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  Jeff Bailey   8/5/2004,  5:29:31 PM
Pivot Matrix for tomorrow at this Link

 
 
  Mark Davis   8/5/2004,  4:19:25 PM
Did anybody notice the inflation of contract prices right at the close? BOTH the SPX Aug 1075 put and the SPX Aug 1080 call are UP about $1.00 since our entry point... Market Makers taking advantage of the volatility.

This works in our favor as we now have about a 10% cushion on both plays going into tomorrow's opening bell. Overnight futures will be scrutinized more closely than a film of Sasquatch, and I'll be right there watching.

 
 
  Jeff Bailey   8/5/2004,  4:16:34 PM
Current OPEN MM profiles at this Link

Today's activity....

Day trade short Protein Design Labs (PDLI) at $16.80, closed out at $16.47. ($+0.33, or +1.96%).

Note: I do not like to hold a BIOTECH SHORT overnight just in case they find a cure for what ails us.

 
 
  Jonathan Levinson   8/5/2004,  4:07:25 PM
The QQQ's 30 min cycle bullish divergences are history, and the break below 33.80, complete with failed retests, is behaving like a descending triangle breakdown. 33.80 is now key resistance, having previously been key support beneath the daily cycle.

 
 
  Linda Piazza   8/5/2004,  4:04:36 PM
I mentioned earlier today that the OEX was behaving in a classic bearish manner, trading in a bear flag since 7/26, showing bearish divergence and then breaking down out of that flag. It retested the flag by rising into the right shoulder of a H&S formation, then broke through the neckline. The downside target was 529.30 or so, and the OEX came within $0.56 of that goal. Classic. Wish we got more of those, either bullish or bearish.

 
 
  Mark Davis   8/5/2004,  3:59:51 PM
Day Trade Entry Point Alert -

Go long now... SPQHQ (SPX Aug 1080 call) @ 10.70
Go short now... SPQTO (SPX AUG 1075 put) @ 11.50

1/2 positions only and RISK money only. This appears to be overdone with TRIN hitting an incredible 3.57 just before the close. My bias is to the upside tomorrow, BUT, if the May lows are taken out all hell may break loose.

Assuming a big move out of the gate, we will exit the losing position at the opening bell.

I have a feeling Jane would not approve of this trade.

 
 
  Jeff Bailey   8/5/2004,  3:55:59 PM
200-day SMA Alert ... American Express (AXP) $49.55 -1.31%

 
 
  Linda Piazza   8/5/2004,  3:54:03 PM
Congratulations to those brave enough to hold out until the last minute. The OEX is now dropping ever closer to the 529.30-ish downside target of that H&S, but exiting bearish positions soon if you intend to do so before the close.

 
 
  Jonathan Levinson   8/5/2004,  3:53:15 PM
Crude oil is trading again, at session high of 44.475.

 
 
  Jeff Bailey   8/5/2004,  3:50:07 PM
Bearish day trade close out alert for Protein Design Labs (PDLI) here at $16.47 ($+0.33, or 1.96%)

 
 
  Linda Piazza   8/5/2004,  3:46:36 PM
Thanks, Jonathan. I'm calm. I'm the one who kept working while tornado sirens were blasting, trying to finish off before the electricity went off.

By now, I hope all have made decisions about holding over or not holding over and are beginning to put them into effect, if they haven't already done so. Remember that you can take profits and spend only part of the profits on your preferred directional play for tomorrow if you're determined to jump in ahead of tomorrow morning's NFP.

 
 
  Jonathan Levinson   8/5/2004,  3:43:55 PM
New lows for futures across the board here.

 
 
  Jonathan Levinson   8/5/2004,  3:43:20 PM
Stay calm, Linda, and turn on your radio to follow the updates.

 
 
  Jonathan Levinson   8/5/2004,  3:43:03 PM
Amazing lack of strength here for equities. Metals are doing OK, but the miners are getting clocked as well, down 2.18% and 1.64% for the HUI and XAU respectively.

 
 
  Linda Piazza   8/5/2004,  3:42:14 PM
Oh, gosh. I live just a few minutes from DFW.

 
 
  Jim Brown   8/5/2004,  3:41:28 PM
FOX is reporting a possible bomb at DFW airport. Hearing that the package went through the bomb screener and set off alarms. All unconfirmed.

 
 
  Mark Davis   8/5/2004,  3:39:40 PM
Somebody who has positioned themselves correctly is probably going to make a lot of money tomorrow before the bell even rings. It's tempting to take opposing positions, short and long, and hold them overnight... but not THAT tempting.

 
 
  Linda Piazza   8/5/2004,  3:39:09 PM
The TRAN is easing below the 50-dma. I've long thought that the TRAN is a good indicator index, too, as it often leads other indices, particularly the Dow. It can certainly get moving when it decides to do so, too. The TRAN turned down exactly from its touch of the descending trendline off the July low. If it fails to find support near its 50-dma, it will be moving down into the lower half of its descending regression channel with the bottom support of that channel near 3000, but with further support possible at 3020-3030.

 
 
  James Brown   8/5/2004,  3:37:12 PM
The pull back in IR has turned into a rout. The stock is down more than 3% and breaking under its simple 200-dma. We're going to close the play un-opened.

 
 
  Linda Piazza   8/5/2004,  3:34:10 PM
Keltner resistance is trying to converge between the OEX's current position and 532.68, with four Keltner lines trying to move in concert. Unless the OEX bounces hard and quick, those lines will likely pressure it lower.

 
 
  James Brown   8/5/2004,  3:33:47 PM
Ouch! FDX is down 2.4% and breaking down through the $80.00 mark and its simple 40-dma. It may be time to exit!

 
 
  James Brown   8/5/2004,  3:33:02 PM
ADSK is breaking down under its simple 50-dma. Traders need to be careful here and double check their stops.

 
 
  James Brown   8/5/2004,  3:32:17 PM
AZO is down 2.77% on volume 50% above normal. Its MACD is producing a new "sell" signal.

 
 
  Linda Piazza   8/5/2004,  3:32:11 PM
The OEX is breaking out again, below the lowest Keltner line, creating another breakout signal. On the 15-minute chart, it needs to move below 531.60 to do that.

 
 
  James Brown   8/5/2004,  3:31:28 PM
We have been TRIGGERED in the CAT put play at $70.75. The stock is now down more than 2.3% and breaking through the $70.00 mark.

 
 
  James Brown   8/5/2004,  3:30:33 PM
EBAY is down 1.9% and remains under the $75.00 level.

 
 
  James Brown   8/5/2004,  3:30:05 PM
AMZN is now down more than 4% and nearing the $35.00 level.

 
 
  Jonathan Levinson   8/5/2004,  3:28:10 PM
That last plunge should have bottomed the 30 min cycle, but we won't know until the turn is in the rearview mirror. Pricewise, I'd look for a move above 34 at minimum to set up the next 30 min cycle upphase.

 
 
  Mark Davis   8/5/2004,  3:23:36 PM
Jane... Ah, but you DIDN'T

 
 
  Jim Brown   8/5/2004,  3:19:50 PM
I agree, I have always said women were more focused without all the macho BS we guys have to carry around. Our egos get in the way plus we are bigger gamblers which increases our risk.

 
 
  Mark Davis   8/5/2004,  3:17:33 PM
Nice trade Jane! I've always believed women generally make better traders than men (they have more patience)

 
 
  Jonathan Levinson   8/5/2004,  3:14:04 PM
Chart link corrected.

 
 
  Linda Piazza   8/5/2004,  3:13:38 PM
And the bears got their breakdown out of the bear flag and moved a point closer to their downside target from the H&S. The 15-minute chart is now showing a possible downside target of 530.18, still declining, so fitting rather well with the P&F downside target. It looks possible to meet that, but more danger arises to those in bearish positions with each point lower and each minute closer to the time of day when market participants decide to buy to cover or sell to . . . well, to get out. Continue to follow the OEX lower with profit stops and make some decisions soon about stepping out of positions or taking other precautions.

 
 
  Jonathan Levinson   8/5/2004,  3:12:51 PM
Slight bullish divergences in the short cycle TRIX and Macd against the last session low for QQQ. We'll see if the bulls can make anything of it above 33.80. Link

 
 
  Mark Davis   8/5/2004,  3:05:47 PM
Jim they shook the tree and it looks like we were the low-hanging fruit.

 
 
  Jeff Bailey   8/5/2004,  3:04:12 PM
03:00 Market Watch at this Link

 
 
  Jonathan Levinson   8/5/2004,  3:03:38 PM
The bounce here was the single tallest 100-tick volume candle of the day- it generated a roughly 3 cent move within the bounce.

 
 
  Jonathan Levinson   8/5/2004,  3:02:41 PM
QQQ returning to the scene of the crime here, retesting 33.80 from below.

 
 
  Mark Davis   8/5/2004,  3:00:23 PM
Day Trade Exit Point Alert -

Criminy!!! Stopped out of SPQHR (SPX Aug 1090 call) @ 10.00, -9%

I sure didn't expect that! What a nasty looking HUGE red candle. That's it... we're done for the day, and all in all it wasn't a bad one.

 
 
  Jeff Bailey   8/5/2004,  2:59:57 PM
S&P Banks Index (BIX.X) 346.21 -0.95% .... session low and WEEKLY S1.

 
 
  Jonathan Levinson   8/5/2004,  2:56:02 PM
Session high for silver here at 6.77. Gold is up to flat at 393.30.

Sessions lows across the board here for equites- QQQ is breaking to a new low below 33.80 support.

 
 
  Linda Piazza   8/5/2004,  2:52:38 PM
Bears are getting their wish, with the OEX still behaving in a bear-flag-like manner, retreating to the level they would have wished it would do. Now they'd prefer for it to break down out of that flag, breaking to a new day's low. The OEX currently tests Keltner support from 532.93 to the OEX's current position near 533.30. If the OEX rises into that flag again, bears would prefer for it to find resistance at 534, but would take a climb higher into the flag, at 534.64, as long as it turned down again near that level. I suspect that flag is climbing toward the mid-channel level, currently near 536, but still descending, but bear flags can break down at any time. We've got a special circumstance today, too, so that soon the crowd who wants to exit ahead of tomorrow's numbers will begin doing so, no matter what charts say. The question is: Is the bearish or bullish crowd the biggest? Will more shorts cover or more longs sell?

 
 
  Jonathan Levinson   8/5/2004,  2:50:29 PM
If the bulls mean to bounce it, this would be the place on both the intraday and 30 min QQQ charts.

 
 
  Linda Piazza   8/5/2004,  2:45:20 PM
The OEX's behavior is still looking like a possible bear flag with the OEX just turning down from the 534.65 Keltner resistance, back into that flag. Bears want to see flag-like behavior, so want to see the OEX retrace all the way to 533.60 or so before either failing and breaking down out of that flag or turning back up into the flag again. They don't want to see the OEX break out above 534.70 or find support at the basis line of its smallest channel, at 534.10, and climb again from there.

 
 
  Jonathan Levinson   8/5/2004,  2:44:35 PM
34.00 QQQ has held again for the third time. But the short cycle upphase hasn't let go yet.

 
 
  Jonathan Levinson   8/5/2004,  2:37:24 PM
Another test of 34.00. The 30 min cycle channel is now flat for the first time today- this would be the place for 34 to break and channel resistance at 34.10 to be tested.

 
 
  Mark Davis   8/5/2004,  2:36:30 PM
Here we go... just took our SPX 1089.53

Nice timing Jim

 
 
  Linda Piazza   8/5/2004,  2:32:21 PM
I agree with the writers who are suggesting that being flat overnight might be a good idea. I regularly listen to CNBC Europe in the wee hours of the night when I can't sleep and at 5:00 as I begin preparing the Asia/Europe report, and I've heard endless discussions about this number for more than a week. It could be a market-moving number, but which direction will it move them? Therefore, only those who are using only their weekly lottery-money allowances for positions or who are in hedged positions that can benefit either direction should probably give some consideration to lessening their exposure.

 
 
  Jeff Bailey   8/5/2004,  2:31:39 PM
Protein Design Labs (PDLI) $16.91 -1.34% .... finding a bit of a bid. Volume anemic.

 
 
  Linda Piazza   8/5/2004,  2:29:19 PM
On the five-minute Keltner chart, support near 533-533.40 is beginning to look stronger than nearby resistance, supporting the possibility of a bear-flag rise. However, resistance is trying to converge at 534.40-534.65 and stronger resistance exists near 535.90-536.00. It looks possible that the OEX advance could be stopped between 536-537 if that lower resistance doesn't converge soon enough.

 
 
  Mark Davis   8/5/2004,  2:24:49 PM
Day Trade Exit Point Alert -

Keep your stops on SPQHR (SPX Aug 1090 call) @ 10.00

We still have over 1 1/2 hours for this play to work and I have a feeling short-covering will give us a boost sometime before EOD. It may not be huge but we'll take whatever they give us, right?

I plan on being flat overnight unless we get a large move to the upside. If that happens then maybe we'll take 1/2 profits and let the remaining 1/2 ride overnight... emphasis on MAYBE. I'm more inclined to be flat overnight.

 
 
  Jonathan Levinson   8/5/2004,  2:19:45 PM
Bonds have slid, with the TNX back up to 4.4% resistance, down 2.9 bps for the day. Crude oil reached a new high of 44.50 but is back to 44.30 currently.

 
 
  Jonathan Levinson   8/5/2004,  2:18:45 PM
The 30 min cycle channel isn't pointed as steeply south as it was earlier, with the sideways chop stemming the 30 min cycle downphase. But, given the extreme oversold short cycle readings that preceded it, the bounce is so far weak and sideways. If the bulls drop it here, I expect a retest of 33.80 here and if it breaks, the lower channel support at 33.70 QQQ should get broken easily. The key range here is 33.80-34.

 
 
  James Brown   8/5/2004,  2:18:34 PM
Whirlpool (WHR) just broke down under support at the $61.00 mark and its simple 200-week moving average. A move under $60.00 will produce a new spread triple-bottom breakdown sell signal on its P&F chart. Currently the P&F chart target is $53.

 
 
  Jeff Bailey   8/5/2004,  2:17:53 PM
Current OPEN MM Profiles at this Link

 
 
  Mark Davis   8/5/2004,  2:17:30 PM
I just checked the QQQ Aug 34 puts we bailed on at 45 cents for break even. Best price of the day is 65 cents... only a 44.5% gain. We did much better with the SPX puts, which is why I don't fiddle with the Q's too often. It's just harder to make money in that option chain (IMESHO).

 
 
  Jim Brown   8/5/2004,  2:14:33 PM
Mark, I think the strength in semis is a false hope. Tech traders normally jump in early hoping for rebounds from bear markets and I think there is another leg down in our future. A wise trader sent me a chart lately suggesting 375 was the target. (Do you still have that chart you sent me? Grin)

 
 
  Linda Piazza   8/5/2004,  2:11:12 PM
The OEX did move lower before all those Keltner lines could converge, but there's still support trying to build near 533.30. Whether it's successful or not depends on how quickly the OEX moves and in what direction. This is beginning to look like a bear flag trying to build on this chart. Such bear flags can retrace up to half the flagpole drop that preceded them and still be bearish formations, so the OEX could work its way as high as 536.50 and still be in a bearish formation. If in a profitable bearish play, assess your willingness to ride a movement up that far before you know whether it's a bear flag or something more bullish. Set profit stops that are appropriate for your account-management style and adhere to them.

 
 
  James Brown   8/5/2004,  2:09:17 PM
Dow-component and retail titan Wal-Mart (WMT) reported that July same-store sales rose 3.2% and reaffirmed their August sales forecast for 2-4%. The news was uninspiring and shares have broken the trend of higher lows. Technicals are bearish and its MACD is very close to producing a new "sell" signal. Earnings are expected on August 12th.

 
 
  Jeff Bailey   8/5/2004,  2:07:47 PM
02:00 Internals at this Link

 
 
  Mark Davis   8/5/2004,  2:06:25 PM
One thing I like today, despite all the weakness, is the SOX is the strongest index. Couple that with the fact that we are near support levels and my bias is tilted to the bullish side very slightly, although upside may be limited. Let's hope shorts cash in before EOD and give our call play a boost... still watching for SPX 1089.53 to be taken out to the upside.

 
 
  Jonathan Levinson   8/5/2004,  2:06:04 PM
Rising support off the QQQ intraday low is breaking here.

 
 
  James Brown   8/5/2004,  2:04:19 PM
Apparel retailer The Wet Seal (WTSLA) is down 28% to $3.07 after reporting that July same-store sales fell 14.7% and that Q2 revenues would fall under analysts' estimates.

 
 
  James Brown   8/5/2004,  2:01:58 PM
Whoops! Sharper Image (SHRP) is down 20% to $20.34 after warning that Q2 earnings would fall in the 3-to-5 cent range compared to analysts' estimates at 10 cents. July same-store sales were flat.

 
 
  Jonathan Levinson   8/5/2004,  2:01:21 PM
The last pullback reversed from a higher low for the 100-tick QQQ, with rising trendline support at 33.89. The higher lows and horizontal resistance at 34 could be a small rising triangle or reverse h&s, and in either case the implied target would be around QQQ 34.20. But the advance is weak, particularly given the strength of support down here and the degree to which the intraday oscillators were oversold by the sharp decline.

 
 
  Linda Piazza   8/5/2004,  1:57:53 PM
On the OEX's five-minute chart, Keltner lines are snaking beneath the OEX and trying to converge there, near 533.30-533.70. If the OEX doesn't break lower soon, that support will converge, allowing it to move higher.

 
 
  Mark Davis   8/5/2004,  1:57:51 PM
If we can take out the swing high @ SPX 1089.53 we may get some traction to the upside, but 1-min oscillators are getting toppy so we may need to take another dip lower before we can punch through. Link

Our SPX Aug 1090 call play is currently bid/ask 10.80/12.40 so in theory we're about 50 cents, or +4.5% in the green.

 
 
  James Brown   8/5/2004,  1:54:17 PM
Briggs Stratton (BGG) is down 5.8% and breaking down through the $80.00 mark after reporting earnings this morning that beat estimates by 6 cents per share. Last night the company announced a 2-for-1 stock split.

 
 
  Linda Piazza   8/5/2004,  1:51:37 PM
Although the formation is so lopsided now as to throw some doubt onto its validity, the OEX is pushing higher, toward the neckline of the inverse H&S. That neckline is probably at about 534.60 now, and rising steeply, if you use the ascending neckline that I pictured in the chart linked to my 13:18 post. However, the formation is so rough that it's also possible to draw a horizontal neckline at about 534 and say it works, too. If so, the OEX has pushed above that neckline.

 
 
  James Brown   8/5/2004,  1:50:53 PM
Payless Shoesource (PSS) is down 13.66% to $11.06 after reporting that July's same-store sales fell 6.5%. The high-volume drop today breaks major support at the $12.00 level. The move produces a spread triple-bottom breakdown sell signal with a $4.00 price target. Look for PSS to report earnings on August 12th.

 
 
  James Brown   8/5/2004,  1:44:15 PM
XM Satellite Radio (XMSR) is up about 4.4% to $25.63 after reporting an increase of 418K subscribers during the second quarter. The company has upped its full-year subscriber target from 2.8 million to 3.1 million. XMSR also reported Q2 earnings that beat estimates by 6 cents a share with revenues soaring 190% to $53 million.

 
 
  Jonathan Levinson   8/5/2004,  1:42:27 PM
Still that possible bullish divergence on the 30 min QQQ chart, telling us that IF we get a bounce here, it could be very strong. Link But my problem is that the bullish divergence, which is another way of seeing a longer cycle upturn on a shorter cycle chart, has no longer cycle upturn of which I'm aware to support it. The daily cycle upphase looks like a writeoff, letting go almost as soon as it started, and, furthermore, is that a bearish descending triangle building above now triple-bottom support of 33.80?

 
 
  Mark Davis   8/5/2004,  1:41:41 PM
Hopefully this is Linda's stop-running push to test the markets to the downside (and hopefully they pass the test).

 
 
  James Brown   8/5/2004,  1:36:50 PM
Jeff has already mentioned the same-store sales for The Gap (GPS). The retailer said July same-store sales fell 5% and they only expect Q2 same-store sales to rise 1%. Breaking it down the Gap U.S. same-store sales fell 3% vs. +13% last year. Gap Intl dropped 12% vs. +8% last year. Banana Republic sales fell 10% vs. +5% last year and Old Navy sales fell 2% vs. +9% last year.

The company guided earnings under analysts' estimates and GPS is expected to report sometime in the second half of August.

Here's an excerpt from their press release:

"Although sales of summer product at Gap, Banana Republic and Old Navy were strong in May, June's soft traffic trends continued into July, making summer clearance results disappointing overall," said Sabrina Simmons, Senior Vice President, Treasury and Investor Relations. "Due to markdowns needed to clear summer product, total company merchandise margins in July were slightly below last year...."

 
 
  Jonathan Levinson   8/5/2004,  1:31:55 PM
Session low for INTC here. QQQ is sinking back toward the day lows at 33.81. A bounce from here could set up a small reverse head and shoulders on teh 100-tick/1 minute chart, projecting to roughly 34.20. But for the moment, the 30 and 60 min channels are still pointing south, with channel support down to 33.75.

 
 
  Linda Piazza   8/5/2004,  1:29:44 PM
If that OEX formation is an inverse H&S, it's time now for the OEX to begin steadying and then rounding up into a shoulder, before the OEX drops below 533. If the OEX does drop that low, we can probably negate the inverse H&S theory and the bulls will not have proven their ability to marshal a bounce. . . OEX dropping as I type.

 
 
  James Brown   8/5/2004,  1:29:16 PM
Kmart Holding (KMRT) is down four days in a row now and today's 3.4% drop is breaking through support at the $70.00 mark and its simple 50-dma. This looks like an entry point for puts and the $70 strike is seeing a lot of volume. KMRT's P&F chart points to a $58 target.

 
 
  James Brown   8/5/2004,  1:26:46 PM
Brown Shoe Co (BWS) has guided its Q2 lower for the second time in only a month. July's same-store sales fell 2%. Investor reaction has sent the stock down 13.6% to $27.27.

 
 
  Jonathan Levinson   8/5/2004,  1:22:46 PM
Nymex Crude is back to its session high at 44.35, +3.56% or 1.525.

 
 
  Jonathan Levinson   8/5/2004,  1:21:26 PM
Session low for MSFT here at 27.77.

 
 
  Linda Piazza   8/5/2004,  1:18:09 PM
Here's the possible inverse H&S I've mentioned on the OEX, as seen on the 2-minute chart. Link A drop to 533 or below would tend to negate the possible formation. The upside target would be about 535.80, but those in bearish positions should assess their willingness to tag along for that bounce if the formation confirms and then meets its upside target. A 50% retracement of the steep decline would occur at about 536.50, the mid-channel level, and a retracement could even extend that far and just be traveling in a bear flag. Some might prefer to take at least partial if not full profits if the formation is confirmed, and then see if another play presents itself.

 
 
  Jonathan Levinson   8/5/2004,  1:11:44 PM
Volume is again pretty weak on this QQQ bounce, but price has just exceeded the prior bounce attempt high. 34.01 is now resistance at the prior day high, with confluence up to 34.10 QQQ. 30 min channel resistance has lowered to 34.12, so the next battleground looks pretty well laid out for QQQ. The good news for bulls is that the prior lows for the daily downmove at 33.80 held- but that's about the extent of it. The outlook remains bearish below 34.48, and with the break below yesterday's low, the burden of proof has shifted to the bulls- so far, it looks like they've fumbled the daily cycle upphase.

 
 
  Linda Piazza   8/5/2004,  1:08:20 PM
The OEX is attempting to push above the Keltner resistance at 534.37, but so far, it's holding.

 
 
  Jeff Bailey   8/5/2004,  1:08:02 PM
01:02 Market Watch at this Link

 
 
  Linda Piazza   8/5/2004,  1:02:44 PM
Careful, OEX bears. It's possible that the OEX is forming an inverse H&S on the five-minute chart, with the head at the day's low. The right shoulder is yet to be formed, of course. However, as that formation tries to set up, Keltner resistance is coursing down toward the neckline area, trying to converge between 533.86-534.37.

 
 
  Jeff Bailey   8/5/2004,  1:00:50 PM
Sept. Crude Oil futures (cl04u) 30-minute interval chart at this Link

Chart captured at 12:52 PM EDT, where chart reflects trade at 12:22 PM EDT.

 
 
  Mark Davis   8/5/2004,  12:57:46 PM
Stepping away for a few minutes...

 
 
  Mark Davis   8/5/2004,  12:55:59 PM
Day Trade Exit Point Alert -

Lower your stops on SPQHR (SPX Aug 1090 call) to 10.00

We have a little cushion to play with now so I'm willing to risk about a 9% hit. If we continue higher from here we may just get a double play today.

 
 
  Jonathan Levinson   8/5/2004,  12:54:56 PM
Crude is pulling back down, currently 44.10 +1.275 or 2.98% for the day. Link

 
 
  James Brown   8/5/2004,  12:54:17 PM
JetBlue Airways reports that July traffic was up 30.6%.

 
 
  Linda Piazza   8/5/2004,  12:54:08 PM
Nearby resistance was stronger than support on the OEX. Now it tries to bounce again. Resistance is trying to converge near 534-534.50, but if the OEX bounces too strongly, it will not have time to converge.

This has been a classic bearish setup so far, working just as expected. On 7/26, the OEX began forming a tight pattern of higher highs and higher lows, climbing off that 7/26 low. After a steep decline, such a formation should always be viewed as a possible bear flag. On 7/29, the OEX rose up to test the upper resistance of that channel. On 8/02 and 03, the OEX actually rose to a higher high, but when compared to the previous approach to the top of that channel or flag, it was clear that the OEX had not been able to approach it as closely as it had the previous time. That's a type of bearish divergence, and when the OEX again returned to the same support level, it had then broken below the flag's support. When it rose again to test that previous support, it was forming the right shoulder of a H&S formation. Classic, complete with bearish divergence as the head was produced.

Now, however, the OEX has dropped to 533, one possible support level, although 529-531 look stronger. Bears should be lowering their stops as the OEX moves lower and should have profit-taking plans in mind as the OEX drops. Many know how to calculate the downside target of a H&S, and those waiting for an opportunity to buy may do so ahead of the actual target. At the same time, some might want employ a tactic that allows them to participate in further declines if the OEX should push through to and beyond the 526-527 weekly support, such as selling partial positions. Just don't let a profitable position become unprofitable by letting a bounce get away with your profits.

 
 
  James Brown   8/5/2004,  12:52:03 PM
In spite of news that LLL has won another $34 million contract today, the stock is breaking down through support at the $60.00 level. This looks like a bearish entry point to target a drop toward the simple 200-dma near $55.85.

 
 
  Jane Fox   8/5/2004,  12:50:20 PM
Mark nice trade!

 
 
  Jonathan Levinson   8/5/2004,  12:49:53 PM
The drop today has been too steep for the 30 min cycle oscillators to properly track, setting up a potential bullish divergence. But if the prior lows at 33.80 QQQ don't hold, we can expect an acceleration to the downside and a whipsaw of the young daily cycle upphase to the downside.

 
 
  Mark Davis   8/5/2004,  12:49:30 PM
Day Trade Exit Point Alert -

Exiting remaining 1/2 position here on SPTTT (SPX Aug 1100 put) @ 20.00, +71%

Average gain, +65.5%

 
 
  James Brown   8/5/2004,  12:49:14 PM
Ralph Lauren Polo (RL) gapped higher this morning after Prudential upgraded the stock to an "over weight". The move follows RL's earnings report yesterday where the company beat estimates by 3 cents a share. Unfortunately, the rally today is fading and the stock is down 1.59%. Today's candle is starting to look like a bearish "dark cloud cover" pattern.

 
 
  James Brown   8/5/2004,  12:45:08 PM
Bank of America has started coverage on Whole Foods (WFMI) with a "sell" rating and a $70 target today. The stock is down another 1.45% to a fresh two-month low at $77.25. The simple 200-dma near $75 still looks like potential support.

 
 
  Jeff Bailey   8/5/2004,  12:43:05 PM
Protein Design Labs (PDLI) $16.72 -2.45% .... with Qchart's WEEKLY and DAILY Pivot levels at this Link

For "clean" chart, I'm not showing full "lower 5-MRT," but RED #3 is my target. Opening 5-minute bar was from $17.14-$16.82. Trader's can type in these numbers in your 5-MRT spreadsheet at this Link if you don't have access to retracement tool.

 
 
  James Brown   8/5/2004,  12:41:30 PM
Chicago Mercantile Exchange (CME) is starting to roll over after failing to breakout over resistance near $127.50 for the last two weeks. Its descending 21-dma has crossed through its simple 40 and 50-dma's and could be overhead resistance. Traders might want to consider new bearish positions if CME breaks down through the $120 level and its simple 100-dma.

 
 
  Jonathan Levinson   8/5/2004,  12:39:57 PM
Bonds to a new session high, with TNX now down 4.5 bps to 4.384%. 4.4% should now act as resistance.

 
 
  James Brown   8/5/2004,  12:38:52 PM
DirectTV (DTV) is up 3.3% to $16.88 after reporting earnings this morning. Revenues rose more than 20% to $2.64 billion coming in above analysts' estimates.

 
 
  Linda Piazza   8/5/2004,  12:37:51 PM
Nearest OEX Keltner resistance is now at 534.15 and somewhat less firm at 534.64-534.88. Keltner support is snaking under the OEX, at 533.64, but it currently looks less firm than the nearest resistance. Bears would like to see the OEX turned back at that nearest resistance, and don't want to see the OEX maintain levels above 535.

 
 
  James Brown   8/5/2004,  12:37:20 PM
ATA Airlines (ATAH) reports July traffic up 7.6%.

 
 
  James Brown   8/5/2004,  12:33:55 PM
Spirit Airlines has released its latest traffic numbers. July saw a 16.4% increase in business.

 
 
  Jonathan Levinson   8/5/2004,  12:33:10 PM
Volume is still weak, as is the bounce off the lows. So far, it's just a wavelet bounce, but if bulls can regain yesterday's low 5 cents away at 34.01 QQQ, the short cycle oscillators will give buy signals. Crude oil fell back and bounced off the 44 level, currently back up to 44.225, +1.40 or 3.27% for the day.

 
 
  Jim Brown   8/5/2004,  12:27:29 PM
Nice trade Mark!

 
 
  Jeff Bailey   8/5/2004,  12:27:21 PM
Day trade short alert .... Protein Design Labs (PDLI) $16.80 -1.98% here, stop $17.05, target $16.30.

 
 
  Linda Piazza   8/5/2004,  12:24:22 PM
The OEX has produced a breakout on the five-minute chart. This is a time of danger for bears, as risks shift onto their shoulders, but bears also have the H&S neckline break and the 529.30-ish downside target to encourage them. Some bounces should be expected along the way, however, although they've certainly been in short supply today. Keltner resistance is trying to bunch up at 534.50 and again at just over 535. Bears want one of those to hold.

 
 
  Mark Davis   8/5/2004,  12:23:11 PM
Day Trade Exit Point Alert -

Take 1/2 profits here on SPTTT (SPX Aug 1100 put) @ 18.70, +60%

 
 
  Jeff Bailey   8/5/2004,  12:20:51 PM
September Crude Oil (cl04u) $43.90 +2.45% (30-minute delayed)

 
 
  Jeff Bailey   8/5/2004,  12:20:00 PM
S&P Retail Index (RLX.X) 367.96 -2.17% .... voilating their May and recent July relative lows.

 
 
  Jonathan Levinson   8/5/2004,  12:16:53 PM
Volume declined pretty quickly as price began to rise for QQQ off the lows.

 
 
  Jeff Bailey   8/5/2004,  12:15:03 PM
JP Morgan (JPM) $36.71 -1.34% .... testing yesterday morning's lows.

KBW Bank Index (BKX.X) 94.52 -0.74% .... almost identical

 
 
  Mark Davis   8/5/2004,  12:14:51 PM
Day Trade Exit Point Alert -

Cinch down your stops on SPTTT (SPX Aug 1100 put) to SPX 1090.00

 
 
  Jeff Bailey   8/5/2004,  12:13:41 PM
Current OPEN MM profiles at this Link

 
 
  Mark Davis   8/5/2004,  12:12:56 PM
Day Trade Entry Point Alert -

One more try at a scalp long play...

Go long now SPQHR (SPX Aug 1090 call) @ 11.00, stop 10.50

 
 
  Jonathan Levinson   8/5/2004,  12:11:57 PM
Here's that support. The short cycle oscillators are buried in oversold and that big volume spike should be good for some support. But the 30 min and 60 min cycles will be key, and they've just rolled over from lower price and oscillator highs. My guess is for a short cycle pause or possibly a bounce to fail at a lower high.

 
 
  Jeff Bailey   8/5/2004,  12:10:01 PM
12:07 Market Watch at this Link

 
 
  Linda Piazza   8/5/2004,  12:07:48 PM
The OEX has broken through another Keltner channel line, this one on the 15-minute chart, with that breakdown setting up a potential downside target of 531.02. The OEX needs to maintain levels below 537.41 and hopefully below 535 to keep pointed toward that goal.

 
 
  Mark Davis   8/5/2004,  12:07:25 PM
Day Trade Exit Point Alert -

Cinch down your stops on SPTTT (SPX Aug 1100 put) to SPX 1092.50

 
 
  Jonathan Levinson   8/5/2004,  12:07:00 PM
Volume is really picking up on QQQ now, with price now below the falling 30 and 60 min Keltner channels. We should see some support coming in here, but so far the market feels just awful.

 
 
  Mark Davis   8/5/2004,  12:04:45 PM
Thanks for keeping me honest Jonathan... here's what I was looking at when I entered the scalp long play Link

 
 
  Jonathan Levinson   8/5/2004,  12:03:44 PM
QQQ is breaking yesterday's low now with a print of 33.98.

 
 
  Jeff Bailey   8/5/2004,  12:02:55 PM
Semiconductor Index (SOX.X) 406.81 (unch) .... didn't like DAILY R1.

 
 
  Jonathan Levinson   8/5/2004,  12:01:49 PM
The bounce is aborting here, with QQQ returning to but not yet breaking the 34.02 low for the day.

 
 
  James Brown   8/5/2004,  12:01:11 PM
OI put play EBAY is also fading lower again. Shares have cracked potential round-number support at $75.00 with its 1.76% drop.

 
 
  Mark Davis   8/5/2004,  12:00:14 PM
Day Trade Exit Point Alert -

Exiting SPTHT (SPX Aug 1100 call) @ 8.00, +7.14%

 
 
  James Brown   8/5/2004,  11:59:56 AM
Heads up! OI put play CAT has broken support at the $71.00 level but has not yet hit our TRIGGER to go short at $70.75. The move under $71.00 helps confirm the spread-triple-bottom breakdown sell signal on its P&F chart.

 
 
  James Brown   8/5/2004,  11:58:29 AM
Recently added OI put play AZO is seeing some follow through on yesterday's breakdown under support at the $75.00 level. AZO's 1.8% decline today is brining the next MACD sell signal that much closer.

 
 
  James Brown   8/5/2004,  11:56:44 AM
OI put play AMZN is slipping again down another 2.77% to $36.10.

 
 
  James Brown   8/5/2004,  11:55:15 AM
Bill Siedman, the chief commentator currently on CNBC, just predicted that crude oil would be back under $35 a barrel by election day.

 
 
  James Brown   8/5/2004,  11:54:34 AM
Traders should also be careful with HUG, which is slipping under the $60.00 mark and trading toward the $59 level. Another test of recent support near $58.40 may be imminent.

 
 
  James Brown   8/5/2004,  11:52:20 AM
Uh-oh.. OI call play FDX is falling sharply back to round-number, psychological support at the $80.00 mark. Fortunately, this time support is being bolstered by its simple 40-dma.

 
 
  Jonathan Levinson   8/5/2004,  11:52:13 AM
Crude oil pulling back to 43.90 here, up 1.075 or 2.51% for the day.

 
 
  James Brown   8/5/2004,  11:51:08 AM
shares of CCMP, an OI call play, is bucking the downtrend in the markets with a 1.27% gain. The stock is challenging current (minor) resistance in the $35.50 region.

 
 
  Jonathan Levinson   8/5/2004,  11:51:06 AM
The short cycles are certainly oversold enough to justify an upphase, but with the 30 min cycles in a strong downphase, my expectation would be for a sideways bounce.

 
 
  Mark Davis   8/5/2004,  11:50:25 AM
Day Trade Entry Point Alert -

Let's see if we can grab another scalp long play...

Go long now SPTHT (SPX Aug 1100 call) @ 7.50, stop 7.00

 
 
  Linda Piazza   8/5/2004,  11:48:47 AM
I now show the OEX below the neckline of the H&S on its 60-minute chart, with that neckline at 535.40-535.60, depending on how you draw the neckline, but with the OEX trying to come up and retest that neckline as I type. The OEX also dropped a few cents below the 534.96 low from 7/30, also showing a confirmation of that neckline. There's now a downside target set for 529.30 or so, but we should remember that some recent patterns have not been fulfilling their targets. OEX bears should have had a plan in place for handling this test of the neckline, because it's not too late for the OEX to bounce and perhaps attempt a second right shoulder or even a rejection of the formation. Bears who want to enter new positions on the neckline break should be aware of both of those possibilities and should plan accordingly. Below this level, the OEX faces multiple possible historical and Keltner support levels. Despite the downside target set, the OEX might find support anywhere within the 526-531 zone.

 
 
  Jonathan Levinson   8/5/2004,  11:45:56 AM
Lower channel support is holding for the moment, as did yesterday's low. But the 30 min cycle downphase has a long way to go before it reaches oversold. Meanwhile, Nymex crude is at a session high of 43.975 here.

 
 
  Mark Davis   8/5/2004,  11:42:00 AM
Are we having fun yet? Link

 
 
  Jonathan Levinson   8/5/2004,  11:40:45 AM
New lows across the board. QQQ testing lower channel support here.

 
 
  Mark Davis   8/5/2004,  11:38:21 AM
Day Trade Exit Point Alert -

Cinch down your stops on SPTTT (SPX Aug 1100 put) to SPX 1095.50, locking in a +6 point gain.

 
 
  Linda Piazza   8/5/2004,  11:36:51 AM
The OEX has broken out below one channel line, setting up a possible downside target of 534.85. The neckline of the possible H&S crosses ahead of that, however, so that the OEX might bounce ahead of that downside target.

 
 
  Jonathan Levinson   8/5/2004,  11:34:16 AM
For QQQ, the previous low is at 34.01.

 
 
  Jonathan Levinson   8/5/2004,  11:32:30 AM
Channel support is down to 34.07 QQQ.

 
 
  Jonathan Levinson   8/5/2004,  11:30:58 AM
Session high for 10-year bonds here, with TNX now down 3.6 bps to 4.393%. QQQ is back to session lows at 34.18. Breaking them as I type.

 
 
  Jonathan Levinson   8/5/2004,  11:22:59 AM
QQQ has so far matched the previous low but did not break it. The short cycle intraday oscillators are back to chop.

 
 
  Linda Piazza   8/5/2004,  11:21:30 AM
Back. As bears hoped, the OEX's bounce attempt was stopped below the Keltner resistance that was then at 537.89-538.00, never even touching that resistance. Actually, that might not have been a bear's fondest hope, because some might have wanted new bearish entries at the right-shoulder level near 540. That might not come to pass. As I write, the OEX is trying another breakdown below a Keltner channel, setting up a downside target of 535 if that breakout can be maintained.

 
 
  Mark Davis   8/5/2004,  11:21:29 AM
Jim... nice call yesterday afternoon re: the markets moving lower

 
 
  Jonathan Levinson   8/5/2004,  11:21:08 AM
Session lows in the futures here, QQQ following along at 34.18.

 
 
  Jonathan Levinson   8/5/2004,  11:14:04 AM
Nymex crude is holding its earlier gains, currently up .575 at 43.40, +1.4%. Link

 
 
  Mark Davis   8/5/2004,  11:12:57 AM
I may have bailed too early on the QQQ put but I didn't like the SOX leading the charge up and TRIN declining. I didn't consider it worth the risk to stay in the play, especially because it is much harder to make a profit with QQQ options than SPX. You need a pretty good move in the Q's to make a decent gain. It that happens today, so be it... better safe than sorry and we have the SPX put looking very nice, with profits locked in.

 
 
  Jeff Bailey   8/5/2004,  11:12:03 AM
Market Snapshot/Internals at this Link

Yesterday's Internals at this Link

 
 
  Jonathan Levinson   8/5/2004,  11:10:24 AM
Session low for MSFT hre. QQQ is actually looking good on this wavelet downphase, with a low for th emove so far at 34.22. There's still room to run lower, but the wavelet cycle is into oversold territory here. 34.18 is the level of the prior low.

 
 
  Linda Piazza   8/5/2004,  11:10:08 AM
I'm caught on a telephone call.

 
 
  Mark Davis   8/5/2004,  11:06:10 AM
Day Trade Exit Point Alert -

Lower your stops on SPTTT (SPX Aug 1100 put) to SPX 1097.25

No matter what happens now we're going to bank some profits today, in addition to the +5% call scalp.

 
 
  Jeff Bailey   8/5/2004,  11:03:22 AM
11:00 Market Watch at this Link

 
 
  Jim Brown   8/5/2004,  11:00:50 AM
SMH Put Play Triggered

The semiconductor holders (SMH) put play I profiled in Sunday's LEAPs column was just triggered at SMH $32.50. The Nov-30 Put SMH-WF is $1.40, Nov-35 Put SMH-WG is $3.80. This is a speculative position for the expected tech weakness over the next two months. The target price is $28.

Play profile: Link

 
 
  Jonathan Levinson   8/5/2004,  10:58:26 AM
That bounce yielded a lower high, and the short cycle downphase, while stalled, is not over. The wavelet downphase forming now could do some damage if the previous low of 34.18 QQQ breaks.

 
 
  Mark Davis   8/5/2004,  10:58:07 AM
Day Trade Exit Point Alert -

Exiting QAVTH (QQQ Aug 34 put) @ 0.45, break even

 
 
  Linda Piazza   8/5/2004,  10:55:37 AM
The OEX is close to testing the overhead Keltner resistance, now from 537.89-538.00 Bulls want to see that level broken and maintained, but even if that happens, that still sets a first upside target of only 539.08, well in keeping with the possibility of this being a part of a right-shoulder formation. A sustained break above that sets an upside target in the 540.40-540.90 range, and that may be a bit more problematic for the possible H&S theory.

For a heads-up on strength or weakness, keep a watch on that possible inverse H&S on the SOX's 120-minute chart, detailed in my 10:40 post.

 
 
  Mark Davis   8/5/2004,  10:55:07 AM
Day Trade Exit Point Alert -

Exiting SPTHT (SPX Aug 1100 call) @ 9.50, +5%

 
 
  Jeff Bailey   8/5/2004,  10:52:07 AM
Ispat Intl. (IST) $23.55 +21.57% .... finished steel products company surging to all-time highs.

 
 
  Jonathan Levinson   8/5/2004,  10:49:26 AM
A 6B overnight repo leaves us with a net add of 5B today- the first net addition since Tuesday.

 
 
  Jeff Bailey   8/5/2004,  10:46:20 AM
Semiconductor Index (SOX.X) 411.81 +1.25% .... DAILY R1 here.

QQQ $34.37 +0.35%.

 
 
  Jonathan Levinson   8/5/2004,  10:45:54 AM
This wavelet bounce is challneging the short cycle downphase within yesterday afternoon's chop zone. At this point, the cycle picture looks like just a formality to me- the outlook is bearish below 34.50, bullish above.

 
 
  Linda Piazza   8/5/2004,  10:45:38 AM
There was no sustained OEX break below the Keltner support near 537, but instead a punch down and a quick move up again. We're not seeing much of an OEX bounce yet, and it's coming from a few cents lower than I expected, but it looks as if the bounce attempt may be beginning. Keltner resistance now converges near 537.90-538.00 on the five-minute chart and there's some resistance there, too, on the 15-minute chart. The five-minute chart suggests that the OEX could test 539 if it manages to sustain levels above 538. Right now, however, 538 looks fairly strong, but I'm watching crude and the SOX's behavior to help me measure what might happen.

 
 
  Mark Davis   8/5/2004,  10:44:24 AM
Day Trade Entry Point Alert -

Go long now... SPTHT (SPX 1100 call) @ 9.00, stop 8.50

Benchmarking entry point... SPX = 1095.00

Let's lock in our +20% profits on the puts and try to "bracket" the range.

 
 
  Jonathan Levinson   8/5/2004,  10:43:15 AM
The 30 min cycle for QQQ started a downphase before maxxing out in overbought, which is a bearish sign of trouble in the daily cycle upphase, which trouble we've been noting since Tuesday's weakness. The 60 min cycle continues to point up, but it's stuttering here. 30 and 60 min channel support and resistance are unchanged between 34.10 and 34.51. I'm frankly surprised that we're not seeing more weakness below 34.50, as that confluence zone was barely tickled by the bounces yesterday and today.

 
 
  Linda Piazza   8/5/2004,  10:40:41 AM
Semi-related stocks were seeing some technical or oversold bounces in Asia and Europe, and the SOX is bouncing here, too. While it does, daily 21(3)3 stochastics continue to roll down, but RSI hooks up again, giving conflicting evidence. I'm watching a possible inverse H&S (with a steeply descending neckline) on the SOX, best seen on the 120-minute chart. We saw bullish divergence as the head was produced, but it's a little difficult to determine the best neckline. I've chosen a best-fit one: Link The confirmation level looks to be at about 416.50 currently, but because of the neckline confusion, it might be best to assume a 420 confirmation level. I'm a little leery of this formation as the meeting of its upside target means that the SOX has to travel up through that gap, and gaps can be tricky. Still, this bears watching, especially since the SOX can lead other indices. At this point, a rejection of the formation would be as telling as a confirmation, however.

 
 
  Mark Davis   8/5/2004,  10:31:02 AM
Day Trade Exit Point Alert -

Current spread on our QQQ Aug 34 put is 0.50/0.55. If it changes to 0.45/0.50 DO NOT bail immediately. It will take a pretty good move up in the Q's to lower the spread to 0.40/0.45

Leave stops on SPX and QQQ puts at break even for now.

 
 
  Linda Piazza   8/5/2004,  10:29:54 AM
Once again, the TRAN is below its 30-dma and below 3100, but it hasn't yet breached yesterday's low or touched its 50-dma, now at 3075.41. The TRAN bounced from its 50-dma through the latter half of July, so it might provide some support, particularly since it coincides with the midline support of the TRAN's descending regression channel. I wouldn't count on that bounce if crude futures keep climbing, however. As of 30 minutes ago, crude futures were consolidating just beneath the 38.2% retracement of a steep fall off yesterday's high. Not until the futures retrace more than 50% of that steep climb should we suppose that the climb is anything other than a bear-flag climb, however. That means that it's possible that crude futures could roll lower again as they test and reaffirm support, giving equities just a little breathing space. I don't know how much breathing space they'll be afforded with on-camera commentators speculating about $57.00/barrel prices.

 
 
  Mark Davis   8/5/2004,  10:25:15 AM
Now that was nice... just when it looked like things might be stabilizing a bit... WHOOSH! A big red candle. Our puts are looking much better now and I'm stepping outside for a breath of fresh air... back in 5

 
 
  Linda Piazza   8/5/2004,  10:20:39 AM
The OEX looks as if it might even be slipping through Keltner support at 537-537.50. Although I expected a bounce attempt somewhere through here, with hopes of a rollover at the right-shoulder level, it looks just as possible now that the OEX is going to break through and make a dash for that 535-535.60 level. We'll have to see.

 
 
  Linda Piazza   8/5/2004,  10:16:00 AM
And the OEX is slipping down to the 537-537.50 level that Keltner charts suggested might be necessary before the OEX found enough support to attempt a bounce. This level should provide a bounce attempt, with bears hoping it's just part of the right-shoulder formation if it occurs. If the OEX doesn't bounce and the OEX instead sustains a break through 537, that sets a Keltner downside target of 535-535.50 as a first target. That would bring the OEX down to test the neckline of the possible H&S formation, and plans should be made to protect bearish profits in that area as it's possible to OEX could bounce up into a second right shoulder or even reject the formation entirely.

 
 
  Jonathan Levinson   8/5/2004,  10:12:55 AM
The short cycle oscillators are resolving their uncertain chop to the downside here, heading for a test of 30/60 min channel support lined up at 34.10 QQQ. Volume is declining on this wavelet downleg, suggesting a lack of directional commitment so far.

 
 
  Mark Davis   8/5/2004,  10:12:26 AM
Day Trade Exit Point Alert -

QAVTH (QQQ Aug 34 put) @ $0.45, stop $0.45, break even

SPTTT (SPX Aug 1100 put) @ $11.70, stop $11.70, break even

*Note - When exiting the SPX trade DO NOT just bail when/if the bid hits 11.70. Always split the bid/ask spread. Example... right now the bid/ask is 12.40/14.00. That's a 1.60 spread. Split it in half (80 cents or a price of 13.20) and then give the Market Maker some, say 13.40. He will probably take it. If you want out fast give him a little more, but do not just put in an order to sell at the bid unless you want out immediately, at any price.

QQQ works a bit differently. The spread is usually only 5 cents so you can't split it, BUT I have been filled many times at the bid. In other words if the bid/ask is 0.45/0.50 you can sometimes get filled on a buy at 0.45. Don't count on this working all the time but I just wanted to point out that you don't necessarily have to pay what they are asking, especially on SPX, OEX and NDX. If you want to see some criminal spreads take a look at the NDX option chain.

 
 
  Jeff Bailey   8/5/2004,  10:06:48 AM
10:04 Market Watch at this Link

 
 
  Jonathan Levinson   8/5/2004,  10:06:40 AM
New session low for QQQ here at 34.29.

 
 
  Linda Piazza   8/5/2004,  10:04:59 AM
Keltner support just above 537.00-537.50 still looks strong enough to produce at least a bounce attempt, but each bounce attempt is being met with failure at the first Keltner resistance, so far. Looking back at the five-minute chart, I see resistance near 538.35. Beyond that, only single lines of Keltner resistance snake overhead on the five-minute chart, with strongest resistance probably at 539.45 and then again at 541.02, but with some five-minute Keltner resistance also at 538.78. It looks as if the OEX may have to test that 537.00-537.50 level first, though. Remember that I'm thinking that any such bounce, if it occurs, should be only part of the right-shoulder formation.

 
 
  Jonathan Levinson   8/5/2004,  9:59:12 AM
30 min cycle channels are showing the first sign of rollover here, but the 60 min channels continue to point higher. Support for both channels is now 34.10, resistance for both at 34.51 QQQ.

 
 
  Jonathan Levinson   8/5/2004,  9:58:28 AM
The Fed has just announced a 7-day repo of 4B, so that leaves a net 1B drain for the day. But it also leaves the door open for an overnight repo announcement today, and I'll continue updating the releases for any changes.

 
 
  Jeff Bailey   8/5/2004,  9:54:07 AM
Current OPEN MM profiles at this Link

 
 
  Jonathan Levinson   8/5/2004,  9:50:45 AM
Session low for Russell2K futures here.

 
 
  Linda Piazza   8/5/2004,  9:49:24 AM
The OEX's 538-ish support may be softening a bit, with the possibility growing that the OEX may slip down closer to 537.00-537.50. If it does, be prepared for a possible bounce attempt from that level, too, although bears hope that the bounce, if it comes, is just part of the right-shoulder formation. Keltner resistance is trying to converge now toward 538.40, with bears wishing the OEX would stay below that number while bulls want it to maintain levels above 538.88. A just-completed test of resistance while I typed did turn down at that first resistance.

 
 
  Jonathan Levinson   8/5/2004,  9:46:51 AM
An 8B 14-day repo expires today, and the Fed has announced a 7B 14-day repo to replace it, and so this week's draining trend appears to be intact. 4B in overnight repos expire and we await the 10AM announcement with respect thereto.

 
 
  Jeff Bailey   8/5/2004,  9:45:30 AM
Sears Roebuck (S) $35.61 -0.22% Link ... July same-store sales fell 2.6%.

 
 
  Jonathan Levinson   8/5/2004,  9:43:47 AM
The short cycle oscillators are mixed here and direction is up for grabs. Short cycle support is at 34.24, resistance 34.41.

 
 
  Jeff Bailey   8/5/2004,  9:43:17 AM
May Dept. Stores (MAY) $25.19 -1.75% Link ... July same-store sales -5% preannounces Q2 revenues of $2.96 billion versus consensus of $3.02 billion.

 
 
  Jonathan Levinson   8/5/2004,  9:41:21 AM
Gold is back to fractionally negative, session low at 392.60, while XAU and HUI are both fractionally positive. Bonds have reversed and are heading back up, with TNX now down 3.2 bps at 4.397%, testing 4.4% support.

 
 
  Jeff Bailey   8/5/2004,  9:41:08 AM
Gap Stores Inc. (GPS) $20.70 -3.18% Link .... July same-store sales -5%. Company preannounces Q2 EPS of $0.23-$0.25 versus consensus of $0.28 per share.

 
 
  Linda Piazza   8/5/2004,  9:39:47 AM
Bears got their wish on that first attempt, with the OEX finding resistance below 538.60, with 538.51 being the high so far. However, I'm not sure that the OEX is through testing overhead resistance. So far, the TRIN isn't supporting a roll-over-any-moment thesis. It's supporting the bounce-for-a-while one.

 
 
  Mark Davis   8/5/2004,  9:38:33 AM
Day Trade Entry Point Alert -

Go short now... QAVTH (QQQ Aug 34 put) @ $0.45, stop $0.40

 
 
  Jeff Bailey   8/5/2004,  9:37:44 AM
Joseph A Bank Clothier (JOSB) $30.50 +6.26% Link .... July comparable sales up 14.5%. Company also preannounces Q2 revenues of $82.0 million versus consensus of $75.6 milliion.

 
 
  Linda Piazza   8/5/2004,  9:37:30 AM
During the first five minutes of trading, the OEX spanned a tight range from 538.12-538.49. It's trying to bounce from yesterday's closing level. As I mentioned last night, Keltner resistance lines are scattered overhead, so if the OEX bounces fast enough, it can get through a number of them before they have the opportunity to converge. Bears want to see the OEX steady off somewhere below the right-shoulder level on the 60-minute H&S, but would really prefer to see the OEX find resistance at 539 or preferably even at 538.60.

 
 
  Linda Piazza   8/5/2004,  9:34:52 AM
Jane has her storm and we have ours here in Dallas, with the Cowboys unexpectedly cutting their lead quarterback yesterday. I live about two minutes away from their training fields here in Valley Ranch outside Dallas, and so it's the big topic everywhere you go. Unfortunately, I'm not much of a football fan, so can't keep up.

 
 
  Jonathan Levinson   8/5/2004,  9:31:21 AM
The 30 min cycle upphase continues, but has so far been weak, with 34.38-34.48 QQQ still intact. 30 min channel support flat at 34.17, resistance currently at 34.51 .

 
 
  Jeff Bailey   8/5/2004,  9:30:19 AM
Whole Foods Market $78.42 Link ... lower at $77.49 in pre-market with Bank of America initiating coverage with a "sell" rating and target of $70.00. Firm thinks that although comparable sales growth should remain at relatively robust levels, they see meaningful contraction on decelerating growth.

 
 
  Jonathan Levinson   8/5/2004,  9:30:01 AM
Mark, I'm not certain but believe that he's been on record for years saying that the world's about to end.

 
 
  Linda Piazza   8/5/2004,  9:29:39 AM
As expected, the Bank of England raised its benchmark interest rate to 4.75%, a quarter-point increase. Also as expected, the ECB left its rate unchanged.

 
 
  Mark Davis   8/5/2004,  9:28:28 AM
Keene we should have known we were probably headed higher when Prechter went on record the other day saying the world was about to end (grin)

 
 
  Linda Piazza   8/5/2004,  9:26:49 AM
In my 23:21 post, I speculated that we might see an OEX bounce beginning somewhere around Wednesday's closing level or 537.00-537.50. I note that ES futures are slightly higher while crude futures are off their overnight high, though still above $43.00 as of 30 minutes ago. That overnight high was reached after they satisfied the downside target for their H&S on the ten-minute chart.

Crude is still a pressure on the markets, however, but perhaps this allows for an early-morning bounce. If the OEX should bounce and not drop at the open, I'd be watching for possible resistance in the 540-ish level as the OEX continues to form the right shoulder to go with its possible H&S on its 60-minute chart. If the OEX instead breaches yesterday's high, the H&S formation is negated.

If the OEX instead drops, look for possible support anywhere between yesterday's closing level and 537-537.50, with the hope that any bounce on hitting that possible support would still be part of a right-shoulder formation.

Most of all, don't bet your total account on any of these events occurring. In the past, as the OEX neared the breakout of some consolidation pattern, it has tended to be more volatile, producing lots of false breakouts, and to be less amenable to technical analysis. That kind of action might be beginning now, especially with markets across the globe jittery ahead of tomorrow's non-farm payrolls number.

 
 
  Jonathan Levinson   8/5/2004,  8:56:46 AM
QQQ is up to 34.42 here, taking another run at 34.48 resistance.

 
 
  Jonathan Levinson   8/5/2004,  8:45:45 AM
Session low for ten year bonds, TNX now down .4 bps at 4.425%.

 
 
  Jonathan Levinson   8/5/2004,  8:43:28 AM
Jim was mentioning getting his stop hit on a stop run yesterday, and many have noted the almost telepathic ability of the markets to find, tickle and trigger stops on false moves. Well, check out the move in Nymex crude yesterday afternoon. Link This is reminiscent of the moves in gold we saw months ago- 2 minute stop-runners that immediately reverse.

 
 
  Jonathan Levinson   8/5/2004,  8:40:56 AM
Naz futures are climbing now, NQ +6 at a session high of 1385. QQQ +.15 at 34.40.

 
 
  Jonathan Levinson   8/5/2004,  8:33:40 AM
Equities are not reacting to the data, unchanged from the levels I previously reported. Gold is up 20 cents now at 393.50, bonds slightly lower but still positive with TNX down .9 bps at 4.42%.

 
 
  Jonathan Levinson   8/5/2004,  8:31:56 AM
Initial claims 336K.

 
 
  Jonathan Levinson   8/5/2004,  8:00:53 AM
We await the 8:30AM release of initial claims for the week ending 07/31, est. 340K (prior 345K).

 
 
  Jonathan Levinson   8/5/2004,  7:58:36 AM
Equities are higher this morning, with ES +1 at 1098, NQ +4 at 1383, YM +10 at 10115 and QQQ +.11 at 34.35. Gold is down to a session low of 392.60, silver -.058 at 6.677, and NYMEX crude higher by .275 at 43.10. Bond futures are up .093 at 110.1094.

 
 
  Linda Piazza   8/5/2004,  6:50:29 AM
Good morning. The Nikkei gapped up at the open, dipped below 10,100 and then coiled throughout the morning session. In the afternoon, the Nikkei broke out of that coil to the upside, but found resistance at 11,100. It closed up 50.87 points or 0.46%, at 11,060.89.

Chip stocks performed well in the early part of the session, and many closed sharply higher. Tokyo Electron gained 4.1%, for example. Mitsubishi Motors rebounded after its recent drubbing. The company had reported earnings Wednesday after the close, with those earnings showing a widening net loss from the year-ago-level. UFJ Holdings also rebounded, with the company deciding on an appeal to Tokyo High Court after yesterday's rejection of its lower-court appeal to halt the injunction against its planned merger with Mitsubishi Tokyo Financial Group. Big-cap NTT DoCoMo dropped in early trading after announcing plans to buy back almost 2 million of its own shares at a discount to Wednesday's closing price, and closed lower by 2%.

Most other Asian markets closed higher, too. With tech stocks Taiwan Semiconductor and United Microelectronics climbing 2.7% and 4.6% respectively, the Taiwan Weighted gained 2.08%. South Korea's Kospi gained 1.91%, and Singapore's Straits Times climbed 1.67%. Hong Kong's Hang Seng gained 1.72%, but China's Shanghai Composite fell 1.10%.

Currently, most European bourses trade higher, with financials higher in the U.K. and Europe ahead of decisions by the Bank of England and ECB. The Bank of England is expected to raise rates and the ECB to leave them steady. The reception given earnings results from U.K. bank Barclays, Dutch insurer and bank ING, and Germany bank HVB helped the financials. However, all wasn't rosy among the financials, with SG Securities downgrading Credit Suisse to a hold rating from its former buy rating, mentioning the disappointing investment banking. Many reporting banks, including HVB today, have noted declining profits on trading.

As happened in Asia, many chip stocks performed well in early trading. Swiss chemicals group Clariant dropped after reporting Q2 profit at the bottom end of the expected range.

Despite the gains today in European bourses, much attention focuses on crude prices, up above $43.00 again this morning. CNBC Europe featured a trader who forecast prices of $57.00 for crude, with $47.50 expected over the short term. While I have no way to vet this trader's credentials, his comments at least show what traders fear. Another commentator, listing his talking points, noted that all awaited Friday's NFP, referring to the U.S.'s non-farm payrolls number.

As of this writing, the FTSE 100 has climbed 13.40 points or 0.30%, to 4,421.50. The CAC 40 has climbed 29.52 points or 0.82%, to 3,637.10. The DAX has climbed 21.43 points or 0.56%, to 3,845.17.

 
 
  Linda Piazza   8/4/2004,  11:21:48 PM
For days, I've been writing tomes when discussing the OEX's likely behavior. Unfortunately, this is another one, although I started out to write something shorter. I've been explaining weekly Keltner support and weekly, daily, 60- , 30-, 15-, and 5-minute Keltner and traditional support and resistance levels. You know it all by heart by now. The sum is that the OEX hasn't been able to get over the resistance levels that looked like resistance, and Keltner support and resistance levels are both sinking lower as the OEX chops above weekly historical and Keltner support. It may be time for a breakout one direction or the other, but there's a danger in that assumption, because trading sometimes becomes more volatile and less amenable to technical analysis as the true breakout approaches.

However, let's start ratcheting down our viewpoint and look at possible short-term moves with the warning that these moves could be reversed at any moment. Because resistance appears to be holding and pressures against the market don't seem to be abating, and because of certain chart conditions, my preference for now would be bearish entries near resistance with the caveat that this depends on the movements of crude futures. Important OEX resistance levels appear to be near 539-541 and again from 542-544.60 and perhaps up to 547.

The OEX appeared to be beginning a possible rollover beneath one of those resistance levels late yesterday, although I wouldn't be surprised to see another attempt at that resistance before the rollover is completed, if it is. However, I would suggest quick exits if the OEX's movements show such entries to have been wrong, and plans made for protecting profits at key support levels, too. To illustrate the danger of believing too strongly in any one interpretation of the markets, one only needs to look at the battling bearish and bullish chart formations. I posted this 60-minute OEX chart as the first chart in my Market Wrap Wednesday: Link

Here's what we know about the short term. That H&S is forming underneath the 120-minute 100/130-ema's (not shown), so that those averages might be important guides to whether the H&S theory is wrong. The averages are currently at 539.55 and 540.66, respectively. The 15-minute Keltner chart shows support gathering near 537.50, and the 5-minute chart shows that the OEX approached the midline of its widest Keltner channel at the close. Therefore, it might be possible to expect a bounce from between Wednesday's closing level and 537-537.50. That bounce might be part of the formation of the right shoulder on that H&S. As the Keltner charts were aligned at Wednesday's close, resistance appeared thinly layered, so if the OEX bounces too quickly, it can get through those resistance lines. If that happens, gains could accelerate as shorts rush to cover, and all bets are off until and unless the OEX rounds off beneath one of those named resistance levels. If the OEX bounces up toward 539-541 again and rounds off, however, it may be forming part of the right shoulder. It's dangerous in this climate to assume that any formation will confirm before it does confirm, but entering near resistance on signs of a rollover appear to be the best entries these days. I would not consider such an entry if TRIN and advdec patterns were bullish and would be cautious if crude futures were still diving. Diving crude futures might allow for further consolidation or even a stronger bounce.

Support might be supposed at the neckline of that potential H&S, currently near 535.30, and it wouldn't be surprising to see a bounce into a (hopefully lower) second right shoulder. Conservative bears already in positions or considering new ones should make plans to protect profits in that neckline area. If confirmed, the H&S downside target would send the OEX back to test that weekly support, with the target at about 529.30 and with that weekly support from 526-530. We saw some support/resistance lately near 533.75-534.30, but that doesn't seem as strong as the 526-530 area. Plans should be made to protect positions in the 526-530 level, too, and perhaps as high as 531-532, with those plans perhaps including methods to participate in a play if downside support were violated this time. Such plans could include staging partial exits or perhaps exiting the entire position and using only part of the profits to roll into a lower strike put. Mark Davis has been demonstrating some trades that bracket the position with calls bought on dips (or puts bought on bounces on bullish positions), and that might be a way some would consider protecting their profits, too, exiting the losing position and letting the other run. Understand the risks and reward before engaging in any new tactic, however.

 
 
  OI Technical Staff   8/4/2004,  7:09:53 PM
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