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  Jeff Bailey   8/10/200,  5:57:13 PM
Pivot Matrix for tomorrow at this Link

Post CSCO has DIA $99.30, SPY $108.00, QQQ $33.00

 
 
  Mark Davis   8/10/200,  5:25:27 PM
Recap of Tuesday's trades...
SPQTM (SPX Aug 1065 put) @ 9.50
SPQTM (SPX Aug 1065 put) @ 8.60, -9.47%

SPQTN (SPX Aug 1070 put) @ 7.70
SPQTM (SPX Aug 1065 put) @ 7.70, break even

SPQHP (SPX Aug 1080 call) @ 6.50
SPQHP (SPX Aug 1080 call) @ 6.00, -7.69%

SPQTN (SPX Aug 1070 put) @ 8.60
SPQTN (SPX Aug 1070 put) @ 7.50, -12.69%

SPQUJ (SPX Sept 1050 put) @ 12.80 (holding overnight)
___________________________________________
Total gain/loss for Tuesday = -2.70, -29.85%
Total gain/loss for the week = -4.50, -47.97%

Total gain/loss since inception = +15.15, +117.51%

 
 
  Jim Brown   8/10/200,  5:12:31 PM
Alert - CSCO revenue guidance flat to up only slightly for current quarter

 
 
  Jeff Bailey   8/10/200,  4:58:53 PM
Semiconductor HOLDRs (SMH) $30.86 +1.04% .... lower at $30.25 after NSM's warnings (see Jim's 16:34:09)

QCharts' weekly pivot levels for SMH are $28.68, $29.68, P= $31.44, $32.44, $34.20.

 
 
  Jeff Bailey   8/10/200,  4:56:33 PM
Closing Internals at this Link

 
 
  Mark Davis   8/10/200,  4:52:37 PM
CSCO is now tanking hard in AH trading, currently 18.91, -7.58%

 
 
  Jim Brown   8/10/200,  4:34:09 PM
NSM - Warning - reversing prior guidance of a +3-5% rise to a -3-5% drop.

 
 
  Jeff Bailey   8/10/200,  4:25:52 PM
Current OPEN MM Profiles at this Link

Today's Activity ....

Swing trade short the underlying QQQ at $33.18, stop $33.55 and targeting $32.25.

 
 
  Mark Davis   8/10/200,  4:22:36 PM
CSCO is declining in AH trading and so far today's LOD @ 20.05 is acting as resistance.

 
 
  Jeff Bailey   8/10/200,  4:16:38 PM
S&P Depository Receipts (SPY) .... went out at $108.22 +1.14% ... looking $108.20

 
 
  Jeff Bailey   8/10/200,  4:15:02 PM
QQQ $33.20 +1.21% .... on the CSCO headline numbers.

 
 
  Jeff Bailey   8/10/200,  4:14:04 PM
S&P Retail Index (RLX.X) 370.37 +1.81% .... closed just above its QCharts' WEEKLY Pivot (369.50)

 
 
  Jonathan Levinson   8/10/200,  4:08:24 PM
QQQ has failed at upper wedge resistance and is now below wedge support in the blink of an eye. Channel support is 33.14.

 
 
  Mark Davis   8/10/200,  4:07:08 PM
CSCO beats by a penny Link

 
 
  Jonathan Levinson   8/10/200,  4:05:34 PM
The daily cycle has yet to respond to today's print, no decisive improvement in the daily cycle oscillators yet, but today's candle would qualify as a bullish harami if we ignore yesterday's flat close doji stars. Once again, there's good potential for a bullish stochastic divergence on the higher 10-day stochastic low, if the bulls can convert the downphase up.

 
 
  Jim Brown   8/10/200,  4:05:19 PM
Alert - CSCO Earnings = 0.21 , est was +0.20

Cisco said inventory levels were increasing. (like Intel)

 
 
  Jeff Bailey   8/10/200,  4:03:57 PM
Broker/Dealer Index (XBD.X) 118.07 +2.68% .... closed just under its QCharts' WEEKLY R1 of 118.09.

 
 
  Mark Davis   8/10/200,  4:01:53 PM
This looks like short covering to me (wishful thinking?) We'll see tomorrow but by purchasing the Sept puts vs. the Aug puts we've bought ourselves some time and also protection against volatility. We nailed an entry price on the puts within 30 cents of the day's lows so we are looking good unless the market can come up with another rally tomorrow.

 
 
  Jeff Bailey   8/10/200,  4:01:45 PM
Dow Diamonds (DIA) $99.68 +1.28% ... session highs and above WEEKLY Pivot of $99.58.

 
 
  Jonathan Levinson   8/10/200,  4:01:04 PM
QQQ is trying to clear 33.40 here, new highs printing as I type. Link Channel and rising upper wedge resistance are at 33.50. That's the next hurdle for bulls, but if they can hold above 33.40 on this run, then it's a significant bullish victory.

 
 
  Jeff Bailey   8/10/200,  4:00:28 PM
QQQ $33.43 +1.9% .... session highs, WEEKLY Pivot just ahead at $33.47.

 
 
  Jeff Bailey   8/10/200,  3:59:01 PM
S&P 500 (SPX.X) 1,078.28 +1.22% ... session highs and WEEKLY Pivot.

 
 
  Mark Davis   8/10/200,  3:54:36 PM
TRIN is printing a LOD @ .49... I consider this borderline overdone to the bullish side. It looks like we may have nailed the top with the SPQUJ (SPX Sept 1050 put) @ 12.80, although it will only be clear when viewed in the rear view mirror. I just don't see much upside from here, but that's JMO.

 
 
  Jeff Bailey   8/10/200,  3:54:04 PM
JDS Uniphase (JDSU) $3.18 +3.61% .... just off session high of $3.24, but back at the bulk of today's trading around $3.18 and just under WEEKLY Pivot of $3.21.

 
 
  Jeff Bailey   8/10/200,  3:51:52 PM
Cisco Systems (CSCO) $20.31 +1.29% .... earnings after the bell.

 
 
  Linda Piazza   8/10/200,  3:51:13 PM
The OEX is pushing above the resistance that had tried to gather above its position on the five-minute Keltner chart. It could be headed up again toward the top channel's resistance, at 528.36, near the 38.2% retracement of the steep decline off the 8/04 high. It's still finding resistance where expected on the 15-minute Keltner chart. This is going to be a tough place for bears to make a decision about holding overnight, with many in positions that are currently underwater and with the OEX positioned to either roll down tomorrow beneath that resistance or push up toward the 530-533 level. It's even tougher because we could have expected a prolonged test of this resistance level.

 
 
  Jeff Bailey   8/10/200,  3:50:58 PM
WEEKLY Pivots and just barely for the SPY, OEX and BIX.X

 
 
  Jonathan Levinson   8/10/200,  3:44:47 PM
QQQ is pushing higher again after bouncing from a higher low at 33.25. 30 min channel resistance is up to 33.47, support at 33.07.

 
 
  Linda Piazza   8/10/200,  3:40:34 PM
Keltner resistance is beginning to gather over the OEX's position on the five-minute Keltner chart, too, something that bears want to see happen. That resistance gathers in a rather wide range from 527.24-528.28, however, and bears would like to see it converge into a tighter range to have stronger hopes of it holding.

 
 
  Linda Piazza   8/10/200,  3:33:43 PM
Here's the rub on the OEX. It's finding resistance (so far) where we would have expected it to find resistance, based on known historical resistance and Keltner evidence on the 15-minute chart, but there was that roughly formed inverse H&S that's possibly been confirmed, too. CSCO reports after the bell, and it's always been possible that the OEX could rise toward 530-532, where even stronger resistance should await. Whether in a bullish or bearish position, decide within the next 20 minutes if you want to hold overnight, and begin making exit plans if not. I still think there's a chance this resistance will hold and haven't seen anything too discouraging yet to those in bearish positions, but I definitely see lots of risk.

 
 
  Mark Davis   8/10/200,  3:27:09 PM
We now have confirmation (on the shortest-term charts) of a top @ SPX 1077.44. If this holds and we fail from anywhere near this area, the SPX Sept 1050 puts could be very profitable.

 
 
  Linda Piazza   8/10/200,  3:25:44 PM
The OEX is finding resistance where it was expected on the 15-minute Keltner chart, but it's not exactly breaking down under that resistance, either. That presents a danger to bears, who want to see the OEX below 525.90 again and maintaining values below that level.

 
 
  Jonathan Levinson   8/10/200,  3:21:25 PM
33.40 QQQ has held so far and the sharp upper Keltner violation should be a sell signal in light of the toppy 30 min cycle. Any upside above 33.40 on this run would be a trending move on the 30 min cycle- in other words, if today's strength is going to fail, I would expect it to do so from these levels now. Link

 
 
  Jonathan Levinson   8/10/200,  3:17:43 PM
Here's a look at the 30 min delayed USD Index to tie it all together. Link Looks like equities are trading against bonds and rising with the dollar.

 
 
  Jonathan Levinson   8/10/200,  3:16:57 PM
Session lows for gold, Canuck bucks and euros, with Nymex crude trading up to 44.525 here.

 
 
  Linda Piazza   8/10/200,  3:16:21 PM
With lots of imagination, it's possible to interpret this as an inverse H&S formation, which would blow a hole in any bearish thesis for a while, but the OEX currently tests gathering Keltner resistance on the 15-minute chart. It hasn't yet moved above a 38.2% retracement of the steep decline from the 8/04 high. Link

 
 
  Mark Davis   8/10/200,  3:14:08 PM
Day Trade Exit Point Alert -

Stopped out... SPQTN (SPX Aug 1070 put) @ 7.50, -12.79%

 
 
  Jeff Bailey   8/10/200,  3:11:48 PM
QQQ $33.36 +1.7% ... major indices should close at session highs.

 
 
  Jonathan Levinson   8/10/200,  3:11:42 PM
QQQ is now exceeding the 60 min channel boundary at 33.32 and is hitting rising 30 min channel resistance at 33.36. A break above 33.40 would be a break back into the bulk of Friday's post-plunge range.

 
 
  Jeff Bailey   8/10/200,  3:10:52 PM
Buy Program Premium ... SPX 1,076.28

 
 
  Mark Davis   8/10/200,  3:09:23 PM
Day Trade Entry Point Alert -

Go short now... SPQUJ (SPX Sept 1050 put) @ 12.80, stop 11.00
My bias remains down over the next couple of months... we will hold this one overnight.

 
 
  Jeff Bailey   8/10/200,  3:08:48 PM
03:00 Internals at this Link

 
 
  Linda Piazza   8/10/200,  3:08:48 PM
The OEX has now broken out on the five-minute Keltner chart, trying to head toward next Keltner resistance.

 
 
  James Brown   8/10/200,  3:08:43 PM
H&R Block (HRB) has just broken out over round-number psychological resistance at the $50.00 mark. This looks like a bullish entry point but the simple 200-dma just overhead could be a significant hurdle.

 
 
  Linda Piazza   8/10/200,  3:07:31 PM
And here's the breakout attempt on the OEX--not yet successful, Keltner-wise--that I feared might whipsaw bearish traders out of their trades. The OEX is perhaps headed up into the 15-minute resistance trying to firm from 527.62-528.07. That resistance looks relatively firm, but I wouldn't be surprised to see the OEX spend some time testing it. On the five-minute chart, support is trying to firm near 525.

 
 
  Jonathan Levinson   8/10/200,  3:05:31 PM
Session highs breaking out here on a strong volume spike of 1.4M shares within 100 QQQ ticks.

 
 
  Jeff Bailey   8/10/200,  2:59:45 PM
02:55 Market Watch at this Link

Treasuries most moved since FOMC announcement.

 
 
  Jonathan Levinson   8/10/200,  2:58:34 PM
Session lows for ten year bond futures and euro futures here. TNX is up 4.7 bps to 4.291%.

 
 
  James Brown   8/10/200,  2:57:24 PM
Could this be a bullish entry point in Apple Computer (AAPL)? The blue line of support has proven to be buy points in the past. Here's a chart: Link

 
 
  Jonathan Levinson   8/10/200,  2:57:04 PM
The volume on this bounce is clearly weaker than the sell volume that preceded it. I'd be inclined to doubt it, but a move above 33.30 would have me reconsider, and above 33.40 would qualify as a bear fumble.

 
 
  Linda Piazza   8/10/200,  2:56:51 PM
I think Mark and Jim both have the rigth idea, although there's the possibility of being whipsawed out of trades, OEX trades at least, if the OEX should break out and attempt a rise toward 530-532 or 533. This is a natural area to attempt a bearish position. However, due to the possibility of the continuation-form H&S, anyone engaging in such a play should perhaps have patience, as symmetry would suggest that the OEX might hang around that 527-528.30 level for a while before rounding over into a possible right shoulder.

 
 
  Jeff Bailey   8/10/200,  2:55:35 PM
QQQ $33.17 +1.12% ... post-FOMC low was $32.97, but a couple of buy program premiums have see QQQ pushed back to $33.19, just under MONTHLY S1 of $33.22, which has marked session high so far today.

 
 
  Linda Piazza   8/10/200,  2:53:45 PM
Turning to a 15-minute Keltner chart because of the scattering of Keltner lines by the rapid movements on the shorter-term ones, I see that resistance is trying to converge between 527.50-528.10. The 528.30-ish level also represents a 38.2% retracement of the steep decline from the 8/04 high to yesterday's low, with the 50% retracement at 530.60. That shows correlation between resistance implied by the Keltner charts and that inferred from more traditional means. A break above 528.35 or so implies a rise toward 530.60 according to traditional technical analysis, while we can also infer that the OEX might find trouble at a lower range, from 527-528 or maybe up to 528.30.

 
 
  Mark Davis   8/10/200,  2:52:40 PM
Day Trade Entry Point Alert -

Go short now... SPQTN (SPX Aug 1070 put) @ 8.60, stop 7.50

 
 
  Jonathan Levinson   8/10/200,  2:51:55 PM
Session low for euro futures here at 1.2239, down .25%.

 
 
  Mark Davis   8/10/200,  2:50:38 PM
LOL Jonathan!

 
 
  Jonathan Levinson   8/10/200,  2:49:53 PM
You mean this guy, Jim? Link

 
 
  James Brown   8/10/200,  2:48:56 PM
OI call play SYMC has pushed through the $46 level and this looks like a new entry point for calls.

 
 
  Jonathan Levinson   8/10/200,  2:48:19 PM
QQQ 100-tick update at this Link , showing a steep bounce from a higher short cycle price and oscillator low. The 33.30 level looks very daunting, however, particularly given the degree of upside extension in the 30 min cycle.

 
 
  Linda Piazza   8/10/200,  2:48:01 PM
The OEX has made it past the first resistance implied by the five-minute Keltner chart before that resistance could firm enough to stop the OEX. The rapid movements (five-minute wise) are scattering the Keltner lines, so that it's difficult to give relative weight to the various levels depicted. It looks as if the high of the day is about to be tested, however, and we'll see if that will hold or if 527-528 will be tested, too.

 
 
  James Brown   8/10/200,  2:47:12 PM
Cisco Systems' (CSCO) meager bounce from $20.00 today doesn't show much confidence in the company's earnings due out after the bell today. Estimates are for 20 cents a share.

 
 
  Jonathan Levinson   8/10/200,  2:46:51 PM
Bonds are bouncing from their lows, with TNX up 2.7 bps to 4.271%, while gold is up to a 1.70 loss at 401.30. The miners are still positive, holding onto a .47% and .41% gain for HUI and XAU respectively.

 
 
  Mark Davis   8/10/200,  2:46:28 PM
Day Trade Exit Point Alert -

Stopped out... SPQTM (SPX Aug 1065 put) @ 7.70, break even

 
 
  James Brown   8/10/200,  2:42:05 PM
The bounce in the DDX disk drive index is failing and the sector index is back under the 90 level.

 
 
  Linda Piazza   8/10/200,  2:41:01 PM
An OEX bounce does begin from the 524 level suggested as downside from one Keltner chart and the site of the ascending trendline off Friday's late-afternoon low. The five-minute Keltner chart suggests that resistance is trying to firm from 525.06-525.78 and is also trying to narrow that resistance range. If the current 524.35-ish level doesn't catch it and tug it back, that may be one first place to look for possible firm resistance, but if the OEX bounces fast enough, it may be able to get through that resistance before it can firm.

 
 
  James Brown   8/10/200,  2:40:13 PM
The Dow Jones Transportation Index is up 1.28% and pushing back above the 3000 level after falling toward its 100-dma and 200-dma.

 
 
  Jonathan Levinson   8/10/200,  2:38:59 PM
30 min Nasdaq futures chart (QQQ proxy) showing first sign of trouble for the 30 min cycle. Link Channel support is approaching 60-min channel support at 32.94.

 
 
  Mark Davis   8/10/200,  2:38:46 PM
Day Trade Exit Point Alert -

Raise your stops... SPQTM (SPX Aug 1065 put) to 7.70 and break even... current spread is 8.00/9.00 and we have the wind at our back, although it appears a bounce could appear at any time.

 
 
  Jonathan Levinson   8/10/200,  2:34:31 PM
100-tick QQQ chart at this Link.

 
 
  Linda Piazza   8/10/200,  2:33:15 PM
The ascending trendline off Friday's OEX low crosses at about 524, so this would be a natural place for a potential bounce. If so, such a bounce could be part of a continuation-form H&S, a bounce to form a right shoulder. If the OEX should bounce to somewhere below 526, bulls should not necessarily assume that the move is bullish. If it begins to round down from that level, bulls should be careful of a possible H&S formation, although you know how little I trust these continuation-form H&S's.

 
 
  Jonathan Levinson   8/10/200,  2:32:56 PM
There are no green volume bars on my 100 tick QQQ chart for the past 5 minutes. Yesterday's endless resistance just below 33.00 QQQ is now support.

 
 
  Jeff Bailey   8/10/200,  2:32:19 PM
Biotech (BTK.X) 447.01 -0.17% and Oil Service (OSX.X) 106.06 -0.10% are first equity-based to turn red.

 
 
  James Brown   8/10/200,  2:31:56 PM
It is noteworthy that the OIX and OSX oil indices are both trading lower, albeit fractionally, while the rest of the market is green.

 
 
  Jonathan Levinson   8/10/200,  2:31:06 PM
Dec gold to a session low here at 400.40, down 2.60.

 
 
  Jeff Bailey   8/10/200,  2:30:49 PM
Sell Program Premium .... SPX 1,070

 
 
  James Brown   8/10/200,  2:30:08 PM
The early morning bounce in OI put play WHR is fading again and shares are back under the $60.00 mark. This could be another entry point to buy puts.

 
 
  Jeff Bailey   8/10/200,  2:29:57 PM
Current OPEN MM Profiles at this Link

 
 
  Jonathan Levinson   8/10/200,  2:29:54 PM
QQQ zigged and is now zagging lower to 33.04, as the declining 30 min channel support moves to 32.97. If it's going to bounce, I expect it to do so from just beneath 32.97 confluence in the 32.92 area.

 
 
  Mark Davis   8/10/200,  2:29:33 PM
We're now in the green with our SPX Aug 1065 put play... let's hope momentum accelerates from here.

 
 
  Linda Piazza   8/10/200,  2:28:41 PM
The OEX's three-minute chart shows vulnerability down to 524 now, actually 524.84, but the last few three-minute candles show increasing volatility, of course, and it's possible for the OEX to break to the upside, too. Down looks more likely . . . and the OEX is breaking that direction, it appears.

The five-minute chart shows the OEX at the channel line that usually stops its declines, however, so the OEX may again attempt a bounce somewhere through here. If not, that chart suggests vulnerability down to 522.83.

 
 
  Linda Piazza   8/10/200,  2:26:59 PM
So far, the BIX has come within $0.40 of its 72-ema, at 345.78. It's down a little from that average now. This average supported the BIX all through the more-than-two-month consolidation period until last Thursday when it fell below it. (See my 12:40 post for a chart.) Friday, the BIX pierced it, but fell back again, and today it has risen to retest that MA, to see if it holds as resistance. So far, it has, but the 200-sma's support should be deemed important, too.

 
 
  Jonathan Levinson   8/10/200,  2:23:59 PM
Nymex crude is down to 44.50 here, -.35 or .78%. 2-day 10-tick chart at this Link.

 
 
  Jonathan Levinson   8/10/200,  2:23:29 PM
The 30 min cycle channel is still flat, but support has fallen back to 33 QQQ. Rising 60 min support is 32.90. The short cycle downphase is still in progress and strengthening, but looking at the large sell volume that came in, I'm surprise that the Qubes didn't drop more than the 6 or 7 cents that resulted.

 
 
  Linda Piazza   8/10/200,  2:22:35 PM
It's still possible that the 526.53 level was the OEX high of the day, as I suggested earlier that it might be. Unless the OEX bounces quickly and can bet above the 525.35 level and preferably the 525.75 level, it risks breaking down and moving toward 524. (Evidence from three-minute chart.)

 
 
  Jim Brown   8/10/200,  2:21:24 PM
Complete text of Fed statement: Link

 
 
  Jeff Bailey   8/10/200,  2:20:23 PM
QQQ $33.10 .... slips back to DAILY R2.

 
 
  Linda Piazza   8/10/200,  2:18:00 PM
The OEX heads down toward 525.30 possible support instead of rising.

 
 
  Mark Davis   8/10/200,  2:17:15 PM
Day Trade Exit Point Alert -

Exit now... SPQHP (SPX Aug 1080 call) @ 6.00, -7.69%

 
 
  Jonathan Levinson   8/10/200,  2:16:53 PM
Session low for 10-yr bond futures at 112.3125, TNX +1.5 bps at 4.259%. Equities declining as I type.

 
 
  Jeff Bailey   8/10/200,  2:16:13 PM
02:14 Market Watch just seconds before the FOMC decision on interest rates at this Link

 
 
  Jonathan Levinson   8/10/200,  2:15:52 PM
14:15 *DJ Fed Raises Rates 0.25-Pt To 1.50%; Sees Balanced Risks

 
 
  Jim Brown   8/10/200,  2:15:23 PM
alert - FED Announcement +25 point hike !

 
 
  Linda Piazza   8/10/200,  2:14:41 PM
The OEX's pullback off its high could be a bull-flag pullback. If so, perhaps we'll get that post-FOMC spike that everyone awaits. Nearest five-minute Keltner resistance is from 525.98-526.31, with a breakout above that level and a subsequent sustaining of that zone on pullbacks could again set up a rise toward 527-528. With crude prices still high, I'd be wary of counting on too much upside, and, like others would look for a rollover point for a bearish entry, being ready to jump back out again if the OEX looks as if it's going to extend toward 530-532. On the contrarian view, however, that recent crude climb off the end-of-June low sure looks extended on the 60-minute chart. Also on the contrarian view, isn't it scary that we're all pretty much in accordance as to what should happen?

 
 
  Mark Davis   8/10/200,  2:12:59 PM
Keene does this fit your 5th wave up scenario?

 
 
  Jonathan Levinson   8/10/200,  2:12:44 PM
The current aimless chop with the 30 min cycle upphase this extended is commensurate with the "weightless" period inside a 30 min cycle top. We'll know soon enough- above 33.40 on a 30 min closing basis (long enough for one full candle), it should become a trending move in overbought, while a drop below 32.97 should get the ball rolling to the downside.

 
 
  Mark Davis   8/10/200,  2:12:05 PM
Day Trade Exit Point Alert -

Keep your fingers on the trigger for both our short and long plays. The action post the FOMC meeting is likely to be both fast and furious. I'll try to catch the top... my bias still being to the downside, but we'll let price be the final arbiter.

 
 
  Jonathan Levinson   8/10/200,  2:08:49 PM
Session low for 10 year bond futures at 112.3594, TNX up 1.4 bps at 4.258%.

 
 
  Mark Davis   8/10/200,  2:08:27 PM
Keene I'm just hoping the beast I'm riding doesn't go lame Link

Jim just profiled my dream trade... a spike post FOMC announcement followed by a failure.

 
 
  Jeff Bailey   8/10/200,  2:05:13 PM
Swing trade short alert for the QQQ $33.18 here, stop $33.55, target $32.25.

 
 
  Jonathan Levinson   8/10/200,  2:04:46 PM
INTC is back at the lows here while the indices hang just off the highs. The first high volume buy program is printing here on QQQ with the largest 100-tcik volume of the day as I type. Price remains steady, however, with a very weak short cycle downphase in progress against the extended but still active 30 min cycle upphase. Channel support is 33.05, resistance 33.30.

 
 
  Jonathan Levinson   8/10/200,  1:50:02 PM
Stepping away for 10 minutes here.

 
 
  Linda Piazza   8/10/200,  1:42:35 PM
I hesitate to keep reporting on each new wriggle in the OEX's chart because I know with each report I'm alternately encouraging those with bullish hopes or those with bearish hopes, and I don't want to be giving false signals. Currently, it's my belief that today has seen a countertrend rally, one that might be stopped at 527-528, with the OEX perhaps already having seen the high of the day, or at 530-532 or 533, particularly if the rally continues beyond today. To help me determine whether I'm completely off base in that conclusion, I'm watching crude, the TRAN, the BIX, and the SOX, among other factors.

In order for that conclusion to be proven correct, I'd like to see the TRAN turned lower from or below the midline of its descending regression channel off the year's high, at about 3050, with the TRAN currently at 3033.87, or from the 50-dma, currently at 3077.36. (Well, actually I'd like to see the economy performing well and all equity indices, too, but you know what I mean.) Ideally, I'd like to see the TRAN turned lower from the 72-ema, currently at 3033.88. I'd like to see the BIX turned lower by its 72-ema, currently at 345.17. I'd like to see the SOX fail to retrace more than 50% of Friday's tall red candle.

 
 
  Mark Davis   8/10/200,  1:34:45 PM
Day Trade Entry Point Alert -

Go long now... SPQHP (SPX Aug 1080 call) @ 6.50, stop 5.50

Trying to bracket the index here... If we're going to go up I don't want to miss it. This also places us in a neutral position going into the meeting. If we're quick we may be able to scalp a long or short and then go with the flow post FOMC. The statement will likely be as important as the announcement itself.

 
 
  Mark Davis   8/10/200,  1:22:23 PM
Some potentially encouraging action for our put play here... we've just printed the largest 1-min red candle in the last 3 hours, however this could just be the start of pre-FOMC announcement volatility. I'd like to see the swing low @ SPX 1072.43 taken out but we're now printing a slightly larger green candle... here comes the volatility.

 
 
  Linda Piazza   8/10/200,  1:22:11 PM
Anyone considering an entry today before or after the Fed decision also needs to be aware that CSCO reports after the close. We could see lots of permutations of sell-the-news/buy-the-news reactions after the Fed and after CSCO earnings: Steep sell-off this afternoon after the Fed decision/CSCO bounce tomorrow, sell-off this afternoon/continuation tomorrow on a failure by CSCO to raise forecasts, post FOMC bounce on some buy-the-news reaction/sell-off tomorrow on disappointment with CSCO's report . . . you get the dangers.

 
 
  Jonathan Levinson   8/10/200,  1:20:44 PM
QQQ has drifted through rising intraday trendline support on the 100 tick chart and is now coming in for a test of what looks like a hunchback head and shoulders neckline at 33.12, a break below which would have an implied target of roughly 33.02, lining up with lower 30 min Keltner support. The short cycle is in a weak downphase here as we await the 2:15 FOMC announcement.

 
 
  Linda Piazza   8/10/200,  1:16:59 PM
OEX 526.53 may have been as close as the OEX gets to 527 today, although making that assumption carries great risk ahead of the Fed's decision. The 527 level was one of two levels I'd hoped to see before a rollover, but if the OEX can punch above 527-528 for more than a momentary piercing, then 530-532 or even 533 might be possible.

 
 
  Linda Piazza   8/10/200,  1:14:20 PM
The five-minute Keltner resistance is holding. The OEX is vulnerable down to 525.00-525.60.

 
 
  Linda Piazza   8/10/200,  1:08:34 PM
Because the OEX has stalled for so long, five-minute Keltner resistance has snaked over it again, with that resistance currently just below 526.20. It looks relatively firm, but so far, the OEX is showing strength in staying over a Keltner line currently at 525.95.

 
 
  Jeff Bailey   8/10/200,  1:04:42 PM
01:00 Market Watch at this Link

 
 
  Linda Piazza   8/10/200,  12:56:51 PM
Although OEX prices have moved below the H&S neckline a couple of times since I first described that pattern on the two-minute chart, they've always popped right back above the neckline--validating one reason that I'm reluctant to suggest trades ahead of the FOMC decision. Bears have not been able to maintain confirmation levels on that formation and bulls have not been able to soundly reject it, either. Bears are giving it another try as I type, but so far, the OEX is just squiggling around under 527 resistance ahead of the FOMC decision and it might just keep doing that very thing into the decision.

 
 
  Jonathan Levinson   8/10/200,  12:55:58 PM
30 min resistance is up to 33.28 now as it slows its rise. The 33.20 level continues to look like firm resistance, however, as the short cycle channel flattens within the rising 30 min channel. 30 min channel support is up to 33.05. This is a tricky spot because of the extension in the overbought 30 min cycle oscillator. Unless it's going to begin a trending move in the coming hours, the next move should be a 30 min cycle downphase. The FOMC announcement will come at a perfectly puzzling time, with the 30 min cycle maxxed out and the daily cycle on a potential bullish divergence set up for a whipsaw.

 
 
  Mark Davis   8/10/200,  12:54:48 PM
Day Trade Exit Point Alert -

Lower your stops on SPQTM (SPX Aug 1065 put) to 6.00.

This will allow for the possibility of Keene's 5'th wave move up and also give us a bit more room for potential whipsaw action after the FOMC announcement. We're risking about -22% with this adjustment. If you're not comfortable with that then keep your stop @ 6.70. You'll be risking less (about -13%) but increasing the odds of being shaken out during any potential volatility post the FOMC announcement.

 
 
  Linda Piazza   8/10/200,  12:40:40 PM
Will the 72-ema prove to be resistance now for the BIX? The 72-ema is the green MA on this daily chart while the 200-sma is the blue MA from which the BIX bounced. Link

 
 
  Mark Davis   8/10/200,  12:36:42 PM
Things have slowed considerably... for a second there I thought my feed had gone down.

 
 
  Jonathan Levinson   8/10/200,  12:30:18 PM
The current pullback is only registering as a wavelet downphase so far, and the trending short cycle oscillators have yet to react. A nove below 33.10 will change that, but for the moment the picture remains the same.

 
 
  Linda Piazza   8/10/200,  12:26:55 PM
The OEX's two-minute H&S has not yet confirmed, with the OEX in the process of either rejecting the formation or forming a second right shoulder . . . or maybe just squiggling around.

 
 
  Mark Davis   8/10/200,  12:22:00 PM
All things considered it looks like we got a pretty good entry with our put play... SPQTM (SPX Aug 1065 put) @ 7.70
Current spread is 6.90/7.80 which means you could probably get in right now for about 7.40.

*** Note... true spread is sometimes difficult to discern. Example: spread is now showing 7.00/7.50, which is a reflection of the best bid/ask, in this case someone is trying to sell their puts for 7.00 and someone is trying to buy puts for 7.50, in both cases they are attempting to "split the spread" by giving the MM the fat part of the spread.

In such a case you can be mislead into thinking you might get filled on a buy @ 7.30. Look at the strike prices just above and below your contract... usually one has low volume and will show the true spread. You can use this information to guesstimate what the true spread is on your contract.

In the time it took me to type this post prices have increased slightly and changed the quoted numbers higher, but hopefully you caught the drift of the general principle.

 
 
  Linda Piazza   8/10/200,  12:14:08 PM
We're getting the sideways trade out of the bearish rising wedge that I mentioned might happen in my 11:55 post. Sometimes that sideways trade precedes another attempt to climb. Keltner-wise, the OEX is barely maintaining the preferred support on the five-minute chart, above 525.72. Switching to a two-minute chart shows that it's possible that it won't be able to hold that support. In fact, there's a nicely formed H&S building on that two-minute chart, neckline at about 525.75 and with the OEX currently rounding down into a possible right shoulder.

There's some doubt now that the OEX will be able to reach 527, depending on whether that H&S is confirmed among other factors. The 526.53 high of the day may be as close as it gets, but so far, the OEX hasn't violated the needed support and the H&S hasn't been confirmed, and I'm still reluctant to suggest entries this far ahead of the Fed rate decision.

 
 
  Jonathan Levinson   8/10/200,  12:02:10 PM
The wavelet upphase just ending took the QQQ to higher high, and if the current downphase trying to commence hits a higher low, it will confirm the 30 min and short cycle upphase still in effect. A lower low beneath 33.10 will kick off a new short cycle downphase within the ongoing but overbought 30 min upphase. Resistance is up to 33.25, support 32.98.

 
 
  Linda Piazza   8/10/200,  11:55:05 AM
After that false upside breakout attempt, the OEX now breaks to the downside out of that bearish rising wedge I mentioned in my 11:40 post. One event that sometimes occurs when the bullish fervor remains is that instead of the expected precipitous drop, we get a sideways trade and then the OEX rises under the former supporting trendline, rising nonetheless. The five-minute Keltner channel shows support gathering near 525.70 and again near 524.95, so that fits that possible scenario. Bulls want to see the OEX hold above 525.70, however, to keep the smallest Keltner channel pointed higher.

 
 
  Mark Davis   8/10/200,  11:49:23 AM
TRIN makes a new LOD @ .55

 
 
  Jonathan Levinson   8/10/200,  11:49:06 AM
QQQ is back to rising 30 min upper channel resistance as QQQ and Russell2K futures make new session high. This looks like the 5th wave of one of Keene's 5-wave moves, but I defer to his expertise there. Rising trendlinesupport is at 33.12, while channel support has risent to 32.96. The daily cycle remains in a downphase, but still with that higher stochastic low discussed in last night's Market Wrap. If bulls can get through 33.40, the picture will begin to look considerably stronger.

 
 
  James Brown   8/10/200,  11:45:44 AM
Morgan Stanley has initiated coverage on E*Ttrade (ET) and Ameritrade (AMTD) with an "over weight" this morning. MWD has also slapped a $14 price target on both of them.

 
 
  James Brown   8/10/200,  11:43:44 AM
Troubled Canadian telecom Nortel Networks (NT) has finally chosen a date where they expect to finish their financial restatements. That date is August 19th.

 
 
  Mark Davis   8/10/200,  11:43:30 AM
TRIN has dropped to .61 ... I'm not sure whether this is a prelude to the next leg up or whether it's a bit overdone to the bullish side. Bearish MACD divergence continues. We can't levitate up here forever... or can we??? We should know pretty soon.

 
 
  James Brown   8/10/200,  11:41:13 AM
Mortgage lender Countrywide (CFC) reported that July loan funding fell 43% to $29.7 billion compared to last July and that funding had fallen 7% since June. Yet the company said home equity loans rose 68% and that applications being processed are very strong ($48 billion) as consumers produced a wave of new purchasing activity as rates fell. The recent drop in the 10-year bond yield is expected to increase business in August.

 
 
  Linda Piazza   8/10/200,  11:40:35 AM
The OEX is behaving just as it should, Keltner wise, to continue its rise toward 527 resistance, but its shape as it climbs is one that traditional technical analysis tells us is bearish: a bearish rising wedge. Those should break to the downside. We should know soon, however, as it's narrowing to its apex. As I uploaded the already-snapped chart, the OEX attempted an upside breakout, but it hasn't completed it yet and could reverse: Link

 
 
  James Brown   8/10/200,  11:35:07 AM
Video chipmaker NVDA is gapping up above resistance at the bottom of its gap down after being upgraded to a "buy" this morning by Needham. This could be an extremely aggressive bullish entry point as NVDA may attempt to "fill" some or all of the gap. I'd probably wait for shares to dip back and bounce at the $10.00 level first.

 
 
  Jonathan Levinson   8/10/200,  11:33:11 AM
Bonds have weakened slightly, with TNX currently down .9 bps at 4.233%. Dec. gold is up to flat at 403, with HUI now up 1.68% at 186.33 and XAU up 1.34% at 87.48.

 
 
  Jonathan Levinson   8/10/200,  11:31:25 AM
30 min channel resistance has risen to 33.20, and the current wavelet bounce is returning QQQ to the session highs. The 30 min cycle oscillators are showing no sign of weakness yet, and the futures are printing new highs as I type.

 
 
  Linda Piazza   8/10/200,  11:29:14 AM
The OEX appears ready to challenge 526 again after consolidating just under that value. It's acting as it should to continue moving toward 527, but the problem with possible countertrend moves is that they can fail at any time.

 
 
  James Brown   8/10/200,  11:27:09 AM
TASER Intl (TASR) is up more than 7% to $28.56 after announcing new orders of more than $724,000. Technical traders will note that TASR's short-term technicals (RSI and stochastics) are turning bullish and even its MACD is hinting at a new "buy" signal soon.

 
 
  Mark Davis   8/10/200,  11:26:45 AM
Keene that fib target area closely coincides with the SPX May low (1076.30) and the July low (1078.80)... support turned resistance

 
 
  Mark Davis   8/10/200,  11:23:20 AM
Here's what I was looking at when we entered the short play Link

 
 
  James Brown   8/10/200,  11:23:17 AM
7-Eleven (SE) continues in its two-week uptrend after reporting this morning that July same-store sales rose 4.2%. The stock is nearing resistance at $18.50.

 
 
  James Brown   8/10/200,  11:19:35 AM
eCollege.com (ECLG) is down more than 21% to $7.23 as investors react to its Q2 earnings news this morning. The company beat estimates by 1 cent but then guided the next quarter under analysts' estimates.

 
 
  James Brown   8/10/200,  11:18:01 AM
For those interested parties... Google (GOOG) says the IPO will take place after bidder registration closes on August 12th.

 
 
  James Brown   8/10/200,  11:16:52 AM
Lehman Brothers and Smith Barney have released a bunch of new coverage and up/downgrades for the retail sector today. Yet I'm not seeing much reaction to any of the brokers' calls.

 
 
  Linda Piazza   8/10/200,  11:15:31 AM
Jeff may have mentioned it already, but the BIX is another index that's rising today, rising specifically from its 200-sma. The reflexive bounce from that average was expected, but the BIX has now reached the bottom of its former congestion zone, and further gains might not come easily. If it makes it higher, however, a river of MA's courses down toward it, with those MA's ranging from 347.10-348.02, and consisting of the 10-, 20-, 30-, and 50-dma's. As I type, the BIX measures 344.45.

 
 
  Jonathan Levinson   8/10/200,  11:13:29 AM
I'm seeing Sept Nymex crude trading 44.75, down .10, with a session high of 45.025. My data should be realtime. That's a lower high against yesterday's 45.25 high.

 
 
  Jane Fox   8/10/200,  11:12:42 AM
Dateline CNN U.S. Rep. Porter Goss is President Bush's choice as new director of the CIA.

 
 
  Linda Piazza   8/10/200,  11:12:33 AM
The OEX fights for every point, doesn't it? It's stalling just beneath 526, but does hold onto the levels needed to maintain hope that it can climb toward 527-528. Support is trying to converge above 525.

 
 
  Mark Davis   8/10/200,  11:12:32 AM
Just hearing on Bloomberg TV that oil has crossed $45/bbl on the Nymex

 
 
  Jonathan Levinson   8/10/200,  11:12:27 AM
The short cycles have been trending in overbought for the past hour and the 30 min cycle channel is flattening slightly. However, bears will want to see the QQQ fall away from the upper channel boundary at 33.16 quickly here as the channel will resume its steep rise in a few minutes with price at current levels. Support has risen to 32.90, and the 32.97-33.03 resistance area should now act as confluence support.

 
 
  Mark Davis   8/10/200,  11:09:18 AM
I'm seeing bearish MACD divergence on the SPX 1-min chart since 5 minutes after the opening bell

 
 
  Linda Piazza   8/10/200,  11:05:25 AM
The TRAN continues to move higher, now having retraced more than half of Friday's tall red candle. If the TRAN can maintain the current value into the close, it will have produced a morning-star formation. This index is particularly sensitive to the perceived ups and downs of the economy, however, and might be strongly affected by any statements coming out of the Fed meeting.

 
 
  Mark Davis   8/10/200,  11:04:17 AM
Day Trade Entry Point Alert -

Go short now... SPQTM (SPX Aug 1065 put) @ 7.70, stop 6.70

 
 
  Jonathan Levinson   8/10/200,  11:02:25 AM
QQQ is printing 33.15 here, testing upper rising 30 min resistance.

 
 
  Linda Piazza   8/10/200,  10:59:06 AM
I mentioned yesterday that I had thought the OEX might reach for 527 or possibly even 530, and the 527 level grows more possible this morning. Short-term bulls hoping for that eventuality want to see the OEX hold above the 525.50 level on pullbacks or at least above 524.65. Remember that I see this as a possible countertrend movement, particularly risky to trade in front of the FOMC rate-hike decision.

 
 
  Mark Davis   8/10/200,  10:59:02 AM
I should have listened to my buddy Keene's warning about that premature short, but I couldn't resist the SPX 1070 area which had held back several previous attempts at a rally.

We went short right after a bearish MACD kiss following a rollover. The only piece missing from my "perfect" short setup was CCI never printed a +200 reading, however, CCI just printed +220 and MACD just crossed down. Many times it's the second CCI print of +200 (or close to it) that's the real sell signal, so perhaps this next short attempt (if we get the signal) will tie in with Keene's EW analysis and we'll get a good play. As I typed this we got a second CCI print over +200 and still rising, but MACD just crossed up and we need it to cross down.

 
 
  Jeff Bailey   8/10/200,  10:57:16 AM
Buy Program Premium SPX 1,071.97

 
 
  Jeff Bailey   8/10/200,  10:56:05 AM
10:50 Market Watch at this Link

SOX.X found some buyers at its DAILY Pivot, while majors currently trade at their DAILY R2s.

 
 
  Jonathan Levinson   8/10/200,  10:54:50 AM
Session highs for Dec. gold at 402.90 and Sept. silver at 6.805. GE and QQQ are at new highs as well. 30 min channel resistance for QQQ is now lined up with confluence at 33.15.

 
 
  Linda Piazza   8/10/200,  10:49:31 AM
The OEX tries to hold onto its breakout level. Short-term bulls, those hoping for a test of 527-528, want to see the OEX maintain 525.25 on pullbacks, but if that doesn't hold, want to see it maintain 524.40-524.60 on pullbacks.

 
 
  Jonathan Levinson   8/10/200,  10:43:46 AM
The 30 min channel is rising more steeply now and the 60 min channel is edging higher. Resistance is up to 33.12 on the 30 min, but so far the action is suggestive of the short covering that Jim was expecting earlier this AM. 33.15 remains the start of Friday's confluence resistance, and with the 30 min cycle entering overbought territory, it's going to take a great show of strength to clear upper confluence of 33.40 on this attempt.

 
 
  James Brown   8/10/200,  10:43:12 AM
OI call play SYMC is bouncing again near $44.75 for the third time in three days. A move above $46.00 could be a new bullish entry point.

Yesterday SYMC announced that an error was made in its quarterly filing. Correcting the error will cut its Q1 revenues by $20 million to $557 million and cut its earnings from 37 cents to 33 cents (excluding charges that's 39 to 36 cents). The company also stated that the correction would actually bump its Q2 numbers higher. The lack of reaction in the stock price suggests Wall Street does not see this as an issue.

 
 
  Linda Piazza   8/10/200,  10:36:06 AM
I found one leading index today. While the SOX doesn't appear to be making much headway in producing a candle that will confirm its potential morning-star formation, take a look at the TRAN's chart. (Note: I've used a 390-minute chart since my charting service refuses to produce all candles on the TRAN's daily chart. The aqua MA is the 200-sma.) Link

 
 
  James Brown   8/10/200,  10:35:22 AM
Ex-Dow component Eastman Kokak (EK) is breaking out to the upside through the top of its five-month trading range near $27.50. I don't see any catalyst yet for the 4% gain.

 
 
  Linda Piazza   8/10/200,  10:32:55 AM
The SOX is trying to recoup its day's high, but the SOX doesn't appear to be the leading index today, does it?

 
 
  Mark Davis   8/10/200,  10:31:45 AM
Day Trade Exit Point Alert -

Stopped out... SPQTM (SPX Aug 1065 put) @ 8.60, -9.47%

 
 
  Jonathan Levinson   8/10/200,  10:31:07 AM
QQQ is retesting the previous high at 33.02 here. Channel resistance moves to 33.10.

 
 
  Linda Piazza   8/10/200,  10:29:33 AM
Well, that was quick. Here's the test of OEX 525. The OEX is at the Keltner line that usually stops its advances. A breakout here above the channel line currently at 525.13 and then a holding of that level on any pullbacks would set up a possible test of 527-528. A move below 523.93 and a sustaining of levels below that would set up a possible test of the 522.77 level, and even possibly a test of 15-minute Keltner support, now just above 522, up to 522.84.

 
 
  Linda Piazza   8/10/200,  10:26:39 AM
The OEX is trying to break above the lower edge of the five-minute Keltner resistance band that extends up to 525. Meanwhile, support continues to try to firm, now near 524. It looks as if 525 will be tested, at least.

 
 
  Jeff Bailey   8/10/200,  10:22:31 AM
Cephalon Inc. (CEPH) $43.99 -8% Link .... lower on downgrades from Morgan Stanley and Thomas Weisel

 
 
  Mark Davis   8/10/200,  10:19:35 AM
Day Trade Exit Point Alert -

Lower your stops... SPQTM (SPX Aug 1065 put) to 8.60 (entry, 9.50)
I don't want to get stopped out at a minimal new high only to watch it roll over right after we're stopped out.

 
 
  Jonathan Levinson   8/10/200,  10:19:00 AM
Session high for Dow futures just now, but QQQ continues to hesitate below 33.00.

 
 
  Jeff Bailey   8/10/200,  10:18:27 AM
Buy Program Premium ... SPX 1,069.95

 
 
  Linda Piazza   8/10/200,  10:17:51 AM
The OEX keeps butting against the resistance shown on its five-minute Keltner chart. It hasn't been able to make it above that resistance and support continues to try to firm, nearer 532.72 rather than 523.50, as I first thought. Fifteen-minute Keltner support looks firmest near 522.20-522.25, but that range extends up to 522.94.

 
 
  Linda Piazza   8/10/200,  10:09:23 AM
Guess so, Mark. And they think alike at the same instant, too, apparently.

 
 
  Mark Davis   8/10/200,  10:08:52 AM
Great minds think alike, eh Linda?

 
 
  Jonathan Levinson   8/10/200,  10:08:36 AM
Session highs for silver and euro futures, which are trading 1.2305 here. Gold remains lower, down 1.20 at 400.50, while miners are up, HUI +1% at 185.1 and XAU +.93% at 87.12.

 
 
  Mark Davis   8/10/200,  10:07:54 AM
The SOX has rolled over and just printed a new LOD

 
 
  Linda Piazza   8/10/200,  10:07:25 AM
The SOX has been unable to advance.

 
 
  Jonathan Levinson   8/10/200,  10:06:32 AM
The Fed has announced a 4.75B repo, rolling over the expiring 4.75B from yesterday. No net gain or drain.

 
 
  Linda Piazza   8/10/200,  10:05:50 AM
Once again, the OEX's five-minute Keltner resistance held firm. That resistance still looks strong, but five-minute support is trying to converge in the 523.50 region, too. If the OEX drops quickly, it could drop through before that support converges, but if not, it will be a battle between five-minute support and five-minute resistance.

 
 
  Jeff Bailey   8/10/200,  10:03:59 AM
10:00 Market Watch at this Link

 
 
  Jonathan Levinson   8/10/200,  10:03:24 AM
Nymex crude is down .30 at a session of 44.55. I'm noticing that crude is backwardaded, with front month Sept. crude trading higher than even October, which is currently trading 44.15. Backwardation has generally been attributed to supply problems in the immediate term, where oil is required more urgently now than for future delivery.

 
 
  Mark Davis   8/10/200,  10:00:54 AM
Day Trade Exit Point Alert -

Go short now... SPQTM (SPX Aug 1065 put) @ 9.50, stop 9.00

 
 
  Mark Davis   8/10/200,  9:56:59 AM
Potential Day Trade Setup Alert -

Short signal developing... if we take it we'll be using SPQTM (SPX Aug 1065 put)

 
 
  Linda Piazza   8/10/200,  9:55:24 AM
Support held where OEX short-term bulls would have hoped to see it hold, at least so far. Now the OEX has to break higher again and retest that five-minute Keltner resistance, currently from 524.58-525.02. That resistance still looks firm, although lines are beginning to separate a little. It would still take a concerted effort to push through them, however. On the five-minute chart, that resistance still looks firmer than support, although the 15-minute chart shows support from 522.19-522.53 that looks reasonably firm. No breakout either direction yet, and these conflicting views suggest that the OEX could remain range bound for a while. This is a signal for it to break through as soon as this post is uploaded.

 
 
  Jeff Bailey   8/10/200,  9:53:33 AM
Current OPEN MM profiles at this Link

 
 
  Jane Fox   8/10/200,  9:52:27 AM
Jonathan, you never know what you can come up with early in the morning.

 
 
  Jonathan Levinson   8/10/200,  9:49:35 AM
Awesome display of poetic prowess, Jane!

 
 
  Jonathan Levinson   8/10/200,  9:48:16 AM
QQQ failed at high of 33.02, currently printing a session low at 32.939. INTC led the way by a few seconds with a low at 22.51.

 
 
  Linda Piazza   8/10/200,  9:46:47 AM
The OEX did find resistance at the five-minute Keltner resistance, currently from 524.63-525.02, turning back just ahead of and during the typical first retracement of the day. Bulls want to see the OEX hold above 523.86 during that first retracement, or at least 523.08. Since this first retracement currently looks like a bull flag on the 3-minute chart, it's possible the OEX might hold that support. We just have to see. Remember that I'm not advising long positions ahead of the Fed's action, but wouldn't be surprised to see the OEX and other indices bounce. I also wouldn't be surprised to see them stagnate much of the day, either, so that outlook, coupled with the fact that any bounce should probably be considered a countertrend one makes me unwilling to suggest long positions even though there's the possibility that they could be profitable.

 
 
  Linda Piazza   8/10/200,  9:40:40 AM
Despite the negative analyst's comments, the SOX begins the day with the possibility of creating that morning-star formation. It has come nowhere near retracing at least half of Friday's tall red candle, however, and lately the candle that produces a reversal candle is the only reversal seen. Still, thus should be watched for short-term guidance.

 
 
  Jonathan Levinson   8/10/200,  9:39:50 AM
TNX is down 1.5 bps to 4.227%- still within yesterday's range. But the current intermarket combination is certainly Fed-friendly- higher bonds, lower oil, and gold is down at a session low of 400.00, -1.70.

 
 
  Jonathan Levinson   8/10/200,  9:37:28 AM
And crude oil is down .20 to 44.65.

 
 
  Jonathan Levinson   8/10/200,  9:36:43 AM
Session highs across the board for equities and bonds.

 
 
  Linda Piazza   8/10/200,  9:34:40 AM
The OEX opens and climbs off the 15-min Keltner support, into the 5-min Keltner resistance, up to 525.

 
 
  Jonathan Levinson   8/10/200,  9:33:02 AM
The futures are still pressing their overnight session highs, but QQQ is only now testing 33.00. Better late than never. Channel resistance has risen to 33.07, yesterday's high for the 30 and 60 min channel, while support is up to 32.70.

 
 
  Jonathan Levinson   8/10/200,  9:23:38 AM
The 30 min cycle upphase continues higher, with QQQ finally exceeding yesterday's high if only by a couple of cents. 33.00 remains resistance- make it channel resistance of 33.05, while confluence from Friday's range starts at 33.15 and continues to 33.40. I would be surprised to see that range broken ahead of the 2:15 announcement, but if it is, I'll be watching the daily cycle for signs of an upside whipsaw.

 
 
  Jonathan Levinson   8/10/200,  9:09:21 AM
Session high for Dow futures here at 9832. QQQ is holding at 32.95.

 
 
  Linda Piazza   8/10/200,  8:53:51 AM
Lehman didn't do its part to help the semis confirm its potential morning-star formations today. (See my 00:33 post for information on why I'm watching the SOX this morning.) Lehman downgraded the semis to a neutral rating, cutting INTC's price target. In separate news, a report speculates that INTC will trim prices on some chipsets next month. Of course, this could be a case of Lehman being a little late to the party after the chip stocks' steep declines, but we'll see. Bulls don't want to see the SOX fall below the 50% retracement of its rally off the Fall, 2002's low unless there's only a brief dip (intraday) and then a steep climb that closes above that 50% level.

 
 
  Jonathan Levinson   8/10/200,  8:46:23 AM
Session low for gold, down 1.50 at 400.20 on the October e-mini future.

 
 
  Jonathan Levinson   8/10/200,  8:36:53 AM
QQQ has printed a session high of 32.96. 30 min channel resistance lines up with the 60 min line at 33.06 currently.

 
 
  Jonathan Levinson   8/10/200,  8:33:18 AM
Equities are higher and bonds are flat, ES +3 at 1067.25, NQ +5.50 at 1326, YM +9829 and QQQ +.145 at 32.935.

 
 
  Jonathan Levinson   8/10/200,  8:31:48 AM
8:29am U.S. Q2 PRODUCTIVITY 2.9% ANNUAL VS. 2.1% EXPECTED

8:29am U.S. Q2 UNIT LABOR COSTS UP 1.9% ANNUALIZED

8:30am U.S. Q2 MANUFACTURING PRODUCTIVITY UP 7.5%

8:30am U.S. PRODUCTIVITY UP 4.7% YEAR-OVER-YEAR

8:30am U.S. UNIT LABOR COSTS UP 0.2% YEAR-OVER-YEAR

 
 
  Jonathan Levinson   8/10/200,  8:27:05 AM
Session highs printing here for ES and YM futures. Data due in 4 minutes.

 
 
  Jonathan Levinson   8/10/200,  8:00:27 AM
Equities are higher, with ES trading 1066.25, NQ 1325, YM 9817 and QQQ up .14 to 32.93. Gold is down .80 to 400.90, silver down .023 to 6.71, ten year bonds flat at 112.50, euros flat at 1.2273 and crude oil down .10 to 44.75.

We await the 8:30 release of Q2 nonfarm productivity, est. +2%.

 
 
  Linda Piazza   8/10/200,  6:50:18 AM
Good morning. The Nikkei traded in a 122-point range in Tuesday's session, closing near the high of that range at 10,953.55, up 44.85 points or 0.41%. Although the steam leak that killed four workers and injured others at a nuclear plant in Japan reportedly helped weaken European bourses Monday, the event seemed to have little effect on the already oversold Nikkei. Kansai Electric Power, the owner of the affected nuclear plant, did fall 2.7%.

Most exporters were weak again. With the news that Yahoo and Google reached a settlement in their patent and stock dispute, Yahoo Japan posted an almost 10% gain. UFJ Holdings and some other banks continued recent gains, with UFJ reportedly set to join other creditor banks in urging troubled retailer Daiei to approach the Industrial Revitalization Corporation for help.

Other Asian markets turned in mixed performances. The Taiwan Weighted lost 0.11%, but South Korea's Kospi gained 0.87%. Singapore's Straits Times lost 1.11%, and Hong Kong's Hang Seng lost 0.48% as a government changeover approached, with the prime minister leaving office. As expected to occur some time today, China's July industrial production was released, and that number showed a lower-than-expected 15.5% rise from the year-ago level, down from June's 16.2% rise. The production number suggests that China's efforts to cool its economy are working. The Shanghai Composite gained 0.35%.

Currently, European bourses trade higher with the exception of the Moscow Times and Madrid General. CNBC Europe commentators mention the possibility that the climb is an oversold bounce since some recently beaten-down stocks are seeing gains. Even Swiss banking group UBS was climbing after warning that a slowdown in market activity would likely mean that its H2 2004 revenue would be lower than H1's. Meanwhile, Swiss chemicals group Givaudan was a victim of its own success, after reporting profits that beat expectations. It drew a downgrade to neutral from Merrill Lynch on valuation concerns, and was trading slightly in the red in early trade. Also drawing negative attention from analysts were Philips Electronics and Michelin. JPMorgan removed Philips from its focus list for Europe, cutting their 12-month target for the company. The firm downgraded all consumer discretionary sectors due to rising oil prices and weaker U.S. jobs numbers. Credit Suisse First Boston downgraded Michelin to an underperform rating, but kept its price target steady. German utility RWE dropped after reporting earnings and failing to raise guidance for the full year.

As of this writing, the FTSE 100 has climbed 16.90 points or 0.39%, to 4,331.30. The CAC 40 has gained 11.94 points or 0.34%, to trade at 3,509.24. The DAX has gained 3.42 points or 0.09%, to trade at 3,693.75.

 
 
  Linda Piazza   8/9/2004,  12:33:13 AM
Last week, the OEX ended the week at the bottom support of its descending regression channel on its daily chart. That's pretty well where it ended Monday, too, with MACD growing more bearish. It was a consolidation day for many indices, including the SOX. I'd been watching the SOX as one gauge of possible strength or weakness on the markets, with the SOX ending last week poised on the 50% retracement of the rally off the September, 2002 low. That's pretty well where the SOX closed Monday, too, producing a near-doji at the bottom of its most recent decline. Although that doji didn't gap down in a classic way, it could still be the second candle in a potential three-candle reversal signal called a morning-star pattern. Why am I spending so much time on the SOX when this post discusses the OEX? A reversal in the SOX could help pull other indices into a bounce, too, while a failure of a potential SOX bounce could do the opposite.

The Keltner daily view shows the OEX having violated a channel line Friday and then bouncing down from its test of that channel line today, with that resistance line at 523.20 Monday night and joined by another channel line at 523.50. On that chart, the OEX looks in real danger of falling to the next Keltner channel's support, way down at 502, a viewpoint that would be changed only if the OEX could maintain values above another channel line currently at 531.75, maintaining that value on a daily basis.

On an intraday view, the OEX spent the day establishing one ascending trendline after another, and failing from each. The correlative fan theory suggests that a typical rally proceeds in three stages, with prices breaking down out of the first steep and not-sustainable trendline, to establish a second and more moderate one. Then prices break down from that one and establish a third one. It's upon the break of the third trendline that the decline escalates. That breakdown came about 15 minutes before Monday's close, with the decline escalating just as expected. The OEX ended the day sitting on 15-minute Keltner support. That support appeared to be in the process of turning lower. The OEX also ended the day sitting on one channel's support line on the five-minute chart, threatening to break through toward 521.57, but not yet having broken through that channel line. Resistance at 524.75-525 looked firm on both the five- and fifteen-minute charts.

Tuesday offers many reasons to be cautious about trading. Any bounce could be a countertrend bounce, doomed to fail near 525-527 or 530-532. Such a bounce and rollover may have begun today, but investing in options ahead of a possible pin-them-to-the-numbers morning tomorrow leading into the Fed decision could sap premium from options positions. Any drop could find support near 520-520.80, although the OEX is verging on creating a breakout signal that could send it much lower. The Fed's rate decision tomorrow could certainly be market-moving, but so could the CSCO earnings after the close. Tech-related conferences are going on all week, with news out of those conferences possibly moving the tech-related indices. As I write this evening, entries either direction seem too risky to recommend, but we'll watch closely as the day progresses tomorrow.

 
 
  OI Technical Staff   8/9/2004,  12:32:55 AM
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