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  Jeff Bailey   8/17/200,  5:47:53 PM
Pivot Matrix for tomorrow at this Link

Per Traders' request, added both a DAILY and WEEKLY TRIN to pivot analysis. Check it out! Will discuss how a trader might begin divising a trading plan for tomorrow.

  Jeff Bailey   8/17/200,  4:59:11 PM
Closing Internals at this Link

  Mark Davis   8/17/200,  4:40:18 PM
Recap of Tuesday's trades (08-17-04)...
SPQHR (SPX Aug 1090 call) @ 2.90
SPQHR (SPX Aug 1090 call) @ 2.75, -5.17%
SPQHQ (SPX Aug 1085 call) @ 4.50
SPQHQ (SPX Aug 1085 call) @ 4.50, +0.00%
SPQTP (SPX Aug 1080 put) @ 4.00
SPQTP (SPX Aug 1080 put) @ 4.80, +20.00%
SPQHQ (SPX Aug 1085 call) @ 3.70
SPQHQ (SPX Aug 1085 call) @ 3.90, +5.40%
SPQTP (SPX Aug 1080 put) @ 4.70
SPQTP (SPX Aug 1080 put) @ 4.40, -6.82%
SPQTP (SPX Aug 1080 put) @ 4.20
SPQTP (SPX Aug 1080 put) @ 4.50, +7.14%
SPQHQ (SPX Aug 1085 call) @ 3.90
SPQHQ (SPX Aug 1085 call) @ 3.90, +0.00%
SPQTP (SPX Aug 1080 put) @ 4.00
SPQTP (SPX Aug 1080 put) @ 5.00, +25.00%
Total gain/loss for Tuesday = +1.85, +45.55%
Total gain/loss for the week = +2.45, +56.91%
Total gain/loss since inception (07-29-04) = +20.90, +222.25%

  Jeff Bailey   8/17/200,  4:19:36 PM
QQQ ... goes out at $33.26 +1.13%. I would have guessed $33.19-$33.22.

  Jeff Bailey   8/17/200,  4:16:50 PM
Current OPEN MM Profiles at this Link

Today's Activity ....

Closed out the swing trade bullish for Dollar Tree (DLTR) at the bid of $23.90. ($0.65, or +2.80%)

Day trade long Netease.com (NTES) at $32.59 offer. Closed out at $32.73 bid. ($0.14, or +0.43%).

Today's high for the QQQ was $33.44. We might not be the ONLY traders short the QQQ having sold the August $32 puts.

If tomorrow's low is $33.18 - $0.25 = $32.93 then something fishy is going on.

  Mark Davis   8/17/200,  4:14:32 PM
Day Trade Exit Point Alert -
Stopped out... SPQTP (SPX Aug 1080 put) @ 5.00, +20.00%
We were stopped out of our SPX Aug 1080 put @ 3:45PM

  Mark Davis   8/17/200,  4:12:01 PM
Jane I kept shaking my 8 ball trying to determine tomorrow's direction but it just said "Try again later." That's not nearly as poetic as your post, but hey I'm the new guy.

  Linda Piazza   8/17/200,  3:59:25 PM
Well, we got a little- more-than-three-point range on the OEX today, from 527.16-530.54, rather than the four-point range from 527-531 that I expected might be one of the four-point range choices for the OEX today. The OEX did hit the top within the first hour of trading, as I suggested in my 9:41 post this morning. Now I just wish I knew what happened next. Today's OEX candle is a bearish one, but we'll need to see confirmation of a reversal tomorrow.

  Jeff Bailey   8/17/200,  3:58:51 PM
JP Morgan (JPM) $37.97 +0.59% .... 200-day SMA at $37.99, do bulls have any further conviction near the close?

  Jeff Bailey   8/17/200,  3:56:34 PM
Broker/Dealer Index (XBD.X) 121.56 +1.80% .... bulls would have liked to see some further sign of strength above DAILY R2 for some hint of further bullish carryover into tomorrow's trade.

I had my eye on AMTD for a bullish trade all afternoon above $11.04, to see close at high of session, but just couldn't gather another bid.

  Linda Piazza   8/17/200,  3:49:55 PM
The OEX remains trapped between the 30-minute and 60-minute 100/130-ema's, but we've still got ten minutes.

  Jeff Bailey   8/17/200,  3:46:43 PM
Bullish day trade exit alert ... for Netease.com (NTES) $32.73 bid.

Thought about holding overnight, using the Dec. $30 puts has partial hedge, but simply not comfortable with oil closing near the highs.

  Jonathan Levinson   8/17/200,  3:45:31 PM
The 30 minute cycle oscillators for QQQ have that lower high to contend with, and the 30 min channel continues to edge lower. It appears to be light volume and general confusion at this 33.20 level that is holding the Qubes in suspended animation- that and the bullish oscillator kisses on the daily cycle oscillators opposed with the toppy-looking 30 min oscillators.

  James Brown   8/17/200,  3:44:51 PM
Countrywide Financial (CFC) shareholders have approved a plan to increase the number of authorized shares thus making it possible for the proposed 2-for-1 split to take effect. The BoD announced the split back in June. The split will be payable on August 30th.

  James Brown   8/17/200,  3:42:19 PM
The homebuilders are starting to bounce again just a bit after fading from their early morning gains. More importantly the DJUSHB index has broken out above the 600 level on top of yesterday's breakout above technical resistance at the 100 and 200-dma's.

PHM, who appears to be leading the homebuilders, rallied past the $60 mark today but is currently trading back to $59.00. Bullish traders might want to watch this stock for a bounce from $58.00, which was previous resistance.

  Mark Davis   8/17/200,  3:41:21 PM
Bulls need a Hail Mary to pull this one out of the fire and bears know it.

  Linda Piazza   8/17/200,  3:35:25 PM
Here's the new version of the H&S on the OEX's five-minute chart with a lower neckline that the previous one, and with that neckline having just been tested: Link

  Mark Davis   8/17/200,  3:33:04 PM
Day Trade Exit Point Alert -
Swoosh! Cinch up your stops again... SPQTP (SPX Aug 1080 put) to 5.00

  Jonathan Levinson   8/17/200,  3:29:57 PM
QQQ is testing the rising trendline connecting the session lows on the break below 33.20 here, with volume just beginning to pick up. A move below the session low would be required to confirm a 30 min cycle downphase, but the fact remains that the 30 min cycle is more closer to overbought than oversold here. The short cycles are chopped up, and short term direction looks like a coin toss to me. The 30 min channel and oscillators suggest that the next move should be to the downside. Link

  Mark Davis   8/17/200,  3:25:53 PM
SPX b-bands are rapidly tightening... we're either going to get a big swoosh to the downside or get stopped out (pretty soon)

  Linda Piazza   8/17/200,  3:20:06 PM
Although I'm not pleased with the action today, I am pleased with what technical analysis tools showed us was likely to happen with the OEX. It happened just about line-by-line according to the script. Now I just wish I knew what happened next. Sigh. Because it was my original, out-of-the-heat-of-the-fire conclusion, I still give a slight nod to the downside being more likely than the upside, an impression that's backed by that possible H&S building on the OEX's five-minute chart. However, I'm not at all sure how much downside there might be, at least not until I've had an opportunity to study charts again this evening, and I always get cautious about making projections about the last 45 minutes of trading. We can see some strange things happen that have little relationship to what went before or what will happen the next day. This is approaching the time when I would expect the H&S formation to be rejected, if it's going to be, for example, but then I wouldn't be at all surprised to see the OEX turn down from any breakout point when trading resumes tomorrow morning.

  Mark Davis   8/17/200,  3:17:50 PM
Stepping away for a few minutes...

  Linda Piazza   8/17/200,  3:12:55 PM
On the OEX's five-minute Keltner chart, support at the channel lines currently at about 527.15 still looks relatively firm, but showing the slightest weakening. I don't think it's much of a weakening just yet, however, so it could conceivably hold the OEX through the end of the day. The fifteen-minute chart also shows some Keltner support in that area, down to 527. I've redrawn the neckline of that H&S-ish formation to take in later actions, actually rethinking the whole formation, and it's possible that the true neckline is lower, at about 527.45, but rising. At any point, an ascending trendline off yesterday's 10:40 candle crosses there, whether or not it's a neckline. That Keltner support lies just below it.

  Jeff Bailey   8/17/200,  3:10:15 PM
03:05 Market Watch at this Link

Deleted the PHLX Housing Index and added TRIN at the bottom per traders' request.

  Mark Davis   8/17/200,  3:06:47 PM
Day Trade Exit Point Alert -
Cinch up your stops... SPQTP (SPX Aug 1080 put) to 4.50
This is good stuff!

  Linda Piazza   8/17/200,  2:59:47 PM
The OEX's 60-minute 100/130-ema's hold again as resistance, as does the right-shoulder level of the H&S-ish formation on the five-minute chart. Is it time to test the 30-minute versions again as the OEX ping-pongs back and forth?

  Mark Davis   8/17/200,  2:58:12 PM

  Jonathan Levinson   8/17/200,  2:57:39 PM
Bonds are holding at the highs approaching the 3PM cash close, with TNX down 5.1 bps at 4.207%.

  Mark Davis   8/17/200,  2:54:30 PM
Day Trade Entry Point Alert -
Go short now... SPQTP (SPX Aug 1080 put) @ 4.00, stop 3.60

  Linda Piazza   8/17/200,  2:50:35 PM
We're still seeing a doji at the top of yesterday's climb on the TRAN. I'm still surprised that the TRAN is holding up so well with crude climbing.

  Mark Davis   8/17/200,  2:48:28 PM
Day Trade Exit Point Alert -
Stopped out... SPQTP (SPX Aug 1080 put) @ 4.50, +7.14%
Wow! Where did that big green candle come from?

  Linda Piazza   8/17/200,  2:40:20 PM
The OEX is still trading between the 30- and 60-minute 100/130-ema's.

  Jonathan Levinson   8/17/200,  2:38:27 PM
QQQ 2-day 100-tick update at this Link.

  Jonathan Levinson   8/17/200,  2:34:36 PM
Session high for bonds, TNX down 4.5 bps at 4.213%.

  Jonathan Levinson   8/17/200,  2:33:46 PM
QQQ is back above that 33.20 level, but volume is still light.

  Linda Piazza   8/17/200,  2:31:45 PM
The OEX did find support just above 527, where Keltner support said that it might be found. Now it's risen to test the H&S neckline. Resistance lines space out again on the five-minute chart. On the 15-minute chart, resistance looks just as strong, with that resistance up near 529. Still more chop.

  Mark Davis   8/17/200,  2:25:31 PM
Stepping away for a few minutes...

  Jonathan Levinson   8/17/200,  2:21:18 PM
Crude is back to 46.80 here: Link

  Keene Little   8/17/200,  2:19:59 PM
Seeing the discussion on crude and oil stocks reminded me of some things I've taken note of lately. One of the interesting takes on crude versus equity markets is that there is a lot of public money (especially in hedge funds) that is long oil, short equities. The scary part, for equity bears, is that the public short interest ratio is at a record high, meaning the public is massively short the market versus the smart money (the specialists).

We see oil stocks dropping and like gold stocks, the stocks often precede the commodity. So, I'm thinking we could be set up for hard reversals in both markets once the unwinding starts. If the longs in oil start to sell and the shorts in equities start to buy, it could get violent.

The EW pattern would support a bottom in the pullback in equities and the start of a rally to new annual highs (see March and May of last year to see how it might start), and the EW count for oil price could be counted as complete to the upside. I was thinking oil might reach $50 and it still might, but with the above scenario, either an equity rally or an oil selloff could spark the other side to start their unwinding. Something to watch for.

  Jonathan Levinson   8/17/200,  2:16:01 PM
QQQ is printing 33.18, below 33.20 with only a minor pause here. MSFT and GE are trading session lows, and this could be selling associated with that big 9.25B repo drain announced at 10AM.

  Mark Davis   8/17/200,  2:15:14 PM
Day Trade Exit Point Alert -
Cinch up your stops... SPQTP (SPX Aug 1080 put) to 4.50

  Jonathan Levinson   8/17/200,  2:13:16 PM
30 min channel support is currently 33.10, 60 min just below it at 33.05 QQQ.

  Jeff Bailey   8/17/200,  2:11:05 PM
02:00 Internals at this Link

  Linda Piazza   8/17/200,  2:11:03 PM
The OEX is now just above the 30-minute 100/130-ema's, with those averages at 526.36 and 527.22, respectively. So far, those averages are holding as support, but this test may tell us more. I'd expect the 100-ema to steady the OEX for a time at least if not provide a bounce attempt, if it's tested.

  Mark Davis   8/17/200,  2:09:41 PM
We just took out the 11:56 swing low @ SPX 1081.37... this "should" get things going to the downside, but keep in mind this IS scam week.

  Linda Piazza   8/17/200,  2:08:46 PM
I'm actually surprised with the large net drain today that Jonathan covered this morning and with the rising crude costs as he's also been detailing, that markets have held up as well as they have.

The OEX appears to be violating one version of its H&S-ish formation on its five-minute chart, heading down now to test that 527-ish Keltner support.

  Linda Piazza   8/17/200,  2:05:55 PM
The OEX now tests one possible neckline for the H&S-ish formation on its five-minute chart. Keltner support still tries to firm just above 527 and up to 527.20.

  Jeff Bailey   8/17/200,  2:04:14 PM
02:00 Market Watch at this Link

  Jonathan Levinson   8/17/200,  2:03:46 PM
Make that 46.95.

  Mark Davis   8/17/200,  2:03:36 PM
Day Trade Exit Point Alert -
Stopped out... SPQHQ (SPX Aug 1085 call) @ 3.90 and break even
That didn't take long

  Jonathan Levinson   8/17/200,  2:03:23 PM
Session high for Nymex crude here at 46.925.

  Mark Davis   8/17/200,  2:01:30 PM
Day Trade Exit Point Alert -
Cinch up your stops... SPQHQ (SPX Aug 1085 call) to 3.90 and break even

  Linda Piazza   8/17/200,  1:52:29 PM
Support on the OEX's five-minute Keltner chart is trying to firm near 527, suggesting that even if the H&S-ish formation did confirm by dropping through the neckline, as it had been threatening to do, the OEX might soon bounce right back up to test that neckline from the underside. Symmetry suggests that the OEX might have a while to go, perhaps another hour or two, before it firmly rejects or confirms that H&S formation, if it ever does, and by then, Keltner levels will have changed. Sometimes the two shoulders are not symmetrical, however.

  Jonathan Levinson   8/17/200,  1:50:54 PM
The daily QQQ chart is giving us bullish kisses Link on the daily cycle oscillators, with the 10 day stochastic looking for a confirmation cross for its bullish divergence. A close above 33.48 should be enough to do it.

  Jeff Bailey   8/17/200,  1:50:14 PM
Ameritrade Holding (AMTD) $10.99 +2.9% .... right at its WEEKLY R2 ($11.01), but just below its DAILY R2 ($11.04).

  Jeff Bailey   8/17/200,  1:49:11 PM
Broker/Dealer Index (XBD.X) 121.95 +2.13% ... right at its DAILY R2, but above WEEKLY R1 119.69.

  Mark Davis   8/17/200,  1:48:26 PM
Day Trade Entry Point Alert -
Go long now... SPQHQ (SPX Aug 1085 call) @ 3.90, stop 3.50

  Jonathan Levinson   8/17/200,  1:48:20 PM
Chart of Nymex crude at this Link.

  Jonathan Levinson   8/17/200,  1:47:32 PM
100-tick 2-day QQQ update at this Link.

  James Brown   8/17/200,  1:47:08 PM
EBAY has been in a non-stop rebound from its August 9th low. Now shares are pushing up against round-number resistance at $80.00, where the stock failed in late July. Will EBAY breakout? How will Google's imminent IPO affect shares?

  Jeff Bailey   8/17/200,  1:45:35 PM
Day trade raise bullish stop alert ... for Netease.com (NTES) $32.57 +2.67% .... to $32.30.

  James Brown   8/17/200,  1:45:24 PM
Collegiate Pacific (BOO) is reporting they know of no reason for their stock's sell-off. Shares were down more than 5% on more than 8 times the average volume.

  Jeff Bailey   8/17/200,  1:43:49 PM
I feel great pressure building .....

  Jonathan Levinson   8/17/200,  1:39:03 PM
The 30 min cycle oscillators are still pointed up, but the channel remains flat on the lacklustre drift higher and the current short cycle failure from a lower high. Channel resistance remains 33.40 QQQ, support 33.04. The short cycles are in a choppy upphase that is on the verge of rolling over here, but volume is low in this chop zone.

  Mark Davis   8/17/200,  1:37:44 PM
Stepping away for a few minutes... this trade looks a lot better than the last one.

  Mark Davis   8/17/200,  1:36:19 PM
Day Trade Exit Point Alert -
Cinch up your stops... SPQTP (SPX Aug 1080 put) to 4.20 and break even

  Linda Piazza   8/17/200,  1:34:22 PM
I'm sure everyone has noted the H&S-ish formation at the top of the OEX's climb, with bearish divergence as the head was formed. I think (if my version is correct) the neckline is about to be tested, with that neckline at about 527.60 and ascending.

It's possible to draw a higher version of that H&S neckline, with that version currently crossing at just under 528 and rising.

  Mark Davis   8/17/200,  1:33:45 PM
That push was slapped back hard, right at Keene's target for the high. I said earlier I'd need my seeing-eye Keene today.

  Linda Piazza   8/17/200,  1:31:03 PM
Yep, Mark, although that push is a few minutes early. I could have guessed it would be to the topside today, which is why I mentioned that the OEX could even briefly pierce the 60-minute 130-ema, but I sure don't know what they'll do with it after that. My vote would still have to go with resistance holding except for a brief push higher, but it's a tepid vote.

  Mark Davis   8/17/200,  1:28:32 PM
Here comes your stop-running push Linda

  Mark Davis   8/17/200,  1:27:01 PM
If you took that short play you should have gotten an easy fill on the little spike higher.

  Mark Davis   8/17/200,  1:20:58 PM
Day Trade Entry Point Alert -
Go short now... SPQTP (SPX Aug 1080 put) @ 4.20, stop 3.80

  Linda Piazza   8/17/200,  1:17:36 PM
The OEX did find support at its 30-minute 100/130-ema's, as I thought it might do today. Now it's risen again to test the 60-minute versions, now at 528.83 and 530.39, respectively. The OEX has pretty much followed the script for the scenario I'd developed mid-morning yesterday, rising up to test 530-531, finding resistance there, trading in a four-point range for several hours, except it's been an even narrower three-point range. Now we've had that "at least several hours" of consolidation in that range. I wouldn't be surprised to see the OEX continue to ping-pong between those 30- and 60-minute averages for the rest of the day, but a breakout could come any time since we've had the needed consolidation. Which direction? When I first determined that 530-531 and possibly up to 533 might top out OEX advances before a need for a pullback, I was studying charts after hours and pre-market. Now, in the heat of the battle, after the OEX has risen to test those levels, Keltner lines have risen, too, and it feels different. It always does. Since I know that I was able to be more analytical when working outside market hours, I'd go with a slight preference for this scenario: a greater likelihood of a pullback, perhaps after more testing and even a brief upside breach of the 60-minute 130-ema, than of a continued climb, but with downside perhaps limited, too, and trading perhaps choppy. Kind of all depends on crude, although I'm beginning to wonder at what point equity markets might begin to discount a pullback in crude ahead of the actual pullback.

  James Brown   8/17/200,  1:11:07 PM
Another oil refiner to watch for a bearish play is Sunoco (SUN). The stock is rolling over under its simple 10-dma and is now trading back under the $60.00 mark. I'd watch for a breakdown under $58.00. This should break price support dating back to March, April and May near $58.00 and would also break technical support at its 200-dma.

A move under $58.00 would also produce a quintuple-bottom breakdown sell signal on its P&F chart, which is already bearish with a $50 target.

  Mark Davis   8/17/200,  1:10:24 PM
The dog and squirrel rumble was a standoff Link

  James Brown   8/17/200,  1:09:09 PM
Bob Pisani on CNBC talking about profit taking in oil stocks. He pointed out that oil refiner Valero (VLO) is being sold and currently down about 4.3% to $65.00. This is a sharp reversal of the recent oversold bounce. Traders might want to consider bearish plays if VLO breaks to a new low under $64.60. VLO's bearish P&F chart points to a $57 target.

  Jeff Bailey   8/17/200,  1:07:01 PM
01:00 Internals at this Link

  Mark Davis   8/17/200,  1:06:26 PM
Day Trade Exit Point Alert -
Stopped out... SPQTP (SPX Aug 1080 put) @ 4.40, -6.82%
I'm not sure if we got too close to the action or if the tight stop will prove to be a good move.

  James Brown   8/17/200,  1:06:26 PM
The XBD broker-dealer index is seeing some strong follow through on yesterday's bullish breakout through the top of its descending channel. The XBD is up another 2% and is now above round-number resistance at the 120 level and technical resistance at its 40 and 50-dma's.

Lehman Brothers (LEH) has broken out above the $72.00 level of resistance and its simple 50-dma.

Merrill Lynch (MER) is back above the $50.00 mark.

Morgan Stanley (MWD) is approaching the $50.00 mark.

While Goldman Sachs is still lagging its peers.

Meanwhile Legg Mason (LM) has pushed through its trendline of resistance and the $80.00 level to hit our stop loss closing the play.

  James Brown   8/17/200,  1:02:39 PM
The three-day rebound in technology is sending a few sector indices through round-number resistance.

The GHA hardware index is pushing through its simple 10-dma but just under round-number resistance at 220.

The GSO software index is above its 10-dma and above the 130 mark.

The INX Internet index is above its 10-dma and above the 160 level.

  James Brown   8/17/200,  1:00:06 PM
The oversold bounce in the Dow Transportation average is failing at the same spot it did last week near 3075. Today's high was actually 3070 a lower low. Although it may be noteworthy that the index is ticking higher again.

  Jeff Bailey   8/17/200,  12:59:50 PM
12:55 Market Watch at this Link

  Linda Piazza   8/17/200,  12:53:48 PM
The OEX isn't doing much of anything, Keltner wise. Support is trying to firm at about 528 on the five-minute chart, but resistance is trying to firm at 529 on the 15-minute one.

  Mark Davis   8/17/200,  12:50:42 PM
Stepping away for a few minutes... There's a dog and squirrel rumble occurring in the back yard (I'm long my dog)

  Jeff Bailey   8/17/200,  12:45:52 PM
Netease.com (NTES) $32.41 +2.17% .... chart with DAILY Pivot levels and today's upper 5-MRT. I'm seeing quite a few NASDAQ stocks gravitating towards their August "Max Pain" levels. Link

  Mark Davis   8/17/200,  12:45:17 PM
Our put play SPQTP (SPX Aug 1080 put) @ 4.70... is still available for 4.70. All things considered I don't know if that's good or bad but I always like to get in the green quickly with a play and we're not doing it with this one (at least yet).
Things seem to have come to a standoff. Maybe we should handle this Texas style Link

  James Brown   8/17/200,  12:44:45 PM
Dick's Sporting Goods (DKS) is up almost 14% to $32.09 as investors react to DKS' earnings report. The company beat by a penny and guides higher for the rest of the year. Shares have broken through technical resistance at its 10, 21, 40, 50 and 100-dma's. DKS has also broken its six-week trend of lower highs.

  Jonathan Levinson   8/17/200,  12:43:01 PM
Stepping away briefly here.

  James Brown   8/17/200,  12:41:55 PM
Ouch! Estee Lauder (EL) has gapped lower and is trading down 8.65% to $39.73 and breaking multiple levels of support. The company reported earnings this morning that missed consensus by a penny.

  Linda Piazza   8/17/200,  12:41:33 PM
The BIX continues in its orthodox broadening formation, a bulloney bullhorn as we've become accustomed to Jonathan calling these formations: Link They're typically bearish when they come at the top of a climb, but you know what I'm going to say next, don't you? They don't always break to the downside. They're the dickens to figure out, whichever way they break, because of their expanding nature. This one is even more difficult to figure out because it's extended so far and widened so much. Currently, the upside breakout point appears to be about 356 and the downside about 342.

  James Brown   8/17/200,  12:39:58 PM
Atari Inc (ATAR) is down more than 10% to $1.55 after USB Piper Jaffray downgraded the stock from market perform to under perform and lowered their price target to $1.00.

Previously known as Infogames the company began trading under the Atari name in May 2003 around $6.50 a share.

  Mark Davis   8/17/200,  12:39:45 PM
SPX 1-min b-bands getting pinched VERY tight here... I wish it weren't during the lunchtime lull

  Jonathan Levinson   8/17/200,  12:35:58 PM
Session high for Sept crude here at 46.90.

  Jonathan Levinson   8/17/200,  12:35:30 PM
QQQ continues to chug along between 33.20 and 33.24 Link . The short cycles are perfectly mixed to boot, within a flat 30 min channel.

  James Brown   8/17/200,  12:33:49 PM
Copper miner Phelps Dodge (PD) is up 1.59% and pushing past round-number resistance at $80.00 after Legg Mason started coverage on the stock with a "buy" and a $100 price target. Currently copper prices are down 1 cent to $1.29 a lb. after its recent rally.

The next hurdle for PD is the July highs near $81.50. The stock's P&F chart is bullish and points to a $93 target.

  Jeff Bailey   8/17/200,  12:32:19 PM
Current OPEN MM Profiles at this Link

I added TRIN at the bottom as a benchmark.

  Mark Davis   8/17/200,  12:31:52 PM
Day Trade Exit Point Alert -
Exiting now... SPQHQ (SPX Aug 1085 call) @ 3.90, +5.4%

  Linda Piazza   8/17/200,  12:28:10 PM
FWIW: Remember that SPX monthly chart showing a formation that everyone debated back in early 2002, asking if it were a valid H&S or not since the head appeared so out of proportion to the shoulders? Here it is with one version of the neckline extended into the present: Link The pullback since the neckline level was retested at the beginning of this year could still be a bull flag prior to another push higher according to that monthly chart, but for the time being, the neckline appears to have held as resistance. If that is a bull flag and the SPX breaks above the neckline again, confirmed by a push to a new yearly high, or perhaps by a move above 1200, that would reject the formation. Of course, that neckline version might not be valid even if the formation were. It's open to interpretation.

  James Brown   8/17/200,  12:27:39 PM
Deere & Co (DE) reported its Q3 earnings this morning that beat analysts' estimates by 7 cents per share. Revenues soared more than 26% to hit $4.85 billion, which was also above expectations.

Here's an excerpt from DE's press release:

"Though strong markets are helping drive Deere's performance, the company is seeing major benefits from its ongoing business-improvement efforts, noted Robert W. Lane, chairman and chief executive officer. "Our intense focus on asset management, cost control and responsive order fulfillment is helping Deere successfully manage the current high level of demand for our equipment. Through these efforts, we have been able to continue delivering exceptional service to customers, while securing raw materials as needed, and offsetting material-cost pressures to a large extent. As a result, the company is fully participating in the strong market upswing now taking place."

Discussing their outlook...
company equipment sales for 2004 are expected to increase around 32 percent with net income forecast around $1.3 billion. Fourth-quarter sales are currently forecast to be up approximately 35 percent in comparison with the same period last year. Production levels are expected to increase about 25 percent for the quarter. Although Deere continues to see higher costs for steel and other raw materials, aggressive cost management is expected to offset the biggest part of the increase for the year

This guidance is above analysts' estimates for its Q4 revenues.

  Mark Davis   8/17/200,  12:26:09 PM
Day Trade Exit Point Alert -
Cinch up your stops... SPQTP (SPX Aug 1080 put) to 4.40

  Jonathan Levinson   8/17/200,  12:24:08 PM
Session high for ZN bonds here, TNX now down 3.7 bps at 4.221%. Gold is back to 406, QQQ holding above 33.20 but not yet giving up it up with a cross above 33.24.

  Jeff Bailey   8/17/200,  12:21:11 PM
Bullish day trade raise stop alert ... for Netease.com (NTES) $32.38 +2.08% .... to $32.19.

  James Brown   8/17/200,  12:20:39 PM
Golden West Financial (GDW) is in day three of its oversold bounce but the rebound is struggling under its simple 200-dma and the $105 level. This could prove to be a bearish entry point if shares roll over from here.

  Mark Davis   8/17/200,  12:20:33 PM
Day Trade Entry Point Alert -
Go short now... SPQTP (SPX Aug 1080 put) @ 4.70, stop 4.20
We'll let the market decide which direction we should be playing.

  James Brown   8/17/200,  12:18:48 PM
Choridant Software (CHRD) is up more than 23% to $2.99 after the company reported Q2 earnings yesterday and guided higher on revenues for the third quarter. Two firms came out this morning and upgraded CHRD to a "strong buy".

  James Brown   8/17/200,  12:15:57 PM
Drugmaker Wyeth (WYE) has announced that the FDA has given WYE's renal cancer drug a "fast-track" status toward approval. Yet shares of WYE are not moving much on the news up 25 cents to $35.91.

  Jonathan Levinson   8/17/200,  12:14:04 PM
Crude is currently trading both sides of 46.60, last at 46.575.

  Mark Davis   8/17/200,  12:13:49 PM
Day Trade Exit Point Alert -
Cinch up your stops... SPQHQ (SPX Aug 1085 call) to 3.70 and break even

  James Brown   8/17/200,  12:12:52 PM
I'm seeing a headline here that a Russian court has rejected oil company Yukos' $3.4 billion tax appeal. This could be pushing crude prices higher.

  Jeff Bailey   8/17/200,  12:10:49 PM
12:00 Internals at this Link

  Linda Piazza   8/17/200,  12:09:50 PM
Careful, equity bulls. As Jonathan has been updating us through the day, crude prices have been rising, at $46.52 as I type after having reached a high of $46.85, a slightly higher high than yesterday's. Although there's the possibility of a double-top on crude, backed up by incipient bearish price/oscillator divergence, that divergence can be erased. What is certain is that crude has rejected yesterday's H&S after seeming to confirm it.

  Mark Davis   8/17/200,  12:08:11 PM

  Mark Davis   8/17/200,  12:05:58 PM
1-min b-bands are getting pinched here... we should know pretty soon which way this is going to go

  Mark Davis   8/17/200,  12:04:08 PM
If we can take out the last swing high @ SPX 1082.33 we may get some traction to the upside... currently printing 1082.06

  Jonathan Levinson   8/17/200,  11:59:04 AM
6-month daily chart of Dec. gold futures at this Link with trendlines added. This 404-406 level is key resistance. While the daily cycle points higher, we've seen early failures in recent months. A move above 408 would confirm bullishness, while a failure below it would open the door to a rtest of 395 and 388 supports.

  Mark Davis   8/17/200,  11:58:46 AM
Day Trade Exit Point Alert -
Stopped out... SPQTP (SPX Aug 1080 put) @ 4.80, +20.00%

  Mark Davis   8/17/200,  11:57:49 AM
Day Trade Entry Point Alert -
Go long now... SPQHQ (SPX Aug 1085 call) @ 3.70, stop 3.40

  Jeff Bailey   8/17/200,  11:57:14 AM
Sept. Crude Oil futures (cl04u) 30-minute delayed with DAILY Pivots.

  Linda Piazza   8/17/200,  11:56:28 AM
A study of Keltner charts, moving averages, and historical S/R led me to believe that 530-531 might top out the OEX today. Here are charts that show one of the reasons why I thought the OEX might trade in a four-point range for a number of hours, at least. Link Link Others include the width of the OEX's smallest Keltner channel, and a historical tendency, mentioned by Mark yesterday in another context, for indices to trade in a small-range day after a large-range one.

  Jonathan Levinson   8/17/200,  11:54:19 AM
Gold is back to unchanged at 405.30. 406 has acted as resistance this week. HUI is down .23%, XAU up .17% here.

  Jonathan Levinson   8/17/200,  11:52:40 AM
The 100-tick QQQ Link shows a large volume buy candle here at 33.20. This confluence zone is being tested for the fourth time today, this time from the downside. The short cycle is flattened here, trying for an upturn. Above 33.20, the picture should be bullish, below it bearish. A move above 33.24 should confirm the break back above this key level.

  Linda Piazza   8/17/200,  11:44:26 AM
Resistance lines are now separating somewhat on the OEX, so that if it can maintain five-minute closes above the line currently at 527.95, as it appears to be doing, it will likely test 528.40 and perhaps even the 529 level again before it finds significant resistance.

  Linda Piazza   8/17/200,  11:42:08 AM
The OEX currently finds support at its 30-minute 100/130-ema's, with those averages at 526.25 and 527.14, respectively.

  Mark Davis   8/17/200,  11:40:38 AM
Stepping away for a few minutes...

  Jonathan Levinson   8/17/200,  11:40:31 AM
Nymex crude is currently trading 46.675. Chart at this Link.

  Mark Davis   8/17/200,  11:38:55 AM
I feel like I should be issuing a call signal right about now but we have a nice gain locked in that could get even nicer so we'll just watch the action.

  Jonathan Levinson   8/17/200,  11:32:45 AM
There's a small bullish divergence in the short cycle Macd histogram, but a break below 33.10 QQQ will invalidate it. The short cycle oscillators are approaching oversold territory, but with the 30 min cycle channel just beginning to roll over, it's iffy to bet on lower support, currently 33.05, holding on the first test. 32.97-33.03 is the more likely range, and it's backed up by 60 min channel support at 32.94. A break below 32.90 should see strong downside followthrough if that level fails to hold.

  Mark Davis   8/17/200,  11:29:44 AM
Day Trade Exit Point Alert -
Cinch up your stops... SPQTP (SPX Aug 1080 put) to 4.80
Let's lock in a +20% gain

  Linda Piazza   8/17/200,  11:28:55 AM
Now new resistance converges over the OEX's current position, with that resistance currently near 528. Bears want to see the OEX maintain closes beneath the line currently at 528.06. According to the OEX's five-minute Keltner chart, the OEX now has vulnerability down to 526.74, but the latest version of an ascending trendline off yesterday's 10:40 five-minute candle now crosses just above 527, so that might provide support.

  Mark Davis   8/17/200,  11:26:15 AM
I hear a cracking sound Jane. Make sure your flip line is tied securely to your waist and dig in those spurs (that's tree trimmer lingo). If the limb breaks yell "Headache!" so the ground crew has a chance to get out of the way.

  Jonathan Levinson   8/17/200,  11:25:24 AM
30 min channel support has descended to 33.05 QQQ on the break. Volume has increased as well. 32.97-33.03 QQQ is confluence support below.

  Linda Piazza   8/17/200,  11:24:57 AM
The TRAN drops further and is now trading below yesterday's close.

  Jonathan Levinson   8/17/200,  11:17:12 AM
QQQ 2-day 1090-tick update at this Link . The 30 min channel is flattening on this short cycledownphase, but has not yet rolled over. A break below 33.20 support for longer than 5 minutes should do it.

  Linda Piazza   8/17/200,  11:17:07 AM
After pushing up to and almost touching its 30-dma and last week's high, the TRAN has dropped back, currently printing a doji with a long upper shadow. Instead of confirming the double-bottom, the TRAN risks turning down again and confirming the resistance offered at the top of its current rectangular trading pattern, with that possibly being the bulb portion of a "b" distribution pattern.

  Jeff Bailey   8/17/200,  11:13:46 AM
11:00 Internals at this Link

  Linda Piazza   8/17/200,  11:10:53 AM
Look for continued five-minute closes beneath the Keltner line currently at 528.41 or at least below the lines currently grouping near 528.80-529 as a sign that the OEX turns lower within its Keltner channels.

  Jane Fox   8/17/200,  11:06:40 AM
Great analogy Mark.

  Mark Davis   8/17/200,  11:05:42 AM
In this atmosphere you, as a trader, have to relate to the market as the tongue does to the teeth... darting in and out to avoid being bitten, moving food (money) around as the teeth (the market) grinds the food up.

  Jeff Bailey   8/17/200,  11:04:02 AM
11:00 Market Watch at this Link

  Linda Piazza   8/17/200,  10:59:41 AM
That Keltner resistance on the five-minute chart did prove strong enough to send the OEX lower, but not much lower, so far. It is possible that the OEX has seen its high of the day, although there's not enough evidence to say that for sure. So far, the movement fits my scenario for today, one that would see the OEX possibly trade in a four-point range near that high of the day, and possibly mostly below it, for a number of hours now.

  Mark Davis   8/17/200,  10:57:13 AM
Day Trade Exit Point Alert -
Cinch up your stops... SPQTP (SPX Aug 1080 put) to 4.00 and break even

  Mark Davis   8/17/200,  10:54:06 AM
Day Trade Exit Point Alert -
Stopped out... SPQHQ (SPX Aug 1085 call) @ 4.50 and break even

  Jonathan Levinson   8/17/200,  10:53:06 AM
Current intraday chart of crude oil at this Link.

  Jonathan Levinson   8/17/200,  10:52:08 AM
Bonds are flat near the highs, with TNX down 1.2 bps at 4.246%. Gold once again failed to hold above 405, pulling back to the lows but currently bouncing to 404.90, down .40. HUI is down .46% to 193.61, XAU down .03% at 89.66.

  Jonathan Levinson   8/17/200,  10:50:56 AM
Session high for Nymex crude at 46.20 printing here.

  Mark Davis   8/17/200,  10:49:51 AM
Day Trade Entry Point Alert -
Go short now... SPQTP (SPX Aug 1080 put) @ 4.00, stop 3.60

  Linda Piazza   8/17/200,  10:49:30 AM
The OEX is trying to push past the resistance on the OEX's five-minute Keltner chart. It's already had one five-minute close above a key level, the Keltner line currently at 528.79, but whether or not the OEX can push above this combined resistance it tests is still in question.

  Mark Davis   8/17/200,  10:46:31 AM
Day Trade Exit Point Alert -
Cinch up your stops... SPQHQ (SPX Aug 1085 call) to 4.50 and break even
I'm beginning to lose confidence in this play because of the lack of a meaningful bounce.

  Jeff Bailey   8/17/200,  10:44:26 AM
Day trade long alert .... Netease.com (NTES) $32.59 here, stop $31.65, target $34.00.

  Jonathan Levinson   8/17/200,  10:41:56 AM
30 min channel resistance is currently 33.46, support 33.10 QQQ.

  Linda Piazza   8/17/200,  10:40:42 AM
The OEX is still looking fine on the 15-minute chart, still holding above the level it needs in order to maintain the possibility of pushing toward 531 or even possibly above that, to 531.32. However, on the five-minute chart, resistance is firming now just above the OEX's current position. If it can't bulldoze through that resistance, it looks vulnerable to a decline down to 527.78 or maybe even lower, closer to 527.

  Jonathan Levinson   8/17/200,  10:36:03 AM
Crude oil is back above 46 here, currently flat at 46.05.

  Mark Davis   8/17/200,  10:33:19 AM
Day Trade Entry Point Alert -
Go long now... SPQHQ (SPX Aug 1085 call) @ 4.50, stop 4.10

  Jonathan Levinson   8/17/200,  10:31:54 AM
Former resistance turned support at 33.20 QQQ is holding as a wavelet upphase begins to form. The short cycle downphase will be confirmed if that upphase puts in a lower high (fails to break the high of the day).

  Mark Davis   8/17/200,  10:29:42 AM
Day Trade Entry Point Alert -
Get ready to go long again...

  Jeff Bailey   8/17/200,  10:28:27 AM
Intra-day TRIN chart at this Link

I've set intra-day alerts just below at 0.58 and 0.49, along with higher alert at 1.01.

  Linda Piazza   8/17/200,  10:27:18 AM
If the OEX breaks below 528.33 and maintains values below that, it will turn its smallest Keltner channel lower again. Now resistance appears to be firming up near 528.74, ranging up to 528.90 and than again at 529.42.

If my earlier scenario holds true, it's possible the OEX has seen its high of the day, but also possible that the OEX could hover between that high of the day and 527 or so.

  Mark Davis   8/17/200,  10:27:14 AM
Day Trade Exit Point Alert -
Stopped out... SPQHR (SPX Aug 1090 call) @ 2.75, -5.17%

  Linda Piazza   8/17/200,  10:24:27 AM
Reader Question: In your 9.02 post you suggest watching crude prices. They have certainly had quite an impact on equities in the last few weeks. Do you know of web site in internet were prices can be watched, even though they may be delayed a few minutes?

Response: You can go to www.nymex.com. At the home page, about a third of the way down the page and under the word "energy," you'll find a series of icons with instruction to click on the one you want to view. Click on the derrick, and you'll get crude and then can select futures. At some point in the process, you'll be asked to agree to the standard agreement as to how you'll use the information--not sell it, etc. (Note: Read the contract for yourself before signaling your agreement.) You'll find an intraday chart with delayed data and information on various contracts--September's, etc. The data on the September 2004 contract does not say that it's delayed, as does the chart, but as far as I can determine, the data might be delayed, too.

  Jonathan Levinson   8/17/200,  10:20:44 AM
Nymex crude update at this Link showing the breakdown below Linda's head and shoulders neckline from yesterday.

  Jeff Bailey   8/17/200,  10:19:32 AM
QQQ $33.21 +1.03% ... after trading session high of $33.44, pulls back to test DAILY R1 and WEEKLY R1 correlations.

  Mark Davis   8/17/200,  10:17:40 AM
Day Trade Entry Point Alert -
Go long now... SPQHR (SPX Aug 1090 call) @ 2.90, stop 2.75

  Jonathan Levinson   8/17/200,  10:17:39 AM
A short cycle downphase is trying to start, but volume is much lighter than it was on the way up for QQQ. Look for support at former resistance of 33.20, with 30 min channel support rising to 33.03 QQQ here.

  Jeff Bailey   8/17/200,  10:14:22 AM
Dow Industrials (INDU) 10,002.92 +0.48% ... session high of 10,023.79 just shy of WEEKLY R2. 21-day SMA (10,013) offers near-term resistance.

  Jeff Bailey   8/17/200,  10:12:26 AM
10:10 Market Watch at this Link

Strong moves from brokers and retailers.

  Jonathan Levinson   8/17/200,  10:11:44 AM
QQQ 100-tick 2-day chart update at this Link.

  Linda Piazza   8/17/200,  10:10:47 AM
The OEX's five-minute Keltner chart reveals that the OEX looks a little unsupported up here, and may tumble toward 528.70.

However, one Keltner line currently at 529.23 may provide enough support.

  Jeff Bailey   8/17/200,  10:08:28 AM
Dow Jones Home Construction (DJUSHB) 619.79 +4.08% Link.

  Jonathan Levinson   8/17/200,  10:06:49 AM
14.75B in repos expires today, and the Fed's open market desk has announced an overnight repo in the amount of 5.5B, for a large net drain of 9.25B.

  Mark Davis   8/17/200,  10:05:51 AM
Potential Day Trade Setup Alert -
I'm considering a quick long play on the first retracement, then a short play if we get close to the 1090 target... If the opportunity presents itself we'll be using SPQHR (SPX Aug 1090 call) and SPQTQ (SPX Aug 1085 put)

Be ready to enter either of those trades at any time though, and not necessarily as outlined above. Things could move quickly today and I may issue a short or long play without any more warning than this post.

  Linda Piazza   8/17/200,  10:02:27 AM
Maintaining the 15-minute breakout on the OEX requires fifteen-minute closes above the Keltner line currently at 529.45 or at least above the one currently at 528.16 to keep the smallest Keltner channel from flattening.

  Jeff Bailey   8/17/200,  10:02:18 AM
Stanley Works (SWK) $44.50 +4.95% .... surging.... most likely the Home Depot numbers and housing data.

  Linda Piazza   8/17/200,  10:00:37 AM
The SOX tests 380, at 379.80 as I type. (Note: Dropped to 378.83 as I typed.) The 385-386 level is one of historical S/R, but is also the location of the 50% retracement of rally off the October 2002 low. If the SOX had dipped below that 50% retracement intraday and then immediately bounced or if it had spent only a day or so below that average before bouncing, I wouldn't feel that the violation had been serious, but the SOX has spent most of a week below that average. Not far below, but below. Therefore, that 50% retracement level might prove to be firm resistance, at least on the first retest. We have to see, but since this is also the location of the bottom line of its former descending regression channel, that level should be watched for rollover potential. A surge up through that level might be meaningful, then, but would see resistance again at about 393-394 and 400.

  Jonathan Levinson   8/17/200,  9:55:17 AM
The short cycle oscillators for QQQ are overbought and will be maxxed out in approx. 5 minutes. But with the 30 min upphase launching from a higher oscillator low, the short cycle could easily trend in overbought on a move that clears 33.48 resistance.

  Linda Piazza   8/17/200,  9:54:52 AM
And there's OEX 530. The 15-minute Keltner channel shows the outer Keltner channel line having moved up to 531.16, the new target for the OEX.

  Jonathan Levinson   8/17/200,  9:53:32 AM
Knocking at the door of 33.38-.48 confluence here.

  Linda Piazza   8/17/200,  9:52:29 AM
The TRAN pushes higher through one MA after another. The 30- and 50-dma's wait overhead, at 3072.76 and 3082.67, respectively, near last week's 3074.90 intraday high. A move above that intraday high confirms a double-bottom on the TRAN, but then the TRAN faces the 50-dma, the historical resistance near 3085 and 3100, and then a descending trendline off the July 1 high, at about 3120.

  Jeff Bailey   8/17/200,  9:50:57 AM
Bullish swing trade target/exit alert for Dollar Tree Stores (DLTR) $23.90 +3.05%. ($+0.65, or +2.80%)

  Jeff Bailey   8/17/200,  9:49:28 AM
Current OPEN MM Profiles at this Link

  Linda Piazza   8/17/200,  9:48:28 AM
To maintain the breakout signals on the five- and fifteen-minute Keltner charts, bulls would like to see the OEX maintain five- and fifteen-minute closes above 528.72. Fifteen-minute closes above 527.63 would keep the smallest fifteen-minute channel from flattening.

  Jonathan Levinson   8/17/200,  9:43:30 AM
QQQ is testing 30 min channel resistance here at 33.25 as the young short cycle upphase continues to strengthen.

  Linda Piazza   8/17/200,  9:41:47 AM
During the first five minutes of trading, the OEX spanned a range from 527.56 to 528.87. The OEX has created a breakout signal on the five- and fifteen-minute Keltner charts. Using the fifteen-minute charts to help set a target as the OEX moves from the outer boundary of one Keltner channel to another shows us a possible upside target of 530-531. Beginning yesterday morning, my best-guess scenario was for a push up toward 530-531 either last thing yesterday or first thing this morning and then perhaps a hovering there for a period before a pullback, but a pullback that might or might not be shallow, depending on crude's action. I thought it likely today would be spent mostly within a four-point range, at least for a few hours, with that range's top likely to have been hit within the first hour of trading. That's just best-guess, though, and I'll be continually testing the action against what does happen.

  Jeff Bailey   8/17/200,  9:41:28 AM
Stanley Works (SWK) $43.60 +2.83% .... gaps above 50-day SMA after delayed opening.

  Jeff Bailey   8/17/200,  9:37:47 AM
200-day SMA alert ... JP Morgan (JPM) $32.00 +0.66%.

  Jonathan Levinson   8/17/200,  9:37:29 AM
Gold is back down to its pre-data levels, -2.3 at 403. Industrial production came in at +.4%, below consensus of .5%, and capacity utilization was 77.1%, below expectations of 77.5%.

  Jeff Bailey   8/17/200,  9:34:25 AM
NVE Corp. (NVEC) $40.80 +29% ... surging after company announced it has been notified by U.S. Patent and Trademark Office that it will be awarded a key patent for MRAM "Antiparallel Magnetoresistive Memory Cells." Story at this Link

  Linda Piazza   8/17/200,  9:33:20 AM
The OEX opens jammed up against the Keltner resistance on the five-minute chart. If it breaks through this resistance, up to 528.12 on the fifteen-minute chart, with a strong enough move that's sustained, it will issue a breakout signal on the fifteen-minute chart, again setting up the potential to move toward 530-531.

  Jeff Bailey   8/17/200,  9:31:58 AM
200-day SMA alert .... Home Depot (HD) $35.85 +5.5% on earnings and upbeat forward guidance.

  Mark Davis   8/17/200,  9:31:27 AM
If Jim were here I'll bet he'd be talking about Dow 10,000 being within spitting distance.

  Jonathan Levinson   8/17/200,  9:25:38 AM
The current bounce has stopped the 30 min cycle downphase in the Nasdaq futuers (proxy for QQQ) at a much higher low above the midpoint. Pricewise, we see the 30 min proxy channel flattened, with channel support at 32.83 QQQ and resistance at 33.22, the same levels that prevailed for most of yesterday afternoon. The short cycle oscillators are pulling up from the bottom of their range, and if price holds above 33.05 for the next 30 minutes or so, I'll expect the 30 min cycle to commence a new upphase from that much lower oscillator high. That would set us up for a move above 33.22 and a retest of the 33.38-.48 confluence zone, above which the daily cycle should begin to print buy signals.

A move below 33.05 will need to bounce quickly in order to preserve this bullish scenario. If 32.80 fails this morning, the 30 min cycle downphase will resume.

  Jonathan Levinson   8/17/200,  9:21:19 AM
Good one, Mark :)

  Mark Davis   8/17/200,  9:20:40 AM
I'm going to need my seeing-eye analysts today... Jane, Jeff, Jonathan, Keene and Linda... listed in alphabetical order so as not to offend anyone &:>) Entering trades today may feel like this Link

  Linda Piazza   8/17/200,  9:02:20 AM
Although some unrest begins in Venezuela, crude prices continued lower in the overnight session. This morning's economic numbers were well received and futures are higher as I type. Although the cash open doesn't always hold onto all the gains shown by the futures, it looks as if a continued bounce attempt may be possible. I thought all day yesterday that the OEX might attempt a push up toward 530-531, either at yesterday's close or near today's open, but thought that 527-528.50 was also strong enough resistance that the OEX might not be successful. I guess we'll get to see this morning. If the OEX does make it up to that 530-531 level, I would think gains would be limited after that, and we might get a number of hours or a day consolidating near that level or in a four-point range capped by that level, so be careful about initiating new long positions this morning and make plans to protect long profits at those levels. OEX 530-531 and maybe up to 533 should be a level from which the OEX eventually needs to pull back and regroup or maybe even roll over again, but we need to see how matters look as that level is tested. Yesterday's close above an important channel line on the daily Keltner chart presented the possibility of a higher climb, perhaps into the 535-536 range. Looking forward last week, however, it appeared that 530-531 would likely cap any upside movement early this week. Sure looks different when the indices hit those levels, though, and you start second-guessing yourself. Watch crude, and watch the TRAN and the SOX. Both need to move in tandem.

  Mark Davis   8/17/200,  8:45:57 AM
Good Morning... Well, here we stand on the platform again watching the train leave the station without us. This makes two days in a row. I didn't feel like chasing the train yesterday and I definitely don't feel like chasing it today. I'm even afraid of getting long on a pullback at this point. Oh, and did I forget to mention it's scam week?

  Jonathan Levinson   8/17/200,  8:35:12 AM
Session highs for equity futures across the board here, ES 1084, NQ 1335.5, YM 9992, ER 531. Recall NQ's bull wedge objective in the 1344-48 area (depending on whether we count the doji shadow or not).

  Jonathan Levinson   8/17/200,  8:33:25 AM
Gold has advanced to 405.70, with equities and bonds rising on the data, TNX currently lower by 1.3 bps to 4.245%, QQQ up .31 at 33.15 currently.

  Jonathan Levinson   8/17/200,  8:32:21 AM
Ticker headlines:

8:30am U.S. JULY CPI DOWN 0.1% VS UP 0.1% EXPECTED

8:30am U.S. JULY CORE CPI UP 0.1%, VS. 0.2% EXPECTED



8:30am U.S. JULY CORE CPI UP 0.1%, VS. 0.2% EXPECTED



8:31am U.S. CPI UP 3.0% IN PAST YEAR, CORE UP 1.8%

  Jonathan Levinson   8/17/200,  8:30:45 AM


  Jonathan Levinson   8/17/200,  7:48:36 AM
Equities are higher, with ES trading 1080.25, NQ 1330 at a session high, YM 9965 and QQQ up .18 at 33.02. Gold is down 1.20 at a session low of 404.10, silver up .012 at a session high of 6.745, euros down .002 at a session low of 1.2326 and crude oil down .325 to a session low of 45.725.

We await the 8:30 release of housing starts, est. 1.9M, building permits, est. 1.95M, CPI for July, est. +.2%, Core CPI est. +.2%, and at 9:15 Industrial production and capacity utilization for July, est. .5% and 77.5% respectively.

  Linda Piazza   8/17/200,  7:23:02 AM
Good morning. Just as had happened with U.S. indices yesterday, the drop in oil prices yesterday and then further during the overnight session allowed the Nikkei to rise. Airliners benefited, but so did exporters of electronics. Those companies also gained as U.S. retailers such as Kmart reported encouraging earnings. Merrill Lynch added Mitsubishi Tokyo Financial Group and NTT DoCoMo to its list of recommended Japanese stocks, with both stocks gaining in early trading as a result. Carmakers appeared mixed, with Toyota Motor rising a modest 0.2% and Mitsubishi Motors closing flat. Mitsubishi Motors has confirmed that it will offer its dealers a cash incentive for each vehicle sold, with dealers suffering after the revelation of Mitsubishi Motors' cover-up of defects that warranted recalls. A newspaper reported that several equity or investment funds were interested in struggling retailer Daiei, suggesting that the company might not need the help of the IRC, Japan's state-run Industrial Revitalization Corp. Daiei tacked on another 1.6% to the 2.2% it gained Monday.

Another reason for the bounce may have been a technical one. Monday, the Nikkei had approached the 10,550-10,570 support on its daily chart, bouncing from that level as traders returned after this weekend's holiday. The Nikkei had strongest resistance nearer 10,850, with the Nikkei not able to climb and stay above 10,800 despite several tries. The Nikkei ended the day closer to the day's low than the day's high, up 38.16 points or 0.36%, at 10,725.97.

Other Asian markets were mixed, with more closing in the green than in the red. The Taiwan Weighted fell 0.18%. DaimlerChrysler has now sold its 10.5% position in South Korea's Hyundai, and Hyundai lost 2.6% as a result. The Kospi fell 0.36%, but Singapore's Straits Times climbed 0.16%. Hong Kong's Hang Seng climbed 0.30%, and China's Shanghai Composite climbed 0.42%.

Currently, most European bourses trade in the green as the overnight drop in crude futures allowed them some breathing room. August's investor confidence for Germany dropped to 45.3 from July's 48.4, according to the ZEW Center for European Economic Research. That number disappointed, with expectations being for a drop to 48, but the DAX joined other gaining bourses in Europe.

Technology stocks led gains, while some carmakers declined. Declining carmakers included DaimlerChrysler, dropping after its sale of its stake in Hyundai Motor, and Peugeot, dropping after news circulated that it would be sued by a French independent dealer group. Today's declining crude prices did not help airline Deutsche Lufthansa, falling after announcing yesterday that it would add a surcharge to help it deal with rising fuel costs. Airline Finnair plummeted after blaming rising fuel costs for an anticipated loss in 2004. The airline had narrowed its Q2 loss from the year-ago period. In the U.K., British Airways traded higher, however. Many banks gained amid merger speculation involving Abbey National. Economic releases showed that house price growth may be slowing. Energy stocks traded lower.

Currently, the FTSE 100 trades higher by 8.90 points or 0.20%, at 4,359.10. The CAC 40 has gained 18.56 points or 0.53%, to trade at 3,535.24. The DAX has gained 19.36 points or 0.52%, to trade at 3,718.47.

  Linda Piazza   8/16/200,  11:23:46 PM
Here we are again, with the OEX back inside the bulb of its possible "b" distribution pattern, this time near the top of that formation. Although these patterns are supposedly bearish, this chart shows how differently the OEX has treated them in two examples as the OEX was traveling through its descending regression channel: Link Other examples of "b" distribution patterns and "p" accumulation patterns, for that matter, can be picked out, with varying results. Sometimes the OEX broke to the downside out of "p" accumulation patterns, and sometimes to the upside out of "b" distribution patterns. Why watch them, then? They serve as an indicator might, warning of a possible outcome but not promising that it will occur. Recognizing them also helps us realize when the OEX might be in a choppy zone.

The other indices show mixed results with respect to their analogous formations. Although the OEX and Russell 2000 never broke above the top of their formations, both the Dow and the SPX attempted breaks, but fell back within them before the close. The TRAN climbed right to the top of its formation and stopped there, closing at the high of the day. It may the TRAN that leads the other indices higher or leads them into a roll down into the formations again, as the TRAN reacts in opposition to crude prices. It's been the TRAN rather than the SOX that has taken over the short-term leadership role, with the SOX not making much headway Monday, stopped at first resistance. The TRAN maintained its breakout signal on the five-minute Keltner chart into the close Monday, while the SOX, SPX, Dow, and OEX did not. The SOX created a possible lower high, not yet confirmed by a move to a new five-minute low.

As I type, futures have not moved appreciably off their levels at the cash close today, although they have not maintained all gains even though the Nikkei gains and crude prices fall. That bears watching. The indices have been held hostage by rising crude prices for so long that it's important to keep an eye on what's happening with crude prices before making any decision about market direction. Crude futures for September delivery have eased below $46.00 as I type, creating a potential for a drop toward next light support, perhaps at about $45.10, but whether that drop or a deeper one occurs depends on geopolitical developments beyond my knowledge tonight.

As the day ended Monday, the last OEX 15-minute candle straddled a set of converging Keltner lines. On the five-minute chart, the OEX appeared to be headed toward a retest of the 527.70-527.85 zone. If futures--both crude and equity--preserve that possibility, it might be that the OEX will encounter resistance strong enough to hold it back near 528. If not, the fifteen-minute chart suggests that the OEX will next encounter resistance at 530-531, a level of historical resistance, too. I thought all day Monday that it might be possible for the OEX to reach up toward that 530-531 level either near Monday's close or Tuesday's open, but it may be that either 527-528 or 530-531 will mark the top of the current OEX movement. That doesn't mean that the OEX would necessarily pull back right away--a consolidation day after yesterday's strong gain wouldn't be unexpected. Therefore, I'd be careful of entering new positions Tuesday, as it could be that the OEX would spend at least part of the day tomorrow in a consolidation pattern, perhaps a range of about four points, either from 524-528 or perhaps from 527-531. It's too early to tell for sure, this far ahead of the European open, any overnight developments that would impact crude prices, and the reaction of our futures to those possible developments.

  OI Technical Staff   8/16/200,  7:10:45 PM
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