Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
  Mark Davis   8/2/2004,  5:50:34 PM
After Market analysis of individual stocks...

Here are a couple of short lists of stocks closing at new highs.

Nasdaq, New Highs, High RS, Closed Up on at least 1.5x ADV... AMXC SNDA OCLR SFCC ZEUS PNFP DECK NTMD

Nasdaq, New Highs, Any RS, Closed Up on at least 2x ADV... NTMD BMHC DECK PNFP ZEUS DBLE IFNY ATPG OCLR EWBC TWTI UEIC GNRL AMXC

I'm not recommending any of these stocks for purchase... just giving a heads up for your own individual research.

 
 
  Jeff Bailey   8/2/2004,  5:17:39 PM
Pivot Matrix for tomorrow at this Link

 
 
  Jeff Bailey   8/2/2004,  4:36:51 PM
Closing Internals at this Link

It would currently take a reading of 22.00% for the NASDAQ 10-day NH/NL ratio to reverse up into a column of "X." Chart of NASDAQ NH/NL ratio at this Link

 
 
  Mark Davis   8/2/2004,  4:10:03 PM
Thanks Linda. The most frustrating part of today's action was the clear buy signal @ SPX 1099 I ignored because of my downward bias. That would have been a nice trade. Tomorrow is another day.

cya_l8r

 
 
  Jeff Bailey   8/2/2004,  4:06:15 PM
Current OPEN MM Profiles at this Link

Today's open/close trades.

NEM day trade short from Friday closed out at $40.78 ($-0.31, or -0.77%)

WMT day trade long ($53.06) closed out at $53.68 ($0.62, or +1.17%)

HD day trade short ($34.15) close out at $34.14 (break-even).

 
 
  Linda Piazza   8/2/2004,  4:03:22 PM
Mark, congratulations on having the courage to trade in public. It's a difficult thing to do. Based on what I thought the OEX was likely to do today--turn down below 542 or maybe even 541.50--I thought your trade had a good chance of working, but then there was that drive to move the SPX above its 200-sma.

 
 
  Mark Davis   8/2/2004,  3:54:23 PM
Swing Trade Exit Point Alert -
Stopped out @ 1107.50, -10%

I saw the gathering support @ 1103 on the cash index but by the time I had the "bracketing" (opposing) long entry typed, SPX had already spiked to 1105 so I didn't issue the signal.

I really thought that was a great sell signal @ SPX 1106.50 but after dropping to 1103 the SPX got it's second wind. The SOX continued gaining strength and TRIN reversed lower.

Sometimes you're the whip and sometimes you're the rented mule.

 
 
  Linda Piazza   8/2/2004,  3:53:58 PM
The OEX still hasn't been able to break out above its top channel line on the five-minute chart. That doesn't mean that the OEX isn't climbing: it is, of course. However, that top line keeps serving as resistance and if the OEX can't manage a breakout, other Keltner lines are going to snake above its position and add to the resistance at that top line.

 
 
  Linda Piazza   8/2/2004,  3:48:08 PM
The OEX is again attempting a breakout, with the five-minute chart showing that the OEX needs to maintain values above 540.22 but preferably above 540.65 to keep its smallest channel pointed higher. The 15-minute chart shows slightly different numbers, with the OEX needing to maintain 539.87 to keep its smallest channel pointed higher. The 15-minute chart shows an upside target of 543.47 currently if the OEX can keep that smallest channel pointed higher, with the numbers needed to accomplish that goal changing, of course, as the OEX moves. I had thought that the 539.50-542 zone might cap the OEX's upside for today, with 543-547 looking even more difficult to exceed, but if shorts start closing out their positions, my top target for today could be exceeded. Much might depend on what happens with the SPX, as to whether it can maintain its 200-sma.

 
 
  James Brown   8/2/2004,  3:47:54 PM
Today's 1.7% gain in the DJUSHB home construction index appears noteworthy as it breaks through its descending trendline of resistance dating back to late March. The DJUSHB still has technical resistance at the simple 200-dma directly overhead.

 
 
  James Brown   8/2/2004,  3:46:33 PM
The rally in the DFI defense index continues and the index is very close to breaking out over resistance near 770 and hitting new all-time highs.

 
 
  James Brown   8/2/2004,  3:44:35 PM
The oversold bounce in the INX Internet index is struggling somewhat to keep the momentum alive even as its MACD produces a new "buy" signal.

 
 
  Jeff Bailey   8/2/2004,  3:44:14 PM
Bearish day trade exit alert ... for Home Depot (HD) $34.14 here.

Dow Industrials (INDU) 10,200 +0.6% taking out highs of session.

 
 
  Linda Piazza   8/2/2004,  3:37:45 PM
I was thinking earlier that if I were a fund manager, I think I'd want to see the SPX close above its 200-sma, no matter what my bias. If I had a negative bias, I'd want higher prices to sell into, for example. We'll see if that can be managed, and, of course, I'm not a fund manager and never have been, so my imaginings might count for little.

 
 
  Linda Piazza   8/2/2004,  3:35:47 PM
For those with bullish hopes, the OEX needs to maintain values above 540.50 to break out again, setting an upside target at 541.36. Keep a watch on the SPX, rising to test its 200-sma again.

 
 
  Linda Piazza   8/2/2004,  3:34:13 PM
Crude futures had pushed toward $44.00 again, but had fallen back after that attempt. They didn't fall far, however, declining only to $43.80.

 
 
  Linda Piazza   8/2/2004,  3:27:43 PM
Keltner resistance tries to gather at 540.20-540.50 on the OEX's five-minute chart.

 
 
  Linda Piazza   8/2/2004,  3:21:48 PM
The OEX is again trying to find support on the basis line of its smallest channel rather than retreat to the bottom support of that smallest channel. As I study the five-minute chart, I note that support and resistance seem almost equally weighted, with support at 539 and resistance from 540.14-540.36. Below is stronger support at 538 and above is perhaps-stronger resistance at 541.25.

 
 
  James Brown   8/2/2004,  3:16:42 PM
Cooper Tire (CTB) is on the upswing and breaking out over resistance in the $23.50 region to hit new one-year highs in the last few minutes.

 
 
  Linda Piazza   8/2/2004,  3:14:58 PM
Keltner resistance is now trying to group near 540.20-540.25.

 
 
  Linda Piazza   8/2/2004,  3:09:37 PM
The OEX is trying to hang onto support near 539. Below that, next Keltner support is near 538, but the OEX can move below the Keltner support near 539 briefly and then bounce back above it, only bulging the support line out a little. It needs to maintain values below 539 or else move deeply below it quickly in order to violate it.

 
 
  Jeff Bailey   8/2/2004,  3:04:39 PM
03:00 Market Watch at this Link

 
 
  Linda Piazza   8/2/2004,  3:01:22 PM
The OEX heads toward the mid-channel level on the Keltner channels, also down toward the 60-minute 100/130-ema's that it just worked so hard to surpass.

 
 
  Linda Piazza   8/2/2004,  2:59:48 PM
Earlier I had suggested that some Keltner signs were hinting that the OEX might find resistance in the 539.50-542 zone rather than breaking out again, and now the smallest Keltner channel turns lower again. The OEX needs to maintain values above gathering resistance at 540.40 to turn that channel higher again, while bears hope the OEX finds resistance lower, at 539.83, if it tries to rise.

 
 
  James Brown   8/2/2004,  2:56:40 PM
OI call play TXT is also showing some strength by cracking the $62 level about 30 minutes ago and still up more than 1% today.

 
 
  Jeff Bailey   8/2/2004,  2:56:14 PM
Wal-Mart (WMT) $53.28 +0.5% ... BLUE #2 after trading session high of $53.73.

 
 
  James Brown   8/2/2004,  2:55:17 PM
OI call play FDX is breaking out over the $82.00 level of resistance. This looks like an entry point for new bullish positions.

 
 
  James Brown   8/2/2004,  2:53:55 PM
The FDA has okayed two new drugs for HIV treatment today. One from GlaxoSmithKline (GSK) and one from Gilead Sciences (GILD). Neither stock is moving on the news.

 
 
  Linda Piazza   8/2/2004,  2:52:46 PM
OEX bulls do not want to see the OEX maintain figures below 539.46. Doing so will turn the OEX's smallest channel lower, toward 537.80-538.00.

 
 
  Jeff Bailey   8/2/2004,  2:46:12 PM
Day trade short alert ... for Home Depot (HD) $34.15 here, stop $34.25, target $33.81.

 
 
  Linda Piazza   8/2/2004,  2:41:01 PM
The SPX rises toward its 200-sma again, now only a little more than a point away from another test of that average at 1107.30.

 
 
  Linda Piazza   8/2/2004,  2:30:31 PM
The basis line for the OEX's smallest Keltner channel did not hold as support this time, suggesting that the OEX risks turning its smallest Keltner channel lower again. Bulls do not want to see the OEX maintain values below 539.44, as that would turn that smallest Keltner channel lower again.

 
 
  Mark Davis   8/2/2004,  2:28:25 PM
Swing Trade Exit Point Alert -
Stopped out @ 1107.50, -10%

I saw the gathering support @ 1103 on the cash index but by the time I had the "bracketing" (opposing) long entry typed to lock in profits on the put play, SPX had already spiked to 1105 so I didn't post it.

I really thought that was a great sell signal @ SPX 1106.50 but the SOX kept gaining traction and TRIN reversed lower. Sometimes you're the whip and sometimes you're the rented mule.

 
 
  Linda Piazza   8/2/2004,  2:20:31 PM
So far, the OEX is finding support just where bulls would hope on a Keltner basis, the basis line of its smallest Keltner channel. It's not descending all the way to the bottom of that smallest channel before finding support. However, it keeps turning down from the upper channel line of its widest channel on that five-minute chart, not yet able to break out. That suggests but doesn't prove that the OEX might find resistance somewhere within the 539.50-542 zone. The OEX is coming down to retest that midline of its smallest channel again, at 540.04, so we'll see if it holds this time. If it does, as looks possible as I study Keltner support and resistance, a breakout could still be possible. Bulls don't want to see the OEX maintain values below 539.40.

 
 
  James Brown   8/2/2004,  2:14:39 PM
The 2.3% rally in homebuilder PHM is a notable breakout over the $55 level of resistance although it's arguable that the $56 level is also resistance. The P&F chart is bullish with a $66 target.

BZH is up 2.4% and pushing through its 40-dma and the $95 level.

TOL is up 1.6% and pushing through round-number resistance at $40.00 but still struggling with a crowd of moving averages.

CTX, MTH, and HOV are also bouncing.

 
 
  Mark Davis   8/2/2004,  2:11:25 PM
Swing Trade Entry Point Alert -
We now have a very clear and strong sell signal on SPX so we'll give it another try...

Go short now with - SPTTT (SPX Aug 1100 put) @ $10.70, stop just above a new HOD, 1106.50

I know I said I was done for the day but I reserve the right to change my mind on a moment's notice (grin)

There is also a developing buy signal so be prepared to try and bracket the last swing high (puts) with the next swing low (calls) if the opportunity presents itself. We will be using the SPX 1110 calls as a balancing trade if the buy signal confirms.

 
 
  Linda Piazza   8/2/2004,  2:06:19 PM
OEX bulls would prefer to see the OEX maintain the 539.84 level, but if that fails, they want to see the OEX above 539.27. A sustained move below 539 would turn the OEX's smallest Keltner channel lower again, something they don't want to see happen. Watch the SPX, too, to see if it falls back below 1,100 again or climbs above the 200-sma.

 
 
  James Brown   8/2/2004,  2:05:02 PM
Hmm.... the oversold bounce in WFMI appears to be failing at its simple 100-dma. The stock is down more than 20% and testing the $80 level as support.

 
 
  Linda Piazza   8/2/2004,  1:55:39 PM
I want to emphasize again that the OEX has now bumped into one resistance zone that might be difficult to surpass, with this being a zone of known historical S/R and also the location of resistance on the weekly Keltner chart, with that resistance at 541.28. Since Keltner lines are dynamic, unlike trendlines, and since we're talking about a weekly line and not an intraday one, the piercing of the line would not be considered a breaking of that resistance unless the OEX either maintains values above that level on a weekly basis or else moves far above it quickly. Even if the OEX moved up to the 543-547 zone and then was quickly rebuffed, with the week's candle forming below 541.28, for example, that line's resistance would not be considered to have been overcome.

The OEX could be getting ready to zoom or this could just be more chop above weekly support before the OEX establishes direction. In fact, some might consider this a good level to short since the weekly support Keltner lines are separating, but in an election year, it worries me a little to assume that markets will be allowed to fall too much, no matter what the chart characteristics.

 
 
  Jeff Bailey   8/2/2004,  1:53:54 PM
Bullish day trade exit alert for Wal-Mart (WMT) $53.68 bid.

(+$0.62, or +1.17%)

Dow Industrials (INDU) 10,180 +0.4% ... just off session high of 10,190 and pretty close to its DAILY R2 of 10,188.

 
 
  James Brown   8/2/2004,  1:52:28 PM
We're not seeing any weakness in Chinese Internet SOHU. The stock gapped higher last week on earnings and it's now breaking out above the $20.00 level, its simple 100-dma, and two descending trendlines of resistance. Watch for historical, psychological and P&F resistance at the $25 level.

 
 
  Mark Davis   8/2/2004,  1:51:31 PM
Recap... Who is it that always says "Plan your trade and trade your plan"? (a free Jane Fox lapel pin to the first person who answers correctly)

I broke my own rules today. I normally try to "bracket" the daily range with puts and calls, then let the market take out the losing position while letting the winning position run. There was a clear buy signal @ SPX 1099 and I would have normally issued a buy signal for SPX Aug 1110 calls, but I ignored it today because of my downside bias. That position would now be up about +35%, more than making up for the worst case -10% loss on the Aug 1090 puts.

I will now write on the blackboard 100 times... "Plan your trade and trade your plan."

 
 
  Linda Piazza   8/2/2004,  1:47:54 PM
And the OEX now hits the top boundary of the biggest Keltner channel on the OEX's five-minute chart. A breakout above that channel line at 540.57 (a dynamic line that can be bulged out slightly without being broken), creates another breakout situation, while a hard rebuffing of the OEX suggests a downturn toward mid-channel support. Already the OEX's 15-minute chart suggests a breakout and possible target of 543 if 540 or at least 539 can be maintained. Note, however, that the SPX is fast approaching its 200-sma at 1107.30 and the reaction when that average is hit may either knock the markets back or propel them higher. Have a plan in place to protect any profits on this SPX test of the 200-sma, and have another in mind for the OEX 543-547 zone, a zone that might be difficult for the OEX to get through at least on a first approach.

 
 
  Jeff Bailey   8/2/2004,  1:43:16 PM
200-day SMA alert for Du Pont (DD) $43.06 +0.44% ...

 
 
  Jeff Bailey   8/2/2004,  1:42:29 PM
Wal-Mart (WMT) $53.50 +0.92% ... session high and BLUE #4

 
 
  Linda Piazza   8/2/2004,  1:37:07 PM
The TRAN is above 3100 again, rising to challenge its 30-dma again, with that average at 3109.98 and the TRAN currently at 3108.13.

 
 
  James Brown   8/2/2004,  1:33:57 PM
In the same vein Pepsi Bottling (PBG) is rebounding from its test of the simple 200-dma last week.

 
 
  James Brown   8/2/2004,  1:33:04 PM
Coca-Cola Enterprises (CCE) is attempting a bounce from support at the $20.00 level after last week's extremely sharp sell-off.

 
 
  Linda Piazza   8/2/2004,  1:32:53 PM
The OEX is now well above the 60-minute 100/130-ema's. Of course, it's been well above them before, and it's currently facing the possibility of a double-top formation unless it can maintain values above the 7/29 high of 539.64. The OEX punched above that by 11 cents in the push that occurred a short while ago, but it's close enough to an equal-top level that some will be watching attentively to see if the OEX pulls back or shoots higher, above that 7/29 high again. Currently, 60-minute RSI shows bearish price/oscillator divergence, but that can be erased if RSI continues climbing.

 
 
  James Brown   8/2/2004,  1:29:44 PM
A couple of days ago I made note of the bullish breakout in Canadian Pacific Railway (CP) as it pushed through the $25.25 level and its simple 200-dma (fueled by its earnings report). Today shares are seeing some follow through on Friday's dip/bounce from the 200-dma. Unfortunately, there are not any options on CP.

 
 
  Linda Piazza   8/2/2004,  1:28:02 PM
Remember this morning's bearish rising wedge on the OEX's five-minute chart and its breakdown out of that wedge? The OEX then did what it did so many times last year: it traded sideways a while and then rose along the underside of the broken supporting trendline of that wedge. It may have broken down out of the wedge, but it climbed the wedge nonetheless. It then challenged the converging top and bottom trendlines and is falling back from that test. Bulls want to see it maintain 539 or at least 538.76. This is an iffy climate for a bullish play, so be careful.

 
 
  Mark Davis   8/2/2004,  1:26:59 PM
I'm done for the day. We've had a clean break of the 1100-1102 trading range on the SPX cash index and although I'm showing a very overbought CCI @ +400, there's always the chance the market will start trending to the upside, against all logic.

When in doubt, stay out, but we gave it the good old college try. The markets are free to tank now that we've been shaken out of our position.

 
 
  James Brown   8/2/2004,  1:24:51 PM
Oil giant ChevronTexaco (CVX) is bouncing from a test of the $95 level today. This could be an entry point for a rally towards the $100 level. The bullish P&F chart points to a $111.

 
 
  Linda Piazza   8/2/2004,  1:24:17 PM
The OEX is so far maintaining levels needed to affirm the breakout above the middle Keltner channel, setting up a test of the outer channel's upper boundary, at 540.42. On the current pullback, however, OEX bulls want to see the OEX maintain levels above 538.71, but preferably above 539. A sustained move below 538 turns the smallest Keltner channel lower again.

 
 
  James Brown   8/2/2004,  1:23:58 PM
LLL is breaking out over resistance at the $62 mark following last week's big rebound. Its MACD is in a new buy signal. This could be a bullish entry point but shares do have their 40 and 50-dma directly overhead.

 
 
  Linda Piazza   8/2/2004,  1:16:48 PM
The OEX gapped up exactly to the midline of the ascending regression channel it established on July 26th. It' now moving toward that 539.50-542 (maybe 543?) zone. There's been a breakout above the middle channel on the five-minute nested Keltner charts. If the OEX can maintain values above 538.28, but hopefully above 538.82, it can point its smallest Keltner channel toward 540.37, but beware if there's a quick reversal down into the smallest channel again or if the OEX falls below 538 and maintains values below that level.

 
 
  Mark Davis   8/2/2004,  1:15:16 PM
Swing Trade Exit Point Alert -
Conservative traders with stops set at SPX 1101.25 should have been able to exit the trade @ 9.00, -5%

Aggressive traders with stops set at SPX 1102.50 should have been able to exit @ 8.50, -10%

 
 
  Linda Piazza   8/2/2004,  1:12:46 PM
Although the SOX is a couple of points off its low of the day, it hasn't been able to move back above the midline of its descending regression channel or back up to challenge 420. It looks as if it's trying to move higher again as I type, but the SOX five-minute nested Keltner chart shows that it's facing strong Keltner resistance in the current area, up to 414.26. I haven't watched the SOX long enough on this chart to know whether it has a habit of overrunning Keltner resistance and support, the way it often does traditional resistance and support levels, but as I typed, the SOX gapped above that gathering strong Keltner resistance. Bulls now want to see the SOX maintain levels above 413.70 or at least 412.74 to keep its smallest Keltner channel pointed higher. An immediate downturn suggests that this could have been a stop-running move that soon got reversed.

 
 
  Linda Piazza   8/2/2004,  1:04:26 PM
The OEX tests its 60-minute 130-ema once again. Six out of the last 18 trading hours, it's touched or pierced this average and has so far fallen back each time.

 
 
  Jeff Bailey   8/2/2004,  1:01:58 PM
12:56 Market Watch at this Link with intra-day highs and lows.

 
 
  Mark Davis   8/2/2004,  1:01:10 PM
Bollinger Bands are tightening and SPX is approaching the apex of a sideways triangle on the 1-min chart. We should see a spike one way or the other here pretty soon. I wish I knew which way. Linda's famous "stop-running push" is almost upon us as floor traders return from lunch and test the market's strength or weakness.

Our SPX Aug 1090 puts are sitting at right about break even.

 
 
  Linda Piazza   8/2/2004,  12:51:14 PM
Here's what the OEX 15-minute nested Keltner chart shows: While the OEX has wandered around, Keltner support has somewhat separated. That support lies near the current 537.78 level and 536.95-537, and then at 535.86 and at 534.47. A sustained break below the 534.50 level suggests a plunge toward 529. Resistance lies at 538.52 and again at 539.61. A break above the 539.61 level suggests a move toward 542.80.

 
 
  Linda Piazza   8/2/2004,  12:44:32 PM
The VIX has again been challenging its 200-sma today. After climbing above that average last week, the VIX was stopped by its 200-ema on a closing basis, currently at 17.40. The intraday high last week hit the descending trendline off the 3/22 intraday high. The 200-sma is at 16.52 and that descending trendline is now near the 200-ema.

 
 
  James Brown   8/2/2004,  12:38:17 PM
Administaff Inc (ASF) is down 11.87% to $11.71 after reporting earnings that beat by a penny but came in under analysts' revenue expectations. The bearish P&F chart continues to look increasingly negative with a $6.50 target but it does show possible P&F support near $10.50.

 
 
  Jeff Bailey   8/2/2004,  12:36:43 PM
Wal-Mart (WMT) $53.33 +0.6% .... here's my day trader's chart at this Link

Little zone of resistance right here from BLUE #3 and DAILY R1.

 
 
  James Brown   8/2/2004,  12:34:18 PM
Defense contractor Alliant Tech Systems (ATK) is up 1.28% and pushing through its 21 and 40-dma's after announcing a 3-year $3.5 million contract from the NYPD.

 
 
  James Brown   8/2/2004,  12:31:49 PM
Nortel Networks (NT) is up 3% to $3.77 after Smith Barney upgraded the stock to a "buy". NT also announced it has been chosen to build a VoIP network in Pakistan.

 
 
  Mark Davis   8/2/2004,  12:30:08 PM
The markets may be experiencing the "Little Boy Who Cried Wolf" syndrome. There have been many threats, but nothing has really happened.

Still, the risk level is elevated and the threats are very specific this time. That alone should keep a lid on any rally attempts, thus my willingness to try an aggressive short today.

 
 
  Jeff Bailey   8/2/2004,  12:29:18 PM
Raymond James (RJF) $23.47 +0.42% ... only broker in the XBD.X 117.97 -1.18% to show a gain.

Jeffries (JEF) $31.34 (unch) ....

Ameritrade $10.69 -3.6% and E*trade (ET) $10.68 -3.52% percentage decliners.

Prudential (PRU) $45.67 -1.93% and Citigroup (C) $45.66 -1.93% are not XBD.X components.

 
 
  Linda Piazza   8/2/2004,  12:28:39 PM
Sorry to note, James, that the TRAN is now slipping beneath 3100 again. It can't seem to maintain values above its 30-dma at 3109.68.

 
 
  James Brown   8/2/2004,  12:26:28 PM
Linda mentioned the strength in the transports. I'm seeing a nascent rally in shares of UPS and OI call play FDX. UPS is bouncing from its simple 200-dma and FDX is coiling for a breakout over resistance at $82.

 
 
  Linda Piazza   8/2/2004,  12:25:40 PM
Jim mentioned the rising advdec line. I've been noting TRIN rising along with the rising advdec line, something we don't often see happen in conjunction. Is TRIN sounding a warning to bulls? Is the rising advdec line to bears?

 
 
  Jeff Bailey   8/2/2004,  12:25:23 PM
eCollege.com (ECLG) $9.95 -16.8% .... in sympathy with COCO $10.66 -43.00%.

 
 
  James Brown   8/2/2004,  12:23:05 PM
We put Moody's Corp (MCO) on the watch list this weekend after its unexplained bullish breakout from its tight trading range. Shares are seeing some follow through today up another 3.6% and breaking out over the $70 level. The stock did manage to hit a new all-time high just a few minutes ago.

 
 
  Linda Piazza   8/2/2004,  12:21:16 PM
Some on the futures side are commenting on their amazement that the markets are holding up so well with the concerns about terrorism. I'd add my amazement that with crude futures at $43.43 as of 30 minutes ago that markets are holding up so well. The TRAN is even back above 3100 again.

 
 
  James Brown   8/2/2004,  12:20:23 PM
Jeff already mentioned the crash in shares of COCO. Rival APOL is also gapping lower, down 12%, and gapping below multiple levels of support. EDMC is down 14.55% to $23.72. STRA is down 10.3% to $87.34. CECO is down 13.33% to $29.30.

 
 
  Jeff Bailey   8/2/2004,  12:17:37 PM
S&P Retail Index (RLX.X) 383.73 (unch) Link .... battle back to unchanged. Trending lower 21-day SMA provided opening bell resistance.

 
 
  James Brown   8/2/2004,  12:17:26 PM
Dow-component Pfizer (PFE) is up +0.71% and breaking out over its simple 10-dma with its MACD producing a new "buy" signal after announcing that the FDA has approved LIPITOR to prevent heart attacks.

 
 
  Mark Davis   8/2/2004,  12:12:01 PM
Ditto Jim... can you please email me a 5 lb. box of Maalox?

 
 
  Jeff Bailey   8/2/2004,  12:08:34 PM
Current OPEN MM Profiles at this Link

 
 
  Mark Davis   8/2/2004,  12:05:43 PM
The SOX is breaking below it's last swing low as I type. This may be the catalyst we need to get things going to the downside.

 
 
  Jeff Bailey   8/2/2004,  12:05:32 PM
12:03 Market Watch at this Link

 
 
  Linda Piazza   8/2/2004,  12:04:46 PM
The OEX still tests the 60-minute 100/130-emas and still remains above the 30-minute 100/130-ema's. I hesitate to say too much, because that entrapment between those averages is still the governing fact.

 
 
  James Brown   8/2/2004,  11:58:20 AM
Dow-component MMM is trying to rebound from support at the simple 200-dma this morning. Its short-term technicals are looking positive and its MACD is hinting at a new buy signal soon.

 
 
  Mark Davis   8/2/2004,  11:51:40 AM
Stepping away for a few minutes...

 
 
  Mark Davis   8/2/2004,  11:49:52 AM
Swing Trade Exit Point Alert -
Conservative traders may want to lower their stops to SPX 1101.25, just above the last swing high.

Aggressive traders can leave their stops @ 1102.50

With a stop @ 1101.25 you're probably risking about 10-12% on the trade. That's a pretty tight stop but I'd like to see a little more impulsive action to the downside and I'm not seeing it yet.

At SPX 1100 the trade is just about break even. This is an aggressive trade so if you're uncomfortable with it feel free to exit at your own discretion.

 
 
  James Brown   8/2/2004,  11:46:22 AM
There is an unexplained rally in shares of EchoStar (DISH), which has been a cooperative put play thus far. Unfortunately, today's 5.3% rally has tripped our stop loss at $29.05. At least it looks that way on the daily chart... QCharts is showing a jump to $29.20 on the daily chart but the intraday charts do NOT show the rally today.

The only probable explanation for the rally I can find is news out of COX Communications. COX is up more than 20% on news that the family who controls COX is offering a $7.9 billion buy out offer to take the company private again.

 
 
  Linda Piazza   8/2/2004,  11:44:53 AM
The BIX found support yet again today at its 50-dma, now at 347.32, but it hasn't been able to break above 350 again, and today sees a tentative bearish kiss on its 21(3)3 stochastics. That kiss is more of a flattening of the stochastics from their upward push than an actual downturn, however. MACD remains flat and RSI is trending along the neutral 50-ish value line.

 
 
  James Brown   8/2/2004,  11:40:42 AM
Most of our calls are going sideways or slipping fractionally backwards. Meanwhile OI put play Cephalon (CEPH) is down 1.34% and producing the failed rally at the 21-dma like it should be. Today's drop back under the $50.00 level is encouraging. Unfortunately, CEPH reports earnings after the bell on Tuesday so we need to exit tomorrow afternoon.

 
 
  Linda Piazza   8/2/2004,  11:37:38 AM
That stronger-than-resistance support on the OEX's five-minute Keltner chart did sent the OEX higher, but so far, it's gone only high enough to retest the broken supporting trendline from the possible rising wedge that I detailed earlier today. I wouldn't be surprised to see another test of that mid-channel level, but if the OEX pushes higher instead, we're still looking for a sustained push above the channel line now at 538.60 to set up a breakout situation, turning the smallest channel up toward 540.38.

 
 
  Linda Piazza   8/2/2004,  11:30:53 AM
The OEX is now back to gathering Keltner support on the five-minute chart, with that support gathering from 536.81-537.06. As I type, that support looks stronger than resistance, but the 15-minute chart shows strongest support lower, near 535.60-536.00. So far, the OEX is just wandering from one side of its smallest channel to the other on that 15-minute chart.

 
 
  Linda Piazza   8/2/2004,  11:11:58 AM
I am noting that on the five-minute OEX chart, the action since about 2:00 Friday afternoon could be described as a (bearish) rising wedge, except for one spike below the bottom trendline this morning. Link The apex of that wedge points up to the 450.50 level, so at the level that's suggested if the OEX is able to break above nearest Keltner resistance and set up an upside target at the outer boundary of the nested channels. The OEX will have moved about 2/3 of the way through that wedge somewhere between noon and 12:30 this afternoon, and such wedges typically break down or break to the upside by about 2/3 of the way through. Many of these have not been working as expected, however, and break to the upside as often as the downside, but it at least gives us trendlines to watch.

 
 
  Jeff Bailey   8/2/2004,  11:02:51 AM
10:57 Market Watch at this Link

 
 
  Linda Piazza   8/2/2004,  10:58:08 AM
And the OEX is once again beaten back on its attempt to push above the 60-minute 130-ema, but not far back. I really don't consider anything settled yet, either bearish or bullish.

 
 
  Linda Piazza   8/2/2004,  10:52:23 AM
Keltner resistance is converging overhead near 538.50, but it may not have firmed up quite enough to stop the OEX. A sustained breakout above the two converging lines would currently set up a possible upside target of 540.36, but I'd be careful here as the OEX has popped above this zone before, only to be beaten back. If inclined to participate in a bullish play, be aware that it may require quick reactions and may result in some whipsawing action.

 
 
  Jeff Bailey   8/2/2004,  10:50:30 AM
Day trade long alert ... for Wal-Mart (WMT) $53.06 +0.09% here, stop $52.83, target $53.70.

 
 
  Linda Piazza   8/2/2004,  10:49:29 AM
The OEX is still being stopped by the 200-ema and the 60-minute 130-ema.

 
 
  Mark Davis   8/2/2004,  10:45:37 AM
Swing Trade Entry Point Alert -
Go short now with - SPQTR (SPX Aug 1090 put) @ $9.50, stop @ new HOD, call it SPX 1102.50

 
 
  Linda Piazza   8/2/2004,  10:42:48 AM
The OEX has just bumped above the trendline off the 7/29 high, with that trendline drawn on the five-minute chart. The 60-minute 130-ema is just ahead at 538.38.

 
 
  Linda Piazza   8/2/2004,  10:41:33 AM
The TRAN remains below 3100, but like some other indices, it fails to give us a clear picture since it also hasn't moved far from 3100, at 3096.74 as I type.

 
 
  Mark Davis   8/2/2004,  10:41:05 AM
Potential Swing Trade Setup Alert -
SPX... first sell signal may be developing with a CCI print of +300 (1-min chart). If we get another poke higher and another CCI print over +200 (or close) followed by a MACD bearish cross I would consider getting short with SPX Aug 1090 puts.

 
 
  Jeff Bailey   8/2/2004,  10:39:50 AM
U.S. Dollar Index (dx00y) 89.78 -0.19% (30-min delayed) ..... morning highs and nearing DAILY Pivot of 89.80.

Was stopped out of NEM $40.26 -0.51% from Friday's bearish entry of $40.47 at the opening, but turns lower on dollar strength.

 
 
  Jeff Bailey   8/2/2004,  10:36:52 AM
University of Phoenix (UOPX) $73.60 -14.58% Link .... in sympathy with COCO.

 
 
  Linda Piazza   8/2/2004,  10:36:51 AM
The OEX again touched the descending trendline on its five-minute chart, formed off the 7/29 high. So far, it's turning down from that trendline, just below 538, but it hasn't turned down far yet. Keltner support is trying to firm up from 536.50-536.75 on the five-minute chart, but a plunge through that support, if sustained, would then set up a downside target just above 535.

 
 
  Mark Davis   8/2/2004,  10:25:09 AM
Keene... per your 9:38 post on the Plunge Protection Team... it sure appears somebody is propping things up this morning. It's difficult enough trying to make sense of the markets, but when you add in the PPT factor it makes things downright frustrating.

My bias remains to the downside today. The SOX was the first to break it's uptrend and now I see a series of bearish MACD kisses on the SPX 1-min chart, although I have not seen any clear sell signal (yet).

 
 
  Linda Piazza   8/2/2004,  10:23:05 AM
The OEX is testing mid-channel support on the OEX's five-minute chart, with that support at 536.61. A sustained move below 536.17 sets up a possible downside target of 535, with a breakout of that channel line setting up a possible downside target of 533.05. A sustained move above 537.54 sets up a first upside target of 538.23, with a possible upside target of 540.20 upon a breakout of that 538.23 channel line.

 
 
  Linda Piazza   8/2/2004,  10:19:45 AM
I've drawn my descending regression channel for the SOX a little differently than some other writers have, but on my chart, the SOX pierced the midline of that regression channel Friday, but fell back below it by the close. Today, it's so far moving down from that midline, with RSI hooking over but the other oscillators not yet following the SOX into a rollover. If the pullback continues, traditional technical analysis suggests that traders watch for support at about 408, 406, 400, and then last week's low. On my descending regression channel, bottom support lies at about 382.50 currently, with the 50% retracement of the SOX's rally off the October 2002 low at about 385.40. If the SOX should decline toward the bottom of its channel, then, I'd certainly be on the lookout for possible support just ahead of that 50% retracement, especially as that's so near the bottom of the descending regression channel that I have drawn. If in bearish SOX-related plays, have profit-protecting plans in place for that level, if it's approached.

 
 
  Jeff Bailey   8/2/2004,  10:15:47 AM
S&P 100 Index (OEX.X) 537.14 -0.09% .... with updated weekly/monthly pivot retracement at this Link

 
 
  Linda Piazza   8/2/2004,  10:10:14 AM
The TRAN slips below 3100.

 
 
  Linda Piazza   8/2/2004,  10:08:38 AM
For those on the options side of the MM, perhaps tune into the futures side, too, and watch for Jane's posts concerning the TRIN and other breadth indicators to help you measure market strength or weakness. My charts show TRIN still neutral, below its opening levels, but advdec also below its level at the opening.

 
 
  Jim Brown   8/2/2004,  10:07:23 AM
There was a symbol error in the Russell 2000 play in the LEAPs section on Sunday. It has been corrected and can be viewed here. Link

 
 
  Linda Piazza   8/2/2004,  10:06:11 AM
The OEX has also not been able to push above a descending trendline formed off the 12:30 (15-minute chart) high on 7/29. That descending trendline now crosses at about 537.90-538, joining other resistance in that zone, but the OEX appears to be trying to challenge it again.

 
 
  Jim Brown   8/2/2004,  10:03:37 AM
Jonathan is off today for a Canadian Holiday.

 
 
  Jim Brown   8/2/2004,  10:00:25 AM
ISM = 62.0, (62.0, last 61.1)
Construction Spending = -0.3%, (est +0.1%, last +0.3%)

 
 
  Mark Davis   8/2/2004,  9:59:33 AM
If SPX can make a sustained break above 1100 I would consider that quite bullish, considering weekend events, but somehow I just don't trust this bounce. It may be a just an "In your face, Al Queda" patriotic bounce that fades, but as always, price is the final arbiter.

 
 
  Linda Piazza   8/2/2004,  9:57:31 AM
Today the TRAN again shows the importance of its 30-dma. This morning, the TRAN gapped down to that average again and currently trades near it, with the average at 3109.91 and the TRAN at 3106.06 as I type. It's important to watch the TRAN, since it sometimes leads the Dow in a similar way to the manner in which the SOX sometimes leads the Nasdaq.

 
 
  Linda Piazza   8/2/2004,  9:55:00 AM
As a reminder, the OEX's 200-ema is at 537.95, with the OEX piercing that average for the last several trading days, but then falling back so that the candle bodies form underneath the average. It's being tested again. Early in July, this average did not necessarily prove a barrier to either bounces or declines, so that the OEX could move through it easily enough, but the OEX did appear to oscillate around the average, so that candles seem to line up near it.

 
 
  Jeff Bailey   8/2/2004,  9:53:46 AM
Current OPEN MM profiles at this Link

 
 
  Linda Piazza   8/2/2004,  9:48:15 AM
The OEX trades within a range bounded by the 60-minute 100/130-ema's on the topside and the 30-minute versions on the bottom. The 60-minute versions, currently being challenged again, are at 537.20 and 538.37, respectively. If the OEX can bound back above those and maintain levels above them, it sets up a test of the 539.50-542 zone, but for now, it's trapped between support and resistance. I wouldn't make too many decisions ahead of the ISM number.

 
 
  Linda Piazza   8/2/2004,  9:40:27 AM
During the first five minutes of trading, the OEX ranged from 537.67 to 535.22.

 
 
  Linda Piazza   8/2/2004,  9:36:23 AM
And the OEX bounces above the 30-minute 100/130-ema's.

 
 
  Jeff Bailey   8/2/2004,  9:34:58 AM
Bearish day trade stop alert .... for Newmont Mining (NEM) $40.78

(-$0.31, or -0.77%)

 
 
  Linda Piazza   8/2/2004,  9:33:24 AM
The OEX is dropping below the 30-minute 100-ema at 535.48. Now we'll need to see what occurs during the first retracement of the day, typically beginning in about 8-10 minutes.

 
 
  Jeff Bailey   8/2/2004,  9:32:06 AM
Corinthian College (COCO) $10.75 -42% Link ... after company warns that its fourth quarter (ended June 30) will have EPS from $0.19-$0.20, which is below previous forecast of $0.27.

Also forecasting fiscal 2004 EPS of $0.86-$0.87, well below consensus of $0.96 per share.

The for-profit college operator added that it does not expect to meet its April forecast for fiscal 2005 earnings of $1.28 per share (consensus $1.27 per share). For Q1 COCO now forecasting EPS between $0.17 and $0.19 per share, below consensus of $0.28.

COCO blamed lower forecasts on decreased revenue and higher spending for marketing, salaries, rents and other operating expenses.

 
 
  Linda Piazza   8/2/2004,  9:31:38 AM
The OEX opens near Friday's close, near the 60-minute 100-ema and begins dropping toward the support offered last week by the 30-minute versions of the 30-minute 100/130-ema's. Will they again serve as support?

 
 
  Mark Davis   8/2/2004,  9:31:12 AM
Another prime terror target is disruption of the flow of oil. Higher oil prices and a lower stock market would be powerful tools for terrorists to attempt a change in leadership in the United States. They have already successfully changed leadership in Spain.

 
 
  Jim Brown   8/2/2004,  9:29:32 AM
Only two economic reports at 10:00 today but one of them is a biggie. The ISM could be the straw that breaks the markets back or the fuel to overcome the weekend terror news. After last weeks reports the whisper number for the ISM has risen to about 63 or better. That could make n inline number disappointing.

Construction Spending (est +0.1%, last +0.3%)
ISM (est 62.0, last 61.1)

 
 
  Mark Davis   8/2/2004,  8:34:15 AM
Well, so much for no weekend terror events. Considering the targets of the threats and the regionally raised terror alert level, I'm surprised futures are not even lower this morning. Al Queda, if nothing else, is clever and tenacious. It occurs to me there may be more behind these threats than just disrupting the US financial system. Whatever your political persuasion, Al Queda does NOT want the current US President reelected. He has been all over their organization like a badger on a beef steak and they want a change of leadership. What better way to cast their vote than to disrupt the stock market?

 
 
  Linda Piazza   8/2/2004,  6:59:14 AM
Good morning. This weekend's revelation of allegedly credible threats to buildings in the U.S. financial centers raised concerns around the world. In Japan, exporters fell. Friday, Tokyo Electron, Toshiba, Fuji, NTT DoCoMo, Mazda Motor, Japan Airlines and All Nippon Airways all reported earnings and traded in reaction to those earnings. Early in the day, Toshiba, NTT DoCoMo, and Mazda had risen, with the others declining or flat. Toshiba could not hold onto its gains, however, and moved to the negative side of the page by the end of the day, closing lower by 0.7%. NTT DoCoMo, All Nippon Airways, and Mazda Motor were the only three gainers among those named blue chips reporting Friday, with NTT DoCoMo gaining 2.1% and the others gaining 0.3% and 1.3%, respectively. The Nikkei closed lower by 103.54 points or 0.91%, at 11,222.24.

Most other Asian markets closed lower. The Taiwan Weighted lost 1.29%. South Korea's Duam Communications reportedly will buy Lycos from Terra Lycos, with the report sending Daum, a web site operator, lower by 5.5%. The Kospi lost 2.14%. Singapore's Straits Times declined 0.23%, and Hong Kong's Hang Seng fell 0.30%. China's Shanghai Composite fell 0.94%.

Currently, European bourses mostly trade lower with techs and airlines the worst-performing sectors. In the U.K., the FTSE 100's lone tech stock, Sage, declined, but it is British Airways' decline, almost 3% at one point, that most pressures U.K. bourses. British Airways reported earnings, but some speculate that it's reacting to rising crude prices and increased concerns about terrorists. Bank HSBC's strong earnings and resultant gains in the stock helped temper the losses in the FTSE 100. In continental Europe, French bank BNP Paribas and Dutch bank ABN AMRO reported earnings that beat expectations, but both eased in early trading. In stock-specific news, Euro Disney plunged almost 13% as it revealed earnings in which reduced occupancy in the theme park's owned and operated hotels counteracted increased theme park revenue growth. The company detailed the progress it had made in avoiding bankruptcy and detailed the remaining risks, including a needed approval by a unanimous lender. Business Objects, a software maker, fell more than 6% after the revelation that Goldman Sachs had placed 5.75 million shares of the company's stock.

As of this writing, the FTSE 100 has dipped 8.20 points or 0.19%, to 4,404.90. The CAC 40 has declined 34.77 points or 0.95%, to 3,612.33. The DAX has fallen 46.08 points or 1.18%, to 3,849.53.

 
 
  Jim Brown   8/1/2004,  12:23:00 AM
Info on Terror Alert Link

 
 
  Linda Piazza   8/1/2004,  12:22:24 AM
Friday before leaving for a weekend trip, I began this report with a survey of what had happened last week and what was likely to happen this week, but this weekend's warning of credible terrorist threats to U.S. financial institutions may have changed the outlook. Let's look at what charts were showing. The SOX and Nasdaq began bounces from the bottoms of their descending regression channels. The Dow never reached the bottom of its channel, but instead bounced from support near the bottom of May's congestion zone, as did the Russell 2000, SPX and OEX. The BIX found support all week on its 50-dma, climbing along with that rising average, but its oscillators show a troubling tendency to hook down or flatten. The TRAN also found support on its 50-dma and zoomed back above its 30-dma, an average that had been important throughout the first half of May, but then fell back to close on that average. Crude futures closed at another high.

Taken all together, that presents a picture of markets that want to rise, led by the techs, but that may still be pressured and unable to maintain gains. That was my impression Friday, and declining futures as I type show their vulnerability to declines. What about the OEX specifically? Does it present that same kind of picture?

Certainly some aspects of the daily candlestick chart present a picture of some confusion or uncertainty. That's depicted by a second near-doji in a row on Friday, with Friday's near doji displaying a lower high and a lower low than Thursday's. For three days, candle bodies have formed underneath the 200-ema, with the upper candle shadows piercing that average but not able to move above it. Some oscillators hint at a slight flattening, but they haven't rolled down into more bearish positioning yet. Still, when I see a lot of upper candle shadows begin to appear, I begin to wonder about the possibility for a decline. That was the picture Friday, before this weekend's developments.

The daily Keltner chart presents a more positive appearance, with the OEX climbing above the basis line for the smallest Keltner channel, flattening it and stopping it from its decline toward 526 Keltner support. Still, several Keltner lines converge in the 542.50-544 zone, suggesting that strong Keltner resistance has drifted lower than its previous 544-547 level. As mentioned in a post last week, this Keltner resistance is joined by the 30-, 50-, and 200-sma's, all converging between 543.40-544.50. That looks as if it should be tough for the OEX to punch through and then maintain levels above that zone, at least on the first attempt, but as I type Sunday evening, it's not daily resistance, but daily support that might be most important. Support on the daily chart might be found at 536 and then back at the double-bottom level near 527. Keltner support on that chart lies from 526-528.

The weekly Keltner chart shows the OEX trying to steady at mid-channel support, with that support ranging down to 526, but with the OEX capable of stretching that channel line to the downside a few points without really breaking support offered by that dynamic line. The smallest Keltner channel turns down on that weekly chart, emphasizing that vulnerability, but the gathered Keltner and historical support also suggests that bears might find it difficult to drive the OEX too much lower. A sustained move below 526 on a weekly basis will turn that smallest channel down toward 499.

Flattening out that downward slant on that channel requires a sustained move above 541.85 on a weekly basis, a move that the daily chart already shows us may be difficult to achieve on the first attempt, and turning that smallest weekly Keltner channel up again requires a sustained move above 557.89. The OEX has now consolidated a couple of weeks near that weekly Keltner support and we could begin to see more volatility as the OEX tries to pick a direction, especially in a climate of renewed threats.

That's the background. What do the intraday charts say? Probably most important in late-week trading were the 30- and 60-minute 100/130-ema's, with the 30-minute versions providing support and the 60-minute, resistance. Those averages lie at 535.48 and 535.98 for the 30-minute version and 537.21 and 538.40 for the 60-minute version. As trading ended Friday, the OEX had refused to maintain values below the 30-minute 100-ema and had headed up again to test the 60-minute versions, closing just above the 100-ema on that chart. If futures cannot reclaim some of their losses, the OEX is likely to open below the 60-minute versions tomorrow, but, if so, watch to see if the 30-minute versions provide support again.

The five-minute Keltner chart showed the OEX attempting a breakout of its smallest Keltner channel, trying to turn it up toward 539.35. The OEX was not able to break above a descending trendline established off Thursday's high, and the end-of-day action could have been short-covering when the bears could not keep the OEX below the 30-minute 100-ema. It appears important to watch those two groupings of averages Monday morning, then, looking for an upside or downside break. At Friday's close, Keltner charts perhaps showed a slightly higher chance of reaching 539.35 before 533.62 was touched, but only slightly, and I had originally written that this slightly higher chance could change before Monday's cash open. As I type Sunday night, it appears that may have indeed changed.

The OEX established an ascending regression channel last week, after the preceding time of declining bourses. The bottom of that channel is now near 534, a level that could provide support on declines, and the top is now near 542.60, near resistance pinpointed on the daily Keltner chart. Moves outside those ranges would represent breaks out of the ascending regression channel. It should be noted that this channel could be a bear flag after the steep fall. It's a little too wide in relationship to the previous trading pattern, not quite tight enough to be a classic bear flag if that's what it is, to be a perfectly classical form, but I'd watch that 534 level, too, for possible support if the OEX should decline tomorrow morning.

As I type, I'd expect a pullback tomorrow morning unless something happens to change that expectation. If there is a pullback, watch the OEX with respect to the 30-minute 100/130-ema's. If the OEX should decline below those averages, those in bearish positions should have a plan in effect for protecting profits from the 526-530 region. If that level should fall, plans should be made to protect profits in the 520-522 region.

If the OEX should bounce from the 30-minute 100/130-pma's, watch the 60-minute versions for first resistance again. Also make plans to protect profits if necessary in the 539.50-542 zone and again in the 543.50-547 zone.

 
 
  OI Technical Staff   8/1/2004,  12:22:12 AM
The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

 
 

Market Monitor Archives