.

Because the SOX is about to challenge that midline of one version of that channel and because daily and weekly oscillators aren't yet committed to the upside, I'm not certain whether the SOX will be stopped somewhere between 418-425, rolling down toward 385-386 to test that bottom-of-the-channel and 50%-retracement support again or whether it will break through that resistance. If the OEX can instead move above 430-433, it looks ready to move up and challenge that river of MA's coursing down toward it. The first will be the 30-dma at 440.13, near known historical S/R.

Here's what Keltner charts have to say: The weekly Keltner channel chart shows that the 539 level begins a band of Keltner resistance lines that stretch up to 562. Currently, that chart shows that this band should be hard for the SOX to negotiate, and shows vulnerability down to 370, but doesn't predict whether the SOX is likely to first rise up to test that resistance or fall to test that support. The daily Keltner chart suggests that if the SOX can maintain 410.33 on a sustained basis, it's likely to try for a test of 430, but that if it falls below 391 again or possibly even below 403.50 on a sustained basis, it's likely to test 370.

  Linda Piazza   7/29/200,  3:31:52 PM
The OEX did hit the channel line that had been at 538.78, by then moved up to 538.93, and then fell sharply away. It's now in the process of creating a possible evening-star formation. Keltner lines have separated beneath it again, with the strongest support perhaps from 535.72-536.19, but with lighter support at537.38 and 536.74. So far, that nearest light support is producing a small bounce, but if that mid-channel support fails on a sustained basis, 532.46 is next according to the five-minute nested Keltner chart.

  Jonathan Levinson   7/29/200,  3:31:49 PM
Here it is:

LONDON (Reuters) - Pakistan has arrested a senior al Qaeda figure with a bounty of up to $25 million on his head, Interior Minister Makhdoom Faisal Saleh Hayat told CNN television Thursday.

He said the suspect had been captured during a raid in central Pakistan a few days ago. He did not identify the captive but said he was "a person who is most wanted internationally."


  Jonathan Levinson   7/29/200,  3:29:47 PM
Yet another unconfirmed Al Qaeda/terrorist capture rumor just made the rounds, but I've been unable to find any links or mention in mainstream sources to confirm it- just noise, but it could explain the manic feel to the pop that's just reversing now.

  Jane Fox   7/29/200,  3:24:33 PM
The TRIN is (ADVANCING ISSUES/DECLINING ISSUES) / (ADVANCING VOLUME/DECLINING VOLUME). A neutral TRIN means the ratio of advancing issues to declining issues is equal to the ratio of adv volume to dec volume. When I see both going up I expect to see TRIN going down but the visual is misleading because you have to look at the ratio not the actual A/D line. I think I will quit looking at the A/D volume so I don't get wrapped around this one again.

  Jeff Bailey   7/29/200,  3:20:52 PM
Aluminum Corp. China (ACH) $53.28 +1.00% .... challenging its flat 21-day SMA. MACD trying to move back above zero level.

  Jonathan Levinson   7/29/200,  3:20:39 PM
Volume is light so far, smaller than the previous buy and sell programs today, but price has just cleared the previous breakout zone to the upside. 30 min channel resistance is 5 cents away for QQQ at 34.90, with the short cycle oscillators early in a new upphase.

  Linda Piazza   7/29/200,  3:19:51 PM
The smallest Keltner channel still points toward 538.78, and toward 539.79 if it can get through that resistance and the 60-minute 100/130-ema's.

  Linda Piazza   7/29/200,  3:18:10 PM
New Keltner support is trying to firm under the OEX at 537.20 or so. Bulls want to see that support hold as the mid-channel level is beginning to see Keltner support lines separate again. I don't think I've often seen the Keltner picture change so rapidly. Usually when we have chop, it's because the Keltner channels are trying to align themselves in an equilibrium position, but this is just a picture that changes from one moment to the next.

  Jeff Bailey   7/29/200,  3:13:50 PM
Petro Canada (PCZ) $46.95 +1.04% ... challenging 6-month resistance.

  Jane Fox   7/29/200,  3:08:53 PM
Linda (15:05 post) I have to do some research into the TRIN. I have been watching the A/D volume and A/D issues in relation to the TRIN and it has not been making any sense for two days now. A/D volume and A/D issues are rising but the TRIN was flat. Makes no sense.

  Jonathan Levinson   7/29/200,  3:06:25 PM
The bears managed to do some damage with that decline to 34.50, as the 30 min channel resistance line has come down from 35.04 to the current 34.90. The short cycle downphase was short and bottomed at a higher price low, and is trying to turn back up. Bulls don't need to charge to new highs, but at least hold current levels long enough to turn the 30 min channel back up.

  Linda Piazza   7/29/200,  3:05:18 PM
The TRIN's level was warning those with bearish hopes that something might be amiss, wasn't it, Jane? It's still sticking around the neutral zone.

  Jeff Bailey   7/29/200,  3:03:23 PM
03:00 Market Watch at this Link

Nice little bounce in the INDU from DAILY Pivot after FBI Warning.

  Linda Piazza   7/29/200,  3:03:21 PM
Resistance has thinned ahead of the OEX. When bears weren't able to drive it below the mid-channel level and keep it there, the result was that Keltner support firmed. That support near 536 now looks stronger than resistance, but now we're back to a test of the 60-minute 100/130-ema's at 537.27 and 538.61, respectively.

  Jonathan Levinson   7/29/200,  3:01:47 PM
QQQ back to prior resistance at 34.77.

  Linda Piazza   7/29/200,  2:58:09 PM
Keltner support trying to firm up under the OEX at 536. This occurred after bears weren't able to sustain values below that support.

  Linda Piazza   7/29/200,  2:55:46 PM
The OEX tests next Keltner resistance, with the move up to test it looking more impulsive than corrective, to borrow Keene's term.

  Linda Piazza   7/29/200,  2:46:57 PM
Bears want to see the OEX stopped at just above 537, if not lower.

  Jeff Bailey   7/29/200,  2:46:45 PM
Current OPEN MM profiles at this Link

JDSU Update. Short the underlying stock at $3.44, now hedged using the Dec. $3.00 call (must be 29 calls and 2,900 short for true hedge).

NAKED the JDSU Aug. $3.00 calls, where we measure profit/loss between these calls and the underlying short in stock , to then look to CLOSE OUT the Aug. $3.00 calls, ideally when underlying SHORT is as PROFITABLE as the AUG.$3.00 calls are at a loss.

  Linda Piazza   7/29/200,  2:40:05 PM
The OEX slipped below the mi-channel level and now comes up to retest it, with that level at 535.96.

  Jonathan Levinson   7/29/200,  2:36:51 PM
WASHINGTON - The FBI (news - web sites) warned police in California and New Mexico that it received information about possible terrorist activity in their states. However, the warning wasn't specific about particular targets or a method of attack, a federal law enforcement official said Thursday.

The FBI decided to pass along the threat information but warned that it was considered unsubstantiated and uncorroborated, said the official, who spoke only on condition of anonymity.

The vague warning was distributed to authorities in California, New Mexico and some other Western states the official did not identify.

U.S. officials earlier this month warned that a regular stream of intelligence indicates al-Qaida wants to attack the United States to disrupt the upcoming elections.


  Jonathan Levinson   7/29/200,  2:30:10 PM
Unless the indices are being propped, I find it impressive that the terrorist news couldn't crack higher support at these levels.

  Linda Piazza   7/29/200,  2:29:49 PM
TRIN hasn't really been ticking up with the declines in the equities. A worry for bears?

  Jonathan Levinson   7/29/200,  2:27:16 PM
Here's the wire release of your news clip, Jim:


  Jonathan Levinson   7/29/200,  2:26:16 PM
QQQ 1 cent away from session low at 34.50.

  Jeff Bailey   7/29/200,  2:24:33 PM
Swing trade short alert .... short 2,900 shares of JDSU $3.44 here, stop $3.60, target to be determined.

  Linda Piazza   7/29/200,  2:23:37 PM
The OEX tries to steady at the Keltner mid-channel level, but it's threatening to fall through toward 532.33.

  Jonathan Levinson   7/29/200,  2:23:32 PM
Session high for ten year bond futures at 110 even. TNX is down 1.5 bps at 4.57% with 37 minutes to go in the cash session.

  Jeff Bailey   7/29/200,  2:23:18 PM
Cancel covered call alert .... cancel the selling of the JDSU Sept. $4 calls. of $0.15. Right now.... that's the offer and I can't be sure we would get filled. ..... Thinking about shorting the underlying stock at this point.

  Jonathan Levinson   7/29/200,  2:20:21 PM
Session low for MSFT.

  Jonathan Levinson   7/29/200,  2:18:33 PM
NYMEX Crude oil back to unchanged at 42.90 here.

  Jonathan Levinson   7/29/200,  2:16:54 PM
Session low for Dow futs as well.

  Jonathan Levinson   7/29/200,  2:16:23 PM
Session low for GE here.

  James Brown   7/29/200,  2:16:11 PM
Olympic Steel (ZEUS) is up almost 12% and breaking out over resistance at $21.00 to hit new highs not seen since January of 1997. The company reported record earnings today with net sales for Q2 up 96.4% to $222.8 million.

Here's an excerpt from their press release:

"We are optimistic about the second half of 2004, based upon our customers' and suppliers' performance and their favorable outlook for the remainder of 2004. We see many positive growth opportunities this year for Olympic Steel..."

  Jeff Bailey   7/29/200,  2:16:07 PM
Swing trade additional covered call alert .... Sell 29 of the JDSU September $4.00 calls (UQDIH) for $0.15 cents.

Will then close out the August $3 calls we sold yesterday near the close of today's trade.

  Jim Brown   7/29/200,  2:14:37 PM
FBI warning California and New Mexico about a possible terrorist attack.

  Jonathan Levinson   7/29/200,  2:14:04 PM
Short cycle downphase on QQQ testing higher support here: Link . While a 30 min cycle downphase can be expected at anytime, I expect it to bottom at higher price and oscillator lows within the daily cycle upphase discussed earlier.

  Jeff Bailey   7/29/200,  2:12:32 PM
Bullish day trade raise stop alert .... for Paychex (PAYX) $29.65 ... to 29.58.

  James Brown   7/29/200,  2:12:18 PM
Borg Warner (BWA) is up 1.75% and breaking out over resistance at $45.00 after reporting earnings this morning and beating estimates by 5 cents.

  Linda Piazza   7/29/200,  2:10:56 PM
The OEX moved down to test the 535.90-536.35 Keltner support that it had been suggested that it would test. Now what? A sustained drop through that support would set up a downside target near 532.30, but that support should likely be good for at least a bounce attempt. First Keltner resistance gathers at 537.60 and slightly above, with the 60-minute 100-ema also at 537.27. If the OEX can climb back above that resistance, the next Keltner level to be tested is 538.35. Bears don't want to see the OEX climb back above that level or at least sustain levels above it, as that would turn the smallest Keltner channel higher again.

I'm not surprised at this action as I've been expecting the OEX to churn for at least a couple of weeks (it's been a week so far) near the 526-530 weekly Keltner support before it decides on final direction. That's why I've been advising small targets and plans in place to protect profits either direction. I actually didn't expect the OEX to get so far past 536-537.

  James Brown   7/29/200,  2:10:32 PM
Check out the rebound in the SOX from the bottom of its channel. Chart: Link

  Jeff Bailey   7/29/200,  2:08:31 PM
Bearish day trade close out alert ... WMT $53.44 -0.89% here.

  Jonathan Levinson   7/29/200,  2:07:12 PM
That was a quick spike back below previous resistance, with QQQ now spiking lower to the flat lower 30 min Keltner channel support at 34.54. The wavelet oscillator is trending in oversold, short cycles in a downphase that is just reaching oversold territory now. The 30 min channel has not turned down, however, and bears need to hold these lows for awhile in order to do so. Bulls want to see a quick spike back up from this channel support.

  Linda Piazza   7/29/200,  2:01:06 PM
Thanks, Jonathan, for your 13:59 post updating us on the OEX's position.

  Linda Piazza   7/29/200,  2:00:11 PM
For those also not getting fresh candles on the OEX on QCharts, try changing servers. I finally found one that's working. The OEX is forming a possible "b" distribution pattern just above the 60-minute 100-ema.

  Jonathan Levinson   7/29/200,  1:59:58 PM
Now up 1.09 at 537.55.

  Jonathan Levinson   7/29/200,  1:59:27 PM
Linda, OEX is currently up 1.22 at 537.68.

  Linda Piazza   7/29/200,  1:58:42 PM
I'm still not getting up-to-date info on the OEX.

  Jonathan Levinson   7/29/200,  1:56:20 PM
Volume is very light for QQQ too.

  Jonathan Levinson   7/29/200,  1:53:35 PM
Session low for MSFT here.

  Linda Piazza   7/29/200,  1:51:39 PM
Careful, OEX traders. My OEX charts are not updating on QCharts.

  Jeff Bailey   7/29/200,  1:50:20 PM
Bearish day trade lower stop alert ... for Wal-Mart (WMT) to $53.82.

  James Brown   7/29/200,  1:47:49 PM
Canadian Pacific Railway (CP) is up nearly 1% and breaking out over resistance at $25.00 and its simple 200-dma. The company reported earnings today. Revenue surpassed $1 billion and drove net income up 146 percent to $84 million for the quarter.

  Jeff Bailey   7/29/200,  1:46:23 PM
Current OPEN MM profiles at this Link

  Jonathan Levinson   7/29/200,  1:46:03 PM
QQQ is finding support above 34.70. The short cycle oscillators are no longer overbought, teetering on the verge of a downphase as the wavelet oscillator moves lower. So far, previous resistance is acting as support, but bulls would prefer to see that 34.94 fibonacci level cleared to the upside. The 30 min cycle oscillators are overbought here, and all things being equal, a corrective 30 min cycle downphase within the new daily cycle upphase would be next development to expect. That downphase should end at a higher price and oscillator low to confirm the daily cycle upphase.

  James Brown   7/29/200,  1:44:10 PM
General Dynamics (GD) is cracking round-number resistance at the $100 mark.

  James Brown   7/29/200,  1:43:18 PM
Prudential is downgrading medical-device maker Zimmer Holdings (ZMH) and rival Stryker (SYK) to "neutral". Both stocks are trading lower on the session although ZMH is sharply higher off its lows.

  Linda Piazza   7/29/200,  1:41:07 PM
The OEX has pointed its smallest channel toward 535.80-536.50. It's slipping through a Keltner channel line that proved important in recent trading as well as the 60-minute 100-ema at 537.29, and so might attempt a bounce soon. If so, bears want to see the OEX stay under 538.31 or at least 538.78.

  James Brown   7/29/200,  1:40:28 PM
Ball Corp (BLL) is up again (+2%) after reporting strong Q2 earnings. You may remember yesterday that the company announced a 2-for-1 stock split.

Here are some excerpts from their press release:
"All three of our reporting segments showed increases in both sales and earnings over the second quarter of 2003. Additionally, interest expense is down and our free cash flow generation continues to be very strong.

"We had a successful second quarter and a good first half of 2004," Hoover said. "The first half included the six extra accounting days compared to the first half of 2003. Now in the second half of this year we will have five fewer accounting days, all coming out of the fourth quarter, than we did in the second half of 2003. That will make the comparables more difficult in the second half.

"Still, barring the unforeseen, we currently believe that it is possible our second half results could exceed our first half results. Our plants are running very well. Our sales volumes are strong in nearly all areas. We are bringing new packages to market. Our aerospace business is growing nicely.

  Jim Brown   7/29/200,  1:40:07 PM
MSFT Reaffirming guidance given only last week in their analyst meeting today. No change and analysts had hoped there would be a more positive spin.

  Jonathan Levinson   7/29/200,  1:39:53 PM
Another session high for 10-yr bond futures here at 109.97, with TNX -1.3 bps at 4.572%.

  James Brown   7/29/200,  1:36:25 PM
InfoSpace (INSP) surprised everyone when it reported earnings last night. Wall Street was looking for 14 cents and INSP turned in 27 cents a share. Revenues climbed more than 70% to $54.4 million surpassing analysts' estimates. INSP piled on the good news by guiding higher for the third quarter. Analysts have responded by upgrading the stock. Shares of INSP are up about 29% to $36.72.

  Jonathan Levinson   7/29/200,  1:30:51 PM
Current 30 min channel support for QQQ is up to 34.59, resistance 35.01.

  James Brown   7/29/200,  1:30:34 PM
NCR is down more than 7% and breaking support at the bottom of its rising channel as investors react to its earnings report. The company beat estimates by a penny but guided lower for the third quarter. The stock is rebounding sharply from its lows so the question will be where shares close. Will it be under technical support at the 100-dma or round-number support near $45? NCR is very long-term overbought from its January 2003 lows and due for a correction.

  Jonathan Levinson   7/29/200,  1:30:24 PM
The US Dollar Index has reversed its earlier losses and is retesting the 89.9 resistance level. Gold has given up its gains, back below 388 support at 386.70, with HUI down to a 0.8% gain at 182.16, XAU +1.05% at 85.31. Silver is down .022 at 6.35, and crude oil is down .25 at 42.65.

  Linda Piazza   7/29/200,  1:27:55 PM
OEX Keltner resistance is now stronger than support, lending credence to the belief that 539.50-542 might top out the OEX's advances. The OEX is now vulnerable down to 535.75-536.

  James Brown   7/29/200,  1:26:10 PM
Eaton Corp (ETN) is in the process of breaking out over resistance at $65.00. This is a new all-time high and looks like a bullish entry point now that it's over the June highs.

  Jonathan Levinson   7/29/200,  1:15:08 PM
Session high for bonds at 109.95 here, TNX -1.1 bps at 4.574% currently.

  Jonathan Levinson   7/29/200,  1:13:23 PM
Crude oil continues to climb off its lows- currently up .175 at 42.725, -.41% for the day.

  Linda Piazza   7/29/200,  1:09:29 PM
The OEX is being squeezed between nearby Keltner resistance and support, both looking relatively strong. One has to break, but neither the five-minute channels nor the five-minute MACD are giving us a clue as to which direction . . . push higher to test resistance starting as I type.

  Jeff Bailey   7/29/200,  1:06:57 PM
01:00 Internals at this Link

  James Brown   7/29/200,  1:04:30 PM
Oil refiner Valero Energy (VLO) is up 2.6% to $75.46 and continuing its bounce from support at $70 and its simple 50-dma following its earnings report. The company beat estimates by 17 cents a share as revenues climbed more than 56% for the quarter. VLO also raised its guidance above analyst estimates for the third quarter.

  Linda Piazza   7/29/200,  1:02:23 PM
Here's one sign that the 539.50-542 zone might stop OEX advances: Link

  Jonathan Levinson   7/29/200,  1:01:54 PM
QQQ is back down to the breakout zone at the prior highs. It should find support in the 34.70-.75 area. The bearish view on a short cycle basis is that the short cycle oscillators were maxxed out in overbought at the session highs, lining up with the test of 30 min channel resistance, and an overdue downphase is trying to start. If so, a move to the lower channel support at 35.50 is possible. However, the 30 min cycle oscillators are approaching overbought territory, and a sustained move to 34.50 would likely turn the channels back down. While I expect a higher low from the next 30 min cycle downphase, either at 34.38, 34.20 or 34.05, bulls need to be careful if that first 34.70-.75 area lets go.

  James Brown   7/29/200,  1:00:21 PM
Semiconductor stock ESS Technology (ESST) is down almost 19% to $6.90 after reporting earnings last night and missing estimates by 3 cents a share. ESST also guided lower for the next quarter.

  Jeff Bailey   7/29/200,  1:00:03 PM
12:55 Market Watch at this Link

  James Brown   7/29/200,  12:56:28 PM
L3 Communications (LLL) continues to see a rebound after its recent earnings report. Today's move was boosted by news that LLL has won another $27 million contract from the Air Force. Bulls might want to consider new positions if shares can breakout over resistance at $62.00.

  James Brown   7/29/200,  12:53:01 PM
French software maker Business Objects (BOBJ) is up 10.8% to $22.33 following its earnings last night. The company beat estimates by 2 cents but actually came in under the revenue estimates. They also guided lower for the next quarter in addition to announcing that their COO was leaving. Yet strangely enough shares are soaring. Following the earnings report Wachovia upgraded the stock to "market perform".

  Linda Piazza   7/29/200,  12:50:45 PM
The BIX still has not been able to move above 350, and is at 349.47 as I type.

  Linda Piazza   7/29/200,  12:49:05 PM
So far, the Keltner support that is currently at 538.66 is holding, except for minimal piercings of that Keltner channel line.

  James Brown   7/29/200,  12:46:06 PM
TXT is reporting that it has received a $50 million armored vehicle contract from the Iraqi government.

  Jeff Bailey   7/29/200,  12:43:42 PM
Wal-Mart (WMT) $54.02 +0.2% .... still quiet.

RLX.X 386.93 +1.51% ...

  James Brown   7/29/200,  12:43:05 PM
Another ouch! Digimarc (DMRC) is down more than 25% to $9.02 as investors react to its earnings report last night. DMRC missed estimates by 13 cents and guided lower for the future.

Here's an excerpt from their press release:
Bruce Davis, Chairman and CEO, commented: "Our disappointing financial results relate primarily to our ID Systems business unit and call for decisive action to improve the efficiency, effectiveness, and predictability of operations.

DMRC has been downgraded to "market perform", "under perform" and "sell" by Morgan Keegan, DA Davidson, and Janney Montgomery Scott, respectively.

  James Brown   7/29/200,  12:42:53 PM
Aetna (AET) is up 5.68% to $83.45 after reporting earnings that beat estimates by 11 cents. The company did raise its full year guidance but they still guided under Wall Street estimates. The stock is probably trading higher on news that AET will use part of its $740 million tax refund to buy back stock.

In response to this morning's announcements Prudential upgraded AET to "over weight".

  James Brown   7/29/200,  12:38:32 PM
Aetna (AET) is up 5.68% to $83.45 after reporting earnings that beat estimates by 11 cents. The company did raise its full year guidance but they still guided under Wall Street estimates. The stock is probably trading higher on news that AET will use part of its $740 million tax refund to buy back stock.

In response to this morning's announcements Prudential upgraded AET to "over weight".

  Linda Piazza   7/29/200,  12:37:49 PM
Nearest OEX Keltner support is at 538.96 and then again at 538.55-537.60.

  Linda Piazza   7/29/200,  12:35:24 PM
The OEX moves into the next possible resistance zone from 539.50-541. The 15-minute Keltner chart suggests that 541.90 might be possible while the ascending regression channel suggests that resistance might be found closer, just over 540. As I suggested this morning, bulls should have a plan in mind for dealing with this possible resistance level, as they should for 543.50-547 if that zone should be reached.

  Jonathan Levinson   7/29/200,  12:33:46 PM
QQQ has a 127% fib line off yesterday's low at 34.94, which lines up with 30 min channel resistance. Look for next short cycle resistance at that level.

  Jeff Bailey   7/29/200,  12:32:59 PM
200-day SMA Alert .... Retail Index (RLX.X) 386.77 +1.46% ...

  Jonathan Levinson   7/29/200,  12:31:06 PM
Short cycle 2 day view of the QQQ at this Link . Note the volume expanding here.

  Linda Piazza   7/29/200,  12:30:45 PM
The top of the QCharts-drawn ascending regression channel is now at 540.28. The 15-minute Keltner charts suggest that if the OEX can maintain values above 537.94 in the short term, that it will keep its smallest Keltner channel pointed toward 541.86.

  Jeff Bailey   7/29/200,  12:30:39 PM
Day trade long alert for Paychex (PAYX) $29.75 here, stop $29.45, target $30.30.

  Jeff Bailey   7/29/200,  12:27:14 PM
Monster Worldwide (MNST) $22.13 +0.98% .... best levels of the session.

  Jonathan Levinson   7/29/200,  12:26:42 PM
Further to Jim's comment on the futures side, here's a 30 min view of the SPX. I agree with his assessment. Note that the implied target on the bull wedge is 1116 SPX with next resistance at 1120. In fact, confluence is from 1116-1120, a level we saw several times this year: Link.

  Linda Piazza   7/29/200,  12:26:20 PM
The OEX broke through Keltner resistance and made an equal high. Actually, it moved .02 higher than the previous day's high. It's dropping back again, however. Again, bulls do not want to see it break below and sustain levels the 60-minute 100/130-ema's currently at 537.26 and 538.66 after having tried to pierce these levels.

  Jonathan Levinson   7/29/200,  12:23:23 PM
Another attemot on the highs here. INTC to a session high.

  Linda Piazza   7/29/200,  12:20:00 PM
As of 30 minutes ago, crude futures had risen off their day's low of 42.00 and were testing 42.50 again.

  Jeff Bailey   7/29/200,  12:19:37 PM
12:00 Internals at this Link

Yesterday's Internals at this Link

  Jonathan Levinson   7/29/200,  12:18:10 PM
Barely any movement in the past hour with QQQ pinned to the 34.70 level. Bonds are back to negative territory with TNX +1.2 bps at 4.597%. Crude oil is back up off the lows at 42.35 currently, -1.28% today. Gold and the miners have pulled back.

  Linda Piazza   7/29/200,  12:15:53 PM
I've been studying the OEX's 15-minute chart, trying to gain clues. That chart shows the OEX beginning to form an ascending regression channel Monday. The OEX approached or touched the top of that channel this morning. It's still ascending, so that top is now just above 540. Unlike the 5-minute chart where resistance appears slightly stronger than support, the 15-minute Keltner chart gives about equal chances of a test of the upper channel line (and perhaps a move all the way up toward 541.80) or a test of the mid-channel level, currently at 533.77. MACD is making a tentative bearish cross on that chart, but it's tentative only and is from above signal.

  Jim Brown   7/29/200,  12:15:41 PM
Material earnings after the close today:

IM est +0.15,
ACS est +0.71,
CYTC est +0.18,
GILD est +0.36,
KLAC est +0.45,
THQI est -0.10,
VSEA est +0.51

  Linda Piazza   7/29/200,  12:07:41 PM
So far, nearest OEX Keltner resistance at 538.21 is holding. Nearest support is spread more thinly, at 537.73, now being tested, 537.20, 536.70, and then more strongly at 534.80-535.24.

  Jeff Bailey   7/29/200,  12:02:23 PM
12:00 Market Watch at this Link

  Jonathan Levinson   7/29/200,  11:58:30 AM
Volume is still very light, with none of the huge volume bars that we got in abundance yesterday. The 30 min channel is narrowing for what will hopefully be a big move- 30 min resistance is down to 34.85, support 34.45. Stepping away for 10 minutes here- hopefully that will get it moving :)

  Linda Piazza   7/29/200,  11:56:15 AM
The OEX makes another Keltner breakout attempt and another assault on the 60-minute 130-ema, currently at 538.65. The OEX has been battling the 100/130-ema's since the last hour of trading yesterday.

  Linda Piazza   7/29/200,  11:54:42 AM
As a reminder, the OEX's 200-ema is at 537.96, with that average stopping the OEX's advance yesterday and with it proving somewhat important in today's trading. So far, today's candle shows the OEX as having pierced that average, but then moving back to it.

  Jeff Bailey   7/29/200,  11:52:50 AM
Current OPEN MM profiles at this Link

Closed out the 2 MNST Dec. $22.50 calls (BSQLX) at $2.20 (-$0.50 per contract) as I didn't get the upside catalyst from the Help Wanted Index.

  Linda Piazza   7/29/200,  11:50:17 AM
One for the bulls: the OEX is so far refusing to break below the neckline of the H&S on its five-minute chart. If the formation is a triangle instead, it's challenging the top resistance now. Keltner resistance lies at 537.97 and again at 538.47. That resistance looks stronger than support, but the support that's currently at 536.98 has been holding so far today except for being bulged downward a time or two. Bulls therefore don't want to see it soundly broken as that would both signal a change in trend and would turn the smallest channel lower.

  Linda Piazza   7/29/200,  11:46:11 AM
The BIX tried to pierce 350 today, but hasn't yet been able to do so.

  Jeff Bailey   7/29/200,  11:44:26 AM
Bearish Day trade lower stop alert ... for Wal-Mart (WMT) $53.85 -0.11% to ... $54.19.

  Jonathan Levinson   7/29/200,  11:43:35 AM
The lack of expanding volume was the tell, with QQQ back below the 34.70 level but still looking like the handle of a cup and handle formation. A break below 34.40 would violate the lower support line on the handle and spell toruble for bulls, but the short cycle has pulled back from overbought and the price remains closer to the highs than to the lows. 30 min channel support has advanced to 34.45.

  Linda Piazza   7/29/200,  11:33:11 AM
The OEX is breaking through/threatening to break through the H&S neckline on its five-minute chart, with the two options depending on how you draw that neckline. This is the point at which bulls need to muster their strength to avoid pointing the smallest Keltner channel down toward 536.32 or perhaps 534.43-534.73.

  Jane Fox   7/29/200,  11:27:24 AM
Latest edition from the "And the Beat Goes On" Column

Dateline Reuters - Express Scripts Inc. (NasdaqNM:ESRX - News), on Wednesday, a pharmacy benefits company, said it may be sued by the state of New York, and that 19 other states are probing company practices.

St. Louis-based Express Scripts said that it received a "notice of proposed litigation" from the Attorney General of the State of New York on July 12. The notice alleges certain breaches of contracts and violations of civil law in connection with the management of the prescription drug plan for the State of New York and its employees, Express Scripts said.

Express Scripts said it is in talks with the Attorney General's office regarding the notice and that the company believes it has abided by all laws in connection with New York State's plan.

  Jonathan Levinson   7/29/200,  11:24:38 AM
30 min view of QQQ at this Link . The short cycle downphase has so far found support above the upper descending wedge trendline.

  Linda Piazza   7/29/200,  11:24:18 AM
If the OEX is any guide, Keene may get his preferred triangle consolidation at the top of the climb (see Keene's 11:10 post). The formation that looked most like a H&S at the top of the OEX's climb is now resolving into a triangle shape, something that sometimes happens with the H&S formations. A drop below 537-537.15 would still confirm the H&S, but the right shoulder level is now lengthening enough that it's thrown the H&S interpretation into doubt. Nearby Keltner resistance still looks stronger than nearby Keltner support, too.

  Jonathan Levinson   7/29/200,  11:17:45 AM
This is the more bullish view of QQQ on the daily: Link

  Linda Piazza   7/29/200,  11:14:16 AM
The OEX's pattern at the top of its rise could be viewed as a roughly formed H&S on its five-minute chart. A drop below 537 would confirm that H&S. The downside would be about 2.3 points, so not a big drop, but would bring the OEX down to test the mid-channel level, currently at 534.44. The biggest value of watching this in may be letting us gauge strength or weakness, however. Its presence shows some underlying possible weakness. A rejection of the formation would show that bulls mustered some strength against the bears. A failure to confirm or to meet the downside target would show that bears don't have the strength to carry through on promised weakness.

  Jonathan Levinson   7/29/200,  11:09:33 AM
Gold and the miners are reversing their earlier losses, with Gold up 1 to 190, HUI up 1.74% to 183.87 and XAU up 1.69% to 85.85. Ten year bond futures are at session highs of 109.89, TNX down .4 bps to 4.583%.

  Jonathan Levinson   7/29/200,  11:07:49 AM
It's been a long day already, Jane :)

  Jonathan Levinson   7/29/200,  11:07:27 AM
Volume is picking up but remains very light overall today. QQQ's Price is in the zone for a bull flag/ cup and handle breakout as discussed earlier, and all that's needed is a volume surge to light the candle.

  Linda Piazza   7/29/200,  11:03:04 AM
So far, the Keltner resistance is holding, with the OEX threatening to roll down into a lower high. Nearest Keltner support is just underneath, though, at 537.66. Bulls want to see that support maintained, or at least that at 537, to avoid turning the smallest channel lower toward 536 and then 534.

  Jeff Bailey   7/29/200,  11:00:54 AM
10:55 Market Watch at this Link

  Jeff Bailey   7/29/200,  10:57:07 AM
200-day SMA Alert ... DD $43.00 +1.70%

  Jeff Bailey   7/29/200,  10:56:24 AM
Buy Program Premium ... SPX 1,100.00

  Linda Piazza   7/29/200,  10:56:05 AM
The OEX is moving up to test that nearby Keltner resistance at 538.20. We'll see if it holds as resistance or if the OEX will have the strength to break out again. Bulls want to see that breakout to turn the Keltner channel higher again. Just a few minutes earlier, that resistance looked stronger than nearby support, but the picture changed a little with the upthrust so that they look almost equal.

  Jonathan Levinson   7/29/200,  10:55:18 AM
And a session low for crude oil, 42.07 here, -1.92%.

  Jonathan Levinson   7/29/200,  10:52:51 AM
Session high for INTC here.

  Linda Piazza   7/29/200,  10:52:45 AM
I've neglected the TRAN lately. Today it's rising to test its 30-dma. This is an important average for the TRAN, as that average supported the TRAN throughout the early part of July, until the 7/21 close beneath that average and subsequent fall down to the 50-dma. Since it was such important support for so long, it may tend to serve as resistance now, especially as it's at 3107.55, just above the historical horizontal S/R near 3100. The TRAN is at 3104.88 as I type.

  Jonathan Levinson   7/29/200,  10:50:00 AM
Sure does, Linda. I noticed your comment earlier and have been reflecting on that ever since. Interestingly, fuel is still 40 cents off the previous high here in Canada- still 89.9 cents per litre in Montreal. The price bounced from 85.2 cents per litre, and I managed to fill up at 85.4 that day. That would have been nosebleed territory at the beginning of this year.

  Linda Piazza   7/29/200,  10:49:58 AM
Keltner resistance at just over 538 is now beginning to look stronger than nearby support, furthering the impression that the OEX might need to retreat and regroup, perhaps as low as 533.88.

  Linda Piazza   7/29/200,  10:47:35 AM
Jonathan, doesn't it seem strange to talk about crude being weak in connection with numbers such as 42.325?

  Linda Piazza   7/29/200,  10:45:51 AM
The OEX continues to balance on its 60-minute 100-ema at 537.23. Keltner evidence suggests that its balance is precarious at best, however, and that the OEX might need to retreat to 535.70 or even 534 to regroup.

The OEX began a retreat as I uploaded this post. I forgot to mention potential support at 536.67.

  James Brown   7/29/200,  10:45:47 AM
Taro Pharmaceuticals (TARO) is down more than 37% to $18.85 after reporting earnings this morning. Wall Street was expecting TARO to deliver earnings of 44 cents per share. Instead the company reported a loss of 31 cents a share (a 75 cent miss!). Revenues dropped more than 34% to come in at $49 million versus estimates of $88 million.

Here's an excerpt from TARO's press release:
A substantial majority of the decrease in sales in the second quarter of 2004 was attributable to reduced purchases by several of the Company's largest wholesaler customers. Additional factors that impacted sales during the quarter were competitive pricing pressure on the Company's generic products and the mix of products sold.

  Jonathan Levinson   7/29/200,  10:45:14 AM
Crude oil remains weak this morning, with Sept crude down .575 to 42.325.

  Jonathan Levinson   7/29/200,  10:44:30 AM
Session low for MSFT here while bonds, euros and canuck bucks print session highs. This is very choppy action, particularly with equities fading off their highs in what appears to be a bullish descending formation. Lower flag/wedge support on QQQ is down to 34.47 here.

  James Brown   7/29/200,  10:41:11 AM
The rally in the XBD broker-dealer index is putting our put play in Goldman Sachs (GS) into jeopardy. The XBD is trying to breakout over the 120 level while GS is trying to breakout over the $90 level.

  James Brown   7/29/200,  10:40:00 AM
OI put play EchoStar (DISH) continues to fade under a new short-term trend of lower highs.

  James Brown   7/29/200,  10:38:20 AM
We were a bit worried about OI put play Cephalon (CEPH)'s bullish close over the $50 level yesterday. The stock now appears to be failing at its simple 21-dma. We remain cautious with the stock over $50 and its MACD in a new buy signal.

  Jane Fox   7/29/200,  10:36:26 AM
Dateline WSJ - July 29, 2004 9:48 a.m. Krispy Kreme Doughnuts Inc. disclosed that the Securities and Exchange Commission is conducting an informal inquiry regarding the doughnut seller.

In a statement, Krispy Kreme said the inquiry "generally concerns" the company's franchise repurchases and its previously announced reduction in earnings guidance. Krispy Kreme said it is "fully cooperating with the SEC" in response to requests for information.

Since going public in 2000, Krispy Kreme has faced questions about its accounting transparency and potential for conflicts of interest in investments that its executives made in its franchises. Investors bought the sugar-fueled stock anyway.

But, as The Wall Street Journal reported in May, two recent deals in which Krispy Kreme bought back franchisees could spark new concerns. Some independent accounting experts say the Winston-Salem, N.C., company may have used aggressive bookkeeping to boost its earnings when it acquired its Michigan franchise last year. In the other buyout, completed in January, Krispy Kreme didn't disclose that one of the sellers was Chief Executive Scott Livengood's ex-wife, whose share was valued at about $1.5 million.

  James Brown   7/29/200,  10:36:08 AM
OI call play Textron Inc (TXT) is inching higher and near new four-year highs above the $61 level.

  James Brown   7/29/200,  10:35:13 AM
OI call play Symantec (SYMC) is also building on its recent breakout and shares are up another 2.6% to $46.11.

  James Brown   7/29/200,  10:34:08 AM
OI call play Hughes Supply (HUG) is building on yesterday's breakout over the $60 level with another 1% gain today.

  James Brown   7/29/200,  10:32:55 AM
It's a sad day for the Buffett family. Susan Buffett, wife of billionaire investor Warren Buffett, died of a stroke while visiting friends in Wyoming this morning. Susan has been a director of Berkshire since 1991 and owns 2.2% of the company's stock. (-Associated Press)

  Linda Piazza   7/29/200,  10:32:20 AM
The OEX is trying to rise from its Keltner support, the 60-minute 100-ema, and the neckline of its inverse H&S. Bulls want to see the OEX achieve a new day's high and remain above the 60-minute 130-ema at 538.66.

  Jonathan Levinson   7/29/200,  10:28:22 AM
Another session low for QQQ and MSFT printed a moment ago. The 30 min cycle channel for QQQ is no longer rising, just sideways here with the 30 min cycle oscillators still rising and not yet at overbought. For the time being, this looks like short cycle weakness only, but obviously if the bears can hold the price near the bottom of the channel long enough, the 30 min cycle upphase will abort. Channel support is up to 34.42 here, with a wavelet downphase bottoming here. The decline off the intraday high could be a bull flag, part of a cup and handle over the past 2 days. A break above 34.75 would be a potential breakout (look for the volume spike), while below 34.45 would set it up as a complex intraday top.

  Linda Piazza   7/29/200,  10:20:33 AM
The OEX is once again back to the neckline of its inverse H&S, back to the 60-minute 100-ema, and is at Keltner support that needs to hold if the OEX isn't going to risk dropping to 535.20 or perhaps 533-533.50. These levels all need to hold.

  Jeff Bailey   7/29/200,  10:18:51 AM
Swing Trade bullish call exit alert for Monster Worldwide (MNST) and the 2 December $22.5 calls (BSQLX) $2.20 bid.

  Linda Piazza   7/29/200,  10:18:43 AM
The OEX is in danger of producing a second shooting star on this 60-minute period, with the OEX dropping back to/slightly below the 60-minute 100-ema. This is not action that the OEX bull wants to see.

  Jonathan Levinson   7/29/200,  10:18:00 AM
30 min channel support is up to 34.41.

  Jonathan Levinson   7/29/200,  10:17:45 AM
Session low for QQQ at 34.58.

  Jeff Bailey   7/29/200,  10:15:40 AM
10:13 Market Watch at this Link

  Linda Piazza   7/29/200,  10:14:59 AM
Keltner evidence is suggesting that the OEX needs to retrace to just above 537, if not lower. Bulls want to see that 537 level hold to avoid turning the smallest Keltner channel lower.

  Jonathan Levinson   7/29/200,  10:14:11 AM
Session high for bonds with TNX -.2 bps to 4.583%.

  Jeff Bailey   7/29/200,  10:12:05 AM
Monster Worldwide (MNST) $21.75 -0.77% ..... not much reaction to Help Wanted at this time.

Paychex (PAYX) $29.60 -0.26% did fall back to opening lows.

  Linda Piazza   7/29/200,  10:05:58 AM
The OEX is expending a lot of energy trying to break through those 60-minute 100/130-ema's, not the result that bulls wanted to see early this morning, but perhaps still not particularly alarming. Next Keltner support is somewhat light at 537.60-338 and a little stronger at 536.88-537.14, but if that support fails, support is scattered much more thinly below, and that would be more troublesome for those in bullish plays.

  Jeff Bailey   7/29/200,  10:05:03 AM
Day trade short alert .... for Wal-Mart (WMT) $54.01 here, stop $54.25, target $53.47.

  Jonathan Levinson   7/29/200,  10:02:12 AM
Help wanted index for June 38 vs. exp. 40. May's reading was 39.

  Linda Piazza   7/29/200,  10:00:46 AM
The OEX broke above the 60-minute 130-ema, but has now pulled back to that average again. Still watching.

  Jeff Bailey   7/29/200,  10:00:11 AM
Paychex (PAYX) $29.93 +0.87% ....

  Jeff Bailey   7/29/200,  9:58:13 AM
Broker/Dealer Index (XBD.X) 120.18 +1.37% ....

  Jonathan Levinson   7/29/200,  9:58:13 AM
An 8.25B overnight repo leaves a 3.25B net addition on the table. Once again, this reverses the draining trend from the Fed's open market desk last week.

  Linda Piazza   7/29/200,  9:56:37 AM
So far, the neckline of the OEX inverse H&S is holding. So is the 60-minute 100-ema, with the OEX again moving up to challenge the 130-ema. Now the OEX needs to get above that 130-ema and above Keltner resistance now at 538.54. The gains seem hard won this morning, don't they?

  Jonathan Levinson   7/29/200,  9:53:52 AM
Attention parents of young children/babies. From Reuters:

LOS ANGELES (Reuters) - Two jars of Gerber baby food sold in Southern California tested positive for traces of the highly toxic poison ricin on Wednesday, prompting police to warn parents to check for tampering before serving prepared food to their children.

Tests conducted at a Food and Drug Administration laboratory showed that the ricin found in the jars was not highly concentrated but a less toxic form that would not likely have been fatal, police said.


  Linda Piazza   7/29/200,  9:49:38 AM
First Keltner support has not held. Next is near 537.40, with 536.25-536.50 below that. So far, no great damage has occurred, but watch those levels as well as the 60-minute 100-ema at 537.24. This average was important on 7/14 and 7/21, and so should be considered important today, too. Bulls want to see the OEX maintain that level: bears don't.

  Jonathan Levinson   7/29/200,  9:47:41 AM
There are 10B in different repos expiring today. The Fed has just announced a 14-day repo of 5B. We await the 10AM announcement with respect to the remaining 5B expiring.

  Linda Piazza   7/29/200,  9:45:36 AM
The first OEX retracement of the day should begin any moment now, if there's going to be any retracement. We'll then get a better idea of the OEX's strength. So far, there's no particular reason to doubt that short-term strength, with yesterday's troublesome shooting star pattern on the 60-minute chart not seeing downside follow-through this morning, and with the OEX challenging the 60-minute 100/130-ema's. Bulls don't want to see the OEX fall back beneath those ema's, however, as it did after challenging them on the 21st. The 100-ema currently measures 537.26. It's possible that even if the OEX can climb above those 100/130-ema's, upside could be limited to 541 or 543.50-547, however, so have a plan in place for dealing with those levels.

  Jonathan Levinson   7/29/200,  9:45:29 AM
Session low for GE and MSFT.

  Jonathan Levinson   7/29/200,  9:45:16 AM
30 min Kelnter resistance rises to 34.80 QQQ here.

Gold remains weak, down 1.80 at 387.20 and just below 388 support. Crude oil is printing a session low here, down .55 at 42.35, -1.28% today.

  Jeff Bailey   7/29/200,  9:39:40 AM
Current OPEN MM Profiles at this Link

  Linda Piazza   7/29/200,  9:39:13 AM
OEX first Keltner support is at 538.15, but stronger support gathers just above 537 and then again just under 536. OEX bulls want to see one of those levels hold, with a preference for the higher two, of course.

  Linda Piazza   7/29/200,  9:37:40 AM
During the first five minutes of trading, the OEX ranged from 537.26 to 538.40.

  Jonathan Levinson   7/29/200,  9:35:13 AM
The wavelet oscillator is sporting a bearish divergence for QQQ, and that upside 30 min Keltner break has equities stalling at the cash open. But 30 min support is up to 34.20, with confluence support at 34.38-.44. Look for a higher low on the short cycle downphase if we get one here- for the past 2 weeks, the short cycle has been trending almost entirely through the dominant 30 min up- and down-phases.

  Linda Piazza   7/29/200,  9:34:36 AM
The OEX opens at the 60-minute 100-ema and climbs toward the 130-ema, at 538.60. If the OEX isn't safely above these before the first retracement of the day that begins in a few minutes, OEX bulls will want to watch carefully how the OEX reacts in relationship to these averages on that first retracement.

  Jeff Bailey   7/29/200,  9:27:42 AM
JDS Uniphase (JDSU) $3.00 ... jumps to $3.32 in pre-market after last night's quarterly earnings report of narrower than expected loss.

Yesterday I profiled the writing of a covered call and the August $3.00 calls.

I will DO NOTHING this morning, but may begin looking to SWAP the August $3.00 calls (buy them back) with an offsetting out-the-money call. Should have near-term overhead resistance around the $3.40 level.

IF you wrote the Aug. $3 calls and get exercised, let me know via e-mail, but I would then exercise your December $3 calls, and make delivery.

  Jonathan Levinson   7/29/200,  9:24:51 AM
Normally, the break above the 30 or 60 min Keltner bands with an overbought short cycle upphase would be a sell signal. Those conditions are present here for QQQ, as they've been since yesterday at 3PM. However, with the 30 min oscillators still rising and nowhere near overbought territory, and the daily cycle upphase finally getting moving on its upphase and only now coming up out of oversold, there's room to run higher. It's for that reason that I'm in no hurry to get bearish on this bounce. That will change once the daily cycle upphase is over.

  Linda Piazza   7/29/200,  8:44:12 AM
As Jonathan has already noted this morning, crude futures are down and equity futures are up. Although it's strange to consider crude futures at $42.47/barrel (30-minute delayed) as being "down," the pattern presents a combination that equity bulls wanted to see, as mentioned in my 22:38 post. Moreover, equity futures held up well while the Nikkei was diving and then climbed with the European markets, displaying the kind of pattern that bulls want to see. Next, however, OEX bulls want to see an OEX open above the neckline of that reverse H&S seen on intraday charts, with that neckline at about 536.60. They want to see the OEX hold that level in any early pullback, or at least hold above 533, although a hold above 534.60 would be preferable to one over 533. OEX bulls should have a plan in place for how they'll handle a test of the 60-minute 100/130-pma's at 537.23 and 538.70, if the OEX should open below them, and also tests of 539.50-541 and 543.50-547.

  Jonathan Levinson   7/29/200,  8:33:40 AM
Session highs across the board for equities, ES 1100.75, NQ 1398.5, YM 10137, QQQ 34.73. Gold is up to 387.30, holding most of its losses, crude oil is down further at 42.425 and bonds are down to 109.59, with TNX up 3.1 bps to 4.616%.

  Jonathan Levinson   7/29/200,  8:31:04 AM


8:29am U.S. 4-WK AVG. JOBLESS CLAIMS OFF 1,000 TO 336,250



8:30am U.S. Q2 BENEFIT COSTS UP 1.8% VS. 2.4% Q2



8:30am 07/29/04 U.S. PVT-SECTOR BENEFIT COSTS UP 7.3% Y-O-Y, 20-YR HIGH

  Jonathan Levinson   7/29/200,  8:22:17 AM
Gold is down to 386.10 now, and bonds continue to fall. The employment data is due in 9 minutes, but the new highs and lows breaking out everywhere might be trying to tell us something.

  Jonathan Levinson   7/29/200,  8:21:02 AM
QQQ's new high at 34.64 is right on the rising 30 min channel resistance line, but that line is rising with the 30 min oscillators in a new upphase, in gear with the daily cycle upphase.

  Jonathan Levinson   7/29/200,  8:17:54 AM
New session low for gold at 388, session high for SPX futures at 1099.25.

  Jonathan Levinson   7/29/200,  8:16:07 AM
Session low for 10-yr bonds at 109.641, session high for Naz futures at 1394. QQQ is 3 cents off its session high of 34.63.

  Jonathan Levinson   7/29/200,  7:58:34 AM
Equities are higher, with ES trading 1098, NQ 1391, YM 10125 and QQQ +.18 at 34.56. Gold is down 30 cents at 388.70, silver +.005 at 6.377 and crude oil down .35 to 42.55. Ten year bonds are down .156 to 109.6719.

We await the 8:30 release of initial claims for the week ending 7/23/2004, est. 340K and the Employment Cost Index for Q2, est. +0.9%.

  Linda Piazza   7/29/200,  7:08:50 AM
Good morning. June's Japanese industrial production surprised to the downside in a number released Thursday, falling 1.3% from May's number against an expectation of a 0.3-0.5% decline, depending on the source. According to one report, that slowdown was at least partly attributable to electronics manufacturers trimming their inventories ahead of a feared slowing in global demand. According to another report, inventories of digital home electronics products rose, and that created worries about the business outlook. It's difficult to reconcile the two reports unless those inventories rose, and companies as a result decided to trim the inventories because they feared that demand was slowing.

Some print sources mentioned rising crude prices, hitting a record high of $43.05/barrel yesterday, as pressuring the Asian markets. In addition, Advantest, termed the largest manufacturer of chip-testing equipment, lowered its H2 profit forecast, but both Advantest and NEC also reported strong quarterly net profits for the just-concluded quarters.

The Nikkei dove throughout the morning session, with big caps Canon, Sharp and Sony all dropping despite earnings reports that were deemed strong. The Nikkei spent the afternoon session oscillating between 11,050 and 11,100, breaking just above that afternoon high at the close, to close down 87.53 points or 0.78%, at 11,116.84. Advantest, Canon, Sharp and Sony all closed lower. Mitsubishi Electric bucked the evidence of the industrial production number, with the electronics manufacturer reporting H1 net profit that tripled the forecasted number and Q1 net income that increased nearly twenty times year-over-year, and mentioning strong demand for industrial production equipment and home appliances. The stock still fell 2%.

In other stock-specific news, UFJ Holdings admitted to doctoring documents to make its borrowers look in better shape than they were, in order to avoid inspections by the Financial Services Agency. The stock fell 5.2%. Two stocks gaining were Honda Motor and Nintendo, both after reporting their earnings.

Other Asian markets turned in mixed performances, with big-cap tech stocks weak in some markets. The Taiwan Weighted fell 0.63%. South Korea's industrial production dropped 2% in June, with chip manufacturers leading that decline. In addition, Hyundai Motors dropped after its earnings report. Net profit fell but beat expectations. The Kospi declined 1.86%. Singapore's Straits Times climbed 0.90%, but Hong Kong's Hang Seng fell 1.11%. China's Shanghai Composite climbed 1.33%.

Currently, European bourses trade higher. In the U.K., financials lead gains. In France and Germany, auto stocks are credited with helping to lead the bourses higher ahead of DaimlerChrysler's earnings report. That report showed Q2 operating profit beating expectations, and the company also thought 2004's operating profit would improve significantly. In addition, Siemens beat expectations when reporting earnings and also said it would best its previous forecast for the year that ends September 30. The stock had jumped more than 4% at one point in European trading. EADS also reported earnings, with the aerospace group crediting 80%-owned Airbus and the space division for helping it to beat expectations. EADS had traded higher, but had eased later in European trading. The FTC approved Sanofi-Synthelabo's acquisition of Aventis, setting extra conditions in addition to those previously agreed upon. Sanofi-Synthelabo was gaining in early European trading.

Royal Dutch had at first lost ground, but erased those losses to gain strongly after reporting Q2 earnings and saying that it would likely settle a SEC and U.K. financial regulatory inquiry into its lowering of proven oil reserves. One stock not erasing early losses was Alcatel. According to CNBC Europe, Alcatel led decliners. The company failed to raise expectations for the Q3 earnings, saying they would come in near the Q3's, worrying some who feared that the company might not meet its 2005 operating margin target since operational spending was increasing.

As of this writing, the FTSE 100 had gained 51.60 points or 1.18%, to trade at 4,407.80. The CAC 40 had gained 51.62 points or 1.44%, to trade at 3,627.54. The DAX had gained 63.57 points or 1.67%, to trade at 3,870.78.

  Linda Piazza   7/28/200,  10:38:42 PM
I was gone most of Wednesday afternoon, and the OEX surprised me by breaking out above 536-537 while I was gone, breaking above the neckline of this inverse H&S that I had mentioned earlier in the day: Link I had thought that 536-537 might prove to be tougher resistance. Note, however, that the OEX immediately turned down to retest that inverse H&S neckline. When viewed on the 60-minute chart, the candle looks more ominous, an upthrust or shooting star that pierced the neckline but then fell back to that neckline again. Such shooting stars at the top of a rise, as was the case this time, can be reversal signals. That throws the confirmation of that inverse H&S into doubt, making one wonder whether the OEX just overran that level near the close as shorts rushed to cover. In addition, a study of the 60-minute 100/130-ema's shows that the OEX charged up to test those averages, with the shooting star piercing the 60-minute 100-ema but then falling beneath it again. However, if the action in the last fifteen minutes was just a downturn to retest broken neckline resistance and establish it as support, perhaps to gather strength ahead of another assault on the 60-minute 100/130-ema's, the upside target of that reverse H&S is just over 546.

Here's how the day's action looked when pictured on a daily nested Keltner channel chart: Link That chart shows that the OEX still has vulnerability down to that still-sliding-lower black channel line at 526, with MACD not yet committed to the upside, but with the MACD histogram showing less negative numbers. The Keltner chart also shows that 544-545 may be difficult resistance for the OEX. As I've mentioned recently, the OEX surmounted a similar configuration of Keltner resistance in May, so it's not impossible to get past, but perhaps difficult. One major difference exists between the current period and that in May: this time, the OEX will also be facing the 200-sma at 544.10, the 50-sma at 544.28, the 30-sma at 544.45, and the top of early July's congestion zone near 544. Historical resistance ranges up to 547. That's a river of resistance blocking the OEX's progress once it reaches 543.50-547, if it reaches that high.

According to the OEX's 15-minute Keltner chart, if 535.50-536 holds as support tomorrow morning, the OEX might continue on its way to test 541, but first it has to move through the 60-minute 100/130-ema's, currently at 537.23 and 538.70, respectively. Once again tonight as I type, futures have been unable to hold onto their levels at the close of the cash markets, although tonight that might be counted as a coup since they're holding relatively close to those levels even though the Nikkei dives. Check the performance of the futures during the overnight session, however, before you make decisions tomorrow morning.

Crude futures closed at $42.90/barrel Wednesday. Unless market watchers are discounting those rising prices as a temporary reaction to the Yukos troubles in Russia, those rising prices might trouble market watchers, so don't forget to watch crude prices tomorrow, too. The OEX's 15-minute Keltner chart suggests that if the OEX fails to hold 536 early tomorrow morning, it's likely to test first 534.60 and then the 533 area if the first support doesn't hold. Strongest support on that chart gathers near 532.50-533.40, with that zone also marking the 15-minute 100/130-pma's.

  OI Technical Staff   7/28/200,  7:55:41 PM
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