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  Jeff Bailey   8/26/200,  9:13:33 PM
Current OPEN MM Profiles at this Link

I had to reload my QCharts' this evening to get the portfolio tracker to work, thus no MM Profile updated during today's trade.

Today's activity ....

Day traded short Taser (TASR) at $28.97, got stopped at $29.20 (right at afternoon high). ($-0.23, or 0.79%). TASR didn't seem to be as willing to reverse early session gains like it has in recent weeks. Stock could be a mover on a break above $30.00.

  Jeff Bailey   8/26/200,  6:41:33 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   8/26/200,  6:33:19 PM
e-mini S&P (es04u) went out at 1,104.50 .... trade just off Friday's high of 1,105.50.

  Jeff Bailey   8/26/200,  6:31:13 PM
U.S.A. Women win Olympic gold Final ... USA 2 : Brazil 1

  Jeff Bailey   8/26/200,  6:25:10 PM
Novellus (NVLS) ... quiet now at $24.95.

  Jeff Bailey   8/26/200,  6:23:00 PM
U.S. Goal alert In second overtime period, U.S. scores to lead Brazil 2 to 1.

Brazil has been dominating play in relentless attack.

  Jeff Bailey   8/26/200,  5:29:23 PM
Brazil Goal alert Women's Olympic Soccer .... Brazil scores to tie U.S. at 1 to 1.

Similar to today's trade at this point.

  Jeff Bailey   8/26/200,  5:20:23 PM
Closing Internals at this Link

  Mark Davis   8/26/200,  5:01:11 PM
Recap of Thursday's trades
Short SPX @ 1105.51 (held overnight)
Exit @ 1105.34, +0.17
Long SPX @ 1104.58 (hold overnight)
Total gain/loss for Wednesday = +0.17
Total gain/loss for the week = -7.96

  Mark Davis   8/26/200,  4:56:43 PM
***Note to readers
I've received several emails asking whether I'm trading ES futures or the SPX cash index. Recently I changed the format of buy/sell signals from calling out specific entry/exit prices on SPX option strike prices to just calling out entry/exit prices based on current SPX cash index prices. This was a "fine tuning" move designed to eliminate confusion as to entry/exit prices. The lag time between research/analysis and the actual posting of a long/short signal was resulting in traders not being able to enter/exit at the same prices I was posting in a fast moving market. Since I primarily use 1-min charts and look to other writers for the larger picture, this was a built-in "glitch"... so to resolve the discrepancy I now post entry/exit prices at the current SPX cash index print and let readers decide which stike price they want to use.

This has two advantages... traders can choose which contract/strike price they want to use and they can also decide whether to use my signals for futures or options trades.

As a former reader and index options trader I always had to interpolate the futures posts to fit my options trading. Now option traders have someone who closely follows the SPX cash index so they don't have to interpolate futures posts to their trades. Hopefully this resolves any confusion, especially as related to entry/exit prices. If you have any suggestions as to how I can better serve you as a reader please feel free to email me. I'm open to all suggestions.

  Jeff Bailey   8/26/200,  4:50:16 PM
Novellus (NVLS) $24.80 ....

  Jeff Bailey   8/26/200,  4:46:59 PM
KLA-Tencor (KLAC) $37.52 -0.50% Link .... $37.75

  Jeff Bailey   8/26/200,  4:45:56 PM
Applied Materials (AMAT) $15.98 -1.72% Link .... $16.06

  Jeff Bailey   8/26/200,  4:43:29 PM
QQQ went out at $34.40 -0.43% ... edges up at $34.45.

  Jeff Bailey   8/26/200,  4:42:38 PM
Novellus (NVLS) $24.65 -1.94% Link .... jumps to $25.08 in extended session.

  Jeff Bailey   8/26/200,  4:40:11 PM
U.S. Goal alert Women's Olympic Soccer .... U.S. scores first goal of match to take a 1 nil lead over Brazil. Winner gets gold.

  Jim Brown   8/26/200,  4:34:10 PM
NVLS midquarter update alert - guiding revenues to the low end of guidance, warning on bookings and earnings.

  James Brown   8/26/200,  4:05:51 PM
If you're wondering where crude oil might bounce watch the $42 level. This would be a 50% retracement of the late June to August rally (on the October contract). Longer-term a drop to $41.00 would be a 38.2% retracement from its rally from $30 to $48. The $41 level happens to coincide with the early June high.

  Mark Davis   8/26/200,  4:03:40 PM
Day Trade Exit Point Alert -
I may be changing the stops on our long play before the opening bell tomorrow, depending on overnight developments... for now leave them @ 1104.58 and break even. Closing print was 1105.09, closer to our stop than I'd like, but IF we can break through resistance we could see a very nice rally... maybe as much as +20 SPX points (IMESHO)

  Linda Piazza   8/26/200,  4:01:53 PM
Doji, doji, doji, doji, doji: On SPX, OEX, Dow, Nasdaq, TRAN. Tomorrow will be better. I hope.

  Jim Brown   8/26/200,  4:00:09 PM
NVLS - midquarter update at 4:30 ET tonight.

  Jeff Bailey   8/26/200,  3:59:23 PM
Aluminum Corp. China (ACH) rings the bell at $50.00 +3.26% ...

  Jonathan Levinson   8/26/200,  3:57:10 PM
Yesterday's 34.60 QQQ high hasn't been tested, let alone broken, and this will spell trouble for the so-far strong 1-day cycle upphase if today's low gets broken tomorrow.

  Mark Davis   8/26/200,  3:55:40 PM
Developing (potential) buy signal @ SPX 1105.50

  Jeff Bailey   8/26/200,  3:53:51 PM
Taser Intl (TASR) $28.18 ...

  Mark Davis   8/26/200,  3:53:18 PM
TRIN making a new LOD according to my (inexact) numbers

  Jim Brown   8/26/200,  3:53:05 PM
I would feel a lot better if we could break that 1103.50 support before the close to setup a negative bias for tomorrow.

  Mark Davis   8/26/200,  3:51:48 PM
Looks like you nailed the short-term top Jim... nice timing

  Jeff Bailey   8/26/200,  3:51:18 PM
Taser Intl. (TASR) $28.58 +5.46% ... all be darned if TASR didn't trade $29.20, now just off a session low of $28.51.

  Mark Davis   8/26/200,  3:50:05 PM
TRIN printing close to LOD tells me traders are betting on better than expected GDP numbers tomorrow. Either that or they're trading on lower crude prices (or both)

  Linda Piazza   8/26/200,  3:48:41 PM
In my 15:14 post, I commented that the OEX's Keltner lines had separated and that the OEX could either drop to the mid-channel level or climb to the top channel line, then at 540.84, without much suggestion which it would be. That top channel line has now climbed to 541, but the OEX is currently facing the channel line that usually stops it, with that line at 540.51. I wouldn't be surprised to see a push up to that top channel line, but mostly my expectation for today is that the OEX (and some other markets) would just get pinned somewhere within a few-point range near the high of the short-term rally.

The OEX has now established since yesterday afternoon a rectangular trading pattern from about 538.50-540.50, with that a rough estimation, so a push outside of that range might be something to remark, but a close within it just matches my expectations for the day, ahead of tomorrow's GDP number.

  Mark Davis   8/26/200,  3:43:22 PM
Right at the upper b-band Jim... either we drop back or continue trending higher

  Jonathan Levinson   8/26/200,  3:42:27 PM
Session high for ZN 10-yr treasury bond futures here at 112.859.

  Jonathan Levinson   8/26/200,  3:41:50 PM
QQQ is down 2 cents on the day, up approx. 13 cents from its low in the first 10 minutes... you get the idea.

  Linda Piazza   8/26/200,  3:39:22 PM
Except for two quick spikes down today, the SOX has been trading in a less-than-two-point range since 10:10. Including those two spikes down, the range widens to a whopping less-than-three-point range.

  Mark Davis   8/26/200,  3:35:28 PM
I was afraid you might say that Jim

  Mark Davis   8/26/200,  3:27:23 PM
Day Trade Exit Point Alert -
Cinch up your stops... to 1104.58 and break even

  Jonathan Levinson   8/26/200,  3:25:48 PM
30 and 60 min channel resistance is lined up at 34.60. Bulls need to get above 34.55 for long enough to turn the 30 minute channel more steeply up- so far, the upphase is every bit as weak as the down. Looks like the markets are waiting for tomorrow economic data.

  Linda Piazza   8/26/200,  3:23:22 PM
The TRAN has been climbing in a tight pattern of higher highs and higher lows off the day's low. At about 3110, also horizontal resistance, the TRAN will be hitting the top of that flag pattern. At about 3108.75, the TRAN's current price as I type, the TRAN is hitting the 50% retracement of the dip off the 1:00 high. If the current climb is a bear flag, as its shape suggests it could be, it should not climb much higher than the current level up to 3110 before turning lower and subsequently breaking to the downside. Anything else calls the "bear flag" theory into question. I just markets are just buzzing around.

  Jonathan Levinson   8/26/200,  3:20:22 PM
Nymex crude is trading 43.10 here, flat in the evening session.

  Jeff Bailey   8/26/200,  3:19:50 PM
QQQ $34.49

  Jeff Bailey   8/26/200,  3:19:23 PM
TRIN 0.89 ... might be a bid to the close

  Jonathan Levinson   8/26/200,  3:19:04 PM
Session high for ES here at 1106.25.

  Jeff Bailey   8/26/200,  3:18:54 PM
VIX.X alert 14.89 .... session low

  Mark Davis   8/26/200,  3:18:44 PM
Here we go... this could get the bears on the run

  Mark Davis   8/26/200,  3:17:35 PM
They jumped on that little dip in a hurry

  Jonathan Levinson   8/26/200,  3:16:27 PM
Session high for bond futures here with TNX closed in the cash market at 4.227% for a 3.4 bp loss. I suspect that some of that 5.5B in Fed money is finding its way into treasuries.

  Linda Piazza   8/26/200,  3:14:50 PM
The OEX is exactly in the middle of the top half of the Keltner channels, with Keltner lines spread thinly in either direction, not giving hint of any direction but making it possible for the OEX to easily drop to 538.76 or climb to 540.84. It would just take enough of a shove either direction to get buyers or sellers to scatter.

  Jeff Bailey   8/26/200,  3:13:20 PM
Stillwater Mining (SWC) $14.60 +2.23% ... sudden "burst" higher.

  Jeff Bailey   8/26/200,  3:12:46 PM
Broker/Dealer Index (XBD.X) 127.34 +0.76% ... pressing session highs from this morning.

  Jeff Bailey   8/26/200,  3:10:10 PM
03:00 Internals at this Link

  Jonathan Levinson   8/26/200,  3:07:37 PM
The wavelet cycle oscillator is heading down after being pinned in overbought- the next longer cycle is the short cycle, which is still headed up. More chop on the menu for QQQ.

  Jim Brown   8/26/200,  3:05:31 PM
We just now broke 2 billion shares across all markets. This is worse than holiday volume.

  Linda Piazza   8/26/200,  3:05:28 PM
Well, I've been thinking that the markets might get pinned near the top of their climbs into tomorrow after seeing Jonathan's notation about the Fed infusion of cash, and also as a result of last night's study of the OEX's chart, which showed close support and close resistance. One thing today has been good for has been printing doji at resistance. For the SPX, for example, that doji is printing on and just above the 50-dma at 1104.59. The OEX is also printing its doji at or slightly above the 50-dma, with that average at 539.01. For the Dow, the doji is just above the 50 and below the 100-dma. For these three indices, the doji are being printed at the top of a steep climb. The Nasdaq prints one, too, an inside-day setup so far. It's tempting to conclude that these are likely reversal signals, but in truth, they're signals of indecision, indecision about driving markets higher ahead of tomorrow's economic numbers. Whether or not they'll be confirmed as reversal signals has to be shown by tomorrow's action: that's assuming that they stay doji into the close, which isn't guaranteed. For example, consider 5/26, when the OEX printed a doji at the top of a steep climb, with the open and close not so very far from today's levels, in the 542.40-542.60 zone. The next day, the OEX rose again, then spent about a week consolidating in a very-tough-to-trade zone and then shot up higher again before reaching the June high. You have to wait for confirmation to be sure, although not all traders wait for trade entries, planning to exit when their bias is proven wrong. This looks like a good place for the Dow and two S&P's to turn down into possible right shoulders for inverse H&S formations on the daily charts, but that doesn't mean it absolutely has to happen that way.

  Jeff Bailey   8/26/200,  3:04:14 PM
03:00 Market Watch at this Link

  Mark Davis   8/26/200,  3:00:25 PM
Here comes the 3PM Hammer...

  Mark Davis   8/26/200,  2:59:36 PM
Could we possibly continue flat into the close??? That would give a lot of weight to tomorrow's numbers.

  Mark Davis   8/26/200,  2:57:17 PM
Now we're beginning to test the swing highs in the SPX 1105.50 area and yesterday's HOD @ 1106.03... if they can crack yesterday's HOD we may get some upside traction, but again, that hasn't happened yet and we're still stuck in a 3 point trading range. The length of time in this range hints that once it's broken there should be a fair amount of stored energy to continue the move.

  Jonathan Levinson   8/26/200,  2:49:01 PM
Which will take us to a test of yesterday's 34.60 high, which should break if the 30 min cycle upphase within the daily cycle upphase is to remain valid. The daily cycle upphase needs to have higher lows (which we've just seen) and higher highs to continue.

  Mark Davis   8/26/200,  2:47:26 PM
IF... the 1104-1106 area does break to the upside it could be a swift trip to 1110 as shorts cover (emphasis on "if"). I always have Bloomberg TV running in the background and there was a piece earlier on rumors of a better than expected GDP number.

  Jonathan Levinson   8/26/200,  2:46:56 PM
The 30 min cycle channel has flattened again, with support ticking up here to 34.25 QQQ. The short cycle is starting an upphase as well, and if it holds above 34.43 for another 2 or 3 minutes, we should have that new upphase. Above 34.50, a break of 34.55 will turn the 30 min channel back up.

  Jim Brown   8/26/200,  2:46:22 PM
I hope it is exciting in a fun way not a terror filled run to my stops.

  Mark Davis   8/26/200,  2:45:32 PM
Jim you were right on the money re: sellers waiting in the 1105 area. They jumped on the opportunity to bail but the market's are still refusing to give up much ground. The last hour of trading could be exciting today.

  Jeff Bailey   8/26/200,  2:38:49 PM
Bearish day trade stop alert .... TASR $29.20

  Linda Piazza   8/26/200,  2:34:38 PM
The TRAN appears to be trying to turn down from its neckline test. (Was that enough qualifiers so that I'll appear to be right whatever direction it goes?) I'd wait for a confirming new low of the day before I considered the neckline test showing that level holding as resistance. The previous low of the day was 3098.83, with the TRAN now at 3102.61.

In all honesty, though, today has been a day when I haven't expected follow-through on any formations, whether bullish or bearish, at least through the major part of the day. It's been a day when I didn't expect technical analysis to be particularly helpful, as trading could be governed by crude and by how big-money people feel about holding shorts or longs ahead of tomorrow's GDP.

  Mark Davis   8/26/200,  2:31:37 PM
stepping outside for some fresh air... maybe that will make something happen

  Mark Davis   8/26/200,  2:25:53 PM
LOL Jonathan... a perfect pic for the day

  Jonathan Levinson   8/26/200,  2:25:30 PM
And, I've never been to Denmark.

  Jonathan Levinson   8/26/200,  2:25:07 PM

It's been on my mind since I heard about it. I don't think I could look at that on my wall every day.

  Linda Piazza   8/26/200,  2:24:06 PM
So that was you responsible for that heist, Jonathan? (See Jonathan's 14:22 post. One version of "The Scream" was stolen about a week ago from a lightly guarded museum.)

  Jonathan Levinson   8/26/200,  2:22:10 PM
It sure is, Mark. Link

  Linda Piazza   8/26/200,  2:21:09 PM
Now that was a stop-run, wasn't it, Mark? But will the bulls get too far? I'm watching the TRAN, coming back up to test and now inching back above the neckline of its H&S formation, but not yet above the 3106-3110 zone showing up as light S/R over the last couple of days.

  Mark Davis   8/26/200,  2:20:07 PM
Isn't it amazing the range of emotions you can experience during a day when SPX trades in a 3 point range??? Maybe it's just me (I'm "Just an Excitable Boy")... If you get that joke you're almost a senior citizen.

  Jonathan Levinson   8/26/200,  2:12:32 PM
Looks like a throwunder below support, but price stayed cleanly within the 30 min cycle channel. A break above 34.50, then .55, is what's needed for bulls to close the door on the move.

  Jeff Bailey   8/26/200,  2:12:29 PM
TRIN 0.89

VIX.X 14.95

QQQ $34.40

And the range-trade goes on.

  Jim Brown   8/26/200,  2:10:40 PM
The announcement of a ceasefire in Iraq has rebounded the market off its lows.

  Mark Davis   8/26/200,  2:10:36 PM
What Keene said

  Jeff Bailey   8/26/200,  2:09:51 PM
Taser Intl. (TASR) $28.87 +6.53% ... refuses to give up BLUE #2 $28.83, but WEEKLY R1 of $28.48 makes for a wonderful intra-day bearish target.

  Jeff Bailey   8/26/200,  2:07:38 PM
TRIN 1.01

VIX.X 15.06

QQQ $34.33

  Mark Davis   8/26/200,  2:07:11 PM
Day Trade Exit Point Alert -
Lower your stops to 1102.00... there's a swing low right at 1102.50 and I don't want to be the victim of a stop run

  Linda Piazza   8/26/200,  2:06:54 PM
Now we get to see if the downside holds. The TRAN is trying to steady at just below 3100. The OEX is trying to steady ahead of the 538.50-ish region.

  Linda Piazza   8/26/200,  2:03:48 PM
The TRAN, one of my favorite indicator indices lately, broke through the neckline of its H&S on its five-minute chart. It hasn't been bought immediately, but it's now approaching 3100 support, at 3101.33.

  Jonathan Levinson   8/26/200,  2:03:35 PM
30 min channel support is 34.23 currently. The channel is flat, but 5-10 minutes below 34.30 QQQ will change that.

  Mark Davis   8/26/200,  2:02:55 PM
Ouch! Here we go... down

  Jonathan Levinson   8/26/200,  2:02:27 PM
New lows for QQQ and NQ, testing 34.30 support now.

  Mark Davis   8/26/200,  2:01:54 PM
Jane I'm not sure but I think I may have pilfered that pic from Jonathan.

  Mark Davis   8/26/200,  2:01:06 PM
That 1104 area is amazingly resilient but how many times can it be tested before it gives way?

  Jane Fox   8/26/200,  2:00:43 PM
Mark, I love that picture.

  Jeff Bailey   8/26/200,  2:00:06 PM
U.S. Dollar Index (dx00y) 89.28 -0.15% (30-min delayed) ... back to test DAILY S1 in my DAILY Pivot Matrix.

  Mark Davis   8/26/200,  1:59:02 PM
Jim that's amazing... you're short at ES 1104 and I'm long at SPX 1104.58... currently printing 1104.08. Shall we settle this like gentlemen? Link

  Jonathan Levinson   8/26/200,  1:51:24 PM
It's difficult to consider a nominal new high 2 cents above the prior high as a higher-high on a cyclically significant basis, but that's what occurred. Bulls need to break above 34.47 QQQ, bears below 34.33. The range continues to narrow.

  Linda Piazza   8/26/200,  1:50:06 PM
Here's where the TRAN is with respect to the H&S formation on the five-minute chart: Link

  Jeff Bailey   8/26/200,  1:48:11 PM
Phelps Dodge (PD) $82.05 +2.76% ... gets the triple-top buy signal. Link

DAILY R2 $82.15 right here, but if broken, the "copper hoppers" could start getting aggressive.

  Jane Fox   8/26/200,  1:47:44 PM
Actually Mark I think it is good idea to not let the MM see your fruit (HMM that didn't come out right did it). What I mean is to keep your stops mental at least on options.

  Mark Davis   8/26/200,  1:45:27 PM
This is a good example of why it is a good idea to keep your stops just below swing lows or just above swing highs. MMs love to make stop runs and gobble up the low hanging fruit.

  Jim Brown   8/26/200,  1:44:17 PM
Unfortunately I am biased

  Mark Davis   8/26/200,  1:37:58 PM
Jim this is good... no matter which way the market goes one of us wins (grin)

  Linda Piazza   8/26/200,  1:36:48 PM
The OEX has again just tested the ascending trendline formed off today's lows, bouncing from that trendline. Keltner resistance and support lines are spread widely on the five-minute chart, not giving much indication of whether up or down is most likely, but the OEX has again tested that trendline, currently at about 539.35, so keep a watch on whether that trendline gets violated or not on five-minute closes as one sign of weakness. Be careful of assuming too much downside, though, as we might see some of that cash put to work to buoy the markets or shorts might begin to cover. If you're entering either bullish or bearish trades today, don't let them get away from you. Be prepared for the OEX just to sit there, too.

  Mark Davis   8/26/200,  1:36:40 PM
Linda I hope this is your stop running push (to the downside) and not the start of a trending move.

  Mark Davis   8/26/200,  1:27:42 PM
That last push down stopped right at the 10:54, 11:42 and 12:00 swing lows around 1104. I'm now showing a pretty strong confirmed buy signal for SPX so either that was it for the drop or we start trending down.

  Jonathan Levinson   8/26/200,  1:23:28 PM
Nymex crude is up to 43.40, -.075 or -.17% for the session.

  Jonathan Levinson   8/26/200,  1:20:52 PM
Jane's comment at 13:19 is valid for the Qubes as well, and the lower short cycle high just printed serves to confirm the 30 minute cycle downphase. A lower low is the next step for bears here. 34.30-.35 QQQ remains key confluence support above 34.20 support.

  Linda Piazza   8/26/200,  1:19:30 PM
Here's the formation I'm watching on the TRAN's five-minute chart: Link And here's the one I'm watching on the SOX, this on a 30-minute chart: Link Remember that on days like today, we can see strange things happen with these formations, and trading isn't always amenable to technical analysis. If these appear to confirm, but then there's an immediate bounce, that's going to scare shorts trying to hold out for lower prices and they might drive prices higher again as they rush to cover.

  Jonathan Levinson   8/26/200,  1:16:32 PM
A 10 cent QQQ range for the past 2 hours...

  Linda Piazza   8/26/200,  1:11:34 PM
How to tell a slow-market day: When you play tricks with yourself, such as turn away or walk away from your computer screen, and then turn back to see if anything has changed.

  Jeff Bailey   8/26/200,  1:09:15 PM
Day trade short alert .... for Taser Intl. TASR $28.97 here, stop $29.20, target $28.52.

Opening 5-minute bar was from $27.97-$28.40.

  Jeff Bailey   8/26/200,  1:06:18 PM
01:00 Internals at this Link

  Jonathan Levinson   8/26/200,  1:04:40 PM
This low volume/slow motion wavelet downphase is testing the short cycle upphase here. A break below 34.36 QQQ will stall that upphase.

  Jeff Bailey   8/26/200,  12:59:56 PM
12:55 Market Watch at this Link

  Linda Piazza   8/26/200,  12:58:04 PM
Even if you don't have real-time quotes on crude, you can almost look at the TRAN and tell what's generally happening with crude (rising, falling, reaching support, reaching resistance) because of what's happening on the TRAN. They're trading in opposition today, as they usually do, and it's possible to correlate dips in the TRAN with rises in crude and the other way around. The TRAN earlier found support near 3104-3105 historical and Keltner support, but now tries to round over into a lower high, a potential right shoulder for a H&S on the five-minute chart. Keltner support tries to firm just ahead of the confirmation level for that formation, so it's far from certain that it would complete or confirm.

  Jim Brown   8/26/200,  12:55:52 PM
GOOG - The CBOE announced they will begin listing options on Google as of Friday August 27th (tomorrow). Any guess what the editors play will be this weekend?

  Jeff Bailey   8/26/200,  12:53:06 PM
AMEX Gold Bugs ($HUI.X) 204.47 -0.41% .... off its session lows of 202.34.

  Jeff Bailey   8/26/200,  12:52:09 PM
Newmont Mining (NEM) $44.02 -0.04% ... of session lows of $43.50 and DAILY S1 (43.52)

  Mark Davis   8/26/200,  12:51:34 PM
stepping away for a quick errand...

  Jeff Bailey   8/26/200,  12:51:19 PM
Alcoa (AA) $32.26 +0.58% ....

  Jeff Bailey   8/26/200,  12:50:47 PM
Phelps Dodge (PD) $81.28 +1.80% .... hmmmm....

  Jeff Bailey   8/26/200,  12:49:24 PM
Stillwater Mining (SWC) 14.30 (unch) ... makes a little comeback from session lows of $14.00 and DAILY S1 (13.97)

  Linda Piazza   8/26/200,  12:46:44 PM
I came into today thinking that markets were probably going to be difficult to trade ahead of tomorrow GDP, and wondering what Jonathan was going to show us about the repo activity, as I suspected that markets were being buoyed because of the way they were behaving. I have no idea whether tomorrow's GDP number will be a downside surprise as some were last week, including Japan's shocker, and I have no idea whether we'd get a sell-the-news or buy-the-news reaction afterwards anyway. Maybe others are as uncertain, but I wouldn't want to be jumping in long at this level ahead of that number or even holding a hefty profitable long position overnight. Conversely, if I were short a big position, I'd sure be getting nervous about now if markets didn't start dipping ahead of tomorrow's number.

  Mark Davis   8/26/200,  12:46:04 PM
B-bands are tighter than they have been all day... we should see our move here pretty soon

  Jeff Bailey   8/26/200,  12:45:26 PM
TRIN 0.90

VIX.X 14.97

QQQ $34.47

  Jonathan Levinson   8/26/200,  12:43:14 PM
Volume has dropped off here, and my tick-based indicators are in suspended animation. The chop zone remains 34.33-34.53, and the fact that this range is taking place during a 30 min cycle downphase suggests a strong upphase to follow. A break above or below either end of the range should be directional, but the longer it takes, the more bullish that delay appears to be.

  Jeff Bailey   8/26/200,  12:42:04 PM
12:00 Internals at this Link

Yesterday's 12:00 Internals at this Link

Just can't get a firm directional bias, but NH/NL ratios still look bullish.

  Jim Brown   8/26/200,  12:41:41 PM
ICEW announced a 10:1 stock split today! Sounds exciting until you learn that ICEW trades at 48 CENTS! A 10:1 split would push them back down to a nickel a share. I can hardly contain my excitement. (grin)

  James Brown   8/26/200,  12:41:03 PM
Shares of Apple Computer (AAPL) are surging today. The stock is up more than 6% and breaking out over resistance at $34 to hit new one-year highs.

  James Brown   8/26/200,  12:39:09 PM
Ouch! Retailer Ultimate Electronics (ULTE) is down more than 21% to $2.37 after reporting a huge earnings miss. Wall Street was looking for a loss of 25 cents and ULTE reported a loss of 63 cents per share. The company's turnaround strategy is taking longer than expected to produce results.

  Jonathan Levinson   8/26/200,  12:30:22 PM
Next test is QQQ 34.53. 30 min channel resistance is down to 34.60. A print above 34.53 that isn't reversed within 10 minutes will turn up the 30 min channel from this AM's higher low.

Crude oil has come down a bit here, currently -.30 at 43.175.

  Jeff Bailey   8/26/200,  12:26:49 PM
U.S. Dollar Index (dx00y) 89.47 +0.05% (30-min delayed) Link

With Stillwater Mining (SWC) $14.20 -0.69% thoughts at this Link

  James Brown   8/26/200,  12:26:07 PM
AMD could be weighing on the chip sector. The stock is down more than 3% after being downgraded to "neutral" today. I see the SOX is under performing most of the tech-related indices.

  James Brown   8/26/200,  12:23:43 PM
I'm surprised to see the homebuilders this strong or in the green at all today. The whole sector was hit yesterday with the disappointing home sales numbers. Yet there is no follow through on the selling pressure today.

  Jonathan Levinson   8/26/200,  12:23:41 PM
Guess where the 7200-tick SMA is for QQQ? Right here at 34.45. A break above should get a new short cycle upphase underway, and the 30 min cycle downphase is now stalled. Above 34.53, it should take on an upside bias.

  Linda Piazza   8/26/200,  12:23:31 PM
Today's five-minute BIX chart shows a couple of gaps as the BIX was climbing to the day's high. It's now closed the last gap and is trying to steady at the bottom of another, smaller gap that occurred earlier. It's also neared the bottom of the regression channel in which it's traded since mid-morning yesterday morning, an expected spot for support, at least temporarily. A drop below 359.60 would violate that rising channel if the break comes quickly, but that level will climb during the day. This morning the BIX had climbed above 360, approaching the early March intraday high of 362.64 and closing high of 361.23, coming within less than a point of that closing high. That was a major swing high for the BIX, so could provide strong resistance while a break above that resistance would be significant.

  James Brown   8/26/200,  12:18:49 PM
Retailer Fred's Inc (FRED) is down more than 11% to $15.01 on huge volume after reporting earnings today that missed by a penny.

  James Brown   8/26/200,  12:13:07 PM
They have already added single-stock futures for Google (GOOG).

  Jeff Bailey   8/26/200,  12:12:59 PM
Microsoft (MSFT) $27.52 -0.10% .... has been hanging out at correlative WEEKLY R1 $27.50 and DAILY Pivot $27.46.

  Jonathan Levinson   8/26/200,  12:12:28 PM
Stepping away for 10 minutes.

  Jeff Bailey   8/26/200,  12:11:47 PM
Research in Motion (RIMM) $63.06 -0.48% .... traded up to its DAILY R1 $64.43 after the open, after pegging DAILY Pivot ($62.72) right at the opening tick.

  Linda Piazza   8/26/200,  12:10:36 PM
The OEX approaches slight Keltner support at 539.20-539.27 . . . oops, neared it as I typed, so here's the rest of what I was going to say . . . and might attempt a bounce from here. Keltner resistance lines are separating overhead on the five-minute chart, but 539.80-540.18 begins to look a little tougher on the 15-minute one.

  Jonathan Levinson   8/26/200,  12:07:30 PM
Bonds have continued higher, currently up to 112.7969 on the ZN futures, with TNX down 3.5 bps at 4.226%. Gold is down 1.70 at 408.40, back above 408 support. Crude oil is uo to 43.40 here, -.075 or .17% for the day.

  Jeff Bailey   8/26/200,  12:07:23 PM
S&P Retail Index (RLX.X) 391.52 -0.02% ... slipping back red.

  Jeff Bailey   8/26/200,  12:06:39 PM
Bullish day trade setup cancel alert ... Cancel the QQQ bullish entry for $33.35. QQQ $33.38 here.

No update to write for another 30-minutes, so I can watch things a little closer.

  Jeff Bailey   8/26/200,  12:05:25 PM
October Crude Oil futures (cl04v) $43.23 -0.55% (30-minute delayed) ... intra-day chart at this Link with QCharts' DAILY and WEEKLY Pivots turned on.

  Linda Piazza   8/26/200,  12:04:56 PM
Mark has the right idea with his wider triangle. Here's an approximation of his triangle, as seen on the OEX: Link

  James Brown   8/26/200,  12:04:39 PM
You may have heard that Krispy Kreme Doughnuts (KKD) turned in a rather stale earnings report. The company reported earnings of 12 cents per share, or $7.3 million, which is down from 22 cents per share a year ago. Wall Street was looking for 22 cents per share this time.

Management followed up by guiding lower for its full year revenues. The stock is down more than 10% to $13.76 but up off its lows for the session.

  Mark Davis   8/26/200,  12:03:44 PM
Somebody wake me up when this is over...

  Mark Davis   8/26/200,  11:57:40 AM
Here's another triangle for you Linda (grin)... SPX 1104-1105 Link

  Jonathan Levinson   8/26/200,  11:57:14 AM
The 30 min cycle channels are flattening now, still pointed down but not by much. A break above 34.45 will stop the downphase, and a move above 34.53 for longer than 10 minutes will kick off a new 30 min cycle upphase from a much higher low, virtually guaranteeing a test of upper 34.80 resistance.

  Linda Piazza   8/26/200,  11:55:53 AM
The TRAN has now erased all of today's gains and headed down below yesterday's close again, leaving a long candle shadow behind. The TRAN is at 3108.02 as I type.

  Linda Piazza   8/26/200,  11:52:53 AM
Nope, the bears did no better with their downside violation than the bulls had with their upside violation of the OEX's symmetrical violation. We're going to have to resort to Mark's trick of drawing bigger triangles.

  Jeff Bailey   8/26/200,  11:47:15 AM
TRIN 1.02

VIX.X 14.99

QQQ $34.40.

  Mark Davis   8/26/200,  11:47:04 AM
The overbought/oversold CCI readings on the SPX 1-min chart are doing a great job of pinpointing inflection points... the problem is there's no follow through Link

  Jeff Bailey   8/26/200,  11:46:09 AM
QQQ $34.39 -0.46% .... just edging up from $34.36.

  Linda Piazza   8/26/200,  11:40:51 AM
Upside break/downside break. The OEX got slapped back when it headed above the top of the symmetrical triangle and has now violated the bottom support. Keltner evidence is mixed as to whether the bears have any better chance of success than the bulls did.

  Jonathan Levinson   8/26/200,  11:35:42 AM
The corrective 30 min cycle downphase continues to chop sideways above former resistance of 34.30. The short cycles are just approaching oversold territory here, and 30 min cycle bears are running out of time.

  Linda Piazza   8/26/200,  11:33:53 AM
I prefer the sackful of puppies, if you please, Mark. Particularly golden retrievers or labrador retrievers? There's now been an upside breakout on the OEX's version on the five-minute chart, but I wouldn't be surprised to see this form just morph into a rectangular consolidation of something else yet again. I came into today thinking that we might have a day when technical analysis wasn't particularly helpful, ahead of the GDP number tomorrow, and nothing so far has changed my mind.

  Jim Brown   8/26/200,  11:27:23 AM
It is interesting to note that program trading has declined back to the 50% level since the all time high of 70.5% the week of June 21st. Link)

  Mark Davis   8/26/200,  11:25:29 AM
Don't you just love the triangle game Linda? Just keep redrawing larger triangles... more fun than a sack full of puppies.

  Jeff Bailey   8/26/200,  11:24:43 AM
TRIN 0.96

  Linda Piazza   8/26/200,  11:22:34 AM
The symmetrical triangle on the OEX's five-minute chart now narrows almost to its apex. It's time for the OEX to break out or for it to morph into another form. If markets are being steadied, though, we can just get a series of small-bodied candles that issue out the apex.

  Mark Davis   8/26/200,  11:18:02 AM
Jim I saw a piece on the Afghani poppy fields and the destitute farmers who work them. They have no alternative income so if they stop growing poppies they can't put food on the table. It's a tough decision for a father who might want to stop growing poppies but still has to feed his family.

  Linda Piazza   8/26/200,  11:14:56 AM
The OEX attempted an upside break from its symmetrical triangle, actually showing one on a five-minute chart. The 15-minute chart shows a candle shadow piercing the line, but the OEX closing that 15-minute period back inside the triangle.

  Jeff Bailey   8/26/200,  11:12:39 AM
Day trade bullish setup alert ..... for the QQQ $34.39 -0.46% .... Go long on pullback to $34.35, stop $34.30, target $34.75 by the close.

  Jim Brown   8/26/200,  11:12:08 AM
Actually al Qaeda relies a lot on heroin production for their income. That and the donations from their oil friends.

  Mark Davis   8/26/200,  11:10:12 AM
Interesting Jim... Al Queda will either have to find a new source of income.

  Jim Brown   8/26/200,  11:06:48 AM
All this talk about oil will eventually lead to only one conclusion. It is a limited resource that will eventually disappear. With oil demand rising and oil reserves dropping the end result is a freight train headed straight for us several years from now and there is no way we can get off the track. I listen to the various "analysts" talking about prices returning to the low $30 range and I get a mental picture of an ostrich with its head in the sand. You can't escape the absolute truth. Oil supplies are shrinking and oil demand is rising. Those two line will cross in the next five years when production begins declining. It will be a wake up call heard around the globe. Our grandkids will live in a world where there are no gasoline powered cars and the entire global gas refining/delivery system will disappear. There will be a lot of corner real estate converted into different uses. Yes, oil may go lower in the short term but it will eventually rise to triple digits. This chart shows the various depletion rates according to different published studies. The swing peak theory assume a rapid jump in price to much higher prices will reduce demand and extend the life of available supplies. Link

For a complete description of the problem: Link

  Jeff Bailey   8/26/200,  11:05:51 AM
11:00 Internals at this Link

  Mark Davis   8/26/200,  11:05:24 AM
There's a slightly lopsided inverse H&S pattern on the SPX 5-min chart that has an upside target of 1110 (that's the 200sma). The neckline is at 1105.50... The 50sma is at 1104.59, so you see what an important area we are challenging. If we can break through to the upside there will be some shorts running around with their hair on fire.

  Jonathan Levinson   8/26/200,  11:04:57 AM
The buy program generated 2M shares on the offer within 100 ticks for QQQ, making it the largest QQQ buy program of the day. The bulls aren't done yet, just another indication that this 30 min cycle downphase is corrective.

  Linda Piazza   8/26/200,  11:04:49 AM
At yesterday's and then today's high, the OEX has been testing the converging daily 100/130-ema's, with those averages at 540.41 and 540.39, respectively. Besides known historical S/R at that level and identified Keltner resistance, that's another reason for the difficulty the OEX might have surpassing that level. I'm wondering if the Feds are determined to prop markets up here into tomorrow's economic release, however, so I'm wondering if we'll see markets ending the day rather near where they began it or perhaps with a small breakout. That's a subject that Jonathan knows far more about than I do, though.

  Jonathan Levinson   8/26/200,  11:01:34 AM
Nymex crude is currently -1.32% or .575 at 42.90.

  Jonathan Levinson   8/26/200,  11:00:28 AM
Session high for ZN bonds here, with TNX down 2.3 bps at 4.238%. QQQ found support at 34.33- I'll consider the 34.30 and 34.35 support areas to be one confluence zone between 34.30-.35. Next support below is 34.20. But this break confirmed that the 30 min cycle downphase isn't just going to whipsaw, and bulls are now looking for a higher low for this cycle at which to bottom- anywhere above 33.90 will suffice to confirm the ongoing daily cycle upphase.

  Linda Piazza   8/26/200,  10:58:07 AM
The OEX's presumptive H&S on the five-minute chart is beginning to morph into a symmetrical triangle now, with upside resistance perhaps next to be tested.

  Linda Piazza   8/26/200,  10:56:53 AM
The advdec line's level and its trend aren't inspiring many bullish hopes, are they, but neither is the TRIN's trend-less pattern inspiring many bearish ones.

  Jeff Bailey   8/26/200,  10:54:38 AM
10:50 AM Market Watch at this Link

  Mark Davis   8/26/200,  10:48:33 AM
Just take a position counter to whatever I say and you will do fine (sigh... this has been a humbling week)

  Mark Davis   8/26/200,  10:43:03 AM
Here's an updated chart of the "b" distribution patterns I've been watching on SPX Link

  Mark Davis   8/26/200,  10:41:05 AM
We are right at the lower b-band on the SPX 1-min chart so we should either start popping to the upside very soon or start walking down the lower b-band... I'm guessing UP

benchmarking... SPX = 1104.79

  Jonathan Levinson   8/26/200,  10:40:52 AM
34.40 is being tested now. There's support at 34.35 and stronger support at 34.30, but the failure below 34.60 QQQ confirmed the 30 min cycle downphase and the break of 34.40 will take out the short cycle upphase that has been battling it this morning.

  Linda Piazza   8/26/200,  10:38:12 AM
Watch this potential H&S on the OEX's five-minute chart, too: Link Be aware that when we have net adds by the Fed as we do today, a typical pattern might be a minimal rounding down into a right shoulder or even confirmation of the formation, only to have the OEX shoot up immediately past the right shoulder. If you choose to bank on the bearish side today, be watchful for that kind of behavior. Until everything lines up one side or another, be careful whatever your bias.

  Jonathan Levinson   8/26/200,  10:36:21 AM


  Jonathan Levinson   8/26/200,  10:33:27 AM
Linda notes crude oil, which is currently down .65 at 42.285. QQQ testing 34.40 support here.

  Linda Piazza   8/26/200,  10:31:25 AM
My scan of the indicator indices we usually watch shows a mixed picture, with the TRAN and BIX looking strong and building on gains, but in the BIX's case at least, soon facing a major swing high that might provide resistance. The TRAN isn't so far away from a less major swing high. The SOX doesn't perform so well, however. When gains have been made this week on weak volume and when there's uncertainty about tomorrow's GDP number, I sure would like to have everything lining up just right before suggesting a long OEX trade, and the corroboration just isn't there. The OEX's last test of five-minute Keltner resistance showed that resistance holding, but the OEX also finding support just where bulls would want for a hoped-for further test of resistance, at least temporarily. Technically, down still looks more likely than up, but that net add in Fed funds today and the behavior of the markets over the last week--zooming up out of potentially bearish formations--worries me.

Crude's a problem, too. It's been diving this morning, but it's getting ever closer to next support, too.

  Jonathan Levinson   8/26/200,  10:29:52 AM
The short cycle upphase that brought us this bounce to a lower high below 34.60 is at risk of aborting here, and a break below 34.40 should give us a directional move to confirm the 30 min cycle downphase still in effect below 34.60-.65. Still very choppy in this zone for QQQ, but a break of either 34.40 or 34.60 should give us some directional followthrough.

  Jeff Bailey   8/26/200,  10:26:39 AM
Taser Intl. (TASR) $29.21 +7.7% Link .... company said it received additional $1 million worth of follow-on orders for its stun guns. Updated bar chart at this Link

A trade at $30 should be bullish, maybe bring in some short covering.

  Linda Piazza   8/26/200,  10:25:46 AM
The BIX also extends yesterday's gains, having broken above the usually bearish megaphone shape last week, consolidated a while, and then begun climbing yesterday. At 362.64, the BIX faces a major swing high from early March, with the TRAN currently at 360.31.

  Linda Piazza   8/26/200,  10:23:48 AM
The TRAN is extending yesterday's gains, having moved above the descending trendline off the 7/01 high yesterday. At 3147.23, the TRAN faces the last swing high from 8/03. The TRAN is currently at 3125.52.

  Linda Piazza   8/26/200,  10:21:33 AM
Here's a formation to watch for confirmation (bearish) or rejection (bullish) on the SOX's 15-minute chart: Link

  Jonathan Levinson   8/26/200,  10:21:33 AM

10:19am U.S. 2003 POVERTY RATE RISES TO 12.5% FROM 12.1%

10:20am U.S. 2003 MEDIAN INCOME UNCHANGED AT $43,318

  Jeff Bailey   8/26/200,  10:20:02 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

  Mark Davis   8/26/200,  10:19:51 AM
If we can break through resistance here I think there's a good chance of a nice rally, possibly up to the 1125 area, not necessarily in a straight line, but with the low volume and number of shorts in the market it could provide some fuel for an upside surge. We have to break through resistance first though (grin)

  Jonathan Levinson   8/26/200,  10:17:57 AM
The 30 min cycle channel has not yet turned up, and is still flat with a slightly negative slope for QQQ. Resistance is still 34.65, support 34.33. A short cycle upphase is trying to start, but it's not there yet. A break above 34.55 could do it. Once again, while it's still a downphase, it's a very weak one, and with 5.5B new dollars from the Fed, it's likely to continue to so remain. Above 34.65 QQQ, it will abort.

  Mark Davis   8/26/200,  10:14:50 AM
Day Trade Exit Point Alert -
Exiting short now... SPX 1105.34, +0.17

  Linda Piazza   8/26/200,  10:13:50 AM
The OEX did bounce from the 538.50-ish level, as the study of the 240-minute 100/130-ema's and the Keltner channels suggested it might do, and also found resistance near 540, slightly above the level that the five-minute Keltner chart suggested that it might do. Support is now trying to firm under the OEX just below 539 if the current support (539.30-ish level) does not hold. The Keltner charts suggest that it's possible that the OEX isn't yet through testing resistance, although that further testing isn't promised and may depend on what happens in the next few minutes. Jonathan mentioned the repo, with a net add a little concerning to any who might have bearish hopes for the day. Keep a watch on the TRIN, currently neutral, and other factors. Remember that the GDP number comes tomorrow, with disappointments seen globally in recent GDP numbers. Be careful trading ahead of that number.

  Mark Davis   8/26/200,  10:12:08 AM
Day Trade Entry Point Alert -
Go long now... SPX 1104.58, stop 1102.50

  Jim Brown   8/26/200,  10:09:39 AM
Alert - We experienced a temporary monitor outage this morning but the problem has been resolved. Thank you for your patience. It has been several months since we have had any technical challenges but with highly technical equipment and processes something was bound to disrupt it eventually.

  Jonathan Levinson   8/26/200,  10:02:41 AM



  Jonathan Levinson   8/26/200,  9:59:11 AM
A great-big 11B overnight repo from the Fed replaces the 7.5B expiring for a 3.5B net add, which compounds the 2B added on a 14-day basis for a net 5.5B of new money available to the markets. It's all guesswork, but my guess for what it's worth is that this will cause the so-far corrective 30 min cycle downphase to be corrective at worst- sideways-down or flat.

  Jonathan Levinson   8/26/200,  9:55:37 AM
The downphase feels corrective so far, but it's just getting started and there are potentially hours left within this correction. The 30 min cycle channel has resistance at 34.65 QQQ, and that level allows for a nominal break/headfake above yesterday's high. If we get a meaningful break above 34.60- one that lasts longer that 5-10 minutes or on strong volume- then 34.80 is the next confluence resistance level.

  Jonathan Levinson   8/26/200,  9:50:07 AM
QQQ has its 30 min cycle downphase underway, but so far the action is less than impressive. The bias nevertheless remains down, even if on a corrective basis, so long as the 34.60 level doesn't get breached on any bounce for the next 3-5 hours.

  Jonathan Levinson   8/26/200,  9:45:14 AM
The Fed's open market desk has added a net 2B against the 14-day repos expiring today. We await the 10AM announcement with respect to the remaining overnight expiries.

  Linda Piazza   8/26/200,  9:37:58 AM
The TRAN is climbing quickly, erasing this morning's loss and moving up toward yesterday's high.

  Mark Davis   8/26/200,  9:31:52 AM
Good morning... S&P futures are calling for a basically flat open @ -0.20. If we don't head down fairly quickly this morning my inclination is to enter a counter long play. We already have a couple of points in the bank from yesterday's short and a counter long would not only lock them in but insure against another upside thrashing like yesterday.

  Linda Piazza   8/26/200,  9:31:42 AM
The OEX opens and heads lower without first testing overhead resistance.

  Mark Davis   8/26/200,  9:31:31 AM
Good morning... S&P futures are calling for a basically flat open @ -0.20. If we don't head down fairly quickly this morning my inclination is to enter a counter long play. We already have a couple of points in the bank from yesterday's short and a counter long would not only lock them in but insure against another upside thrashing like yesterday.

  Jeff Bailey   8/26/200,  9:30:33 AM
Taser Intl. (TASR) $27.10 Link ... bid higher at $27.96 after the company said it received four follow-on purchase orders totaling over $1 million for its stun guns.

  Linda Piazza   8/26/200,  9:28:32 AM
We could have a flattish open this morning. The OEX's five-minute Keltner chart suggests that the OEX could rise enough to retest the 539.60-ish range, but that it would likely find resistance there. Keltner support is verrry thin below that on the five-minute chart, so with the exception of a possible retest of Keltner resistance, down seems more likely than up, based on that chart as it was configured at yesterday's close. That can change as trading opens this morning and the OEX moves around, reconfiguring that Keltner chart, too. The 15-minute chart does show possible support at yesterday's close, down to 539, with a retest of higher resistance perhaps possible on a bounce from either yesterday's close or a little lower down. A break through the 539 level and a sustained trade there would begin to turn the smallest Keltner channel lower on that chart, too.

  Jonathan Levinson   8/26/200,  8:46:01 AM
I'm playing catchup here, back at the office and trying to recover from yesterday's router burnout and subsequent modem failure. Looking at the NQ chart as a premarket proxy for QQQ, 1384 is looking like lower bear wedge support on the 30 min chart. A 30 min downphase appears imminent, but I believe that it will take a break of that level, equivalent to 34.42-.45, to get that downphase started.

I apologize to those who have emailed me- I will reply to your emails as soon as I can get my rig working and catch my breath a bit.

  Jonathan Levinson   8/26/200,  8:33:52 AM
The futures aren't reacting to the news, with YM -1 at 10176, NQ -1 at 1389, ES +.25 at 1104, gold +1.30 at 409.90, QQQ-.05 at 34.50 and ZN bonds flat.

  Jonathan Levinson   8/26/200,  8:31:34 AM
Ticker headlines:

8:30am U.S. WEEKLY JOBLESS CLAIMS UP 10,000 TO 343,000




  Jonathan Levinson   8/26/200,  8:30:06 AM
Awaiting initial claims at 8:30AM, est. 335K.

  Linda Piazza   8/26/200,  7:07:01 AM
Good morning. Thursday, the Japanese Ministry of Finance announced that exports fell 0.3% month-over-month due to lower demand in the U.S. and China. The trade surplus widened. Despite the concerns engendered by falling exports in an export-driven economy, Japanese markets concentrated more on falling crude costs in earliest trading, also important in a country that imports 99% of its oil. Exporters climbed. Throughout Asia, techs, especially semi-related stocks, were also helped in earliest trading by the Dramexchange.com's information that prices for a benchmark computer memory chip had risen over the last five days. The Nikkei opened just below 11,200, climbed, and then dropped below that level in the morning session. Selling accelerated and the Nikkei dropped more than 100 points off its day's high, closing just off the low of the day, down 0.69 points or 0.01%, at 11,129.33.

The Nikkei may have been hurt in part by the International Monetary Fund's concern that China's efforts to pull off a soft landing might not have been as successful as had been thought earlier, and that China might not be able to avoid that feared hard landing. By the end of the day, most major banks were higher, with Mitsubishi Tokyo Financial Group the lone decliner among the top four banks. Auto stocks appeared to be mixed, with Mitsubishi Motors retracing some of the spectacular gains it had made in the last few days, ending down almost 6%, and Toyota Motor gaining more than 2%. Mitsubishi Motors will not follow through on previous plans to use common platforms with DaimlerChrysler for midsize-sedan production, which means that Mitsubishi Motors will not be able to use joint purchasing power for as many parts as it would have under the agreement. It wants to limit that joint purchasing to those items where Mitsubishi Motors could be sure of a benefit. Toyota has released its first IMV, or "innovative international multi-purpose vehicle," a pickup truck, for sale in Thailand. It wants to use these vehicles to coordinate production and supply networks across the globe, selling them in 140 countries.

In other stock-specific news, Toshiba declined after announcing expansion plans for a chip production line and plans to increase production output capacity, and NTT DoCoMo fell after announcing that, together with Motorola, the company will develop DoCoMo's G3 mobile handsets.

Other Asian markets were mostly higher, with China and Hong Kong's bourses two of the other declining bourses. Semi-related stocks generally performed well. The Taiwan Weighted gained 2.69%, and South Korea's Kospi gained 0.78%. Singapore's Straits Times gained 0.10%. Hong Kong's Hang Seng fell 0.07%, and China's Shanghai Composite fell 0.40%.

Currently, all European bourses that are open trade in the green. Turkey's appears to be closed. The Ifo Institute released its business confidence survey results for August, showing that German business confidence fell to 95.3 from its previous 95.6. After last week's ZEW Institute numbers had indicated a drop in confidence, expectations had been for a lower Ifo number. The increase in oil prices impacted investment and consumer demand, the results showed. The component that follows current business rose from July's 94.1 to August's 94.7, but future expectations fell from July's 97.1 to the current 96.00.

Declining oil prices over the last few days helped boost Europe's bourses, though, with airlines and techs both benefiting. Many stocks reacted individually to earnings reports, with Swiss Re reversing early gains after its better-than-expected H1 net profits. The company said that it might not be able to keep up the first half's investment performance. Fortis rose after its earnings report beat forecasts except in operating profits, but the company gave a more upbeat forecast. Deutsche Bank pointed to trouble spots in the report, including low loan loss provisions and possibly not reproducible results in non-life outperformance. Royal Ahold missed expectations for the second quarter and tumbled.

Currently, the FTSE 100 has climbed 21.20 points or 0.48%, to 4,432.80. The CAC 40 has climbed 30.16 points or 0.84%, to 3,625.42. The DAX has climbed 40.02 points or 1.06%, to 3,828.90.

  Linda Piazza   8/25/200,  10:49:44 PM
It appears that I missed the afternoon excitement on Wednesday. The OEX broke out again above the most recent three-day consolidation zone. I'm glad that I've been mentioning all this week that although the 535-537 zone appeared strong, the daily Keltner chart indicated that the OEX could get shoved up to 540-541, too, before hitting strong enough Keltner resistance to hold it. The OEX pulled back from its test of the 540-541 resistance on Wednesday, but did manage a close just a few cents above its 50-dma, and the daily candle couldn't be described as anything but bullish. On the bar chart, this still looks like a good place from which to expect a pullback into a possible shoulder for an inverse H&S, but oscillators offer no hint of any such pullback in the making. The only hints lie in obscure clues, such as possible bearish price/oscillator divergence, but that divergence can still be erased by a price climb above the 8/02 high before oscillators turn down. A less obscure clue lies in volume patterns, with volume not supporting this climb as Jane Fox pointed out in Tuesday's Wrap, but anyone who has traded for a while has seen a number of summertime light-volume rallies that carried further than I would want to hold onto a bearish position. That doesn't mean that I'd always want to invest in the long side on a light-volume climb, either, but there are times when that means that I'm missing a good long trade.

Here's my problem. I've been saying for almost a week that the OEX looked as if it would be stopped by either the 535-537 zone or by the 540-541 zone, so we got our better entry into a bearish position, didn't we? Only it looks a lot different up at this height than when the OEX was much lower and we were pinpointing this level as a possible site for a horizontal neckline for a H&S, doesn't it? Plus I didn't watch the blow-by-blow action Wednesday, and that always hampers decision making. Is it possible that the OEX will now make a rush for its 200-sma, up at 545.36? That's also the top of the descending regression channel, and the OEX has already climbed above the midline, so a move up to the top wouldn't be unexpected. We also have the TRAN's recent example, too, with the TRAN climbing to and inching just above the top of its recent descending regression channel.

The daily Keltner channel now suggests that a topping out at that 540-541.50 range is possible, but that resistance doesn't look as firm as it did earlier. The strongest factors suggesting 540-541 as turnaround points for the OEX are historical resistance and the shape of the formation on the OEX's daily chart: one that looks like a possible inverse H&S. That may not be enough to go on.

Studying the 15-minute Keltner chart, I see that the OEX again touched mid-channel support shortly after the open Wednesday morning. After bouncing from that support, it formed another neutral triangle, breaking out of that triangle about noon, along with other indices, when crude futures broke below Tuesday's low. The climb did not produce a breakout above the top channel on that 15-minute chart, however, as 15-minute closes were all beneath it. By the close, the OEX had created a double-top formation on the five-minute charts, breaking back inside the channel and creating a downside target of 538.50, so it's possible that support will be retested. Overhead Keltner resistance now lies at 539.60 and then again at 540.08, but that lower resistance line still climbs, so the OEX could still continue to climb it.

While the OEX has been consolidating over the last few days, it's been testing the 240-minute 100/130-ema's, until this morning closing each 240-minute candle beneath those averages. Let's use those as benchmarks in early trading tomorrow, with those averages at 536.84 and 538.46. Pullbacks to 538.46 and bounces from there, accompanied by appropriate breadth indicators, might suggest a retest of the 540-541 level, although tests of higher levels are far from guaranteed. Dips below the 240-minute 100-ema might suggest retests of 533.50-534, although tests of lower levels are far from guaranteed, too.

A couple of extra concerns attend any plans to trade tomorrow. One is that the SOX was once again stopped near the 50% retracement of the rally off the October 2002 low, and I'd like all the indicator indices such as the TRAN and the BIX to be headed the same direction, to avoid the kind of chop we've seen lately. Another is that Friday is the important GDP number, with markets perhaps being run up ahead of that number, but with their reactions afterwards up for grabs. Trade carefully in front of Friday morning's numbers. The conservative among you might decide to take a day off trading.

  Jeff Bailey   8/25/200,  10:31:49 PM
S&P 500 Index (SPX.X) ... with corrected WEEKLY pivot retracement and WEEKLY S1 and R1. Link

Note correlations at DAILY R1 and DAILY S1.

  Jeff Bailey   8/25/200,  10:05:25 PM
Pivot Matrix for Thursday at this Link

Correction alert! While looking over my charts tonight, I'm just now noting that the LOWS for last WEEK were incorrect for the DIA, SPX, SPY, OEX, NDX, QQQ and SOX.X, which would have impact on this WEEK'S pivot analysis levels.

Most notable is that the QQQ did trade its WEEKLY R1 in today's session. I will post the above matrix in tomorrow morning's 09:00 AM EDT Update.

  OI Technical Staff   8/25/200,  7:47:00 PM
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