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  Jeff Bailey   8/31/200,  6:01:49 PM
Pivot Matrix for tomorrow as well as new MONTHLY pivot levels at this Link

  Jeff Bailey   8/31/200,  5:21:30 PM
Closing Internals at this Link

Decent "power burst" in the final hour more noticeable at the NYSE.

  Mark Davis   8/31/200,  4:29:48 PM
Recap of Tuesday's trades (08-31-04)
Long SPX @ 1101.10
Exit @ 1101.10, +0.00
Long SPX @ 1099.91
Exit @ 1099.00, -0.91
Long SPX @ 1098.75
Exit @ 1098.75, +0.00
Short SPX @ 1098.63
Exit @ 1096.63, +2.00
Short SPX @ 1097.37
Exit @ 1096.34, +1.00
Short SPX @ 1096.08
Exit @ 1097.00, -0.92
Short SPX @ 1098.20
Exit @ 1100.00, -1.80
Short SPX @ 1101.06
Exit @ 1101.06, +0.00
Total gain/loss for Tuesday = -0.63
Total gain/loss for the week = -0.68

  Jeff Bailey   8/31/200,  4:25:01 PM
Current OPEN MM Profiles at this Link

Today's Activity ....

Added additional 1/4 bearish to the Netease.com (NTES) Link ... Dec. $30 Puts (NQGXF) at $2.20. Will most likely follow with a stop on the first 1/2 from 08/13/04 should above NTES trade $37.50, and find Sohu.com (SOHU) Link trade $17.00.

Day trade long Bema Gold (AMEX:BGO) Link at $2.56, stop $2.52, and carrying over with initial target (may be raised depending on overnight dollar action) of $2.65.

Month of August trade blotter at this Link

  Linda Piazza   8/31/200,  3:59:26 PM
The OEX looks as if it might end the day about two points above its opening, a little further away than I'd expected it, but still with a small-bodied candle for the day. It doesn't look as if it will have much of an upper shadow, though, and it dipped just a bit lower than I expected, so that it's got a bit more of a spring to it than a spinning top. Different character entirely than a spinning top or doji. The ranges are about what I expected, with the exception of a little deeper of a dip, but I just didn't expect the close at the top of the range, if that's what happens.

  Linda Piazza   8/31/200,  3:53:47 PM
The OEX is still moving up toward upper-channel Keltner resistance at 538.78, but five-minute candles are beginning to show some upper spikes, so I'm not sure it will make it there before the close. Or at all.

  Mark Davis   8/31/200,  3:53:42 PM
Well we're pretty much locked out now. Volatility premium for a long play is prohibitively high for an entry, although it sure looks like they flushed 'em out at the bottom and odds for further upside are very good. Very frustrating.

  Jeff Bailey   8/31/200,  3:51:06 PM
Bema Gold (BGO) update alert $2.59 +2.77% .... if day traders don't get my day trader's target of $2.65 by the close, I will suggest those comfortable with holding a micro-cap gold/copper producer to hold overnight.

See dollar comments at 15:48:56.

  James Brown   8/31/200,  3:49:31 PM
I've been watching health insurance stock UNH for days as it coils for a breakout over resistance at the top of its trading range near $66.00. Shares just broke out over $66.00 in the last minute. This might be a bullish entry point.

  Jeff Bailey   8/31/200,  3:48:56 PM
U.S. Dollar Index (dx00y) update alert 88.88 -0.9% .... based on tomorrow's DAILY Pivot levels 88.33, 88.63, P= 89.05, 89.35, 89.77

I see correlative near-term resistance at DAILY Pivot and MONTLY Pivot.

  Mark Davis   8/31/200,  3:43:03 PM
They certainly "squoze" me

  Linda Piazza   8/31/200,  3:42:55 PM
Nope. The OEX isn't coiling up into a triangle. It's making a push for that upper Keltner boundary on the five-minute chart, currently at 538.65. It had made a push for it before, but been stopped by the mid-channel level on the 15-minute chart. We haven't yet had a 15-minute close above that level, currently at 537.33, but it looks as if we might this 15-minute period. Maybe just barely, though, so be careful.

  Mark Davis   8/31/200,  3:41:09 PM
Day Trade Exit Point Alert -
Stopped out... 1101.06, +0.00

  Linda Piazza   8/31/200,  3:40:01 PM
The BIX is just 0.14 below yesterday's intraday high . . . oops, make that 0.18, as it slipped back from 361 as I typed.

  Mark Davis   8/31/200,  3:39:58 PM
stepping away for a few minutes...

  Linda Piazza   8/31/200,  3:37:35 PM
The TRAN is challenging its 50-dma, just a point or two above it now, but still below 3100.

  Linda Piazza   8/31/200,  3:34:36 PM
Is the OEX beginning to form a neutral triangle on the five-minute chart? If so, it still has some coiling up to do.

  James Brown   8/31/200,  3:32:05 PM
Occidental Petroleum (OXY) is hitting new highs and given its slow and steady climb it too may be a decent covered call candidate.

  Mark Davis   8/31/200,  3:28:35 PM
My charting service is down. Why don't these charting services ever go down during lulls when it makes no difference? Aaarrrrrrgh!

  James Brown   8/31/200,  3:24:42 PM
IBM is also looking weak now. The afternoon bounce is fading and its MACD is that much closer to a new "sell" signal.

  Mark Davis   8/31/200,  3:21:14 PM
Day Trade Exit Point Alert -
Cinch up your stops... to 1101.06 and break even
We now have a clean sell signal from the top of that flagpole rally. The question is whether that was really a top or just a pause. In any case we aren’t risking any capital at this point.

  James Brown   8/31/200,  3:20:43 PM
The action in Wal-Mart (WMT) does not look good today. The stock is down more than 1% and slipping through its 21, 40 and 50-dma's. WMT's MACD indicator has rolled over into a new "sell" signal.

  James Brown   8/31/200,  3:19:27 PM
Oil giant ExxonMobil (XOM) has not lost its bullish trend and shares are climbing through a crowd of moving averages today. Its MACD has produced a new "buy" signal. Considering now that XOM just split 2-for-1 the stock might be a decent covered call candidate!

  Linda Piazza   8/31/200,  3:15:17 PM
The OEX has had difficulty making it past the mid-channel level on the 15-minute chart, with that level currently at 537.35, but the OEX so far remains above the support trying to group just over and under the mid-channel level on the five-minute chart. This sometimes works a bit like traditional charts when oscillators turn up on one time frame and down on another. Sometimes the action can be choppy. The OEX is moving into an expected resistance level, so we perhaps could have expected that anyway. Although I've expected a bounce once the OEX moved down to the lowest support on the 15-minute Keltner chart, I haven't thought of this as a necessarily good spot to be long, thinking today might be a better day to sit out the action unless one had already been in a bearish play, and then following the OEX lower with stops until stopped out.

  Jeff Bailey   8/31/200,  3:10:37 PM
03:00 Internals at this Link

  Jeff Bailey   8/31/200,  3:04:02 PM
03:00 Market Watch at this Link

  Mark Davis   8/31/200,  3:01:19 PM
Day Trade Exit Point Alert -
Go short now... SPX 1101.06, stop 1103.00

  Jeff Bailey   8/31/200,  2:59:36 PM
Only thing I see bullish today to explain some of this strength is the 5-year yield ($FVX.X) down 6.7 bp, while 30-year yield ($TYX.X) down 4.8 bp and some steepening of yield curve.

  Linda Piazza   8/31/200,  2:58:00 PM
Bulls get another point, as the OEX met the upside target for the inverse H&S. The five-minute Keltner chart shows that if the OEX can maintain five-minute closes above the line currently at 536.44, it's got potential to reach 538.47. That would sort of fit my scenario for the day, with a move down followed by a bounce and then a potential close within a point or so of the opening. We still have a lot of day left, though. At least that last hour can feel like "a lot of day," depending on whether your underlying is moving against you or not.

  Mark Davis   8/31/200,  2:56:44 PM
I was feeling pretty good for a while today. What a rollercoaster... feeling kinda queasy now.

  Mark Davis   8/31/200,  2:55:23 PM
Day Trade Exit Point Alert -
Stopped out... 1100.00, -1.80

  Linda Piazza   8/31/200,  2:52:07 PM
Does this five-minute crude futures chart look like a bullish right triangle (flat top, ascending bottom) to anyone else? Link This is a 30-minute delayed chart, but real-time crude prices (42.15 as I was uploading the chart) have not popped above that horizontal line yet.

  Jeff Bailey   8/31/200,  2:49:50 PM
Newmont Mining (NEM) $44.44 +1.67% ... best levels of the session. Intra-day traders.... see that little pennant from 08/30/04? The apex of that pennant is WEEKLY R1 of $44.52.

Need to see some volume on break through there ,otherwise, may be stuck for remainder of week.

Similar for Stillwater Mining (SWC) $14.28 +1.63% .... WEEKLY R1 is $15.20, and came just shy of that Monday morning.

  James Brown   8/31/200,  2:48:12 PM
The news is now reporting that a suicide bomber killed eight people in a Moscow subway station.

  James Brown   8/31/200,  2:46:24 PM
IVGN has cracked the $49.50 mark as it hits new two-week lows. This may be an entry point to catch a drop toward $45. Technicals are certainly rolling over.

  Mark Davis   8/31/200,  2:46:19 PM
Keene it looks to me like they are trying stop runs in both directions

  Jeff Bailey   8/31/200,  2:43:54 PM
Russell 2000 Index (RUT.X) 544.51 (unch) ... is that a "gap" up on the 5-minute bar just now?

  Mark Davis   8/31/200,  2:43:19 PM
Day Trade Exit Point Alert -
Go short now... SPX 1098.20, stop 1100.00

  James Brown   8/31/200,  2:43:09 PM
A reader just reminded me of the relative strength in Harman Intl Industries (HAR). The company reported earnings on August 18th and shares soared about five points. In the three days following earnings HAR was up about 14 points to new all-time highs and I didn't want to chase it. Now shares are creeping higher and just hit another high.

  Linda Piazza   8/31/200,  2:43:08 PM
The inverse H&S was confirmed on the OEX's five-minute chart, with gains accelerating as the OEX moved above that neckline. Point one for bulls. The upside target is at about 536.11, just under the mid-channel level on the five-minute OEX Keltner chart. Bulls get another point if that target is met, but get one subtracted if it's not.

  Jeff Bailey   8/31/200,  2:42:54 PM
Has anyone noticed.... conventional retracement on HUI.X and SPX.X both show 50% retracement serving as near-term resistance?

Both HUI.X and SPX performed bullish in 2003, but both rather anemic in 2004.

HUI.X just starting to "shape up" a bit.

  Mark Davis   8/31/200,  2:39:32 PM
Day Trade Exit Point Alert -
Stopped out... 1097.00, -0.92

  James Brown   8/31/200,  2:39:20 PM
Bulls might want to keep an eye on QLGC. The stock is ignoring the downtrend in the SOX and traders have bought the recent dip to $25.50. Look for a breakout over its simple 100-dma.

  Jeff Bailey   8/31/200,  2:39:07 PM
Semiconductor Index (SOX.X) 367.47 -1.65% .... best levels of afternoon.

Index breadth negative at 18:0 with STM $16.98 -0.7% and LSI Logic (LSI) $4.83 -0.61% showing some daily relative strength.

  Linda Piazza   8/31/200,  2:38:20 PM
Remember me talking about the correlative-fan theory with relationship to the rally off the 8/13 low? Supposedly the rally is concluded when the third trendline off that rally is broken. Here's how it looks: Link

  James Brown   8/31/200,  2:37:13 PM
Argh! After days of commenting and watching Pixar (PIXR) coil for a breakout over resistance at $71.50 I didn't take it. PIXR burst through resistance on August 16th and I thought it might dip back to $71.50 again and we could buy the bounce. Well shares never slowed and the stock is now up to $77.52 (+2% today). The bullish P&F chart points to $89. Aggressive momentum traders may want to watch it for a dip (and bounce) from the simple 10-dma near $75.

  James Brown   8/31/200,  2:33:15 PM
Fastenal (FAST) is bucking the market's downward trend. The stock is up 1.4% and nearing new all-time highs at $63.50. Its MACD is very close to producing a new "buy" signal. The bullish P&F chart points to $81.00. A trigger over $63.50 could work.

  Jeff Bailey   8/31/200,  2:31:37 PM
Netease.com (NTES) $35.45 -1.06% ... re-test of morning lows and DAILY S1 ($35.47).

Tough little bugger for sure.

Sohu.com (SOHU) $14.70 -3.22% ... not nearly as tough. Rather large 97,500 share volume spike from $14.71-$14.85 at 01:30-01:35 as stock traded under its DAILY S2 $14.72.

  Jonathan Levinson   8/31/200,  2:31:34 PM
Bonds are pulling back, with TNX now down 7.5 bps at 4.114%, -1.77% for the day. Gold and the miners have pulled back as well, but as with bonds, the lion's share of today's impressive gains remain. Equities are still weak, but despite the extremely bearish feel, the losses aren't as large as the gains for bonds and metals, with QQQ down .71% here and the Naz -.78%.

  Mark Davis   8/31/200,  2:30:07 PM
Day Trade Exit Point Alert -
Go short now... SPX 1096.08, stop 1097

  James Brown   8/31/200,  2:27:51 PM
So much for a bounce in shares of VRTS. The troubled software stock is hitting new 18-month lows and falling through the bottom of its recent trading range. The bearish P&F chart points to a $13.00 target.

  James Brown   8/31/200,  2:24:57 PM
Semiconductor stock LLTC is back to the bottom of its six-month trading range. Time to watch for the break down or bounce in the $35.00-34.50 range.

  Jeff Bailey   8/31/200,  2:23:17 PM
Bema Gold (BGO) $2.58 x $2.59 ....

  James Brown   8/31/200,  2:22:21 PM
The rally in RIMM appears to be failing. The stock is back under its 10, 40 and 50-dma's and has just cracked the $60.00 mark. Short-term technicals are bearish and its MACD is nearing a new "sell" signal.

  Mark Davis   8/31/200,  2:22:21 PM
stepping away for a few minutes... I'm still ticked I missed that short entry

  Linda Piazza   8/31/200,  2:22:18 PM
The shape of the potential inverse H&S on the five-minute chart was somewhat roughened by a perhaps bad tick down to 533.79, but otherwise the potential inverse H&S is working as expected. Bulls want to see the OEX push above the descending neckline at 535 and then 535.25, the 12:40 peak, as confirmation. Bears want to see the OEX turned back at that neckline.

We're watching this to give us information about whether bulls or bears are in control.

  Jonathan Levinson   8/31/200,  2:20:55 PM
The power company has just arrived to change the transformer that kept killing my power and necessitated the battery backup I purchased a few weeks ago. The router and modem will go out, as will my battery after the 5 minutes it covers, which means that I won't be on until they're done. It should be around 45 minutes, but I'm at the power co's mercy. I'll be continuing to post until they shut me down.

  Mark Davis   8/31/200,  2:18:47 PM
Don't you just hate that Jim? You just start to get your bearings and then something happens that makes you have to start all over from scratch. Drat!

  Mark Davis   8/31/200,  2:13:43 PM
Oh MAN! Did we ever miss it!

  James Brown   8/31/200,  2:12:34 PM
Networking giant CSCO is leading the NWX lower. CSCO is down 2.67% to $18.52 after its oversold bounce stalled near $19.50 and its descending 21-dma. Short-term technicals have rolled over and its MACD is hinting at a new "sell" signal soon. The P&F chart is bearish with an $11.00 target but does have support near $17.50.

  Mark Davis   8/31/200,  2:11:59 PM
I'd love to get a shot at another short in the 1097-1097.50 area (cash index). Things are potentially setting up but I'm not sure if we'll have an early abort, an overthrow or a perfect setup.......... Aw fiddlesticks! We may have just missed it with a big red candle printing on the 1-min (early abort). Let's hope they run it back up and fill a couple of small gaps in the 1097.20 area, then we'll reassess.

  Jonathan Levinson   8/31/200,  2:09:49 PM
This print a 33.80 invalidates the possible bearish descending triangle interpretation discussed earlier, and now there's a rectangle below 33.80. Until we see this 33.80-.84 overhang broken on QQQ, the outlook will remain bearish. Above it, I expect the 30 min cycle to turn up.

  Jeff Bailey   8/31/200,  2:09:20 PM
02:00 Internals at this Link

  Linda Piazza   8/31/200,  2:05:33 PM
Another OEX downturn from below a potential neckline for an inverse H&S. Bulls want to see the OEX either push back above 535.20 or else steady by 534.20 and then climb again. Bears want to see the OEX drop below the 534.20 right-shoulder level.

  James Brown   8/31/200,  2:04:24 PM
Bob Pisani is right... September is historically the worst month of the year for the stock market.

  Jonathan Levinson   8/31/200,  2:02:20 PM
The lack of a drop below the day lows for the past few hours has the 30 min cycle channel flattening out on QQQ, with lower channel support stabilizing at 33.55 and resistance at 33.90. This is the first step toward a 30 min cycle turn, but it's going to take a break of that 33.80-.84 level (still!) in order to generate an uptick in the cycle. The short cycle is trying to rise again, but at this point it's best to just wait for that break. If it doesn't come, then the 33.38-.48 level is the next support below the current session low.

  Mark Davis   8/31/200,  2:00:34 PM
Potential Day Trade Setup Alert -
Stand by for a potential short play...

  Linda Piazza   8/31/200,  1:58:02 PM
Well, I should have waited a couple of seconds before uploading that 13:56 post I'd just labored over, because now the OEX's climb does look as I expected as the OEX climbs up to possibly retest 535.20-535.30 or so.

  James Brown   8/31/200,  1:57:11 PM
Just an FYI but I'm noticing that the VXO (or old VIX) is up more than 5% to 15.90.

  Mark Davis   8/31/200,  1:56:32 PM
Day Trade Exit Point Alert -
Stopped out... 1096.34, +1.00

  Linda Piazza   8/31/200,  1:56:24 PM
The OEX's climb is taking a form that again looks like a potential bear flag. This isn't the kind of rise I expected into the 535.20 level, so I'm not certain the OEX is going to approach that resistance level after all. It's currently facing Keltner resistance from the 534.59-534.61 zone. Five-minute closes above that level, confirmed by a move above 534.76, would mark a change in pattern for the OEX since the 10:00 numbers, but the OEX will then soon face that 535.20 level, firmed up by a Keltner line that usually stops the OEX, currently at 535.24.

  Jonathan Levinson   8/31/200,  1:52:52 PM
QQQ 2-day 100-tick chart at this Link.

  Jeff Bailey   8/31/200,  1:50:33 PM
Monster Worlwide (MNST) $19.98 -0.99% .... slips to session low, well above its WEEKLY S1 of $19.78.

  Jonathan Levinson   8/31/200,  1:49:42 PM
Nymex crude oil is down .225 at 42.05. Link

  James Brown   8/31/200,  1:49:23 PM
One of my alarms is going off. Bank of Hawaii (BOH) is breaking out to new all-time highs over resistance at $47.50. Shares have a nice four-month trend of higher lows here.

  Jeff Bailey   8/31/200,  1:49:14 PM
Paychex (PAYX) $29.34 -1.41% ... slips below its WEEKLY S2 of $29.35.

  James Brown   8/31/200,  1:45:09 PM
The oversold bounce in defense contractor EASI is failing at old support - now new resistance at the $45.00 level. This could be a bearish entry point but I'd look for some confirmation. The P&F chart points to a $16.00 target. Currently EASI is down 17 cents to $42.97.

  Mark Davis   8/31/200,  1:42:36 PM
Day Trade Exit Point Alert -
Cinch up your stops... to 1096.34
Just above the last swing high @ 1096.31. We’re locking in a +1.00 pt gain

  Mark Davis   8/31/200,  1:38:42 PM
MACD just took a sharp turn down but has not crossed yet... the buy signal is close to aborting on the shortest-term timeframe, which gives it less significance... nevertheless, the 1-min charts are the first to signal a turn.

  Jonathan Levinson   8/31/200,  1:38:09 PM
We've just had a lower high for QQQ, and the equal lows for the past 2 hours suggest a bearish descending triangle shaping up. Once again, a break above 33.80 will invalidate that, while a break below 33.65 will set up a test of 33.38-.48 confluence support. Currently, 30 min keltner support is down to 33.54.

  James Brown   8/31/200,  1:37:31 PM
Kohl's (KSS) six-week long rally got another boost this morning when Merrill Lynch upgraded the stock to a "buy" with a $58 target but KSS' early strength is fading. Shares are up 50 cents to $49.24.

  Linda Piazza   8/31/200,  1:37:12 PM
Once again, the TRAN has not been able to maintain 3100, at 3086.85 as I type.

  Linda Piazza   8/31/200,  1:36:22 PM
If my scenario for the day is to play out, we should see a bounce somewhere, with a close within a point or so of the open, either direction. That scenario might or might not have any validity, but if you look at the 8/24 candle for the OEX, you can see an example of what I expected to happen, covering about the same range I expected.

  James Brown   8/31/200,  1:34:04 PM
New broker coverage at a "buy" this morning was not enough to keep Oracle (ORCL) above support at $10.00. The stock is down more than 1.75% to $9.93. The MACD has rolled over into a new "sell" signal and the P&F chart points to a $4.00 target.

  Linda Piazza   8/31/200,  1:33:49 PM
This time, the bullish price/MACD divergence on the OEX's five-minute chart was pronounced. We could see bullish divergences develop all day while the OEX continues to drop, but this offers a warning to bears. Again, I wouldn't be surprised to see that 535.20-ish area provide resistance again and the OEX again turn down into a possible shoulder for an inverse H&S. This time, the previous formation we were watching would be the left shoulder, with the recently hit low forming the head. This time again, watching the possible setup will help us measure whether bulls or bears hold sway. The previous one showed us incipient bullishness, but its failure to confirm or meet its target demonstrated that the bears were still in control.

  James Brown   8/31/200,  1:31:59 PM
If you haven't heard a car bomb exploded in Moscow a little while ago. It was near a subway station. No injuries have been reported.

  Mark Davis   8/31/200,  1:31:47 PM
We're right at the upper b-band and MACD is trying to flatten but has not yet turned down. This could be the inflection point up or down.
Benchmarking... SPX = 1096.28

  Jonathan Levinson   8/31/200,  1:31:00 PM
Gold and the miners have strengthened along with bonds, with the metal up 2.30 to 412.20, HUI +2.12% at 206.42 and XAU +1.86% at 94.58.

  Mark Davis   8/31/200,  1:27:08 PM
Day Trade Exit Point Alert -
Cinch up your stops... to 1096.84

  Jonathan Levinson   8/31/200,  1:25:27 PM
Bonds remain very strong, with TNX now down to 4.098%, -9 bps or -2.15% for the day. Note that the bid to cover ratio was a solid 2.05 for the 4-week bill auction.

  Mark Davis   8/31/200,  1:25:07 PM
And now we wait... There is a confirmed buy signal on the 1-min chart but if we have reversed the short-term trend from up to down then it will abort, probably somewhere near or below SPX 1096.80

  Jonathan Levinson   8/31/200,  1:23:31 PM
QQQ came close enough to the prior low to have printed a double bottom at that level. But the short cycle is not as oversold as it had previously been. Previous resistance held below 33.80, and that remains the key level from which to assess any attempted upphase. Link

  Linda Piazza   8/31/200,  1:17:25 PM
And there was the break of the OEX's potential bear flag, not potential any longer, but actual. The fifteen-minute channel's lower support has now dropped to 533.58, with the OEX only a little above that level at its low. Those in bearish positions should continue following the OEX lower with their stops. Again, now is not necessarily a good time to go long the OEX, although it could conceivably bounce anywhere through here. Like Keene earlier, I consider any bounces now to be potentially countertrend, so unsafe for all but the quickest trigger-fingered cowboy(or girl)-type scalpers.

  Mark Davis   8/31/200,  1:11:26 PM
That was really ugly... SPX was just about to make a bullish MACD cross on the 1-min chart and then WHACK!

  Jonathan Levinson   8/31/200,  1:11:05 PM
New session lows across the board in the futures. QQQ is 3 cents away.

  Mark Davis   8/31/200,  1:10:08 PM
Day Trade Exit Point Alert -
Cinch up your stops... to 1097.34 and break even

  Linda Piazza   8/31/200,  1:08:09 PM
The potential inverse H&S on the OEX has morphed into a potential bear flag, looking decidedly less bullish.

  Jeff Bailey   8/31/200,  1:06:55 PM
01:00 Internals at this Link

  Mark Davis   8/31/200,  12:55:39 PM
Sorry for no warning on that short. I just walked into my office and saw a good potential sell signal. The reason for the tight stop is we may have reversed the short-term trend at 1095.50. If so, then we can expect to start seeing false/aborted sell signals as we trend higher. If not, then we stuck it pretty close to the top.

  Jonathan Levinson   8/31/200,  12:51:58 PM
The first test of 33.80 failed, but the young short cycle upphase continues to build. However, the 30 min cycle oscillators are still pointed south, as is the 30 min Keltner channel proxy with support now at 33.60. I believe that a test of either 33.60 or 33.38-.48 is going to hold based on oversold 30 min and short cycle readings. The bounce, either from the current low or from those lower levels, will likely be corrective within the rolling daily cycle. In other words, I'm thinking that the best that bulls can reasonably expect from a bounce would be sideways chop, possibly reaching as high as yesterday's high, but no more within the rolling daily cycle upphase. Link

  Mark Davis   8/31/200,  12:48:30 PM
Day Trade Exit Point Alert -
Go short now... SPX 1097.37, stop 1098.00

  Linda Piazza   8/31/200,  12:48:10 PM
The OEX tests the neckline area for a potential inverse H&S, but hasn't been able to effect five-minute closes above that neckline area. A downturn now much beyond 534.75 would be a victory for bears. Bears want to see fifteen-minute closes beneath the Keltner line currently at 535.22, with that line effectively marking the neckline for the inverse H&S seen on the five-minute chart. Bulls want to see 15-minute closes above that line and then above the firming resistance at 535.90.

  Jeff Bailey   8/31/200,  12:46:19 PM
Current OPEN MM Profiles at this Link

I will be profiling a stop on the Netease.com (NTES) puts prior to Friday's close.

  Jeff Bailey   8/31/200,  12:37:51 PM
Stillwater Mining (SWC) $14.34 +2.06 ....

  Jeff Bailey   8/31/200,  12:36:36 PM
U.S. Dollar Index (dx00y) 88.83 -0.95% (30-min delayed) ...

  Jeff Bailey   8/31/200,  12:35:54 PM
Bema Gold (BGO) $2.55 x $2.56 .... should be filled on day trade long.

  Linda Piazza   8/31/200,  12:33:19 PM
The OEX did round down beneath 535.20, so bears are now hopeful for a new low while bulls are hopeful for a steadying above 534.75 and then a rounding up into the neckline of a potential inverse H&S.

  Linda Piazza   8/31/200,  12:27:54 PM
If there's an OEX pullback from below 535.20 or so, bears should be particularly watchful of the potential for an inverse H&S to be forming with a neckline just above that level. The upside target would be just about a point, but, if met, would show that bulls were able to pull together a bullish outcome at least on the very short term.

  Jonathan Levinson   8/31/200,  12:26:55 PM
It's looking like bulls have their higher low here, with the wavelet reinstituting its upphase and the short cycle oscillators printing their first buy signals on QQQ. However, 33.80-.84 remain untested. Link

  Linda Piazza   8/31/200,  12:25:47 PM
Watch for potential OEX historical resistance near 535.20.

  Jeff Bailey   8/31/200,  12:23:30 PM
Bema Gold (BGO) $2.56 x $2.57 .... just sit the current bid.

  Mark Davis   8/31/200,  12:22:11 PM
Day Trade Exit Point Alert -
Stopped out... 1096.63, +2.00

  Jeff Bailey   8/31/200,  12:20:26 PM
Day trade long alert ... for Bema Gold (BGO) $2.56 offer, stop $2.52, target $2.65.

  Mark Davis   8/31/200,  12:19:11 PM
Day Trade Exit Point Alert -
Leave your stops @ 1096.63
I have to leave for a short errand and should be back in about 1/2 hour. If we're stopped out while I'm away I'll post the exit when I return (so don't let us get stopped out... grin)

  Linda Piazza   8/31/200,  12:17:49 PM
Now bearish OEX traders would prefer to see OEX five-minute closes beneath the Keltner line currently at 534.61, although they'll take closes beneath the line currently at 534.95. Resistance lines are beginning to thin, however, and we know that the OEX is deep within a possible support zone, so anyone in a bearish play should be following the OEX lower with their stops. Because I think today could be a smaller-range day and perhaps even produce a doji or spinning top or something similar, I'm not looking for big gains on any climb, so I don't think it's a matter of needing to necessarily switch sides, but just to protect profits. I could be wrong about that scenario for today, of course, and several other writers do believe this could be a time for seeking a long entry, so read their commentary, too, and make up your own mind. I may just be too cautious, but I think the OEX could be in a rounding-over process for a shoulder for a potential inverse H&S, so could ultimately see more downside, perhaps after a bounce to test resistance.

  Jeff Bailey   8/31/200,  12:16:14 PM
Bearish day trade cancel alert ... for the QQQ $33.71 -0.79% bearish entry at $33.97.

Post-profile high came to $33.94, so didn't get filled.

  Jonathan Levinson   8/31/200,  12:14:44 PM
TNX continues to fall as bonds advance, with TNX currently -8.3 bps at 4.105%.

  Mark Davis   8/31/200,  12:13:32 PM
The buy signals on the 1-min chart keep aborting today. It usually happens just about the time they confirm and it happens with a big red candle. We just saw it again. At some point one of them will work and Jim's 1095 target looks like a good bet, but if we blow through that area after a lot of folks get long anticipating a bounce, then look out below.

  Jeff Bailey   8/31/200,  12:10:56 PM
12:00 Internals at this Link

  Linda Piazza   8/31/200,  12:09:58 PM
I've had to dial down to the OEX's 3-minute chart to find any bullish divergences yet, and that one was just followed by this dip.

  Jonathan Levinson   8/31/200,  12:03:44 PM
QQQ bulls want to see the 33.70 line hold- that would generate a higher low on this wavelet pullback, which would kick off the next short cycle upphase. Look for a break above 33.80 and preferably 33.84 for confirmation.

  Jonathan Levinson   8/31/200,  12:02:50 PM
Session high for Dec gold futures here at 413.

  Jonathan Levinson   8/31/200,  12:01:21 PM
Bonds remain very strong today, with TNX now down 7.1 bps at 4.117%, a 1.7% decline. The 14-day bill auction generated a bid-to-cover ratio is 2.42. We await the results of the more significant 22B auction at 1PM.

  Mark Davis   8/31/200,  12:01:16 PM
Day Trade Exit Point Alert -
Cinch up your stops again... to 1096.63
I realize this is very close to the action but I’m showing a developing buy signal and if we’re going to bounce from here then let’s lock in +2.00 pts. If we roll over again then no harm no foul.

  Linda Piazza   8/31/200,  11:55:35 AM
Bears want to see the OEX maintain closes beneath the Keltner line currently at 534.86.

  Jeff Bailey   8/31/200,  11:55:24 AM
U.S. Dollar Index (dx00y) 89.06 -0.7% (30-minute delayed) ... with WEEKLY and current MONTHLY Pivot retracement at this Link

  Mark Davis   8/31/200,  11:55:08 AM
It slipped right by me while I was watching SPX but so much for the potential support (congestion) area on the SOX @ around 370 Link
I now see it vulnerable to 360 or lower

  Jonathan Levinson   8/31/200,  11:53:34 AM
Updated QQQ chart at this Link . Never made it to 33.80.

  Linda Piazza   8/31/200,  11:52:47 AM
Lower Keltner support has drifted down to 533.85.

  Linda Piazza   8/31/200,  11:45:02 AM
Based on my potential scenario for today, I wouldn't be surprised to see the OEX steady off somewhere within the next point or so and then climb, but perhaps end the day within a point or so of where it ended the day yesterday. That doesn't encourage me to suggest long OEX entries as potential support is hit. Neither does the fact that the OEX could be rounding down into a right shoulder for an inverse H&S, and so could conceivably eventually see 530-532, a possibility still supported by the daily Keltner chart.

  Linda Piazza   8/31/200,  11:41:32 AM
So far, the OEX has had five-minute closes beneath the Keltner line currently at 535.16, just as bearish traders would have hoped. Turning to the 15-minute chart to determine a potential downside target, the lowest Keltner line is still at 533.90.

  Mark Davis   8/31/200,  11:41:22 AM
Day Trade Exit Point Alert -
Cinch up your stops... to 1097.63
We’re right at the top of the 1-min b-bands and it would require a violation of the upper b-band to stop us out so let’s lock in +1.00 pts

  Jonathan Levinson   8/31/200,  11:38:34 AM
The wavelet upphase continues to advance on QQQ, but the short cycle oscillators have yet to take up the bullish cause. I believe it will take a break of 33.80 or possibly 33.84 to see that occur. So far, the bounce remains countertrend and corrective, but we need to be vigilant for a stronger move because the 30 min cycle is itself oversold.

  Linda Piazza   8/31/200,  11:28:12 AM
On the five-minute OEX Keltner chart, resistance begins to thin a bit, although the OEX will encounter resistance lines at about 0.30-point intervals up to 536.17 and then again at 536.81, and then again nearer 538. It's difficult to say where it might be stopped as thinning lines sometimes suggest that it can rise further. Right now, 535.96-536.17 looks like strongest near-term resistance, but bears hope that the OEX will instead print five-minute closes beneath the line currently at 535.36.

  Jonathan Levinson   8/31/200,  11:25:53 AM
The short cycle oscillators were oversold this morning, and they're buried now beneath a trending move in QQQ. The current uptick to 33.73 is enough to have them giving preliminary buy signals, and cautious traders afraid of getting whipsawed by another false move off the lows can wait for a print above 33.80, which is the level of last broken fib and confluence support.

  Jane Fox   8/31/200,  11:24:02 AM
Poor Florida, they get most of the bad Hurricanes. TKS for the post Jonathan.

  Jonathan Levinson   8/31/200,  11:20:29 AM
I've just come across this Link to Hurricane Frances' projected path.

  Mark Davis   8/31/200,  11:16:39 AM
I'm beginning to think we put in a top on Friday @ SPX 1109.70 and we're now headed lower. Money Flow is about to go negative on the daily chart. Looking back at the past 2 "b" distribution patterns and their bounces from the bottom of the bulb... once Money Flow went negative on the daily there was no looking back.

  Jonathan Levinson   8/31/200,  11:16:16 AM
The daily cycle upphase is currently stalled, with a bearish kiss on the 10-day stochastic for the NQ futures (QQQ proxy using pre-market data). A close at or below current levels sets the stage for a bearish cross and the start of a new daily cycle downphase. It will take a close above 34 to repair the damage currently appearing on the daily chart.

  Jonathan Levinson   8/31/200,  11:13:23 AM
Gold has just made it above 412 resistance, currently up 2.50 to 412.40 and silver +.073 to a session high of 6.784. HUI is up 1.71% at 205.59, XAU +1.57% at 94.31.

  Jeff Bailey   8/31/200,  11:12:22 AM
11:00 Internals at this Link

  Jonathan Levinson   8/31/200,  11:11:41 AM
Looks like we're going to get that 33.60 pretty shortly- volume is coming in on the sell side here, with the TRINQ currently 2.08. The current drop has violated the lower descending 30 min keltner channel, which generally sees a reversal. The exception is in impulsive trending moves, and this one has great potential to do so given the whipsaw to the downside in the 30 min cycle oscillators.

  Jim Brown   8/31/200,  11:11:22 AM
All this negative talk about Intel is pushing INTC closer to the $20 level we are looking for as an entry in the LEAPs section. Already at a 52-week low under $21 today we are getting close.

  Linda Piazza   8/31/200,  11:09:03 AM
The lower support line on the OEX's 15-minute chart has now drifted down to 533.96. The SPX's has now drifted down to 1094.20. The Nasdaq's has already been breached, creating a breakdown signal on that chart, and the Dow's is at 10,067.

  Mark Davis   8/31/200,  11:05:58 AM
Day Trade Exit Point Alert -
Cinch up your stops... to 1098.63 and break even

  Jonathan Levinson   8/31/200,  11:04:16 AM
Below 33.80 QQQ, next support is at 33.60 and then in the 33.38-.48 confluence zone.

  Jim Brown   8/31/200,  11:03:31 AM
Linda, it is amazing how well those Keltner charts work.

  Linda Piazza   8/31/200,  11:02:04 AM
If the OEX bounces now, as one Keltner chart suggests it might do, watch for resistance at 536, but firmer at 536.40. That second level looks firm enough to stop it if a bounce happens before the Keltner lines separate again.

  Jonathan Levinson   8/31/200,  11:01:25 AM
Crude oil is down .575 to 41.70 here.

  Jonathan Levinson   8/31/200,  11:01:13 AM
QQQ intraday chart updat at this Link.

  Jeff Bailey   8/31/200,  11:00:18 AM
Swing trade bearish round to 3/4 alert .... buying 1 additional Netease.com (NTES) $35.63 December $30 put (NQGXF) at $2.20 offer.

  Jonathan Levinson   8/31/200,  10:54:56 AM
Session lows across the board, with QQQ currently trading 33.83. Channel support has descended to 33.78.

  Mark Davis   8/31/200,  10:47:08 AM
Day Trade Exit Point Alert -
Go short now... SPX 1098.63, stop 1100.00

  Jonathan Levinson   8/31/200,  10:46:01 AM
QQQ falling back below the trendline here, but on even weaker volume.

  Mark Davis   8/31/200,  10:45:24 AM
Day Trade Exit Point Alert -
Stopped out... 1098.75 and break even

  Mark Davis   8/31/200,  10:44:19 AM
Day Trade Exit Point Alert -
Cinch up your stops... to 1098.75 and break even
Very early stages of a short signal are developing... stand by

  Jeff Bailey   8/31/200,  10:43:16 AM
U.S. Dollar Index (dx00y) $89.21 -0.53% (30-minute delayed) ... Breaks back under the WEEKLY Pivot here.

MONTHLY Pivot (89.08) is bigger test of support.

Stillwater Mining (SWC) $14.34 +1.06% ....

$HUI.X 204.94 +1.39% ....

  Linda Piazza   8/31/200,  10:41:17 AM
Remember that my so-far favored scenario for today is a smaller-range day, perhaps one that forms some type of candle indicating indecision.

The OEX just gapped up, but gapped right into the next firm Keltner resistance on the five-minute chart. If it can produce five-minute closes above 536.68, then it might next challenge 537 resistance, then 537.56 and then firmer resistance again at 538.46. Those are various Keltner lines, however, and they're all still descending, so that unless the OEX bounces quickly, they're likely to be lower when hit, if they are hit, than they are now. So far, that next firm Keltner resistance is holding.

  Jonathan Levinson   8/31/200,  10:39:34 AM
QQQ has regained the lower channel trendline in the previous chart with a print above 33.91. The wavelet cycle is in a new upphase, and a break of 34.01-.03 should be enough to get the short cycle going higher as well. But volume is so far declining on the bounce- not a good sign for bulls.

  Jeff Bailey   8/31/200,  10:31:33 AM
Shutting down for about 10-minutes to resolve some computer issues.

  Jonathan Levinson   8/31/200,  10:30:42 AM
Intraday QQQ with updated trendlines at this Link.

  Jeff Bailey   8/31/200,  10:30:21 AM
Day trade short setup alert for the QQQ $33.89 -0.33. Will go short on trade back higher at $33.97, stop $34.15, target $33.66.

  Jonathan Levinson   8/31/200,  10:28:29 AM
Gold is up 1.40 to 411.30, with HUI up 1.39% and XAU up 1.25%.

  Jonathan Levinson   8/31/200,  10:28:03 AM
Session lows across the board, QQQ at 33.85.

  Linda Piazza   8/31/200,  10:25:32 AM
The five-minute Keltner chart suggests that next Keltner resistance will be found at 536.28, but that's light resistance. Next firm resistance will be found from 536.67-537.13.

  Jonathan Levinson   8/31/200,  10:25:19 AM
Bonds are getting bought aggressively, with TNX now down 4.3 bps to 4.145%, a 1.03% move for the day.

  Mark Davis   8/31/200,  10:24:12 AM
Day Trade Entry Point Alert -
Go long now... SPX 1098.75, stop 1097.75

  Linda Piazza   8/31/200,  10:23:30 AM
Remember yesterday when I posted this: Watch out below? The 15-minute Keltner chart suggests that a drop toward 534.40-535 could be rather sudden if the OEX doesn't pull up soon. However, there's still that support . . . so traditional and Keltner charts differ here. I trust Keltner charts enough that I suggest you be prepared for such an eventuality, but not enough that I'd say that you not have plans for dealing with a possible bounce from 537. Turns out that both traditional and Keltner chart analysis had something to offer. Yesterday's close and 537 support both interfered with the OEX dropping quickly toward 534.50-535, as I think it might have done if markets had been open about 30 minute longer, but that downside target still had a possibility of being met. One problem with that target is seen on another Keltner chart, the daily one. That shows the OEX currently testing two Keltner support lines, and they could be enough to hold the OEX up, at least temporarily. If not, though, that chart suggests vulnerability to 531.

  Jonathan Levinson   8/31/200,  10:22:31 AM
QQQ's new session low is 33.86. There was a burst of volume on the break below 33.90, with a bounce retesting it from below. The 30 min cycle has rolled over and channel support is down to 33.82.

  Jonathan Levinson   8/31/200,  10:18:38 AM
QQQ is retesting the day low. Session low for INTC at 21.10., as well as for euro futures.

  Linda Piazza   8/31/200,  10:18:28 AM
The OEX's behavior remains consistent with a possible test of the lower end of the 535-537 support band. In fact, the 15-minute Keltner chart suggests that the OEX could drop as low as 534.15 and could do it quickly. That could be changed by other developments, but that's what it suggests now.

  Jeff Bailey   8/31/200,  10:18:14 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

  Mark Davis   8/31/200,  10:17:57 AM
Day Trade Exit Point Alert -
Stopped out... 1099.00, -0.89

  Jonathan Levinson   8/31/200,  10:13:07 AM
QQQ has broken yestreday's low with a print of 33.91, but it bounced to the current 33.97. The fibonacci retracement off yesterday's 34.03 support caught the bounce to within 2 cents, but bulls need the brouce to regain 34.03 in order for a short cycle upphase to gain traction. Link

  Linda Piazza   8/31/200,  10:12:18 AM
The TRAN tests 3100 again, at 3102.65 as I type.

  Linda Piazza   8/31/200,  10:11:33 AM
OEX desperately trying to stay above yesterday's low.

  Mark Davis   8/31/200,  10:10:38 AM
Day Trade Entry Point Alert -
Go long now... SPX 1099.89, stop 1099.00

  Linda Piazza   8/31/200,  10:08:51 AM
For reference, yesterday's OEX low was 536.57. Also, I've been forgetting to give the first five-minute OEX range for those who have wanted to see those figures. It was 536.91 to 537.56.

  Linda Piazza   8/31/200,  10:07:02 AM
The BIX is the index that won't give up, taking another stab at 360 (at 360.25 as I type) and the last swing high from the spring at 362.64.

  Jim Brown   8/31/200,  10:06:35 AM
Alert - Monthly Mass Layoffs = 2,094 (last 1,379)
Layoffs increased from 134,588 in June to 253,929 in July.

  Linda Piazza   8/31/200,  10:05:06 AM
Semi-related stocks performed poorly in Asia and Europe, and this morning the SOX continues its drop.

  Linda Piazza   8/31/200,  10:03:20 AM
The first reaction isn't always the final reaction, but the expected reaction is what we're getting so far. The OEX turned down at Keltner resistance, preserving the possibility of testing the lower end of the 535-537 support band. However, it hasn't yet created another breakdown signal, holding at least temporarily above yesterday's low.

  Jonathan Levinson   8/31/200,  10:02:52 AM
Nymex crude is holding below 42, currently trading 41.95, -.77%, with a session low of 41.675.

  Jeff Bailey   8/31/200,  10:02:46 AM
10:00 Market Watch at this Link

  Jonathan Levinson   8/31/200,  10:02:23 AM
QQQ intraday chart update at this Link.

  Mark Davis   8/31/200,  10:01:26 AM
Day Trade Exit Point Alert -
Stopped out... 1101.10 and break even

  Jonathan Levinson   8/31/200,  10:00:40 AM
Session high for bonds here, with TNX -1.9 bps at 4.169%.

  Jim Brown   8/31/200,  10:00:15 AM
Consumer Confidence = 98.2 , (est 103.0, last 106.1)
Chicago PMI = 57.3 ,(est 60.0, last 64.7)
PPI Prices Paid component at 16 year highs!

  Linda Piazza   8/31/200,  9:58:15 AM
So far, OEX Keltner resistance just above 538 is holding, but it's being tested now. That leaves the OEX in an ambiguous position heading into 10:00, between support and resistance, but 15-minute resistance from just above 538 up to 538.93 looks at least moderately firm. It can be blown through on an upside surprise or some other buy-the-news reaction, but otherwise looks firm enough to hold.

  Jonathan Levinson   8/31/200,  9:57:10 AM
The Fed has announced a 4B overnight repo to replace the 4B expiring from yesterday- no net change for the day. The consumer confidence and Chicago PMI data are due in 3 minutes.

  Mark Davis   8/31/200,  9:56:05 AM
Day Trade Exit Point Alert -
Cinch up your stops... to 1101.10 and break even
This will protect us against a potential quick reversal after Consumer Confidence numbers are released

  Jim Brown   8/31/200,  9:53:11 AM
We are rapidly approaching the 10:00 economics.

Consumer Confidence (est 103.0, last 106.1)
Chicago PMI (est 60.0, last 64.7)
Monthly Mass Layoffs (last 1,379)

  Jonathan Levinson   8/31/200,  9:49:32 AM
QQQ's session high at 34.11 is right on the descending trendline connecting yesterday's highs. A break above it sets up the test of 34.15-.20 discussed earlier. GE is printing a session high as I type, as are ten year note futures, with TNX down 1.8 bps at 4.17%.

  Linda Piazza   8/31/200,  9:45:22 AM
Back. The OEX appears to be moving above the first Keltner resistance, which sets up the possibility that the bounce might be beginning from yesterday's close and not from the lower end of the support band from 535-537. Next Keltner resistance is at 538.08-535.15. I'd be leery of jumping in here, with 539.50-540.80 possible resistance looming, just ahead of important economic numbers.

  Jonathan Levinson   8/31/200,  9:45:08 AM
Session highs across the board.

  Mark Davis   8/31/200,  9:38:14 AM
Day Trade Entry Point Alert -
Go long now @ SPX 1101.10, stop 1099.10

  Jonathan Levinson   8/31/200,  9:36:38 AM
The short cycle upphase on the 2-day QQQ 100-tick chart hasn't started, but it will within the next five minutes if bulls can hold above 34.03-.05. That would in turn support the hesitant 30-min cycle discussed earlier. This is a critical battlezone right here.

  Jonathan Levinson   8/31/200,  9:34:30 AM
QQQ is breaking first resistance, headed for the next trendline at 34.11 before confluence at 34.15-.20. This chart Link says it all.

  Mark Davis   8/31/200,  9:33:28 AM
One of the things I'm watching this morning is the SOX. It is vulnerable all the way to recent lows of 360 or even lower but there is a small area of congestion on the 30 min chart @ 370 which could provide a bounce point if we get that low. It is currently printing 373.19

  Linda Piazza   8/31/200,  9:30:56 AM
If the OEX should rise into the opening, as futures suggest it might do, Keltner resistance is trying to gather at 537.30-537.60, so that would be the first place to watch for resistance. If that holds, then 535 might still be a possibility, but I wouldn't make any assumptions at all ahead of the 10:00 numbers. Be careful.

I have to be gone for about ten minutes and will return as soon as possible.

  Jeff Bailey   8/31/200,  9:30:06 AM
IPIX Corp. (IPIX) $7.30 Link ... Jumps to $8.04 in pre-market after company announced distribution agreement with Russian-based Soling Company for IPIX's Full-360 degree video surveillance systems.

  Mark Davis   8/31/200,  9:20:42 AM
Potential Day Trade Setup Alert -
Stand by for a potential long play...

  Jonathan Levinson   8/31/200,  8:46:23 AM
QQQ is trading back above 34, currently +.03 at 34.02. The 30 min chart with which I was struggling so greatly last night has yet to resolve- it's still showing the 300 min stochastic stalled at the beginning of its upphase, with price hanging at a lower low. This is a textbook setup for a bullish divergence, but price needs to cooperate. In this case, that would require clearing first the 34.06 trendline resistance from yesterday and then the 34.14-.20 confluence. The short cycle is looking for a new upphase, and I'm still guessing that we'll see our intraday bounce, but it could break either way from this setup. Hopefully we won't need to wait for the 10AM data to resolve the deadlock.

  Jonathan Levinson   8/31/200,  7:58:27 AM
Equities are flat this morning, with ES trading 1099.5, NQ 1366, YM 10126 and QQQ -.01 to 33.97. Gold is up .60 to 410.5, silver +.046 to 6.757, ten year bonds +.031 to 113.125 and Nymex crude oil -.45 to 41.825.

We await the 10AM releases of August consumer confidence, est. 103.4 and the Chicago PMI, est. 60.

  Linda Piazza   8/31/200,  6:45:13 AM
Good morning. The Nikkei was hit by several concerns Tuesday. With Japan's July industrial production disappointing, the Nikkei dropped in the morning session. Expectations had been for production to rise 1.1%, but instead it was unchanged from June's number after seasonal adjustments. Chip stocks also weakened throughout Asia ahead of Intel's Thursday update. Declines were characterized as broad based, but strong earnings outlooks from steelmakers JFE Holdings and Nippon Steel sent the steelmakers higher. The UFJ Holdings/Mitsubishi Tokyo Financial Group/Sumitomo Mitsui Financial saga might soon be settled, as Japan's Supreme Court decided in favor of Mitsubishi Tokyo Financial's plan to merge with UFJ Holdings, a merger Sumitomo had sought to block. When UFJ decided to merge with Mitsubishi Tokyo Financial, it canceled a previous agreement to sell a bank unit to Sumitomo.

With semi-related stocks such as Samsung Electronics, Taiwan Semiconductor and others trading lower, other Asian markets still managed mixed performances. The Taiwan Weighted lost 0.40%, and South Korea's Kospi declined 0.20%. Singapore's Straits Times gained 0.68%, but Hong Kong's Hang Seng lost 0.21%. China's Shanghai Composite gapped higher. Although closing a few points off its high of the day, it closed higher by 1.72%.

Currently, most European bourses trade in the red, with chip stocks also weak in Europe. Economic news included an INSEE statistics agency report on French unemployment showing that July's unemployment dipped to 9.8% from the previous month's 9.9%. One non-chip stock sharing the weakness was Bayer, with its earnings report characterized as missing expectations on profit and beating on the sales. Another decliner was Swiss reinsurer Converium, falling more than 10% after revealing its need to raise money to boost reserves. One stock not sharing the general weakness was Siemens, gaining after Morgan Stanley upgraded the stock to an overweight rating from its previous equal weight rating. In the U.K., National Grid Transco also crept slightly higher after revealing a gas distribution deal.

As of this writing, the FTSE 100 had fallen 19.30 points or 0.43%, to 4,470.80. The CAC 40 had fallen 21.55 points or 0.59%, to 3,615.16. The DAX had fallen 35.68 points or 0.93%, to 3,803.17.

  Linda Piazza   8/30/200,  11:02:59 PM
As cash markets closed Monday, the OEX was poised near the top of the 535-537 support zone. It had dropped just beneath the 240-minute 100/130-ema's that had been instrumental in its trading pattern over the last couple of weeks. It had pulled back at the possible neckline level for a potential inverse H&S. Therefore, we have to consider the possibility that the OEX could drop to the right-shoulder level, somewhere near the 530-ish zone. Could has to be the operative word, however. Although daily RSI has hooked down, stochastics have not rolled down out of territory indicating overbought conditions and daily MACD has not completed a bearish cross.

The daily candlestick was an ugly one, a tall red candle, but we all know the axiom that smaller-range days tend to follow big-range days, so we should be watchful for that possibility Tuesday. The TRIN also reached levels not seen since 8/12, with 8/12 followed by a small-range spinning top, fitting the thesis of a smaller-range day following a big-range one. That spinning top was followed by the climb into last week's high, so that TRIN could be considered a risk factor for bearish plays, from a contrarian standpoint. Of course, price action should be the arbiter, and the high TRIN could have been signaling that matters are very bearish without that necessarily being a contrarian indication.

The OEX then appears to have vulnerability down to the 530 area, although a more likely scenario upon any decline could perhaps be a move down toward 534-535 and a bounce from there, possibly high enough to test the 537 or 539.50-540.80 resistance, although we'd have to see what conditions looked like as any bounce began to see if the outlook had changed. That bounce to test resistance could just as easily get started at the level of Monday's close, but Keltner charts, as they were configured at Monday's close, suggest the drop down to the lower support first. That could be changed by tomorrow's economic numbers.

If there is a drop down to that 534-535 level, should you consider a long position? That might depend on what tomorrow's numbers show us and what breadth indicators do, too, but from this vantage point Monday evening, due to the possibility that the OEX is rounding down into a right shoulder and the possibility that tomorrow could produce some kind of spinning top or other candle indicative of indecision, waiting the day out might be the best idea.

  Jeff Bailey   8/30/200,  8:00:39 PM
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Today's Activity ....

Day trade long the QQQ at $34.07, closed out at $34.14 ($0.07, or +0.21%).

  OI Technical Staff   8/30/200,  6:00:47 PM
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