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  Jeff Bailey   8/6/2004,  7:46:07 PM
Closing Internals at this Link

 
 
  Jeff Bailey   8/6/2004,  7:32:19 PM
Daily/Weekly/Monthly Pivot Matrix for next week at this Link

 
 
  Mark Davis   8/6/2004,  5:34:02 PM
Trade Statistics for week of 08-02-04

Date Ticker/Contract Entry Exit G/L G/L%
08-02-04 SPQTR (SPX Aug 1090 put) $09.50 $09.00 -$00.50 -05.50%
08-02-04 SPTTT (SPX Aug 1100 put) $10.70 $09.60 -$01.10 -10.28%
08-03-04 SPTHB (SPX Aug 1110 call) $08.60 $08.00 -$00.60 -06.97%
08-03-04 SPTTT (SPX Aug 1100 put) $10.50 $13.10 +$02.60 +24.76%
08-03-04 SPTHT (SPX Aug 1110 call) $12.70 $12.70 +$00.00 +00.00%
08-03-04 SPTHB (SPX Aug 1110 call) $07.00 $06.65 -$00.35 -05.00%
08-04-04 SPQTR (SPX Aug 1090 put) $09.50 $08.40 -$01.10 -11.58%
08-04-04 SPTTT (SPX Aug 1100 put) $11.70 $19.35 +$07.65 +65.38%
08-05-04 QAVTH (QQQ Aug 34 put) $00.45 $00.45 +$00.00 +00.00%
08-05-04 SPTHT (SPX Aug 1100 call) $09.00 $09.50 +$00.50 +05.50%
08-05-04 SPTHT (SPX Aug 1100 call) $07.50 $08.00 +$00.50 +06.67%
08-05-04 SPQHR (SPX Aug 1090 call) $11.00 $10.00 -$01.00 -09.09%
08-05-04 SPQHQ (SPX Aug 1080 call) $10.70 $10.00 -$00.70 -06.54%
08-05-04 SPQTO (SPX Aug 1075 put) $11.50 $16.85 +$05.35 +46.52%
08-06-04 SPQHO (SPX Aug 1075 call) $11.30 $12.50 +$01.20 +10.61%
08-06-04 SPQHO (SPX Aug 1075 call) $11.30 $12.00 +$00.70 +06.19%
08-06-04 SPQHO (SPX Aug 1075 call) $10.00 $11.00 +$01.00 +10.00%
08-06-04 SPQHN (SPX Aug 1070 call) $12.50 $13.00 +$00.50 +04.00%
08-06-04 SPQTM (SPX Aug 1065 put) $11.00 $15.60 +$04.60 +41.81%
08-06-04 SPQHN (SPX Aug 1070 call) $11.70 $11.70 +$00.00 +00.00%
_____________________________________________________________________
Total Gain/Loss +$19.25 +165.48%

 
 
  Jeff Bailey   8/6/2004,  4:10:29 PM
Current OPEN MM profiles at this Link

Today's Activity ....

Sold 2 of the 3 WFMI Aug. $75 puts (FMQTO) at the bid of $1.85 ($+0.95, or +105.56%)

Day trade short Biogen Idex (BIIB) at the bid of $57.10, closed out at the offer of $56.35 ($+0.75, or +1.31%).

Tabulation of this week's trades at this Link

I'm using the $10,000.00 per trade column as my account management positions, not the 1,000 share column. When I specify shares (ie. ACH, JDSU) or contracts (FMQ-TO) these gains/losses are depicted in BOTH th 1,000/share column and $10,000 per trade.

I post 1,000/share to give you SOES bandits an idea of what we're doing.

 
 
  Jonathan Levinson   8/6/2004,  4:00:13 PM
32.80 QQQ just held for another lower high. This has been the pattern for the past 2 days on literally every bounce.

 
 
  Jonathan Levinson   8/6/2004,  3:56:16 PM
139M QQQ shares traded so far today.

 
 
  Jonathan Levinson   8/6/2004,  3:55:45 PM
QQQ is bouncing back to 32.80, which should now act as weak resistance. I wonder if there will be fireworks after the 4PM cash close, and if so, in which direction? 32.80 is the midpoint of the 30 min channel.

 
 
  Mark Davis   8/6/2004,  3:50:14 PM
Thanks Linda. Do you have a spare bottle of oxygen I can borrow?

 
 
  Linda Piazza   8/6/2004,  3:49:14 PM
Congratulations, Mark!

 
 
  Mark Davis   8/6/2004,  3:48:47 PM
Day Trade Exit Point Alert -

Exiting now... SPQTM (SPX Aug 1065 put) @ 15.60, +41.81%

 
 
  Jeff Bailey   8/6/2004,  3:46:27 PM
Bearish day trade close out alert ... for Biogen Idec (BIIB) $56.35. ($+0.75, or +1.31%)

 
 
  James Brown   8/6/2004,  3:43:45 PM
Best Buy (BBY) has broken down through daily chart and P&F chart support at the $45.00 level. The stock looks vulnerable toward the $40 level.

 
 
  Jonathan Levinson   8/6/2004,  3:43:14 PM
39 min support is now following price lower for QQQ in a trending move, with channel resistance now down to 33.10.

 
 
  Linda Piazza   8/6/2004,  3:39:22 PM
Looking at the OEX's weekly Keltner chart, I note that this week's action had made an eventual test of 497-498 look more possible. The daily chart suggests that a breakdown that could lead to a test of 502 is already in progress, unless the OEX can pull up above the 525 range before the close of trading. By another measure, the descending trendline running beneath the 3/24 and 5/12 lows now crosses at about 517-518, the reason I mentioned a possibility of dropping into this level in an earlier post. Possibilities do not always get fulfilled, but as others have noted, some significant technical damage has been done. I've been eyeing that weekly chart for some time, becoming convinced over the last few days that there was danger of such damage being done, but I just somehow thought that we'd get a bounce today up into resistance and then another rollover from there, probably near 529-532 if not lower. I missed on that one.

OEX 520.50-521 appeared to be support from early September-late November, 2003, so the OEX has again approached a level from which it could bounce, but any such bounce, if it should occur today or early next week, should now be considered a likely countertrend bounce.

 
 
  Mark Davis   8/6/2004,  3:38:39 PM
Day Trade Exit Point Alert -

Lower stops on SPQTM (SPX Aug 1065 put) to SPX 1065
There's another buy signal flashing on SPX but I'm going to call it a day. If we're stopped out at SPX 1065 then it's been a great day.

 
 
  Jonathan Levinson   8/6/2004,  3:35:23 PM
32.80 broke briefly but the lower channel support has held so far.

 
 
  Mark Davis   8/6/2004,  3:29:29 PM
Day Trade Exit Point Alert -

Stopped out of SPQHN (SPX Aug 1070 call) @ 11.70, break even
I'm speechless! We'll be lowering the stops on the SPX 1065 puts as soon as I can get it posted.

 
 
  Jonathan Levinson   8/6/2004,  3:26:01 PM
QQQ is coming in for a test of that lower channel target here. The short cycle oscillators are as oversold as I've seen them, and the lower channel support should be firm due to the oversold 30 and 60 min oscillators as well. A break of 32.80 that doesn't bounce immediately should result in another trending plunge, but based on the oscillators, we should expect support here to hold.

 
 
  Mark Davis   8/6/2004,  3:21:14 PM
Day Trade Exit Point Alert -

Stepping away for a few minutes... keep your stops at previously posted levels. We're probably done trading for the day... we have the SPX bracketed with puts and calls set to break even (calls) or better (puts) and the worst we could do at this point would be to get stopped out at break even on the calls and for a small profit on the puts.

 
 
  Jonathan Levinson   8/6/2004,  3:18:43 PM
30 min channel support has faded to 32.80 now, with upper channel resistance at 33.20.

 
 
  James Brown   8/6/2004,  3:16:51 PM
Railroad UNP is down 2.28% after a failed rally yesterday and the stock looks like a bearish candidate for a drop toward $50.00 The bearish P&F chart points to a $44 target.

 
 
  Mark Davis   8/6/2004,  3:16:00 PM
Day Trade Exit Point Alert -

Raise stops on SPQHN (SPX Aug 1070 call) to 11.70 and break even

 
 
  Jonathan Levinson   8/6/2004,  3:15:58 PM
Big volume in QQQ so far today at 113M shares. Since the 8:30AM drop, QQQ has respected a less than 50 cent range, but we're already well over the 102M average volume and yesterday's total volume of 109M shares.

 
 
  Linda Piazza   8/6/2004,  3:10:17 PM
Jane, so much for my supposition that the OEX would bounce (although only modestly, in a countertrend bounce) from somewhere between yesterday's close and 524. (See Jane's 14:59 post on the Futures side.) I could give myself a little credit, because in my 9:53 post, I said that I could even see a pullback to 520-522 and said I wasn't certain of the bounce, and I did mention the breakdowns as they occurred and a possibility of a dip to 513-515 in my 10:11 post, but I was just wrong on my supposition, because I thought that bounce was the most likely event. While I was far from being bullish, that supposition kept me from suggesting new bearish entries near 527-528. I just wasn't sure that there was enough downside. I didn't have a good feel for the markets today.

 
 
  Mark Davis   8/6/2004,  3:10:05 PM
Day Trade Entry Point Alert -

Go long now... SPQHN (SPX Aug 1070 call) @ 11.70, stop 11.00

 
 
  Jonathan Levinson   8/6/2004,  3:08:42 PM
The absence of rallies is most striking this week. What used to be epic short squeezes are now only pauses.

 
 
  Jeff Bailey   8/6/2004,  3:08:04 PM
03:00 Internals at this Link

 
 
  Mark Davis   8/6/2004,  3:01:45 PM
Day Trade Exit Point Alert -

Stopped out of SPQHN (SPX Aug 1070 call) @ 13.00, +3.84%
What a day! Sheesh! My head is spinning. We still have the SPX 1065 puts alive.

 
 
  Jonathan Levinson   8/6/2004,  2:59:22 PM
30 min channel support is down to QQQ 32.90. Oversold just became more oversold.

 
 
  Jonathan Levinson   8/6/2004,  2:57:28 PM
Session lows across the board here. QQQ breaking 33.

 
 
  Mark Davis   8/6/2004,  2:56:29 PM
Day Trade Exit Point Alert -

Raise stops on SPQTM (SPX Aug 1065 put) to 12.00

 
 
  Jonathan Levinson   8/6/2004,  2:50:47 PM
Crude oil closes below 44 at 43.925: Link

 
 
  Jonathan Levinson   8/6/2004,  2:48:43 PM
Session low for INTC. 30 min channel support for QQQ is down to 32.92. The steady pattern of lower highs is doing some damage here- if the consolidation range for most of today proves to be distribution with a break lower from here, the resulting bear flag would project another steep drop to follow on Monday. The oversold 30 min and 60 min cycle oscillators wouldn't like that much, but the absence of any kind of bounce for the second day in a row is on the verge of producing a trending move on those longer intraday cycles.

 
 
  Linda Piazza   8/6/2004,  2:47:35 PM
I'm continuing to see bullish divergences on the OEX's five-minute chart as the OEX reaches new lows, but price continues to slide lower. Let those divergences warn you to pay attention if you're in bearish plays, but let price be your guide. Resistance can be found just above 525 and the 15-minute chart shows firm resistance from 525.98-526.11. Support can be found from 523.98-524.00. Maybe.

 
 
  Mark Davis   8/6/2004,  2:46:41 PM
Day Trade Entry Point Alert -

Go short now... SPQTM (SPX Aug 1065 put) @ 11.00, stop 10.00

 
 
  Linda Piazza   8/6/2004,  2:41:37 PM
Reader Question: Amzn is up today due to an analyst upgrade or due to an oversold condition?

Reply: I don't see AMZN on any lists of upgrades for today. I do see an initiation for YHOO by S.G. Cohen, listing YHOO as benefiting from the shift of ads to online media rather than traditional mediate. However, I don't find any other upgrades or initiations or anything similar for other Internet sites. In fact, the stock received a market underperform rating several days ago from one site. Perhaps one of the other writers knows of news concerning AMZN.

Looking at the bar chart, I note that AMZN approached its 200-week exponential moving average at 34.18 before bouncing. It also approached a 50% retracement of the rally off the September/01 low, with that 50% level at $33.38, and with the 50% retracement often proving to be at least a temporary support level, even if it's eventually broken. Some weekly historical support appears to be found from about $34.00 to maybe $37.00, so AMZN had moved into that possible support zone, because its approach to those other levels wasn't really as close as I would think necessary to see a bounce attempt.

With a bearish price objective of $15.00, the P&F chart suggests that the 50% may eventually be broken, but what does the daily bar chart show? It kinda shows AMZN just hanging out in space, having broken through the $40.00 level. I'm at a loss to explain today's bounce, although that bounce had mostly evaporated by the time I had returned to my computer again, other than by mentioning those weekly levels and Fib levels that I did. Perhaps some market participants are buying ahead of anticipated support from those levels and from the 200-week simple moving average at $26.22? Perhaps there was something about the number $35.00?

AMZN has the possibility of producing a doji today, a potential reversal signal if followed by a strong day Monday. I'd look for first resistance near $37-38.60, and then from $39.30-41.00, at $42.41 and again at $44.74. Some of those are Fib numbers snapped on the decline since late June. A river of moving averages slants down toward $45.00, and I would think that level would be hard to breach on the first approach.

I haven't watched AMZN using Keltner channels, but I snapped on those channels to test it. Those show vulnerability down to $33.00-33.38 over the near term, but that if AMZN should sustain moves above $37.00, it will have changed with regard to the Keltner resistance that has been topping its advances on its 15-minute chart over the last month, setting up a possibility of moving toward $38.93 on the short-term.

 
 
  Jeff Bailey   8/6/2004,  2:36:50 PM
Stepping out for 15-minutes

 
 
  James Brown   8/6/2004,  2:34:22 PM
CME has now broken out above three-week old resistance at $127.50.

 
 
  Mark Davis   8/6/2004,  2:33:00 PM
Day Trade Exit Point Alert -

Raise your stops on SPQHN (SPX Aug 1070 call) to 13.00
We'll keep doing this until it doesn't work

 
 
  Jonathan Levinson   8/6/2004,  2:31:07 PM
Look for resistance at former 33.20 QQQ support here.

 
 
  Mark Davis   8/6/2004,  2:29:32 PM
Day Trade Exit Point Alert -

Take remaining 1/2 profits on SPQTO (SPX AUG 1075 put) @ 16.70, +45.21%

 
 
  Mark Davis   8/6/2004,  2:23:48 PM
Day Trade Exit Point Alert -

Take 1/2 profits on SPQTO (SPX AUG 1075 put) @ 17.00, +47.82%

 
 
  Jonathan Levinson   8/6/2004,  2:20:14 PM
The first test of 33.00 QQQ held, and the keltner channels have slipped only by a penny or two. A continued bounce from here would have a good chance of converting the 30 min channel to an upphase on a cross above 33.20. But if the bulls can't move the price up from here within the coming minutes, around 10 minutes or so, then the channel will fall lower and the downphase will reassert itself. The market continues to be amazingly devoid of strength, and the trend continues to be solidly down. These short cycle discussions are covering the minimum conditions to see anything bullish at these levels.

 
 
  Mark Davis   8/6/2004,  2:20:06 PM
There's a very strong looking buy signal (almost confirmed) on SPX

 
 
  Mark Davis   8/6/2004,  2:08:54 PM
Day Trade Exit Point Alert -

Cinch up your stops on SPQHN (SPX Aug 1070 call) to 12.50 and break even

 
 
  James Brown   8/6/2004,  2:06:48 PM
Hartford Financial (HIG) is breaking technical support at the 200-dma and nearing price support at $61.00.

 
 
  Mark Davis   8/6/2004,  2:05:25 PM
Day Trade Exit Point Alert -

Lower your stops on SPQTO (SPX Aug 1075 put) to SPX 1072.50

 
 
  Jonathan Levinson   8/6/2004,  2:03:45 PM
Interestingly, the 30 minute cycle upphase that was due almost at the cash open still hasn't begun- even on the longer intraday timeframes, the flatline we're seeing in the short cycles is also in progress. It's as if the price has just stopped dead from the initial drop.

 
 
  Jonathan Levinson   8/6/2004,  2:01:43 PM
Nymex crude has been moving sharply lower, currently down to 43.95 and bouncing to 44.025 as I did the screen capture. Link

 
 
  James Brown   8/6/2004,  2:01:33 PM
We have a reversal of fortunes for CME. After dipping under support at $120 and its simple 100-dma this morning the stock has rocketed higher again and is now up 4.5% to $126.74. Volume is very strong and the move is painting a bullish engulfing candlestick. I can't seem to find any news as a catalyst. I doubt yesterday's announcement of a 26-cent dividend is driving the move.

 
 
  Mark Davis   8/6/2004,  2:00:55 PM
Day Trade Entry Point Alert -

Go long now... SPQHN (SPX Aug 1070 call) @ 12.50, stop 11.50

 
 
  Linda Piazza   8/6/2004,  2:00:28 PM
The OEX has broken down out of that bearish triangle. We have to assume this is what it looks like: a downside break out of a bearish formation. As I said earlier, I have no compunction about those who might have already been in bearish positions, with appropriate stops set, but sure have been hesitating for some reason to suggest new bearish plays. I know it's because of my suspicion that support might be found rather soon, but the OEX failed to confirm a potential bullish formation (inverse H&S), set up a neutral one and resolved that into a bearish one, and now has broken down out of that bearish formation. I should feel very comfortable with suggesting plays on that breakdown, but perhaps this is just a day when I'm off, because I don't feel comfortable with that at all.

 
 
  Mark Davis   8/6/2004,  2:00:26 PM
Day Trade Entry Point Alert -

Go long now... SPQHN (SPX Aug 1070 call) @ 12.50, stop 11.50

 
 
  Jeff Bailey   8/6/2004,  1:57:06 PM
Whole Foods Market (WFMI) $74.59 -3.11% ... edging below "zone of support."

Chart from 08/03/2004 market monitor at this Link

 
 
  Jonathan Levinson   8/6/2004,  1:55:31 PM
The short cycle chop has resolved into a short cycle downphase from the midpoint of the oscillator ranges, with the oscillators already in or at oversold territory. There's no short cycle indication that 33.00 shouldn't hold, but a break below the low of the day, occurring as I type, could be the catalyst for a stronger move. 1st test is channel support at 33.00, 9 cents away.

 
 
  Mark Davis   8/6/2004,  1:53:52 PM
Day Trade Exit Point Alert -

Stopped out of SPQHQ (SPX Aug 1075 call) @ 11.00, +10.00%

I may also be reentering another scalp long soon... stand by

 
 
  Jeff Bailey   8/6/2004,  1:52:29 PM
Day trade short alert .... Biogen Idec (BIIB) $57.10 -0.38% here, stop $57.55, target $55.55.

 
 
  James Brown   8/6/2004,  1:52:22 PM
Wow! IMCL has dropped from $87 to $52 in just over a month. Today's decline is breaking support at the $55 level and its simple 200-dma.

 
 
  Jonathan Levinson   8/6/2004,  1:51:14 PM
Gold lost the battle for 402 for the second time today, currently back to 400.40. The miners have risen slightly during the same time- could be some funds hedging the metal against the stocks here.

 
 
  Mark Davis   8/6/2004,  1:51:04 PM
Stepping outside for a few minutes... I seem to need more fresh air than usual today

 
 
  James Brown   8/6/2004,  1:50:34 PM
Avon Products (AVP) is looking like a bearish candidate here with a drop under support at $42.00 and its simple 100-dma.

 
 
  Linda Piazza   8/6/2004,  1:50:12 PM
The former neutral triangle on the OEX's 5-minute chart has resolved into a bearish right triangle with a flat bottom at about 524.90, with a few candle spikes lower than that. Now we have to see if the OEX breaks to the downside out of that triangle, as would be expected. That would blow apart the whole countertrend bounce theory unless there's a quick break to the downside and an immediate reversal higher. Still, for the first time today, Keltner support is trying to firm up underneath the OEX on the five-minute chart, with that Keltner support near 525. The OEX's smallest channel has to move back inside its largest channel, however, before much progress could be made, which would mean that the OEX would have to move above 526.09 and preferably 526.50 and hold above that level on pullbacks.

 
 
  Mark Davis   8/6/2004,  1:48:18 PM
Day Trade Exit Point Alert -

Cinch your stops up on SPQHQ (SPX Aug 1075 call) to 11.00
Conservative traders might want to exit right now. I don't know why I added that because any conservative trader would likely be miles away from me.

 
 
  James Brown   8/6/2004,  1:45:07 PM
CSCO is once again testing support at the $20.00 level. The P&F chart is still bullish but a drop under $20.00 should produce a new sell signal. CSCO is due to report earnings on Tuesday, August 10th.

 
 
  Jonathan Levinson   8/6/2004,  1:44:19 PM
The 30 min channel is contracting to the current 33.01 support and 33.40 resistance.

 
 
  James Brown   8/6/2004,  1:42:37 PM
It is very interesting how a large number of stocks are seeing a significant bounce off their lows today while the major indices are not. Seeing lots of "hammer"-type candlesticks.

 
 
  James Brown   8/6/2004,  1:39:08 PM
Dow-component MMM is confirming yesterday's breakdown under the simple 200-dma and is testing support at the $80.00 mark. The P&F chart points to a $71 target.

 
 
  James Brown   8/6/2004,  1:38:05 PM
IBM does appear to have broken down from a bear flag pattern but traders may want to wait for the stock to crack the $84 level before considering bearish positions. The P&F chart currently points to $77.

 
 
  Jonathan Levinson   8/6/2004,  1:37:59 PM
I've heard that the Innuit have 30 words for "snow". How many words for "flat" is this moving giving us? 33.20 QQQ is the magnet.

 
 
  Mark Davis   8/6/2004,  1:36:37 PM
Day Trade Exit Point Alert -

Cinch your stops up on SPQHQ (SPX Aug 1075 call) to 10.50
If we're going to head back down I want to at least make lunch money

 
 
  James Brown   8/6/2004,  1:35:34 PM
Playboy Entertainment (PLA) is down more than 17% to $9.01 after reporting disappointing earnings last night with a general slow down across the board for its various segments.

 
 
  Linda Piazza   8/6/2004,  1:33:19 PM
The OEX is maintaining five-minute closes above the Keltner line that has been stopping it most of today, so that's a plus on the possible-bounce side. It has not broken above the needed 526.65 to head it toward 528, however. Now, on pullbacks, those favoring the bounce theory want the OEX to maintain five-minute closes above 525.57 or at least above 525.14. Either of those will keep at least two converging Keltner lines beneath the OEX, serving as possible support.

 
 
  James Brown   8/6/2004,  1:26:08 PM
A BBC article suggests that Google may have more problems than just getting their IPO launched. Assuming the IPO does eventually happen what happens when all of a sudden most of your staff becomes super-rich? They could encounter a staff exodus to a downturn in productivity. The drive to keep working hard might diminish when the parking lot is suddenly full of sports cars.

 
 
  Jonathan Levinson   8/6/2004,  1:25:52 PM
Here's a long-term oil chart I've just come across, adjusted for inflation in year 2000 dollars: Link

 
 
  Linda Piazza   8/6/2004,  1:23:01 PM
OEX making a bid for an upside break here. It needs to move above 526.73 and maintain levels above that to set up a test of 528.

 
 
  Jonathan Levinson   8/6/2004,  1:21:30 PM
Session high for Oct. gold here at 401.70, still pressing that 402 resistance level. The miners are slightly lower, however, with HUI and XAU now up 2.58% and 61% and 2.75%. Interesting that the bigger move took place in gold rather than silver today- most often, the thinner silver market spikes higher on positive days.

 
 
  Mark Davis   8/6/2004,  1:21:15 PM
Day Trade Exit Point Alert -

Cinch your stops up on SPQHQ (SPX Aug 1075 call) to 10.00, break even

That was a nice little bounce so let's get safe right now. We can't be hurt by a downdraft and the SPX 1075 puts are still firmly in the green.

 
 
  Linda Piazza   8/6/2004,  1:16:48 PM
The break out of the OEX's triangle has come to the downside, but there's been no new low as yet, so I don't consider the break confirmed. The OEX also has not been able to maintain levels that would allow several Keltner support lines to converge beneath it and provide support. The OEX is still being pressured down by the Keltner line currently at 525.40. Bounce possibilities are decreasing unless the OEX can quickly get above that resistance and the resistance currently at 525.97-526.84 and remain above that level.

A break to the downside faces possible support soon, but has some possibilities of reaching 520-522, too, if not lower. I'd have no compunctions about those currently in bearish positions staying in them until stops are hit, but have some reservations about new bearish ones, especially if the downward break comes during the stop-running push in a few moments and then is quickly reversed. Still, with the appropriate stops and with the understanding that support could be hit as soon as 524, some aggressive traders might want to take the risk.

 
 
  Jonathan Levinson   8/6/2004,  1:12:44 PM
Euro futures to a session high here, +1.80 at 1.2273. Crude is back to positive territory, +.10 at 44.50.

 
 
  Mark Davis   8/6/2004,  1:12:35 PM
Day Trade Entry Point Alert -

Let's try that 1075 call again...

Go long now... SPQHQ (SPX Aug 1075 call) @ 10.00, stop 9.50

 
 
  James Brown   8/6/2004,  1:10:30 PM
The Morgan Stanley Cyclical Index (CYC.X) is significantly under its simple 200-dma since April 2003. This level of technical support held up in May and July.

 
 
  Jeff Bailey   8/6/2004,  1:08:49 PM
01:00 Internals at this Link

 
 
  James Brown   8/6/2004,  1:08:32 PM
Airline stocks are testing the bottom of the descending channel. Here's a weekly chart of the XAL.X: Link

 
 
  Jonathan Levinson   8/6/2004,  1:02:50 PM
There's big volume coming into QQQ here- 3M shares so far in the past 100 ticks. Link

 
 
  Jeff Bailey   8/6/2004,  12:55:31 PM
12:50 Market Watch at this Link

 
 
  Mark Davis   8/6/2004,  12:41:43 PM
I don't know why I'm so jittery today. I keep expecting a spike to the upside that takes out our stop and then a big swoosh to the downside.

In the words of one of my favorite recording artists, John Prine...

"Well she wrapped her arms around me, and she gave me a little squeeze, but I knew that topless lady had something up her sleeve"

 
 
  Jonathan Levinson   8/6/2004,  12:41:07 PM
Intraday Nymex crude oil update at this Link.

 
 
  Jonathan Levinson   8/6/2004,  12:39:11 PM
I don't report much on the CBOE put to call ratio much anymore. But today's sustained readings above the 1.5 level are very high, and in the past have signalled points of caution for bears. With the volatility indices strongly higher today (QQV +3% and VXO +7.78%), the high p/c ratio shows put volume dominating the market, and higher premiums being paid for those puts. This is just a secondary indicator, and again, it's one that I follow much less closely than in the past, but worth reporting for these high sustained readings.

 
 
  Linda Piazza   8/6/2004,  12:33:48 PM
Although I've mentioned my expectations for a possible countertrend bounce today, I'm far from an advocate of a long play. I just think it's possible the bounce could occur, although we may be seeing consolidation while oversold pressure is relieved instead of the expected bounce. A downside break out of the current consolidation formation would negate that bounce possibility, at least until a test of lower support. However, besides Keltner and historical support, here's another reason I thought a bounce might be possible today from either the morning's opening level or closer to 524: Link The OEX is threatening to break out of its triangle to the downside, but I'd want to see a new low as confirmation.

 
 
  Jonathan Levinson   8/6/2004,  12:32:08 PM
The 30 min Keltner channel for QQQ is showing an uptick here, but the bounce that sparked it stuttering again. That 33.40 level feels like cement.

 
 
  Jonathan Levinson   8/6/2004,  12:30:58 PM
WASHINGTON, Aug 6 (Reuters) - The Bush administration said on Friday it was adding more oil to the U.S. emergency petroleum reserve, despite record high crude prices and strong oil demand.

The U.S. Interior Department said it awarded contracts to ChevronTexaco Corp. (NYSE:CVX) and Royal Dutch/Shell Group's (AMS:RD) (LSE:SHEL) Shell Oil to deliver more than 100,000 barrels of crude a day to the nation's Strategic Petroleum Reserve.

Link

 
 
  James Brown   8/6/2004,  12:30:19 PM
Another big loser today is Hollywood Entertainment (HLYW). The stock is down more than 23% to $9.76 after announcing that its proposed merger/acquisition of Leonard Green & Partners may not go through.

 
 
  Jonathan Levinson   8/6/2004,  12:27:19 PM
Gold is holding above 400, currently up 7.30 at 400.8 below a session high of 401.50, not clearing 402 resistance. HUI is off its highs as well, up 2.53% at 183.26 and XAU up 2.64% at 86.47. Ten year bonds are softening slightly, TNX now down 15.7 bps at 4.24%. Nymex crude is back above 44 at 44.30, down .10 for the day.

 
 
  James Brown   8/6/2004,  12:26:27 PM
ATI Technologies (ATYT) is down more than 8% in sympathy to rival NVDA's drop.

 
 
  Linda Piazza   8/6/2004,  12:25:02 PM
Next OEX Keltner resistance is trying to converge somewhere near 527 or just over that value.

 
 
  Jonathan Levinson   8/6/2004,  12:24:30 PM
Remember the flagpole rallies of 2003? Some of these ranges lasted for days. I hope that this doesn't prove to be one of them.

 
 
  James Brown   8/6/2004,  12:24:16 PM
Ouch! video card/chip maker NVIDIA (NVDA) is down more than 31% to $9.92 as investors react to its earnings report last night. The company missed estimates by 12 cents. Wall Street is definitely mixed on the news. Some see the drop as an entry point other are reiterating their "sell".

 
 
  Mark Davis   8/6/2004,  12:23:56 PM
I'd really like to see the MACD cross back down on the 1-min SPX chart. It's been just hanging there for about 10 minutes.

 
 
  Jeff Bailey   8/6/2004,  12:22:25 PM
Current OPEN MM Profiles at this Link

 
 
  Jonathan Levinson   8/6/2004,  12:19:27 PM
Back just in time to catch the largest QQQ buy candle in the last 3 hours. Look for confirmation of short cycle strength on a break above 33.40. 30 min channel resistance is at 33.45, but the channel based on the deeply oversold cycle is flat and should turn up if the bulls can avoid losing it for approximately 10 minutes.

 
 
  Mark Davis   8/6/2004,  12:18:44 PM
I was just thinking the same thing Jim. It looks like things may be setting up for a spike to the upside here.

 
 
  Jeff Bailey   8/6/2004,  12:16:35 PM
12:00 Internals at this Link

Correction to the NASDAQ's 11:00 AM new lows. 216 not 261.

 
 
  Mark Davis   8/6/2004,  12:13:22 PM
Not much mention of the TRIN today, which is about as far into bear country as possible without being overdone.

 
 
  James Brown   8/6/2004,  12:11:34 PM
The XBD broker-dealer index is also sliding lower in a descending channel. Unlike the SOX and GSO, which are already near trendline support, the XBD still has farther to fall. Here's a chart of the XBD: Link

 
 
  Mark Davis   8/6/2004,  12:09:55 PM
We've been going sideways since 10 minutes after the opening bell (almost 2 1/2 hours) in a very tight range. If this breaks to the downside it could be very ugly and the longer we hang around the lows the better the chances they won't hold IMO... still, you always have to keep in mind how the big boys love to make those stop runs (as in "to the upside" for today). They have the cash to do it, we don't, and that's why I'm staying well away from the range with our put play. Even if we get tagged at SPX 1075 we'll book a nice profit.

 
 
  Linda Piazza   8/6/2004,  12:09:46 PM
If the OEX can climb above 525.88 and stay above it, the OEX will for the first time today have several Keltner lines below it to provide support.

 
 
  Linda Piazza   8/6/2004,  12:05:01 PM
The OEX is building a triangle shape, so we should at least be able to tell when a breakout occurs. Unless it's a false one. Link

 
 
  James Brown   8/6/2004,  12:04:43 PM
The GSO software index is also testing its trendline of lower lows. Here's a chart: Link

 
 
  James Brown   8/6/2004,  12:04:42 PM
The GSO software index is also testing its trendline of lower lows. Here's a chart: Link

 
 
  James Brown   8/6/2004,  12:01:23 PM
The SOX semiconductor index is back under the 400 level and nearing the bottom of its descending channel. Here's a chart: Link

 
 
  Mark Davis   8/6/2004,  11:59:36 AM
Day Trade Exit Point Alert -

Leave your stops on SPQTO (SPX Aug 1075 put) @ SPX 1075 for now

It's very tempting to lower the stops to SPX 1074 but we're sitting on fat profits and there's still the possibility of a serious breakdown. If I lowered the stop too close to the action and got tagged, then watched the market do one of Jonathan's Acapulco cliff dives... well, I don't even want to think about that.

 
 
  Jeff Bailey   8/6/2004,  11:58:05 AM
About only think I see bullish today is BIG steepening of the yield curve.

5-year yield ($FVX.X) down 21 bp while longest-dated 30-year yield ($TYX.X) down "just" 11.1 bp

 
 
  James Brown   8/6/2004,  11:55:38 AM
The GHA hardware index is down more than 2% to a new one-year low and testing round-number support at 220. What looks interesting is the potential Head & Shoulders pattern built over the last year and the sector is currently at the neckline. The pattern is more easily seen on the weekly chart. The neckline is broken it would point to a drop toward the 180 region.

 
 
  Jim Brown   8/6/2004,  11:48:03 AM
Mark, the last couple days have definitely been worth the wait.

 
 
  Linda Piazza   8/6/2004,  11:46:08 AM
The OEX just can't make it over that 527-528 level and sustain values over that level. It could be building a base from which to rise or could be building a "b" distribution pattern on the five-minute chart. We'll have to wait for a breakout to be sure which it is. I don't see a lot of Keltner support gathering yet underneath the OEX position, although that smallest channel has arrested its downward slide. The OEX needs to maintain values above 527 and hopefully above 528 to begin to turn its lowest Keltner channel higher again.

 
 
  Mark Davis   8/6/2004,  11:44:01 AM
Day Trade Exit Point Alert -

I see we were stopped out of SPQHQ (SPX Aug 1075 call) @ 12.00 while I was outside admiring my 2 lb. tomatoes... +6.19%

We've been all over this market like a rat on a cheetoh these past 2 days. Jim I think your subscribers are getting their money's worth this week (grin)

 
 
  Jonathan Levinson   8/6/2004,  11:39:10 AM
Stepping away for what should be a brief appointment here.

 
 
  Mark Davis   8/6/2004,  11:34:08 AM
Stepping away for a few minutes...

 
 
  Mark Davis   8/6/2004,  11:33:06 AM
Day Trade Exit Point Alert -

Cinch up your stops on SPQHQ (SPX Aug 1075 call) to 12.00

We're now in the green with both concurrent puts and calls.

 
 
  Jonathan Levinson   8/6/2004,  11:26:00 AM
There's a bullish short cycle TRIX and Macd divergence here as the wavelet downphase on the last dip makes a higher oscillator low. This should be marking the start of a more substantial short cycle upphase for QQQ.

 
 
  Mark Davis   8/6/2004,  11:23:02 AM
Day Trade Exit Point Alert -

Cinch up your stops on SPQHQ (SPX Aug 1075 call) to 11.30 and break even

I don't trust this market.

 
 
  Jeff Bailey   8/6/2004,  11:18:48 AM
11:00 Internals at this Link

 
 
  Linda Piazza   8/6/2004,  11:18:12 AM
Keltner resistance lines are trying to separate again on the five-minute OEX chart. The Keltner line that's been stopping the OEX all morning is currently at 525.73, with the OEX sometimes piercing it but falling back. Those in countertrend long plays want the OEX to maintain levels above 527.

 
 
  Mark Davis   8/6/2004,  11:16:18 AM
Day Trade Entry Point Alert -

Go long now... SPQHQ (SPX Aug 1075 call) @ 11.20, stop 10.20

 
 
  Jonathan Levinson   8/6/2004,  11:14:40 AM
QQQ is poking above 33.20 again as crude continues to sink. 39 min channel support is down to 32.92, resistance 33.48.

 
 
  Jonathan Levinson   8/6/2004,  11:07:32 AM
Session low at 43.975 here.

 
 
  Jonathan Levinson   8/6/2004,  11:06:48 AM
Intraday realtime crude oil 10-tick chart at this Link.

 
 
  Mark Davis   8/6/2004,  11:04:53 AM
Day Trade Exit Point Alert -

Cinch your stops down on SPQTO (SPX AUG 1075 put) to SPX 1075

I hesitated a long time before doing this because I do NOT want to be stopped out of this play. I'll be really ticked if SPX comes up and tags that stop then immediately rolls over, but maybe we can catch another scalp long play and get back in that Cat Bird's Seat again (having the range bracketed with puts and calls, both in the green)... once you get there it doesn't matter what the market does.

 
 
  Linda Piazza   8/6/2004,  11:04:24 AM
The OEX dropped below the shoulder level on the potential inverse H&S on its five-minute OEX chart. It's trying to steady ahead of or at the day's low, but we'll have to see whether it can manage that steadying. Nearest Keltner resistance is at 526.17, with that Keltner line mostly stopping the OEX all day, and with stronger resistance trying to converge near 527.06-527.37.

 
 
  Linda Piazza   8/6/2004,  11:02:15 AM
Just caught the tail end of Martin Pring's talk on CNBC. He suggests we're in the fifth stage of the economic cycle, with a 2% gain expected in equities during that cycle (less when dividends are stripped out). The next stage, according to Pring, is Stage 6, in which equities typically see a 13% decline, and in which equities, bonds, and commodities are all bearish. Guess we're all going to make lots of money on short and put positions if he's right. As Jane mentioned earlier, for trading purposes, we don't care whether markets are going up or down, as long as we're along for the ride. For the purposes of our economy's well-being, we care, but we can actually make more money faster on the downside than on the upside as long as markets are directional. Now, the question is, is he right?

 
 
  Jeff Bailey   8/6/2004,  11:01:16 AM
Sell Program Premium SPX 1,070.90.

 
 
  Jeff Bailey   8/6/2004,  10:59:24 AM
Swing trade bearish close out alert .... close out 2 of the 3 Whole Foods Market (WFMI) August $75 puts (FMQTO) here at $1.85 bid. ($+0.95, or +105%)

 
 
  Jane Fox   8/6/2004,  10:56:13 AM
Mark Ms. Cleo has been replaced by Ken Jennings. (10:47 post)

 
 
  Jeff Bailey   8/6/2004,  10:55:59 AM
10:52 Market Watch at this Link

 
 
  Jonathan Levinson   8/6/2004,  10:54:51 AM
The short cycle upphase for QQQ isn't exactly setting the market on fire, with QQQ back to trading both sides of 33.20. The 30 min channel has slipped on the renewed weakness, with support down to 32.98 currently. Channel resistance is now 33.50.

 
 
  Jeff Bailey   8/6/2004,  10:49:56 AM
Whole Foods Market (WFMI) $75.34 -2.14% .... moving into near-term "zone of support" on my fitted retracement bar chart.

 
 
  Linda Piazza   8/6/2004,  10:48:26 AM
Still no confirmation of the OEX's inverse H&S, although the OEX also has not of yet violated the shoulder level, so it's still possible that it will confirm.

Beginning now, I'm going to be in and out today, but will make posts as frequently as possible. Watch Mark's SPX-related posts and Jim's futures posts for information that might be helpful to OEX traders.

 
 
  Mark Davis   8/6/2004,  10:47:13 AM
Aha! MACD just made a bearish cross... but unfortunatley the stochastics are bottomed out indicating a possible bounce. Will somebody please tell me whether we're going to head up or down? Where's Ms. Cleo when you need her???

 
 
  Mark Davis   8/6/2004,  10:44:17 AM
I keep watching the SPX 1-min chart MACD readings to give me a hint of what may happen but it refuses to give up it's secret. Link

 
 
  Jonathan Levinson   8/6/2004,  10:42:10 AM
Session low for Nymex crude here at 44.075, down .73%.

 
 
  Jonathan Levinson   8/6/2004,  10:41:46 AM
The continued prints above 33.20 are stabilizing the falling 7200-tick SMA for QQQ, and the 30 min channel is now flat, now longer falling. The short cycle upphase is in its early stages from what I see, and if bulls can avoid another plunge to the session lows, the 30 min channel should begin to turn up. Looking for a break of 33.40 for the first signs of an upturn that should ideally break 33.60 for confirmation.

 
 
  Linda Piazza   8/6/2004,  10:38:26 AM
No confirmation yet of the OEX's inverse H&S on the five-minute chart. This pause is allowing Keltner resistance to begin to converge right at the 527.81-528.17 level near the neckline. The OEX needs to move through it soon before that resistance has time to firm up.

 
 
  Jonathan Levinson   8/6/2004,  10:36:50 AM
They're all sold out. Looks like I'm not the only one suffering from power fades in the neighbourhood.

 
 
  Linda Piazza   8/6/2004,  10:31:23 AM
As a Southerner (born in Louisiana, raised in Texas), I thought I had an explanation for every little idiom and saying there was, but I didn't know that one's origin, so had to check it out.

 
 
  Linda Piazza   8/6/2004,  10:30:11 AM
The OEX did pull back from near 528, having begun that pullback as I was uploading my 10:22 post. It's now approaching what should be the shoulder level for a potential inverse H&S. This is a sign that dip-buyers are trying to step in, but not a promise that they're going to be successful. We expected them at this level and they appeared, and now those in countertrend bullish plays better hope they pull it together and send the OEX up through the neckline of that inverse H&S. The upside target would be at about 530, one area in which historical and Keltner resistance may come together, so I would certainly have potential profit-protecting plans in mind as that level was approached, if it is.

 
 
  Jonathan Levinson   8/6/2004,  10:29:07 AM
Another brownout this morning- I'm running across the street to buy a UPS. Looks like my new office comes with old wiring.

 
 
  Jane Fox   8/6/2004,  10:28:40 AM
Thank you Linda - I knew you would have an answer for us. (10:25 post)

 
 
  Mark Davis   8/6/2004,  10:26:27 AM
Jane I haven't listened to Bob for a long time now, althought I love his show. Somehow on Sunday afternoons I usually find myself out trying to make life miserable for the Striped Bass in SF Bay, with financial thoughts FAR from my mind.

 
 
  Linda Piazza   8/6/2004,  10:25:23 AM
catbird seat: You made me curious. According to encarta.msn, it's a "position of power: a position or situation that gives somebody power and an edge over others, especially competitors or opponents."

The origin is apparently uncertain, but there are actually catbirds who tend to sit on high perches and are perceived as clever.

 
 
  Mark Davis   8/6/2004,  10:23:39 AM
Day Trade Exit Point Alert -

Exiting SPQHQ (SPX Aug 1075 call) @ 12.50, +10.61%

 
 
  Jane Fox   8/6/2004,  10:22:52 AM
Mark you must listen to Bob Brinker. Cat Bird Seat is one of his sayings and I surely don't know what he means either than it is good. (10:19 post)

 
 
  Linda Piazza   8/6/2004,  10:22:15 AM
Be prepared for a possible OEX pullback from near 528. Those in bullish countertrend plays hope then to see the OEX steady near 525.50 or so and move up again--forming an inverse H&S.

 
 
  Jonathan Levinson   8/6/2004,  10:21:52 AM
That dip never made it to 30 min channel support, and the break back above 33.20 confirmed a bullish short cycle TRIX divergence for QQQ. The 7200-tick SMA is being tested at 33.34, above which is the flattening 30 min channel resistance line at 33.53.

 
 
  Mark Davis   8/6/2004,  10:19:50 AM
Day Trade Exit Point Alert -

Cinch up your stops on SPQHQ (SPX Aug 1075 call) to 11.30, break even.

We are now sitting in the proverbial "Cat Bird's Seat" (whatever that is... I only know it's GOOD)

 
 
  Linda Piazza   8/6/2004,  10:16:49 AM
OEX Keltner resistance lines have now separated and might allow a stronger bounce, perhaps even up to 533, according to the five-minute Keltner chart. However, the resistance now at 526.66 often catches the OEX on upswings when the breakout has been so severe. Those in countertrend bullish plays on hopes for a bounce from 524-526 certainly want to see the OEX above 527.80 and maintaining values above that level as a first step. They should also be prepared for a breakdown at any point.

 
 
  Jeff Bailey   8/6/2004,  10:16:23 AM
Buy Program Premium

 
 
  Jeff Bailey   8/6/2004,  10:15:31 AM
S&P 500 Index (SPX.X) 1,071.75 -0.82% ... so far has been able to hold its WEEKLY S2.

SPY $107.70 -0.64% ... came within a penny of its WEEKLY S2.

 
 
  Mark Davis   8/6/2004,  10:14:47 AM
Day Trade Entry Point Alert -

Go long now... SPQHO (SPX Aug 1075 call) @ 11.30, stop 10.20

 
 
  Mark Davis   8/6/2004,  10:12:12 AM
Day Trade Exit Point Alert -

Cinch your stops down to SPX 1076, just above the last swing high.

 
 
  Linda Piazza   8/6/2004,  10:11:17 AM
If the OEX cannot steady near 524, then the weekly chart shows the possibility for a much lower low, near 520-522, or perhaps even near 513-515. If those levels don't hold, a drop to 498 looks possible on that weekly chart. However, I do expect bounces along the way, and think it possible that we could see one today, although I'm not 100% convinced we will. I just expect those bounces to be countertrend ones.

 
 
  Jonathan Levinson   8/6/2004,  10:10:35 AM
The Fed has announced a 4.25B weekend repo, for a net drain of 1.75B against the 6B overnight repo expiring today.

 
 
  Jeff Bailey   8/6/2004,  10:10:19 AM
Current OPEN MM profiles at this Link

 
 
  Jonathan Levinson   8/6/2004,  10:09:13 AM
Bonds and gold continue to slack off, but equities are slacking with them, Dow and Russell2K futs hitting new lows here. The trending short cycle oscillators for QQQ are back to extreme oversold levels, with channel support unchanged at 33.00.

 
 
  Jeff Bailey   8/6/2004,  10:04:23 AM
10:01 Market Watch at this Link

 
 
  Jonathan Levinson   8/6/2004,  10:01:25 AM
QQQ never made it above 33.40, and that's going to be key resistance on what is shaping up as another flat rectangle, support currently being tested at 33.20. If it breaks, look for support at the 30 min channel bottom, currently 33. Because the oscillators are so oversold, I expect those channel supports to be firmer than we saw yesterday.

 
 
  Mark Davis   8/6/2004,  9:57:37 AM
Day Trade Exit Point Alert -

Leave your stops on SPQTO (SPX AUG 1075 put) @ 11.50, break even

It's unthinkable to me that we could be stopped out and I want to wait until the initial volatility subsides before cinching down stops. I would hate to get too close and get stopped out of this play.

 
 
  Linda Piazza   8/6/2004,  9:56:52 AM
One reason that quick countertrend movements are suitable only for adept scalpers concerns the changes in volatility in options. Right now, options prices are bound to be inflated, due to the quick drop and to this time being during amateur hour, when they often are. If the OEX steadies, volatility begins dropping and options prices do, too. As the OEX moved up in a countertrend move, volatility might drop more, and call prices can sometimes drop even as the OEX moves higher. Doesn't always happen that way, but often does.

 
 
  Linda Piazza   8/6/2004,  9:53:16 AM
I'm still thinking that on the OEX, a bounce from somewhere between the current level and 524 could possibly be expected, but as of now, I think that bounce might be a countertrend bounce, dangerous to play for all but adept scalpers, and might find strong resistance between 530-532, and possibly lower, nearer 529. I'm just not certain of the OEX's ability to move much above 532 or so, and not even certain it could move that high or steady before 524. Some charts suggest a dip to 520-522.

 
 
  Jonathan Levinson   8/6/2004,  9:49:28 AM
Gold holding most of its gains at 401, with HUI up 3.03% and XAU +2.96% at 184.14 and 86.74 respectively.

 
 
  Jeff Bailey   8/6/2004,  9:48:03 AM
S&P Banks Index (BIX.X) 345.90 +0.42% ....

KBW Banks Index (BKX.X) 94.01 +0.34% ...

 
 
  Jonathan Levinson   8/6/2004,  9:46:23 AM
Session high for GE here at 31.82, down 1.21%. QQQ is bouncing from the earlier Keltner violations, currently above 33.00 support. Resistance is at 33.62, and the bounce needs to continue through 33.40 resistance in order to stall the downslope in the 30 min channel.

 
 
  Linda Piazza   8/6/2004,  9:45:34 AM
The OEX is bouncing. On a Keltner basis (not historical), the OEX has little resistance until 529 and then 530-531. If the OEX bounces quickly enough, it could easily get up to the 530-ish level, but when there's been a breakout like this one, the OEX is often stopped by a channel line currently at 528.75-529.

 
 
  Jonathan Levinson   8/6/2004,  9:44:31 AM
Here's the move in the USD Index: Link.

 
 
  Jonathan Levinson   8/6/2004,  9:43:49 AM
Bonds have eased off their highs slightly, with TNX up to 4.2098%, down 19.2 bps.

 
 
  Mark Davis   8/6/2004,  9:43:22 AM
Day Trade Exit Point Alert -

Exit SPQHQ (SPX Aug 1080 call) @ 10.00, -6.54%

Let the puts run... SPQTO (SPX AUG 1075 put) @ 11.50, currently up about +40%

 
 
  Linda Piazza   8/6/2004,  9:43:07 AM
Perhaps Jane has already mentioned the TRIN, but it's awfully high, compared to recent values. That can be a contrarian signal, suggesting that a bounce could be imminent. However, let price be your arbiter, because it could also just be a sign that we're going to have watershed selling all day.

 
 
  Linda Piazza   8/6/2004,  9:41:26 AM
Caution, OEX traders: I'm not getting up-to-date feeds on the OEX.

Mark mentioned a non-classic H&S. There's this one on the OEX, too: Link I've been watching it a number of days, but haven't mentioned it because it formed essentially within a congestion zone, and I just wasn't sure how valid it was. However, now I think we should be watching the neckline area for possible resistance on any bounces.

 
 
  Jeff Bailey   8/6/2004,  9:38:15 AM
Swing trade put option alert .... taking 3 of the Paychex (PAYX) $29.28 -3.23% .... December $30 puts (PQXXF) $2.35 offer.

No stop, target $25.00.

 
 
  Linda Piazza   8/6/2004,  9:35:55 AM
The OEX is dipping toward the 5/12 low of 526.53. I would expect some dip-buying to occur near this level . . . oops, the OEX just exceeded it. Nevertheless, I would expect some dip-buying to perhaps begin somewhere between here and the 524.50-ish level, but would now expect strong resistance in the 531-532-ish level, if not before.

 
 
  Linda Piazza   8/6/2004,  9:32:01 AM
The SPX did not open far below that 5/12 low. I'm never good at predicting where the cash markets will open based on futures activities.

 
 
  Linda Piazza   8/6/2004,  9:30:28 AM
If the cash markets open near the level at which the futures closed this morning, the SPX will open far below the 5/12 low of 1076.32. I would expect some dip-buying, but then we would have to see how the 1080-ish level was handled. I mention this because the ES contract is the best guess we have for what might happen on the OEX, too. The OEX is likely to open deeper inside its weekly support zone, with dip-buying perhaps bringing it up to test resistance. Let's see what happens.

 
 
  Jeff Bailey   8/6/2004,  9:30:10 AM
Delayed openings ... their will be quite a few delayed openings this morning for NYSE-listed stocks. INDU/DIA, OEX, SPX, traders may want to wait 10-minutes or so.

 
 
  Mark Davis   8/6/2004,  9:29:06 AM
Jane I was working late last night. Odd things pop into my head when I'm tired but sometimes a valid thought comes through. Jim stated yesterday that a bad report was already being priced into the markets with the big decline, but there is another factor (that popped into my fuzzy gourd late last night).

What effect would a bad jobs report have on the Presidential election? If it looks like Kerry has a good chance of winning the election then another unknown (uncertainty) has to be factored into the equation. Kerry's odds just went up this morning and you can bet his team will milk this for all it's worth. This could trigger another leg down and it could be a nasty one. We'll find out soon enough, but I'm hearing the talking heads mulling this one over already.

 
 
  Jonathan Levinson   8/6/2004,  9:27:34 AM
Unsurprisingly, the 30 and 60 min cycle oscillators are buried in oversold by this move, and there's even a bullish divergence on the 60 min chart for the NQ futures (using them as a proxy for QQQ to catch pre-market data). Once again, bulls will want to see some kind of confirmation with a break of upside resistance before committing to a direction, which for QQQ would be 33.60. First resistance along the way is at 33.39, which has held since the initial drop from 8:30.

 
 
  Jeff Bailey   8/6/2004,  9:25:28 AM
U.S. Dollar Index (dx00y) 88.37 -1.41% (30-minute delayed) ... well below the 89.05-89.08 pivot correlations.

 
 
  Jonathan Levinson   8/6/2004,  9:02:19 AM
It's going to be fascinating to see whether the Fed adds or drains via today's open market operations. On the one hand, its explicit approach to economic softness has been to expand the monetary base. On the other, its stated approach for rising asset prices is to contract. Here, we have precisely the wrong combination- oil within 1$ of record highs (not inflation adjusted) and a weak employment report. Expanding the monetary base to spur employment will rally oil and other hard assets, while contracting it to reign in asset prices should hurt employment. Tough dilemma for a Friday morning. The repo announcement is due at 10AM - there is a 6B repo expiring today.

 
 
  Jonathan Levinson   8/6/2004,  8:56:53 AM
Gold is up to 401.50 here, coming in for a test of 402 resistance, which is the top of the key confluence zone. 398 resistance held for only a few minutes. Look for next resistance at 405 if 402 gets cleared.

 
 
  Jonathan Levinson   8/6/2004,  8:55:07 AM
Here's a view of the move in euros: Link

 
 
  Jonathan Levinson   8/6/2004,  8:53:21 AM
The 30 min-delayed USD Index chart ( Link ) isn't reflecting the 8:30 data yet, but gold and currencies are (euro futures up 1.54% here). Interestingly, crude oil is lower at 44.35 here.

 
 
  Jonathan Levinson   8/6/2004,  8:49:05 AM
Gold is hitting a session high of 400 here, +6.50, with Dow futs to a sesion low of 9853, ES 1068.25. QQQ is back down to 33.25.

 
 
  Mark Davis   8/6/2004,  8:48:11 AM
It could be argued that a H&S formation is only valid in an uptrending market, nevertheless, the SPX daily looks like the neckline will surely be violated today and the downside target is SPX 1000. Link

All the other major indices daily charts look about the same (showing similar H&S formations), with the exception of the SOX, which broke down long ago, and the Nasdaq, which just recently broke down.

A case could be made that the first domino (the SOX) tipped over some time ago and the rest are about to fall.

I'm not trying to scare anybody here... just pointing out a potential scenario that just became more likely.

 
 
  Jonathan Levinson   8/6/2004,  8:43:32 AM
Bonds still climbing, with TNX now down 21.8 bps, a 4.95% decline today to 4.185%.

 
 
  Mark Davis   8/6/2004,  8:37:59 AM
Day Trade Exit Point Alert -

Ouch! That Non-Farm Payroll number really hurt.

Exit SPQHP (SPX Aug 1080 call) at the opening bell

Let SPQTO (SPX Aug 1075 put) RUN (and it will!)

 
 
  Jonathan Levinson   8/6/2004,  8:36:12 AM
Gold is up 5.20 to 398.70, silver +.111 to 6.86 and crude oil holding flat at 44..40. Bonds are up huge, with TNX down a whopping 21.7 bps to 4.183%, a 4.93% decline.

 
 
  Jonathan Levinson   8/6/2004,  8:34:53 AM
Bounce attempt underway now, with QQQ up to 33.37 off a spike low to 33.20.

 
 
  Jonathan Levinson   8/6/2004,  8:33:58 AM
Still falling. This is the downside trending move implied by the whipsaw reversal to the daily cycle upphase. All downside 30 and 60 min Keltner channel supports are being broken on the 8:30 move.

 
 
  Jonathan Levinson   8/6/2004,  8:31:54 AM
Equities are diving on the data, QQQ down to 33.302 here, futures setting new lows, ES 1070.5, NQ 1339, YM 9872, ER 524.60.

 
 
  Jonathan Levinson   8/6/2004,  8:30:59 AM
Huge miss in the payroll number.

8:29am U.S. JULY NONFARM PAYROLLS 32,000 VS. 235,000 EXPECTED

8:29am U.S. JULY AVERAGE HOURLY EARNINGS 0.3%

8:30am U.S. JULY AVERAGE WORKWEEK UP TO 33.7 HOURS

8:30am U.S. JUNE PAYROLLS REVISED DOWN TO 78K VS. 112K

8:30am U.S. JULY MANUFACTURING PAYROLLS UP 10,000

8:30am U.S. JULY HOUSEHOLD SURVEY: 629,000 MORE HAVE JOBS

 
 
  Jonathan Levinson   8/6/2004,  8:24:22 AM
Futures still drifting higher, with QQQ now up .11 to 33.71.

 
 
  Jonathan Levinson   8/6/2004,  8:17:56 AM
Session high for gold and Russell2K futures here.

 
 
  Jonathan Levinson   8/6/2004,  8:15:05 AM
Nymex crude is showing a new high of 44.74, currently trading flat at 44.40.

 
 
  Jonathan Levinson   8/6/2004,  7:58:05 AM
Equities are higher, ES +2.5 at 1081, NQ +2.5 at 1356.5, YM +25 at 9958 and QQQ +.077 at 33.677. Gold is down 50 cents to a session low of 393, silver -.022 to 6.727, euro futures down .12% to a session low of 1.2041, and crude oil down .025 to 44.375. Bonds are higher by .203 to 111.4375 for the ZN 10-yr treasury future.

We await the 8:30 release of nonfarm payrolls, est. 243K, unemployment rate, est. 5.6%, hourly earnings, est. +.3%, average workweek, est. 33.8, and at 3PM, consumer credit for June, est. 4.0B.

 
 
  Linda Piazza   8/6/2004,  7:05:05 AM
Good morning. The Nikkei opened and dropped straight toward Wednesday's low. It spent the rest of the day between that low and about 10,975, closing down 88.32 points or 0.80%, at 10,972.57. The culprit was the usual one of late: oil prices. Some reporting companies, specifically retailers, begin to mention the impact that the rising prices are having on their outlooks. In addition, June's household spending was down 2.6%, year-over-year. Exporters sank in early trading, and many closed lower, including Toyota and Sega. Sega was reacting to its earnings report, too. Among stocks closing lower were electronics companies Hitachi and Matsushita, and Toshiba, with a report speculating that the three could jointly turn out LCD panels for flat-screen televisions.

Most other Asian markets closed down, too. In Taiwan, the same techs that were rebounding yesterday were lower today, with the Taiwan Weighted dropping 0.52%. South Korea's Kospi fell 1.26%, and Singapore's Straits Times declined 0.67%. Hong Kong's Hang Seng fell 0.11%, but China's Shanghai Composite gained 0.10%.

Currently, most European bourses trade lower, too. Germany's June industrial production fell 1.9% month-over-month, much more than the expected 0.1% drop. German companies reported fewer foreign orders for their goods. In the U.K., bank Barclays continued its gains, reportedly on higher volume than has been seen in three years, on the belief that Citigroup (C) might make a bid for the U.K. bank. French insurer AXA reported earnings and also presented its plan to buy the rest of its Asian business it does not already own, with the CEO mentioning company plans to make other acquisitions in North America, Europe and Asia. Shares of the company declined slightly. German reinsurer Munich Re reported that Q2 profit rose from the year-ago's 28 million euros to the current 628 million euros.

As of this writing, the FTSE 100 had fallen 22.60 points or 0.51%, to 4,390.80. The CAC 40 had dropped 31.36 points or 0.87%, to 3,591.62. The DAX had dropped 55.22 points or 1.44%, to 3,773.81.

 
 
  Linda Piazza   8/6/2004,  7:05:04 AM
Good morning. The Nikkei opened and dropped straight toward Wednesday's low. It spent the rest of the day between that low and about 10,975, closing down 88.32 points or 0.80%, at 10,972.57. The culprit was the usual one of late: oil prices. Some reporting companies, specifically retailers, begin to mention the impact that the rising prices are having on their outlooks. In addition, June's household spending was down 2.6%, year-over-year. Exporters sank in early trading, and many closed lower, including Toyota and Sega. Sega was reacting to its earnings report, too. Among stocks closing lower were electronics companies Hitachi and Matsushita, and Toshiba, with a report speculating that the three could jointly turn out LCD panels for flat-screen televisions.

Most other Asian markets closed down, too. In Taiwan, the same techs that were rebounding yesterday were lower today, with the Taiwan Weighted dropping 0.52%. South Korea's Kospi fell 1.26%, and Singapore's Straits Times declined 0.67%. Hong Kong's Hang Seng fell 0.11%, but China's Shanghai Composite gained 0.10%.

Currently, most European bourses trade lower, too. Germany's June industrial production fell 1.9% month-over-month, much more than the expected 0.1% drop. German companies reported fewer foreign orders for their goods. In the U.K., bank Barclays continued its gains, reportedly on higher volume than has been seen in three years, on the belief that Citigroup (C) might make a bid for the U.K. bank. French insurer AXA reported earnings and also presented its plan to buy the rest of its Asian business it does not already own, with the CEO mentioning company plans to make other acquisitions in North America, Europe and Asia. Shares of the company declined slightly. German reinsurer Munich Re reported that Q2 profit rose from the year-ago's 28 million euros to the current 628 million euros.

As of this writing, the FTSE 100 had fallen 22.60 points or 0.51%, to 4,390.80. The CAC 40 had dropped 31.36 points or 0.87%, to 3,591.62. The DAX had dropped 55.22 points or 1.44%, to 3,773.81.

 
 
  Linda Piazza   8/5/2004,  10:23:04 PM
Thursday, the OEX confirmed its H&S pattern and came within a few cents of meeting the downside target, all within the space of a single day. It created a downside breakout signal on the five-minute Keltner channels and touched bottom support on the 15-minute one, bouncing slightly from that support. It reached down to the weekly historical and Keltner support.

Tomorrow morning, we see the much-awaited non-farm payrolls number and will face the reaction from that number. At this point, it's difficult to anticipate the likely reaction to that number, as there are various sell-the-news/buy-the-news permutations depending on expectations and the actual number. All I can point out is the information already baked into the charts, giving some if/then possibilities.

Weekly and daily Keltner support has now drifted down to 524.24-524.85, so the OEX certainly has vulnerability down to that level. Unless the OEX can climb to and maintain values above 540.30 on a weekly basis, the Keltner charts suggest that the vulnerability to the 524-525 level will remain.

What about on an intraday basis? Tomorrow morning, we're going to need to let some of the first volatility shake out after the NFP number before we see how Keltner resistance lines up, but as I type Thursday night, first Keltner resistance was trying to line up near 532-532.50 and then again near 535-536. As of tonight, about all that can be said is that logic would advise that the markets are ready for an oversold bounce at least, that the OEX still has vulnerability down to 524 and that 535-537 appears to be strong enough resistance to stall the OEX, with multiple resistance layers below and above that, too. If the OEX should get slung all the way from one side of its Keltner channels to the other, as sometimes happens when there's been a breakout such as today's, top resistance appears to be at 538.40 or so, but 535-537 would seem to be a top goal for tomorrow if a bounce should get underway.

If you're inclined to participate in a bullish play on hopes of a bounce, make sure all your ducks are lined up in a row, and that TRIN and the advdec support your play. Although I expect a bounce sometime and it could be explosive when it occurs, it could also be a countertrend bounce that could fail at any moment. Because it's such a benchmark number, consider the Dow's position in relationship to 10,000, perhaps not entering a bullish OEX play just ahead of a Dow test of 10,000, for example. Watch the SOX, measuring whether it might still be rising toward the 417-420-ish neckline of a possible inverse H&S on its daily chart. If that neckline is approached, the possibility exists that the formation could be confirmed or rejected, with opposite effect on the tech-related and other indices, of course. And of course watch crude prices. Today's new closing high certainly contributed to the pressure on the indices.

What about new bearish plays? That's difficult with the OEX already inside that weekly support zone. Despite the vulnerability to 524 shown by the Keltner charts, the 5/12 low of 526.53 and the 7/26 low of 527.17 might provide an automatic bounce somewhere near the two. At the same time, a break below those might set up a new leg down or at least a drop down to the 524-525-ish support. If you're entering bearish plays or still in one, make plans to protect profits near 526-527 and again near 524-525.

 
 
  Jeff Bailey   8/5/2004,  9:43:29 PM
September Crude Oil futures (cl04u) $44.71 and nearing WEEKLY R1

 
 
  OI Technical Staff   8/5/2004,  9:30:23 PM
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